Pleadings re: Admissions or Undisputed Facts iro Stated Case or Amicable Action Proceedings & the Dispensing of a Trial

HH44-09 : BLESSMOE CHANAKIRA and AUXILIA DANAYI MYNYEZA vs MAI KAI REAL ESTATE DEVELOPMENT TRUST and BERNARD MUTANGA
Ruled By: BERE J

Application in terms of Order 29 of the High Court Rules, 1971.The BackgroundThe agreed facts of this matter, as given by the parties, are as follows:-On 9 November 2004, the plaintiffs entered into an Agreement of Sale with the first defendant, represented by the second defendant, in respect of the ...

Application in terms of Order 29 of the High Court Rules, 1971.

The Background

The agreed facts of this matter, as given by the parties, are as follows:-

On 9 November 2004, the plaintiffs entered into an Agreement of Sale with the first defendant, represented by the second defendant, in respect of the extend of subdivision “A” of subdivision “C” of Kingsmead extension of Borrowdale Estates.

In terms of that agreement, the plaintiffs purchased from the defendant the above-mentioned property for the sum of $700 million (old currency).

The plaintiffs duly paid in full the purchase price in terms of the agreement.

Subsequent to payment of the purchase price, the plaintiffs could not get transfer of the property because a Mr Geoffrey Andrew Harrel, the previous owner of the property, from whom the first defendant had purchased it, was refusing to pass transfer to the first defendant claiming that he was still owed the sum of $460 million (old currency) by the first defendant with the latter disputing it.

Acting on that understanding, and in the interest of protecting their rights arising from their agreement with the first and second defendants, the plaintiff duly paid the $460 million to Mr Geoffrey Harrel.

The first and second defendants do not deny that they are liable to the plaintiff, what is however in issue is the quantum of such liability.

The plaintiffs claim is for unjust enrichment as set out in the summons.

The defendants deny the plaintiffs are entitled to claim for unjust enrichment and aver that the defendant's are entitled to the sum of $460 million plus interest calculated at the prescribed rate only.

The plaintiffs deny the defendants' computation of its liability to the plaintiffs.

ISSUE BEFORE THE COURT

The issue which the court has been called upon to determine is a question of law, viz whether, in the light of the agreed facts, the plaintiffs' claim for unjust enrichment is sustainable or whether the plaintiffs are entitled to the tendered amount of four hundred and sixty million dollars together with interest at the prescribed rate calculated from the date of liability to the date of payment.

Counsel for the plaintiffs put up a very strong and persuasive argument in favour of the plaintiffs' claim for unjust enrichment.

It was his contention, guided by precedent from this court: Industrial Equity v Walker 1996 (1) ZLR 269: Mtunda v Ndudzo 2000 (1) ZLR 71 (H) 718; Jengwa v Jengwa 1999 (2) ZLR H 121 and outside our own jurisdiction; Nortje En'nAnder v Pool NO 1966 (111) SALR 96 that the remedy of unjust enrichment would entitle the plaintiffs to get damages in order to achieve equity.

Counsel also reasoned that if the court were to proceed with this claim under unjust enrichment, the court would be able to award damages at current values which would take into account inflation for purposes of computing the amount of compensation.

Counsel for the defendants vehemently opposed the position adopted by the plaintiffs by arguing, inter alia, that, the amount paid by the plaintiffs to a Mr Harrel was a simple debt which should be repaid with interest at the prescribed rate hence the tender by the defendants.

It was also argued by counsel that the issues to do with inflation are really to do with the legislature which prescribes what it deems to be an appropriate rate of interest from time to time.

Having acquainted myself with the authorities cited there can be no denial that a claim of unjust enrichment is recognised as part of our law.

In an appropriate case, such a claim can be sustainable.

I think the issue which must remain impeded in my mind, to avoid clouding my focus, is whether or not the circumstances under which the debt of four hundred and sixty million dollars arose would justify the claim as crafted by the plaintiffs.

In doing so, I remain cognisant of the fact that not every claim made under unjust enrichment will pass the test under this heading.

In determining this matter, I remain conscious that it is not the function of the court to re-write the contract for the parties but that the court must endeavour to ascertain what was in the minds of the parties at the time the issue of four hundred and sixty million dollars arose.

What is clear from the pleadings, and agreed upon by the parties, is that the sole reason why the plaintiffs paid Mr Harrel the four hundred and sixty million dollars was that they wanted to protect their rights in the sold property or to ensure the smooth transfer of the purchased property.

It is also clear that the first defendant had never accepted this liability to Mr Harrel and that the plaintiffs were themselves not privy to the circumstances surrounding the liability as between the first defendant and Mr Harrel.

It is important to note that the main contract between the plaintiffs and the first defendant remained intact and that the property was transferred with the purchase figure still remaining pegged at the original agreed price of seven hundred million dollars.

It is a time honoured principle of our law of contract that it is founded upon true consensus ad idem of the parties involved: The Law of Contract in South Africa, (Butterworths), by R H CHRISTIE…,.

In the words of WESSELS…, and approved by ROBERTS AJ in the case of Jordaan v Trollip 1960 1 PH A25 (T):

“Although the minds of the parties must come together, courts of law can only judge from external facts whether this has or has not occurred. In practice, therefore, it is the manifestation of their wills and not the unexpressed will which is of importance.”

Can it be seriously contended in this matter, that, at the time the plaintiffs paid the four hundred and sixty million dollars to Mr Harrel, on behalf of the defendant (who was disputing liability at the time), the plaintiffs had in mind the recovery of their money from the defendant based on the principles of unjust enrichment?

In the same vein, can it be said that, at the time the issue of four hundred and sixty million dollars arose, the first defendant had in his mind the concept of unjust enrichment at the time of repayment or both parties viewed the transaction as a simple ascertainable debt which would be repaid as such?

I detect some revealing indication from the plaintiff's heads of argument where counsel on behalf of the plaintiffs states as follows:-

“An equitable remedy is one that seeks to do justice between the parties, and, in the circumstances of this matter, an order for the payment of 460 million dollars (old currency) plus interest will not do justice to the plaintiff's claim. This amount has become so insignificant as a result of inflation and the removal of zeros on our currency in June 2006 and July 2008 such that in today's terms the said amount is now the equivalent of 0,00046 cents. When the said 460 million dollars was paid, in October of 2005, it was about the equivalent of 66% of the value of the property that the plaintiff's were purchasing; now, the said amount cannot buy a single brick.”…,.

I have not the slightest doubt in my mind, that, at the time the plaintiffs and the first defendant discussed the issue of four hundred and sixty million dollars paid to Mr Harrel they all looked at it as a simple debt that would be repaid as it was. The issue of unjust enrichment could not possibly have occupied their minds at the time this money was paid out.

As is clearly apparent from the above quotations, it does seem to me that the plaintiffs claim, as now crafted, is not as a result of the arrangement as they perceived it with the first defendant at the time the four hundred and sixty million dollars was paid out to Mr Harrel but an afterthought, a direct response to the impact of galloping inflation coupled with the axing of zeros from our currency which has rendered the advanced amount completely valueless.

There has been no suggestion by the plaintiffs that the first defendant was responsible for triggering inflation, let alone the removal of zeros from our currency.

It is quite significant to note that, at the time the plaintiffs paid the four hundred and sixty million dollars to Mr Harrel, they were fully aware that the first defendant had a dispute with Mr Harrel over the amount in question. The plaintiffs, for convenience's sake, decided to pay the disputed amount because they did not want the transfer of the purchased property compromised.

In such a scenario, there can be no question of non-disclosure on the part of the first defendant and this probably explains why even in the declaration filed there was no reference to such non-disclosure as the basis for the claim.

Even if this court were to make a specific finding that there was a material non-disclosure on the part of the first defendant; in my view, such a finding would not advance the plaintiffs claim under unjust enrichment for as long as it is agreed that the plaintiffs claim is a simple debt sounding in money the principle of currency nominalism would come into play.

The principle of currency nominalism, which no doubt is part of our law, forbids the approach adopted by the plaintiffs in this matter.

I am fortified in this view by the position adopted by E.M. GROSSKOPF JA in SA Eagle Insurance Co. Ltd v Hartley 1990 4 SA 833…, when he eloquently elaborated on the principle of currency nominalism in the following terms:-

“'This result seems to me to be in conflict with the principle of nominalism of currency which underlies all aspects of South African law, including the law of obligations. Its essence, in the field of obligations, is that a debt sounding in money has to be paid in terms of its nominal value irrespective of any fluctuation in the purchasing power of currency.'

This places the risk of a depreciation of the currency on the creditor and saddles the debtor with the risk of an appreciation…,.

Nominalism is the norm in the common law of Western States with similar systems to our own. Thus, in Deutsche Bank Filiale Nurnberg v Humphrey (1926) 272 US S17 at 519 the United States Supreme Court said:

'An obligation in terms of the currency of a country takes the risk of currency fluctuations and whether creditor or debtor profits by the change the law takes no account of it…,. Obviously, in fact, a dollar or a mark may have different values at different times, but, to the law that established it, is always the same. If the debt had been due here and the value of dollars had dropped before suit was brought the plaintiff could recover no more dollars on that account.'

The same applies in England.

In Treseder–Griffin and Another v Co-operative Insurance Society Ltd (1956) 2 QB 127 (CA) at 144 DENNING LJ said the following:

'…,. (I)n England, we have always looked upon a pound as a pound, whatever its international value…,. In all our dealings we have disregarded alike the debasement of the currency by kings and rulers or the depreciation of it by the march of time or events…,. A man who stipulates for a pound must take a pound when payment is made, whatever the pound is worth at that time.'”…,.

After commenting on nominalism of currency in the Netehrlands and German legal systems the learned Judge of Appeal went on to consider the reasons commonly given for currency nominalism. The judge commented as follows:

“It is not necessary to consider them in detail, except to point out that it would represent a revolutionary transformation of our legal system if courts were to be called upon to determine the true economic value (in terms of purchasing power) of all obligations sounding in money. I need not, however, labour the point; currency nominalism, for whatever reason, is firmly entrenched in our law:” SA Eagle Insurance Co. Ltd v Hartley 1990 4 SA 833 p840…,.

Clearly, the attempt by the plaintiffs to lodge their claim under unjust enrichment in this case is an attempt to circumvent the principles of nominalism of currency given the effect of the rapid depreciation or debasement of the Zimbabwean dollar ever since the debt of four hundred and sixty million dollars was paid by the plaintiffs.

I am in total agreement with the views expressed by my brother judge, KUDYA J, in the recent case of Constantinos Bakari v George Kattarenos HH01-09 where he stated that:

“Courts have adopted a conservative approach to the question of determining the true economic value of money” by leaving it up to the legislature which is empowered to review and set from time to time the prescribed rate of interest.

Everything considered, I do not see how the plaintiffs claim, under unjust enrichment, can be sustained in this case.

I am of a very strong conviction that the plaintiffs are entitled to no more than the sum of four hundred and sixty million dollars (revalued) together with interest at the prescribed rate of 30% as tendered by the defendants.

COSTS

I think in all fairness the Stated Case is of great legal significance. This probably explains why neither of the parties have asked for costs.

Each of the parties must bear their own costs.

HH167-12 : ZIMBABWE DEVELOPMENT BANK vs GENERAL ACCIDENT INSURANCE COMPANY
Ruled By: CHIWESHE J

At the pre-trial conference it was declared that this matter be referred to trial as a Stated Case. The agreed facts were as follows...,.

HH116-10 : DEBORAH GLORIA KOUMIDES vs PAUL KOUMIDES
Ruled By: MAVANGIRA J

When the matter came up for trial, on 19 October 2009, the parties advised the court that it was their intention, by consent, and in terms of Order 29 Rule 199, to proceed by way of Stated Case on the issue of the defendant's liability for the maintenance of Elena Gloria Koumides and on the issue of an interdict barring the plaintiff from cohabiting with a boyfriend in the matrimonial home. They indicated that they would lead evidence only with regard to the issue of the level of maintenance for Elena Gloria Koumides should the defendant be found to be liable, and also on the issue of the level of maintenance for Andreas Wilfred Koumides, and on the issue of costs. The parties then followed the said procedure and on 23 October 2009 the parties filed a “Stated Case in Terms of Order 29”. It states –

“WHEREAS:

A. The parties are plaintiff and defendant respectively in this matter, the trial of which commenced on 19^th October before Honourable Justice Mavangira.

B. Two issues for trial, as reflected in the Pre-Trial Conference minute are:-

1. Whether the plaintiff should be interdicted from living with a boyfriend, now or in the future.

2. Whether defendant has a legal obligation to providing maintenance for his daughter Elena.

C. The parties are agreed that both issues are questions of law, the facts of which are not in dispute and can therefore be determined on a Stated Case.

D. Accordingly, the parties set out the agreed facts in respect of the two issues and will, as expeditiously as possible, file Heads of Argument setting out the respective contentions of law. The parties respectfully request that the issues be dealt with by the Honourable Court on the above basis.

NOW THEREFORE THE AGREED FACTS ARE AS FOLLOWS:-

1. The parties have 2 children born of their marriage, namely:-

ELENA GLORIA KOUMIDES (born on 24^th May 1990) (”ELENA”)

ANDREAS WILFRED KOUMIDES (born on 13^th March 1995) (”ANDREAS”)

2. ELENA is at school and will be writing her “A” Level examinations later this term.

3. ELENA lives with her mother, the plaintiff in this matter, and with ANDREAS, in the former marital home, being 187 Dublin Road, Emerald Hill, Harare.

4. The Emerald Hill Home is jointly owned by the parties in equal shares, and the parties are agreed that the plaintiff be entitled to continue to so reside there until such time as ANDREAS attains the age of 18 years or becomes self-supporting. Thereafter, the property will be sold for the best account and the proceeds divided equally between the parties.

5. Defendant claims that plaintiff's continued occupation of the property, up to its sale, is conditional upon her refraining, even after the parties' divorce, from living on the property with any man with whom she is romantically involved.

6. Plaintiff's attitude is that she is not presently romantically involved with anyone, and, at present, has not the remotest intention of cohabitation in the manner that defendant wishes to interdict. However, she disputes defendant's legal grounds for claiming the interdict, opposes the interdict on a question of pure principal, and wishes to have her options freely available in case, at some future date, she should meet and fall in love with another man.

7. ELENA is now, and until she completes her tertiary education, totally financially dependent on the plaintiff and defendant for all her living, health, educational, and extra-mural requirements.

8. After graduating from school, it is ELENA's desire and intention to undertake tertiary education in the Degree course of Bachelor of Education at the Australian Catholic University, for which course she will apply next year.

WHEREFORE the parties hereto do hereby file this Stated Case for the Order of the Honourable Court in respect of the following questions:-

1. Whether plaintiff should be interdicted from living in the matrimonial home with a boyfriend, now or in the future.

2. Whether defendant has a legal obligation of providing maintenance for his daughter ELENA.”

SC39-15 : COSMAS BUNGU and THE EXECUTIVE COMMITTEE HARARE MUNICIPAL WORKERS UNION and THE HARARE MUNICIPAL WORKERS UNION vs JOHN MAKARUDZE and MAXWELL MUNONDO
Ruled By: ZIYAMBI JA, GARWE JA, and GUVAVA JA

This matter was dealt with in the court a quo as a Stated Case. At the hearing of the appeal, certain issues arose which had not been canvassed by the parties in the court a quo: for example, the issue of the validity of Clause 5(a) of the new Constitution and the propriety of the ...

View Appeal
HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MTSHIYA J

On 29 July 2008, the plaintiff issued summons against the defendant for the following relief:-

“(a) Payment of the sum of US$750,000.

(b) Interest a tempore morae at the London Interbank rate for United States dollars, 3.5% per annum, from 1 September 2005 to date of payment.

(c) Costs of suit.”

The background to the relief sought can briefly be narrated as follows:-

The plaintiff is a manufacturer and supplier of exclusive range of cables for the transmission and distribution of energy and communications involving entities like the Zimbabwe Electricity Supply Authority, the Rural Electrification Agency, and Tel-One.

The plaintiff's business caters for both domestic and export markets. As at end of 2003, 50% of its sales volumes were largely in exports.

In October 2004, the plaintiff approached the defendant for assistance. The defendant was then operating a foreign currency auction system. Through that system, the defendant made available, each week, from 25% of export proceeds, an amount of foreign currency for which commercial banks would submit bids for their customers. On the basis of those bids, allocations would then be made to the highest bidder(s).

In line with the auction system, on 24 October 2004, the defendant, through its Governor, informed the plaintiff, that, if it (plaintiff) submitted bids to the auction, the defendant would ensure that it (plaintiff) succeeded to the extent of US$150,000 per week to enable it to pay for essential inputs in its operations.

That process was indeed put into place on a weekly basis as from 14 January 2005 up to June 2005.

This was a special arrangement where the plaintiff would, instead of placing a bid, it would merely be advised, through a telephone call, each week, from the defendant's officials, that, the said allocation of US$150,000 was ready. All the plaintiff was required to do, in turn, was to pay the Zimbabwe dollar equivalent within 24 hours. The plaintiff would then, in turn, transfer, through a Commercial Bank, the requisite Zimbabwean dollar amount and details of the foreign suppliers to be paid in foreign currency (i.e from the US$150,000 allocated to the plaintiff).

The allocation of US$150,000, was, with effect from 16 June 2005, increased to US$250,000.

Weekly allocations, at that new level, were made to the plaintiff until the end of July 2005.

The allocation system was continued in August 2005 resulting in the plaintiff making three transfers of undisputed payments in Zimbabwe dollars for the equivalent of the amount of US$750,000 - now being claimed by the plaintiff.

The payments were, in each case, accompanied by details of external creditors to be paid by the defendant.

Notwithstanding the payment of the equivalent amount in Zimbabwe dollars by the plaintiff, the defendant has, to date, not forwarded the foreign currency to the plaintiff's external creditors or refunded the plaintiff with the said amount of US$750,000. In fact, the plaintiff has already, through other sources, paid its suppliers.

The above, in brief, explains why the plaintiff has resorted to this court action claiming the said amount of US$750,000.

With both the plaintiff and the defendant having amended their pleadings at the pretrial conference, it was agreed that the issues for trial were:-

“(a) Whether defendant is contractually obliged to pay plaintiff the sum of US$750,000;

(b) Whether defendant is estopped from denying its obligation to pay plaintiff the sum of US$750,000;

(c) Whether defendant's tender to repay the sums of Zimbabwean currency paid to it by plaintiff is a proper tender which plaintiff is obliged to accept.”

At the commencement of the trial, I indicated to both parties that, given the fact that both parties were generally agreed on what transpired, my view was that the matter could be determined through merely hearing arguments from both sides.

The plaintiff was, however, opposed to that approach and preferred to lead evidence. The defendant then also adopted the same stance.

I therefore had no option but to allow the parties to lead viva voce evidence.

HH228-10 : CAROLINE MABAIRE vs SHEPHERD JAILOSI and THE MINISTRY OF TRANSPORT AND COMMUNICATIONS
Ruled By: KUDYA J

Liability in this matter is admitted. The dispute concerns the measure of damages that is due to the plaintiff. On 1 June 2010, the parties filed a Stated Case which reads - 1. It is common cause between the parties that on 15 November 2006 at No.17 418 Flanagan Road Hillside Harare, the first defendant, ...

Liability in this matter is admitted. The dispute concerns the measure of damages that is due to the plaintiff. On 1 June 2010, the parties filed a Stated Case which reads -

1. It is common cause between the parties that on 15 November 2006 at No.17 418 Flanagan Road Hillside Harare, the first defendant, who was driving in the course and scope of his employment, drove a Mazda B2500 registration number R58PY onto the plaintiff's property.

2. It is common cause that the plaintiff's husband was standing just outside the gate of his property when the first defendant veered off the road and rammed into him causing his death instantaneously.

3. It is common cause that as a result of the accident the electric gate, the intercom device and the adjacent wall was extensively damaged.

4. It is common cause that the first and second defendants are admitting liability with regards to negligently causing the death of the plaintiff's husband who was the breadwinner for his family.

