Appeal re: Findings of Fact or Exercise of Discretion Made by Lower Court and Non Sequitur Reasoning iro Approach

SC23-20 : JOHN CHIKURA N.O. and DEPOSIT PROTECTION CORPORATION vs AL SHAMS GLOBAL BVI LTD
Ruled By: MAKARAU JA, HLATSHWAYO JA and MAKONI JA

This is an appeal against the whole judgment of the High court handed down on 15 June 2016, granting a declaratory order in favour of the respondent.The judgment declared binding and enforceable certain agreements concluded between the respondent and Interfin Bank Ltd and further compelled the first and second appellants ...

This is an appeal against the whole judgment of the High court handed down on 15 June 2016, granting a declaratory order in favour of the respondent.

The judgment declared binding and enforceable certain agreements concluded between the respondent and Interfin Bank Ltd and further compelled the first and second appellants to honour the terms of the agreements.

BACKGROUND FACTS

The respondent purchased certain bankers acceptances from Interfin Bank Limited ("the Bank”) on a buy back basis. This was between 2011 and 2012. As security for the payment of the purchase price upon the maturity of the bankers acceptances, the Bank ceded to the respondent various agreements that it had with the drawers and issuers of the bankers acceptances. In addition, the parties concluded two agreements, in April 2012, styled Security Assignment Agreement and Security Trust Deed, respectively, detailing the terms of the transaction.

In simple terms, the respondent made available to Interfin Bank Limited (the Bank) a certain sum of money (whose amount is not disclosed in any of the written agreements), in exchange for the Bank's debts. As security that the respondent would recover part or the whole of its outlay, the Bank ceded to it the agreements and rights that the Bank had against the debtors and the debts due therefrom.

Thus, it was specifically agreed between the parties that:

(i) The security and contracts assigned to the respondent would be re-assigned to Interfin Bank Limited (the Bank) upon repayment of all amounts due to the respondent;

(ii) The Bank would provide the respondent with any information or documents concerning the security held in respect of the advance;

(iii) The Bank would promptly commence legal proceedings against any issuer of the bankers acceptances or assigned contracts who defaulted thereof; and

(iv) The Bank would, at the request of the respondent, provide all reasonable administrative and operational support in connection with the enforcement of any judgment or award given against a party to an assigned contract.

On 11 June 2012, Interfin Bank Limited (the Bank) was placed under curatorship by the Reserve Bank in terms of section 53 of the Banking Act [Chapter 24:20]. This is the law that authorises and empowers the Reserve Bank to curate a bank which is in an unsound financial position and is not operating in accordance with sound administrative and accounting practices or has failed to comply with the minimum prescribed financial requirements.

A curator was duly appointed.

The agreements that Interfin Bank Limited (the Bank) had concluded with the respondent, in April 2012, were brought to his attention. He agreed to be bound by the terms of the agreements. Up to the time when his curatorship ended, in December 2014, the curator collected on some of the debts on behalf of the Bank and remitted these to the respondent in accordance with the terms of the two agreements.

In February 2015, Interfin Bank Limited (the Bank) was placed under final liquidation. The second appellant was appointed as the liquidator.

Once again, the respondent brought to the attention of the liquidator the two agreements, at the same time seeking confirmation that the second respondent would honour the agreements. The first appellant, in his capacity, then, as Chief Executive Officer of the second appellant, did not respond to the inquiry.

This prompted the respondent to file an application with the court a quo four months after making the inquiry.

In the application, the respondent sought a declaratory order that the agreements were binding on the appellants. As consequential relief, it prayed that the appellants be compelled to honour the terms of the agreements.

The application was opposed.

The appellants, as respondents a quo, filed a counter application seeking an order setting aside the agreements and compelling the respondent to refund the remittances he had received from the curator.

At the hearing of the application, the appellants took a number of points in limine. These included the following:

(i) That, there were material disputes of facts which could not be resolved on the basis of the papers filed of record;

(ii) That, there was no prior exchange control approval for the agreements;

(iii) That, the respondent, being a foreign company, was illegally trading in the jurisdiction without a locally registered office;

(iv) That, the transactions between the respondent and Interfin Bank Limited (the Bank) were impeachable under the insolvency laws; and

(v) That, the respondent had proceeded to file the court application without the prior leave of the court.

After dismissing all the preliminary points and the counter-claim, the court a quo, as stated above, granted the declaratory order and consequential relief.

Aggrieved by that decision, the appellant noted this appeal, raising eight grounds of appeal. It is not necessary that I recite the eight grounds in this judgment.

At the hearing of the matter, counsel for the appellants argued, and correctly so in my view, that, one or more of the first three grounds of appeal would resolve the appeal. These included the issue raised in the last point in limine taken by the appellants a quo, to the effect that the respondent had proceeded to file the proceedings a quo without the prior leave of the court.

This appeal turns on whether the proceedings a quo were properly before that court. Put differently, it turns on whether leave was required before the application could be made?

As indicated above, the issue whether leave was required before the proceedings a quo could be brought was specifically raised before the court a quo. Agreeing with the argument by the respondent, that, the cause before it was not against Interfin Bank Limited (the Bank) but was against the liquidator, as an administrative authority, under the Administrative Justice Act [Chapter 10:28], the court a quo held that its prior leave was not necessary in the circumstances.

It was of the further view, that, the cause before it sought to coerce the first appellant, in his official and personal capacity, to respond to the questions that the respondent had posed to him as to whether the second appellant would recognise and honour the two agreements.

In its view, where a liquidator acts unreasonably or unfairly, he or she can be sued without the leave of the court.

It is not necessary that I determine whether the court a quo was correct in holding, that, where the liquidator, as an administrative authority, is sued to respond to questions posed to him or her in connection with the liquidation process, leave of the court is not required before such proceedings are commenced.

This is so because the proceedings before the court a quo were not to compel the liquidator to respond to the questions that had been posed to it by the respondent or to compel the liquidator to act reasonably and fairly.

The cause before the court was against Interfin Bank Limited (the Bank) in liquidation, founded as it was on the two contracts between the Bank and the respondent. The cause was contractual and not administrative in nature. This is clear from the terms of the order that was sought and granted.

Per contra, no order was sought against the first appellant in his personal capacity.

Whilst it is common cause that the first appellant had not responded to the inquiry by the respondent, the draft order did not seek to compel him to so respond.

Thus, if the application was to compel the first appellant to respond to the inquiry, as the court a quo held, then, the draft order would have sought a mandamus and the order of the court would have equally been a mandamus directing the appellants to respond to the inquiry and nothing more.

It was not.

Instead, the order sought, and granted, required the second appellant to step into the shoes of Interfin Bank Limited (the Bank) and apply the assets of the Bank to meet the terms of the agreements.

Having found as the ratio of its decision, that, the application before it sought to compel the first appellant to respond to the inquiry made by the respondent, it stretches the mind how the court a quo then issued the order that it did.

In making its finding, that leave was not necessary, the court a quo had this to say:

"It is only where the company under liquidation is being asked to perform certain functions that the leave of the court is required. But, where it is the liquidator himself or herself is the one (sic) who is being asked to do or not to do certain things, then, the liquidator can be sued without citing the company under liquidation. The contention by the respondent is therefore baseless and it is dismissed."

As correctly observed, in part, by the court a quo, leave of the Court is required before proceeding against a company and/or bank in liquidation.

This is so because the broad purpose of the law of insolvency and the winding up of companies is to ensure due distribution of the insufficient assets of the debtor company amongst the competing creditors under the watchful eyes of the court.

Thus, the position is settled at law, that, an order placing an estate or a company in liquidation has the effect of creating a concursus of the creditors of the insolvent and no creditor can thereafter do anything that will alter the rights and interest of other creditors without the leave of the court.

Un-supervised and unsanctioned litigation and proceedings against the insolvent will disturb the due distribution of the insufficient assets and removes the role of the court from the process.

It may also be added, that, the leave of the court is necessary in such circumstances as a broader consideration of protecting the economically fragile company from unnecessary litigation quite apart from merely protecting the interests of the creditors.

It being common cause, that, leave of the court was not sought and obtained prior to the institution of the proceedings a quo, the appeal succeeds on this basis alone.

It is therefore my finding, that, the court a quo erred in construing the cause that was before it.

The application a quo was not against the appellants in their personal capacities. It was against Interfin Bank Limited (the Bank) in liquidation. It sought to compel the second appellant to perform under the two agreements that the respondent had with the Bank - as if it was the Bank.

Such proceedings ought to have been with the leave of court.

In view of the finding that I make above, it is not necessary that I determine the remaining grounds of appeal.

There is no reason why costs in this appeal should not follow the cause. The respondent did not advance any for our consideration.

In the result, I make the following order:

1. The appeal is allowed with costs.

2. The judgment of the court a quo is set aside and is substituted with the following:

“The application is dismissed with costs.”

SC24-18 : MEDLOG ZIMBABWE (PVT) LTD vs COST BENEFIT HOLDINGS (PVT) LTD
Ruled By: GARWE JA, GOWORA JA and GUVAVA JA

The respondent issued summons out of the High Court seeking an order for the release of its plastic bags which were being retained by the appellant, payment of the sum of US$157,350=05 representing the business it lost as a result of such retention, and costs of suit on the scale of legal practitioner and client.

The respondent also sought payment of interest from the date of issue of summons to the date of payment in full.

After hearing evidence and submissions from the parties, the court a quo ordered the appellant to pay the sum of $157,350=05 to the respondent being damages for loss of business, interest on that sum at the prescribed rate, and costs of suit on the ordinary scale.

The present appeal is against that order.

FACTUAL BACKGROUND

The appellant is a company registered in accordance with the laws of Zimbabwe and carries on business from premises in Avondale, Harare. It is an agent of the Mediterranean Shipping Company (“Mediterranean Shipping”) a company that operates worldwide with its core business being the carriage of containers.

As agent, appellant's responsibility is to fulfil the obligations of Mediterranean Shipping by facilitating delivery of containerised cargo to the clients of Mediterranean Shipping in Zimbabwe.

In this particular instance, at the behest of Mediterranean Shipping, the appellant supervised the movement, by road, of the plastic bags, which were in a container, from the Port of Beira to Mutare Dry Port.

In Mutare, the appellant instructed the employees of the Port not to release the goods until certain monies were paid by the respondent.

It is common cause, that, initially, the appellant refused to release the container until a sum of money owed by the wife of one of the directors of the respondent had been paid. Upon realizing that the debt had nothing to do with the respondent, the appellant then demanded payment of the sum of $80=50 in respect of handling charges.

The respondent, believing the bags had been unlawfully retained by the appellant, instituted proceedings in October 2012 for the release of the bags, damages for loss of business, and interest thereon at the prescribed rate.

The sum of $80=50 was only paid in August 2013 after which the plastic bags were then retrieved.

PROCEEDINGS A QUO

In its declaration, the respondent alleged that it had imported a container of plastic bags from Hong Kong and that it had engaged the appellant as its agent to facilitate the importation and clearing of the goods with the Zimbabwe Revenue Authority(“ZIMRA”).

It alleged, that, notwithstanding the fact that it had paid the import duty and the appellant's clearing fees, the appellant had refused to release the container on the basis that it was owed money from a previous transaction by the wife of one of the respondent's directors.

It alleged, that, consequent upon the refusal by the appellant to release the container, a client who had placed an order with it for plastic bags had cancelled the order as a result of which the respondent had suffered damages in the amount claimed.

In its plea, the appellant, as defendant, denied that it had entered into a contract of agency with the respondent.

It alleged, that, it had been contracted by the shipper (a term used in the freight business to denote the person who prepares the necessary documentation for the carriage of goods), Hong Kong Richer Int'l Group Limited (”Richer International”) to transport the cartons of plastic bags cif Mutare. It alleged, that, it duly discharged its obligations to deliver the container to Mutare Dry Port after which the respondent became liable to pay its administration fee relating to the Bill of Lading and the container in the sum of $80=50.

The appellant accepted that it refused to release the container before payment of the administration fee in the sum of $80=50 had been made.

At a pre-trial conference before a judge in chambers, the parties agreed the issues to be determined at the trial.

The issues included, inter alia, whether a contract existed between the parties, and, if so, the terms thereof. Further, whether the appellant was entitled to refuse to release the container until payment of the handling fee of $80=50 had been made, and, if not, whether the respondent had suffered damages in the amount claimed in the summons.

During viva voce evidence, the respondent, represented by its managing director, Albert Kuwaza, stated as follows:

His company ordered the plastic bags from China, and, through the supplier, engaged the appellant at its offices in China to transport the merchandise from China to Mutare, Zimbabwe. Once the goods were in Mutare, the appellant then demanded payment of the sum of $1,750 which it alleged was owed by a Mrs Kuwaza, wife of one of the respondent's directors, in respect of a previous transaction.

The issue of the handling fee of $80=50 was raised by the appellant for the first time in October 2012, way after a client who had placed an order for the bags had cancelled the purchase.

Under cross-examination, he conceded, that, in fact, the company with which he contracted in China was Hong Kong Richer Int'l Group Limited (Richer International) and that Richer International, in turn, contracted with Mediterranean Shipping to transport the goods to Mutare. He further conceded, that, the clearing fees were paid directly to Green Motor Services, the company that was operating Mutare Dry Port and not to the appellant. He told the court, further, that, as far as he was concerned, the appellant, Mediterranean Shipping, and Green Motor Services were part of the same company.

Following the dismissal of an application for absolution at the close of the plaintiff's case, the appellant's managing director, Dr Giorgio Spambinato, gave evidence before the court a quo. His evidence was as follows:

The appellant, which operates from offices situate at 27 Natal Road, Belgravia, Harare is an agent of Mediterranean Shipping. It has no offices outside Zimbabwe. The appellant's role was to assist Mediterranean Shipping to execute its contractual obligation of moving cargo into and out of Zimbabwe. In this case, the appellant only supervised the movement, by road, of the container from the Port of Beira to Mutare. It was not involved in the clearance of the goods with the Zimbabwe Revenue Authority (ZIMRA).

He confirmed that, initially, the appellant had insisted on payment of the sum of $1,750 owed by a Mrs Kuwaza in respect of a previous transaction, but, on realizing the error, had personally instructed that the container be released on payment of the sum of $80=50.

That sum represented the handling fee for facilitating the necessary documentation and supervising the speedy execution of delivery by sub-contractors and service providers.

He explained, that, in Zimbabwe, it is customary for the agent handling the cargo on behalf of Mediterranean Shipping to recover the costs directly from the recipients of the cargo. In other countries, the handling fee is paid by Mediterranean Shipping.

Whatever role the appellant played in this case was in fulfilment of its agency agreement with Mediterranean Shipping.

In its closing address a quo, the respondent submitted, that, the question whether there was a contract was “of no real consequence” and that “there needn't have been a contract between them because the scenario can be resolved by the principles of depositum…,.” Further, that, as depositary, the appellant had an obligation to return the goods to the respondent upon demand.

The respondent further submitted, that, it was clear from the summons and declaration that the claim “was vindicatory in nature, not contractual.”

Accordingly, the respondent prayed for its claim for damages and interest thereon to be granted on the basis of depositum.

In its address a quo, the appellant submitted, that, on the evidence led before the court, no contract had been proven. The person with whom the respondent had communicated in China was not the appellant but an employee of Mediterranean Shipping. More critically, the terms of the alleged contract between the respondent and the appellant had not been established. Moreover, at no stage had the respondent deposited the goods with the appellant.

In its judgment, the court a quo found, that, Mr Kuwaza, the managing director of the respondent had been unclear as to the nature of the relationship between the appellant, Mediterranean Shipping, Hong Kong Richer Int'l Group Limited (Richer International) and the respondent.

The court remarked as follows at page 10 of its judgment:

“What is apparent from Mr Kuwaza's evidence is that he did not produce any documents to show the existence of a contract between the plaintiff and the defendant. From the evidence that is before me, it is clear that the plaintiff entered into a shipping agreement with Mediterranean Shipping Company in Hong Kong, China in April 2012 for the shipment of its plastic container from China to Zimbabwe. That contract did not involve the defendant.”

However, at pages 10-11 of the cyclostyled judgment, the court a quo stated:

“I am of the considered view, that, the circumstances of this case show, that, there was a contract between the plaintiff and the defendant. Although the defendant said that it was acting as an agent of Mediterranean Shipping Company, its conduct towards the plaintiff shows that it also contracted with the plaintiff separately. It is not disputed that the defendant facilitated the importation of the plaintiff's cargo from the Port of Beira to Mutare.

Thereafter, it demanded payment from the plaintiff for the service that it had rendered.

The parties did not enter into this contract verbally or in writing, but, they did so by their conduct.

By demanding payment from the plaintiff for the costs it incurred in facilitating the importation of the plaintiff's cargo, the defendant created a contract between itself and the plaintiff. It made it a condition of the contract, that, if the administration fee was not paid, the plaintiff's cargo was not going to be released.

If there was no contract between the plaintiff and the defendant, the defendant should have simply demanded payment of its fees from Mediterranean Shipping Company which it alleges to be its principal.

At law, an agent's duty is to perform his mandate on behalf of his principal and he accounts to his principal. The agent's remuneration is paid by the principal and not by a third party.

I therefore take it, that, the moment an agent starts demanding payment from the third party and not from his principal, then, it means that he is no longer acting in terms of the contract between himself and his principal, but he would have created his own contract with the third party.

That contract he would have created with the third party is separate from his contract with his principal.

In casu, this is what the defendant did. It created its own contract with the plaintiff, which contract was separate from the one it had with Mediterranean Shipping Company.”

At page 12 of its judgment, the court, without commenting on the submission by the respondent, that, it now relied on a contract of depositum, concluded by stating:

“If there was no contract between the 2 companies, then, the defendant should and would have demanded its fee from Mediterranean Shipping Company which is its principal. If there was on (sic) contract, the defendant had no business demanding that money from the plaintiff. It also had no business withholding or refusing to release the plaintiff's container on the basis that the handling fee had not been paid. All the defendant's payments would have been due from Mediterranean Shipping Company. The plaintiff managed to prove that there was contract between itself and the defendant.”

Based on the above findings, the court concluded, that, the appellant had wrongfully refused to release the container and that the respondent had proved its contractual damages. It consequently made the order which is the subject of this appeal.

GROUNDS OF APPEAL

In its notice of appeal, the appellant raised five grounds. These are:

(i) The court a quo erred in finding, that, there was a contract between the appellant and the respondent when the latter was unable to identify the nature of the contract it relied upon and its terms – i.e. whether the contract was one of carriage, depositum, or agency.

(ii) The court a quo erred in finding, that, there was a contract between the appellant and the respondent despite a contrary indication in the Bill of Lading and the respondent's lack of knowledge of the terms of the contract it alleged.

(iii) The court a quo erred in placing the onus of proving the terms of the contractual relationship between the appellant and the respondent on the former, albeit obliquely.

(iv) The court a quo erred in finding that -

(1) The contract for the sale of the plastic bags between the respondent and Nedol Investments (Private) Limited was not a sham; and

(2) The loss suffered by the respondent, if any, was reasonably foreseen by the appellant at the time of the conclusion of the alleged contract, and, despite the fact that the reasonable foreseeability was not specifically pleaded and proved.

(v) The court a quo erred in finding that the respondent had mitigated its loss.

APPELLANT'S SUBMISSIONS BEFORE THIS COURT

In its submissions before this Court, the appellant has argued, that, the respondent did not sufficiently identify the nature of the contract between the parties, in particular, whether it was one of agency or depositum. The terms of the agreement, be it agency or depositum, remained unknown.

It further submitted, that, the case for the respondent was muddled and that the judgment of the court a quo was equally confusing and confused. Lastly, it submitted that whilst the facts show some relationship between the parties, the respondent had not proved the nature of the relationship that existed between them.

RESPONDENT'S SUBMISSIONS BEFORE THIS COURT

In its heads of argument, the respondent has submitted as follows:

Its declaration in the court a quo made it clear, that, what it sought was the release of its goods arising from their unlawful detention. Further, that, even if there was no contract of agency between the parties, the respondent “was not without a remedy” and that there was a tacit contract of depositum between the parties.

In paragraph 3 of its heads of argument, it has further stated:

“The respondent had contended that the claim was of a vindicatory nature and that any contract between the parties was one of depositum…,. As the appellant states, the court did not deal with these issues. It is here noted, that, by the time the matter came before the court, the goods had been released, and, if the claim had originally been vindicatory in nature, it no longer was, which was probably the reason why the court a quo allowed itself to be misled by the appellant to believe that the claim fell to be decided in contract.”…,.

At paragraph 10 of its heads of argument, the respondent has also stated:

“The absence of a contract, however, would not have left the respondent without a remedy because he would have a claim in delict for any loss incurred as a result of the unlawful possession of his property…,.”

Finally, at paragraphs 13 and 14 of its heads, the respondent has further argued:

“13. Thus, as the respondent's counsel contended at p239, the issue whether there was a contract between the parties was really of no consequence and the appeal cannot succeed on the basis that no such contract was brought into being.

The court a quo found, in effect, that, there was a tacit contract between the parties based on the fact, that, the appellant raised charges mentioned above against the respondent.”...,.

REQUISITES FOR PLEADING A CONTRACT

In an action based on a contract, the material averments that must usually be made are the existence of the contract, the relevant terms of the contract, and the applicability of those terms to the particular right forming the basis ex contractu of the claim: see HERBSTEIN & Van WINSEN, The Civil Practice of the High Courts of South Africa (5th edn, Juta and Co. Ltd, Cape Town 2009)…,.

Whether the contract of agency was proved

This was the basis of the respondent's cause of action before the High Court.

The respondent's managing director did not know the exact relationship between the appellant, Mediterranean Shipping, and Hong Kong Richer Int'l Group Limited (Richer International) of Hong Kong.

From the evidence, it is clear that the appellant was not involved in the transactions that took place in China. It does not conduct operations outside Zimbabwe. It only got involved, as agent of Mediterranean Shipping, in tracking the container once it landed in Beira and in having it transported to Mutare Dry Port.

It was also clear from the evidence, that, as agent of Mediterranean Shipping, the appellant was supposed to receive payment from Mediterranean Shipping for its role in checking the Bill of Lading and ensuring that the cargo was delivered to Mutare Dry Port. The appellant's managing director explained, however, that, it is the practice in Zimbabwe for the recipient to be billed directly by the appellant.

Clearly, no contract of agency was proved.

The fact that the appellant invoiced the respondent for handling fees does not, on its own, show the existence of a contract. The exact relationship that existed between the two parties was not established.

In the circumstances, the court a quo should have granted the application for absolution from the instance which was made at the close of the case for the plaintiff.

The court a quo accepted, that, the respondent had not produced documents to show the existence of a contract. The court further accepted, that, the respondent had entered into a shipping agreement with Mediterranean Shipping in Hong Kong and that the appellant was not involved.

The court also accepted, that, the appellant only got involved in supervising the movement of the container from Beira to Mutare at the behest of Mediterranean Shipping. The court further found, that, although the parties had been involved in these transactions over the years, the respondent did not know that the appellant was merely an agent of Mediterranean Shipping.

Having made these findings, that really should have been the end of the matter.

The suggestion, that, judging by the conduct of the parties, there must have been some other undefined contract between them, is not borne by the evidence. In any event, the court did not state what type of contract this may have been and what its terms were.

Of significance is the fact, that, the respondent itself accepted, in its closing submissions, that, its claim was not based on agency but rather on depositum.

Having abandoned its claim based on a contract of agency, it was not for the court a quo to find, as it did, that there was some other undefined contract. Once the respondent abandoned its pleadings, the court should have granted absolution from the instance.

The attempt by the respondent, to rely on the rei vindicatio and depositum, as well as delict, clearly confirms that the respondent had not established any real cause of action against the appellant.

Appealed
SC42-15 : CRISPEN HATIVAGONE and AUDREY HATIVAGONE vs CAG FARMS (PVT) LTD and DBT PROPERTIES and REGISTRAR OF DEEDS
Ruled By: GARWE JA, GOWORA JA and PATEL JA

THE FACTUAL BACKGROUNDThe appellants are the owners of a certain immovable property, known as WAMICA Farm measuring 644,795ha (“the farm”). It is rural land.The first respondent (hereinafter referred to as the respondent) is a private company duly registered as such under the laws of Zimbabwe. It carries on business in ...

THE FACTUAL BACKGROUND

The appellants are the owners of a certain immovable property, known as WAMICA Farm measuring 644,795ha (“the farm”). It is rural land.

The first respondent (hereinafter referred to as the respondent) is a private company duly registered as such under the laws of Zimbabwe. It carries on business in the agricultural sector.

On 5 December 2012, the respondent made a written 'Final Offer' for the acquisition of the farm to the appellants. The offer describes the farm, outlines how valuation of the price was conducted, and specifies the price offered together with the proposed payment terms.

The appellants accepted the offer on 6 December 2012.

On the same date, pursuant to the acceptance of the offer, the parties concluded an “Irrevocable Memorandum of Understanding' (hereinafter referred to as the “MOU”) in relation to the same.

In view of the statutory legal requirement attendant upon the sale of rural land, the appellants immediately made an application to the Ministry of Lands for the issuance of a Certificate of No Present Interest.

The application was acknowledged by letter of the same date. The Certificate of No Present Interest was issued sometime in the same month.

In the meantime, in anticipation of the issuance of the certificate, the respondent had, through its legal practitioners, prepared a written agreement of sale. However, the agreement was not signed due to alleged unwillingness to co-operate on the part of the appellants.

On 16 March 2013, the respondent became aware that the farm was being advertised for sale as subdivided plots.

The respondent, being of the view that a valid sale agreement had been concluded between itself and the appellants, approached the High Court on a certificate of urgency seeking an interim interdict against transfer of the farm, and a final order declaring that a valid agreement of sale of the farm had been concluded between the parties, and, consequent thereto, an order for specific performance of the sale agreement in its favour.

The respondent sought, ultimately, an order for the transfer of title in the farm to itself.

The matter was found not to be urgent and was subsequently re-set down on the normal roll.

The court a quo found, that, an agreement of sale had been entered into and it ordered specific performance in favour of the respondent.

The appellants were aggrieved by that decision and have entered the present appeal on the following grounds:

1. The learned judge a quo erred and misdirected herself by failing to appreciate, that, the first respondent was not entitled to the relief of specific performance. In particular, that, the learned judge ignored the evidence that the property in dispute had been subdivided, advertised, and sold prior to the commencement of proceedings in court and at the time of hearing counsel.

2. The learned judge a quo erred and misdirected herself by making an order for specific performance yet the evidence put before the court did not show the existence of a valid and binding agreement between the parties.

3. The learned judge a quo erred and misdirected herself by making a finding that the appellants were in breach of contract yet no valid Agreement of Sale was put before the court.

4. The learned judge a quo erred and misdirected herself by failing to appreciate, that, both the offer and acceptance document and the Memorandum of Understanding were both void ab initio at the time of their signing as these were entered into before the issuance of a Certificate of No Present Interest by the Ministry of Lands and Rural Resettlement.

5. The learned Judge a quo erred and misdirected herself by failing to appreciate, that, the dies induciae of signing the actual agreement of sale, as contemplated in the offer document and Memorandum of Understanding, lapsed before the parties could sign, therefore, no valid and binding agreement existed as between the parties.

There are three factual issues which are common cause in this case:

(i) Firstly, that the respondent made a valid offer to purchase the farm from the appellants, which offer was accepted by the appellants, the proof whereof lies in the offer document to which all the parties appended their signatures on 6 December 2012.

(ii) Secondly, that the parties proceeded to execute a Memorandum of Understanding (MOU) on the same day.

(iii) The last is that the agreement of sale that was dependent upon the issuance of a Certificate of No Present Interest from the relevant Ministry was not concluded by the parties.

Counsel for the appellants argued that the court a quo, contrary to its comments as stated above, clearly misdirected itself when it then made a finding that the series of documents agreed to by the parties metamorphosised into an agreement of sale of the farm - a position postulated by the respondent.

It was argued, further, on behalf of the appellants, that, the judgment of the court a quo remained unclear as to which agreement the court considered to be binding on the parties.

The passage which is the subject of the attack is at p5 of the cyclostyled judgment and reads:

“The agreements entered into by the parties are enforceable. All the key terms were agreed to in the final offer and the MOU. In fact, all the essential elements of a contract were present and all that remained was for the parties to prepare the contract document and sign it. It is for these reasons that I conclude that the parties intended to be bound by these agreements.”

The court a quo refers to the offer and the Memorandum of Understanding (MOU) as the contract between the parties, and it took these separate agreements as one when it granted specific performance, based on the MOU.

The parties themselves were not agreed that the Memorandum of Understanding (MOU) would be the agreement of sale.

This is evident from the Memorandum of Understanding (MOU) itself. The thrust of the MOU was:

“…, to set out the basis upon which the transaction shall be concluded and to set out rights and obligations upon each party leading to the signing of a SALE AGREEMENT between the parties. It is the parties understanding that the sale agreement be concluded immediately upon the successful completion of the necessary regulatory approvals by the Ministry of Agriculture, Land and Rural Resettlement.”

In my view, the dispute stands to be resolved by the determination of the following issues:

1. Whether the court a quo made the correct finding that a valid agreement of sale existed between the parties.

2. Whether any legal rights flow from the Memorandum of Understanding (MOU) signed by the parties.

3. Whether the court could order transfer of the farm notwithstanding the subdivision of the same into plots pursuant to a permit.

1. DID A VALID AGREEMENT OF SALE EXIST BETWEEN THE PARTIES

In essence, there were two contracts envisaged after the offer for the purchase of the farm was accepted:

The first was the Memorandum of Understanding (MOU) itself, which would lay the basis for the conclusion of the agreement of sale of the land; the second the contract of sale itself.

The court a quo properly undertook a process under which it scrutinised and analysed each of the documents executed by the parties. It commented thus in relation to the Final Offer:

“It is clear from the offer, that, an agreement of sale would be concluded at a subsequent stage. The offer was subject to the acquisition of a certificate of no present interest from the relevant authority. In order to record this fact, the parties entered into a Memorandum of Understanding. The MOU recorded that a contract would only be concluded after the certificate of no present interest had been granted. The contract was subject to the happening of a future event.”

The court a quo also found that:

“…,. The final offer constitutes a preliminary agreement where the parties would sign another contract. The parties had agreed on the key terms of the contract but had not signed the actual contract and had agreed to be bound to carry out, in good faith all the actions as may be necessary to expedite the transfer and registration of the farm.”

As a consequence, the court accepted that there was no contract of sale entered into through the Final Offer.

The Memorandum of Understanding (MOU) was a vehicle through which the agreement of sale would be concluded.

The Memorandum of Understanding (MOU) specifically provided that a contract would be concluded upon the obtaining of a Certificate of No Present Interest.

In discussing the terms of the MOU, the court remarked:

“These facts disclose an agreement to agree in future in good faith. The objective, which was to bind the parties to agree to enter into a final contract, did not happen. No agreement of sale was entered into. This scenario is distinguishable from a contract of sale subject to a suspensive condition which comes into effect on fulfilment of a specified condition. In this case, there was no contract of sale entered into as envisaged.”…,.

It is abundantly clear that the court's analysis of the offer and the Memorandum of Understanding (MOU) cannot be faulted nor can the conclusion by the court that a contract would be concluded after a Certificate of No Present Interest would have been obtained from the relevant ministry.

The court a quo was alive to the condition upon which an agreement would be entered into, and that, in fact, no agreement of sale was ever entered into.

Its finding, in the face of all the above observations, that an enforceable agreement existed through a series of agreements, was a clear misdirection.

2. WHETHER ANY LEGAL RIGHTS FLOWED FROM THE MEMORANDUM OF UNDERSTANDING

It is evident that the court accepted that the offer was subject to a condition precedent, and further, that no agreement of sale was entered into. This finding emerges clearly in the judgment, wherein it is stated as follows:

“The objective, which was to bind the parties to agree to enter into a final contract, did not happen. No agreement of sale was entered into….,. In this case, there was no contract of sale entered into as envisaged.”

However, the court then departed from this pertinent finding and fell into error when it held, as it did, that:

“…, the agreement to agree contains key or sufficient and definite terms of agreement, even though a few details still have to be worked out, and there is a dispute resolution mechanism provided for in this case; this renders the agreement certain and enforceable. The agreements entered into by the parties are enforceable. All the key terms were agreed to it in the final offer and the MOU. In fact, all the essential elements of a contract were present and all that remained was for the parties to prepare a contract document and sign it. It is for these reasons that I conclude that the parties intended to be bound by these agreements.”…,.

The courts are enjoined to give effect to contracts between parties in the manner the parties agreed.

The aim of the Memorandum of Understanding (MOU) was to set out the basis upon which a sale would later be concluded. This is apparent from section 1 of the MOU. It is worded as follows:

“The aims and objectives of this Memorandum of Understanding shall be to set out the basis upon which the transaction shall be concluded and to set out the rights and obligations of each party leading to the signing of a SALE AGREEMENT between the parties. it is the parties (sic) understanding that the Sale Agreement be concluded immediately upon the successful completion of the necessary regulatory approvals by the Ministry of Agriculture, Land and Rural Resettlement.”

It stands to reason therefore, that, the sale agreement was to be effected at a later date subject to the terms and conditions set out in the Memorandum of Understanding (MOU). and, subject also to further negotiations by the parties.

The wording of the MOU itself lends support to an interpretation which is only consonant with a finding that the MOU was not the agreement of sale in itself.

Section 5 of the Memorandum of Understanding (MOU) reads as follows:

“The parties shall assign personnel on a mutually agreed basis, on terms and conditions which they shall agree to, separate from this memorandum, for the purpose of co-operating in concluding the Sale Agreement.”

Further, and in addition to the above, section 7 of the MOU confirms that the MOU was not in itself the Sale Agreement:

“Both parties shall use their best endeavour and make all efforts to ensure the Sale is concluded and to best advantage.”

The court could not therefore hold, that, the sale of the farm had been concluded in the face of these provisions of the Memorandum of Understanding (MOU).

In this jurisdiction, it is settled law that agreements akin to the one in casu are not enforceable, primarily due to the uncertainty which accompanies such contracts.

The court a quo was alive to this principle and commented, that, in agreements to agree in the future, the parties thereto retain a discretion as to whether or not to agree or disagree in the future.

In Premier, Free State and Ors v Firedom Free Estate (Pvt) Ltd 2000 (3) SA 413 (SCA), the court held:

“An agreement that parties will negotiate to conclude another agreement is not enforceable because the absolute discretion is vested in the parties to agree or disagree.”

If it were to be accepted, for reasons stated by the court, that the Memorandum of Understanding (MOU) is a binding agreement, the respondent could not have successfully sued for specific performance solely based on the same.

The only binding agreement between the parties was an undertaking to agree.

In upholding the Memorandum of Understanding (MOU), the court a quo needed to make a specific finding on what could be enforced in terms of the same; and yet, despite its earlier finding, that, no agreement of sale had been concluded, the court then went on to find that there was an enforceable agreement.

This what the court said:

“Where the parties have agreed on key elements of the contract, it is essential that the court enquire into whether the parties intended to enter into a binding contract. It is essential to examine the terms of the MOU and the final offer to determine if there were any binding terms. This will assist the court in determining what the intention of the parties was when they entered into the agreements.”

It seems that the court was persuaded to find that once the parties had agreed on essential terms, and where the agreement contains terms to negotiate in the future, and the agreement provides dispute resolution mechanisms, the parties should be held to the contract.

The court concluded further, that, the parties had expressed an intention to be bound once the regulatory approvals were obtained, and that, when these were to hand, the agreement would be enforceable.

Accordingly, it was the judge a quo's reasoning, that, the existence of the pretium, the merx, and the payment terms, coupled with the provision of a dispute settlement mechanism, rendered the offer document and Memorandum of Understanding (MOU) enforceable.

The court premised its conclusions on the following authorities; Southernport Developments (Pty) Ltd v Transnet Ltd ZASCA 94 2 ALL SA 16 (SCA) and the Australian case of R & D Construction Group Ltd v Hallam Land Management Ltd (2009) CSO H 128.

Before us counsel for the first respondent advanced the same principle and sought to rely on the authorities on which the High Court based its judgment.

The court went on to state:

“What is clear from the foregoing is that an agreement to agree or negotiate on a future contract is enforceable where the parties have agreed on essential terms of the contract and the agreement provides for a dispute resolution mechanism to resolve the unresolved issues. I intend to determine whether the agreements by the parties are enforceable.”

The dispute resolution mechanism which fortified the court's conviction that an agreement of sale had been entered into related to the Memorandum of Understanding (MOU) itself and not a sale agreement which was to be concluded later.

The dispute resolution mechanism was only applicable in relation to issues arising from the enforceability of the MOU itself. As a result, any remedies emanating from the mechanism in the MOU were restricted to the MOU and could not be extended to a further agreement of sale which would be concluded later.

Thus, the court contradicted itself in material respects.

I therefore find, that, the court, in effect, prematurely found that an agreement of sale had been entered into when both parties agreed that the agreement of sale had not yet been concluded and would only be executed at a later stage.

It was a further term of the Memorandum of Understanding (MOU), that, the rights and obligations arising from the MOU would terminate upon the expiry of 60 days from the signing of the MOU.

The relevant portion reads as follows:

“This agreement shall terminate upon the signature of a Sale Agreement. In the event that a Sale Agreement is not entered into between the parties within 60 days from the date of the signature of this agreement, then, this agreement shall terminate and all rights and obligations flowing from it shall fall away.”

Persuaded by the appellants alleged lack of good faith in their dealings with the respondent, the court a quo went on to grant relief based on the Memorandum of Understanding (MOU).

The court found as follows on page 6 of the cyclostyled judgment:

“The respondents played a hide and seek game and deliberately delayed the signing of the final contract until the 60 days had elapsed and ultimately refused to sign the final agreement. They did not act in good faith. I find therefore that that (sic) the respondents are in breach of contract.”

The agreement was signed on 6 December 2012 and was to expire on 4 February 2013. The application before the High Court was brought on 18 February 2013.

Beyond 4 February 2013, there were no rights arising from the Memorandum of Understanding (MOU) which could be enforced by any of the parties.

Thus, in terms of the same, the parties agreed to an extinctive prescription of any cause of action arising from the Memorandum of Understanding (MOU).

The respondent should have sued the appellants within that period, especially taking into account the fact that by 11 December 2012, it, the respondent, already had determined that the appellants were reneging on the terms of the MOU.

It could have resorted to the dispute resolution clause in the Memorandum of Understanding (MOU).

It was obvious that the MOU had terminated, and, the lack of good faith could not give rise to a right upon which specific performance could be granted. The court did not spell out the breach of contract that it alluded to in the judgment.

On this aspect, the court erred as well.

The right which the respondent seeks to enforce in these proceedings was already lost when it sued.

A court is not entitled to enforce rights which stand lost by operation of law: see Airfield Investments (Pvt) Ltd v Minister of Lands, Agriculture and Rural Resettlement and Others SC36-04.

I therefore find, that, post 4 February 2013, the respondent had no cause of action as against the appellants ex contractu.

On this basis alone, the appeal ought to succeed.

In the event, the court a quo grossly misdirected itself in granting specific performance in the absence of an agreement of sale upon which such order would be legally justifiable.

In Reserve Bank of Zimbabwe v Corrine Granger and Anor SC34-01…, the court held, in part, that:

“An appeal to this Court is based on the record. If it is to be related to the facts, there must be an allegation that there has been a misdirection on the facts which is so unreasonable that no sensible person who applied his mind to the facts would have arrived at such a decision. And, a misdirection of fact is either a failure to appreciate a fact at all, or a finding of fact that is contrary to the evidence actually presented: see Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S) at 670 and S v Pillay 1977 (4) SA 531 (AD) at 535C-E.”…,.

4. WHETHER THE SUBDIVISION OF THE FARM HAD ANY EFFECT ON THE ORDER OF SPECIFIC PERFORMANCE

The court ordered specific performance wherein the basis for the respondent in approaching the court was the allegation against the appellants that they had subdivided their farm and were selling the subdivisions thereof.

The court a quo found, for a fact, that, the farm had been subdivided. The court said, at p6 of the cyclostyled judgment:

“Instead, they tried to sell divided portions of the farm to other people contrary to the agreement.”

The Final Offer was in respect of the whole farm.

A whole piece of land is a different entity to subdivided portions of the same.

Once the appellants obtained a subdivision permit in respect of the farm, the merx, as it originally stood and offered to the respondent, had ceased to exist.

The subdivision of the farm resulted in the creation of a number of different properties, such that, there no longer was a farm, but a number of plots where the farm once stood.

It is trite that the remedy of specific performance is a discretionary power vested in a judicial officer.

In Farmers Co-operative Society (Reg) v Berry 1912 AD 343, INNES JA stated at 350 that:

"Prima facie every party to a binding agreement, who is ready to carry out his own obligation under it, has a right to demand from the other party, so far as it is possible, a performance of his undertaking in terms of the contract. As remarked by KOTZE CJ in Thompson v Pullinger (1 OR p301) 'the right of a plaintiff to the specific performance of a contract where the defendant is in a position to do so is beyond all doubt'. It is true that Courts will exercise a discretion in determining whether or not decrees of specific performance will be made."

In Zimbabwe Express Services (Pvt) Limited v Nuanetsi Ranch (Private) Limited 2009 (1) ZLR 326 (S) GARWE JA had occasion to comment:

“An order of specific performance is, however, at the discretion of the court, and, there are circumstances in which a court may refuse to grant an order of specific performance. The discretion is:

'[not]…, completely unfettered. It remains, after all, a judicial discretion, and, from its very nature, arises from the requirement that it is not to be exercised capriciously, nor upon a wrong principle: Ex parte Neethling (supra at 335). It is aimed at preventing an injustice, for, cases do arise where justice demands that a plaintiff be denied his right to performance, and, the basic principle thus is that the order which the court makes should not produce an unjust result which will be the case, e.g. if, in the particular circumstances, the order will operate unduly harshly on the defendant.'

Per HEFER JA in Benson v South Africa Mutual Life Assurance Society 1986 (1) SA 776 (A) at 783C-D.”

The principle lex non cogit ad impossibilia states, that, specific performance should never be ordered if compliance with the order would be impossible: see RH CHRISTIE, The Law of Contract in South Africa, 3rd ed…,.

Also see Rissik v Pretoria Municipal Council 1907 TS 1024 1037.

The respondent inexplicably assumed that the merx, viz the farm, still existed - this despite the subdivisions. The subdivision of land is not a matter of form, it is one of substance.

The remedy of specific performance was not available to the respondent.

Instead of suing for specific performance, it was open to the respondent to sue for a mandamus directing the appellants to attend to the consolidation of the subdivisions so that the remedy of specific performance could be complied with.

However, that is not the route that the respondent took, and, the court a quo should have considered the dispute on the facts before it.

The order it gave was impossible and incapable of performance by the appellants.

DISPOSITION

It is not in doubt that the court a quo held that the Memorandum of Understanding (MOU) was an enforceable agreement and granted the relief of specific performance on its basis.

In doing this, the court a quo was clearly wrong in three fundamental respects:

(i) Firstly, it erred in holding that the Memorandum of Understanding (MOU) and the final offer could amount to a contract of sale. The MOU was not an enforceable contract as concluded by the court a quo.

(ii) Secondly, it erred in ordering specific performance on the basis of the MOU which was not only void for want of statutory compliance, but whose existence had terminated through effluxion of time. If the MOU was an 'enforceable' contract, it was invalid for want of compliance with the Land Acquisition (Disposal of Rural Land) Regulations, S.I. 287/99.

(iii) Thirdly, it ordered specific performance where the merx was no longer in existence and available for disposal. In addition, specific performance could not possibly have been granted because the merx was no longer available.

There was no basis for the court a quo to order specific performance on the basis of the Final Offer and the Memorandum of Understanding (MOU).

I am satisfied, that, for the above reasons, the appeal has merit and must therefore succeed.

In the result, the following order will issue:

1. The appeal is allowed with costs.

2. The order of the court a quo is set aside and in its place the following is substituted:

“The application is dismissed with costs.”

SC58-15 : ERICKSON MVUDUDU vs AGRICULTURAL AND RURAL DEVELOPMENT AUTHORITY
Ruled By: MALABA DCJ, GWAUNZA JA and PATEL JA

This is an appeal against a judgment of the Labour Court dismissing an appeal against an award rendered by an arbitrator. That arbitral award quantified the damages payable to the appellant pursuant to an earlier award ordering his reinstatement into the service of the respondent.BackgroundThe respondent is a statutory body ...

Background

The respondent is a statutory body established under the Agricultural and Rural Development Authority Act [Chapter 18:01].

The appellant was employed by the respondent in January 2008 as its Chief Executive Officer cum General Manager.

On 26 February 2009 he was sent on special leave, and, on 19 May 2009 he was notified by the respondent of its decision to terminate his employment.

The matter was then referred to an arbitrator.

On 26 January 2010, the arbitrator found that the appellant had been unlawfully dismissed and ordered his reinstatement with effect from the date of his purported dismissal. Thereafter, negotiations for reinstatement having failed, the matter was again referred to the arbitrator.

On 27 October 2010, the arbitrator quantified his award for damages in lieu of reinstatement. He based his award on a monthly salary of US$1,009 in accordance with documentary evidence furnished by the respondent. He then ordered the respondent to pay the following amounts:

$19,384 as back-pay and benefits from the date of dismissal to the date of his first award;
Cash in lieu of leave;
$60,540 being sixty months salary as damages for loss of employment;
A further $60,540 being sixty months salary as punitive damages for failure to reinstate; and
Interest at the prescribed rate on all of these amounts.

The appellant, being dissatisfied with the arbitrator's award, appealed to the Labour Court on several grounds pertaining to the question of his reinstatement, the date of termination of his employment, his correct monthly salary, and his entitlement to contractual benefits.

The respondent, in turn, cross-appealed, defending the propriety of its decision not to reinstate the appellant, and challenged the arbitrator's award of punitive damages and his failure to deduct certain amounts allegedly owed by the appellant to the respondent.

Decision Appealed

The court a quo dismissed the appeal and partially allowed the cross-appeal for the following reasons:

It found, having regard to the relevant correspondence, that, the possibility of reinstatement was not part of the arbitrator's mandate. The effective date of termination of employment was 4 February 2010, when the respondent opted to pay damages, and not when the Labour Court ruled against the appellant's reinstatement. The court also found that the arbitrator's reliance on a monthly salary of $1,009 was based on irrefutable evidence and more in accordance with reason, as compared with the figure of $5,000 claimed by the appellant.

As regards the appellant's claim for contractual benefits, no documentary or other evidence was placed before the arbitrator to substantiate that claim.

Again, his claim for punitive damages was neither placed before the arbitrator nor substantiated by any supporting evidence.

Similarly, the respondent's claim to deduct certain amounts owed by the appellant was not raised before the arbitrator.

In the event, the court a quo dismissed the appeal and allowed the cross-appeal to the extent of setting aside the arbitrator's award of punitive damages.

The issues raised in the notice of appeal herein are largely identical to those before the Labour Court and may be summarised as follows:

(i) Whether the question of reinstatement was an issue before the arbitrator, in addition to the quantification of damages in lieu thereof.

(ii) What was the effective date of termination of employment? (This issue was not pursued by counsel for the appellant and appears to have been abandoned).

(iii) What was the correct amount of the appellant's monthly salary?

(iv) Was the appellant entitled to his claim for contractual benefits?

(v) Whether the claim for punitive damages was properly before the arbitrator and correctly awarded by him....,.

Claim for Punitive Damages

The basis for awarding punitive damages to the appellant was justified by the arbitrator as being the respondent's refusal to reinstate the appellant without proffering any reason for its refusal. In so doing, the arbitrator relied on the discretion conferred upon him by proviso (iii) to section 89(2)(c)(iii) of the Labour Act.

He accordingly awarded punitive damages equivalent to 60 months salary, over and above 60 months salary as damages in lieu of reinstatement.

Counsel for the appellant submits, that, the arbitrator correctly exercised his discretion in this regard and that the court a quo erred in over-ruling the arbitrator on the ground that the appellant had failed to prove the exact quantum of punitive damages.

Counsel for the respondent counters, that, the Labour Court correctly set aside the award of punitive damages.

He submits, that, punitive damages under proviso (iii) to section 89(2)(c)(iii) of the Labour Act are only payable where the order made relates solely to damages as opposed to an order for reinstatement and damages in lieu of reinstatement.

In any event, a claimant for punitive damages must substantiate such damages and the court a quo correctly rejected the appellant's claim as it had not been adequately substantiated.

In awarding punitive damages, the arbitrator sought to reinforce the primacy of reinstatement as the most appropriate remedy for unlawful dismissal.

He considered, that, the respondent had expressly refused to reinstate the appellant without giving any cogent reason why reinstatement was not possible. This stance could not be condoned, and, it was for that reason that he decided to award punitive damages over and above damages in lieu of reinstatement, in order to protect the primary remedy of reinstatement from being eroded by errant employers like the respondent.

In setting aside the award of punitive damages, the Labour Court did not specifically address the arbitrator's reasoning per se but proceeded on the basis that the appellant had failed to adduce any evidence to substantiate his claim for punitive damages.

Section 89(2) of the Labour Act, in its relevant portions, provides as follows:

“(2) In the exercise of its functions, the Labour Court may —

(a)…,.;

(b)…,.;

(c) In the case of an application made in terms of subparagraph (ii) of subsection (7) of section ninety-three, make an order for any of the following or any other appropriate order —

(i) Back pay from the time when the dispute or unfair labour practice arose;

(ii) In the case of an unfair labour practice involving a failure or delay to pay or grant anything due to an employee, the payment by the employer concerned to the employee or someone acting on his behalf of such amount, whether as a lump sum or by way of instalments, as will, in the opinion of the Labour Court, adequately compensate the employee for any loss or prejudice suffered as a result of the unfair labour practice;

(iii) Reinstatement or employment in a job;

Provided that —

(i) Any such determination shall specify an amount of damages to be awarded to the employee concerned as an alternative to his reinstatement or employment;

(ii) In deciding whether to award damages or reinstatement or employment, onus is on the employer to prove that the employment relationship is no longer tenable, taking into account the size of the employer, the preferences of the employee, the situation in the labour market, and any other relevant factors;

(iii) Should damages be awarded instead of reinstatement or employment as a result of an untenable working relationship arising from unlawful or wrongful dismissal by the employer, punitive damages may be imposed;

(iv) Insertion into a seniority list at an appropriate point;

(v) Promotion or, if no promotion post exists, pay at a higher rate pending promotion;

(vi) Payment of legal fees and costs;

(vii) Cessation of the unfair labour practice;

(d)…,.;

(e)…,.”

My reading of provisos (ii) and (iii) to section 89(2)(c)(iii) of the Labour Act is that different considerations apply under these provisos in determining the untenability of the employment relationship in question.

Where the question to be decided is whether to award damages or reinstatement, the onus is on the employer to prove such untenability, taking into account the size of the employer, the preferences of the employee, the situation in the labour market, and any other relevant factors.

These criteria relate to the practicability of reinstatement and the continuation of the employment relationship as assessed from an objective, economic, or commercial standpoint.

However, once it is decided that reinstatement is no longer feasible by dint of any one or more of the specified factors, and that damages should be awarded instead, the sole criterion to be applied is whether the untenable employment relationship arose from the unlawful or wrongful dismissal of the employee by the employer.

What is relevant, at that stage, is the employer's fault in the manner or circumstances in which he dismissed the employee and the extent of his blameworthiness in causing the irretrievable breakdown of the employment relationship.

It is only in this situation that the question of punitive damages comes into play and where the discretion to award such damages may be exercised in order to penalise the employer for his culpable conduct.

Furthermore, proviso (iii) to section 89(2)(c)(iii) of the Labour Act does not, in my view, envisage the award of double damages, i.e. punitive damages in addition to damages in lieu of reinstatement.

Rather, what may be imposed is an award of damages in lieu of reinstatement that is punitive in nature and effect.

In other words, what is contemplated is a single award of punitive damages that exceeds what would ordinarily be awarded as damages in lieu of reinstatement, i.e. in the absence of any aggravating circumstance occasioned by the manner in which the employer dismissed the employee.

It follows from the foregoing, that, the arbitrator in casu misconceived the basis and scope of his discretion under proviso (iii) to section 89(2)(c)(iii) of the Labour Act.

He relied upon the respondent's refusal to reinstate the appellant rather than the untenability of the employment relationship arising from the dismissal of the appellant. He thereby applied the wrong test, and, consequently, misdirected himself in that regard.

Moreover, he also erred by awarding punitive damages in addition to damages in lieu of reinstatement.

SC86-22 : CITY OF HARARE vs EVARISTO MUNGATE
Ruled By: GOWORA JA, MAKONI JA and BERE JA

After hearing counsel, in the matter, we dismissed the appeal with costs and indicated that reasons would follow in due course. Below are the reasons for judgment.This is an appeal against the whole judgment of the High Court upholding the respondent's claim for damages arising from the appellant's negligence.THE BACKGROUND ...

After hearing counsel, in the matter, we dismissed the appeal with costs and indicated that reasons would follow in due course. Below are the reasons for judgment.

This is an appeal against the whole judgment of the High Court upholding the respondent's claim for damages arising from the appellant's negligence.

THE BACKGROUND FACTS

On 28 March 2014, at around 19:00 hours, near Lyon's Maid offices, along Simon Mazorodze Road, the respondent fell into the appellant's uncovered drainage tunnel commonly referred to as a “catch pit.” He was rushing to board a commuter omnibus which he had waved down. He broke his leg, sustaining a permanent limp. The catch pit is situated on a traffic island which is between Simon Mazorodze Road and a pedestrian or foot path.

Subsequently, on 23 September 2014, the respondent issued summons against the appellant claiming damages amounting to US$305,796; interest thereon, and costs of suit.

The breakdown of the damages claimed by the respondent was as follows:

(a) Shock, pain, and suffering US$50,000;
(b) Loss of amenities of life US$100,000;
(c) Disability US$100,000;
(d) Medical expenses US$5,796;
(e) Contumelia US$50,000;

The respondent averred, that, the appellant was liable for the injuries he suffered and ensuing damages as it had failed to either cover or put up any cautionary signs to warn pedestrians of the existence of the uncovered catch pit.

In its plea, the appellant denied liability in toto stating that it was not negligent in any way, nor was it liable for the respondent's injury, loss incurred, and damages claimed. It put the respondent to the strict proof thereof.

It further averred, that, the misfortune that befell the respondent was a result of the respondent's negligence since he failed to keep a proper lookout and acted without due care and attention.

The appellant prayed for the dismissal of the respondent's claim.

PROCEEDINGS IN THE COURT A QUO

The following issues were referred to trial:

“(i) Whether or not the defendant(s) are liable for injuries allegedly suffered by the plaintiff.

(ii) Whether the plaintiff's injuries were not a result of Plaintiff's own negligence and failure to keep a proper outlook.

(iii) Whether or not the defendant(s) are liable to pay any damages whatsoever.

(iv) If the defendant(s) are liable, what is the quantum thereof.”

The respondent was the sole witness in his case.

He testified that he fell into a pit whilst running to catch a lift that he had waved down. He stated that several factors contributed to his fall:

(i) Firstly, the area was unlit because of the absence of street lights.

(ii) Secondly, the area surrounding the pit was covered with tall grass which obscured the pit.

(iii) Thirdly, there was no cover over the catch pit.

(iv) Fourthly, there was no warning sign to caution him of the existence of the pit.

The respondent stated, that, under such circumstances, it was difficult for him to see the catch pit.

He also stated, that, the appellant was liable since council's employees had admitted the pit had been constructed and was under the maintenance of the appellant.

The respondent also produced photographs showing the surrounding area and the pit which he had fallen into, the evidence of the medical expenses which he incurred as a result of the injuries sustained and a report by a medical doctor stating that he suffered a 15 percent permanent disability.

The respondent substantiated his claim for damages stating, that, further to the injuries he sustained from the fall, he had been subjected to embarrassment, had suffered, and continued to suffer pain and shock, had lost amenities of life in that he could not earn extra income as he used to, or attend festivals, run, jog or dance.

In its defence, the appellant led evidence through one George Munyonga, who is a Deputy Chief Engineer employed by the appellant, responsible for maintaining road infrastructure.

He conceded that the catch pit belonged to the appellant and that from the evidence presented before the court, the catch pit was not covered by a steel grating.

However, he took issue with the alleged severity of the respondent's injuries and argued that the injuries sustained by the respondent were not consistent with a fall into a catch pit.

He also testified, that, even if it was established that the respondent had fallen into the appellant's pit and sustained injuries as claimed, these were as a result of the respondent's own negligence.

He stated, that, the respondent had been negligent in crossing the road as he did since he was familiar with the road and would have known of the existence of the various catch pits along the road. He further stated, that, he must have known that there was a possibility of an accident. Further to that, the respondent ran across a traffic island instead of using the pedestrian path. He also sought to board a vehicle at an undesignated bus stop and he ought to have taken more care as the area was unlit.

Issue was also raised in relation to the fact, that, there was a three months delay between the occurrence of the accident and the time the respondent notified the appellant of the accident.

Mr Munyonga conceded that a catch pit without a cover poses a hazard to humans and that it is the appellant's duty to carry out regular maintenance by carrying out inspections and repairs to catch pits every three months. He also conceded that if it was dark, the respondent could not have seen the catch pit, even with a proper lookout. He also affirmed, that, it was impossible for one to board transport from the pedestrian path without crossing over the island where the catch pit was located. He also stated that along the road in question several theft cases of stolen steel gratings covering the pits had been reported.

He however stated, that, the process of replacing the steel covers required funding and since the appellant was going through a cash crunch, there were delays in procuring the necessary infrastructure.

DETERMINATION OF THE COURT A QUO

After considering the parties arguments and evidence placed before it, the court a quo found in favour of the respondent.

It concluded, that, the respondent broke his leg as a result of falling into the appellant's catch pit. The court further held, that, the appellant was liable for the respondent's injuries and that the requirements of the standard test for negligence, as enunciated in Kruger v Coetzee 1966 (2) SA 428…, had been met. The harm was reasonably foreseeable; a diligens pater familias would have taken reasonable steps to guard against such occurrence and no such steps were taken.

The court a quo further held, that, uncovered catch pits posed a deadly hazard to the public and the appellant had a legal duty to ensure that they were regularly inspected and properly covered. It was reasonably foreseeable that an uncovered catch pit could pose danger to the public. Further to this, the appellant was aware of such cases, as several cases of such a nature had been reported to the appellant before. The appellant should have carried out regular inspections of the catch pits; replacing the missing lids; mowing the grass around the catch pits to ensure visibility; maintaining adequate street lighting to ensure visibility at night; erecting danger warning signs to warn members of the pubic of the existence of open catch pits; and erecting barriers to block public access to the catch pits.

The appellant had failed to take these steps and thus failed to do its duty and could not be absolved from liability. It further held, that, the respondent's explanation for the delay was plausible considering the severity of the injuries he sustained.