7. The issue which the parties have failed to agree on is with regards to the computation of damages due to the plaintiff.

8. In the premises, the Honourable Court is requested to adjudicate on the question of the amount of damages due and payable to the plaintiff as against the defendants and to make such order as to costs as seems just under the circumstances.

The evidence

The plaintiff gave evidence. She was the sole witness in her case. She produced eight documentary exhibits. The defendants opened and closed their case without calling any evidence. The measure of damages will thus be determined on the basis of the testimony of the plaintiff that survived cross examination.

The plaintiff was married to the deceased by civil rites. The marriage was blessed with four children that is, Tsitsi, who at the time that she testified, was in her final year at the Midlands State University, Rumbidzai, born 29 August 1991, who was in Form IV at a boarding school in Harare, and the twins, Faith and Anesu, born 7 April 1995, who were in Form III at a boarding school in Chiweshe. The deceased was born on 6 September 1956 and was 50 years old when he met his death. He was a businessman who ran his own construction company and was a farmer growing tobacco and paprika and rearing poultry and cattle.

HB61-10 : LUXION TACHIONA and NONTOKOZO DUBE vs NATIONAL RAILWAYS OF ZIMBABWE
Ruled By: NDOU J

The parties have agreed that their dispute be resolved in terms of a stated special case pursuant to the provisions of Order 29 Rule 199. The parties concurred in a special case for the opinion of this court.

HB63-10 : SALLY MAPLANKA vs B. A. NCUBE HOLDINGS
Ruled By: NDOU J

This matter was commenced by way of summons. At the pre-trial conference the parties agreed to proceed by way of a Stated Case in terms of Order 29 Rule 199 of the High Court Rules, 1971. The Stated Case agreed upon is the following: “1. Outline of agreed facts 1.1 Plaintiff is Sally Maplanka, a private ...

“1. Outline of agreed facts

1.1 Plaintiff is Sally Maplanka, a private individual who resides and does business in Bulawayo.

1.2 Defendant is B A Ncube Holdings (Private) Limited a company which is duly registered in accordance with the laws of Zimbabwe (“the defendant”) entered into a lease agreement in terms of which the plaintiff agreed to let the defendant the filling station.

1.3 Plaintiff is the registered owner of a piece of land known as Lot A Old Breweries, Bulawayo Township, corner Robert Mugabe Way and Escort Avenue, Northend, Bulawayo, also known as Airport Road Service Station on which there is constructed, inter alia, a filling station commonly known as Airport Road Service Station (“the filling station”).

1.4 Sometime in or about October 2001 the plaintiff and defendant entered into a lease agreement in terms of which the plaintiff agreed to let to the defendant the filling station.

1.5 On or about 1 October 2001, the defendant took occupation of the filling station. Occupation was taken on the strength of an oral agreement between the parties.

1.6 Sometime in or about March 2002, the parties reduced the terms of their agreement to writing. The written agreement was drawn by Messrs John Pocock and Company (Private) Limited. Before signing the agreement, the defendant deleted clause 20 of the draft written agreement (hereinafter referred to as “written agreement”) and inscribed on the margin “Needs verification”. The agreement is attached hereto and marked “A”.

1.7 The deleted clause 20 was an option clause in terms of which the lease could be renewed for a further period of 3 years at the instance of the defendant provided the defendant notified the plaintiff, in writing, of its desire to exercise such an option by no later than 30 June 2004 otherwise option would lapse.

1.8 When presented with the written lease agreement the plaintiff refused to sign it because of the deletion of clause 20 by the defendant.

1.9 Notwithstanding her non-signing of the agreement plaintiff allowed defendant to continue in occupation of the leased premises and continued to receive rentals for the property.

1.10 In terms of the written lease agreement the lease was for a period of 36 months “commencing on 10 October, 2001 and expiring on the 30th of September 2004.”

1.11 The parties are agreed that the written lease agreement, even though not signed by the plaintiff, reflects the terms of their agreement serve [sic] for clause 20 which was deleted by defendant.

1.12 In terms of clause 3.2 of the lease agreement defendant is bound to pay rentals for the premises monthly in advance on the first day of each month. More specifically clause 3.2(a) and (b) provide as follows:

(a) The rent shall be payable monthly in advance, without deduction, free of exchange and bank or other charges on or before the first day of each month, at the offices of the agent.

(b) Should the tenant fail to pay the rent in full by the 7th day of the month for which it is due he [it] agrees that he [it] will be liable to pay on demand “a late payer's administration charge” levied by the agent.”

1.13 Clause 17.1 of the lease agreement states that:

“In the event of the rent of the premises being unpaid within 7 days of due date or in the event of the tenant committing a breach or disregarding any of the other terms…, then the owner shall be entitled at his [her] option to cancel this lease agreement…,.”

1.14 By letter dated 2nd December 2005, plaintiff's legal practitioners advised the defendant that the rental for the month of October 2005 had not been paid and that, as a result, they had been instructed by the plaintiff “to issue summons cancelling…, [the lease agreement”]. This was followed up by a letter dated 6th December 2005 in which plaintiff's legal practitioners advised that “the lease agreement between…., [the defendant and plaintiff] is hereby cancelled.”

The letter further demanded that defendant vacate the premises forthwith and also threatened that if defendant did not vacate the premises within 48 hours summons for eviction would be issued. The letters are attached hereto and marked “B” and “C” respectively.

1.15 On 21st December 2005, plaintiff caused to be issued out of this honourable court summons for the eviction of the defendant from the filling station.

1.16 The summons set out the cause of action in paragraph 7 as being the failure of the defendant to pay the rentals for the month of October 2005 and to pay timeously the rental for the month of November 2005.

1.17 In paragraph 8 of the declaration the plaintiff pleaded that the lease agreement had been cancelled by the letters of 2nd and 6th December 2005.

1.18 Contrary to the letter of 2 December 2005 and paragraph 7 of the declaration, rental for the month of October was paid timeously. Consequently, it is conceded by plaintiff that the alleged non-payment of the October rental is not correct and hence the same cannot found a cause of action.

1.19 The rental for the month of November 2005 was paid on the 8^th November 2005.

2. Issues for determination

2.1 Whether the payment of the rental for the month of November 2005, on the 8th of November 2005, entitled the plaintiff to cancel the agreement of lease, and, if so, whether on the facts and the applicable law the plaintiff validly and effectively cancelled the lease agreement.

2.2 More specifically, defendant will contend that this honourable court has no jurisdiction to determine this matter in the light of the provisions of Statutory Instrument 678/83.

2.3 Who would pay the costs of this action and if it is the defendant whether such costs should be on an attorney-client scale.”

SC47-16 : PROFESSOR CHETSANGA and COLLIN KUHUNI and MONICA MUKONOWESHURO vs PATTERSON TIMBA and RENAISSANCE FINANCIAL HOLDINGS (PRIVATE) LIMITED
Ruled By: GWAUNZA JA, PATEL JA and MAVANGIRA JA

The relevant background to the appeals herein may be summarised as follows. The dispute between the parties, in both appeals, commenced in the High Court by way of civil action. After all the parties had filed their pleadings, it was agreed, at the pre-trial conference stage, that a specific point of law be determined by ...

The relevant background to the appeals herein may be summarised as follows.

The dispute between the parties, in both appeals, commenced in the High Court by way of civil action. After all the parties had filed their pleadings, it was agreed, at the pre-trial conference stage, that a specific point of law be determined by the High Court by way of Special Case procedure. The point of law to be determined was the legal effect of section 54 of the Banking Act [Chapter 24:20] on any shareholder of a banking institution placed under curatorship.

According to the judgment of the court a quo, it purported to proceed in terms of a joint pre-trial conference minute dated 11 March 2015. More importantly, the learned judge stated that he was dealing with the Special Case agreed by the parties in a document that was signed by all the parties. The document was dated 11 March 2015 but date-stamped 19 October 2015. The learned judge then set out the specific point of law to be determined and proceeded to expound his interpretation of the import of sections 53, 54 and 55 of the Banking Act [Chapter 24:20]. However, it is apparent from the judgment of the court a quo that it failed to determine the question stated by the parties in the following respects;

(i) Firstly, it did not articulate the answer to the question in the operative part of its judgment.

(ii) Secondly, it delved into questions that were not properly before it and determined them in its operative order without indicating the procedural or jurisdictional basis upon which it was empowered to do so.

In our view, the court a quo did not confine itself to the specific issue before it and thereby misdirected itself.

We note, in passing, that the joint pre-trial conference minute referred to in the judgment of the court a quo does not form part of the record before us. None of the counsel who appeared in this matter was able to shed any light on the existence or otherwise of this supposed minute.

In our view, the absence of the minute is a fundamental irregularity that should be rectified in due course so as to ensure substantial compliance with the procedure prescribed in civil trials.

In the result, the appeals are partially allowed on the basis that:

(i) The court a quo did not clearly and definitively determine the specific legal issue that was referred to it for determination; and

(ii) It proceeded to grant relief that was not specifically sought in the Special Case referred to it.

Accordingly, it is ordered that:

1. The appeals herein be and are hereby partially allowed.

2. The judgment of the court a quo be and is hereby set aside.

3. The matter be and is hereby remitted to the court a quo for a proper determination of the Special Case before it.

4. Each party shall bear its own costs.

SC25-17 : DR NOBERT KUNONGA vs THE CHURCH OF THE PROVINCE OF CENTRAL AFRICA
Ruled By: ZIYAMBI JA, GARWE JA and BHUNU JA

WHAT IS A STATED CASE? The Rules of Court of most countries make provision for the reference of a matter as a Stated Case. But what is a Stated Case? It is a case that is brought upon the agreement of the parties who submit a statement of undisputed facts to the court ...

WHAT IS A STATED CASE?

The Rules of Court of most countries make provision for the reference of a matter as a Stated Case.

But what is a Stated Case?

It is a case that is brought upon the agreement of the parties who submit a statement of undisputed facts to the court but who take adversarial positions as to the legal ramifications of the facts, thereby requiring a judge to decide the question of law presented (Legal dictionary. The free dictionary.com). Put another way, it is a formal written statement of the facts in a case, which is submitted to the court by the parties, jointly, so that a decision may be rendered without trial. The facts being thus ascertained, it is left for the court to decide the question of law presented.

A Stated Case is also called a Special Case, an Amicable Action, a Case Agreed or a Friendly Suit (US Legal, Inc.).

In the case of Elizabeth Mambus v Motor Vehicle Accident Fund Case No. SA 4/2013, a majority decision of the Supreme Court of Namibia, handed down on 11 February 2015, the court noted:

“…, the intention is that the Stated Case will adjudicate the whole of the dispute as stated in the case that exists between the parties and that this is ideally done by setting out the facts agreed to, the questions of law in dispute, and the contentions of the parties. The parties may also require a court to decide an issue of law on the basis of alleged facts, as if agreed.”

The court further cited with approval remarks made by the Irish Supreme Court in Simon McGinley v The Deciding Officer - Criminal Assets Bureau [2001] IESC 49 that:

“The case should set out clearly the judge's findings of fact, and should also set out any inferences or conclusions of fact which he drew from those findings.

What is required in the Case Stated is a finding by the Judge of the facts, and not a recital of the evidence. Except for the purpose of elucidating the findings of fact, it will rarely be necessary to set out any evidence in the case stated save in the one type of case where the question of law intended to be submitted is whether there was evidence before the Judge which would justify him deciding as he did…,. This court should not be required to go outside the case to some other document in order to discover them.

The same principle applies to the contention of the parties, the inferences to be drawn from the primary facts, and the Tribunal's determination. All these must be found within the case, not in documents annexed…,.”

Once the facts are agreed, the court should proceed to determine the particular question of law that arises and not delve into the correctness or otherwise of the facts. It is bound to take those facts as correctly representing the agreed position and to thereafter determine any issues of law that may arise therefrom. It is not open to the parties to the Stated Case to seek to re-open the agreed factual position or to contradict such position. Nor can either party seek to ignore existing legal principle or findings of fact made in connection with the same matter by another court. Of course, either party has a remedy at common law to withdraw any concession made in a Sstated Case owing to justus error, fraud, mistake, or any other valid ground.

It has become necessary to restate what a Stated Case is owing to the fact that, in some instances, the appellant in this case has made submissions contrary to the Stated Case brought before the court. The appellant has also ignored, in part, the decision of this court on which the Stated Case is predicated. It bears stating that if this happens, a party will be kept strictly to the terms of the agreed facts, as it is on the basis of those facts that the court would have been invited to make a determination on some specific question of law.

SC48-17 : FREDERICK WILHEM AUGUST LUTZKIE vs CHIEF IMMIGRATION OFFICER
Ruled By: GARWE JA, GOWORA JA and BERE AJA

In my view, in a Stated Case, such as the present, a party cannot be allowed to raise, in supplementary heads of argument, new issues of law not hitherto canvassed before the court a quo, unless both parties have had the opportunity to deal adequately with the issues so raised. Moreover, the essence of ...

HH08-15 : JOHN MAKARUDZE and MAXWELL MUNONDO vs COSMOS BUNGU and THE EXECUTIVE COMMITTEE, HARARE MUNICIPAL WORKERS' UNION and THE HARARE MUNICIPAL WORKERS' UNION
Ruled By: MAFUSIRE J

The action had been referred to court as a Special Case in terms of Order 29 of the Rules of this Court.

HH66-15 : ROLLEX (PVT) LTD vs DELTA BEVERAGES (PVT) LTD
Ruled By: DUBE J

This matter was brought in terms of Rule 185 of the High Court Rules, 1979. At the hearing of this matter, the parties filed a Statement of Agreed Facts. The court was asked to determine issues identified, dispensing with the need for a full trial.

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CC22-17 : MOVEN KUFA and VOICE FOR DEMOCRACY TRUST vs THE PRESIDENT OF THE REPUBLIC OF ZIMBABWE and THE PRIME MINISTER OF THE REPUBLIC OF ZIMBABWE and OTHERS
Ruled By: CHIDYAUSIKU CJ, ZIYAMBI JA, GARWE JA, GOWORA JA and OMERJEE AJA

The law is clear that once a fact is conceded, no evidence needs to be called to prove such fact. The law is also settled that once a concession on an issue of fact is made, such concession cannot be withdrawn, except on application and good cause shown. This position is so well established in ...

A concession on an issue of law is however different. It is not binding if it is not properly or correctly made.

The rationale for this position is obvious. A court cannot be bound by a concession on the law if such concession is not correct in terms of the law. This principle is based on public policy. Public policy demands that a court must be enabled to make a correct determination of the issues before it based on the correct law applicable and not on some incorrect concession made by one of the parties. It is for this reason that a question of law may be advanced, even for the first time on appeal, if its consideration involves no unfairness to the party against whom it is raised. Where it is not clear that the point has been fully investigated, the court will not, as a general rule, allow a new point of law to be taken for the first time on appeal. The court will however allow such a point where the point is canvassed in the pleadings, there is no unfairness to the other party, the facts are common cause, and there is no basis for considering that other or further evidence would have been produced that could have had an effect on the point in question.

In De Beers Holding v Commissioner for Inland Revenue 1986 (1) S.A. 8.33 CORBETT JA considered the effect of a concession on a question of law not supported by the undisputed facts and which was wrongly made. The learned judge concluded…,:

“Mr. Welsh, although contending that the concession was rightly made, did not suggest that it stemmed from anything other than an erroneous appreciation of the legal position. He therefore could not suggest that this court was precluded from dealing with the matter on the basis of the undisputed facts. Accordingly, there is no reason why this court should not give what it considers to be the right decision on the facts….,.”

In Paddock Motors (Pty) Ltd v Igesund 1976 (3) SA 16 (AD)…, JANSEN JA remarked:

“Were the raising now of the contention that the 'condition precedent' had been fulfilled, on the facts set out in the Special Case, to be treated merely as the raising of a new point on appeal, there can be little doubt that this court would have been bound to consider it and adjudicate accordingly. However, the appellant, through its counsel, expressly abandoned the contention in the court a quo and the question arises whether this alters the situation. It is difficult to see how it can. The facts are agreed and beyond dispute. Is this Court then to be bound by an order given by the court a quo, even if wrong on those facts, as a result of an abandonment of a legal contention flowing from a mistaken view of the law? I think not. If it were so, the intolerable situation envisaged in Van Rensburg v Van Rensburg, supra, would be created and this Court prevented from performing its 'duty to ascertain whether the court below came to a correct conclusion on the case submitted to it.'”

At page 24 B-G, the learned judge continued:-

“If e.g. the parties were to overlook a question of law arising from the facts agreed upon, a question fundamental to the issues they have discerned and stated, the court could hardly be bound to ignore the fundamental problem and only decide the secondary and dependent issues actually mentioned in the special case. This would be a fruitless exercise, divorced from reality, and may lead to a wrong decision. It follows that the court cannot be confined, in all circumstances, to the issues of law explicitly raised in the special case. This does not mean that the court will always be free to enlarge the issues, whether mero motu or at the request of a party. The question of prejudice may arise, e.g., where a party would not have agreed on material facts, or on only those stated in the special case, had he realized that other legal issues, not stated in the special case, were involved.

In the present instance, such considerations do not arise as the question the appellant now seeks to raise was actually part of the special case when the facts were agreed upon…,. Moreover, the contention as to the fulfilment of the 'condition precedent' turns on the proper construction of the contract, which is also basic to the adjudication upon the other two points of law.

It may again be mentioned that the Court a quo did not merely decide the question of the exceptio doli, but proceeded to give judgment against the appellant on the claim (judgment a quo at p. 299H). If the contention the appellant now seeks to revive is good, and the other two bad, it means that this court, by refusing to investigate it, would be upholding a wrong order. In all circumstances, it seems necessary for a proper adjudication to allow the appellant to revive its contention as based on the first question of law stated in the special case. The effect on costs if the appellant were now to succeed, by virtue of this contention, need not be considered at this stage.”

In B.S.N.L. and Others v M/S Subash Chandra Karchan and Another 2006 (8) SCC 279, a decision of the Supreme Court of India, dated 13 September 2006, the Court remarked:

“A concession made by such an advocate is binding on the party whom he represents. If it is binding on the parties, again, subject to just exceptions, they cannot, at a later stage, resile therefrom. The matter may, however, be different if a concession is made on a question of law. A wrong concession on legal question may not be binding upon his client.” (sic)

In (1) Minister of Local Government, Rural and Urban Development N.O. (2) Chairperson of the Disciplinary Committee, City of Harare, Munamato Mutevedzi N.O. v Silas Machetu (2) Maxwell Katsande (3) Paul Gorekore (4) Johnson Zaranyika SC34-12, this Court made much the same remark. It stated…,.:

“…,. The court erred in interpreting the evidence before the second appellant…,. It also erred in relying on a concession which was improperly made by counsel for the appellants…,.”

The position must therefore be accepted as settled, in this jurisdiction, that a wrong concession on a point of law is neither binding on the party that made it nor on the court hearing the matter.

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HH314-16 : AS SCHOOL and CSS SCHOOL and SET COLLEGE and GST SCHOOL and SC COLLEGE and CB SCHOOL vs ZIMBABWE REVENUE AUTHORITY
Ruled By: KUDYA J

In the absence of factual disputes, the parties argued the legal issues on the basis of the Statement of Agreed Facts furnished at the pre-trial hearing….,. The determination of the issues referred on appeal will of necessity be decided on the basis of the Statement of Agreed Facts and the information placed before me in the Rule ...

HH183-15 : ZB BANK LIMITED vs ERIC ROSEN (PVT) LTD and ERIC ANTHONY ROSEN and ELIZABETH ROSEN
Ruled By: MAFUSIRE J

By agreement, the parties referred this matter to court as a Special Case in terms of Order 29 of the Rules of this Court. In my view, this was a mistake. My reasons for saying this are towards the end of this judgment.

HH28-03 : CHRIS ROBERTS vs AIR ZIMBABWE CORPORATION
Ruled By: HUNGWE J

The plaintiff was a passenger aboard Flight UM14176 from Harare to London on 9 September 1997. He had luggage. The defendant airline was to convey the luggage together with the plaintiff to London. When the plaintiff got to London he failed to get his luggage. It was lost. The plaintiff accepted payment of $4,694=28 from the ...

Appealed
SC66-20 : BREASTPLATE SERVICE (PRIVATE) LIMITED vs CAMBRIA AFRICA PLC
Ruled By: GWAUNZA DCJ, PATEL JA and MAKONI JA

This is an appeal against the judgment of the High Court ordering the appellant to pay the outstanding amount due to the respondent in United States dollars (USD) as opposed to its Real Time Gross Settlement (RTGS) equivalent.The relevant background to this matter is as follows;On 25 February 2016, the ...

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HMT55-19 : CAMBRIA AFRICA PLC vs BREASTPLATE SERVICES (PRIVATE) LIMITED T/A NEMCHEM INTERNATIONAL
Ruled By: MUZENDA J

On 24 December 2018 the plaintiff issued summons against the defendant claiming the following:

1. Payment of US$31,400.

2. Interest thereon at the prescribed rate of interest per annum from 19 January 2018 to the date of payment in full and final settlement.

3. Interest at the prescribed rate from 1 March 2016 to 18 January 2018 on the sum of US$40,000.

4. Costs of suit on attorney-client scale.

From the plaintiff's declaration, on or about 25 February 2016, at Harare, the parties entered into an agreement in terms of which the plaintiff sold to the defendant its entire issued share capital of an entity known as Milchem Zambia Limited for US$46,347 which amount was payable to the plaintiff on or before 31 March 2016. The defendant paid US$6,347 on an unspecified date and a further US$8,600 on 19 January 2018 leaving a balance of US$31,400 which amount the defendant rejects or refuses to pay.

The defendant, on the other hand, admits the contents of the 2016 sale agreement but goes on to add that a new agreement was later concluded, more particularly, in that it paid both amounts of $6,347 and $8,600, but, on 2 September 2017, the defendant was using Leopard Rock Hotel for an amount of $23,285=48 being claimed under Case No. HC5580/17. Incidentally, the plaintiff owners or directors or shareholders had interests in Leopard Rock Hotel, the $23,285=48 that was owed to the defendant by Leopard Rock Hotel as US$16,000 for the purpose of off-setting and settling. Hence, the balance outstanding would be US$24,000. After the payment of $8,600, the defendant contends that the balance outstanding, as at 19 January 2018, was $15,400 not $31,400 as pleaded by the plaintiff.

After payment of the $8 600, a misunderstanding pertaining to interest arose as well as the 10% discount which the defendant thought applied to the $40,000 agreed as owing on 2 September 2017. The plaintiff argued that the discount applied to the time prior to 2 September 2017 when the debt was about $45,000 that was owed originally and was dependent on immediate payment which was not affected. The defendant tendered to refund the amount paid to it by Leopard Rock Hotel so as to revert to the 2 September 2017 agreement.

The defendant refutes being in breach of the 2016 sale agreement.

On 22 March 2019, the plaintiff filed its replication where it disputed any novation to the original sale agreement. It insisted that the balance, being the capital on the summons denominated in US dollars, should be paid by the defendant. There was never a set-off agreed by the parties relating to the Leopard Rock Hotel debt. In fact, the defendant was fully paid by Leopard Rock Hotel and accepted payment, and, lastly, it rejects the tendered amount for not being made in accordance with any agreement.

At the joint pre-trial conference held on 13 and 29 May 2019 the following issues were spelt out for trial:

(a) Whether or not the defendant is liable to pay to the plaintiff the sum of $31,400 and interest?

(b) Whether or not the defendant is liable to pay interest on the sum of $40,000 from 1 March 2016 to 18 January 2019?

(c) Whether or not the defendant is liable for the payment of costs at attorney-client scale?

(d) Whether or not there is a new contract between the parties supplanting the terms and conditions of the contract signed on 25 February 2016?

On 15 July 2019, the date of trial, the parties filed a Statement of Agreed Facts to the following effect:

1. The plaintiff is a foreign company registered in terms of the British Laws with a registered office in Zimbabwe and the defendant is a company registered in Zimbabwe.

2. On 25 February 2016, the plaintiff sold to the defendant the entire of its issued shares in Milchem Zambia with effective date of sale being 1 September 2015.

3. The purchase price was US$46,347 (forty six thousand three hundred and forty seven United States dollars); the term sheet agreement is already filed of record as part of the plaintiff's bundle of documents.

4. The defendant initially paid an amount of US$6,347 leaving a balance of US$40,000 of which US$8,600 was paid in cash to the plaintiff at Harare on 19 January 2018 leaving the balance of US$31,400 which is the subject of this claim.

5. The defendant admits the amount of US$31,400 has not been paid to the plaintiff but argues that the amount is now payable in RTGS dollars and not in US dollars as denominated in the term sheet agreement.

6. The issues the court is being called upon to determine are:

6.1. Whether or not the outstanding balance owing to the plaintiff, in terms of the term sheet agreement, is payable in United States dollars or not?

6.2. Whether or not the plaintiff is entitled to interest as acclaimed in the summons?

6.3. Whether or not the plaintiff is entitled to costs of suit on attorney-client basis?

Before the parties addressed the court it was further agreed that issues 6(2) and 6(3) on the Statement of Agreed Facts were no longer meant for determination by the court.

If the plaintiff succeeds, the issue of interest was going to follow the order and would be as acclaimed in the plaintiff's summons. Given the fact that the defendant had admitted owing the plaintiff the amount of US$31,400 and dispensed with the trial proceedings, counsel for the plaintiff, properly in the court's view, abandoned his insistence on claiming costs on attorney-client scale.

It was agreed that if the plaintiff succeeds, the defendant will pay wasted costs at an ordinary scale.

The remaining outstanding issue for determination is whether or not the outstanding balance owing to the plaintiff, in terms of the term sheet agreement, is payable in United States dollars or not?

SC52-18 : INNSCOR AFRICA LIMITED and GERIBRAN SERVICES (PRIVATE) LIMITED vs COMPETITION AND TARIFF COMMISSION
Ruled By: MALABA CJ, HLATSHWAYO JA and PATEL JA

This is an appeal against the judgment of the High Court holding that a conglomerate is a “merger” as defined in terms of section 2 of the Competition Act [Chapter 14:28] (“the Act”), and, therefore, notifiable to the respondent in terms of section 3A of the Competition Act if its value exceeded the statutory threshold.

On the date of hearing, a concession was made to the effect that the appeal lacked merit. The parties advanced argument on costs. The Court made the order that the appeal be dismissed with costs.

It became necessary for the Court to give a full judgment on the meaning of section 2 of the Competition Act [Chapter 14:28].

Factual Background

The first appellant is a limited liability company incorporated in terms of law, trading in the food industry. The second appellant is also a limited liability company incorporated in terms of law, trading in motor spares and accessories. The respondent is a body corporate established in terms of section 4 of the Competition Act.

Sometime in 2015, the first appellant acquired a controlling interest in the second appellant. In terms of section 34 of the Competition Act, as read with the Competition (Notifiable Merger Thresholds) Regulations 2002 (S.I.195 of 2002) (“the Regulations”), all mergers in terms of the Competition Act with a value above the threshold value of US$1.2 million had to be notified to the respondent.

The appellants' conglomerate had a value above the prescribed threshold.

The appellants took the view that their union was not notifiable in terms of the Competition Act as read with the Competition (Notifiable Merger Thresholds) Regulations 2002 (S.I. 195/2002) because it was a conglomerate. A conglomerate is a corporation formed by merging unrelated firms. They alleged that a conglomerate was not a merger in terms of the Competition Act. The appellants based their view on an opinion given by an advocate.

The respondent had initially agreed to the position that the appellants' union, being a conglomerate, did not fall within the statutory definition of “merger” and was thus not notifiable. It later took the view that conglomerates were covered by the definition of “merger” in the Competition Act and were required to be notified if their value exceeded the statutory threshold.

The respondent instituted proceedings in the court a quo, seeking an order declaring the conglomerate formed by the appellants notifiable and compelling them to pay fees in terms of section 34A of the Competition Act as read with the Competition (Notifiable Merger Thresholds) Regulations 2002 (S.I.195/2002).

The parties proceeded by way of a case stated in terms of Rule 199 of the High Court Rules, 1971.

The Statement of Agreed Facts presented by the parties was as follows:

“1. The first defendant and the second defendant entered into a conglomerate merger in 2015 through the acquisition by the first defendant of a controlling interest in the second defendant.

2. The first and second defendants are not competitors nor are they customer and supplier.

3. The plaintiff has insisted on notification of the merger between the defendants on the basis that it is covered by the definition of a merger in section 2 of the Competition Act [Chapter 14:28].

4. The defendants insist that a conglomerate merger is not a notifiable merger in terms of section 2 of the Competition Act [Chapter 14:28].”

The legal issue which the parties placed before the court a quo for determination was whether or not the conglomerate formed by the appellants was a merger in terms of the Competition Act.

The determination of the issue depended on the interpretation of the words “or other person” in the definition of “merger” by section 2 of the Competition Act.

The respondent urged the court a quo to apply the literal rule of interpretation in ascertaining the meaning of “merger”, as used in the Competition Act. It contended that the words “or other person” referred to a person falling outside the categories of persons specifically mentioned in the definition.

The appellants urged the court a quo to apply the eiusdem generis or noscitur a sociis rule to ascertain the meaning of the words “or other person”. According to this interpretation, the words “or other person” would refer to a person who shared qualities similar to those falling within the classes of the persons referred to in the definition of “merger”.

The court a quo held that the conglomerate formed by the appellants was a merger in terms of section 2 of the Competition Act. That meant that it was notifiable to the respondent.

The appellants appealed against the decision of the court a quo on the following grounds:

"1. The court a quo erred in law and misdirected itself by holding that the term 'or other person' in the definition of a 'merger', when used in its ordinary grammatical meaning, includes any other person not specified in that definition who acquires a controlling interest in the business of another.

2. The court a quo erred in law and misdirected itself in holding that the effect of the use of the term 'or other person' in the definition of a merger is to extend the definition of a merger to other classes of persons not previously specifically mentioned.

3. The court a quo erred in law and misdirected itself by holding that the term 'or other person' in the definition of merger ought to be interpreted broadly.

4. The court a quo erred in law and misdirected itself in holding that the term 'or other person' in the definition of 'merger' ought not to be interpreted eiusdem generis and noscitur a sociis.

5. The court a quo erred in law and misdirected itself in holding that the application of the eiusdem generis rule would render the term 'or other person' meaningless or result in an absurdity.

6. The court a quo erred in law and misdirected itself in holding that the transaction between the appellants, commonly known as conglomerate merger, was a merger as envisaged by section 2 of the Competition Act.”

The issue for determination was whether or not the court a quo was correct in its interpretation of the definition of “merger” in section 2 of the Competition Act to include a conglomerate.

The Court held that the court a quo adopted the correct interpretation of section 2 of the Competition Act [Chapter 14:28]. The following are the reasons for the decision;

The Appellants' argument

Counsel for the appellants had submitted that a conglomerate did not fall within the definition of a merger in section 2 of the Competition Act. He had argued that in interpreting the words “or other person”, the eiusdem generis rule ought to have been applied by the court a quo.

His argument was basically that the words “or other person” could not be interpreted widely to mean persons outside the class of those mentioned specifically in the definition. He contended that the words “or other person” were intended to extend the definition to cover “persons” in business relationships at the time they merged.

Counsel for the appellants further submitted that the Legislature's insertion of the words “or other person” in the definition of merger in section 2 of the Competition Act was not intended to include a conglomerate or any mergers other than those formed between persons who were in some form of a business relationship. The basis of his argument was that had it been the Legislature's intention to include conglomerates and other unforeseen mergers in the definition, it would have simply defined a merger as the “acquiring of a controlling interest” without specifically mentioning the categories of customer, competitor, and supplier.

Whether or not a conglomerate is included in the definition of merger in terms of section 2 of the Competition Act

Competition in any marketplace, for the production or supply of goods or services, is necessary for achieving economic growth and development. Competition policy is formulated to encourage, improve, and protect the competition process for the benefit of consumers through monitoring and regulating business conduct that is actually or potentially anti-competitive and capable of depriving consumers of the benefits associated with a competitive market.

One of the forms of business conduct which competition policy seeks to monitor and regulate is corporate merger. Corporate mergers are an important tool for effecting corporate restructuring transactions that are necessary for enhancing general efficiency in the market and ensuring business survival especially in harsh economic environments.

However, corporate mergers can sometimes be harmful or potentially harmful to the competitive structure of the market thereby negating the gains of competition.

An effective merger regulatory framework is necessary for the achievement and maintenance of the balance between the promotion of beneficial corporate restructuring transactions on one hand and protection of the competitive process on the other.

There are three types of mergers recognised under competition law - vertical, horizontal, and conglomerate.

Vertical mergers are those mergers that take place between two related companies as in the case of a customer merging with its supplier.

Horizontal mergers are those that take place between companies that are in direct competition with each other.

Conglomerate mergers are those between two or more firms that engage in unrelated business activities with different customer bases. Such entities are not competitors and do not have a customer and supplier relationship.

All the three types of mergers are potentially harmful to competition notwithstanding the fact that conglomerates are not entered into by competitors, suppliers, and customers. Mergers may cause the elimination of effective competition thereby creating dominant companies that have the capacity and potential of engaging in anti-competitive practices detrimental to consumer welfare, such as price increases and poor service delivery.

For the reason that all mergers recognised under competition law have the potential to negatively affect competition in the market, special laws have been designed to regulate mergers.

The Competition Act [Chapter 14:28], Act No.7 of 1996 came into force in 1998. Section 2 of the Act defined a merger as follows:

“'merger' means –

(a) The acquisition of a controlling interest in -

(i) An undertaking involved in the production or distribution of any commodity or service; or

(ii) An asset which is or may be utilised for or in connection with the production or distribution of any commodity;
where the person who acquires the controlling interest already has a controlling interest in any undertaking involved in the production or distribution of the same commodity or service; or

(b) The acquisition of a controlling interest in an undertaking whose business consists wholly or substantially in –

(i) Supplying a commodity or service to the person who acquires the controlling interest; or

(ii) Distributing a commodity or service produced by the person who acquires the controlling interest;”

This definition was clear as to the types of mergers it covered.

Part (a) covered situations where a person acquired a controlling interest in an undertaking producing the same commodity or service (competitors). That was a horizontal merger.

Part (b) covered situations where a person acquired a controlling interest in a supplier of commodities or distributor of services. That was a vertical merger.

The definition was amended in 2001 by Act 29 of 2001. Section 2 of the Competition Act, as amended, now defines a merger as follows:

“'merger' means the direct or indirect acquisition or establishment of a controlling interest by one or more persons in the whole or part of the business of a competitor, supplier, customer or other person whether that controlling interest is achieved as a result of —…,.”…,.

The Legislature's intention, in amending the definition of merger, could not have been to cover the vertical and horizontal mergers only, as originally provided for under the 1996 Act. The addition of the words “or other person” to the substance of the definition was intended to broaden the definition to include mergers between parties who did not fall within or were not sharing any characteristics with those in the categories of competitor, supplier, and customer. The meaning of “merger” was broadened to cover a situation where one or more persons acquired or established a controlling interest in an undertaking not falling within the categories of a competitor, supplier, or customer.

What determines the applicability of the definition of “merger”, for purposes of the Competition Act, is the existence of a controlling interest by one or more persons in the whole or part of the business of another person. The definition is inclusive. In other words, the definition was deliberately widened to include all types of mergers. Without the words “or other person”, the definition of 'merger' would have been exhaustive as it would apply only to businesses or undertakings falling within each of the categories specifically stated. The word “other” describes a person who would not belong to any of the categories of persons specifically mentioned.

The definition of a merger in section 2 of the Competition Act [Chapter 14:28] is similar to the definition of merger in the South African Competition Act 89 of 1998 which reads as follows:

“12.(1) For the purpose of this Chapter, 'merger' means the direct or indirect acquisition or direct or indirect establishment of control by one or more persons over all significant interests in the whole or part of the business of a competitor, supplier, customer or other person whether that control is achieved as a result of -…,.”

Commenting on the definition of merger in the South African Competition Act, David Lewis, the then Chairperson of the Competition Tribunal, in a speech titled The Competition Act 1998 – Merger Regulation, said:

“There are a number of key features of merger regulation under the Act that you should appreciate upfront -

(i) Firstly, it incorporates vertical, horizontal and conglomerate mergers;

(ii) Secondly, it is about acquisition of control and the mechanisms for acquiring control are broadly defined;

(iii) Thirdly, control itself is broadly construed.

In short, the merger definition is inclusive – there are few business combinations that would fall outside of the definition of merger. This contrasts markedly with the previous Act that dealt with horizontal mergers only; that is, mergers between competitors only.”…,.

In interpreting the same provision of the South African Competition Act of 1998, the South African Competition Tribunal, in the case of Bulmer SA (Pty) Ltd v Distillers Corporation (SA) Ltd (1) [2001-2002] CPLR 448 (CT) 464, said the following:

“Section 12 refers to a competitor, supplier, customer or 'other person'. The inclusion of the category of 'other person' considerably widens the ambit beyond the more obvious concerns about horizontal and vertical mergers to include all mergers.”

From the above, it is clear that the South African definition of a merger, similar to the definition of a merger in section 2 of the Competition Act [Chapter 14;28], was held to include other mergers outside the horizontal and vertical mergers mentioned. In the same vein, the respondent's argument that the definition of a merger in the Competition Act is inclusive of mergers other than horizontal and vertical mergers cannot be faulted.

For clarity, however, the South African Competition Act of 1998 has since been amended by Act No.39 of 2000 to specifically include all mergers, but, it is clear from the above authorities that even before that amendment the words “or other person” in the former definition of 'merger' were held to include conglomerate mergers.

Commenting on the interpretation of the words “or other person”, IGNATIOUS NZERO, in an article titled “Is there a gap in the definition of corporate mergers in Zimbabwe's Competition Act? Revisiting the Caledonia Holdings (Africa) Limited/Blanket Mine (1983) (Private) Limited Merger” 2015 78.4 THRHR 589…, stated that:

“The phrase 'or other person' can be construed as a catch all phrase that is meant to capture all other forms of mergers outside those specified as between competitors, suppliers, and customers. If the legislature really intended to maintain a same line of persons, it is submitted that it would have used the word 'and', not 'or'. 'And' means in addition to the list provided, suggesting in addition to competitor, supplier, and customer whereas 'or' suggests a diversion from the list. Thus, the use of 'or' entails that the legislature intended to expand the list to include even those persons outside the specified list. There is nothing in the statute or anywhere else to suggest that such a construction is wrong…,.”

The words “or other person” in this context cannot be interpreted eiusdem generis as advocated by the appellants. The eiusdem generis rule was defined, by the learned author GAIL-MARYSE COCKRAM, The Interpretation of Statutes, 3ed…, as follows:

“Where a list of items which form a genus or class is followed by a general expression, the general expression is, in the absence of a contrary intention in the statute, construed eiusdem generis to include only other things of the same class as the particular words.”

The eiusdem generis rule is not a rule of general application to be applied every time general words follow particular words. The rule would be applicable where a general expression follows a list of items that form a genus. The categories of “customer, supplier, and competitor” do not constitute a list of items that form a genus.

In S v Makandigona 1981 (4) SA 439 (ZAD)…, the court reiterated that:

“It must be remembered that the eiusdem generis rule is only one of many rules of construction; it is not to be invoked automatically whenever general words follow particular words. Thus, Craies on Statute Law 7ed says at 181:

'The eiusdem generis rule is one to be applied with caution and not pushed too far, as in the case of many decisions, which treat it as automatically applicable, and not as being what it is, a mere presumption, in the absence of other indications of the intention of the legislature.'”