The court a quo further found, that, the respondent may have been negligent by running in the dark when he could not properly see where he was stepping, as he was obscured by tall grass. The risk of tripping and falling, even in the absence of a catch pit, could not be ruled out.

The court, however, concluded that the respondent's negligence was not the proximate cause of the fall.

The proximate cause of the fall was the absence of the catch pit cover. The court stated that if the catch pit had been covered, even if the plaintiff had walked on the island where he was not supposed to, or if he had run in the dark when he could not properly see, he would not have fallen into the catch pit.

Accordingly, the court upheld the respondent's claim and awarded damages amounting to US$9,769. The computation was as follows:

1. US$796 being damages for medical expenses.
2. US$2,000 being damages for shock, pain and suffering.
3. US$1,000 being damages for loss of amenities of life.
4. US$1,000 being damages for disability.

The court, however, dismissed the respondent's claim for damages for contumelia on the basis that he had failed to prove intention, on the part of the appellant, to humiliate him or cause embarrassment to him.

Regarding costs, the court awarded the respondent costs of suit since he had succeeded in his claim.

However, it expressed displeasure at the respondent's ridiculously high and unrealistic claims for damages which, in its view, would have hindered chances of the matter being settled at pre-trial conference stage. It stated that damages are meant to compensate the injured party and not to punish the wrongdoer, and, further, that damages should reflect the state of economic development and the current economic conditions of the country.

Aggrieved by this outcome, the appellant noted this present appeal based on the following grounds:

GROUNDS OF APPEAL

“(i) The court a quo erred in coming to the conclusion, that, there was no contributory negligence by the respondent. It also erred in that it misapplied the 'proximate cause' principle leading to the incorrect conclusion, that, despite being negligent, plaintiff did not contribute to the accident.

(ii) Furthermore, the court erred in its apportionment of damages as a consequence of its failure to apportion blame. It so erred in that an appropriate apportionment of blame would have reduced the amount of damages payable by the appellant at least by half.

(iii) In any event, the decision of the court a quo, as it relates to the issue of contributory negligence, is so outrageous in its defiance of logic that no reasonable person applying his mind to the question to be decided would have arrived at such a conclusion.

(iv) At any rate, the court erred by ordering appellant to pay costs having found that the respondent was equally to blame for the litigation which could have been avoided.”

SUBMISSIONS IN THIS COURT

The appellant's major contention was that some measure of liability must be attributed to the respondent as this was a classical case where the doctrine of contributory negligence was applicable.

Counsel for the appellant submitted, that, the court a quo misapplied the 'proximate cause' principle in the sense that there was more than one proximate cause of the accident. He argued that there were multiple acts of negligence by both the appellant and the respondent which contributed to the accident.

Accordingly, damages should be apportioned in terms of section 4 of the Damages (Apportionment and Assessment) Act [Chapter 8:06], reducing the damages payable by the appellant in half.

Pertaining to the issue of costs, counsel for the appellant argued, that, each party ought to bear its own costs since the respondent was equally to blame for the accident and the litigation because of the unrealistic claims he made which militated against a possible settlement.

Counsel for the respondent, on the other hand, contended that the appellant should have specifically pleaded the defence of contributory negligence and the appropriate relief for apportionment of damages.

It ought to have, at least, set out detailed grounds showing the respondent's negligence and how he contributed to the occurrence of the accident. The issue was not covered in the pleadings, as such, the court a quo could not have canvassed the issue in its judgment in the circumstances.

Counsel for the respondent further stated, that, the court a quo was correct in finding that whatever negligence attributable to the respondent, such negligence was not the cause of the loss. He averred that whatever negligence attributable to the respondent was “negligence in the air” as the respondent would not have been injured but for the existence of the uncovered catch-pit.

The respondent also argued, that, the determinant factor before damages could be apportioned is that the respondent's negligence must have caused the loss. However, the court a quo found, as a fact, that the appellant was the actual cause of the harm suffered by the respondent.

Regarding costs, counsel for the respondent submitted, that, in the absence of a demonstration that the court a quo grossly erred in its exercise of discretion, there would be no basis for interfering with the court a quo's order of costs.

As for the damages, the respondent also argued, that, the appellant had not established a substantial variation or striking disparity between the trial court's award and what the Appellate Court would have awarded, neither had it been proved that the court a quo did not have a sound basis for awarding damages at that scale.

ISSUES FOR DETERMINATION

The appeal raises the following issues for determination by this Court:

(i) Whether or not the court a quo fell into error when it found that the respondent was negligent and then failing to find that there was contributory negligence thereby misapplying the proximate cause principle?

(ii) Whether the court a quo erred in ordering the appellant to pay the costs of suit?

THE LAW

Fault

The case of Kruger v Coetzee 1966 (2) SA 428 …, lays down the standard test for negligence, which is:

(i) Whether the harm was reasonably foreseeable;

(ii) Whether the diligens pater familias would have taken reasonable steps to guard against such occurrence; and

(iii) Whether the defendant failed to take those steps.

In United Bottlers (Private) Limited v Shambawamedza 2002 (1) ZLR 341 (S)…, this Court stated:

“It has been said that negligence is a question of fact, and the onus of proving it is on the party alleging it. A person is negligent if he did not act as a reasonable man would have acted in the particular circumstances. He will be held liable for the actual consequences of his negligence which are reasonably foreseeable.”

In Cape Town Municipality v Paine 1923 AD 207…, INNES CJ said:

“It has repeatedly been laid down in this Court that accountability for unintentional injury depends upon culpa - the failure to observe that degree of care which a reasonable man would have observed. I use the term reasonable man to denote the diligens paterfamilias of Roman Law - the average prudent person.

Every man has a right not to be injured in his person or property by the negligence of another, and that involves a duty on each to exercise due and reasonable care.

The question whether, in any given situation a reasonable man would have foreseen the likelihood of harm, and governed his conduct accordingly, is one to be decided in each case upon a consideration of all the circumstances. Once it is clear that the danger would have been foreseen and guarded against by the diligens paterfamilias, the duty to take care is established, and it only remains to ascertain whether it has been discharged.”

See also: Lomagundi Sheetmetal & Engineering (Private) Limited v Basson 1973 (1) RLR 356 (A)…,.; (4) SA (RAD) 523…,.

CONTRIBUTORY NEGLIGENCE

The defence of contributory negligence is provided for in section 4 of the Damages (Apportionment and Assessment) Act [Chapter 8:06] (“The Act”). It provides:

“(1) Where any person suffers damage which was caused partly by his own fault and partly by the fault of any other person, a claim in respect of that damage shall not be defeated by reason of the fault of the claimant, but, the damages awarded in respect thereof shall be reduced by the court to such extent as the court may deem just and equitable having regard to the respective degrees of fault of the claimant and of such other person in so far as the fault of either of them contributed to the damage.”

The defence must be pleaded and the appropriate relief of an apportionment of damages must be claimed in the plea in the alternative.

In Lewis v Mushangi & Anor HB41-99; 1999 (1) ZLR 506 (H) the court stated that:

“The general rule is that the alternative defence of contributory negligence must be pleaded and the appropriate relief of an apportionment of damages must be claimed in the plea.”

In Mugari v Machiri SC164-87; 1987 (1) ZLR 164 (SC)…, this Court stated that:

“It may not be fatal to fail to allege apportionment (see Cooper and Bamford South African Motor Law at pages 287-8) but it is certainly highly desirable that a defendant should, in the alternative, set out the grounds on which he alleges that the plaintiff was negligent and thereby contributed to the occurrence of the accident.”

It is for the defendant to prove that the plaintiff was negligent and that his negligence was causally connected to the damages suffered by the plaintiff.

APPLICATION OF THE LAW TO THE FACTS

It is the appellant's contention, that, the court a quo fell into error when it failed to make an order that damages be apportioned between the parties considering that the respondent had contributed to the damages he suffered.

On the contrary, the respondent contends, that, he was not negligent at all and that the appellant did not put in issue the contributory negligence of the respondent in its plea and therefore it should not have been canvassed in the judgement of the court a quo.

The starting point is to determine whether the respondent was negligent, and, if so, whether his negligence was causally linked to the damages he suffered.

It is common cause, that, the appellant, in its plea in the court a quo, disputed the respondent's claim in its totality and prayed that the respondent's claim be dismissed with costs.

It did not, in the alternative, specifically plead contributory negligence and pray for an appropriate relief of apportionment of damages.

Nor did it set out, in meaningful detail, the respects in which it was alleged that the plaintiff had been negligent.

In its plea, after denying all averments by the respondent, it stated the following:

“In any event, plaintiff's misfortune, if any, was a failure to keep a proper look out and acting without due care and attention.”

The issue of the alleged respondent's contributory negligence then, somehow, came out, for the first time, in the joint Pre–Trial Conference Minute. It was settled as one of the issues for trial.

The case of Mashonaland Tobacco Company (Private) Limited v Mahem Farms (Private) Limited and Anor SC152-20…, aptly sums the general principle regarding the necessity of pleading a cause of action:

“As a general rule, judgment cannot be granted on a cause of action that is not pleaded. The pleadings must clearly set out the precise parameters of the issues contested between the parties. Thus, in the Namibian case of Courtney-Clarke v Bassingthwaighte 1991 (1) SA 684 (Nm) at 698, it was explained that:

'…, there is no precedent or principle allowing a court to give judgment in favour of a party on a cause of action never pleaded, alternatively, there is no authority for ignoring the pleadings…, and giving judgment in favour of a plaintiff on a cause of action never pleaded. In such a case, the least a party can do if he requires a substitution of or amendment of his cause of action, is to apply for an amendment.'”

During cross examination of the plaintiff, by the appellant's counsel, various particulars of negligence were put to the respondent. These include that he waved down a commuter omnibus where there was no designated bus stop; he ran in the dark and could not see where he was stepping on; he could see that the grass was unkempt and long but still proceeded.

The learned author ISAACS in Beck's Theory and Principles of Pleading in Civil Actions, 5th ed…, makes some very pertinent observations regarding general rules as to pleading:

“It is the duty of defendant to set out his plea in such a manner as to enable the plaintiff to know the nature of the defence. If the defendant admits facts in the declaration, it is not necessary for the plaintiff to prove these facts, and thus those facts are not in issue in the trial. The plaintiff is entitled to know the limits of the defence in clear and concise manner.”

See also Medlog Zimbabwe (Private) Limited v Cost Benefit Holdings (Pvt) Ltd SC24-18; 2018 (1) ZLR 449 (S)…,.

In casu, the appellant, as the defendant in the court a quo, did not, in my view, set out its plea in such a manner as to enable the respondent to fully appreciate the nature of its defence.

In Keavney & Anor v Msabaeka Bus Services (Pvt) Ltd 1996 (1) ZLR 605 (S)…, the following point was made:

“A pleader cannot be allowed to direct the attention of the other party to one issue, and then, at the trial, attempt to canvass another; as MILNE J (as he then was) put it in Kali v Incorporated General Insurance Ltd 1976 (2) SA 179 (D) at 182A.

'The purpose of pleadings is to define the issues and to enable the other party to know what case he has to meet' per MULLINS J in Niewoudt v Joubert 1988 (3) SA 844 (C). See also DD Transport (Pvt) Ltd v Abbot 1988 (2) ZLR 92 (S) at 101F-G.”

Further down on the same page, at D-E, the following findings were made:

“The failure, in this case, to plead the real defence, suggests one or other of three possible explanations:

1. Sheer idleness and incompetence on the part of the pleader.

2. A deliberate and unconscionable attempt to avoid attracting an onus or 'burden of adducing evidence'.

3. That the defence was an afterthought on the part of the defendant.

4. The learned judge who heard the matter made no comment on all this.”

To compound matters, the judge seized with the Pre-Trial Conference let in an issue which did not arise from the pleadings.

The court a quo made the following findings on the issue of the plaintiff's negligence:

“It is not in dispute that when the plaintiff fell into the catch pit, he was rushing to board a commuter omnibus which he had waved (sic) down at a place which is not a bus stop. Bus stops have been put in place by Council to stop members of the public from boarding transport at places which pose danger to them and to prevent commuters from having to run after vehicles as the plaintiff did on the fateful day.

As correctly submitted by the defendant, Council put in place bus stops to minimize road accidents.

From the pictures which were produced by the plaintiff, it is clear that there is no bus stop near the catch pit he fell into. He had therefore stopped the commuter omnibus at an undesignated pick up point. This prompted him to run across the island where the catch pit was instead of walking along the pedestrian path provided after the island. The catch pit is strategically positioned on the side of the road to drain storm water.

George Munyonga explained, that, as a safeguard measure, catch pits are deliberately located on the island because people are not supposed to walk on the island but on the pedestrian path. He said that the island is not a walk way or run way.

It is admitted, that, if the plaintiff had not walked on the island in the dark he would not have fallen into the catch pit. Pedestrians do not walk or board transport wherever they deem. Vehicles also do not stop to pick up passengers wherever they feel like. They should do so at designated pick up points. The plaintiff was running in the dark when he could not properly see where he was stepping. He could also see that the grass was unkempt and it was long. The motor vehicle had stopped for him. So, there was no need for him to run, especially considering that he could not see properly. The risk of tripping and falling, even in the absence of a catch pit, could not be ruled out in such circumstances.”

In making the above findings, the court a quo relied on what was put to the respondent during cross examination - which issues did not arise from the pleadings.

The judge a quo concluded, that, the respondent was negligent by not waiting for transport at designated bus stops.

This was never the appellant's defence, and, the court fell into error in making that finding in the absence of evidence that there are designated stops along that road.

The claim for apportionment seems to emanate from that conclusion.

The court a quo further made the following observation:

“Whilst I accept that the plaintiff can be said to have been negligent as I have described above, it is my considered view that his negligence was not the proximate cause of the fall.

The proximate cause of the fall into the catch pit was the absence of the catch pit lid or cover.

If the catch pit had been covered, even if the plaintiff had walked on the island where he was not supposed to walk, or even if he had run in the dark when he could not see properly, he would not have fallen into the catch pit. The proximate cause of the plaintiff's fall was the uncovered catch pit. For this reason, I will say there was no contributory negligence on part of the plaintiff.”

The judge a quo uses the term “can be said to have been negligent”. She was not categorical. Counsel for the respondent describes it as negligence in the air.

In my view, this is what LORD EDMUND-DAVIES described, in Moorgate Mercantile Company Limited v Twitchings [1977] AC 890…, which was quoted with approval in Autorama (Private) Limited v Farm Equipment Auctions 1984 (1) ZLR 162 (H)…, in the following terms:

“In most situations, it is better to be careful than careless, but, it is quite another thing to elevate all carelessness into a tort.”

The respondent might have been careless, but, his conduct does not amount to a neglect of some duty warranting a finding of negligence on his part.

As was stated in Autorama (Private) Limited v Farm Equipment Auctions 1984 (1) ZLR 162 (H) at 164E:

“It is an elementary proposition of the law, that, to give a cause of action, negligence must be the neglect of some duty. A person cannot be held liable for negligence in the air.”

See also United Bottlers (Private) Limited v Shambawamedza 2002 (1) ZLR 341 (S).

In any event, in view of the concessions made by the appellant's witness that I related to earlier on…, there was no basis for making a finding of contributory negligence on the part of the respondent.

The court a quo was therefore correct to make a finding, that, there was no contributory negligence on the part of the respondent, though for different reasons.

The first three grounds of appeal of the appellant, all being based on the question of contributory negligence, must accordingly fail.

COSTS

It is trite, that, the award of costs is entirely in the discretion of the court, and, generally, costs follow the result.

The basis of the appellant's grief with the order of costs is that the court a quo held that the respondent was partly to blame for the litigation because of the unrealistic claims he made which militated against any possible settlement.

A close reading of the judgment reveals, that, the remarks made by the court a quo, regarding the unrealistic claims made by the appellant, which could possibly militate against a possible settlement, were made obiter. This was after it had made a finding that the respondent was entitled to his costs as he had succeeded in the suit.

HERBSTEIN and VAN WINSEN in The Civil Practice of the High Court, Vol.2, 5th ed…, succinctly set out the purpose of an award of costs as follows:

“…, to indemnify him for the expense to which he has been put through, having been unjustly compelled to initiate or defend litigation, as the case may be.”

The appellant has not demonstrated that the court a quo grossly erred in its exercise of discretion in this regard. I see no reason to interfere with the award of costs against the appellant.

It is for the above reasons that we dismissed the appeal and made the following order:

“The appeal be and is hereby dismissed with costs.”

View Appeal
SC43-13 : ECONET WIRELESS (PVT) LTD vs TRUSTCO MOBILE (PROPRIETARY) LTD and TRUSTCO GROUP INTERNATIONAL (PROPRIETARY) LTD
Ruled By: MALABA DCJ, ZIYAMBI JA and GARWE JA

On 25 July 2011, the High Court at Harare granted an order in the following terms:“FINAL RELIEF SOUGHTThat you show cause to this Honourable Court why a final order should not be made in the following terms:1. Pending the determination of the dispute between the parties by the process of ...

On 25 July 2011, the High Court at Harare granted an order in the following terms:

“FINAL RELIEF SOUGHT

That you show cause to this Honourable Court why a final order should not be made in the following terms:

1. Pending the determination of the dispute between the parties by the process of Arbitration in terms of the provisions of the Arbitration Act, the first respondent shall not take any steps neither shall it act in any such manner as is inconsistent with the rights of the applicants arising from the agreement between the parties (as amended), and shall not act in such a way unless entitled to so act in terms of any Arbitral Award that may be handed down.

2. The costs of this application shall be costs in the envisaged arbitration proceedings.

INTERIM RELIEF GRANTED

That pending determination of this matter on the return date, applicants are granted the following relief:

1. The first respondent is directed to restore to the first applicant the internet based reporting links and all access to Trustco mobile hardware and software, thus enabling it to monitor and process airtime purchase transactions and otherwise perform its obligations in terms of the agreement; and

2. The first respondent be directed to refrain from undertaking and implementing a competing, infringing service to that provided by the first applicant in terms of the agreement.”

Dissatisfied with the order, the appellant filed a notice of appeal with this Court.

In essence, the appellant seeks an order setting aside the decision of the court a quo and substituting it with one dismissing the application with costs.

BACKGROUND

Econet Wireless (Pvt) Ltd (“the appellant”) is a mobile network operator carrying out its operations in Zimbabwe. On 17 August 2010, the appellant concluded an agreement with Trustco Mobile (Proprietary) Ltd (“the first respondent”), a Namibian based company and subsidiary of Trustco Holdings, whose core business is micro-insurance, financial services, and the provision of various wireless application services through mobile telephony.

In terms of the agreement, the first respondent was to provide certain software and support services to facilitate the provision of free life cover to Zimbabwean cellular phone users and customers of the appellant against the purchase of cellular airtime from the appellant.

In terms of the agreement, life cover was to be underwritten by First Mutual Life Assurance Company of Zimbabwe (“First Mutual”) at no cost to the appellant's customers but against payment of a fee by the appellant, to the first respondent, calculated in terms of the agreement.

First Mutual was to underwrite life cover against payment of a premium which was to be subtracted from the amounts due to the first respondent by the appellant.

The project came to be known in Zimbabwe as “Ecolife”.

The project was to be facilitated by a transaction facilitation system, which allowed communication between users seeking insurance, their mobile service provider, and insurance underwriter.

The system would record all the transactions that took place.

A subscriber would only be entitled to life cover if he purchased airtime in excess of three dollars over a period of a month. For life cover to be retained, further airtime of more than three dollars had to be purchased. All subscribers who spent more than three dollars would then be accepted for insurance by First Mutual.

The project was presented on the basis, that, it would result in a substantial increase in the appellant's airtime sales.

It was a term of the agreement, that, the same was to endure for an initial period of eighteen months and that the appellant was to refrain from performing an act contesting, impairing any part of the rights and infringing, copying, duplicating, or passing off any of the first respondent's rights.

It was also a term of the agreement, that, in the event of a breach not remedied within fourteen days of notice of such breach, the innocent party was entitled to cancel the agreement without prejudice to any other rights it may have had.

In February 2011, a dispute arose in regard to the first respondent's entitlement to certain royalties. Whilst the appellant agreed to pay a portion of the royalty fee, it however maintained that no fees would be paid in respect of customers whose details were not completely captured.

On 26 May 2011, the appellant wrote to the first respondent also expressing its concerns over what it regarded as violations of the agreement by the first respondent.

What happened thereafter is what gave rise to the proceedings the subject of this appeal.

On 31 May 2011, the first respondent sent a letter to the appellant, the contents of which triggered the dispute that is the subject of this matter. That letter reads, in relevant part:

“The current situation is unbearable. Econet, as a registered insurance broker, is holding out to 1.85 million subscribers that they in fact have life insurance while the true state of affairs is that the insurer is not obliged to pay any claim while its premiums are outstanding. Trustco cannot be associated with such a state of affairs.

Therefore, be advised that all obligations of Trustco will be suspended 3 June 2011 at 12h00 Namibian time if all overdue payments are not received by then.…,.

Kindly be further advised that if all overdue amounts, of which you have been advised, are not received within 14 days from date hereof, Trustco will deem the contract cancelled in terms of Clause 17.1 of the agreement.”…,.

The appellant responded the following day, 1 June 2011, in the following terms:

“We acknowledge receipt of your letter dated 31st May 2011 regarding the above. Your intention to terminate the agreement has been noted and accepted.

Econet maintains that it has discharged all its obligations under our agreements with you. We repeat our averment, that, royalties are only payable in respect of subscribers who buy airtime of a value exceeding $3 per month. Those subscribers who buy airtime amounting to $3, but do not buy any additional airtime are not entitled to cover. Consequently, no royalties are payable in respect of such subscribers….,.”…,.

In a letter dated 3 June 2011, the day it had threatened to suspend all obligations if all overdue payments were not received, the first respondent wrote in the last paragraph thereof:

“Legal advice received indicated that we are not entitled to switch off the system until 14 working days have lapsed since 31 May 2011. Hence, the system will remain operative until then.”

The appellant, in a letter dated 5 June 2011, stated:

“We refer to your letter of 3 June 2011 and advise that we stand by our letter of 1 June 2011 in terms of which we accepted your notice of termination of our agreement. Therefore, we consider the agreement terminated. We shall proceed to make arrangements to ensure that our subscribers are not prejudiced by the termination of the agreement that was initiated by you….,.”

The appellant further advised, that, in view of the decision it had taken on the matter, it had commenced the steps necessary to discontinue the use of the Trustco Mobile Concept and would not use the system with effect from 14 June 2011.

On 5 June 2011, the appellant severed links with the first respondent's system.

By letter dated 8 June 2011, the first respondent's lawyers, Messrs Rudolph Bernstein & Associates wrote to the appellant advising that the letter of 31 May 2011 indicating an intention to cancel the agreement was never intended to constitute an invitation to the appellant for the consensual termination of the agreement, and that, by purporting to accept such termination, the appellant's conduct constituted an attempt to repudiate the agreement.

The letter further made it clear, that, the first respondent would not accept such repudiation and that it had no intention of cancelling the agreement pending the resolution of the dispute between the parties.

The letter further gave the appellant until 9 June 2011 to restore all links failing which urgent injunctive relief would be sought.

As a result of this impasse, the first respondent filed, on 24 June 2011, an urgent chamber application in the High Court in which it sought the relief in the terms already indicated.

After hearing argument, the court a quo made the following findings:

(a) That, a reasonable explanation had been tendered for the delay in the filing of the application and that the matter was urgent.

(b) That, the relief sought in the interim was restoration of the status quo ante, and, on the return day, a show cause why the first respondent's rights should not be preserved pending determination of the dispute by arbitration. In other words, the relief sought on the return day was dis-similar to the interim relief sought.

(c) That, the requirements for an interdict had been met, and, in particular, the balance of convenience favoured the respondents.

(d) That, the notice to terminate issued by the first respondent was in the future and not ex nunc and therefore invalid. In the circumstances, there was no cancellation which the appellant could note and accept, and, consequently, the agreement remained valid.

Consequent to the above findings, the court a quo granted an order in terms of the draft filed.

That order is the subject of the present appeal.

It is perhaps pertinent to mention at this juncture, that, the first respondent thereafter successfully applied for an order allowing execution notwithstanding the noting of the appeal.

From the submissions made by counsel, it is apparent that the parties have been engaged in arbitration proceedings pursuant to the order granted by the court a quo.

The appellant has attacked the decision of the court a quo on several bases.

Since a point in limine has been taken in respect of the propriety of the Notice of Appeal itself, it becomes necessary to quote the grounds of appeal in toto. The appellant's grounds of appeal are:

“1. The learned Judge in the court a quo erred in fact, and at law, by finding that the matter was urgent and in so finding, failed to pay due regard to the background to the matter, the activities of respondents prior to the filing of the application, to the submissions made, and numerous authorities cited by appellant and to the matters raised by appellant in its opposing papers.

2. The learned Judge in the court a quo erred in fact and at law in finding that the relief sought in the amended provisional order did not suffer from the same defect as the provisional order originally filed and erred in finding that the interim and final reliefs prayed were not the same or not substantially similar.

3. The learned judge in the court a quo erred in failing to appreciate, that, by granting the interim relief as amended, the order granted has the effect of a final order.

4. The learned judge in the court a quo erred in fact, and at law, by failing to appreciate, and disregarding case authorities drawn to his attention that the process of arbitration to which the final relief prayed for refers relies (sic) on an arbitration clause in the agreement which does not oblige the parties to have any dispute determined by the process of arbitration, and, in so finding, took away the appellant's discretion to adopt other dispute resolution methods that are permissible at law, and under the agreement.

5. Having regard to the hostility between the parties that was evident on the papers, the protests by appellant's subscribers over abuse of appellant's system through unsolicited messages sent by the respondents, the fixed term nature of the contract between the parties, and the declaration by respondents herein that they did not wish to honour their side of the contract, the learned judge in the court a quo erred in finding that respondents had established all requirements for the grant of a temporary interdict, and, in particular, erred in finding:

5.1 That respondents fear that appellant had infringed its concept was well grounded, such finding having been erroneously arrived at in view of appellant's averment that such infringement was not in fact possible because appellant does not have access to the source code of respondents system.

5.2 That the balance of convenience favoured the granting of the interdict; and

5.3 That no other adequate remedy was available to the respondents.

6. Having regard to the same factors referred to in paragraph 5 above, the learned Judge in the court a quo erred in exercising his discretion to grant specific performance of the agreement in all the circumstances.

7. Generally, the learned judge in the court a quo did not apply himself to the facts of the matter before him as a result of which he made the following findings of fact that are not supported by the facts of the matter before him, namely:

7.1 That the agreement between the parties required first respondent to procure free life cover for the appellant's subscribers from First Mutual Insurance Company when the agreement contained no such requirement at all, and the facts before the judge showed that the first respondents would not have been able to do so as it was appellant that sought and obtained approval from the Commissioner of Insurance to obtain insurance cover for its subscribers and pay for such cover on behalf of its qualifying subscribers.

7.2 That the “business model for the provision of free life cover as against the purchase of airtime amounts to an intellectual property” when the agreement between the parties did not so provide.

7.3 That “copyright and international patent had been applied for” when the agreement stipulated, falsely, that first respondent already was a holder of International patent over the “Trustco Mobile Concept” and the undisputed facts on record showed that such patent had been sought and declined on the basis the Trustco Mobile Concept was not novel and was thus not patentable, facts that first respondent kept hidden from appellant.

7.4 That “substantial revenue, running into millions of US dollars, was reaped from it (the system) to the benefit of the three parties to the agreement” thereby adopting first respondent's bald and disputed assertions without question and in the absence of evidence to that effect.

8. More specifically, the learned judge in the court a quo based his judgment on the letter dated 31 May 2011 written by the first respondent and found that the contents thereof was a mere expression of an intention to terminate the agreement after 14 days, which intention first respondent was entitled to withdraw on the following selective quotation of the first respondent's letter of 31 May 2011:

“Therefore, be advised that all obligation of Trustco will be suspended on 3 June 2011 at 1200 hours Namibian time if all overdue amounts, of which you have been advised, are not received by then…,. Kindly be further advised that if all overdue amounts, of which you have been advised, are not received within 14 days from the date hereof Trustco will deem the contract cancelled in terms of clause 17.1 of the main agreement.”

Had the learned judge a quo considered the full text of the relevant part of the letter, which reads as follows:

“Therefore, be advised that all obligations of Trustco will be suspended on 3 June 2011 at 1200 hours Namibian time if all overdue amounts, of which you have been advised, are not received by then.

We expect yourselves to appraise the Postal & Telecommunications Regulatory of Zimbabwe (Potraz), the Insurance and Pension Commission as well as the Reserve Bank of the status quo of Eco Life with immediate effect. On Monday 6 June 2011, Trustco will advise the Zimbabwean Press and its shareholders via SENS of the status quo of Ecolife as required by the regulatory environment Trustco operates in.

Kindly be further advised that if all overdue amounts, of which you have been advised, are not received within 14 days from the date hereof, Trustco will deem the contract cancelled in terms of clause 17.1 of the main agreement.”

he would have come to the inevitable conclusion:

(a) That, the letter was an unequivocal expression by first respondent of an intention not to discharge its obligations under the agreement with effect from 3 June 2011 prior to the expiry of the 14 days; and

(b) That such conduct, at law, constitutes anticipatory breach of contract, or repudiation of contract from which first respondent was not entitled to approbate particularly as such repudiation was accepted and acted upon by appellant in notifying the regulatory authorities and its subscribers of the situation before the 3 June 2011, and proceeding to disconnect first respondent's system from its network.

(c) That such repudiation had been accepted by appellant in writing, or by the appellant's conduct in disconnecting first respondent's system from its network.

The learned judge in the court a quo thus erred both in fact and in the application of the law.