At p601 of the article titled “Is there a gap in the definition of corporate mergers in Zimbabwe's Competition Act? Revisiting the Caledonia Holdings (Africa) Limited/Blanket Mine (1983) (Private) Limited Merger” 2015 78.4 THRHR 589, IGNATIOUS NZERO makes the observation that the application of the eiusdem generis rule to the words “or other person” would be a mis-interpretation of the provisions of section 2 of the Competition Act. He criticised the legal opinion that suggested that the application of the eiusdem generis rule in the interpretation of section 2 of the Competition Act was appropriate. He stated:

“It is submitted that the application of the rule (eiusdem generis) in determining the meaning of the phrase 'or other person', as used in the statutory definition of a merger, results in absurdity, as it would mean that only economic activities having an effect on the economy of Zimbabwe in the same class as competitor, supplier and customer would constitute a merger whereas other economic activities with similar effect on the economy of Zimbabwe, but which are not in the same genus or class as 'competitor, supplier, customer', would not constitute a merger.

It is submitted that there is enough ammunition provided in the statute to determine the extent to which the legislature intended the statute to apply in general and the types of mergers covered in particular. As such, the application of the eiusdem generis rule was not necessary as it had the effect of creating an artificial gap in the statutory merger definition. The rule should not be applied as a general rule of application, but, rather, cautiously to avoid misinterpretation of statutory provisions.

In particular, in constructing the meaning of 'or other person' used in section 2, it must be remembered that the eiusdem generis rule is only one of many rules of construction; it is not to be invoked automatically whenever general words follow particular words.”

Interpreting words in their context requires the courts to pay due regard not only to the meaning assigned to the grammatical use of language but also the context, which requires consideration of the rest of the statute as well as its subject matter and its content.

This position was affirmed in the case of Stellenbosch Farmers' Winery Ltd v Distillers Corp (SA) Ltd 1962 (1) SA 458 (AD) 476, as quoted by GM COCKRAM…, The Interpretation of Statutes 3rd ed, as follows:

“It is the duty of the court to read the section of the Act which requires interpretation sensibly, i.e. with due regard, on the one hand, to the meaning which permitted grammatical usage assigns to the words used in the section in question, and, on the other hand, to the contextual scene, which involves consideration of the language of the rest of the statute as well as the matter of the statute, its apparent scope and purpose, and, within limits, its background.”

To determine the context in which the words “or other person” have been used, the scope and purpose of the provision in question and the Competition Act at large must be determined first. The scope and purpose of the Competition Act [Chapter 14:28], as provided for in the Act's long title, reads as follows:

“AN ACT to promote and maintain competition in the economy of Zimbabwe; to establish an Industry and Trade Competition Commission and to provide for its functions; to provide for the prevention and control of restrictive practices, the regulation of mergers, the prevention and control of monopoly situations and the prohibition of unfair trade practices; and to provide for matters connected with or incidental to the foregoing.”

It is clear from this title that, among other things, the Competition Act aims to promote and maintain competition in the economy by regulating anti-competitive mergers.

Merger regulation is at the core of competition law, and, in the spirit of regulating anti-competitive mergers, the Legislature enacted the current wide definition which covers all mergers which must be notified to the respondent.

In terms of the Competition Act, when a merger is notified, the respondent decides if the merger undermines competition.

Conglomerate mergers, although not entered into with competitors, suppliers, or customers, just like horizontal and vertical mergers, affect competition. All mergers have the capacity to undermine competition.

The contention by the appellants was that if the Legislature had intended to cover all types of mergers because of their potential negative effects on competition it would have said so without specifying the categories of customer, supplier, and competitor.

The Legislature has a discretion on how it chooses to express its intention in the enactment of laws. The question of whether the intention behind a statutory provision is inelegantly expressed should not concern a court. The duty of a court is to ascertain the intention of the Legislature however it is expressed.

In Van Heerden v Queen's Hotel (Pty) Ltd 1973 (2) SA 14 (RAD) 21, the court explained that:

“In interpreting statutes, courts are not concerned with the elegance of the language used. Statutory instruments are not usually remarkable for the elegance of their language. The court must interpret the words in a statutory instrument so as to give effect to the true intention of the legislature, and once that intention is clear, the fact that the language used in expressing it may not be as elegant as some would like, is not a matter of consequence, especially if the language is grammatical and easily understood.”

Disposition

It was for these reasons that the Court was satisfied that the concession by counsel for the appellant that the appeal lacked merit was well-founded, and, accordingly, dismissed the appeal with costs.

HH551-15 : W AND D CONSULTANTS (PRIVATE) LIMITED vs SEAN THOMAS NIELSON DORAN
Ruled By: DUBE J

This dispute came before me as a trial matter. The parties agreed to dispense with the need to call oral evidence there being no disputes of fact arising from the facts. Thereafter, the parties filed heads of argument and a Statement of Agreed Facts. After argument, the court granted the ...

“IT IS ORDERED THAT:

1. The defendant shall give vacant possession of No.7 St. Michaels Lane, Borrowdale otherwise known as the remaining extent of Stand 10 Reitfontein Township of Lot 1AB Reitfontein measuring 4,714 square meters within (7) seven days from the date on which the order is served on the defendant.

2. If the respondent, or any person occupying the property through him, remains on the property after that date, the Sheriff is authorised to remove them and their possessions from the property.

3. Payment of holding over damages in the sum of US$2,000 dollars per month from the 7th of February 2013 to the date of ejectment.

4. Costs of suit.”

Brief reasons for the order were given. The court has now been requested for detailed reasons for its order.

The salient facts of this dispute are common cause.

On 12 July 2013, the plaintiff issued summons claiming the ejectment of the defendant and all persons claiming occupation through him from No.7 St Michael's Lane, Borrowdale, Harare and holding over damages at $3,000 per month from January 2013 to the date the defendant vacates the property.

The plaintiff is the registered owner of the property in dispute having bought it at a sale in execution and subsequently transferred it into its name. The defendant, who is in occupation of the property with his family, has refused to vacate the property.

The brief background of this case is aptly summarised in the Statement of Agreed Facts as follows;

“1. A judgment by default for the payment of an amount of US$415,951=91, under case number HC5917/10, was obtained by Kingdom Bank against the defendant, Dreibond Investments (Private) Limited (“Dreibond”) and 9 other defendants on the 14th of February 2011.

2. The judgment also provided that a certain piece of immovable property known as certain piece of land situate in the District of Salisbury called the Remaining Extent of Stand 10 Rietfontein Township of Lot 1AB Reitfontein measuring 4,714 square meters (“the Property”) be declared executable.

3. The Property was registered in the name of Dreibond. Dreibond is not a trading company.

4. The defendant holds all the issued shares in Dreibond.

5. The directors of Dreibond, as per the Company Office records, are Louise Nielson-Doran and the defendant.

6. A writ of execution against immovable property was issued in matter HC5917 on the 15th of April 2011.

7. The Property was attached into execution and duly advertised for sale by public auction on the 19th of October 2012.

8. The Plaintiff, represented by Tsitsi and Prince Zireva, bid for the Property, and the Sheriff for Zimbabwe, on the 7th of November 2012, duly declared the Plaintiff the highest bidder and purchaser of the Property at a purchase price of US$284,000.

9. The Property was transferred to and registered in the name of the Plaintiff on the 5th of February 2013.

10. On the 7th of February 2013, the Plaintiff demanded that the Defendant vacates the Property.

11. The Defendant has refused to vacate the Property and contends that he has the right to remain in occupation in terms of a lease agreement allegedly executed between Dreibond and his wife, Louise Nielsen Doran, on the 28th of September 2012. A copy of the alleged lease agreement is attached hereto marked Annexure “A”. The alleged lease agreement provides for the payment of rentals at the rate of US$1,500 per month.

12. The Defendant and/or his wife have not paid any rentals whatsoever to the Plaintiff. The Defendant tendered rent to the Plaintiff on the 24th of July 201.

13. The Defendant and the other 10 defendants applied for the rescission of the default judgment of the 14th of February 2011 under case number HC9634/11. The application was dismissed on the 17th of October 2013. Judgment HH363-13 refers.

14. On the 19th of March 2013, the Plaintiff obtained a report from Clipcrunt Real Estate which put market rentals for the property at US$3,000 per month. A copy of the report is attached hereto marked Annexure “B”.

15. Defendant obtained two (2) independent evaluation reports from Estate Agents which put the rentals for the Property at US$1,500. Copies are attached marked as Annexure “C” and “D”.

16. The Parties have agreed that a fair market rental for the Property is in the amount of $2,000 per month.”

At the hearing of this matter, the defendant raised preliminary points which I will deal with in seriatim.

The defendant submitted that the plaintiff was required to cite the Registrar of Deeds in compliance with Rule 250 of the High Court Rules. Further, that the Sherriff of the High Court should have been cited as the application makes reference to a sale in execution. That the failure to cite the two parties is fatal to the proceedings.

Order 32 Rule 250 reads as follows:-

“In any case of any application in connection with the performance of any act in the Deeds Registry, a copy of the application shall be served on the Registrar of Deeds concerned not less than ten days before the date of set down for his consideration, and for a report by him if he considers it necessary or the court requires such a report.”

The ownership of property in this dispute has already been transferred to the new owner.

In a related case of Jamila Omar v Shabir Omar HH344-13, the same preliminary points were raised. I had occasion to deal with these points and ruled as follows;

“The relief sought is for eviction and does not require that the Registrar of Deeds to perform any act in 'connection with the performance of any act in the Deeds Registry' as the property has already been transferred.

The applicant is not seeking registration or revocation of registration which would require the Registrar to perform any act in Deeds Registry.

There was no legal basis to cite the Registrar as an order for eviction does not affect the title of the property and does not concern the Registrar of Deeds. The Registrar will not be affected by the decision of the court nor is he required to do anything resulting from the outcome of this application.

There was no need to cite the Deputy Sherriff because the order sought does not require him to perform any act in relation to it. The sale the respondent challenges was not conducted by the Deputy Sheriff but the Sheriff. No basis has been shown for the citation of both the Registrar of Deeds and the Deputy Sheriff. The point in limine does not find favour with the court and must fail.”

I have not been swayed to shift my position with regards these points and my position remains the same.

The Sheriff of the High Court has no interest in this case. He has conducted the sale in execution and has no further interest in the property. The need to cite the Sheriff would only arise if this was an application to set aside the sale.

That point fails.

The defendant submitted that the plaintiff does not have the requisite locus standi to bring this application on the basis that it does not own the property which is subject of the dispute.

The parties agree, in their Statement of Agreed Facts, that the plaintiff bought the property and registered it in its name.

This point was not pursued.

The defendant further submitted that the defendant has the lawful right to remain in occupation of the premises through his wife, Louise Nielsen, who has a legal and binding lease with the former owners of the property thus, Dreibond Investment (Private) Limited.

The defendant submitted that the new owner, the plaintiff, is bound to observe and adhere to that lease agreement on the basis of the huur gaat voor koop concept.

Further, that the defendant's wife ought to have been joined to these proceedings on the basis that she is the holder of that lease.

I propose to deal with this point when I deal with the merits of this case as this point is intrinsically intertwined with the merits of this matter.

The defendant requested the court to stay these proceedings for the reason that the main matter is still pending under HC9634/11.

The proceedings under that file relate to an application for rescission of a default order granted at a Pre-trial Conference stage which led to the sale of the property which is subject of this trial.

The defendant submitted, further, that the defendant has objected to the sale of the property and applied to set aside the sale in terms of Rule 359 and that it is premature for the plaintiff to seek eviction at this stage.

The application for rescission of the default order, under HC9634/11, was subsequently dismissed. The defendant lost the application. The application to set aside the sale, if it has been filed, does not affect the plaintiff's rights over the property as the plaintiff has already transferred the property into his name. It has vested rights in the property and is entitled to vindicate its rights in the property.

In any case, where a party buys a property, and that includes property bought at a sale in execution, and later registers the property in his name, he acquires real rights over the property. His registration of the property in his name, in the Deeds Registries Office, is an announcement to the whole world that he is the owner of the property. Such owner has the right to vindicate his property from any unauthorised person who may be in occupation or possession of the property.

That point fails.

I now come to the merits of this matter.

I will deal, first, with issues related to the making of the lease agreement and the correctness of the parties before the court.

The ownership structure of the company reveals the following:

(i) The defendant is the sole shareholder of Dreibond Investments (Pvt) Ltd, the former owner of the property which is subject of this dispute.

(ii) The company is not a trading company.

(iii) The defendant and his wife are the only directors of that company.

(iv) The property was registered under the defendant's company and was sold in order to settle the defendant and his company's indebtedness to Zimbank Bank.

The cardinal principle is that a company is a separate entity which has a separate and distinct legal existence from that of its members: see Salomon v Salomon (1897) AC 22 (HL). There are exceptions to this rule and these are grounded on policy considerations.

In US v Milwaukee Refrigerator Transit Company (1905) 42 Fed 247…, the court said of exceptions to the rule;

“When the notion of a legal entity is used to defect public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association.”

In such cases, the courts will lift the corporate veil and investigate the activities of the company.

In Cape Pacific Ltd v Lubner Controlling Investment (Pty) Ltd and Others 1993 (2) SA 784 (C) the court held as follows;

“The general principle underlying this aspect of the law, of lifting the veil, is that, when the corporation is the mere ego or business conduit of a person, it may be disregarded. This rule has been adopted by the courts in those cases where the idea of the corporate entity has been used as a subterfuge and to observe it would work an injustice.”

In Waltersteiner v Moir; Moir v Waltersteiner and Others (1974) 3 ALL ER 217 (CA) DENNING MR was prepared to treat various companies through which the appellant, Dr Waltersteiner, had operated as if they were “just puppets of Dr Waltersteiner.” At 1013 of the judgment, LORD DENNING held as follows;

“He controlled their every movement. Each danced to his biding. He pelted the strings. No one else got within reach of them. Transformed into legal language, they were his agents to do as he commanded. He was the principal behind them. I am of the opinion that the court should pull aside the corporate veil and treat these concerns as being his creatures for whose doings he should be and is responsible.”

The evidence that emerged during the trial shows that the defendant and his wife have always been in occupation of the house. They then devised a scheme to save the property from the sale that was imminent. They entered into a lease agreement between themselves on the eve of a sale in execution of the house.

It is necessary to unwrap the lease agreement and reveal its true nature.

On 14 February 2011, Kingdom Bank obtained a default order against the defendant's company. A writ of execution against the property was issued on 15 April 2011 resulting in the property being attached. The property was advertised for sale by the Sheriff on 19 August 2011. The defendant tried to stop the sale by filing an urgent chamber application under HC12308. That application was not to yield any fruit.

The defendant's company states that he only got to know of the default judgment on 19 August 2011 when adverts appeared in the Herald Newspaper advertising the sale in execution. The property was going to be sold on 2 September 2011. The property was sold soon after the urgent chamber application on 7 November 2012.

On 28 September 2011, the defendant's company entered into an agreement of lease over the property. The defendant signed the agreement on behalf of his company. The defendant and his wife continued in occupation of the property.

The lease agreement was entered into after the Sheriff had indicated that the property was going to be sold.

The defendant and his wife were aware, from as far back as April 2011, when judgment was entered against them, that this property was going to be sold. The defendant's company and his wife entered into a lease agreement solely for purposes of defeating the sale in execution that was imminent and so that they could remain in occupation of the property after the sale.

The circumstances of the making of this lease agreement call for the court to pierce the corporate veil and investigate the activities taking place thereunder.

This case is akin to the Cattle Breeders Farm (Pvt) Ltd v Veldman (2) 1973 (2) RLR 261 case. This case involved a husband who used his company to try and evict his wife. The court ruled that the husband could not hide behind the company to seek eviction of his wife.

The defendant has tried to hide behind his wife and the company by leasing the property in issue to her and to escape eviction.

The lease agreement was deliberately offered to the wife even though there is no actual distinction between the wife, the defendant, and the company.

Our courts have held that a husband and wife hold a uniquely special relationship and that they normally have a common interest and household: see Warren Park Trust v Antony Ernest Pahwaringira and Others HH39-09 and Masiyiwa Cleopas Gonye v Stella Mavis Gonye SC15-09.

The facts of the case involved a company formed by the appellant which he, his wife, and sons were shareholders. The court held that the company was part of the matrimonial estate. The court held as follows:

“Stripped of the corporate veil, the proceeds of the farming operations belonged to the appellant. The company was nothing more than the applicant's alter ego. It had no greater rights to the money than he possessed.”

When one considers the defendant's position in the company, and that of his wife, one cannot avoid the conclusion that the property was, before the sale, part of the matrimonial estate of the defendant and his wife.

The transaction entered into is a simulated and dishonest transaction.

The court is not deceived by its form but is concerned about its substance. It appears to me that this is a mere paper agreement. It cannot become a real agreement.

In Kilburn v Estate Kilburn 1931 AD 501 the court held that;

“…, a court of law will not be deceived by the form of a transaction; it will rend aside the veil in which the transaction is wrapped and examine its true nature and substance.”

In Boots Company (Pvt) Ltd v Somerset West Municipality 1990 (3) SA 216 (C)…, the court set out the law on simulated contracts as follows:

“I take the law on this question from the case of Skjelbreds Rederi A/S and Others v Hartless (Pvt) Ltd 1982 (2) SA 710 (A) in particular, I cite the following passage from the (as he then was), reading from p732:

'The law relating to the question of simulated, or disguised, agreements is summed up in the well-known Roamanism, plus valet quod I agituraquam quod simulate concipitur. In Justiniaris Codex 4.22.1 the rule is briefly stated in the following terms: In Contractibusrei veritas debet, i.e. in contract the truth of the matter, rather than the writing, must be looked at.'”

In Zandberg v Van Zyl 1910 AD 302 INNES JA dealt with this subject and held that in a simulated contract, parties enter into such a contract in order to secure some advantage which otherwise the law would not give or escape some disability which the law would otherwise impose. He says, at 309, that such parties;

“Endeavour to conceal its (transaction) real character. They call it by a name, give it a shape intended not to express but to disguise its nature, and, when a court is asked to decide any rights under such agreement, it can only do so by giving effect to what the transaction really is and not what it, in form, purports to be.”

It is easy to detect this simulation.

This is to be done by considering the facts leading up to the contract and circumstances under which it was made.

It is apparent that the transaction, or agreement, was entered into simply to retain the property.

The defendant company and the defendant's wife entered into the lease agreement in order to thwart the sale of the house. They devised a plan wherein they would remain in occupation of the property despite the sale and defeating the sale in execution that was in progress. The agreement was entered into after the writ of execution had been issued and after the property had been placed under judicial management. They wanted to defeat the sale at all costs. They devised a strategy to defeat the sale.

The defence of huur gaat voor koop is being raised to frustrate the plaintiff's rights.

The defendant now resists the eviction on the basis of this lease agreement. He seeks to hide behind his wife. His partner in crime. It is clear that the lease agreement was made simply to save the property. The parties to the lease agreement were not bona fide when they entered into the lease agreement.

The court has considered, in coming up with this position, that the defendant is a sole shareholder and owner of the company. He is, in effect, the sole owner of the company. His company, represented by himself, entered this contract with his own wife, a director of the company. The defendant signed the lease agreement in the face of a pending execution. The defendant benefits from the existence of the lease. He is actually in occupation of the property with his wife. He was well aware that he would benefit from the agreement he was signing. The parties were in occupation of the property without a lease agreement prior to the sale.

One wonders why there was now a need for a lease agreement.

The defendant clearly sought to protect his property. Any threat to the property was a threat to him. This cannot be a genuine lease agreement. There is no doubt in my mind that the lease agreement was simulated.

The evidence reveals that the defendant entered into the lease agreement to evade a creditor who was pursuing his company and property. The lease agreement was fraudulently entered into.

This is a proper case in which to lift the corporate veil and investigate the activities of the company.

The defendant is the alter ego of the company. The defendant controlled the company as he was the sole shareholder. He and his wife were the only two directors of the company. The company is a one-man company. He is the company. The defendant's company is his. There is no separation between the defendant and his company. The company is simply a tool through which the defendant owned the property. He cannot be separated from the company. The defendant has involved in activities, through the company, which are irregular and fraudulent. The defendant used his company to justify wrong and protect fraud.

This lease agreement is irregular. This agreement cannot stand in the way of the plaintiff's claim. The lease agreement is a nullity and no rights flow from it.

The plaintiff is, on the basis of this reason alone, entitled to evict the defendant, his company, and his family from the house in issue.

The defendant contends that he has the right to remain in occupation of the property on the basis of a lease agreement executed between his company and his wife on 28 September 2012. This submission is premised on the argument that the plaintiff inherited an obligation to allow the defendant and his wife to continue in occupation of the property.

He relies on the concept of huur gaat voor koop.

The defendant contends that it is only his wife who can effectively respond to the issue regarding the terms and conditions of the lease agreement.

The defendant and his wife have always been aware of the plaintiff's title and claim in the property. The two are partners in the defendant's company and are in matrimony. The wife is presumed to be aware of this action.

The defendant pleaded that there has been a non-joinder of his wife as a party. No effort was made, either at pre-trial stage or any other subsequent stage, to join her as a party.

The defendant and his wife seem to be playing a hide and seek game with the plaintiff.

No explanation was given regarding the defendant's failure to apply for joinder to this action. The defendant and his wife seemed bent to frustrate the plaintiff's claim by not joining the wife to this claim. This is totally unacceptable. Mis-joinder does not operate as a defence. The rules of this court provide, in Rule 87, as follows:

“87. Misjoinder or nonjoinder of parties

(1) No cause or matter shall be defeated by reason of the misjoinder or non joinder of any party and the court may, in any cause or matter, determine the issues or questions in dispute so far as they affect the rights and interests of the persons who are parties to the cause or matter.”

In any case where there has been a non-joinder, the court may, in terms of Rule 87, determine the issues and questions in dispute in so far as they affect the rights and interests of the persons before it.

The defendant and his wife and family were in occupation of the property before the sale. What this essentially means is that the company, its shareholders, as well as its directors are still in occupation of the house and have not moved an inch since the sale of the property.

The defendant entered into a fraudulent lease agreement so that he would remain in the house.

Once it is accepted that the defendant is the alter ego of the company, and controlled all its activities, he should be responsible for its entire doings.

He and the company are still in occupation of the property and there seems to be sense in citing the defendant as a party to these proceedings.

The court has found that the lease agreement is simulated and a nullity, and, therefore, anyone in the premises may be cited for ejectment.

I cannot find fault with the plaintiff's citation of the defendant as a party to this action. The court will proceed and determine the dispute in so far as it affects the rights and interests of the persons before it.

Even assuming I am wrong in my approach, the rule of huur gaat voor koop does not assist the defendant's case or that of his wife.

The concept of huur gaat voor koop is found under Roman Dutch Law and simply means that hire takes precedence over sale. The doctrine was defined in Genna-Wae Properties (Pty) Ltd v MedloTronics (Natal) (Pvt) Ltd (435/13) (1995) ZA SCA 42 1995 (2) SA 926 AD, 1995 (2) ALL SA 410…, as follows;

“I hold that in terms of our law the alternation of leased property consisting of land or buildings, in pursuance of a contract of sale does not bring the lease to an end.

The purchaser (now owner) is substituted ex lege for the original lesser and the latter falls out of the picture.

On being so substituted, the new owner acquires, by operation of law, all the rights of the original lessor under the lease. At the same time, the new owner is obliged to recognise the lessee and to permit him to continue to occupy the leased premises in terms of the lease - provided that he (the lessee) continues to pay the rent and otherwise to observe the obligations under the lease. The lessee, in turn, is also bound by the lease, and, provided the new owner recognises his rights, does not have any option, a right of election, to resile from the contract.”

What the concept entails is that a tenant who entered into a lease agreement prior to the sale is protected from eviction where the property is sold to a third party. He is entitled to remain in occupation of the property until his lease expires. He must abide by the terms of the lease agreement: see One Naught Three Craighall Park (Pty) Ltd 1940 TPD 299, where the court held that a lessee of property transferred from the previous lesser is required to recognise and observe the terms of the lease after transfer.

For a tenant to benefit from the lease, the lease should not have been fraudulently entered into or entered into in bad faith.

In Genna-Wae Properties (Pty) Ltd v MedloTronics (Natal) (Pvt) Ltd (435/13) (1995) ZA SCA 42 1995 (2) SA 926 AD, 1995 (2) ALL SA 410, CORBETT J quotes from a passage from Voet 19.2.17 which states as follows;

“…, sive private venditio interveniat,sive publica, aut ex decreto magistratus adhibitis hastoe solennibus ad creditorum pettitionem; sic ut et jus retentionis conductor competat, si remanere in conductutione malit, quam post eeexpilsionem intempestivam ad id quod interest judio experiri, si modo bona fide, non in fraudem creditorum (pendent forte subhastationionis judicio, aut lite jam mota), location facta sit.”

The BEINART and ORMONDE's translation of that passage reads as follows;

“…, whether it be a private sale or a public one, or a formal judicial sale following on a decree of a magistrate at a petition of creditors; the result is that the lessee has a right of retention, if he wishes to remain in possession rather than bring an action for damages after he had been ejected with prejudice to himself, provided that the lease had been made in good faith and not in fraud of creditors (for instance, where process for judicial sale was pending, or the suit had already been brought)”…,.

The underlined part emphasizes the need for the tenant to be bona fide and the requirement that the lessee should not enter the contract of lease fraudulently and with a mind to evade creditors - especially where a sale in execution was pending.

A tenant wishing to rely on the concept should show that he entered into the lease agreement with the previous owner before the sale. He should show that he is bona fide and did not enter into a lease agreement fraudulently in order to avoid an imminent sale or a claim by creditors. He must also show that the new owner was aware of the lease agreement and bought the property with the knowledge of the lease agreement.

It is a requirement that the tenant should abide by all terms of the contact and continue to pay his rentals to the new owner. Failure to do so amounts to breach.

The new owner only has an obligation to adhere to the lease agreement if the tenant is willing to pay rentals - and does pay the rentals.

Where the tenant fails to pay rentals agreed to with the previous owner, he commits a breach and he is liable to the new owner: see Genna-Wae Properties (Pty) Ltd v MedloTronics (Natal) (Pvt) Ltd (435/13) (1995) ZA SCA 42 1995 (2) SA 926 AD, 1995 (2) ALL SA 410 for this proposition.

There are two schools of thought regarding whether this concept applies to sales in execution.

In Liquidators Union & D Rhodesia Wholesalers Ltd v Brown & Co 1922 AD 549…, KOTZE JA made the following remarks;

“While an ordinary arrest of property under the Roman-Dutch Law gives no preference, an arrest effected on property in execution of a judgment creates a pignus praetorium or to speak more correctly a pignus judiciale, over such property. The effect of such a judicial arrest is that the goods attached are thereby placed in the hands or custody of the officer of the court. They pass out of the estate of the judgment debtor so that in the event of the debtor's insolvency the curator of the latter's estate cannot claim to have the property attached delivered up to him to be dealt with in the distribution of the insolvent's estate.”

A similar approach was adopted in Maphosa and Anor v Cock and Others 1997 (2) ZLR 314 (HC) where the court, following on Liquidators Union & D Rhodesia Wholesalers Ltd v Brown & Co 1922 AD 549, held that in such an instance, the property could not be dealt with by the company as if it had not been attached. See also Simpson v Klein NO and Others 1987 (1) SA 405 (W).

In HERBSTEIN and Van WINSEN, Civil Practice of the Superior Courts in South Africa, 3ed state…,;

“A judgment creditor is entitled to attach and have sold in execution the property of his debtor notwithstanding that a third party has a personal right against such a debtor to the ownership or possession of such property which right arose prior to the attachment or even the judgment creditor's cause of action and of which the judgment creditor had notice when the attachment was made. An attachment in execution creates a judicial mortgage or pignus judici here are exceptions to this rule.”

In Graham v Local Overseas Investments (Pvt) Ltd 1942 AD 95 the court suggests that the concept is not available if insolvency is involved.

In Genna-Wae Properties (Pty) Ltd v MedloTronics (Natal) (Pvt) Ltd (435/13) (1995) ZA SCA 42 1995 (2) SA 926 AD, 1995 (2) ALL SA 410, the court took the view that the concept of huur gaat voor koop applies to judicial sales in execution. The court in that case remarked as follows;

“Whether the sale takes place privately or publicly or by order of a magistrate a petition of creditor is irrelevant.”

I am persuaded to follow the approach followed in Liquidators Union & D Rhodesia Wholesalers Ltd v Brown & Co 1922 AD 549. This is a decision of our own Appellate Division.

The concept of huur gaat voor koop does not apply to sales in execution.

In any case, where a property has been placed under judicial arrest, it falls into the hands and control of the Sheriff. It ceases to be part of the debtors' estate. It cannot be dealt with in any manner not sanctioned by the Sheriff. The previous owner and debtor are not at liberty to deal with the property as if it has not been attached. The debtor, at that moment, ceases to have any right to deal with the property in any manner not sanctioned or directed by the Sheriff. The debtor cannot deal with the property at his whims. To do so would be to defeat the judicial process underway.

The defendant company, the defendant, and his wife ought not to have dealt with the property as if it was still in under their control.

The defendant is a schemer.

His game plan is as plain as the nose on his face. His imagination ran riot when he and his company, being aware of this development, proceeded and entered into a lease agreement with his wife, a director of the same company, and un-authorised by the Sheriff. The defendant's company and its directors dealt with the property as if unaware that it had been attached.

It should not matter that the sale of the property had not actually gone through.

There is no doubt that the idea behind the principle of huur voor gaat koop was to protect litigants, who, prior to the attachment and sale of the property, had entered into a lease agreement for the lease of the property.

A judgment creditor who leases his property, which is subject of an attachment, in the hope that he can later rely on the lease agreement and remain in occupation of the property to frustrate the new buyer can only fantasize.

They were waiting to pull the carpet from under their feet.

The courts have no interest in aiding and abetting unscrupulous litigants.

The lease agreement is, for this reason, also irregular.

The defendant and his wife did not advise the Sheriff and the purchaser of the lease agreement. The Sheriff dealt with the sale as if it was free of a lease. The purchaser did not have knowledge of the lease. This was part of the game.

The defendant cannot benefit from the lease agreement.

The defendant, and his wife, never treated the lease agreement as such. It does not appear that they ever paid any rentals in lieu of the lease agreement. Although being aware that the plaintiff had bought the property, and his interest in it, the defendant and his wife never paid any rentals for it. The defendant and his wife have deliberately not been paying rentals for the leased property to the new owner, the plaintiff.

They are in breach of the lease agreement.

No evidence was led to show that the defendant and his wife tried to pay rentals to the plaintiff or that the plaintiff refused to accept such rentals as alleged.

Even assuming that the lease was valid, the defence of huur gaat voor koop can only avail a tenant who pays his rentals - and on time.

The plaintiff is entitled to eject the defendant from its property.

The payment plan and rentals payable and due was only discussed and agreed to at the hearing. The parties agreed that a reasonable and fair rental for the premises is $2,000.

The plaintiff became entitled to rentals the moment the property was transferred into its name.

The plaintiff is entitled to vindicate its property from whoever may be in occupation or possession of the property. The defendant and his company are in occupation of the property. They have not shown an entitlement to remain in the property. The plaintiff is entitled to the order sought.

It is for these reasons that I granted the order sought.

SC60-21 : LEATHOUT INVESTMENTS (PVT) LTD vs FUTURE MUVIRIMI and PETRONELLA MUVIRIMI
Ruled By: GOWORA JA, PATEL JA and BERE JA

The parties herein are engaged in various wrangles in the Magistrates Court and the High Court. The wrangles have seen the parties file complaints of alleged criminal activities against each other.

In this appeal, the dispute relates to immovable property.

On 2 April 2014, the appellant caused summons to be issued out of the High Court wherein it sought the eviction of the respondents, who are husband and wife, from the immovable property described as 69 Glenara Avenue, Highlands, Harare. The appellant averred therein that it was the registered owner to the property and that the respondents were in occupation of the same. The appellant alleged that their occupation was without its consent.

The respondents opposed the claim for their eviction.

They filed an exception on 14 May 2014. This was followed up with a special plea filed on 16 May 20104.

In the exception, the respondents challenged the appellant's claim of ownership in the immovable property described above. The same defence was raised in the special plea.

On 27 June 2014, the respondents filed a plea on the merits.

The substance of their defence was to challenge the appellant's claim to ownership of the property in question. They alleged that the registration of title was marred by fraud. They denied that the appellant had a legal and enforceable right to claim their eviction from the property in question.

On 20 November 2015, the parties jointly filed a special case with the registrar of the High Court.

A hearing for the determination of the Special Case was convened before a judge on 3 February 2017.

The Special Case was not heard or determined.

The respondents filed a chamber application for directions, which was heard on 22 February 2017.

On 29 November 2017, the court issued a judgment in which it ordered as follows:

“1. Case Number HC2741/14 shall proceed to hearing as a stated case, subject to the directions given in paras 2 to 7 of this order.

2. The applicants be and are hereby granted leave to lead evidence at the hearing of the stated case to deal with facts relevant to the central issue of the existence or otherwise of valid title for the purposes of the action of rei vindicatio.

3. The applicants shall have the duty to begin.

4. The respondent shall, if it so wishes, be entitled to lead evidence in rebuttal.

5. The respondent shall, if it elects to lead evidence in rebuttal, file a detailed statement of the evidence intended to be led, the witnesses to be called, and a bound and paginated bundle of documents, if any, upon which reliance will be placed. This paragraph shall be complied with at least five clear court days prior to the set down date of the special case.

6. The parties shall address the court on the factual and legal issues involved as provided for by the rules and practice of this court relating to closing submissions at the close of an action.

7. No order as to costs.”

The appellant was aggrieved by the grant of the order aforementioned, and, with the leave of the High Court, has noted an appeal on the following grounds:

“1. The court a quo erred in not coming to the conclusion that the only application for directions made was one made orally and a fortiori invalidly made and stood to be dismissed on that basis.

2. The court a quo erred in coming to the conclusion that a stated case could have its character changed pursuant to the application for directions, however made, and so erred in failing to consider the true nature of the written application belatedly placed before it.

3. The court a quo erred further in coming to the conclusion that any cause existed for respondents to depart from the stated case and so erred in concluding that it had a discretion over the matter.

4. The court a quo erred in directing that the trial proceeds in terms of a course which is unavailable at law and is inconsistent with the nature of a stated case.

5. The court a quo erred at any rate in concluding that there was a dispute of fact and that the respondents had raised a defence worth interrogating in a trial cause.”

ISSUES FOR DETERMINATION

Although the appellant has set out five grounds, only three issues arise;

(i) First, whether or not an oral application for directions was made and considered by the court;

(ii) Secondly, whether or not the court ought to have declined to hear the chamber application as not being properly before it; and

(iii) Last, whether the court a quo misdirected itself in granting the order for directions which was in direct contradiction of the Stated Case.

I will proceed to consider each of the issues ad seriatim....,.

Although the fact of title being in the appellant's name was admitted, there was an issue as to the legality of that title, with an allegation of fraud attaching to such registration.

The main issue for determination by the court was whether or not ownership of the immovable property was in dispute.

This has to be considered against a statement on the agreed facts to the effect that the defendants primary defence to the rei vindicatio was an allegation that the plaintiff's ownership of the property was tainted with fraud and irregularity, which the plaintiff disputed and believed to be irrelevant in the determination of the matter....,.

WHETHER THE COURT MISDIRECTED ITSELF IN GRANTING THE ORDER FOR DIRECTIONS

A Stated Case, or Special Case, is provided for in the rules of court, High Court Rules 1971. Order 29 of the Rules is pertinent and provides:

“ORDER 29

SPECIAL CASES

199 Special case by consent

(1) The parties to a civil action or suit may, after summons has been issued, concur, in a statement, of the questions of law arising therein in the form of a special case for the opinion of the court.

(2) Every such special case shall be divided into paragraphs numbered consecutively, and shall concisely state such facts and documents as may be necessary to enable the court to decide the questions raised thereby.

(3) Upon the argument of such case, the court and the parties shall be at liberty to refer to the whole contents of such documents, and the court shall be at liberty to draw from the facts and documents stated in any such special case any inference, whether of fact or law, which might have been drawn therefrom if proved at a trial.

200 Special case by order before trial

If it appears to the court that there is, in any cause or matter, a question of law which it would be convenient to have decided before any evidence is given or any question or issue of fact is tried, the court may make an order accordingly and may direct such question of law to be raised for the opinion of the court, either by special case or in such other manner as the court may deem expedient, and all such further proceedings as the decision of such question of law may render unnecessary may thereupon be stayed.

201 Special case to be typewritten, etc.

Every special case shall be typewritten or printed by the plaintiff and signed by the several parties or their counsel, and shall be filed by the plaintiff. If the registrar so requests, one or more copies of the special case shall be filed for the use of the court.

202 Special case affecting person under disability

If a minor, or person of unsound mind, is a party to such proceedings, the court may, before determining the questions of law in dispute, require proof that the statements in such special case, so far as concerns the minor or person of unsound mind, are true.

203 Judgment and directions regarding other issues

When giving its decision upon any question in terms of this Order, the court may give such judgment as may upon such decision be appropriate and may give any direction with regard to the hearing of any other issues in the proceedings which may be necessary for the final disposal thereof.

204 Judgment without hearing evidence

If the question in dispute is one of law, and the parties are agreed upon the facts, the facts may be admitted and recorded at the trial and the court may give judgment without hearing any evidence.”

The procedure provided for in the above Rules is available to parties to a civil dispute.

The parties must agree on the undisputed facts. The provisions are available when there is no dispute on the facts. It is meant for situations where only questions of law are in contention.

The uniform rules of South Africa contain provisions that are substantially similar to our own.

In Bane v D'Ambrisio 2010 (2) SA 539 (SCA), the court had to consider what meaning was to be ascribed to the phrase 'stated case'. At 543E-G, the court remarked:

“Rules 33(1) and 33(2) make it clear that the resolution of a stated case proceeds upon the basis of a statement of agreed facts. It is, after all, seen as a means of disposing of a case without the necessity of leading evidence. The case drafted by the parties, with both of them reserving their positions with regard to the factual assumptions, was plainly contrary to the basic object of the rule and the procedure of asking the court to rule on issues thus defined was tantamount to asking the court to give advice on possibly abstract questions.”

It is trite that a statement in a Special Case must set forth the facts agreed upon, the question of law surrounding the dispute, and the issue for determination by the court.

In this jurisdiction, the locus classicus on the requisites of a Stated Case is Kunonga v The Church of Central Africa SC25-17, GARWE JA set out the requisites to be the following:

“WHAT IS A STATED CASE?

[14] The rules of court of most countries make provision for the reference of a matter as a stated case.

But, what is a stated case?

It is a case that is brought upon the agreement of the parties who submit a statement of undisputed facts to the court but who take adversarial positions as to the legal ramifications of the facts, thereby requiring a judge to decide the question of law presented (Legal dictionary. The free dictionary.com).

Put another way, it is a formal written statement of the facts in a case, which is submitted to the court by the parties, jointly, so that a decision may be rendered without trial. The facts being thus ascertained, it is left for the court to decide the question of law presented.

A stated case is also called a special case, an amicable action, a case agreed, or a friendly suit (US Legal, Inc.).

[15] In the case of Elizabeth Mambus v Motor Vehicle Accident Fund, Case No. SA 4/2013, a majority decision of the Supreme Court of Namibia, handed down on 11 February 2015, the court noted:

'…, the intention is that the stated case will adjudicate the whole of the dispute as stated in the case that exists between the parties and that this is ideally done by setting out the facts agreed to, the questions of law in dispute, and the contentions of the parties. The parties may also require a court to decide an issue of law on the basis of alleged facts as if agreed.'