9. The learned judge in the court a quo erred in fact, and at law, by rejecting the submission that the facts of the matter before him related to repudiation of contract, or anticipatory breach, and was thus distinguishable from the case of Waste Management Services (Pvt) Limited that he relied upon in his judgment.

10. The learned judge in the court a quo erred in fact and law in failing to attach weight to various threats by first respondent to suspend its obligation under the contract and by creating the impression that the Trustco Mobile Concept worked flawlessly for nine months when the facts on the record showed repeated failures that were well documented and were not disputed.

11. In any event, the learned judge in the court a quo erred in granting relief to the second respondent in the absence of a finding that second respondent has a substantial interest in the matter particularly as the second respondent was not a party to the agreements between the parties in this matter.”

In their heads of arguments, the respondents also took a number of points in limine. Most were not persisted in save for two. These are:

(1) Whether the grounds of appeal are concise, and, if not, whether the appeal is fatally defective for that reason.

(2) That the appeal is not directed at the order but the reasoning of the court a quo.

I turn to deal with the above issues as well as the others that arise from the papers.

THE QUESTION OF URGENCY

It is common cause on the papers, that, the urgent application filed by the respondents was only filed on 22 June 2011, almost three weeks after the events giving rise to the dispute had occurred.

It is the appellant's contention, that, the delay in filing the application was inordinate and that the court a quo therefore erred in deciding to hear the matter on the basis of urgency.

In deciding to hear the matter on the basis of urgency, the court a quo considered a number of factors.

It considered the fact that the respondents, who are Namibian-based companies, had had to brief their lawyers on the highly technical aspects of the Trustco mobile system, that the services of a South African advocate experienced in intellectual property-related issues had to be sought, that there was need to obtain advice across three jurisdictions, and, in particular, on the procedural and substantive issues applicable to the law in Zimbabwe, that, thereafter, trips had to be undertaken by the first respondent's managing director and a South African lawyer to Zimbabwe to consult with Zimbabwean-based lawyers.

The court a quo was of the view, that, the explanation given for the delay was not only reasonable but was also understandable.

The court further found, that, the matter was urgent.

It is clear, that, in terms of Rules 244 and 246 of the High Court Rules, the decision whether to hear an application on the basis of urgency is that of a judge.

The decision is one, therefore, that involves the exercise of a discretion.

It follows from this, that, this Court has very limited grounds upon which it can interfere with the exercise of such a discretion.

Various decisions of this Court have stressed the point, that, unless the inferior court makes a mistake on the law or the facts, acts upon a wrong principle, allows extraneous considerations to influence its decision, fails to take into account relevant facts, or, more generally, makes a decision that is irrational, an Appellate Court would have no basis for interfering with the exercise of discretion in such a situation.

The position is now settled, that, what constitutes urgency is not only the imminent arrival of the day of reckoning, but, also, if at the time the need to act arises, the matter cannot wait. Urgency which stems from a deliberate or careless abstention from action until the deadline draws near is not the type of urgency contemplated by the Rules.

It is the submission by the appellant, that, it being common cause that the respondents had taken three weeks to file the urgent application, the court a quo erred in deciding to hear the matter on the basis of urgency.

It is not suggested that the court misdirected itself in any other way or that its decision is irrational.

It seems to me, that, on the facts, the matter was urgent. The delay in filing the explanation was explained satisfactorily. I find no basis upon which the decision by the court a quo, to relate to this matter on the basis of urgency, can be impugned.

This ground of appeal must also fail....,.

WHO BETWEEN THE PARTIES REPUDIATED THE AGREEMENT AND WHETHER THE APPELLANT LAWFULLY TERMINATED IT

As correctly found by the court a quo, this is the axis of the matter between the two parties.

In his submission, counsel for the appellant contended, that, on a proper reading of the letters of 31 May 2011 and 3 June 2011 from the first respondent's Group Managing Director, it is clear that the first respondent intended to resile from its obligations in terms of the agreement.

That anticipatory or actual breach required the appellant to make an election either to accept the termination or to enforce the agreement.

The appellant could have said “we do not accept your suspension of the contract and we hold you to it.” Instead, the appellant, firm in its conviction that it would not pay the disputed amounts, accepted the termination.

Whether or not the termination by the respondent was valid or not was not relevant.

Once the appellant accepted the repudiation, this brought the agreement to an end. There would have been no further continuing obligations and the order made by the court a quo would therefore have been wrong.

Whether or not the notice was to terminate the contract in future was irrelevant.

Counsel for the respondents, in his submissions, argued that it was the appellant that sought to repudiate the agreement.

He accepted, that, repudiation is a species of anticipatory breach and that the innocent party has an election either to resist and sue for specific performance, or, alternatively, accept the repudiation which then brings the contract to an end.

It was the appellant, in this case, which sought to repudiate. The respondent did not accept the repudiation.

Further, he submitted, that, as the threat to terminate the agreement by the respondent was not ex nunc but was to take place at a later date, and, as the issue before the court was whether a prima facie case had been established, the court correctly granted the provisional order.

It is correct, that, in determining whether a party has repudiated a contract, the test to be applied is whether the party has acted in such a way as to lead a reasonable person to the conclusion that he did not intend to fulfil his part of the contract.

It is also correct, that, repudiation is a species of anticipatory breach: see Chinyerere v Fraser NO 1994 (2) ZLR 234 (H).

Repudiation may manifest itself in a variety of ways.

As stated by R.H. CHRISTIE, the Law of Contract in South Africa, 3rd ed…,.:

“If it takes place before performance is due, it is sometimes described as anticipatory breach, and, may take the form of a statement that the party concerned is not going to carry out the contract, or an unequivocal tender to perform less than is due, or an unwarranted but unequivocal refusal by a buyer to pay the full purchase price, irrespective of his true intention and the amount of any reduction that may be claimed, or the taking of some action inconsistent with the intention to perform, or, by his own conduct, putting it out of his power to perform….,.”

In his letter of 31 May 2011, the respondents Group Managing Director wrote, inter alia:

“Therefore, be advised that all obligations of Trustco will be suspended on 3 June 2011 at 12h00 Namibian time if all overdue payments are not received by then.”

In my view, this was a clear intimation that the respondent, for the reasons given in the letter, was going to suspend all its obligations towards the appellant. The letter further made it clear, that, if all outstanding amounts were not paid within fourteen days of the date of the letter, the respondent was to deem the contract cancelled.

That this was an anticipatory breach, there can be no doubt.

The procedure to be followed by either party, in the event that it was believed that a breach had occurred at the instance of the other, was clearly provided for in the agreement entered into and signed by both parties.

Nowhere in the agreement was the respondent entitled to suspend all its obligations within three days of giving notice to that effect.

Such conduct suggested that the respondent no longer believed it was bound by the agreement previously entered into by the parties.

The position is now settled, that, a party in the appellant's position has an election to make.

The appellant could have refused or resisted such repudiation and insisted on specific performance. The appellant, in holding the respondent to the agreement, could have, inter alia, argued that the notice of termination was not ex nunc and therefore invalid. Alternatively, the appellant could have accepted the repudiation, such acceptance having the effect of terminating the agreement between the parties.

In its response, the appellant “noted the intention to terminate the agreement and accepted” it.

It is apparent from the appellant's response that it accepted the repudiation. In my view, that brought the contract to an end. There were no further obligations as the contract had come an end.

Therefore, when the first respondent wrote, on 3 June 2011, advising that, on legal advice received, it was not entitled to switch off the system until fourteen working days had lapsed and that the system would remain operational until then, it was too late as there no longer was any contract in existence between the two parties - a position the appellant stressed in its letter of 5 June 2011.

The court a quo found, that, the notice to terminate the agreement was in the future and not ex nunc. The court also found, that, in the circumstances, there was no valid cancellation of the agreement and that the agreement therefore remained in existence.

The court erred in coming to the above conclusion.

It failed to consider the implications in our Law of Contract of the respondents letter of 31 May 2011 and the response by the appellant of 1 June 2011 in which it accepted what it termed the termination of the agreement but which in fact was a repudiation of the agreement.

Clearly, therefore, whilst Jackson v Limly Insurance Company Ltd 1999 (1) ZLR 381 (S) correctly stated the law, when it held that a valid notice of cancellation must be exercised ex nunc, the issue that arises in this case is different.

I am satisfied, therefore, that, the contract ceased to exist once the appellant accepted the first respondent's repudiation.

In the circumstances, the order of specific performance granted by the court was improper and ought therefore to be set aside.

Appealed
SC65-14 : AIR ZIMBABWE (PVT) LTD and AIR ZIMBABWE HOLDINGS (PVT) LTD vs STEPHEN NHUTA and DEPUTY SHERIFF HARARE and SHERIFF OF ZIMBABWE
Ruled By: ZIYAMBI JA, GARWE JA and PATEL JA

This is an appeal against a judgment of the High Court dismissing with costs an urgent application brought by the appellants for the release from 'attachment and execution' of certain motor vehicles and other assets attached by the second respondent (“the Deputy Sheriff”) on the appellants premises on 12 April ...

THE BACKGROUND

The first and second appellants are companies duly incorporated according to the laws of Zimbabwe and whose registered office and principal place of business is situate at the Harare Airport.

The first respondent is an ex-employee of the second appellant. Sometime in October 2010, an arbitral award for outstanding salary and benefits was made in his favour.

No appeal was lodged against the decision of the arbitrator, and the award was registered with the High Court on 5 September 2012.

On 19 October 2012, he caused to be issued a writ of execution on the strength of which the Deputy Sheriff attached and removed twenty–nine vehicles which were found on the appellants premises at the Harare Airport.

The appellants alleged, that, interpleader notices were filed to 'safeguard the claimants interests, which notices are still pending.'

Indeed, it appears that interpleader proceedings in the name of the first appellant, as claimant, and the first respondent, as judgment creditor, were commenced in the High Court on or about 15 November 2012 and not concluded. (I pause here to observe, that, in terms of the High Court Rules, inter-pleader proceedings in respect of property attached in execution are required to be brought by the Deputy Sheriff, as applicant, and the person(s) claiming ownership of the attached property as claimant(s)…,.

The appellants further alleged, that, in December 2012, section 8 of the Finance Act (No.2) of 2012 (“the Finance Act”) was enacted with the sole purpose of protecting, from attachment or execution, the property of the appellants, as the successor companies of the Air Zimbabwe Corporation, and that following this enactment, and in February 2013, the first respondent released the attached motor vehicles subject to the appellants paying to the Deputy Sheriff storage fees which had accumulated in the sum of US$10,000.

The appellants were therefore surprised, when, on 12 April 2013, the Deputy Sheriff returned with the same writ of execution and attached the same motor vehicles which had previously been released from attachment.

They alleged, that, by virtue of the provisions the Finance Act (No.2) of 2012 (the Finance Act) as read with the State Liabilities Act [Chapter 8:14] the attachment of the appellants property to satisfy debts owed by either the first or the second appellant is in violation of the law and therefore illegal.

In the premises, they urged the court to intervene, as a matter of urgency, to prevent the removal of the assets, set for 22 April 2013 for public auctioning, and so put an end to the illegality perpetrated by the respondents.

Failure by the court to intervene and save the attached motor vehicles would result in paralysis of the business operations of the first appellant in a dispute to which it is not a party.

It is of interest to note here, that, notwithstanding the alleged urgency, the application was filed on 22 April 2013, the day scheduled for the removal of the attached property, and served on the first respondent the following day at 4:20pm.

In opposing the application, the first respondent raised two preliminary issues:

(i) Firstly, that the matter was not urgent; and

(ii) Secondly, that, the application was defective by reason of its non-compliance with Rule 241(1) of the High Court Rules which requires the applicant to set out the facts of his application in Form 29B.

No mention was made of the second issue in the judgment, and it is not raised in the Notice of Appeal.

With regard to the first point raised in limine, it was averred by the first respondent, that, the appellants had shown no satisfactory reason, whether in the certificate of urgency or their founding affidavits, as to why the matter should be heard as a matter of urgency.

In particular, there was no disclosure as to when the alleged urgency arose, regard being had to the fact that the writ was issued on 19 October 2012; that, when the Finance Act (No.2) of 2012 (the Finance Act) on which the appellants rely was enacted, in December 2012, no action was taken by the appellants; and that the appellants had concealed from the court an earlier attempt by the Deputy Sheriff, on 10 April 2013, to attach their property before the actual attachment took place on 12 April 2013.

In addition, there was no explanation from the appellants as to why they failed to file this application before 22 April 2013.

In the premises, the urgency was self-created.

As to the merits of the matter, the first respondent averred, that, the property attached belonged to the second appellant (Air Zimbabwe Holdings) which was not protected by the provisions of the Finance Act (No.2) of 2012 (the Finance Act), such protection having been afforded only to the first appellant (Air Zimbabwe (Pvt) Ltd).

While admitting that he had ordered the Deputy Sheriff to release the attached motor vehicles, it was averred, that, the release was not on account of the provisions of the Finance Act but was in consequence of a tender by Air Zimbabwe Holdings of a payment plan in terms of which the latter promised to pay the debt owed to the first respondent in agreed instalments.

When that commitment was not honoured, the Deputy Sheriff was instructed to re-attach and remove the goods formerly released, hence the attempt at attachment on 10 April 2013.

The learned Judge, having heard the matter, dismissed it on the basis that it lacked both urgency and merit.

The following grounds of appeal were relied on by the appellants:

GROUNDS OF APPEAL

1. The court a quo erred in declining to hear and determine the matter on an urgent basis by the exercise of its discretion on whether to hear and determine the matter on an urgent basis on a wrong premise, such wrong premise amounting to an irregular exercise of judicial discretion.

2. The court a quo erred in not holding, that, upon a proper construction of section 9A of the Air Zimbabwe Corporation (Repeal) Act (No.4) of 1998, as inserted by section 8 of the Finance Act (No.2) of 2012, both appellants are successor companies to the Air Zimbabwe Corporation.

3. The court a quo erred in not holding, that, judicial attachment and sale in execution of any property belonging to either of the appellants is proscribed by section 9A of the Air Zimbabwe Corporation (Repeal) Act (No.4) of 1998, as read together with the provisions of section 5(2) of the State Liabilities Act [Chapter 8:14].

The first ground of appeal makes no sense because the court a quo did not decline to hear the matter.

Indeed, having found that the matter was not urgent, it nevertheless proceeded to hear and determine it on an urgent basis.

In so doing, the court a quo contradicted itself.

What it should have done once a finding of lack of urgency was made, was to strike or remove the matter from the roll of urgent matters and not proceed to hear the merits; for, once a hearing has taken place, and a decision made on the merits, the question of urgency becomes irrelevant.

For this reason, a determination on the first ground of appeal would be unnecessary.

Suffice it to say, that, no wrong premise was disclosed to this Court (and, indeed, none was apparent on perusal of the judgment) and the evidence on the record adequately supports the finding of the learned Judge, that, any urgency there was, was self-created.

Appealed
SC65-14 : AIR ZIMBABWE (PVT) LTD and AIR ZIMBABWE HOLDINGS (PVT) LTD vs STEPHEN NHUTA and DEPUTY SHERIFF HARARE and SHERIFF OF ZIMBABWE
Ruled By: ZIYAMBI JA, GARWE JA and PATEL JA

THE BACKGROUND

GROUNDS OF APPEAL

The second and third grounds of appeal raise the issue whether Air Zimbabwe Holdings is a successor company of Air Zimbabwe Corporation as contemplated in section 9A of the Air Zimbabwe Corporation (Repeal) Act (No.4) of 1998 (“the Repeal Act”).

If it is, then, it would follow that the attachment of its property by the Deputy Sheriff was illegal.

It was the appellants contention before this Court, as before the court a quo, that, the word any was meant to convey the meaning that any company formed by the shareholder or Board of the National Airline would automatically enjoy the same immunity provided by the amendment, and that, in the premises, Air Zimbabwe Holdings was such a successor company as would enjoy the immunity.

The learned Judge rejected this contention. At p6 of the cyclostyled judgment he said:

“I do not accept that it was the intention of the legislature to extend such immunity to an indeterminate number of companies some shareholders or Board somewhere could think of floating. I do not see the provisions of the amending section aforesaid as granting the power to anybody, let alone some shareholder or Board of Directors somewhere, to create a successor company, let alone several of them, to the defunct Corporation.

The words used in the amendment are '…, or any successor company.'

The word 'company' is used in the singular.

I do not accept applicants argument that the use of the pronoun 'any' before the noun 'company' transformed the word 'company' from the singular to 'companies' in the plural.

A reading of the whole amendment leaves me in no doubt, that, it was intended to refer to one successor company. If it was meant to refer to more than one company, the legislature could have easily used plurals so that that portion of the amendment would have read '…, or all successor companies' or '…, or any of the successor companies'.”…,.

The correctness of the learned Judge's ruling becomes evident when the legislative history is considered.

The Air Zimbabwe Corporation (Repeal) Act (No.4) of 1998 (the Repeal Act) was brought into operation on May 8, 1998. Its purpose, as set out in the preamble, was 'to provide for the dissolution of Air Zimbabwe Corporation and the transfer of its functions, assets, liabilities and staff to a company formed for the purpose; to provide for the repeal of the Air Zimbabwe Corporation Act [Cap 13:02]; and to provide for matters connected with or incidental to the foregoing'…,.

Section 3 of the Air Zimbabwe Corporation (Repeal) Act (No.4) of 1998 (the Repeal Act) provided:

“3. Formation of a successor company

Subject to this section, the Minister shall take such steps as are necessary under the Companies Act [Chapter 24:03] to secure the formation of a company limited by shares, which shall be the successor company to the Corporation for the purposes of this Act:

Provided that, if such a company has been incorporated for the purpose before the date of commencement of this Act, the Minister may, by notice to the Corporation, direct, that, that company shall be the successor company to the Corporation for the purposes of this Act.”…,.

Section 4 of the Air Zimbabwe Corporation (Repeal) Act (No.4) of 1998 (the Repeal Act) made provision for the shareholding of the successor company and section 5 for the transfer of assets and liabilities of the Corporation to the successor company.

The company nominated by the Minister, in terms of section 3 of the Repeal Act, was Air Zimbabwe (Private) Limited: see Jayesh Shah v Air Zimbabwe Corporation….,.

On 28 December 2012, the Finance Act (No.2) of 2012 (the Finance Act) amended the Repeal Act by inserting a new section 9A.

Section 8 of the Finance Act provided:

“8 New section inserted in Act No.4 of 1998

1. The Air Zimbabwe Corporation (Repeal) Act (No.4 of 1998) is amended by the insertion of the following section after section 9 -

'9A Legal proceedings against Corporation or Successor Company

The State Liabilities Act [Chapter 8:14] applies with necessary changes to all legal proceedings against the Corporation or any successor company.'

2. Subject to subsection (3), the amendment effected by subsection (1) applies to all legal proceedings against the Corporation or successor company (as those terms are defined in section 2 of the Air Zimbabwe Corporation (Repeal) Act (No.4 of 1998)), that were commenced or completed before the date of commencement of this Act.”

The term 'successor company' was defined, in section 2 of the Air Zimbabwe Corporation (Repeal) Act (No.4) of 1998 (the Repeal Act), as follows:

“'successor company' means the company referred to in section three.”

It admits of no doubt, therefore, that the legislature clearly had in mind one successor company.

It is also clear, that, had the appellants contention to the contrary been correct, the legislature would have expressed itself in words which lend themselves clearly, and unambiguously, to the meaning contended for by the appellants.

As submitted by counsel for the respondents, by way of illustration, the Air Zimbabwe Corporation was only one of the many companies which were unbundled. Similar provisions were made in legislation repealing the Electricity Act. For example, section 68 of the Electricity Act [Chapter 13:19] provides:

“68 Formation of successor companies

(1) The Minister shall, not later than six months after the fixed date, take such steps as are necessary under the Companies Act [Chapter 24:03] to secure the formation of one or more of the following companies limited by shares, which shall be the successor company or successor companies to the Authority —

(a) A company to take over the electricity generation plants of the Authority;

(b) A company to take over the transmission system of the Authority;

(c) A company to take over from the authority the distribution and supply of electricity;

(d) Such other companies as the Minister may approve;

(e) A company to hold the shares of the State in the companies referred to in paragraphs (a) to (d).”

Clearly, then, the learned Judge's finding, that, Air Zimbabwe Holdings is not the successor company referred to in section 9A of the Air Zimbabwe Corporation (Repeal) Act (No.4) of 1998 (the Repeal Act) is unassailable.

It follows, therefore, that, the property of Air Zimbabwe Holdings is not protected from execution by the statutory provision.

As to the ownership of property attached, it was alleged by the appellants that that property belonged to Air Zimbabwe and not to Air Zimbabwe Holdings.

In support of this allegation, a number of registration books were attached to the appellants papers. The learned Judge determined this issue as follows:

“Applicants alleged, that, the attached assets did not belong to Air Zimbabwe Holdings against which Nhuta had a judgment, but against Air Zimbabwe which not only was not indebted to Nhuta but also the assets for which are immune from attachment.

But, not a shred of evidence was placed before me that the assets belonged to Air Zimbabwe.

During argument it was contended, from the Bar, that the evidence of ownership was in the interpleader proceedings.

It will be remembered, that, until I had requested a copy of the pleadings in those proceedings, none had been placed before me. No case reference number had been given.

Nonetheless, having perused those papers, I find that Air Zimbabwe laid claim to 20 out of 29 of the attached vehicles and to 1 motor cycle. As proof of ownership of those vehicles, some registration books were copied and attached. From those registration books, about six of the vehicles were in the name of 'Air Zimbabwe Corporation' which could be either or both of the applicants, according to their argument that both are successor companies. The rest of the vehicles were in the name of 'Air Zimbabwe' which again could mean either or both of the applicants.

At any rate, emblazoned on every registration book was a 'WARNING' that read 'This registration book is not proof of legal ownership.'”…,.

I find no fault with the above reasoning.

It is trite that registration books are not proof of ownership.

In any event, the appellants have, still open to them, the option of pursuing the interpleader proceedings in which the issue of ownership can properly be ventilated and determined.

The appeal, for the reasons set out above, lacks merit and is hereby dismissed with costs.

Appealed
SC20-12 : ZIMBABWE OPEN UNIVERSITY vs GIDEON MAGARAMOMBE and DEPUTY SHERIFF HARARE N.O.
Ruled By: CHIDYAUSIKU, CJ

This is a Chamber application in which the applicant, the Zimbabwe Open University (hereinafter referred to as "the University"), seeks the following relief –

(a) An order that the appeal, SC25-12, be heard on an urgent basis; and

(b) A stay of the sale in execution of the University's property, attached in pursuance of an arbitration award it has appealed against.

The first respondent is Gideon Magaramombe (hereinafter referred to as "Magaramombe"). The second respondent is the Deputy Sheriff of Harare.

Magaramombe was formerly employed by the University as a lecturer.

The University terminated Magaramombe's contract of employment. Magaramombe now disputes the termination of employment and contends it was unlawful. The disputed termination was referred to an arbitrator for determination. The dispute was determined in favour of Magaramombe and the arbitrator ordered that Magaramombe be reinstated, or that, alternatively, he be paid damages in lieu of reinstatement.

The University appealed to the Labour Court against the arbitrator's decision in terms of section 98(10) of the Labour Act [Chapter 28:01] (hereinafter referred to as "the Act"). The University also applied to the Labour Court for an order suspending the arbitral award pending the hearing of the appeal. That application was made in terms of section 92E(3) as read with section 89(1)(a) of the Labour Act.

Magaramombe elected to be paid damages in lieu of reinstatement and requested the arbitrator to quantify the damages due to him.

During the quantification proceedings, the University unsuccessfully applied for the stay of proceedings, on the grounds, that, it had applied to the Labour Court for the suspension of the arbitral award pending the appeal.

The application for the stay of proceedings was turned down by the arbitrator on the ground, that, an appeal against an arbitral award and an application for interim relief do not have the effect of suspending an arbitral award.

The arbitrator thereafter awarded Magaramombe the sum of $77,302 as damages.

On 26 September 2011, the University appealed against the award of damages and also applied for a review of the award.

On 27 September 2011, Magaramombe applied to the High Court for registration of the arbitral award.

The University did not oppose the application for registration, as it was of the view that there was no need to oppose the application for registration since it had already applied for the suspension of the award to the Labour Court.

The University assumed, that, the execution of the award was dependent on the outcome of the application to the Labour Court.

The Labour Court granted the University a stay of execution of the arbitral award pending the hearing of the appeal on 3 November 2011.

The High Court registered the arbitral award on or about 14 November 2011.

After the registration of the arbitral award with the High Court, Magaramombe sought to execute the award despite the suspension of the award by the Labour Court.

The University launched an urgent application to stay the execution to the High Court.

The basis of the University's urgent application was that the arbitral award that was executed had been suspended by the Labour Court pending the hearing of an appeal against that award by the Labour Court.

The High Court dismissed the Chamber application.

The University noted an appeal against the dismissal.

The University now applies, in Chambers, for the appeal to be set down on an urgent basis and for an order staying execution pending the determination of that appeal.

In dismissing the urgent application, the learned Judge had this to say at pp4-5 of the cyclostyled judgment (HH61-12):

"The last preliminary point was that the matter was not urgent….,. Ms Mberi submitted, that, the applicant sat on its laurels and only acted when the day of reckoning was at hand. She contended, that, the applicant should have acted on 27 November 2011 when it was served with the notice of registration of the award.

Mr Mpofu made contradictory submissions on the failure to oppose registration.

The first was that the noting of (the) appeal in the Labour Court against the arbitral award automatically suspended the award. The second was that it was hopeless to oppose without first obtaining interim relief from the Labour Court stopping the implementation of the arbitral award.

If the applicant believed that it was on (a) firm footing on the first ground, then, all the more reason for it to oppose registration on that point. But, as events that transpired after it obtained interim relief shows (sic), the applicant believed that implementation could only be stayed by obtaining relief from the Labour Court.

Mr Mpofu did not dispute Ms Mberi's submission, that, the applicant was aware of the judgment of Dhlodhlo supra, that the Labour Court judgment could not stop a High Court order because the latter is a court of superior jurisdiction…,.

I agree with Ms Mberi, that, at the very least, with this foreknowledge, the applicant, knowing that the first respondent was seeking registration of the arbitral award, should have diligently searched for the outcome of the application, especially after it received the interim relief it sought in order to forestall it. It was aware that the purpose of seeking registration was to execute. Armed with the interim order, the applicant was duty bound to either oppose the registration, which was granted on 15 November 2011, or to file an application such as the present one soon thereafter.

I find that it waited until the day of reckoning precipitated by the attachment of 26 January 2011 (2012?) to stay the execution. It did not act with diligence. It sat on its laurels and did not act when the time to act presented itself."

My understanding of the above excerpts of the judgment is that the court a quo made the following two determinations –

(a) The matter was not urgent; and

(b) The execution of the arbitral award could not be stayed because the award had became a High Court judgment whose execution cannot be suspended by the Labour Court.

In this Chamber application, counsel for the University essentially argued, that, execution of the award of the arbitrator was suspended by the Labour Court, which preceded the registration of the award in the High Court. Consequently, Magaramombe could not execute the award, despite its registration with the High Court, as the execution of the award had been suspended by the Labour Court by the time it was registered.

In other words, the award that was registered was a suspended award which could not be executed.

Counsel for Magaramombe, on the other hand, initially raised two preliminary points.

She submitted, that, the Supreme Court had no jurisdiction to hear the Chamber application because there was no valid appeal before the Supreme Court.

She argued, that, the court a quo simply ruled that the matter was not urgent, and, such ruling was interlocutory. She contended, that, the University had not obtained the leave of the court a quo to appeal. Leave to appeal not having been sought and granted, there can be no valid appeal before the Supreme Court.

It was also counsel for Magaramombe's submission, that, on the authority of Dhlodhlo v The Deputy Sheriff for Marondera and Three Ors HH76-11, even if the order issued by the Labour Court had stayed execution of the award, such an order was of no force and effect because the award had since been registered with the High Court and thus became a High Court order which cannot be suspended by an order of an inferior court, namely, the Labour Court.

The learned Judge in the court a quo was probably correct in concluding, that, the University had authored the urgency of the matter before him by delaying the launching of the urgent application until the last minute.

I also accept the submission of counsel for Magaramombe, that, a determination of whether or not a matter is urgent is interlocutory. An appeal against such a determination would certainly require the leave of the court a quo. If such leave were granted, the superior court can only interfere with such a ruling on the basis of a misdirection or gross unreasonableness.

SC10-24 : ELPHAS MAPHISA vs CLEVER SIBANDA N.O. (as executor dative of the Estate of the late Melusi Sibanda) and OTHERS
Ruled By: GWAUNZA DCJ, MAKONI JA and CHITAKUNYE JA

This is an appeal against the whole judgment of the High Court (the court a quo) handed down on 27 January 2022 dismissing the appellant's application. After hearing submissions, we dismissed the appeal, on 20 July 2023, for lack of merit. We indicated that our reasons will follow. These are ...

THE FACTS

The appellant and the first (Clever Sibanda), fifth to eleventh respondents (Ettah Sibanda, Joyce Sibanda, Elphina Sibanda, Khefeni Sibanda, Maxwell Sibanda, Siyolisiwe Sibanda and Sibusisiwe Sibanda) are all surviving children of the late Melusi Sibanda who died on 5 September 2005.

On 7 May 2019, Clever Sibanda was appointed executor dative of the estate of the late Melusi Sibanda by Letters of Administration issued on that date.

The second respondent (Nqobile Mloyi) purchased an immovable property, being House Number 501 Nkulumane, Bulawayo from the estate of the late Melusi Sibanda during its administration by the executor dative.