[16] The court further cited with approval remarks made by the Irish Supreme Court in Simon McGinley v The Deciding Officer – Criminal Assets Bureau [2001] IESC 49 that:

'The case should set out clearly the judge's findings of fact, and should also set out any inferences or conclusions of fact which he drew from those findings.

What is required in the case stated is a finding by the Judge of the facts and not a recital of the evidence. Except for the purpose of elucidating the findings of fact, it will rarely be necessary to set out any evidence in the case stated save in the one type of case where the question of law intended to be submitted is whether there was evidence before the Judge which would justify him deciding as he did…,. This court should not be required to go outside the case to some other document in order to discover them.

The same principle applies to the contention of the parties, the inferences to be drawn from the primary facts, and the Tribunal's determination. All these must be found within the case - not in documents annexed…,.'

[17] Once the facts are agreed, the court should proceed to determine the particular question of law that arises and not delve into the correctness or otherwise of the facts. It is bound to take those facts as correctly representing the agreed position and to thereafter determine any issues of law that may arise therefrom.

It is not open to the parties to the stated case to seek to re-open the agreed factual position or to contradict such position. Nor can either party seek to ignore existing legal principles or findings of fact made in connection with the same matter by another court.

Of course, either party has a remedy, at common law, to withdraw any concession made in a stated case owing to justus error, fraud, mistake, or any other valid ground.

[18] It has become necessary to restate what a stated case is owing to the fact that in some instances, the appellant, in this case, has made submissions contrary to the stated case brought before the court. The appellant has also ignored, in part, the decision of this Court on which the stated case is predicated.

It bears stating, that, if this happens, a party will be kept strictly to the terms of the agreed facts, as it is on the basis of those facts that the court would have been invited to make a determination on some specific question of law.”

The court a quo relied on Kunonga v The Church of Central Africa SC25-17 in deciding whether or not to grant the application for directions. The learned judge reasoned as follows:

“What, in essence, this Court is being asked to determine is if it can resolve the dispute between the parties based on the stated case.

Para 1.1 of the stated case states that the respondent is the registered owner of the property. In para 1.4 of the special case, the parties recognize that the applicants primary defense to the rei vindicatio is that plaintiff's ownership of the property is tainted with fraud and illegality.

The parties recognize that the applicants have a defence to the claim having filed a challenge to the respondent's title. An attempt to settle the matter failed after the withdrawal of a deed of settlement. The claim has since been re-instituted.

It is not surprising that the stated case has attracted so much controversy. The stated case states two mutually exclusive situations, one of which cannot be correct.

The statement that the plaintiff is the registered owner of the property cannot be accepted on the face of it especially in the face of indications to the contrary in the stated case.

The presumption of ownership can only be rebutted by evidence….,.

Mention is made of a fraudulent power of attorney used to support the transfer.

The stated case records that the respondent disputes the allegations of fraud. The stated case discloses a material dispute of fact over ownership of the property between the parties that cannot be resolved on the papers. The fact that the parties previously agreed that the matter should be dealt with as a special case, in a case where there are glaring material disputes of fact that require to be ventilated at a trial, has no effect of binding the court to such an arrangement.

Resort to the special case procedure for the relief of a rei vindicatio, in the face of the disputes existent on the papers, is inappropriate.

Where a special case discloses substantial disputes of fact, the court cannot simply rubber stamp it and accede to insistence on dealing with the case as a special case because the parties agreed on a statement of agreed facts.

Whenever a material dispute of fact appears on the face of a stated case, which cannot be resolved on the papers filed, that dispute will require full ventilation.

The applicants raise a defense of claim of right.

An allegation of fraud cannot be proved in the absence of the documents allegedly used to commit the fraud. The best course to take is to allow the applicants to call evidence to substantiate their claim of fraud. I am not persuaded by the respondent's argument that the defendants are bound by the stated case.

The stated case does not clearly or correctly articulate the issues to be dealt with.

An issue arises regarding whether the respondent acquired valid title from the applicants. What the parties ought to have done is to request the court to determine who the owner of the property is, hence asking the court to determine the issue of ownership. Instead, the court was asked to determine, “whether or not ownership of the immovable property is in dispute.”

What the court is being asked to do is just to make a declaration regarding the existence of a dispute over the property.

If the court determines that ownership is in dispute - then what? That determination does not dispose of the dispute between the parties.

The court ought to have been asked to resolve the real dispute between the parties.

The issue could have been worded along the following lines: 'whether the respondent acquired valid title from the applicants.' That is the issue disclosed by the agreed facts. This way, the trial court is equipped to make a determination over the ownership of the property and dispose of the dispute.”

The Special Case in casu was set out as follows:

“WHEREAS the plaintiff issued summons and declaration against the two defendants under case number HC2741/14 seeking a rei vindication order against the said defendants, together with costs of suit;

AND WHEREAS the said defendants having been served with the summons, defended the proceedings and filed their Plea of record on 27 June 2014;

AND WHEREAS the plaintiff filed its replication to the said plea;

AND WHEREAS the matter proceeded to a pre-trial conference before the Honourable Mrs Justice Matanda-Moyo;

AND WHEREAS at the pretrial conference the parties agree to proceed by way of a special case;

NOW THEREFORE it is stated that:

1. THE AGREED FACTS

1.1 Plaintiff is the registered owner of the property in dispute, that is, Lot 1 of Stand 21A Oval Park Township measuring 5653 square metres, otherwise known as No.69 Glenara Avenue, Highlands, Harare.

1.2 The defendants had filed a suit, under HC5960/13, challenging, inter alia, the plaintiff's title to the above-named property.

1.3 On 16th March 2015, a Deed of Settlement was executed under 5960/13 in terms of which defendants withdrew their claim against, among others, the plaintiff in respect of the abovenamed property. Find attached as annexure “A” a copy of the Deed of Settlement presented at the pre-trial conference.

1.4 Defendants primary defence to plaintiff's rei vindication is the allegation that the plaintiff's ownership of the property is tainted with fraud and illegality, which the plaintiff disputes and believes is of no relevance to its claim for rei vindicatio.

2. ISSUES FOR DETERMINATION

The parties set out the issues for determination in this matter as follows:

2.1 Whether or not the ownership of the immovable property in issue is in dispute.

2.2 Whether or not, therefore, the plaintiff is entitled to a rei vindicatio order.

3. HEADS OF ARGUMENT

The Parties Counsel agreed and undertook to file heads of argument in respect of their positions on the facts as set out above as follows:

3.1 The plaintiff's heads of argument shall be filed on or before 20 November 2015;

3.2 The defendants heads of argument shall be filed on or before 25 November 2015.”

A Stated Case must set out the facts as agreed by the parties. The facts must not be in contention nor should a material dispute of fact be manifest on the statement constituting the agreed facts.

In this case, the registration of title in the appellant's name is admitted.

The causa for the registration of title and how it came to be is challenged by the respondents ex facie the “agreed facts”. They allege fraud on the part of the appellant and suggest that they wish to defend the action on the premise that the registration of title was illegal.

The definition of a Special Case was spelt out in the South African case of National Union of Mineworkers v Hartebeestfon 1986 (3) SA 53 (AD)…, as follows:

“…,. In none of them is 'special case' defined, presumably because the expression has an accepted meaning. MOZLEY and WHITELY's Law Dictionary, 7th ed says sv 'special case' that it is:

“1. A statement of facts agreed to on behalf of two or more litigant parties, and submitted for the opinion of a court of justice as to the law bearing upon the facts so stated.”

STROUD's Judicial Dictionary 4th ed states that:

“A special case is a written statement of the facts in a litigation, agreed to by the parties, so that the court may decide these questions according to law…,. It is also known as a case stated.”…,.

It is, therefore, implicit in the expression 'in the form of a special case' that there should be a statement of the facts agreed by the parties.”

The appellant has suggested that the procedure “created by the court a quo is unknown at law and cannot produce valid proceedings.” It has sought reliance for that contention on Matanhire v BP Shell Marketing 2005 (1) ZLR 140 (S)…,.

I am unable to agree and I conclude that the reliance on Matanhire v B P Shell Marketing 2005 (1) ZLR 140 (S) in this context is misplaced.

The ratio in Matanhire v BP Shell Marketing 2005 (1) ZLR 140 (S) is to the effect that an application for directions can only be made by a court in respect of a matter that was pending before the court.

In this case, there was a claim for a rei vindicatio pending before the court and the court could entertain an application for directions.

The Rules permit the giving of directions and it is trite that the High Court can do anything except that which the law expressly forbids it to do.

In this case, the Rules permit the court to give directions and that is precisely what the court did.

In this case, however, there is no Statement of Agreed Facts.

The parties have set out their respective positions, with the respondents postulating a defence to the claim for rei vindicatio. The respondents challenged the validity of the appellant's title on allegations of fraud in the registration thereof.

What the parties filed did not comply with the requirements of a Special Case, and, given what the parties themselves set out on the 'Stated Case', I cannot conclude that the learned judge in the court a quo misdirected herself in finding, as she did, that there were material disputes of fact requiring the adduction of evidence.

Evident from the 'stated case' as formulated by the parties was a clear dispute on the facts.

The order gives the respondents leave to deal with facts relevant to the central issue of the existence or otherwise of valid title for seeking relief under rei vindicatio. The onus to begin is placed on the respondents and the appellant is afforded a right to rebut any evidence led by the respondents.

No one can be in doubt that these are the issues for determination - even under the stated case itself.

The issues as recorded by the parties are:

(a) Whether or not the ownership of the immovable property in issue is in dispute; and

(b) Whether or not the plaintiff was entitled to an order for a rei vindicatio.

It was the parties who were responsible for drafting the case and issues for determination. It was not the court.

It seems to me, that, the manner of pleading adopted by the parties has resulted in the adoption of a procedure that the pleadings did not support.

If the title to the property was not in issue, it should therefore not have been placed before the court for adjudication. The fact that it was so placed, and that upon a consideration of the pleading themselves, the court was of the view that it could not resolve the matter on the papers as a material dispute of fact was evident on title, cannot be blamed on the court.

The respondents, on the papers, raised a defence to the claim.

The court was duty-bound to consider the defence. It could not do so based on a supposed Stated Case.

The issue of how the appellant acquired its title was pertinent to the disposition of the dispute. The court could not, and is not expected to turn a blind eye to allegations of fraud or illegality. It realized that there were real issues the determination of which required that the parties adduce oral evidence.

There was a clear contradiction in terms of what the appellant's case was and what the respondents case was. The court exercised its discretion, and there is no allegation that such exercise was injudicious or capricious.

The matter was therefore not properly before the court and ought not to have been referred for determination as a Stated Case.

The appellant suggests, that, the court a quo erred in holding that the Stated Case could be maintained but that the parties could give evidence on the question of the registration of title.

I think this contention has merit.

Once the court a quo concluded that there were material disputes of fact on the 'stated case' the complexion of the matter was altered.

The claim for a rei vindicatio was premised on the appellant's title which was being challenged by the respondents. The challenge to the appellant's title, as a consequence, raised the appellant's right to claim eviction as an issue.

This was the only issue for determination between the parties. As a result, there was no Stated Case for adjudication.

Even if the court was inclined to entertain the application for directions, once it concluded that there were material disputes of fact, it ought to have given directions in which it ordered the matter back to a pre-trial conference for the settling of issues for trial purposes. This, in my view, would allow the parties to properly consider their respective positions vis-a-vis the dispute to ensure that all issues pertinent to the determination of the matter are placed before the court.

Counsel for the respondents submits that the Rules give the court the discretion on how to direct the case to be heard.

I accept as correct the contention by the respondents on this point.

Rule 154 provides, that, upon hearing the application, the judge shall, “as far as practicable, make such order as may be just to any matters in respect of which directions were asked.”

In my view, the Rules give the judge the discretion to make such order as may result in the matter being dealt with to achieve justice between the parties.

I did not understand the appellant to suggest that the court lacks the discretion to make an order for directions on the hearing of the matter. What the appellant suggested was that the order for directions was not one that the court is legally permitted to give.

However, in the instant case, there was no Stated Case to determine, and, to the extent that the court a quo continued to deal with the matter as if it was a stated or special case, there was a gross misdirection on the part of the court.

This is a misdirection that impacts upon the substance of the order issued by the court a quo.

It was the wrong order in view of the fact that there was no Stated Case. It was thus a procedural irregularity warranting interference by this court.

In my view, this is a proper case for this court to invoke its powers of review as provided in the Supreme Court Act [Chapter 7: 13], which provides as follows in relevant part:

“25 Review powers

(1) Subject to this section, the Supreme Court, and every judge of the Supreme Court, shall have the same power, jurisdiction, and authority as are vested in the High Court and judges of the High Court, respectively, to review the proceedings and decisions of inferior courts of justice, tribunals, and administrative authorities.

(2) The power, jurisdiction, and authority conferred by subs (1) may be exercised whenever it comes to the notice of the Supreme Court, or a judge of the Supreme Court, that an irregularity has occurred in any proceedings or in the making of any decision notwithstanding that such proceedings are, or such decision is not the subject of an appeal or application to the Supreme Court.

(3) Nothing in this section shall be construed as conferring upon any person any right to institute any review in the first instance before the Supreme Court, or a judge of the Supreme Court, and provision may be made in rules of court, and a judge of the Supreme Court may give directions, specifying that any class of review or any particular review shall be instituted before or shall be referred or remitted to the High Court for determination.”

Notwithstanding the fact that the appellant has not attacked the court a quo, in deciding to entertain the parties herein in what was purportedly a Stated Case which ex-facie the pleadings raised material disputes of fact, the judgment of the court a quo cannot stand. It must be set aside on the basis that it was irregular.

In my view, the court did misdirect itself in ordering that the matter should proceed as a Stated Case.

Once it found that there were material disputes of fact on the so-called Stated Case, it should have referred the matter to trial....,.

However, because of the irregularity that ensued when the court dealt with the matter as a stated case in the light of the material disputes of fact ex facie the alleged stated case, the order of the court cannot stand and must be set aside.

In the result, it is ordered as follows:

1. The appeal is allowed in relation to the fourth ground only.

2. In the exercise of review powers vested in the court, in terms of section 25 of the Supreme Court Act [Chapter 7:13], the order of the court is set aside in its entirety.

3....,.

4. The matter is remitted to the court a quo for the setting up of a pre-trial conference before a judge in chambers.

HH169-13 : TROJAN NICKEL MINE LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MATHONSI J

It is WALLIS JA, with HARMS AJ, VAN HEERDEN JA, MALAN JA and PETSE AJA all concurring who waxed lyrical in Executive Officer of the Financial Services Board v Dynamic Wealth Ltd Ors 2012 (1) SA 543 when he said:“Ever since the bursting of the South Sea Bubble ...

It is WALLIS JA, with HARMS AJ, VAN HEERDEN JA, MALAN JA and PETSE AJA all concurring who waxed lyrical in Executive Officer of the Financial Services Board v Dynamic Wealth Ltd & Ors 2012 (1) SA 543 when he said:

“Ever since the bursting of the South Sea Bubble in 1720, governments have recognised the need, in the interests of the investing public, for regulation of the financial services industry.”

The plaintiff, a public company registered in Zimbabwe sued the defendant for payment of US$1,007,541=30 together with interest at the prescribed rate and costs of suit, being the plaintiff's money allegedly appropriated by the defendant from the plaintiff's bank in pursuance of a Monetary Policy Statement issued in terms of section 46 of the Reserve Bank Act [Chapter 22:15] (“the Act”) and a directive issued to banks in terms of section 35(1) of the Exchange Control Regulations, Statutory Instrument 109/96, SI109/1996.

The defendant is established in terms of section 4 of the Reserve Bank Act [Chapter 22:15] and is charged with, inter alia, the regulation of Zimbabwe's monetary system, the supervision of banking institutions, and the smooth operation of the payment system as well as acting as banker and financial advisor to, and fiscal agent of, the State.

It is salutary that the defendant performs these functions in order to regulate banking and protect the banking public.

In the discharge of its duties aforesaid, the defendant issued a Monetary Policy statement, on 1 October 2007, centralising all foreign currency accounts and directing the lodgement, at its doorsteps, of all corporate foreign currency balances held by authorised dealers.

One such authorised dealer is Banc ABC where the plaintiff maintained a foreign currency account.

In compliance with the monetary policy, and a subsequent directive issued by the defendant, Banc ABC lodged the plaintiff's foreign currency balance with the defendant.

That is the last time the plaintiff saw the money, as the defendant did not return it to Banc ABC as a result of which the plaintiff was unable to access that money.

The plaintiff then sued the defendant aforesaid seeking to recover the money but the defendant contested the action averring, in its plea, that, there was no causal nexus between the parties given that the plaintiff and the defendant did not enjoy any banking relationship and that the plaintiff should have proceeded against its Bank, that is Banc ABC, and not against the defendant.

At the pre-trial conference, the parties agreed on the issues for trial as:

“1.1. Whether or not the plaintiff has a cause of action against the defendant.

1.2. Whether or not the defendant is obliged to pay the amount claimed or any amount at all.”

When the matter initially came before me for trial, the parties were of the view that the facts were generally common cause. They then requested the deferment of the hearing to enable them, firstly, to agree on the facts, prepare and file a Statement of Agreed Facts as well as heads of argument.

In due course this was done, and the Statement of Agreed Facts signed and filed by the parties reads:

“1. The plaintiff is Trojan Nickel Mine Limited, a public company registered in accordance with the laws of Zimbabwe.

2. The defendant is the Reserve Bank of Zimbabwe. It is established in terms of the Reserve Bank of Zimbabwe Act [Cap 22:45] (“the Act”) with the power, amongst other things, to regulate the banking sector.

3. The plaintiff, at all material times, maintained a foreign currency account number ZWTROJ001CALUS0019 domiciled at Banc ABC, formerly the African Banking Corporation.

4. On 1 October 2007, the Governor of the defendant, Dr G. Gono, issued a Monetary Policy Statement in terms of section 46 of the Act. The Monetary Policy Statement provided, in pertinent part, as follows..,.:

'6.2. In order to achieve the twin objectives of boosting exporter viability and improving the economy's accountability for total export and other foreign currency receipts, as well as ensuring judicious allocation of the scarce foreign currency resources, it has become necessary that the Reserve Bank introduces a new frame-work where we pool our resources together without disadvantaging the generators of that foreign currency.

6.3. Within this spirit, of preserving and promoting the welfare of our generators of foreign currency, who are the geese that lay the golden eggs, it has become necessary that the Central Bank centralises the management of FCAs, along with the creation of an interest earning investment window that boosts exporter viability.

6.4. What this means is that, with immediate effect, all corporate FCA balances at Authorised Dealers are to be lodged at the Reserve Bank, such that each bank maintains mirror accounts for transactions tracing purposes.'

5. On 2 October 2007, the defendant's Division Chief, Exchange Control, one M.B. Mpofu, directed a minute to the Head, Exchange Control Department of all Authorised Dealers, which read(s) in pertinent part as follows:

'Dear Sir/Madam

DIRECTIVE ISSUED IN TERMS OF SECTION 35(1) OF THE EXCHANGE CONTROL REGULATIONS, STATUTORY INSTRUMENT 109 OF 1996

1. INTRODUCTION

1.1. Reference is made to the Mid-Year Monetary Policy Statement announced by the Governor on 1 October 2007. In order to operationalize the measures highlighted therein, Authorised Dealers are accordingly directed as follows…,.:

2….,.

3. CENTRALISED FCA MANAGEMENT

3.1. Authorised Dealers are advised, that, with immediate effect, all Corporate and Non-Governmental Organisations (NGOs) FCA balances, as at 1 October 2007, shall be lodged with the Reserve Bank.

3.2. Authorised Dealers shall transfer all their Corporate FCA (including EPZ Companies) and NGOs balances to the Reserve Bank by close of business on 2 October 2007, as directed by International Banking and Portfolio Management Division, and submit to Exchange Control, individual exporter balances on those transfers made.

3.3. Authorised Dealers are required to maintain mirror accounts for their exporting clients indicating individual entitlements for transaction tracking purposes.