Though the appellant alleges that he was named heir in a document purporting to be a Will of the deceased, such assertion did not curry favour with the appointing authority, hence, the appointment of Clever Sibanda as executor dative (executor) on 7 May 2019.

The appointment has not been challenged and is extant.

At a meeting called by and held before the third respondent (the Deputy Master of the High Court of Zimbabwe), on 25 June 2019, it was resolved, that, the late Melusi Sibanda's immovable property, that is, House Number 501 Nkulumane, Bulawayo registered under a Deed of Transfer number 3478/2001 (“the property”), would be sold with the consent of all the beneficiaries thereto.

The meeting was attended by the appellant and some of the cited beneficiaries.

The minutes of the above meeting, before the Deputy Master of the High Court of Zimbabwe, quote the appellant as having stated as follows in respect of the property:

“Rental was $120 per month to 2019, I have collected the rentals as the heir I was chosen by my father, I am responsible to bring these siblings together. I have archived (sic) to take care of my mother, share the cattle, buried my father. I was supposed to take care of my siblings; I am surprised that they say they do not know the Will. At law, the house can be sold according to my father legacy, they can share rent if possible. I agree to let the house be sold.”

On 12 March 2020, the Deputy Master of the High Court of Zimbabwe, upon the executor's application, issued a certificate of consent to sell the house otherwise than by public auction in terms of section 120 of the Administration of Estates Act [Chapter 6:01].

On 1 September 2020, the executor duly entered into an agreement of sale of the aforesaid property with the second respondent. He duly received the purchase price, and, it was submitted that he distributed the proceeds amongst the beneficiaries.

The appellant was aggrieved by the disposal of the immovable property.

He alleged, that, neither himself nor his other siblings, who are also beneficiaries, had been consulted and hence they had not consented to the sale.

Accordingly, on 9 March 2021, he approached the third respondent (the Deputy Master of the High Court of Zimbabwe) for a meeting.

During that meeting, he had an opportunity to peruse the file pertaining to the Estate Late Melusi Sibanda. He noted that a certificate, in terms of section 120 of the Administration of Estates Act [Chapter 6:01] (the Act) had been issued on 12 March 2020. He also noted, that, the immovable property had been valued at US$15,000.

Armed with this information, the appellant filed a court application “for unlawful disposal of deceased's immovable property.”

That application was essentially a challenge to the issuance of a certificate in terms of section 120 of the Administration of Estates Act by the Deputy Master of the High Court of Zimbabwe, which authorized the executor to sell, otherwise than by public auction, the deceased's only immovable property.

In his founding affidavit, the appellant alleged, that, no due inquiry was undertaken by the Deputy Master of the High Court of Zimbabwe before the issuance of the certificate and that not all of the children of the late Melusi Sibanda had given their consent for the disposal of the property. He averred, that, this was contrary to the agreement of 25 June 2019 that this property would only be sold with the consent of all the beneficiaries.

The application was opposed by the second respondent who averred, that, he was an innocent purchaser of the property in question. Further, he denied that the beneficiaries had not been consulted, and, in this regard, he attached affidavits from the beneficiaries consenting to the sale.

In the second respondent's view, the executor's action was bona fide as all the beneficiaries had consented to the sale.

At the hearing of the application, the appellant and the second respondent raised preliminary objections which were all dismissed by the court a quo.

On the merits, the court a quo held, that, the appellant could not competently challenge the sale because the deceased's property had been properly sold. It found, that, at the meeting of 25 June 2019, the appellant is recorded as having unequivocally accepted that the house be sold. In regards to the value of the property, the court a quo made a finding, that, no legal basis had been established for interfering with the decision of the Deputy Master of the High Court of Zimbabwe in issuing his authority under section 120 of the Administration of Estates Act. Accordingly, the court a quo dismissed the appellant's application with costs.

Aggrieved by the decision of the court a quo, the appellant noted the present appeal on four grounds of appeal. These are:

GROUNDS OF APPEAL

“1. The court a quo grossly erred in making a finding that the “applicant has not made a case for the relief he is seeking” yet the appellant's Court Application for Unlawful Disposal of the Deceased's Immovable Property was heard in contravention of peremptory rules of the High Court Rules 1971 for filing and serving the notice of opposition and peremptory rules of the High Court Rules 2021 for setting down opposed matters. The court a quo misunderstood and/or misinterpreted the appellant's points in limine.

2. The court a quo grossly misdirected itself in making a finding that “applicant has not made a case for the relief he is seeking” yet the court a quo conveniently mis-interpreted the resolution of the meeting held on 25 June 2020 (sic) and ignored the executor's letter.

3. The court a quo grossly erred in making a finding that “applicant has not made a case for the relief he is seeking” yet the court a quo did not apply the law according to section 5(1)(a) of the Deceased Estates Succession Act [Chapter 6:02].

4. The court a quo grossly misdirected itself in making a finding that “the applicant has not made a case for the relief he is seeking” yet the Deputy Master of the High Court failed to conduct proper due diligence in terms of section 120 of the Administration of Estates Acts [Chapter 6:01].”

The appellant prayed for the appeal to be allowed and for the setting aside of judgment of the court a quo.

He also prayed for:

(i) The setting aside of the certificate issued by the Deputy Master of the High Court of Zimbabwe in terms of section 120 of the Administration of Estates Act;

(ii) The setting aside of the sale of the immovable property in question;

(iii) The placement of a caveat on the said property;

(iv) For the Deputy Master of the High Court of Zimbabwe to ensure, that, all beneficiaries consent to the sale before the property can be validly sold; and

(v) That, the Registrar of Deeds is forbidden from transferring the property to anyone without an order of the court and that if any transfer had occurred it be reversed.

The court holds, that, only two issues commend themselves for determination, and, these are:

1. Whether or not the court a quo erred in dismissing the appellant's preliminary points, that, the application was heard in contravention of Rule 233 of the High Court Rules 1971 and Rule 59 of the High Court Rules 2021.

2. Whether or not the court a quo erred and misdirected itself in finding, that, the immovable property was sold with the consent of all the beneficiaries and in accordance with the law governing the administration of deceased estates.

SUBMISSIONS BEFORE THIS COURT

The appellant submitted, inter alia, that, the court a quo erred in making a finding that he had failed “to make a case for the relief he was seeking” yet his application challenging the unlawful disposal of the deceased's immovable property was heard in contravention of peremptory rules of the High Court Rules 1971 for filing and serving the notice of opposition and peremptory rules of High Court Rules 2021 for setting down opposed matters. He submitted, that, the court a quo misunderstood and/or misinterpreted his points in limine.

On the merits, he submitted, that, the court a quo mis-interpreted the resolution of the meeting held on 25 June 2019 and ignored the executor's letter, resulting in it holding that the appellant failed to make a case for the relief he sought.

He further took issue with the court a quo's alleged failure to apply section 5(1)(a) of the Deceased Estates Succession Act [Chapter 6:02].

Lastly, he submitted that the Deputy Master of the High Court of Zimbabwe failed to conduct due inquiry in terms of section 120 of the Administration of Estates Act before issuing the authority to sell.

Per contra, counsel for the respondent submitted, that, regarding service of the notice of opposition, the appellant admitted that he was served with the first notice of opposition. He further submitted, that, the appellant also admitted to receiving the second notice of opposition as well.

In this regard, counsel submitted that the court a quo was correct in holding that the appellant did not suffer any prejudice.

Counsel further contended, that, rules are made for the benefit of the court and that the court, in terms of Rule 4C of the then applicable High Court Rules 1971, had the power to condone a departure from the rules as the appellant had been served. The infractions the appellant alluded to in his preliminary points were properly condoned by the court a quo.

On the merits, counsel submitted, that, at a meeting held on 25 June 2019, before the Deputy Master of the High Court of Zimbabwe, where it was resolved that the immovable property would be sold by consent of all beneficiaries, the appellant consented to the sale of the house.

He contended, that, the minutes of the said meeting were never challenged by the appellant; as such, he could not approbate and reprobate. He submitted that the court a quo correctly found, that, according to the minutes, the appellant had consented to the sale.

Further, counsel submitted that the other beneficiaries deposed to affidavits in which they consented to the sale of the house.

In this light, he averred that the Deputy Master of the High Court of Zimbabwe did carry out due inquiry as required of him. Counsel, as a result, prayed that the appeal be dismissed with costs.

ANALYSIS

1. Whether or not the court a quo erred in dismissing the appellant's preliminary point that the application was heard in contravention of Rule 233 of the High Court Rules 1971 and Rule 59 of the High Court Rules 2021

The nub of the ground of appeal, relating to the preliminary points dismissed by the court a quo, is that the application a quo was heard contrary to the rules of the High Court.

The appellant's gripe seemed to be, that, he had not been properly served with the notice of opposition as it was not addressed to him. He thus argued that the matter be treated as unopposed.

However, the court a quo made a specific finding of fact, that, the second respondent's notice of opposition was filed and served in accordance with the Rules as the appellant had admitted receipt of the Notice of Opposition.

“Applicant, by his own version, first found the first copy of a notice of opposition in the letter box, and was again, on the 5th November 2021, served with a second copy of the notice. Again, the copy of a notice of opposition in the court file is copied to the applicant. However, applicant's name and address is in long-hand. The notice is clearly copied to the applicant. This is what the rules require.”

It is apposite to note, that, the second respondent's notice of opposition was filed on 10 May 2021.

On that date, the High Court Rules of 1971 were still in force. Rule 233(1) of the High Court Rules 1971 provided that:

“(1) The respondent shall be entitled, within the time given in the court application, in accordance with rule 232, to file a notice of opposition in Form No.29A, together with one or more opposing affidavits.”

The date stamp on the application shows that it was filed on 26 April 2021. It was served on the second respondent on 27 April 2021. The second respondent filed his notice of opposition on 10 May 2021 and subsequently served it at the appellant's address by placing it in a letter box - after a person found at the address refused to accept service.

In terms of Rule 232 of the High Court Rules, a notice of opposition and affidavit attached thereto is required to be filed in not less than ten days, exclusive of the date of service.

The respondent must soon thereafter serve a copy of the notice of opposition on the applicant.

A respondent who fails to file a notice of opposition and opposing affidavit within the period specified in the court application shall be barred.

In casu, the appellant's contention was not that the second respondent had failed to act within the dies induciae, but, that the notice of opposition filed was not properly addressed to him.

The alleged infraction, as noted by the court a quo, was that the applicant's name and address were hand-written and not in typed form.

The appellant having admitted to receiving the notice of opposition, did not allude to any prejudice he suffered as a consequence of his address being handwritten as opposed to being typewritten.

It was such an infraction that the court a quo held as not fatal and condoned it in the interest of justice.

As aptly noted in Darangwa v Kadungure SC126-21…,.:

“The rules of court are designed for the benefit of the court and the proper administration of justice. As has been said, they are 'not laws of Medes and Persians:' see Scottish Rhodesian Ltd v Honiball 1973 (2) SA 747 (R) at p748. The rules are just the court's tools fashioned for the court's own use and are not an end in themselves to be observed for their own sake: see Federated Trust Ltd v Botha 1978 (3) SA 645 at 654.”

This Court will not easily interfere with findings of fact by a lower court or tribunal unless it is satisfied, that, such findings are contrary to the evidence adduced or so outrageous in their defiance of logic that no reasonable person could have arrived at them: see Nyahondo v Hokonya & Ors 1997 (2) ZLR 475 (S) and Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S).

In casu, the facts evident from the record of proceedings show, that, the second respondent's notice of opposition was filed within the requisite period and served within time at the appellant's address of service.

The appellant admitted receipt thereof. His only gripe was that the pleadings were not addressed to him in the typed form.

He did not refer to any Rule to the effect, that, the address on pleadings must be in typed or printed form. The pleadings filed of record show that the appellant's name and address were handwritten. That is the 'infraction' the court a quo, in the exercise of its discretion, condoned.

The court holds the view, that, the court a quo cannot be faulted for condoning such an 'infraction' if any, in the interest of justice. There is thus no merit in the appellant's argument on this aspect of the preliminary point.

SC10-24 : ELPHAS MAPHISA vs CLEVER SIBANDA N.O. (as executor dative of the Estate of the late Melusi Sibanda) and OTHERS
Ruled By: GWAUNZA DCJ, MAKONI JA and CHITAKUNYE JA

THE FACTS

GROUNDS OF APPEAL

SUBMISSIONS BEFORE THIS COURT

ANALYSIS

2. Whether or not the court a quo erred in dismissing the appellant's application upon finding that the immovable property was sold with the consent of all the beneficiaries and in accordance with the Administration of Estates Act

This issue arises from the second to the fourth grounds of appeal. These grounds of appeal are essentially an attack on the court a quo's finding that the appellant did not prove his case for the relief he sought.

On the other hand, the second respondent averred, that, the court a quo correctly found that the appellant's case had no merit as all beneficiaries had consented to the sale.

It is trite, that, this court can only interfere with the findings of the court a quo on limited grounds.

An Appellate Court will not lightly interfere with an exercise of discretion by a lower court unless it is shown, inter alia, that, some error was made in exercising the discretion, such as that it acted upon a wrong principle; that it allowed extraneous or irrelevant matters to guide it or affect it; that it mistook the facts or failed to take into account some relevant consideration: see Barros & Anor v Chimphonda 1999 (1) ZLR 58 (S); Halwick Investments v Nyamwanza 2009 (2) ZLR 400 (S).

The nub of the appellant's case was that the Deputy Master of the High Court of Zimbabwe had not conducted a due inquiry before issuing a section 120 of the Administration of Estates Act certificate.

He submitted, that, had the Deputy Master of the High Court of Zimbabwe conducted such an inquiry he would have noted, that, not all beneficiaries had consented to the sale of the property as had been agreed to in the meeting of 25 June 2019. It is that agreement he said was binding on the Deputy Master of the High Court of Zimbabwe and the Executor in terms of section 5(1)(a) of the Deceased Estates Succession Act [Chapter 6:02].

Section 120 of the Administration of Estates Act pertains to the power granted to the Master of the High Court of Zimbabwe to authorise the sale of property otherwise than by public auction. The section provides:

“If, after due inquiry, the Master is of (the) opinion that it would be to the advantage of persons interested in the estate to sell any property belonging to such estate otherwise than by public auction he may, if the will of the deceased contains no provisions to the contrary, grant the necessary authority to the executor so to act.”

The due inquiry the Master of the High Court of Zimbabwe is enjoined to conduct is an interrogation of the reasons why the executor would like to sell the property otherwise than by public auction and whether such would be in the interests of those interested in the estate, such as beneficiaries. The Master of the High Court of Zimbabwe must satisfy himself/herself that such a manner of sale would be to the advantage of persons interested in the estate. In the process, the Master of the High Court of Zimbabwe may take such steps as he/she deems fit, including engaging the beneficiaries, in order to arrive at an appropriate opinion: see Katsande v Katsande & Ors 2010 (2) ZLR 82 (H).

In casu, the appellant, and other beneficiaries, held a meeting with the Master of the High Court of Zimbabwe on 25 June 2019.

At that meeting, it was resolved that the immovable property of the deceased would be sold by consent of all the beneficiaries. The appellant is quoted as having stated, inter alia, that:

“At law, the house can be sold according to my father legacy they can share rent if possible. I agree to let the house be sold.”

The minutes of the meeting were in fact provided by the appellant.

It is clear that at that meeting the appellant gave his consent to the sale. It was in light of this that the court a quo made a finding, that, the resolution requiring consent from all beneficiaries applied to those beneficiaries who did not attend the meeting or who had not given their consent thereat, since the appellant had given his consent in the meeting.

The court a quo further noted, that, the other beneficiaries had given their consent through the affidavits filed of record. In the circumstances it could not be said that some of the beneficiaries had not given their consent.

The court is of the view, that, the finding by the court a quo, that, given the obtaining circumstances, the term “all beneficiaries” that were to still give consent as per minutes of 25 June 2019 meeting applied to those beneficiaries who did not attend the meeting or consent thereat, is not unreasonable or irrational so as to warrant this court's interference.

Surely, if there were some beneficiaries who attended the meeting on 25 June 2019 and had expressed their consent to the sale of the property, it was not unreasonable to conclude that the reference to “all” beneficiaries was intended to cover those beneficiaries who were not part of the meeting or were yet to give their consent.

The finding of the court a quo cannot be faulted in this regard.

The other leg of the appellant's attack of the court a quo's decision was that it had failed to appreciate that the Master of the High Court of Zimbabwe did not apply the law according to section 5(1)(a) of the Deceased Estates Succession Act [Chapter 6:02]. That section provides:

“5(1) Where as a result of a distribution in intestacy any property devolves upon any heirs in undivided shares —

(a) The heirs may agree upon an alternative division of the property, and such agreement shall be binding on the executor.”

In his view, the aforesaid section 5(1)(a) of the Deceased Estates Succession Act mandated the Master of the High Court of Zimbabwe, and the executor, to ensure that the consent of all the beneficiaries was obtained before the property was disposed of.

This is what he apparently considered as an alternative division or direction to sell the property.

This argument is again premised on his assertion, that, not all beneficiaries had consented to the sale. He was, however, unable to refute the existence of affidavits from all other beneficiaries consenting to the sale.

It was in this respect that the court a quo alluded to the fact, that, he had no authority to speak on behalf of the other beneficiaries in the light of the affidavits filed of record.

The other beneficiaries had in fact been cited as respondents in the application but had opted not to participate. It was apparent to all and sundry, that, it was only the appellant who had had a change of mind after his initial consent before the Master of the High Court of Zimbabwe.

In dealing with this change of mind, the court a quo aptly remarked, at p8, that:

“Applicant's contention, that, he did not consent to sale of the property, cannot withstand scrutiny. Applicant attended a meeting held on the 25th June 2019. At the meeting, he unequivocally agreed that the house be sold. Applicant cannot be permitted to play double standards, that, when it suits him, he agrees to the sale of the property, and, when it does not suit him, to make a turn and allege that he did not consent to such sale. This is impermissible.”

The Master of the High Court of Zimbabwe cannot, in the circumstances, be faulted for issuing the section 120 certificates as he had been favoured with the necessary information to form an opinion in terms of the law.

In any case, given the circumstances of this case, the Master of the High Court of Zimbabwe was enjoined to exercise his discretion in determining whether to grant the section 120 certificate or not.

The appellant's effort at relying on section 5(1)(a) of the Deceased Persons Succession Act was misplaced and inapplicable.

In casu, the appellant lamentably failed to establish, that, the court a quo erred in holding that the Master of the High Court of Zimbabwe had properly exercised his power in issuing the section 120 certificate. There is indeed nothing to show, that, the Master of the High Court of Zimbabwe may have injudiciously exercised his discretion. On the contrary, the Master of the High Court of Zimbabwe sanctioned the sale of the immovable property in accordance with the law - after due inquiry.

Accordingly, the appeal has no merit.

DISPOSITION

It was for the above reasons that the appeal was dismissed with costs.

SC16-23 : ZIMBABWE PLATINUM MINES (PRIVATE) LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: BHUNU JA, UCHENA JA and CHATUKUTA JA

This is an appeal against part of the judgment of the Special Court for Income Tax Appeals, handed down on 14 August 2020, dismissing the appellant's appeal against the respondent's Commissioner's dismissal of its objection in respect of its failure to deduct Pay As You Earn (PAYE) in respect of meals and accommodation the appellant provided to its employees and penalties the respondent's Commissioner had imposed against the appellant.

At the hearing of the appeal, the appellant abandoned its grounds of appeal in respect of penalties.

The appeal was therefore argued on whether or not the accommodation and meals the appellant provides to its employees are taxable.

FACTUAL BACKGROUND

The appellant is a company duly registered in terms of the laws of Zimbabwe. It is involved in the mining industry at its still to be fully developed mines at Ngezi and Selous areas in Zimbabwe.

The respondent is an administrative authority established in terms of the Revenue Authority Act [Chapter 23:11] and is tasked with, inter alia, the collection of income tax from income earners in terms of the Income Tax Act [Chapter 23:06] (ITA).

On establishing its mines, the appellant built Ngezi, Mupani, and Eagle's Nest Villages where it accommodates and provides meals to employees on shifts and those waiting to go on shifts. It gives packed meals to employees who will be on shift in the mines. The employees on shift in the mines are given breaks of only 15 minutes to eat their packed meals before continuing with their duties.

The appellant's villages can only be accessed by employees who it will have authorised to be accommodated there for the periods they will be on shifts and waiting to go on shifts. The appellant completes forms authorising the admission of employees going on shifts into its villages. The villages do not have individual cooking facilities for the employees. The appellant provides them with meals. The villages can only accommodate employees. They do not accommodate the employees dependents. An employee can only stay in the villages while on shift or waiting to go on shift. When an employee is off duty, he has to go back to his own accommodation.

The respondent carried out a tax review audit of the appellant's payroll tax compliance. Upon concluding the investigations, the respondent's officers found the appellant liable for failure to withhold pay as you earn tax on advantages and benefits accruing to the appellant's employees in respect of the accommodation and meals it provides to them in the villages and mines. As a result, the respondent issued the appellant with revised assessments for the period 2010 to 2016 and required it to pay the outstanding taxes.

The appellant objected, in terms of section 62 of the Income Tax Act, to the assessments raised by the respondent in respect of the accommodation and meals it gives to its on shift and waiting to go on shift employees. It submitted, that, the employees were not deriving any benefit from the accommodation arrangements as they were purely designed for the employer's business transactions.

The respondent's Commissioner disallowed the appellant's objections.

The appellant appealed to the court a quo challenging his determination of its objections.

In the court a quo, the appellant argued, that, the meals and accommodation it provided to its employees did not constitute a taxable advantage or benefit in terms of section 8(1) of the Income Tax Act.

In response, it was submitted for the respondent, that, the assessments had been done in terms of the law. It was argued, that, the appellant's employees were getting a benefit from the free accommodation and meals they got from Eagle's Nest, Ngezi, and Mupani villages as they were relieved of the financial burden of paying for their own accommodation and buying their own meals. The respondent therefore argued, that, this made the provision of accommodation and meals taxable benefits in the hands of the appellant's employees.

In determining the issue of the meals and accommodation provided by the appellant to its employees at Eagle's Nest, Ngezi, and Mupani Villages, the court a quo held, that, they were taxable as they relieved the employees from having to pay for their own accommodation and meals.

The appellant was aggrieved by the decision of the court a quo. It appealed against it to this Court, on the following ground of appeal:

“The court a quo erred in law by holding, that, the meals and accommodation provided by the appellant to its employees temporarily residing at Eagle's Nest, Ngezi, and Mupani Villages, and working at the appellant's mines, constitutes a taxable advantage or benefit in terms of section 8(1)(f)(ii)(b) of the Income Tax Act (Chapter 23:06) accruing to the employees.”

SUBMISSIONS BY THE PARTIES

Counsel for the appellant submitted, that, he will be advancing argument in respect of ground 3, which dealt with section 8(1)(f) of the Income Tax Act focusing on taxation of accommodation and meals provided by the appellant to its employees. He submitted, that, section 8(1)(f) of the Income Tax Act contained an exception to the effect, that, advantages or benefits used, enjoyed, or consumed by employees for purposes of the employer's business transactions are not taxable.

He averred, that, the meals and accommodation provided by the appellant to its employees in the mines and villages were not taxable as they were provided for the employer's business transactions.

He further submitted, that, the circumstances surrounding the operations of the appellant demanded that the employees be provided with temporary accommodation and meals, on site, for the employer's benefit.

Per contra, counsel for the respondent submitted, that, the appellant's employees enjoyed a benefit that was unrelated to the services they rendered and so they ought to have been taxed on the meals and accommodation they received from the appellant. He further averred, that, the appellant's employees ought to have found their own accommodation in neighbouring towns because the accommodation and meals which were provided by the appellant were not in line with the business transactions of the appellant, but was mainly for the convenience of the employees.

He however conceded, that, employees who are off duty cannot stay in the villages and have to go back to their own accommodation and would not be entitled to meals.

The appellant, having abandoned the issue of the penalty imposed upon it, the only issue remaining to be determined relates to: whether or not the court a quo correctly held, that, there was no misdirection on the part of the respondent in holding, that, the meals and accommodation provided by the appellant constituted a taxable advantage or benefit in terms of the Income Tax Act.

THE LAW

It is settled law, that, the taxpayer bears the onus of proving its case on appeal. Section 63 of the Income Tax Act provides as follows:

“63 In any objection or appeal under this Act, the burden of proof that any amount is exempt from or not liable to the tax or is subject to any deduction in terms of this Act or credit, shall be upon the person claiming such exemption, non-liability, deduction or credit, and, upon the hearing of any appeal, the court shall not reverse or alter any decision of the Commissioner unless it is shown by the appellant that the decision is wrong.”

The tax payer can prove this by giving evidence which proves that the law exempts him/her/it from paying the tax the Commissioner is requiring it to pay.

In the case of Parkington v Attorney General 1869 LR 4 H.L. 100, 122 LORD CAIRNS, commenting on the interpretation of fiscal statutes, said:

“As I understand the principle of all fiscal legislation, it is this. If a person sought to be taxed comes within the letter of the law, he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be.”

The facts of each case, and the relevant provisions of the Income Tax Act, must therefore be carefully examined to determine whether or not a taxpayer falls within or outside the ambit of the taxing provision.

Section 8(1)(f) of the Income Tax Act provides as follows:

“8(1) For the purposes of this part:

'gross income' means the total amount received by or accrued to or in favour of a person, or, deemed to have been received by or to have accrued to or in favour of a person in any year of assessment from a source within or deemed to be within Zimbabwe excluding any amount (not being an amount included in 'gross income' by virtue of any of the following paragraphs of this definition) so received or accrued which is proved by the taxpayer to be of a capital nature, and, without derogation from the generality of the foregoing, includes —

(a) to (g)…,.

(f) An amount equal to the value of an advantage or benefit in respect of employment, service, office or other gainful occupation or in connection with the taking up or termination of employment, service, office or other gainful occupation.”

The Income Tax Act proceeds to define the terms 'advantage' or 'benefit' as including:

“the use or enjoyment of any other property whatsoever…, granted to an employee, his spouse or child by or on behalf of his employer in so far as it is not consumed, occupied, used or enjoyed, as the case may be, for the purpose of the business transactions of the employer…,.”…,.

The words “in so far as it is not consumed, occupied, used, or enjoyed, as the case may be, for the purpose of the business transactions of the employer” provides an exception which determines whether or not an employee who receives an advantage or benefit should be taxed.

The words “in so far as it is not” which precedes the words “consumed, occupied, used, or enjoyed” means the taxability of the advantage or benefit depends on the purpose for which the consumption, occupation, use, or enjoyment is given by the employer.

The words “for the business transactions of the employer” exempts the employee from taxation if he/she/it consumes, occupies, uses, or enjoys the advantage or benefit for the business transaction of the employer.

It must be noted, that, the consumption, occupation, use, or enjoyment would be taxable but is exempt because of the need to further the employer's business transactions.

The Legislature deliberately provided for the exemption in appreciation that circumstances may arise when employees may get an advantage or benefit which should be exempt because it will have been necessitated by the business transaction of the employer.

The purpose of the employer's business transaction can be identified by considering who is the dominant beneficiary between the employer and the employee, or, who determines the need for the giving of the benefit and is enriched by it.

If the transaction is predominantly for the employer's benefit or interest, the employee should be exempt from taxation. If the transaction gives the employee an advantage or benefit, as would be the case when employees are given incentives, the employee must be taxed.

This, therefore, means, advantages and benefits which are given to an employee are taxable unless they are consumed or used by the employee for the purpose of the business transactions of the employer.

APPLICATION OF THE LAW TO THE FACTS

In determining the appeal on whether or not the accommodation and meals provided by the appellant to its employees were taxable the court a quo said:

“The issue herein is whether the meals and the accommodation provided by the appellant to its employees at these camps constitute a taxable advantage or benefit accruing to the employees in terms of section 8(1)(f) of the Act. The appellant's contention is basically, that, it provides meals and accommodation to its employees at these villages because it is a necessary part of its business. In other words, there is no taxable benefit which is given to the employees. During the hearing, the appellant chose not to pursue the issue as to whether or not there was a practice generally prevailing within the respondent in terms of which meals provided to low level employees were not subjected to tax. I will therefore focus on the remaining issue.

It is trite that section 8(1)(f) of the Act excludes from taxation any advantage or benefit in so far as it is used, consumed, or enjoyed for the purpose of the business transactions of the employer.

The appellant contents, that, this provision is not different from the so-called convenience of the employer doctrine applied in the United States of America. The later doctrine, as codified by the Internal Revenue Code of 1954, established two requirements for excluding meals:

(a) The employer must provide the meal for the convenience of the employee; and
(b) The meal must be provided 'on the business premises of the employer.'

See also Commissioner v Kawalisk 434 US 77 (1977).

I disagree with the appellant. Section 8(1)(f) creates a dispensation that is materially different from the US doctrine of the convenience of the employer.

The respondent correctly relies upon a case from this court in ITC number 1336 (1981) 43 SATC 114 (Z). In that case, SQUIRES J stated:

'The advantage of (sic) benefit of using a car belonging to the employer is to relieve the employee tax payer of the financial burden of owning a car himself. It can be a very substantial benefit compared to the person who receives no such advantage…, since the relief thus afforded is unquestionably a benefit to the employee. I can see no basis on which the spirit of the Act would save to exclude these from what falls into income particularly as they are equally clear a cost to the employer.'

Although the court was dealing with a motoring benefit, the principle is equally applicable to accommodation and meals benefits in casu.

These benefits are subject to taxation.

The accommodation and meals provided by the appellant to its employees relieves the employees of the financial burden of paying for their own accommodation and buying their own meals.

They are therefore benefits taxable in the hands of the employees.

The accommodation and meals were not consumed for the business transactions of the appellant. The job would have been done whether or not the appellant had provided the accommodation and food. The employees could have looked for their own accommodation and their own food to sustain themselves.

If all that the appellant wants was to prevent its employees from wondering away from the workplace, and, at the same time, not give them a taxable benefit was for the appellant to provide the accommodation and the meals for a market price consideration. The appellant even provided meals to employees who were no longer on shift.”…,.

In his evidence, Mr. Jokonya, the appellant's Human Resources and Community Services Manager, during his examination in-chief, told the court how they run three shifts.

During that part of his evidence, the following exchange took place between him and the appellant's counsel:

“Q. In relation to that, can I ask you, Mr Jokonya, to tell the court how long does an employee stay at this (sic) accommodation villages?

A. We run three shifts, what we call 7:3 when employees are on day shift they are at work for 7 days and then they go off for 3 days. That is when they are on day shift. When they go on night shift, they go on what we call 7:4 which means that they are at work for 7 days and they go off for 4 days. And at any one point in time there is a shift that is off so two shifts are at work, one shift is off. And then we have got the third one that we call 5:2. This basically refers to people who work Monday to Friday and they are off over the weekend.

Q. Mr Jokonya, you have explained to the court the various shifts that employees work for 7 days then after 4 days off, then 5 days off; when these employees are not on shift where did they stay?

A. My Lord, when these employees are not on shift they are expected to go on (sic) wherever they call home.”…,.

The fact that employees who are not on shift, or awaiting to go on shift, have to go to their own accommodation resolves the issue.

It means the court a quo erred when it, in its judgment, held that “the accommodation and meals provided by the appellant to its employees relieves the employees of the financial burden of paying for their own accommodation and buying their own meals.”

If employees have to go to their own accommodation when not on shift, or waiting to go on shift, it means they have to own or rent their own accommodation for use when they are not on shift.

Their stay in the appellant's camps or villages is temporary and does not relieve them of the financial burden of owning or renting their own accommodation.

Counsel for the respondent conceded, during the hearing of the appeal, that, employees go to their own accommodation when they are not on shift or waiting to go on shift.

Entry and exit from the villages are controlled by the employer.

An employee can only be accepted into the villages at the instance of the employer who completes a form instructing the village to book in the employee who will be about to go on shift. The employees can only stay in the villages for the period specified by the employer. At the end of his shift, an employee has to leave the village and go back to his own accommodation. He will be replaced in the village by another employee who will be coming to stay for the duration of the next shift.

The accommodation is therefore only availed to employees during the duration of their shifts.

This clearly demonstrates, that, the accommodation is for the benefit of the employer's business. The employer controls the employees stay in the villages at times it requires their presence in the villages to work in its mines which are located in the bush.

The employer also controls the provision of food in its villages and mines. The villages have no provision for employees to cook their own food. They have to eat what the employer provides. Employees working in the mines are given fifteen minutes, per shift, to eat the packed meals. This is obviously to avoid loss of production time.

This is clearly for the benefit of the employer's business transaction.

The employees can therefore only stay in the villages and consume the meals for purposes of rendering efficient services to their employer during the times they are confined to the villages and mines for the business transactions of the employer.

It is only the appellant's employees, on shift, who can stay in the villages.

The employees have to find their own, and their families, accommodation elsewhere. They have to provide meals for their families during the period they will be on shift. They have to go back to their own accommodation when they are not required to be in the villages or mines for the business transactions of the employer.

The appellant clearly uses its villages and meals for the furtherance of its business transactions.

The appellant, in my view, discharged, on a balance of probabilities, the onus placed on it by the law to prove, that, the Commissioner erred when he held that the meals and accommodation provided to the employees constitute a taxable advantage or benefit.

The advantages or benefits received by the employees of the appellant fall within the broad definition of the term gross income, but, also fall within the exemption under section 8(1) of the Income Tax Act.

The court a quo therefore erred when it held, that, the accommodation and meals provided by the appellant to its employees serve as a financial relief and they are therefore benefits taxable in the hands of the employees.

That finding is contrary to the uncontroverted evidence led from Mr. Jokonya, who said the employees temporarily stayed at the camps/villages when they were on shifts, or waiting to go on shift, but would go back to their own accommodation at the end of the shift.

He also said they provided meals to employees working in the mines because they only give them 15 minutes breaks to eat their meals. He explained, that, 15 minutes is not even enough for an employee to get out of the mine and be cleared out by security to enable an employee to go out and look for his/her own food at the shops located seventeen kilometres from the mine.

It is clear, that, the provision of food to employees working in the mines is for the benefit of the employer's business transactions.

The food given to employees who will be in the employer's villages, awaiting their turn to go on shift, is, in my view, also in the interest of the employer's business transactions.

The employer will have brought the employee from his/her own accommodation and confined him/her in its own accommodation for the efficient running of its mines. The employer gives them food because there are no individual cooking facilities in its villages.

This case is distinguishable from the facts in Arundel School & Ors v Zimbabwe Revenue Authority SC61-17 in which this Court held, that, the exemption of a school's teacher from paying fees for his/her children is a taxable benefit.

The free education given to a teacher's child is a benefit to the child who acquires education at the expenses of his or her parent's employer. The teacher is relieved of the burden of paying for the education of his or her child. The employer derives no benefit from the education of its employee's child.

It is not comparable to merely temporarily staying in the employer's accommodation and consuming the employer's meals because the employer realized, that, it had to make these provisions for the efficient running of its mines.

It is also distinguishable from ITC number 1336 (1981) 43 SATC 114 (Z) where the Special Court held, that, the benefit of using the employer's vehicle for one's own use relieves the employee from having to own his own vehicle.

An employee who uses the employer's vehicle for the employer's business and for his own uses is relieved of the burden of having to buy his own motor vehicle.

While the provision of meals for employees in villages, while waiting to go on shift, may be a benefit to employees because, for the duration of their stay in the villages, they do not have to buy their own food. One must, however, be guided by the law which acknowledges these benefits but exempts them because they are given as part of the employer's business transactions.

As already explained under the analysis of the law, what the Legislature has exempted should remain exempted and what the legislature says should be taxed must be taxed.

Tax legislation must be interpreted in such a way as to give effect to the intention of the legislature – even if it may seem to cause hardship to the taxpayer or loss to the fiscus.

In light of the above, I find that the meals given by the appellant to its employees may be income but they are exempt from taxation by the operation of law. The meals and accommodation have a value that is taxable in terms of section 8(1) of the Income Tax Act but are exempt in terms of section 8(1)(f) of the same Income Tax Act.

The court a quo therefore correctly found, that, the meals and accommodation fit in the definition of gross income in terms of section 8(1) of the Income Tax Act, but, erred in holding that they do not fall within the exemption provided for by section 8(1)(f) of the Income Tax Act.

The appeal has merit.

It is accordingly ordered as follows:

1. The appeal succeeds with no order as to costs.

2. The decision of the court a quo, in respect of the taxation of the employees for the accommodation and meals given to them at the appellant's villages and mines, is set aside and is substituted by the following:

“The objection lodged by the appellant against the amended tax assessments issued by the respondent on 23 May 2017, in respect of employment tax (PAYE) on meals and accommodation provided to employees at Eagle's Nest, Ngezi, and Mupani Villages and working on the appellant's mines, is allowed.”

SC17-23 : RYDALE RIDGE PARK (PRIVATE) LIMITED vs RUTH MURIDZO N.O.
Ruled By: GUVAVA JA, MAVANGIRA JA and KUDYA JA

This is an appeal against the decision of the High Court (the court a quo) wherein the court dismissed the appellant's application for the rescission of a default judgment.BACKGROUND FACTSThe appellant is a company duly registered in terms of the laws of Zimbabwe. The respondent is the executrix dative of ...

This is an appeal against the decision of the High Court (the court a quo) wherein the court dismissed the appellant's application for the rescission of a default judgment.

BACKGROUND FACTS

The appellant is a company duly registered in terms of the laws of Zimbabwe. The respondent is the executrix dative of the estate of the late Tererai Terance Muridzo (the deceased).

The appellant and the respondent entered into an instalment sale agreement of sale of a residential Stand situated at Rydale Park called Stand No.3047, measuring 300 square metres (the Stand). In terms of the agreement, the purchase price was the sum of US$18,500, payable by way of an initial deposit of US$5,000 and the balance of US$13,500 payable in 24 monthly instalments of US$563 on or before the first day of each month, effective from 1 October 2018.

In August 2019, February 2020, and March 2020, the deceased transferred various amounts of money totalling the sum of RTGS$8,996 to the appellant's bank account. The appellant refused to accept the payments and refused to issue receipts for them.

Following the above incident, the deceased issued summons against the appellant for a declarator to the effect, that, he had paid the full purchase price as agreed between the parties; that the appellant's refusal to accept his payment was unjustified; for transfer of the Stand to his name; and for costs on a legal practitioner and client scale.

In his declaration to the summons, the respondent averred, that, the reason why the appellant refused the payment was because it was made in RTGS dollars and not United States Dollars.

The respondent further averred, that, the agreement of sale between the parties was subject to the provisions of section 22(1)(d) of the Finance (No.2) Act 2019, which incorporated the provisions of S.I. 33/2019 in terms of which contractual obligations that existed immediately before the effective date and were valued and expressed in United States dollars, are deemed to be values in RTGS dollars at a rate of one is to one to the United States dollar.

The summons was duly served on the appellant who failed to enter appearance to defend.

The respondent applied for default judgment, which application was granted on 19 November 2020.

Upon realizing that default judgement had been entered against it, the appellant filed an application for rescission of judgement.

In making the application, the appellant averred, that, it was not in wilful default as the summons was never brought to the attention of its managers and directors. It further averred, that, the summons had been served on its receptionist who had since passed away. Furthermore, that, had its management been informed of the summons, an appearance to defend would have been filed timeously....,.

The respondent opposed the application and averred, that, the appellant had failed to give a good explanation for its default....,.

In determining the application for rescission made by the appellant, the court a quo found, that, the explanation given by the appellant for the default was reasonable and that the appellant was not in wilful default.

SC40-23 : JOHANNES MANYENGA vs PETROZIM (PRIVATE) LIMITED
Ruled By: MAVANGIRA JA, MAKONI JA and CHITAKUNYE JA

This is an appeal against the entire judgment of the Labour Court (“the court a quo”), sitting at Harare, wherein it dismissed the appellant's appeal and upheld the decision of the respondent's disciplinary authority dismissing the appellant from employment.FACTUAL BACKGROUNDThe appellant was employed by the respondent as a Deputy General ...

FACTUAL BACKGROUND

The appellant was employed by the respondent as a Deputy General Manager on 1 November 2014. During the course of his employment, he was appointed as Acting General Manager during the following periods:

(i) 6 to 22 January 2016 (16 days);

(ii) 21 to 25 August 2017 (4 days);

(iii) 10 to 11 July 2018 (1 day);

(iv) 15 to 16 August 2018 (1 day); and

(v) 11 to 21 January 2019 (10 days).

The appellant was later charged with two counts of contravening section 4(a) of the Labour (National Employment Code of Conduct) Regulations 2006 (“the Regulations”), that is, committing any act of conduct or omission inconsistent with the fulfilment of the express or implied conditions of his contract.

On the first count, the appellant was charged with failing and/or neglecting to advise the Board of Directors of the respondent (the Board) of the various problems and challenges that the company was facing in implementing its projects during the periods that he was employed as the Deputy General Manager, and, in particular, during the above-mentioned periods when he was the Acting General Manager.

On the second count, it was alleged, that, during the appellant's employment as Deputy General Manager, from 1 November 2014 to 22 March 2019 (when he was placed on mandatory leave), he attended PetroZim Board meetings and failed and/or neglected to advise the Board of the various problems and challenges that the company was facing in implementing its projects, in particular, the items numbered A to A(v) below:

“A. The following are the incidences you failed and/or neglected to report to the Board when you were Acting General Manager and during Board meetings as Deputy General Manager:

A(i) You failed and/or neglected to advise the Board that the Company had purchased two DRA skids from Kaltrade amounting to US$610,000. The purchase order was for new DRA skids. Kaltrade failed to deliver the skids. On their failure to deliver, Kaltrade then offered to sell to the Company the two used demo DRA skids. The Company accepted the old demo skids (which were bought as test kits against a deposit of US$35,000), as a replacement for the new skids that Kaltrade had failed to supply. Despite the skids being previously used, the Company accepted them at the price of US$610,000 that had been quoted for the supply of new skids by Kaltrade.

A(ii) You further failed and/or neglected to advise the Board that the Company had irregularly accepted a purported 5-year warranty on the demo skids from Kaltrade for the period 2013 to 2019. Despite the demo skids being purported to be on a 5-year warranty, the Company subsequently approved the purchase of DRA skid spares at a cost of US$91,082=30.

A(iii) You also did not advise the Board, that, despite various outstanding orders from Kaltrade, including 2 outstanding DRA skids which had been paid for in 2013, as late as September 2018, the Company went ahead and authorised the payment of US$267,760 to Kaltrade for the supply of another DRA skid. To date this has still not been delivered.

A(iv) You did not report to the Board that the ethanol project that had been purported to be commissioned as 100% functional was actually operating at 50% capacity due to the fact that only 3 out of 6 pumps had been installed, and, you failed and neglected to ensure delivery of the remaining 3 pumps from Kaltrade (Private) Limited despite having paid, in advance, the full purchase price.

A(v) You failed to advise the Board that the tank gauging system at Feruka was not working since its failure in 2017. Further, you did not advise the Board that the Company was relying on tank readings from the customer, NOIC, which compromised the Company's efficiency and systems.”

A disciplinary hearing was subsequently held.

It was the respondent's case, that, the material non-disclosures by the appellant, during the course of his employment, created the impression that everything was in order when, in fact, there were serious operational challenges that threatened the company's capacity to deliver on its mandate. The respondent averred, that, the appellant had failed to perform his duties in line with the dictates of his job description which was stipulated in the contract of employment. The contract required the appellant to report on overall company performance and provide input for Board meetings.

The appellant denied the charges.

He argued, that, he was never appointed as the Acting General Manager of the respondent and that the affairs of the company were regulated by a joint venture agreement between Lonrho and NOIC, which agreement reserved the right of appointment of a General Manager to Lonrho.

The appellant also claimed, that, in terms of the company organogram, no subordinates reported to him in his capacity as the Deputy General Manager. He further stated, that, all employees reported to the General Manager.

In addition, the appellant submitted, that, he had previously informed the Board that none of the other employees, including the Chief Engineer and the Accountant, were reporting to him, and, further, that he was being left out of project meetings and appraisals. The Board did not resolve this anomaly, but, instead, passed a resolution that only the General Manager was to communicate with the Board on all issues.

The Disciplinary Authority found, that, the evidence before it established that the appellant, as the Deputy General Manager, had been periodically appointed as the Acting General Manager of the respondent, in terms of the joint venture agreement.

It also found, that, the appellant, by virtue of being the next senior person available as the Deputy General Manager, would automatically be the Acting General Manager in the absence of the substantive General Manager when she either travelled or was on leave.

It further found, that, this evidence was conceded to by the appellant during cross-examination.

Furthermore, the appellant's contract of employment and job description showed, that, he was required to know and be responsible for the day-to-day monitoring of company operations and projects.

Regarding the question of whether the appellant had an obligation to report to the Board or the Board chairperson, it found that there were no Board meetings held during the time that the appellant was Acting General Manager. There was thus no way that the appellant could have reported challenges being faced by the company to the Board.

Nevertheless, it found, that, despite there being no meetings, the appellant was still expected to update the Board chairman on operational issues.

However, the Disciplinary Authority observed that the substantive General Manager, one Mrs Katsande, who the appellant would stand in for as the Acting General Manager, deliberately withheld information from the appellant such that this had an effect on his capacity to perform his duties as Acting General Manager.

It was also found, that, despite being excluded, the appellant was still aware of the challenges concerning the prover loop and metering project.

In light of the above, the Disciplinary Authority concluded, that, the appellant was aware of his responsibilities as stipulated in his contract of employment and the joint venture agreement.

It further held, that, the appellant had an obligation to report to the Board, through the chairperson, to inform it of the prover loop metering project problems and the other problems that he admitted to being aware of, because, as the Acting General Manager, he was the “gateway to the Board.”

The Disciplinary Authority ruled, that, the appellant was guilty, on both counts, of contravening of section 4(a) of the Labour (National Employment Code of Conduct) Regulations 2006. Consequently, the appellant was dismissed from his post as Deputy General Manager of the respondent on 14 August 2020.

Aggrieved by the decision of the Disciplinary Authority, the appellant filed an appeal in the court a quo.

SUBMISSIONS BEFORE THE COURT A QUO

At the hearing of the appeal, the court a quo struck out grounds of appeal one and two because they were improper. The appeal was, therefore, heard on the basis of the remaining three grounds of appeal.

The appellant submitted, that, the Disciplinary Authority erred at law by making wrong factual considerations and failing to consider factual evidence presented at the hearing which absolved the appellant from the allegations of misconduct.

It further erred at law by failing to consider, as it should have done, that the admission by the respondent, that, only the General Manager was permitted to report to the Board resolved the matter before it in favour of the appellant.

Having noted the admission by the respondent, that, there were no Board meetings convened during the period in which the appellant was accused of misconduct, the Disciplinary Authority erred in proceeding to find that the appellant was guilty of the misconduct alleged in that he should have reported to the Board Chair.

Finally, he argued that the Disciplinary Authority erred in failing to consider, as it should have done, that the respondent had failed to prove, on a balance of probabilities, that, the appellant was guilty of the alleged misconduct.

Per contra, the respondent argued, that, the appellant had a duty to report to the Board, which duty he was well aware of and did not perform.

It contended, that, the appellant had numerous occasions to report to the Board on the challenges faced by the company, even when it was not sitting, as he communicated with the Board Chairman on various occasions. The respondent was of the view, that, the appellant was the Acting General Manager at the material times in issue and had a duty to protect his employer's property and interests, hence, he could not escape liability for failure to act.

FINDINGS OF THE COURT A QUO

The court a quo opined, that, the appellant was an expert who had an obligation to perform his job for the benefit of the respondent. In view of this, the court a quo held, that, the appellant had a duty to report any anomalies concerning the functioning of the company, especially during the periods he was the Acting General Manager.

In relation to the grounds of appeal, the court a quo held, that, they had no merit.

It reasoned, that, in the absence of the General Manager, the appellant was the Acting General Manager who had a duty to report to the Board. It was also the court's view, that, even when the Board did not convene, the appellant still had access to the Board Chairman whom he should have advised of any challenges bedevilling the company.

The court a quo thus concluded, that, there was no need for it, as an Appellate Court, to interfere with the findings and the exercise of discretion by the Disciplinary Authority as there was no misdirection on its part, taking into account the evidence that was before it.

In the result, the court a quo dismissed the appeal and upheld the decision of the disciplinary authority.

Irked by the decision of the court a quo, the appellant noted the present appeal on the following grounds:

GROUNDS OF APPEAL

“1. The court a quo erred in law in not finding, that, the principle lex non cogit ad impossibilia applied to the appellant's circumstances, that is to say, that, objective impossibility of discharging a legal duty is always a defence when the type of the conduct charged is an omission.

2. A fortiori the court a quo erred and grossly misdirected itself on the facts and the evidence, such misdirection amounting to a misdirection in law, in not finding as it ought to have done, that, it was objectively impossible for the appellant to perform the obligation in respect of which the omission charged was alleged because on the common cause facts and evidence:

(i) There was no Board meeting that took place or a properly convened and constituted Board meeting that sat at all to deal with the affairs of the respondent during the period the omission is alleged to have taken place; and

(ii) There was an extant instruction from the Board of Directors directing that all communication to the Board, in relation to the affairs of the respondent, was to be through the General Manager only of which the appellant was not; and

(iii) There was no way appellant could have known of the operation challenges faced by the respondent in circumstances where it was clear, that, as a senior managerial employee who was not always on the ground, none of the subordinates with which (sic)? such information reported to him as they all reported directly to the substantive General Manager; and

(iv) In terms of his contract of employment, the appellant had no subordinate who reported to him.

3. The court a quo erred and grossly misdirected itself in law in finding, that, reporting to or advising the Board Chair in respect of issues meant for the whole Board of Directors, at a properly convened and constituted meeting, was enough to comply with the requirement to inform the Board and that appellant's failure and/or neglect to report the Board Chairman, as opposed to the Board, was fatal as to go to the root of his employment contract.

4. The court a quo having found, that, appellant's interpretation of the emails he received from the General Manager is correct, erred and grossly misdirected itself in any event in finding, that, he was appointed the Acting General Manager with duties and responsibilities of advising the Board of Directors on the operational challenges of the company.

5. The court a quo erred in law in considering, that, it was being asked to interfere with the exercise of a discretion (sic) in circumstances wherein the appellant impugned findings of fact.

6. The court a quo erred and misdirected itself, in any event, in not finding that there existed the jurisdictional facts upon which the court a quo could interfere with the factual findings of the disciplinary authority and in not interfering with the same.”

The appellant prays, that, the appeal be allowed with costs and that the decision of the court a quo be set aside and substituted with one allowing the appeal and setting aside the decision of the Disciplinary Authority.

SUBMISSIONS BEFORE THIS COURT

At the hearing of the appeal, and following an exchange with the court, counsel for the appellant conceded, that, the second ground of appeal was argumentative and not concise.

He consequently abandoned it.

On the merits, counsel for the appellant submitted, that, this case shows that the court a quo grossly misdirected itself on the facts and that such misdirection amounts to an error of law. He contended, that, it was objectively impossible for the appellant to perform the obligations in respect of which the charge was based because of the following common cause facts and evidence:

(i) There was no Board meeting that took place or a properly convened and constituted Board meeting that sat at all to deal with the affairs of the respondent during the period in which the omission is alleged to have taken place;

(ii) There was an extant instruction from the Board of Directors directing that all communication to the Board, in relation to the affairs of the respondent, had to pass through the General Manager only; and

(iii) There was no way the appellant could have known of the operational challenges faced by the respondent in the circumstances because he was a senior managerial employee who was not always on the ground. Furthermore, none of the subordinates who would have had such knowledge or information reported to him as they all reported directly to the substantive General Manager.

On the contrary, counsel for the respondent submitted, that, the appellant failed and/or neglected to advise the Board of the various problems and challenges that the company was facing in implementing its projects during the periods that he was employed as the Deputy General Manager and when he acted as the General Manager and attended the respondent's Board meetings.

He further submitted, that, the aforementioned material non-disclosures created the impression that everything was in order when, in fact, there were serious operational challenges that threatened the company's ability to deliver its mandate.

He concluded his submissions by arguing, that, the appellant failed to perform his duties during the tenure of his contract of employment as encompassed by his job description which provided that he should report on the company's overall performance and provide input for Board meetings.

ANALYSIS

Although the appeal raises several grounds of appeal, my considered view is that there is only one issue for determination, that is, whether or not there was sufficient evidence to justify the appellant's conviction and dismissal from employment.

The complaint in the appellant's first ground of appeal is that the court a quo erred in law in not finding, that, the principle lex non cogit ad impossibilia applied to the appellant's circumstances.

The nub of the charges that the appellant was facing was his omission to advise the Board on the operational challenges that the company was facing. The principle is that objective impossibility in discharging a legal duty is always a defence when the type of conduct charged is an omission.

The appellant's main contention is that the court a quo erred by finding him guilty of committing any act of conduct or omission inconsistent with the fulfilment of the express or implied conditions of his contract, in circumstances where it was objectively impossible for him to perform the acts complained of as forming the charge against him.

The law regarding the defence of objective impossibility was espoused in the case of Watergate (Pvt) Ltd v Commercial Bank of Zimbabwe 2006 (1) ZLR 9 (S)..., wherein this Court held that:

“…, the general rule is that the impossibility of performance is an excuse for the non-performance of an obligation: impossibilium nulla obligatio est. However, whether or not the general rule applies in a particular case would depend upon the circumstances of the case and the nature of the impossibility.

In this regard, I can do no better than quote what BOSHOFF JP said in Bischofberger v Van Eyck 1981 (2) SA 607 (W). At 611BD, the learned JUDGE PRESIDENT said:

'…, when the court has to decide on the effect of impossibility of performance on a contract, the court should first have regard to the general rule, that, impossibility of performance does, in general, excuse the performance of a contract, but does not do so in all cases, and must then look to the nature of the contract, the relation of the parties, the circumstances of the case, and the nature of the impossibility to see whether the general rule ought, in the particular circumstances of the case, to be applied.

In this connection, regard must be had not only to the nature of the contract, but also to the causes of the impossibility.

If the causes were in the contemplation of the parties, they are, generally speaking, bound by the contract. If, on the contrary, they were such as no human foresight could have foreseen, the obligations under the contract are extinguished.'”…,.

In order for the defence of impossibility to succeed, the impossibility must be objective in the sense, that, it must be a real impossibility which is not based on a party's disinterest or unwillingness to perform their contractual duties.

This is the position which has been accepted by this Court in the case of Firstel Cellular (Pvt) Ltd v Netone Cellular (Pvt) Ltd SC01-15…, where PATEL JA…, held that:

“It is trite, that, the courts will be astute not to exonerate a party from performing its obligations under a contract that it has voluntarily entered into at arms length….,. In particular, it must be shown that the impossibility is objective and absolute in contradistinction to one that is merely subjective or relative.”

Furthermore, the impossibility to perform must not only temporarily prevent a party from performing their contractual obligations - it must be one where performance of the contract is finally and completely impossible: see the case of Mutangadura v TS Timber Building Supplies 2009 (2) ZLR 424 (H)…,.

Having outlined the principles to consider in applying the defence of objective impossibility, I now turn to determine whether the circumstances in which the appellant found himself, entitled him to be excused for his failure or omission to appraise the respondent's Board of the operational challenges that the company was facing.

Counsel for the appellant contends, that, it was impossible for the appellant to perform his duties as the Acting General Manager in the following respects:

The appellant could not inform the Board of the operational problems plaguing the company due to the fact, that, the Board did not convene during the material times that he was acting as the General Manager.

That, there was no Board that was convened at the relevant times is a fact that is admitted by the respondent. Such an admission cements the appellant's case that it was impossible for him to advise the Board of the problems faced by the company for the simple reason, that, the Board did not convene.

The effect of an admission has been held to be the following in the case of Potato Seed Production (Proprietary) Ltd v Princewood Enterprises (Pvt) Ltd & Ors HH45-17…,.;

“Indeed, the effect of an admission is settled law. Once made, it binds its maker with the attendant consequences: see Kettex Holdings P/L v S Kencor Management Services P/L HH236-15.”

The consequences of making an admission, which is not withdrawn, is that it will not be necessary to prove the admitted fact(s): Adler v Elliot 1988 (2) ZLR 283 (S)…,.

In addition, this Court, in the case of Mashoko v Mashoko & Ors SC114-22, held that:

“The law on admissions in pleadings, and, indeed, in evidence, is also settled. A party to civil proceedings may not, without the leave of the court, withdraw an admission made, nor may it lead evidence to contradict any admission the party would have made. By equal measure, a party is not permitted to attempt to disprove admissions made.”

The above position is also provided for in section 36 of the Civil Evidence Act [Chapter 8:01] in the following manner:

“36. Admissions

(1) An admission as to any fact in issue in civil proceedings, made by or on behalf of a party to those proceedings, shall be admissible in evidence as proof of that fact, whether the admission was made orally or in writing or otherwise.

(2)…,.

(3) It shall not be necessary for any party to civil proceedings to prove any fact admitted on the record of the proceedings.”

This point was conceded by counsel for the respondent upon being engaged by the court.

He further conceded, that, no evidence was led by the respondent tying down the appellant to the acts of omission, as particularized in the charge sheet, to the specific dates mentioned in Count One when the appellant was the Acting General Manager.

I agree with the appellant, that, as Mr Chiganze, the respondent's Board Chairman, admitted, under cross-examination at the disciplinary hearing, that, there was no properly convened Board at the material times, there was no onus on the appellant to prove that indeed the Board did not sit which resulted in him failing to advise it of the problems faced by the company.

In view of the above, the court a quo should have upheld the appellant's defense of objective impossibility in respect of Count One.

Regarding the second count, counsel for the appellant submitted, that it was also a misdirection for the court a quo to find, that, the appellant, as the Deputy General Manager, omitted to advise the Board of the operational challenges when the common cause facts and evidence show, that, there was an extant instruction from the Board of Directors directing that all communication to the Board, in relation to the affairs of the respondent, was to be done by the General Manager only.

The appellant was not the General Manager.

To add on to the above submissions, the appellant's predicament was further compounded by the fact, that, he had no subordinates reporting to him on the company's operations. The respondent's organogram was amended by removing all subordinates that were under him.

The amendment was countersigned by the General Manager.

The position was corroborated by the evidence led by the respondent. Two of its witnesses confirmed that they would report operational challenges to the Chief Engineer and not to the appellant. The Chief Engineer had been removed as a subordinate of the appellant.

It was also common cause, that, with this type of organizational set-up, the appellant could not have known of any operational challenges being faced by the company, which he would have had to appraise the Board of, unless he personally visited the sites.

The next ground of appeal attacks the court a quo's finding, that, reporting to or advising the Board Chairman in respect of issues meant for the whole Board of Directors, at a properly convened meeting, was enough to comply with the requirement to inform the Board, and, that, the appellant's failure and/or neglect to report or advise the Board Chairman, as opposed to the Board, was fatal as to go to the root of his employment contract.

In so finding, the court a quo misdirected itself.