3.4. Authorised Dealers shall submit to the Exchange Control Inspectorate monthly foreign currency account statements for their clients for which global balances should be consistent with holdings at the Reserve Bank's Internal Banking and Portfolio Management Division.

3.5. All special FCAs (transitory accounts) and FCAs for International Organisations, Embassies, and Individuals shall remain with Authorised Dealers.

3.6. In order to ensure that exporters preserve the real value of the foreign exchange deposits under the pooled framework, all such deposits shall earn an all inclusive (interest) rate of 12% per annum in foreign currency for USD, Pound, Euro, Pula and Rand.'

6. The Ban ABC was, and remains, an Authorised Dealer.

7. The plaintiff alleges, that, it had a foreign currency balance of USD1,007,541=30 as at 1 October 2007 in its FCA aforesaid.

8. Banc ABC, pursuant to the directive in para 4 above, remitted the sum of USD1,492,516=06 to the defendant.

9. The plaintiff alleges, that, it has been unable to access its funds from Banc ABC despite demand.

10. The plaintiff has sued the defendant for:

'Payment of an amount of USD1,007,541=30 which amount is due and payable to the plaintiff by the defendant: which amount represents the entire balance of the money which was held by the plaintiff in a foreign currency account in African Banking Corporation Limited: which amount was appropriated by the defendant some time in 2008: and which amount, despite demand, the defendant fails or refuses to pay.'

11. The defendant has pleaded to the summons as follows:

'The defendant pleads that there is no causal nexus between the plaintiff and the defendant, more particularly that:

(a) The plaintiff and defendant have no banking relationship and the defendant did not manage or keep a banking account of the plaintiff and owed the plaintiff no duties normally associated with a banker and its depositor.

(b) The plaintiff's claim should be against its banker and not the defendant. It is improper and there is no legal basis alleged which would entitle the plaintiff to bring a claim against the defendant.

WHEREFORE, the defendant prays for the dismissal of the plaintiff's claim with costs.'

12. The parties have joined issue and agreed on the following issues for disposition:

12.1 Whether or not the plaintiff has a cause of action against the defendant.

12.2. Whether or not the defendant is obliged to pay the amount claimed or any amount at all.

13. The parties respectfully pray that this honourable court may dispose of the agreed issues on the basis of the facts agreed herein and Heads of Argument to be filed by both parties.

DATED AT HARARE this 22nd day of May 2013.”

The Statement of Agreed Facts is duly signed by counsel for the parties.

Counsel for the plaintiff submitted, that, the plaintiff does have a cause of action against the defendant because it is the defendant which wrongfully procured a breach of the contract that exists between the plaintiff and Banc ABC. He maintained, that, an action exists in our law for the intentional and wrongful interference with contractual rights.

In addition, the plaintiff is entitled to recover from the defendant the procured money on the basis of unjust enrichment, it having been enriched at the expense of the plaintiff.

Counsel for the plaintiff strongly argued, that, the directives issued to Authorised Dealers, by the defendant, had the effect:

(i) Firstly, of inducing Banc ABC to commit a breach of its contract with the plaintiff; and

(ii) Secondly, the directives intentionally and wrongfully interfered with contractual rights.

Counsel for the defendant did not address himself to that argument. As far as he was concerned, there was no banker and client relationship between the parties, and, for that reason, the defendant does not owe the plaintiff any duty.

Counsel for the defendant insisted, that, it is the plaintiff's Bank which received the money from the plaintiff, and, for that reason, it is the one with the obligation to pay the money to the plaintiff.

Counsel for the defendant further argued, that, the plaintiff's pleadings do not allege a legal basis entitling it to bring a claim against the defendant especially as the summons does not specify that the suit is based on either contract or delict.

Relying on the judgment of BERE J in China Shougang International v Standard Chartered Bank Zimbabwe Limited HH310-11 where the learned judge stated, obiter dictum…, that there was no privity of contract between the Central Bank and a depositor at a Bank.

I do not think the decision in China Shougang International v Standard Chartered Bank Zimbabwe Limited HH310-11 needs to detain us at all because it is clearly distinguishable from the present case.

In that case, the depositor had sued its own Bank and the defendant (in casu) was not cited as a party to the proceedings. More importantly, apart from the fact that the claim was based on a banker and depositor relationship, and not on the procurement of the deposit by the present defendant, there was also no admission by the Reserve Bank of Zimbabwe (RBZ) that it had indeed appropriated the depositor's money.

I agree with counsel for the plaintiff, that, the question of wrongful procurement was not placed before the court in that matter. Therefore, the case is distinguishable.

In our law, it is generally accepted, and I did not hear counsel for the defendant argue to the contrary, that, an action exists for intentional inducement of a breach of contract.

In PQR BOBERG, The Law of Delict, Vol 1, Juta & Co. Ltd…, the point made that:

“It is well established that the intentional inducement of a breach of contract is an actionable wrong: see Atlas Organic Fertilisers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd 1981 (2) SA 173 (T) at 202G, and the cases there-cited.”

In Dantex Investments Holdings (Pty) Ltd v Brenner & Ors NNO 1989 (1) SA 390 (AD)…, GROSSKOPF JA also made that point in stating:

“It is clear that an interference with contractual rights can, in certain circumstances, constitute a delict. What is less clear is what precisely the requirements for liability are.”

See also Roux v Hattingh 2012 (6) SA 428 and R.H. CHRISTIE, The Law of Contract, 3rd ed, Butterworths…,.

In casu, the defendant acted in terms of section 46 of the Reserve Bank Act [Chapter 22:15]. That section provides:

“In June and December of each year, the Governor shall submit to the Minister a policy statement containing –

(a) A description of the monetary policy to be followed by the Bank during the next succeeding six months, and a statement of reasons for those policies; and

(b) A statement of the principles that the Bank proposes to follow in the implementation of the monetary policy; and

(c) An evaluation of the monetary policy and its implementation for the last preceding six months.”

In order to implement the policy statement given in terms of section 46 of the Reserve Bank Act, to the effect that foreign currency balances were to be lodged with the defendant, a directive was also issued to Banks, in terms of section 35(1) of the Exchange Control Regulations, SI109 of 1996 instructing them to immediately lodge the foreign currency balances with the defendant.

Section 35(1) of the Exchange Control Regulations, SI109/96 is of peremptory application. It reads:

“Authorised dealers shall comply with such directions as may be given to them by an exchange control authority relating to -

(a) The exercise of any functions conferred on them by or under these regulations;

(b) The terms on which they are to exchange foreign currency for Zimbabwean currency;

(c) The offer of foreign currency in their possession for sale to the Reserve Bank.”

It was stated in China Shougang International v Standard Chartered Bank Zimbabwe Limited HH310-11, that, the directive given by the Governor of the defendant was invalid for want of a Ministerial approval.

I do not think it is necessary to discuss that issue in this case because it is accepted that the directive was given.

To that extent, the plaintiff's Bank was obliged to comply with the directive in terms of the law. Doing otherwise would have resulted in dire consequence to it, if not the loss of its Banking licence.

It is common cause, that, after appropriating the plaintiff's money, the defendant did not return that money and has not even begun to give any indication as when, if at all, it will repay the money.

It has contented itself with hedging behind the non-existence of a contractual relationship between it and the plaintiff. The proverbial hiding behind a finger.

Quite how and why the defendant could come to the conclusion that it can just acquire the money and refuse to repay it to the owner is one of the greatest unfathomable mysteries of this world.

There can be no doubt, that, the right to private property is one of the sacrosanct rights protected by law.

There is little doubt, that, the plaintiff should be protected against the arbitrary deprivation of its equity deposited at Banc ABC, which institution was powerless against the defendant's directive and is now unable to perform its contractual obligations, namely, paying the money to the plaintiff on demand.

To my mind, the defendant intentionally induced Banc ABC to breach its contract with the plaintiff.

I have already stated, that, an intentional inducement of a breach of contract is actionable in our law.

As a corollary to that is the submission made on behalf of the plaintiff, that, the directive which led to the appropriation of the plaintiff's foreign currency balance at Banc ABC constitutes a wrongful interference with contractual rights.

I agree.

While it is true, that, the defendant is the monetary authority charged with the management of the Banking sector and the formulation of Banking rules, I have not been directed to any authorities entitling the defendant to proscribe the release of deposits to depositors or indeed to interfere with Bankers obligations to pay balances to their clients on demand.

As a matter of policy, the security of Bank deposits should forever be protected by our courts.

Indeed, it would be an affront to the rights of depositors if ownership of their property, stored with Banks, and the culture of banking money instead of keeping it under a pillow, were to be rendered a serious economic hazard and a ruinous activity.

Our law, which protects ownership of property, is founded on a rock of wisdom. For that reason, the courts should be clear, consistent, and firm in enforcing principles protecting deposits.

Needless to say, that, the expropriation of export proceeds prior to dollarization, which have not been compensated, is one of the major factors inducing weak balance sheets of businesses resulting in poor economic performance.

I am persuaded, that, the plaintiff does have a cause of action against the defendant based on the twin concepts of the intentional inducement of a breach of contract and the wrongful interference with contractual rights: for wrongful it is if the monetary regulatory authority gives a directive for the appropriation of an individual's equity in a Bank and then failing to make good that equity.

Even if I am wrong in that conclusion, the defendant cannot escape liability on the basis of unjust enrichment.

It is now accepted, that, the general enrichment action is recognised in our law: see Industrial Equity v Walker 1996 (1) ZLR 269 (H) where BARTLETT J stated…,.:

“I am of the respectful view, that, the principal requisites for a general action on enrichment can be regarded as aptly summarised by Wouter de Vos in Verry King saanspreeklikheid in die Suid Africkaanse Reg (1958) as stated by Scholtens in the 1996 Annual Survey of South African Law, 150 at 152 as:

'(a) The defendant must be enriched;

(b) The enrichment must be at the expense of another (i.e. the plaintiff must be impoverished and there must be a causal connection between enrichment and impoverishment);

(c) The enrichment must be unjustified;

(d) The case should not come under the scope of one of the classical enrichment actions;

(e) There should be no positive rule of law which refuses the action to the impoverished person.

Obviously, these requirements can only be fulfilled if, in any given case, the action is based on a defined set of circumstances.'”

I am satisfied that all the requirements of unjust enrichment are met in the present case.

It is also not a case that would open floodgates, because, rarely do we have a situation where a depositor's foreign currency balance is appropriated the way it was in this case.

Counsel for the defendant submitted, that, the plaintiff did not plead any case based on delict, and that, for that reason, the claim should fail.

I am of the view, that, the manner in which the plaintiff pleaded its case, predicating it mainly on the fact that the amount claimed “was appropriated by the defendant” was wide enough to encompass the claim as it has been argued by counsel.

I however agree, that, it would be inappropriate, bearing in mind the banking relationship between the parties, the defendant being “a banker of banks” to direct that the money be paid directly to the plaintiff. The correct approach would be for the defendant to return the money to Banc ABC, the plaintiff's banker.

Accordingly it is ordered, that:

1. Judgment is hereby entered in favour of the plaintiff as against the defendant in the sum of USD1,007,541=30 together with interest a tempoe morae at the prescribed rate from the date of summons to date of payment.

2. The defendant is directed to deposit the said sum of USD1,007,541=30 into the plaintiff's Banc ABC account number ZWTROJ001CALUSD0019 or any other account held by the plaintiff at that Bank.

3. The defendant shall bear the costs of suit.

SC163-21 : TENDAYI WASHAYA and CHIPO WASHAYA vs MAKEBREAK TRADING (PVT) LTD and THE SHERIFF OF THE HIGH COURT (N.O.) and THE REGISTRAR OF DEEDS
Ruled By: MALABA CJ, UCHENA JA and CHIWESHE AJA

This is an appeal against the whole judgment of the High Court (“the court a quo”) holding that the first respondent had complied with the provisions of the Contractual Penalties Act [Chapter 8:04] (“the Contractual Penalties Act”) in sending a notice of cancellation of an agreement to the appellants by registered post.

The Court holds, that, the delivery of a registered mail slip at the appellants chosen domicilium citandi constituted due delivery as contemplated by section 8(3)(b) of the Contractual Penalties Act, and as provided for in the parties agreement.

It was not necessary for the document containing the written notice to be delivered to the appellants. Once there was delivery of the registered mail slip then there was delivery of the notice in the same manner as when one is given keys to a house or motor vehicle.

FACTUAL BACKGROUND

On 24 February 2015, the appellants and the first respondent entered into an Agreement of Sale (“the agreement”), in terms of which the first respondent sold to the appellants a vacant piece of land described as Stand Number 321 being a subdivision of Marconi Farm of Kinvara, held under Deed of Transfer number 1136/2002 (“the property”).

The purchase price of the property was pegged at US$30,000.

A deposit of US$15,000 was to be paid in instalments. The first US$10,000 towards the deposit was to be paid upon the signing of the agreement. The balance of the deposit of US$5,000 was to be paid in instalments of US$1,666=67 for a period of three months starting from 30 April 2015. The remaining balance of the purchase price of US$15,000 was to be paid over a period of eighteen months. That balance of the purchase price was to attract interest at the rate of 20% per annum.

Possession of the property was to be given to the purchaser upon payment of 50% of the purchase price.

It was further agreed between the parties, that, if the purchaser failed to perform any of the obligations under the agreement and failed to rectify such breach within thirty days of dispatch by the seller of written notice of such breach by registered post or hand delivery, the seller would have the right to cancel the agreement.

It was further agreed, that, in such circumstances, the seller would regain possession of the property and claim damages by way of a cancellation fee in the sum of US$2,000 subject to compliance with the provisions of the Contractual Penalties Act, or claim specific performance in terms of the agreement with interest at the rate of 20% per annum.

Pursuant to the agreement, the appellants took possession of the property.

In breach of the terms of the agreement, the appellants failed to pay some of the instalments of the purchase price when they became due for payment. Consequently, the first respondent cancelled the agreement.

The cancellation resulted in the appellants instituting summons in the court a quo. They contended, that, contrary to the terms of the Agreement of Sale, there was no thirty day notice given by the first respondent to enable them to rectify the breach.

The allegation was that the first respondent's conduct was in violation of the terms of the agreement.

The appellants sought an order, from the court a quo, declaring the cancellation of the agreement to be invalid. They also asked the court a quo to order the first respondent to accept payment of the arrear instalments together with interest thereon. Lastly, they sought an order compelling the first respondent to sign all documents necessary for the transfer to themselves of the property.

The first respondent filed a plea and a counter-claim in response to the appellants claim.

In the counterclaim, the first respondent averred, that, the appellants breached the agreement when they defaulted on the payment of instalments towards the purchase price for the property when the payment became due. As at 31 October 2017, they had accrued arrears in the sum of US$24,194=04.

The first respondent further contended, that, acting in terms of clause 11 of the agreement, it notified the appellants of the breach through a letter which was served on them via registered mail on 20 November 2017.

The allegation was that the appellants did not rectify the breach, leading to the first respondent cancelling the agreement on 30 October 2018 through a letter which was again served on the appellants via registered mail.

The first respondent prayed for the confirmation of the cancellation of the agreement, eviction of the appellants from the property, the payment of US$2,000 as cancellation fee, payment of holding over damages of US$600 per month, and costs of suit.

In response to the counter claim, the appellants denied all the averments made by the first respondent. They alleged, that, the notice of breach of the agreement given by the first respondent did not comply with the requirements of the contract between the parties.

The appellants accepted that they had breached the agreement by failing to pay the instalments when they became due and payable.

The matter proceeded by way of a Stated Case.

The agreed facts were, that, the appellants had defaulted in the payment of the instalments and had fallen into arrears in the amount of US$24,194=04. It was agreed, that, consequent upon the breach of the agreement between the parties, the first respondent dispatched a letter, by registered post, to the appellants domicilium citandi on 20 November 2017 giving them thirty days notice of intention to cancel the agreement.

The parties also agreed, that, on 15 December 2017, and prior to the expiration of the thirty days notice period, the first respondent dispatched another letter, by registered post, purportedly cancelling the agreement.

The appellants had moved from the domicilium citandi without notifying the first respondent. As a result, the registered mail remained unclaimed at the Post Office until it was returned to the first respondent on 11 April 2018.

The parties were in agreement, that, on 26 October 2018, the first respondent sent another letter to the appellants, advising them to disregard the letter of 15 December 2017 and to consider the letter of 26 October 2018 as the final cancellation letter.

Notwithstanding the letter of 26 October 2018, and in an attempt to remedy the breach of the agreement, the appellants paid into the first respondent's Bank account the sum of US$12,960 on 20 November 2018. They subsequently made payments of US$14,138=20 and US$3,780 on 7 and 9 January 2019 respectively.

The payments were not received because the first respondent had closed the Bank account.

The parties agreed that there was one issue for determination. They couched it as being:

“Whether or not the provisions of the Contractual Penalties Act [Chapter 8:04], in particular section 8(2) as read with section 8(3)(b) that entitles a debtor to a written notice before a credit provider institutes action, requires the debtor to actually receive the notice.”

The court a quo found, that, in sending, by registered post, the notice to the appellants to rectify breach of the agreement within the prescribed period, the first respondent had complied with the legal obligation under the Agreement of Sale. It held that there was compliance with section 8(3)(b) of the Contractual Penalties Act. The appellants claim was dismissed with costs.

Aggrieved by the decision of the court a quo, the appellants noted the present appeal.

The issue for determination is whether the holding by the court a quo, that the delivery of the registered mail slip at the domicilium citandi was service on the appellants of the notice of breach of the agreement of sale in terms of section 8(3)(b) of the Contractual Penalties Act was correct.

The appellants argued, that, what was delivered at the domicilium citandi was not the package containing the written notice itself.

As regards the legal consequences of the delivery, counsel referred the Court to section 40(1) of the Interpretation Act [Chapter 1:01] (“the Interpretation Act”).

Counsel for the appellants argued, that, section 40(1) of the Interpretation Act regulates the interpretation of section 8(3)(b) of the Contractual Penalties Act, which deals with the delivery of registered mail.

It was further submitted, that, section 40(1) of the Interpretation Act envisages a situation where the document with the written notice is delivered rather than the registered mail slip.

He further asserted, that, the provisions of section 8(3)(b) of the Contractual Penalties Act do not depart, in principle, from those of section 40(1) of the Interpretation Act.

He also submitted, that, section 8(3)(b) of the Contractual Penalties Act must be read together with section 40(1) of the Interpretation Act.

The argument was that there was no compliance with section 8(3)(b) of the Contractual Penalties Act.

Counsel for the first respondent argued, that, it was common cause that the registered mail slip was delivered at the appellants domicilium citandi.

He argued, that, the obligations under section 8(3)(b) of the Contractual Penalties Act were discharged by the first respondent.

Counsel further asserted, that. the first respondent did not have the additional obligation to ensure that the appellants collected the registered mail from the Post Office.

Counsel for the first respondent further stated, that, contrary to the terms of the agreement, the appellants had vacated their chosen domicilium citandi without informing the first respondent. He argued, that, while the appellants claimed not to have seen the registered mail slip, they had admitted receipt of a process sent in the same way subsequent to the delivery of the registered mail slip.

THE LAW AND THE FACTS

The question is whether the court a quo was correct in holding that the delivery of the registered mail slip at the appellants domicilium citandi constituted service of the written notice of breach of the agreement between the parties in terms of section 8(3)(b) of the Contractual Penalties Act [Chapter 8:04].

The court a quo said at pp9 and 10 of the judgment:

“The first defendant served the notice in terms of the parties agreement. Paragraph 15 of that agreement gave either party's chosen domicilium citandi and 268/64 Chiltern Road, Waterfalls was the plaintiffs chosen domicilium.

The parties had also indicated in the agreement that any variations or changes to the contract should be in writing and signed by both parties. It is in that same contract that the parties agreed on their respective domicilium for the purpose of receiving any correspondence. There was no variation or change to this.

…,.

A chosen domicilium citandi denotes where a party to a contract desires to receive whatever communication that is in relation to issues to do with such contract.