There is a clear distinction between the Board of Directors and the chairperson of the Board.

According to Black's Law Dictionary, 2nd ed, a Board is defined to mean “a committee of persons organised under authority of law in order to exercise certain authorities, have oversight or control of certain matters, or discharge functions….,.”

Reporting to the chairperson of the Board would not have sufficed as performance of the appellant's duties as the Acting General Manager, or as Deputy General Manager, for the simple reason, that, the chairman does not constitute the Board on his own.

This court has time and again pronounced, that, what constitutes a Board of Directors is a properly convened and constituted Board of Directors as prescribed in terms of the company's Articles of Association or other governing documents: see Crown and Anor v Energy Resources Africa Consortium (Private) Limited & Anor SC03-17.

This proposition was alluded to by GARWE JA…, in the case of Dube v Premier Service Medical Aid Society & Anor SC73-19 at pp14-15 paragraph 39:

“Whilst the deponent may be the chairperson of the Board of Directors of the first respondent, that position does not, on its own, clothe him with the necessary authority to represent the first respondent's Board of Directors.”

The fact that no Board was convened is one that was admitted by the respondent.

The admission, that, there was no Board that was convened, is sufficient proof that it was impossible for the appellant to advise the Board of the operational challenges that the company was facing.

The court a quo clearly misdirected itself in its finding, that, the appellant should have reported to the Board Chairman as he is the face of the Board. Such a finding has no foundation at law.

Counsel for the appellant further contended, that, a further complaint by the appellant is that the court a quo erred in law in considering that it was being asked to interfere with the exercise of a discretion in circumstances wherein the appellant impugned findings of fact.

It is submitted, that, the record is clear that the appellant's grief a quo related to the disciplinary authority's findings of fact. The appellant clearly pointed out how impossible it was, on a careful application of the law to the facts, for the Disciplinary Authority to find him guilty of the charges he faced.

The fact that the court a quo went on to frame the appellant's grounds of appeal as impugning the exercise of discretion by the Disciplinary Authority, was a question that the court a quo invented for itself and answered.

In Proton Bakery (Pvt) Ltd v Takaendesa 2005 (1) ZLR 60 (S)..., GWAUNZA JA said:

“The appellant argues, in the light of all this, that, the action of the court a quo, in reaching a material decision on its own, amounted to gross irregularity justifying interference by this court on the principles that have now become trite.

I am, for the reasons outlined below, persuaded by this argument....,.

The misdirection on the part of the court a quo is left in no doubt. It is my view so serious as to leave this Court with no option but to interfere with the determination of the lower court.”

I associate myself with the above sentiments. The court a quo created its own ground of appeal and answered it, which was a misdirection on its part.

The next ground of complaint is that the court a quo erred and misdirected itself, in any event, in not finding that there existed jurisdictional facts upon which the court a quo could interfere with the factual findings of the disciplinary authority and in not interfering with the same.

Counsel for the appellant submitted, that, the law is that the Appellate Court can interfere with the factual findings of a lower court if such findings are irrational. The principle is that the decision impugned must, on the facts, be so grossly irrational and outrageous in its defiance of logic that no reasonable person, having applied his mind to the question at issue, could have arrived at that decision. For the proposition, he relied on the authority of Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S)…,.

He further submitted, that, failure to properly apply one's mind to the facts in issue amounts to failure to take proper and relevant consideration of the questions at issue.

This Court can interfere with a decision arising out of irrelevant considerations or upon a mistaken view of the facts.

In Barros & Anor v Chimphonda 1999 (1) ZLR 58 (SC)…, the court said:

“The attack upon the determination of the learned judge that there were no special circumstances for preferring the second purchaser above the first, one which clearly involved the exercise of a judicial discretion, may only be interfered with on limited grounds: see Farmers Co-operative Society (Reg.) v Berry 1912 AD 343 at 350.

These grounds are firmly entrenched.

It is not enough that the Appellate Court considers, that, if it had been in the position of the primary court, it would have taken a different course. It must appear that some error has been made in exercising the discretion.

If the primary court acts upon a wrong principle, if it allows extraneous or irrelevant matters to guide or affect it, if it mistakes the facts, if it does not take into account some relevant consideration, then, its determination should be reviewed and the Appellate Court may exercise its own discretion in substitution, provided always it has the materials for so doing. In short, this court is not imbued with the same broad discretion as was enjoyed by the trial court.”

Based on the above authorities, I find that it was an error and mistaken view of facts for the court to find, that, the appellant was guilty of the charges merely because he failed to advise the Board Chairman when the charge sheet speaks of the Board of Directors.

In any event, the appellant's contract of employment, and his job description, mandated him to report to the General Manager and not to the Board.

It is a fact, that, there was a resolution by the Board that all communication to the Board be made only by the General Manager.

The appellant was not a General Manager of the respondent.

He was just a Deputy General Manager who fell within the genus of those specifically prohibited from communicating with the Board of the respondent on all issues to do with the operations of the company.

This was a common cause fact which the court a quo was expected to accept as proven without further ado.

It was also common cause, that, there were no subordinates who reported to him on what was happening on the ground. The court a quo appositely described him as a “lone ranger”. There being no subordinate reporting directly to the appellant, there was no way that the appellant could have known of the operational challenges that the company was facing.

There was, therefore, no basis for the court a quo to confirm the findings of the Disciplinary Authority in this regard.

DISPOSITION

In the light of the foregoing analysis, it is my finding, that, in the circumstances of this case, the court a quo misdirected itself in a number of respects and this Court can safely interfere with its decision. The Disciplinary Authority reached a conclusion which was not supported by the evidence before it. The court a quo erred in upholding that decision. The judgment must be vacated.

Accordingly, it is ordered as follows:

1. The appeal be and is hereby allowed with costs.

2. The judgment of the court a quo be and is hereby set aside and substituted with the following:

“(a) The appeal be and is hereby allowed with costs.

(b) The judgment of the Disciplinary Authority, per Honourable W. Mandinde, be and is hereby set aside and is substituted with the following:

'(i) The finding of guilty by the Disciplinary Authority, and the resultant dismissal of the appellant from employment, be and is hereby set aside.

(ii) The appellant be and is hereby reinstated without loss of salary and benefits from the date of suspension, being the 20th of September 2019.

(iii) In the event that reinstatement is no longer tenable, the respondent shall pay the appellant damages in lieu of reinstatement, to be agreed between the parties, failing which either party may approach the court a quo for quantification.'”

SC41-23 : CASSIAN MANUHWA vs SEEDCO ZIMBABWE (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, KUDYA JA and MWAYERA JA

The appellant appeals against the whole judgment of the Labour Court (the court a quo), which was handed down on 9 January 2015. The court a quo dismissed his appeal against the determination of the disciplinary authority, which found him guilty of misconduct and dismissed him from employment.The FactsThe appellant ...

The Facts

The appellant was employed by the respondent as a Sales Distribution Services Manager. He was suspended from employment without any salary or benefits on 13 December 2010. On 4 January 2011, he was charged, by the disciplinary authority, with an act of conduct or omission inconsistent with the fulfilment of the express or implied conditions of his contract of employment in contravention of section 4(a) of the Labour (National Code of Conduct) S.I.15/2006 (the National Employment Code).

He was alleged to have authorized the dispatch of seed maize valued at US$931,735=06 on credit to Nelmah Holdings (Pvt) Ltd (the agro-dealer) in violation of the requisite internal procedures of the respondent.

He contested the charge, but, was subsequently convicted thereof, on 13 January 2011, and dismissed with effect from the date of suspension.

He was legally represented at the hearing.

He raised two defences:

(i) The first was that he was verbally authorized by his immediate supervisor, Ivan Craig, to dispatch the seed maize to the agro-dealer.

(ii) The second was that the respondent's electronic credit management system broke down and disabled him from detecting the breach of the credit limit of the agro-dealer and stop the sales transactions in real time.

He, however, conceded that he was well versed with the respondent's manual pre-credit check system.

The disciplinary authority found his “evidence to be full of inconsistencies” and his “conduct reckless”. It held, that, Ivan Craig did not authorize him to dispatch the seed maize to the agro-dealer.

It was common cause, that, the appellant did not conduct any pre-credit checks. It was also common cause, that, the manual pre-credit checks preceded the credit sales and the electronic notification of the breach of a credit sale. It was further common cause, that, the respondent's electronic sales management system was down and could not, therefore, alert the Sales Office of any credit limit breach in real time.

The disciplinary authority found, that, by virtue of his seniority, the appellant knew the manual, internal pre-credit checking procedures required of him before he could authorize the sale of seed maize on credit. It, therefore held, that, the failure of the electronic system to flag the breach would not absolve him from physically verifying the credit limit and status of the agro-dealer before authorizing the sale.

Lastly, it found that even though the electronic warning system was down, he ignored the verbal warning given to him by the Credit Controller, one Thomas Mavhurumutse, on 22 October 2010 and on 28 October 2010, that, the agro-dealer had exceeded its credit limit. He, therefore, failed to stop any further deliveries to the prejudice of the respondent.

He was thus convicted of misconduct and duly dismissed from employment.

Aggrieved by the determination of the disciplinary authority, he filed an appeal and an application for review in the court a quo, raising 15 grounds of appeal against conviction, an additional 5 grounds against the penalty, and, a further, 4 grounds of review.

The Contentions a quo

In the court a quo, counsel for the appellant impugned the disciplinary authority's factual findings on the basis, that, they constituted a gross misdirection, which amounted to a misdirection of law to which no sensible court applying its mind to the facts would have made.

He contended, that, the disciplinary authority incorrectly found that the appellant had mero motu authorized the dispatch of seed maize to the agro-dealer. He argued, that, the appellant had acted, as he was wont to do, on the verbal instruction of his immediate supervisor.

He contended, that, the contrary finding of the disciplinary authority ignored the testimony of Thomas Mavhurumutse and the contents of the input credit application forms submitted by the agro-dealer for its respective winter wheat and summer maize programs.

He argued, that, Thomas Mavhurumutse and the agro-dealer's representatives confirmed, that, Ivan Craig had verbally authorized the appellant to sell seed maize on credit.

He further argued, that, Ivan Craig's signature, for and on behalf of the respondent, on the summer maize application form signified two things:

(i) Firstly, the execution of a binding contract between the agro-dealer and the respondent.

(ii) Secondly, the written authorization by Ivan Craig to sell maize seed to the agro-dealer on credit.

He also contended, that, Bramwell Bushu, who replaced Ivan Craig as his immediate supervisor, had prior knowledge of the agro-dealer's credit transaction. This, so he argued, was demonstrated by the letter written to the agro-dealer by Bramwell Bushu on 6 October 2010. In the letter, Bramwell Bushu affirmed the respondent's ability to supply the agro dealer's seed maize requirements, specified in its letter dated 5 October 2010.

Counsel further argued, that, the failure by the respondent's electronic sales management system to block the excessive credit sales led the appellant to believe, that, it had an extant credit limit that had not yet been reached.

The appellant did not motivate any of his grounds of review in his main written heads of argument a quo. He was prompted to do so in his supplementary heads, which he filed in response to the respondent's heads.

He, therein, strenuously argued, that, his references to the conduct of Bramwell Bushu, which only came to his attention after the disciplinary proceedings, established his four grounds for review.

The only relevant ground for review was that Bramwell Bushu was an interested and biased party, who, for that reason, could not have represented the respondent as the complainant in the disciplinary proceedings. This was because he had concealed his letter of 6 October 2010 from the disciplinary authority.

The other three grounds for review related to the subsequent fraud charges levelled against Bramwell Bushu after the hearing, and the recovery efforts the appellant purportedly initiated and negotiated with the agro-dealer, after the misconduct came to light.

Per contra, the respondent made the following contentions in its written heads of argument a quo.

The application for review was fatally defective in that it sought to introduce new evidence which was not before the disciplinary authority.

This evidence, comprised the arrest of Bramwell Bushu for fraud, arising from the same transactions, subsequent to the disciplinary proceedings, and his letter of 6 October 2010.

The letter did not constitute a credit guarantee letter but was a supply guarantee letter.

In any event, the new evidence was not only irrelevant to the resolution of the dispute before the disciplinary authority but also negated the hallowed principle of finality to litigation.

It was improper for the appellant to seek to try out new issues on fresh facts simply because the first set of facts had proved inadequate.

The remaining grounds of review did not impugn the manner in which the disciplinary proceedings were conducted. They raised mitigatory factors, which rightly fall into the ambit of an appeal against sentence rather than the legality, procedural propriety, and rationality of the hearing.

Regarding the appeal, it argued that the determination was rationally linked to the facts and evidence and could not be interfered with on appeal. It submitted, that, the appellant was correctly convicted and rightly dismissed, because, the offence went to the substratum of and destroyed the employment relationship between the parties.

The findings of the court a quo

The court a quo reduced 15 grounds of appeal to a single issue of whether the hearing officer grossly misdirected himself by convicting the appellant on the evidence that was placed before him. Likewise, the issue raised against sentence was whether or not the sentence of dismissal was appropriate.

It held, that, the review grounds did not constitute proper grounds of review.

It however regarded them as abandoned as they had not been motivated, but, did not make a determination on the application.

Regarding the appeal, the court a quo held, that, the appellant authorized credit sales above the agro-dealer's US$20,000 limit. He did so without adhering to the prevailing manual procedures - which were known to him. He was required to follow them before authorizing the sale. The electronic credit sales management system would only be activated subsequent to the mandatory manual pre-credit checks. The malfunctioning of the electronic system did not, therefore, absolve him from making the manual pre-credit checks.

It also upheld the factual findings of the disciplinary authority, that, Ivan Craig did not authorize any sales in excess of the agro-dealer's credit limit. The findings were supported by the oral and written testimonies of Ivan Craig, Thomas Mavhurumutse, Melody, Locadia Marongwe and Muzadzi who all interacted with the appellant at all material times.

They were also confirmed by the documentary evidence and the probabilities.

It further found, that, the agro-dealer could not have concluded a summer seed maize credit sale contract with the respondent, as suggested for the first time on appeal by the appellant, without submitting the required credit insurance cover.

The court a quo further found, that, the probabilities demonstrated that the appellant's conversation with Ivan Craig, over the Zimbabwe Farmers Union (ZFU) seed maize voucher program, could not reasonably be construed as constituting the disputed verbal authorization. The court a quo, therefore, held that the appellant had disingenuously authorized the credit sale for the benefit of the agro-dealer in lieu of the ZFU voucher program.

By consent, the parties called, on appeal, the evidence of Ivan Craig and Bramwell Bushu and produced the letter written by the agro-dealer on 5 October 2010 and Bramwell Bushu's 6 October 2010 reply.

It found, that, Bramwell Bushu's reply did not constitute the requisite authority to open a credit sales trading account; its absence at the disciplinary hearing did not prejudice the appellant and its production thereat would have served no useful purpose.

The court a quo, consequently, dismissed the appeal with no order as to costs. It, however, did not pronounce itself on the application for review.

The grounds of appeal

Irked by the decision of the court a quo, the appellant appeals to this court on the following grounds of appeal:

“1. The court a quo erred at law in confirming the appellant's dismissal when there was no evidence that the appellant acted in a manner inconsistent with the fulfillment of the express or implied conditions of his contract of employment.

2. The court a quo erred at law in confirming the appellant's dismissal contrary to the evidence of Ivan Craig and Bramwell Bushu which exonerated the appellant of any wrongdoing.

3. The court a quo erred at law in confirming the appellant's dismissal for misconduct, yet the record clearly shows that appellant sought authorization before dispatching seed to Nelmah.”

He seeks the success of the appeal with costs, the vacation of the court a quo's judgment, and its substitution with an order granting both the appeal and the application for review with costs, his reinstatement with salary and other benefits, alternatively, damages, which may be computed by the Labour Court, if the parties fail to agree thereon within 30 days of the substituted order.

At the commencement of the hearing, counsel for the appellant moved for the addition of two other grounds of appeal. After some initial opposition, counsel for the respondent conceded to the addition thereof.

Consequently, the following two grounds of appeal were, by consent, added to the notice of appeal as numbers:

(4) The court a quo erred in finding, that, the appellant's first ground of review, alleging interest in the cause, did not raise a review ground, and, a fortiori, having heard new evidence on review, in failing to record the full evidence given by the parties and to determine the effect of the new evidence on that review ground; and

(5) The court a quo erred in groundlessly commenting, that, the review application had been abandoned and in leaving the same hanging and undetermined.

The contentions before this Court

The preliminary applications

At the commencement of the hearing before this Court, counsel for the appellant took two preliminary applications:

(i) Firstly, he sought the vacation of the judgment of the court a quo and the remittal of the matter before a different judge.

This was because of the common cause fact, that, the transcript of the proceedings and notes of the presiding judge a quo could not be located after diligent search. The transcript and the notes could also not be reconstructed due to the 5-year time lapse between the dates on which judgment was handed down and the request for reconstruction was made.

(ii) Secondly, he sought the amendment of the notice of appeal by the addition of the two grounds that are set out in paragraph (18), above.

After interacting with the Court, counsel for the appellant abandoned the first application. He conceded, that, it was in the interests of the due administration of justice that there be finality to this matter, which has been raging between the parties for the past decade. It was therefore dismissed.

The second application was, however, granted by consent.

The substantive contentions on the merits

On the merits, counsel for the appellant contended, that, the conviction was not established by the evidence called at the disciplinary hearing.

He argued, that, Ivan Craig and Bramwell Bushu exonerated the appellant of any wrongdoing.

He strenuously argued, that, the court a quo did not properly assess the common cause evidence of the telephonic conversation between Ivan Craig and the appellant, which took place when the appellant was in the company of Nyathi and the agro-dealer's Mahupete.

He submitted, that, a proper consideration of the evidence would have led to the inevitable conclusion, that, Ivan Craig had verbally authorized the sales transaction and resulted in the appellant's acquittal.

He also argued, that, an acquittal would also have followed from the correct appreciation of the minutes of the meeting held at Wild Geese Lodge on 15 December 2010 between the top management of the respondent and the agro-dealer.

Regarding the two additional grounds of appeal, counsel for the appellant argued, that, they raise the issue of whether or not the review application was dealt with and the manner of its disposal.

The review grounds concerned the alleged interest and bias of Bramwell Bushu, who acted as the complainant at the hearing. Counsel argued, that, the non-disclosure of Bramwell Bushu's letter of 6 October 2010, and of his arrest for fraud ex post facto the hearing, constituted a gross misdirection by the disciplinary authority.

He, however, failed to articulate how the disciplinary authority's failure to consider evidence that was never placed before it could ever amount to a misdirection.

He also argued, that, the failure to make a substantive order on the application for review was a misdirection which would be subject to correction by this Court.

Counsel for the respondent made the following contrary submissions.

The evidence on record confirmed, that, the appellant was guilty of the misconduct for which he was charged with. The evidence of Ivan Craig, Bramwell Bushu, Muzadzi and Locadia Marongwe implicated him of wrong doing. The tele conversation between Ivan Craig and the appellant, on 19 October 2010, which preceded the first dispatch of seed maize, and the minutes of the meeting at the Wild Geese Lodge, did not exonerate him of any wrong-doing. His assertion that he did not have access to the credit limit modules was controverted by Melody and Thomas Mavhurumutse. In any event, it was common cause, that, he never conducted the pre-creditworthiness checks required of him before authorizing the dispatch of the seed maize.

He further submitted, that, the two additional grounds of appeal could not properly be related to by this Court in view of the finding a quo, that, the appellant had abandoned the application for review.

He submitted, that, the court a quo dealt with the application for review and concluded that it had been abandoned.

He argued, that, the court a quo only assessed the evidence of the two witnesses that were called before it in the context of an appeal and not of an application for review.

He further contended, that, the appellant's failure to assail the finding on abandonment is fatal to his case.

He therefore implored the Court to dismiss the appeal in its entirety.

The Issues

The two issues that arise from the grounds of appeal are;

(i) Firstly, whether the court a quo correctly upheld the conviction of the appellant, which resulted in his dismissal from employment; and

(ii) Secondly, whether the application for review was abandoned and a substantive order pronounced a quo.

Analysis

Whether or not the court a quo correctly upheld the conviction of misconduct and dismissal from employment

It is trite, that, an Appeal Court will not lightly interfere with the factual findings of a trial court unless that court is found to have proceeded on some material mis-appreciation or mis-application of the law and/or the facts, or where it has relied on some extraneous or irrelevant consideration, or has failed to take into account some particularly relevant matter: see Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S)…, and Zimbabwe Homeless People's Federation et al v Minister of Local Government and National Housing & Ors SC94-20…,.

The disciplinary authority made the following findings.

The tele conversation between the appellant and Ivan Craig, on 19 October 2010, related to the supply of seed maize to the Zimbabwe Farmers Union's Nyathi (ZFU). Ivan Craig confirmed, that, the respondent had an extant voucher program with the ZFU and not the agro-dealer. The seed maize for the voucher programme would be drawn down on the trading account of the ZFU, but, there were no vouchers or orders bearing the ZFU stamp and the signatures of its signatories.

The appellant mero motu demanded vouchers from the agro-dealer and proceeded to sell seed maize to it on credit.

He was duty bound to conduct manual pre-creditworthiness checks of the agro-dealer before he could authorize his subordinates to sell seed maize to it on credit. He was warned by the credit controller, Thomas Mavhurumutse, when the credit limit exceeded the authorized limit of US$20,000 by US$83,936=90 on 22 October 2010, and by US$489,000 on 28 October 2010.

He ignored both warnings.

In any event, he had no reason to mero motu stop further deliveries of seed maize, on 30 October 2010, if his version that he had been authorized to accord unlimited credit to the agro-dealer was true.

The ratio decidendi of the court a quo, in respect of the conviction, is found at page 145 of the appeal record. The court stated that:

“In the present case, if the evidence led is accepted, it does not appear that the decision arrived at was outrageous in its defiance of logic. The defence to the charge was that Ivan Craig had authorized the purchase by Nelma. He denies it, and his denial is supported by other witnesses. It is also supported by the fact, that, Nelma did not have a good history as a credit customer. This was known to the appellant. The so-called authority, as explained by the appellant himself, does not strictly refer to Nelma but to Mr Nyathi and ZFU. Whichever way the matter is taken, the appellant had a duty to check on the credit limit. He had to know that in order to monitor. In the light of all this, the decision to convict does not sound wrong.”

The court a quo thus confirmed the factual findings of the disciplinary authority.

The confirmation is indeed supported by the oral testimony of the witnesses, the documentary evidence, and the probabilities of the case that was before the disciplinary authority. Its findings do not fall into the ambit of those that are so outrageous in their defiance of logic or accepted moral standards that no sensible court applying its mind to the questions at issue could have arrived at.

We are therefore satisfied, that, he was properly convicted by the disciplinary authority and that the court a quo correctly upheld the conviction. The first three grounds of appeal are therefore devoid of merit and ought to be dismissed.

It is noteworthy, that, the appellant did not impugn the penalty of dismissal in his grounds of appeal. We therefore uphold it....,.

1....,.

2. The appeal against conviction is dismissed in its entirety.

Appealed
SC49-23 : PETROMOC EXOR (PVT) LTD vs KUDZANAI CHIMEDZA and CRANDID PETROLEUM (PVT) LTD and MINISTER OF LANDS, AGRICULTURE, WATER, CLIMATE and SHERIFF OF ZIMBABWE
Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

The appellant brings an appeal against the judgment of the High Court (the court a quo) handed down on 21 July 2021. The reasons for judgment were delivered on 28 September 2021 under judgment number HH533-21.

The order struck off the appellant's application to be declared the lawful lessee and occupier of Duncombe Service Station (the service station) situate at Duncombe Farm, Mazowe District in Mashonaland Central Province.

The appellant further sought the eviction of the first and second respondents from the premises, together with all those claiming the right of occupation and use through them.

BRIEF SUMMARY OF THE FACTS

The appellant and the first and second respondents are wrangling over the right of lease and occupation of the service station.

The service station is situate at Duncombe Farm which has since been acquired by the Government under the land reform programme.

The first respondent is the current occupier of the service station. He claims lawful occupation through a 5 year lease granted to him by the third respondent in his capacity as the land owner through the Mazowe District Council.

He also claims legitimate expectation to lawful occupation and use of the service station pursuant to certain verbal promises made to him by the third respondent's officers.

The second respondent did not oppose the appeal, giving the impression that it will abide by the decision of the court.

On the other hand, the appellant claims the lawful right to occupy and use the service station through a 5 year lease granted to it by the third respondent on 17 July 2019.

Before the court a quo, both contesting parties made claims and counterclaims disparaging the basis of each other's claim to legitimate lease and occupation of the service station.

The first respondent, in turn, countered the appellant's application with an application for review seeking to invalidate the appellant's lease agreement with the third respondent.

Having heard both parties, the learned judge a quo determined the appellant's application on the merits but ended up with an order striking off the matter from the roll.

On the merits, the learned judge a quo found, that, the appellant's lease agreement was invalid because it had been signed by an Under-Secretary who had no authority to sign.

At p5 of the cyclostyled judgment, this is what the learned judge a quo had to say:

“It goes without saying, that, the lease which the Under Secretary issued is not valid. It has no legal force or effect. It violates clear provisions of the law. The Under-Secretary cannot issue any lease to anyone, let alone to the applicant. The Minister has neither the power nor authority to allow the Under Secretary to issue the lease to the applicant. He cannot delegate the responsibility which is reposed in him to the Under-Secretary. The mandate to issue the offer letter or lease lies with no one else but the Minister.”

Having determined the merits of the appellant's application, the learned judge a quo noted that the application was fraught with serious procedural irregularities warranting the striking off of the matter so that it could be heard afresh.

In coming up with that conclusion, the learned judge a quo made the following remarks, at the same page of his judgment:

“It is for the mentioned reason, if for no other, that the first respondent was quick to cast doubt on the authenticity of the lease which the applicant attached to its application. The fact that the lease was not legible from pp13 to 18 did not work in the applicant's favour at all. As the dominus litis party, the applicant should have availed to me a lease whose contents were/are legible. It should not have availed to me a document the contents of which made no sense and expected me to make sense out of them. The lease was/is after all the backbone of its case. It should, therefore, have allowed it to make sense to the decision maker.

I mention in passing, that, a matter which is not sustainable on a balance of probabilities, but which is not so hopeless so as to warrant an outright dismissal is more often than not struck off the roll. It is struck off because it is fatally defective. The fatal defects which are inherent in it leave the court with no choice but to treat it as such.”

Having said that, the learned judge a quo proceeded to strike the matter off the roll with remarks that the appellant could approach the court again, within 90 days, after putting its house in order.

ANALYSIS AND DETERMINATION

It is plain to the Court, that, the learned judge a quo's line of reasoning is rather convoluted and littered with gross irrationality so as to amount to fatal procedural irregularity. I am of the firm view, that, once the learned judge had found on the merits, that, the appellant's lease agreement was a nullity and unenforceable, that should have been the end of the matter.

No rights or obligations can flow from a nullity.

It was therefore not within his discretion to proceed beyond that finding on the basis of spurious technical grounds.

The learned judge struck the matter off from the roll on the basis, that, the appellant had tendered an illegible lease agreement.

Again, it is plain and a matter of common sense, that, once the learned judge had held the lease agreement to be void and unenforceable, it did not matter whether or not it was legible. It was therefore irrational for the learned judge to strike the matter off the roll in the vain hope that the appellant would, again, approach the courts with a legible but void lease agreement.

It is unfathomable how the learned judge thought he was going to use a lease agreement which he had held to be void and unenforceable to determine the merits of the case which he had already determined.

Tendering a defective exhibit in evidence in court cannot, in my view, amount to a fatal procedural irregularity. It merely affects the weight and credibility of evidence. It is not a fatal procedural irregularity warranting the matter to be struck off the roll.

The learned judge, therefore, fell into error and strayed into fatal procedural irregularity when he struck the application from the roll on the basis, that, the appellant had tendered in evidence an illegible lease agreement.

Faced with a defective document or exhibit, a judicial officer should not take the easy way out by striking the matter off, the roll.

The judicial officer should first of all look at the relevance and admissibility of the exhibit tendered. If it is relevant and admissible, then, one looks at whether the situation can be saved by calling for rectification where possible. A brief postponement may be allowed to effect rectification with a suitable award of costs.

Judicial officers should always bear at the back of their minds, that, their primary function is to dispose of matters on the merits and not flimsy technicalities.

This prompted SCHREINER JA, in Trans-African Insurance Co. Ltd v Maluleka 1956 (2) SA 273 (A)…, to remark that:

“No doubt, parties and their legal advisers should not be encouraged to become slack in the observance of the Rules, which are an important element in the machinery for the administration of justice. But, on the other hand, technical objections to less than perfect procedural steps should not be permitted, in the absence of prejudice, to interfere with the expeditious, and, if possible, inexpensive decision of cases on their real merits.”…,.

As previously stated, it was grossly irregular for the learned judge to first determine the merits of the case and then proceed to strike off the matter on a technicality.

The court a quo's decision is therefore confusing in that it provides an irreconcilable contradiction as to whether it determined the matter on the merits or a technicality.

That irregularity can only be corrected by invoking the provisions of section 25 of the Supreme Court Act [Chapter 7:13]. The section provides as follows:

“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 subsection (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.”

The section undoubtedly confers review jurisdiction on this Court whenever it comes to its attention, that, there has been a procedural irregularity in a lower Court as happened in this case.

The gross procedural irregularity warrants the intervention of this Court, on review, by quashing the proceedings a quo and ordering a trial de novo. As the trial judge has already taken a stance on the merits of the case, it is necessary that the retrial be placed before a different judge.