It follows, therefore, that one's residential address need not be one's chosen domicilium.

A party may choose such domicilium based on where they regard as the most convenient place to receive legal notices, and, should that change, it is to be expected that such party will duly notify those likely to be sending such notice, otherwise the whole concept of choosing a domicilium citandi loses meaning.

It is in this context that one must interpret the provisions of section 8(3)(b) of the Act.

I am therefore persuaded by Mr Nyahuma's argument, that, when the notice dated 17 November 2017 was sent by registered post to the purchaser's chosen domicilium citandi, the first defendant was complying with the exigencies of the provisions of section 8(3)(b).”

Choosing a domicilium citandi has specific legal consequences, such as -

(i) The party who elected the domicilium citandi should be ready to receive any legal notice that is delivered to that address;

(ii) If a change in address occurs, a party should notify the other contracting party, preferably in writing, of such a change in address; and

(iii) Delivery of a legal notice or document to the domicilium citandi chosen by a party to a contract will be considered sufficient for the purposes of legal action and such party would be deemed to have received the legal notice or document.

Section 8 of the Contractual Penalties Act [Chapter 8:04] provides as follows:

“8 Restriction of sellers rights

(1) No seller under an instalment sale of land may, on account of any breach of contract by the purchaser —

(a) Enforce a penalty stipulation or a provision for the accelerated payment of the purchase price; or

(b) Terminate the contract; or

(c) Institute any proceedings for damages;
unless he has given notice in terms of subsection (2) and the period of the notice has expired without the breach being remedied, rectified, or discontinued, as the case may be.

(2) Notice for the purposes of subsection (1) shall —

(a) Be given in writing to the purchaser; and

(b) Advise the purchaser of the breach concerned; and

(c) Call upon the purchaser to remedy, rectify, or desist from continuing, as the case may be, the breach concerned within a reasonable period specified in the notice, which period shall not be less than —

(i) The period fixed for the purpose in the instalment sale of the land concerned; or

(ii) Thirty days;
whichever is the longer period.

(3) Without derogation from section 40 of the Interpretation Act [Chapter 1:01], a notice shall be regarded as having been duly given to the purchaser for the purposes of subsection (1) —

(a) If it has been delivered to the purchaser personally or to an agent chosen by the purchaser for the purpose of receiving such notices; or

(b) If it has been posted, by registered post, to the address chosen by the purchaser for the delivery of correspondence or legal documents relating to the instalment sale of land concerned, or, in the absence thereof, to the purchaser's usual or last known place of residence or business.”

Section 40(1) of the Interpretation Act [Chapter 1:01] provides as follows:

“40 Service of Documents

(1) Where an enactment authorises or requires a document to be served by post, and where the word 'serve' or any of the words 'give' 'deliver' or 'send' or any other word is used, the service of the document may be effected by prepaying, registering and posting an envelope addressed to the person on whom the document is to be served at his usual or last-known place of abode or business, and containing such document, and, unless the contrary is proved, the document shall be deemed to have been served at the time at which such envelope would have been delivered in the ordinary course of post.”…,.

Parties to a contract are allowed the discretion to choose different forms of delivery of documents or legal notices that relate to the contractual relationship.

The parties elected to use the registered mail system as a mode of delivery.

Because they chose this mode of delivery of documents relating to the contractual relationship, it meant that they agreed to be bound by it.

The law of service of documents by registered post prescribes a procedure for ensuring effective service.

The procedure entails that the registered article, such as an envelope containing the document concerned and bearing the name of the addressee and place where the mail is to be delivered, be deposited by the originator or sender at a Post Office. The registered article must be accepted and its receipt, as a registered item, acknowledged.

Using the internal system of ensuring the security of registered mail, the Post Office concerned conveys the registered article to the branch nearest to the address on the registered item. The branch of the Post Office in possession of the registered item issues out a registered mail slip directed at the address on the registered article, notifying the person whose name appears as the addressee of the availability of the registered item at the Post Office for collection.

The registered item becomes capable of retrieval by the addressee from the Post Office.

Delivery of the registered mail slip at the address appearing on the registered article constitutes effective service of the registered mail. The collection of the registered item from the Post Office is the responsibility of the addressee.

The South African case of Kubaya v Standard Bank of South Africa Ltd [2014] ZACC 1 sets out, at paragraph 48, a standard practice of the Post Office on the conveyance and delivery of registered mail similar to that prevailing in Zimbabwe. The court said:

“It is so, that, section 96(1) requires that notices be delivered 'at the address' provided by the recipient. However, this requirement must be understood with due regard to the practical aspects of dispatching a notice by way of registered mail.

When a credit provider dispatches a notice in that manner, the notice is sent to a particular branch of the Post Office. That branch then sends a notification to the consumer, indicating that a registered item is available for collection. It is never the case that an item dispatched by registered mail will physically be delivered to an individual – such delivery only occurs if the item is sent by ordinary mail, which does not suffice for purposes of sections 129 and 130 of the Act.

If a consumer elects not to respond to the notification from the Post Office, despite the fact that she is able to do so, it does not lie in her mouth to claim that the credit provider has failed to discharge its statutory obligation to effect delivery.”

Where a party to a contract has chosen an address as a domicilium citandi where service of documents or correspondence on matters relating to the contract should be effected and has selected the registered mail as the preferred mode of service of documents or correspondence, compliance by the other party with the procedure prescribed under the law of service by registered post would constitute effective service of any such document or correspondence upon delivery of the registered mail slip at the chosen domicilium citandi.

The procedure prescribed by the law of service of documents or correspondence by registered post does not require delivery of the registered item itself at the chosen domicilium citandi.

In Munien v BMW Financial Services (SA) (Pty) Ltd and Another 2010 (1) SA 549 WALLIS J stated the following...,:

“It follows, that, in my judgment, provided the credit provider delivered the notice in the manner chosen by the consumer in the agreement, and such manner was one specified in section 65(2)(a), it is irrelevant whether the notice in fact came to the attention of the consumer.

As the consumer has the right to choose the manner in which notice is to be given, it is for the consumer to ensure that the method chosen will be one that is reasonably certain to bring any notice to his or her attention.

In the present case, the applicant was presumably aware of the deficiency in the postal services at the address chosen in the agreement. He was certainly aware that he had moved. In terms of clause 15.1 of the contract, he was perfectly entitled to give notice of that fact to the first respondent and to alter his domicilium. He did not do so.

His right to alter his address was reinforced by section 96 of the NCA.

In addition, he was obliged, under section 97 of the NCA, to inform the first respondent that the location of the motor vehicle had changed, but, it does not appear that he did so.

The fact that he did not receive either the notices or the summons appears to follow very largely from his own actions rather than those of the first respondent.”

It is common cause, that, the parties had agreed, under clause 15 of the agreement, that the domicilium citandi would be as stated in the agreement. It is also common cause, that, under clause 14 of the agreement, the parties had agreed that any variation or change to the contract would be in writing and agreed on by both parties.

The written notice, drawing the attention of the appellants, as purchasers, to breach of the contract and calling upon them to rectify the breach within thirty days of service of the notice on them failing which cancellation of the contract would follow, was sent by registered post to the branch of the Post Office nearest to the address the appellants had chosen as the domicilium citandi.

The Post Office issued out a registered mail slip to the domicilium citandi, notifying the appellants of the availability of the registered item for collection. The registered mail slip was delivered at the domicilium citandi.

The act of delivery of the registered mail slip at the domicilium citandi completed the process of effective service of the notice by registered post contemplated under section 8(3)(b) of the Contractual Penalties Act.

Section 8(3)(b) of the Contractual Penalties Act does not require actual receipt of the registered mail itself by the addressee. It does not require the seller, under an instalment sale of land, to bring the contents of the notice of breach to the subjective attention of the purchaser.

Section 8(3)(b) of the Contractual Penalties Act is to the effect, that, the notice shall be regarded as having been duly given to the purchaser if it has been posted, by registered post, to the address chosen by the purchaser for the delivery of correspondence or legal documents relating to the instalment sale of land concerned.

The seller discharged its obligation to the appellants, as purchasers, in terms of the contract, as read with section 8(3)(b) of the Contractual Penalties Act, regarding the mode of service of the notice of breach of the contract.

The fact that the appellants no longer resided at the chosen domicilium citandi was of no consequence to the determination of the question whether delivery of the registered mail slip at the domicilium citandi constituted effective service of the notice of breach of the contract for purposes of section 8(3)(b) of the Contractual Penalties Act.

The risk of non-receipt of the registered item lay with the appellants once the registered mail slip was delivered at the domicilium citandi. The obligation to notify the seller, in writing, that they were no longer residing at the chosen domicilium citandi was theirs.

In Van Niekerk and Another v Favel and Another 2006 (4) SA 548 (W)…, it was held, that, the requirement of notifying the purchaser of breach of contract and making demand of the purchaser to rectify the breach was satisfied provided that the letter had in fact been sent to him by registered post, whether or not it was received by the purchaser.

The contention advanced on behalf of the appellants was that the service of the written notice of breach by the seller, on the purchaser, by registered mail, required under section 8(3)(b) of the Contractual Penalties Act was the delivery of the written notice itself in a registered envelope at the chosen domicilium citandi.

That meaning, of section 8(3)(b) of the Contractual Penalties Act, was said to be derived from the application of section 40(1) of the Interpretation Act on the interpretation of enactments providing for service of documents by registered post.

The contention advanced on behalf of the appellants overlooked the principle contained in section 2(1)(a) of the Interpretation Act, to the effect, that, the application of the provisions of the Interpretation Act to the construction of any enactment must be consistent with the intention, purpose, or context of the enactment.

The purpose of section 8(3)(b) of the Contractual Penalties Act is to make provision for effective service of a written notice of breach of the instalment sale of land by the seller, to the purchaser, where it has been posted by registered post to the address chosen by the purchaser for the delivery of correspondence or legal documents relating to the instalment sale of land.

Section 8(3)(b) of the Contractual Penalties Act expressly provides that the notice shall be regarded as having been duly given to the purchaser for the purposes of subsection (1)(b) (termination of the contract) if it has been posted by registered post to the address chosen by the purchaser as the domicilium citandi.

Given the provisions of section 2 of the Interpretation Act, section 40(1) of the of the Interpretation Act may not be relied upon to contradict the purpose of section 8(3)(b) of the Contractual Penalties Act.

Section 8(3)(b) of the Contractual Penalties Act does not need the application of section 40(1) of the Interpretation Act because its provisions are clear and unambiguous.

DISPOSITION

Accordingly, it is ordered as follows -

“The appeal is dismissed with costs.”

HHB62-15 : MICHAEL BIDDLECOMBE vs THE STATE
Ruled By: TAKUVA J and MOYO J

This is an appeal against the decision of the Magistrates Court sitting at Gwanda, in which the appellant was ordered to stand trial on allegations of contravening the provisions of section 3 of the Gazetted Land (Consequential Provisions) Act [Chapter 20:28] (hereinafter “the Act”).

The factual allegations were, that, on 19 May 2006, the State acquired Famona Farm in terms of section 16(B)(2)(a)(iii) of the Constitution of Zimbabwe by publishing General Notice 128 of 2005 in the Government Gazette (Extraordinary) of the 19th of May 2006.

The appellant then failed to comply with the provisions of section 3 of the Gazetted Land (Consequential Provisions) Act. Specifically, it was alleged, that, the appellant failed to vacate the acquired land within 45 days from the fixed date which was the 20th day of December 2006.

Essentially, the charge was, that, the appellant had continued to occupy the farm without lawful authority.

After the ruling, the appellant appealed to this court.

On 9 September 2013, both parties filed what they termed “Stated case on a point of law arising on appeal.” The document states:

“Background and Accepted Facts

1. On the 29th November 2010, the above cited appeal was called before this Honourable Court.

2. Upon hearing the parties briefly, the court directed that counsel for the respondent must investigate the authenticity of the letters filed of record by the appellant.

3. Such letters related to Famona Farm, the farm in respect of occupation of which the criminal charges against the appellant were levelled, which charges the appellant moved, unsuccessfully, to quash, leading to the present appeal.

4. The letters purported that Famona Farm had been transferred from the control of the Ministry of Environment and Tourism.

5. Further, the letters reported that the Ministry of Environment and Tourism desired to leave the farm, for stated reasons, in the control and administration of the appellant and his company, GAMESTONE SAFARIS.

6. Counsel for the respondent had investigated the letters and can confirm before this Honourable Court, that, the letters have been written with the authority of the Ministry of Environment and Tourism and that this Ministry has consented that the appellant and GAMESTONE SAFARIS remain in occupation and control of the farm.

7. The parties, therefore agree that:

7.1 Famona farm has been acquired by the State;

7.2 The State is now the owner of the farm;

7.3 The administration of Famona Farm, however, has been removed from the Ministry of Lands, Agriculture and Rural Resettlement, to the Ministry of Environment and Tourism;

7.4 The Ministry of Environment and Tourism administers the farm on behalf of the State.

POINTS OF LAW

At the present time, with the leave of this Honourable Court, the parties agree that they will, when the appeal is called, argue only the following points of law:

8.1 Whether the letters produced of record by the appellant, emanating from the Ministry of Environment and Tourism, amount to a 'permit' or other legal authority for the appellant to remain on the farm;

8.2 Whether, therefore, the charges against the appellant were incompetent, standing to be quashed by the trial court, by reason that the appellant had lawful authority to remain on Famona Farm.”

The appellant's argument is two-pronged:

(i) Firstly, he argues, that, he had lawful authority in the form of letters from certain Government departments to remain on the farm.

(ii) Secondly, he relies on the defence of mistake of law.

I will deal with these grounds seriatum, but, before I do that, let me examine the essentials of the offence the appellant was charge with.

Section 3(1) and (3) of the Gazetted Land (Consequential Provisions) Act read as follows:

“(1) Subject to this section, no person may hold, use, or occupy gazetted land without lawful authority;

(2)…,.

(3) If a former owner or occupier of gazetted land, who is not lawfully authorized to occupy, hold, or use that land, does not cease to occupy, hold or use that land after the expiry of the appropriate period referred to in subsection (2)(a) or (b), or, in the case of a former owner or occupier referred to in section 2(b), does not cease to occupy his or her living quarters in contravention of proviso (iii) to section 2(b), he or she shall be guilty of an offence and liable to a fine not exceeding level seven or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.”

Section 2 of the Gazetted Land (Consequential Provisions) Act, in which the definitions are contained, is also relevant in the following parts:

1. In its definition of lawful authority, as follows;

“'Lawful authority' means -

(a) An offer letter; or

(b) A permit; or

(c) A land settlement lease: and

'Lawfully authorized' shall be construed accordingly.”

2. In its definition of offer letter:

“'Offer letter' means a letter issued by the acquiring authority to any person that offers to allocate to that person any gazetted land, or a portion of gazetted land, described in that letter;” and

3. In its definition of permit:

“'Permit' when used as a noun, means a permit issued by the State which entitles any person to occupy and use resettlement land.”

From the above, it is clear, that, the following are the essential elements of the charge;

(a) The accused must be a former owner or occupier;

(b) Of gazetted land;

(c) Who has not ceased to occupy, hold, or use that land;

(d) After the expiry of the appropriate period referred to; and

(e) Has no lawful authority to occupy or use that land.

In casu, the only issue is whether or not the appellant has lawful authority to occupy or use that land.

It was contended, on the appellant's behalf, that, he had permission to remain on the farm. This permission arose from the various negotiations, representations, and undertakings by Government officials.

The essence of the representations was that the farm would be removed from the control of the Ministry of Lands, Agriculture and Rural Resettlement, the acquiring authority, to the control of the Ministry of Environment and Tourism because of the business operations carried out on the farm.

Further, an undertaking was then made to the appellant and the company, that, upon such transfer, the Ministry of Environment and Tourism would sign a 25 year lease with the appellant.

The appellant attached the following correspondence by consent of the respondent:

1. Appendix 1, a letter, dated 1 November 2007, advising the appellant of the initiative to transfer the farm from the Ministry of Lands, Agriculture and Rural Resettlement, to the Ministry of Environment and Tourism;

2. Appendix 2, a letter from the Director General of the Zimbabwe Parks and Wildlife Management Authority, confirming the strategic location of and business at the farm on 18 February 2008.

3. Appendix 3, a letter, dated 9 November 2010, served as apparent from the stamp and signature acknowledging receipt of a copy on the Minister of Lands and Rural Resettlement on 9 November 2010, which advised that a 25 year lease was being prepared in favour of the company.

4. Appendix 4, letter from the appellant, dated 16 November 2010, accepting the offer of a 25-year lease.

5. Appendix 5, letter, dated 20 February 2012, advising that deliberations were being held between the Ministries of Lands & Rural Resettlement and Environment and Tourism, concerning the farm in issue.

6. Appendix 6, a letter, dated 12 July 2012, advising that the farm had been formally transferred from the control of the Ministry of Environment and Tourism.

The respondent, while acknowledging the authenticity and sources of the above letters, insisted, that, the appellant did not have lawful authority because he does not possess an offer letter issued by “the acquiring authority” i.e. the Ministry of Lands.

However, the respondent conceded, that, a proper interpretation of the definition of a permit in the Gazetted Land (Consequential Provisions) Act is that it can be issued by “any State organ” unlike an offer letter that can only be issued by the “acquiring authority.”

Put differently, it was conceded, that, the definition of a 'permit' is wide.

In my view, the land reform policy is multi-faceted in that it focuses on different uses of acquired land.

What happens in practice is that once land is gazetted and acquired by the State through the “acquiring authority” that authority can transfer the land to another ministry for occupation and use in accordance with that ministry's requirements and needs.

Gazetted land, for example, can be transferred from the Ministry of Lands to the Ministry of Local Government for urban expansion. It can also be transferred to the Ministry of Environment and Tourism in order to boost or promote proper management of Government's wildlife policy.

For these reasons, the argument, that, notwithstanding such transfers, the Ministry of Lands retains the mandate to authorize the use and occupation of such transferred land becomes untenable, not only because it defies logic and common sense, but, because it contradicts the clear meaning of the definition of the word 'permit' in the Gazetted Land (Consequential Provisions) Act.

In casu, the inter-ministerial process has since been finalised in July 2012, as seen from appendix 6.

As matters stand, the farm in issue is now under the control of the Ministry of Environment and Tourism, which, based on their business operations and record, is willing to permit the appellant and the company to occupy and run the farm on the basis of a twenty-five year lease.

In view of the wide definition of the word permit, I find that the letters of 16 November 2010 and 12 July 2012, in particular, constitute a permit as defined in section 2 of the Gazetted Land (Consequential Provisions) Act.

Consequently, the appellant had lawful authority to occupy and use the farm in issue.

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HH44-09 : BLESSMOE CHANAKIRA and AUXILIA DANAYI MYNYEZA vs MAI KAI REAL ESTATE DEVELOPMENT TRUST and BERNARD MUTANGA
Ruled By: BERE J

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Ruled By: CHIWESHE J

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Ruled By: MAVANGIRA J

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HH186-10 : CAFCA LIMITED vs RESERVE BANK OF ZIMBABWE
Ruled By: MTSHIYA J

HH228-10 : CAROLINE MABAIRE vs SHEPHERD JAILOSI and THE MINISTRY OF TRANSPORT AND COMMUNICATIONS
Ruled By: KUDYA J

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Ruled By: NDOU J

HB63-10 : SALLY MAPLANKA vs B. A. NCUBE HOLDINGS
Ruled By: NDOU J

SC47-16 : PROFESSOR CHETSANGA and COLLIN KUHUNI and MONICA MUKONOWESHURO vs PATTERSON TIMBA and RENAISSANCE FINANCIAL HOLDINGS (PRIVATE) LIMITED
Ruled By: GWAUNZA JA, PATEL JA and MAVANGIRA JA

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Ruled By: ZIYAMBI JA, GARWE JA and BHUNU JA

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Ruled By: GARWE JA, GOWORA JA and BERE AJA

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Ruled By: TAKUVA J and MOYO J