As neither party is to blame for the learned judge's error, each party is to bear its own costs. It is accordingly ordered as follows:

1. That, the proceedings in the court a quo be and are hereby quashed and set aside.

2. That, the matter be and is hereby remitted to the court a quo for a trial de novo before a different judge.

3. That, each party bears its own costs.

Appealed
SC56-21 : CHRISTOPHER SAMBADZA vs AL SHAMS GLOBAL BVI LIMITED
Ruled By: GOWORA JA, MAKONI JA and BERE JA

The respondent is a company registered in the British Virgin Islands. Its principal place of business is in Dubai, the United Arab Emirates. The appellant was formerly one of the directors of Rodstreet Trading (Private) Limited (Rodstreet), a company duly registered as such under the laws of Zimbabwe.

In or about August 2011, Rodstreet Trading (Private) Limited (Rodstreet) accessed loan facilities from Interfin Bank (Interfin). The loan was secured by a Bankers Acceptance in the sum of USD$117,335=91. The Bankers Acceptance (BA) was issued on 22 August 2011 and was due for payment on 21 November 2011.

On 24 November 2011, Interfin Bank wrote to the appellant, and a co-director in Rodstreet Trading (Private) Limited, demanding payment of the debt. This was followed by a letter to the appellant on 19 January 2012.

Both letters went un-answered.

On or about 7 March 2012, Interfin Bank advised Rodstreet Trading (Private) Limited that it had sold the Bankers Acceptance (BA) to the respondent when the amount became due, and that payment on the BA was to be made to the respondent.

No payment was made.

On 27 April 2012, the respondent issued out summons in the High Court against Rodstreet Trading (Private) Limited for the payment of USD$117,335=91. On 18 June 2012, the High Court granted a default judgment in favour of the respondent in the sum claimed.

The judgment was not satisfied.

An attempt to execute the judgment at the last known address for the company proved unsuccessful as Rodstreet Trading (Private) Limited appeared to have ceased operating. The Deputy Sheriff was unable to locate the company.

On 30 April 2014, the respondent filed an application with the High Court under section 318 of the Companies Act [Chapter 24:03].

The premise of the application was that the appellant, as a director for Rodstreet Trading (Private) Limited, would have, or should have known that the company would not be able to pay the amounts owed under the Bankers Acceptance (BA) issued to Interfin Bank. It was contended by the respondent, that, despite such knowledge, the appellant, negligently or fraudulently, represented to Interfin Bank that Rodstreet would liquidate the amount on the BA on the maturity date.

The further contention made was that the appellant, as a director, knew, or should have been aware of the financial position of the company and its inability to pay the amounts owed under the facility.

It was contended, that, the knowledge or lack thereof, amounted to gross negligence on the part of the appellant.

It was suggested, that, the appellant owed a duty of care to all parties that Rodstreet Trading (Private) Limited conducted business with to ensure that Rodstreet would be able to meet its financial obligations.
The appellant should therefore be held liable on the basis that he was grossly negligent in the performance of his mandate as a director for Rodstreet Trading (Private) Limited.

The appellant opposed the application.

He averred that he was no longer a director for Rodstreet Trading (Private) Limited, having resigned from the Board on 3 November 2011. He was aware, that, for some time, the company operated an overdraft facility with Interfin Bank.

He denied knowledge of the Bankers Acceptance (BA) which he alleged was issued and signed by his co-directors without his knowledge. He contended further, that, there was no Board resolution authorizing the issuance of the BA.

He averred, that, he was a Non-Executive Director and was not involved in the day-to-day running of the company. As such, he never made any representation to Interfin Bank, or any other person, on the financial status of the company or the redemption of the Bankers Acceptance (BA).

He, therefore, denied that he had been negligent in any manner, and denied being liable to Interfin Bank or the respondent in respect of the Bankers Acceptance (BA).

In so far as the respondent was concerned, the appellant denied ever having dealt with it and denied further, that, Rodstreet Trading (Private) Limited had financial dealings with the respondent. He contended that the respondent had failed to exercise due diligence and should not have purchased the Bankers Acceptance (BA) without ensuring that the BA would be redeemed when due.

Lastly, he challenged the rate of interest. He said that the respondent had to prove the rate of interest at 30 percent per annum.

JUDGMENT OF THE COURT A QUO

The court found that section 318 of the Companies Act was applicable in the circumstances. It further found, that, the provisions of the section extended liability to both present and past directors and that his resignation, a few days before the Bankers Acceptance (BA) fell due for payment did not serve to protect the appellant from liability in respect of the debt.

The court was of the view that the appellant had been negligent, despite his knowledge of the perilous financial position of the company, in permitting the company to carry on trading in order to create a good impression of the company's name as a trading entity.

The learned judge in the court a quo concluded that the directors, including the appellant, traded recklessly in general, and, in particular, in securing the debt with the Bankers Acceptance (BA). The Board had conducted the business of the company in a manner that contravened the provisions of the Companies Act. They were, as a consequence, personally liable for the debt due under the BA.

Judgment was entered against the appellant in the sum of USD$117,335=91 with interest at 30 percent per annum with effect from 21 November 2011 and costs.

THE APPEAL

The appellant was aggrieved and has noted an appeal to this Court on the following grounds:

“1. The court a quo grossly misdirected itself in failing to determine the issue of the validity of the Bankers Acceptances in the hands of the respondent, notwithstanding the fact that this was a legal point argued at length by the parties in court.

2. The court a quo erred in finding the appellant personally liable, in terms of section 318 of the Companies Act [Chapter 24:03], when no evidence was adduced by the respondent to meet the strict requirements of section 318 of the Act before a person is held personally liable.

3. The court a quo grossly misdirected itself in finding that the respondent, in fact, presented the Bankers Acceptances to Rodstreet (Private) Limited on the due date when, on the papers, it was clear that Rodstreet (Private) Limited was only advised of the sale of the Bankers Acceptances to the respondent by Interfin Bank on 7 March 2012 after the due date.

4. The court a quo grossly misdirected itself in failing to determine the issue of 30 percent interest which had been placed before it for determination, which appellant contended was illegal.”

ARGUMENTS ON APPEAL

Although counsel for both parties settled written argument on all four grounds, at the hearing, counsel for the appellant took the position that grounds 1 and 3 were not relevant to the determination of the issues in contention.

I think that was a proper course to adopt.

The stance taken narrowed the issues to two, viz; the finding by the court on the liability of the appellant under section 318 of the Companies Act and the order by the court, that, the judgment should attract interest on the judgment amount at 30 percent per annum.

As a consequence, the only grounds that fall for determination are Grounds 2 and 4.

AD GROUND 2

Counsel for the appellant argued as follows:

In respect of the Bankers Acceptance (BA), the contention made was that the court a quo had misdirected itself by placing reliance on the BA as proof of liability against the appellant, especially when regard is had to the strict requirements under section 318 of the Companies Act for the finding of liability on the part of a director or any other person.

In addition to the above, it was contended that the appellant had no knowledge of the issuance of the Bankers Acceptance (BA), had not seen a resolution authorising its issuance, and could therefore not be said to have been liable for the debt which was secured by the BA.

He argued that the other two directors would be the ones with the requisite knowledge as they signed the Bankers Acceptance (BA).

Counsel for the appellant submitted, that, a finding of liability under section 318 of the Companies Act is rather drastic and has harmful effects on the status of any person against whom liability is levied in terms of the section.

He contended, that, the appellant had not participated in the issuance of the Bankers Acceptance (BA) and could not, therefore, be said to have been grossly negligent in the running of the business of the respondent.

As a result, went the argument, the respondent was required to establish, by way of evidence, that the appellant had been a party to the carrying on of the business in order to defraud creditors of the company or other creditors.

Counsel for the appellant submitted that the word “knowingly” in the section must be read to mean, that, a director attracts liability when he has knowledge of the facts surrounding the debt and the running of the business. The appellant did not have such knowledge of the facts nor did the respondent establish that he had.

He argued, that, in this respect, there were clear disputes of fact that were incapable of resolution on the papers.

The onus to show liability on the part of the appellant lay on the respondent.

He also contended, that, the appellant should be afforded a fair hearing at the option of the respondent.

Counsel for the respondent contended, that, the Bankers Acceptance (BA) issued by Rodstreet Trading (Private) Limited was accepted by Interfin Bank. He contended further, that, Rodstreet always had an underlying facility with Interfin Bank, a fact accepted by the appellant.

He suggested that once the appellant had conceded that he was aware of a facility, then, he must have had knowledge of the issuance of the Bankers Acceptance (BA).

Further to this, the appellant only resigned as director after the Bankers Acceptance (BA) was issued.

In reply, counsel for the appellant countered that the underlying facility was not the basis of the cause of action against the appellant. He argued that the test to establish knowledge on the part of the appellant had not been met.

THE LAW

DIRECTORS LIABILITY UNDER SECTION 318 OF THE COMPANIES ACT

At common law, the Board, or individual directors, are agents of the company and stand in a fiduciary relationship with the company. As a consequence, a director has all the common law duties of agents and must act with utmost good faith as regards the affairs of the company.

Section 318 of the Companies Act [Chapter 24:03] reads as follows in relevant part:

“318. Responsibility of directors and other persons for fraudulent conduct of business

(1) If at any time it appears that any business of a company was being carried on —

(a) Recklessly; or

(b) With gross negligence; or

(c) With intent to defraud any person or for any fraudulent purpose; the court may, on the application of the Master, or liquidator or judicial manager or any creditor of or contributory to the company, if it thinks it proper to do so, declare that any of the past or present directors of the company or any other persons who were knowingly parties to the carrying on of the business in the manner or circumstances aforesaid shall be personally responsible, without limitation of liability, for all or any of the debts or other liabilities of the company as the court may direct.”

A finding of personal liability against a director, or any other person, under the section, must be premised upon a finding by the court that one or more of the elements specified therein was evident from how the business of the company was being run.

The relevant elements for discussion in this judgment, therefore, are the following:

(i) Recklessness;

(ii) Gross negligence;

(iii) Intent to defraud a creditor;

(iv) Knowingly being a party to the running of the business in the manner aforesaid.

In Toakoana Trading (Pvt) Ltd v Van Rooyen & Anor HH684-14, MAFUSIRE J had occasion to discuss what connotes gross negligence or recklessness under section 318 of the Companies Act. The learned judge said the following:

“In my view 'recklessness' or 'gross negligence' means someone exhibiting an 'I don't care' attitude. One may not intend the harmful consequences of one's actions, which are reasonably foreseeable, but nonetheless one persists with that conduct in total disregard of the harmful consequences. Despite the separate depiction of 'recklessness' and 'gross negligence' in section 318 of the Act, in my view, both refer to the conduct of business in an extremely very bad manner. But, no matter how extremely bad that conduct may be, the statute did not, in my view, intend to equate 'recklessness' or 'gross negligence' with dolus….,.

In Attorney-General v Munganyi 1986 (2) ZLR 137 (SC) in the context of reckless driving within the meaning of the Road Traffic Act, then No.48 of 1976 (now Chapter 13:11), where driving 'recklessly' and 'negligently' are now listed separately and seemingly disjunctively following an amendment to that Act, a pitched argument was presented, that, because of that amendment, the Legislator intended to create two separate offences. The court rejected that argument. It held that in the context of reckless driving 'recklessness' had a well-settled meaning. It is one of the categories of negligent driving which involves a gross and aggravated degree of negligence. It does not require any element of dolus.”

In this context, recklessness is to be judged by the standards of reasonable people in business.

This means, that, the test on whether or not a director exhibited recklessness in the conduct of the business of the company, as provided under section 318 of the Companies Act, must be objective and not subjective.

As concluded by the court in Toakoana Trading (Pvt) Ltd v Van Rooyen & Anor HH684-14, gross negligence is sufficient for a finding of liability under the section in question.

The court a quo found that the directors of Rodstreet Trading (Private) Limited conducted the business of the company recklessly, negligently, if not fraudulently.

I turn to consider the element of fraud under the section and what needs to be established as regards personal liability attaching to a director.

This element has received attention within this jurisdiction under the old legislation. The precursor to section 318 of the Companies Act [Chapter 24:03] was section 281 of the Companies Act [Chapter 190] (“the repealed Act”).

The pertinent part to section 281(1) of the Companies Act [Chapter 190] read as follows:

“281(1) If, in the course of a winding-up or the judicial management of a company, it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any person, or for any fraudulent purpose, the court, on the application of the Master, or the liquidator or judicial manager or any creditor or contributory to the company, may, if it thinks proper so to do, declare that any of the directors, whether past or present, of the company or any other persons who were knowingly parties to the carrying on of the business in manner aforesaid, shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the court may direct.”

In Mayhew v Alcock NO 1991 (1) ZLR 203 (S), the court focused on what fraudulent conduct under section 281 of the Companies Act [Chapter 190] entailed. At p208C-F, the court surmised as follows:

“Basically, as REYNOLDS J said, the purpose of the provision is:

'…, to render personally liable any person who is knowingly a party to the carrying on of any business of a company in a…, fraudulent manner' (per DE KOK J in Gordon NO and Rennie NO v Standard Merchant Bank Ltd & Ors 1984 (2) SA 519 at 528G).

It is not sufficient to prove an intent to prefer one creditor over another: see Dorklerk Investments (Pty) Ltd v Bhyat 1980 (1) SA 443 (W) at 447 and In re Sarflax Ltd [1979] 1 All ER 529 at 545. And, although the case turned on the question of 'recklessness' which is not part of our statute, the decision in Howard v Herrigel & Anor NNO 1991 (2) SA 660 is useful because of its reference to the liquidator's right to choose between motion proceedings and action (664E). The respondent must establish at least some element of dishonesty.”

I think it appropriate, at this stage, to refer to the dicta in Howard v Herrigel & Anor NNO 1991 (2) SA 660. At 673I-674A, the court remarked:

“Having regard to the provisions of section 424 and to its purpose, to be entitled to an order, the applicant must prove, on a balance of probabilities, that the person sought to be held liable had knowledge of the facts from which the conclusion may be drawn that the business of the company was or is being carried on recklessly or with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose.

It would not be necessary to go further and prove that the person also had actual knowledge of the legal consequences of those facts.”

The court, in that case, had to consider whether a director could be held personally liable for the debts of a company under section 424(1) of the Companies Act in South Africa, the provision of which read as follows:

“When it appears, whether it be in a winding up, judicial management or otherwise, that any business of the company was, or is, being carried on recklessly or with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Court may, on the application of the Master, the liquidator, the judicial manager, any creditor or member or contributory of the company, declare that any person who was knowingly a party to the carrying on of the business in the manner aforesaid, shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court may direct.”

It is evident from the dicta in Howard v Herrigel & Anor NNO 1991 (2) SA 660, that, the court was considering elements of fraud and recklessness in the running of the business of the company.

What is of import is that the finding of liability on the fraudulent running of the company must be premised on the knowledge of such fact on the person sought to be found personally liable.

According to the court in Mayhew v Alcock N.O. 1991 (1) ZLR 203 (S), the element of dishonesty must be established.

Where before, the relevant statute did not provide for recklessness as one of the necessary elements for liability, as discussed in Mayhew v Alcock NO 1991 (1) ZLR 203 (S), the new statute, in terms of section 318 of the Companies Act [Chapter 24:03], does.

The ambit for finding directors personally liable has been expanded in the Companies Act [Chapter 24:03] to include gross negligence and recklessness, which were encompassed in the law in South Africa.

The result is that the law in both jurisdictions is now in sync and the authorities under which the liability of directors was discussed, and decided, become a useful guide to courts in this jurisdiction.

I will therefore place heavy reliance on such authorities in the determination of this appeal.

In addition to recklessness, gross negligence, or fraud, a director must be shown to have knowingly been a party to the manner of carrying on the business which resulted in the prejudice to the creditor or creditors or of how the affairs of the company are being conducted.

I can only say that knowledge must be subjective as regards such a director.

This aspect of the law has received extensive attention by courts in South Africa. The concept of being a party to the manner in which a company was run, for purposes of liability, in this context, was discussed in Powertech Industries Ltd v Mayberry and Another 1996 (2) SA 742 (W). At 749D-I the following passage appears and is pertinent:

“Those considerations aside, in my view, a more fundamental reason why the plaintiff cannot succeed is that to which I have already adverted. The submissions by the plaintiff's counsel seem to assume that one may be a 'party' to the carrying on of business without in some way participating in it. To be a party to the conduct of business requires an association within a common pursuit. That is the ordinary meaning of the word as it is used in the statute. The meaning given to that sense of the word by the Oxford English Dictionary is one who takes part, participates, or is concerned in some action or affair; a participator; an accessory, conveying the idea of a person who associates with the company, not in pursuit of his own ends, but in pursuit of those of the company.

A party to the carrying on of a company's business is one who has joined with the company in a common purpose. Generally, this would include its directors and managers, all of whom are acting in common pursuit of the company's business. If the business is conducted recklessly, they are liable therefor, and for good reason, as they ought not to be permitted to shield behind the limited liability accorded to the company in these circumstances.”

In order to be held liable under section 424(1), knowledge of the aforesaid facts is not, on its own, sufficient. It is further necessary that the person was “a party to the carrying on of the business in the manner aforesaid.”

In Re Maidstone Buildings Provisions Ltd [1971] 3 All ER 363 (ChD) at 368f-g, PENNYCUICK V-C said of the corresponding provision of the 1948 English Companies Act (s332(1)):

“The expression 'party to the carrying on of a business' is not, I think a very familiar one, but, so far as I can see, the expression 'party to' must on its natural meaning indicate no more than 'participates in' or 'concurs in'. And that, it seems to me, involves some positive steps of some nature. I do not think it can be said that someone is party to carrying on a business if he takes no positive steps at all. So, in order to bring a person within the section, one must show that he is taking some positive steps in the carrying on of the company's business in a fraudulent manner.”

As liability is premised on an intent to defraud creditors, it is necessary, in my view, that the claimant establish a subjective intention to defraud.

In Ex Parte Lebowa Development Corporation Ltd 1989 (3) SA 105 (TPD), the court clarified the elements necessary for proof in establishing personal liability on the part of directors where an intent to defraud creditors is alleged. At pp103G-104E it stated:

“…,. Fraud is not committed without dishonesty. It necessarily involves an element of conscious deceit on the part of the person making the false representation. That element can never be identified without enquiry as to the state of mind of the representor as known to himself. The test is inevitably subjective….,.

That, I think, is the substance of the distinction between gross negligence and fraud that was re-emphasised by Greenberg J in R v Myers 1948 (1) SA 375 (A) at 382-4. If the question to be determined is whether fraud has been proved, the maxim culpa lata dolo aequiparatur does not apply. A subjective intention to deceive must be shown, both in our own law and, apparently, in English law.

Lord Herschell's statement of the law as being that '…, fraud is proved when it is shown that a false representation has been made…, recklessly, careless whether it be true or false' is misunderstood if it is thought to import the objective test of the reasonable man. It uses the term 'recklessly' in a narrow sense in which (in the context of a representation of fact) the elements of recklessness in the state of mind of the representor are not all present unless they include ignorance of the truth of the subject matter of the representation and an absence of honest belief in the truth of the representation itself.

Whether those elements are present is a question that can only be determined 'subjectively' by examining the facts reflecting the state of mind of the representor suspected of fraud.

When those elements are found to be present, they lead, inevitably, to the inference that the representor intended the representee to understand that the representor had an honest belief; and hence to the further inference that, viewed subjectively from the representor's point of view, he intended to deceive the representee about his own state of mind, and that he accordingly intended (assuming the element of prejudice or potential prejudice) to commit fraud.”

A high standard of honesty is required from directors of a company, both as it relates to their relationship with the company or in dealings with other persons concerning the business of the company.

A director may cause loss to the company but is not liable unless it is established that he acted with gross negligence, fraud, or recklessly.

However, the legislature has found it necessary to make provision for the directors in a company that has been managed in a manner that shows reckless, negligent, or fraudulent conduct on the part of the directors, which results in a party associated with the company suffering loss resulting from an inability by the company to pay its debts.

A director cannot contract out of these duties, and, it matters not that he is a non-executive or an executive director. He cannot indemnify himself from liability that would otherwise attach to him for failing to act in the best interest of the company, in breach of good faith or trust concerning his duties as a director. He thus must safeguard the interests of the company.

This was made clear in Fisheries Development Corporation of SA Ltd v Jorgensen and Another; Fisheries Development Corporation of SA Ltd v AWJ Investments (Pty) Ltd and Others 1980 (4) SA 156 (W), where MAGO J said the following:

“Obviously, a director exercising reasonable care would not accept information and advice blindly. He would accept it, and he would be entitled to rely on it, but, he would give it due consideration and exercise his own judgment in the light thereof. Gower (op cit at 602 et seq) refers to the striking contrast between the directors heavy duties of loyalty and good faith and their very light obligations of skill and diligence. Nevertheless, a director may not be indifferent or a mere dummy. Nor may he shelter behind culpable ignorance or failure to understand the company's affairs.”

It seems to me, that, the law does not distinguish between those who are executive directors and ordinary directors. Their role, in so far as the company is concerned, is the same. They all have an affirmative duty to safeguard and protect the interests of the company.

ANALYSIS OF THE FACTS

It seems to me, that, in the arguments presented to the court by counsel, a vital factor required for proof of liability under the section was omitted.

The section refers to the recklessness in the management of a business such that it incurs debts which it cannot pay, with an intent to defraud creditors.

I heard both counsel speak mainly on the issue of knowledge of the manner of conducting business. In my view, before the court can decide on the knowledge or lack thereof by a director, a plaintiff seeking judgment against a director, based on the provisions of section 318 of the Companies Act [Chapter 24:03] must establish that the company was being run recklessly.

Where it is claimed, in any proceedings, that, any business of a company was being carried on recklessly, or with gross negligence or with intent to defraud any person or for any fraudulent purpose, so as to establish that any director, past or present, was knowingly a party to the carrying on of the business in the manner or circumstances to find the director personally liable, it was necessary that the party so claiming to adduce evidence to that effect.

The nature of the business, how the business was being managed, and, whether recklessness or gross negligence was a feature in the business, the knowledge of the director in the conduct of the business, were all issues of a factual nature to be established by evidence.

It is a trite principle of our law that he who alleges must prove: see Nyahondo v Hokonya 1997 (2) ZLR 457 (S)…,.

In casu, the appellant was found liable based on a Bankers Acceptance (BA) that was not met. The circumstances under which the BA was issued were not set out. The level of indebtedness of Rodstreet Trading (Private) Limited was not established.

I do not believe that merely alleging that a company issued a Bankers Acceptance (BA) which was not met upon presentment, on its own, can be sufficient proof under section 318 of the Companies Act [Chapter 24:03] that the business of a company was being run recklessly with the intention to defraud creditors or any other person.

In this case, the respondent bore the onus to show reckless conduct on the part of the appellant, and his co-directors, in the running of the affairs of Rodstreet Trading (Private) Limited. The respondent chose to rely on the Bankers Acceptance (BA).

It failed to discharge the onus that it bore.

Besides, the respondent needed to establish knowledge of the running of the business in the manner aforesaid by the appellant.

The appellant resigned after the Bankers Acceptance (BA) was issued. However, his stance was to the effect that he had no knowledge of its issuance.

This raised a dispute of fact which the respondent had to establish. The respondent did not.

The appellant further stated, that, although he was aware of an underlying facility, that did not necessarily mean that he had knowledge of the Bankers Acceptance (BA). He was not aware that the BA had been issued as security for the Bankers Acceptance (BA).

The dispute of fact raised by his disavowal required facts to be placed before the court to counter this.

Given the absence of evidence, as to the state of mind of the appellant herein, it stands to reason that a critical element in the inquiry that must be conducted in order to find liability on the part of the appellant is missing.

A state of mind is subjective, and, in this instance, it is not clear how the finding as to his intent to defraud creditors could have been arrived at.

SC62-23 : GOLDLOCK INDUSTRIES 2003 (PVT) LTD vs SHERIFF OF ZIMBABWE and INTERFIN BANKING CORPORATION and AL SHAMS GLOBAL BVI LTD and JAYESH SHAH and OTHERS
Ruled By: MAVANGIRA JA, CHITAKUNYE JA and MUSAKWA JA

This is an appeal against the whole judgment of the High Court (the court a quo) in which it dismissed the appellant's application for a declarator.FACTUAL BACKGROUNDThe appellant is a company under liquidation. The first respondent (Sheriff of Zimbabwe) is cited in his official capacity. The second respondent (Interfin Banking ...

This is an appeal against the whole judgment of the High Court (the court a quo) in which it dismissed the appellant's application for a declarator.

FACTUAL BACKGROUND

The appellant is a company under liquidation. The first respondent (Sheriff of Zimbabwe) is cited in his official capacity. The second respondent (Interfin Banking Corporation) is a banking institution incorporated in terms of the laws of Zimbabwe. The third respondent (Al Shams Global BVI Limited) is a company incorporated in terms of the laws of the British Virgin Islands. The fourth respondent (Jayesh Shah) is a male adult who is also the director of the third respondent. The fifth and sixth respondents (Registrar of Deeds and Master of the High Court) have been cited in their official capacities.

On 12 December 2019, the appellant filed an application for a declarator through its liquidator, who was acting in terms of a certificate of appointment issued by the sixth respondent. In that application, the appellant sought a declaration to the effect, that, it is the owner of a certain piece of land known as Stand 666 Marlborough Township Extension 5 of Subdivision A of Strathmore held under Deed of Transfer No. 8810/2003 (hereinafter called the property).

The appellant also wanted delivery of the original copy of the Deed of Transfer No. 8810/2003, under which the property was held, from the first and third respondents.

The events that led to the application are as follows:

On a date that was not specifically stated, the appellant obtained a loan from the second respondent (Interfin Banking Corporation) which was secured under Mortgage No.2069/2010. The second respondent subsequently went under liquidation, but, before that, it ceded the debts and rights in the mortgage bond registered in its favour, to the third respondent (Al Shams Global BVI Limited). The third respondent later obtained a judgment against the appellant and issued a writ against the property which was sold in execution.

During the sale of the property, which had been declared specially executable by the court on 4 May 2016, the appellant instituted voluntary liquidation proceedings. The first respondent (Sheriff of Zimbabwe) placed the property under a caveat on 24 August 2016. The appellant was placed under provisional liquidation on 9 August 2017 and the order was confirmed on 11 October 2017.

The first respondent conducted a sale in execution on 6 February 2017.

Initially, the fourth respondent (Jayesh Shah) was confirmed as the highest bidder but failed to pay the purchase price. The second highest bidder, who happened to be the third respondent (Al Shams Global BVI Limited), was offered the property and was subsequently confirmed as the winning bidder.

The appellant claimed, that, the sale had been confirmed without it being given the required fifteen (15) days notice to object to the sale in terms of the repealed High Court Rules 1971. In addition, the appellant claimed, that, there had been a sham scheme by the third and fourth respondents, with the fourth respondent being a major shareholder of the third respondent. The appellant claimed, that, the fourth respondent was competing with himself by offering the highest bid which he failed to pay so that the third respondent would be declared the second highest bidder.

When the order for the final liquidation of the appellant was granted by the court, on 11 October 2017, the property had not been transferred to the third respondent.

The appellant's liquidator requested the first respondent to give him the title deeds of the property. However, the first and third respondents are said to have refused to hand over the original copy of the Deed of Transfer.

This prompted the appellant to file an application for a declaratur in the court a quo.

It is in that application that the liquidator of the appellant disclosed that he had already sold the property to one Mr Manyika, on 24 July 2017, for the amount of US$190,000 and that the purchaser had paid the full purchase price and was awaiting transfer of the property.

The liquidator submitted, that, he was allowed, at law, to sell the mortgaged property in order to pay off creditors.

The application was opposed by the second respondent who contended, that, it had been unnecessarily joined to the proceedings as it would not be affected by the relief sought by the appellant.

The third respondent also opposed the application and raised four points in limine:

(i) Firstly, the third respondent argued, that, there was an existing matter pending before the court a quo, under HC11203/17, which was premised on the same cause of action as the court application that was before the court.

(ii) The second issue raised was that the non-joinder of Mr Manyika as a party to the proceedings was fatal to the application.

(iii) The third respondent also argued, that, the appellant ought to have sought leave to institute proceedings against the second respondent which was under liquidation.

(iv) In addition, the third respondent contended, that, the application was fatally defective due to the appellant's failure to obtain leave to institute proceedings against it as it is a peregrinus.

In relation to the merits of the case, the third respondent opposed the application on the basis, that, the appellant had no real right of dominium over the property which had been declared specially executable by the court. The third respondent asserted, that, the property had been sold in execution before the appellant was placed in liquidation. It also argued, that, as the property had been bonded owing to the debt due to the third respondent, as ceded by the second respondent, the appellant ought to have sought the consent of the second and third respondents before selling the property.

Moreover, the third respondent prayed for the application to be dismissed, with costs borne by the liquidator of the appellant in his personal capacity.

The fourth respondent also opposed the application. As the fourth respondent had deposed to the third respondent's opposing affidavit, in his capacity as its director, he associated himself with the averments made in that affidavit.

Nonetheless, the fourth respondent added that the application was unwarranted and motivated by a desire to assist the appellant's shareholders. He argued, that, there was no basis, at law, in terms of which the appellant's liquidator could set aside an entire sale in execution and sell the property to a third party.

He stressed, that, liquidation does not automatically set aside a sale in execution and permit the appellant to resell the property.

Additionally, the fourth respondent submitted, that, the order confirming the liquidation of the appellant only set out parts of section 221(2)(a)–(h) of the repealed Companies Act [Chapter 24:03] (hereinafter referred to as the Act) as the powers which the liquidator could exercise in terms of the Act. As the liquidator of the appellant relied upon other provisions of the Companies Act, the fourth respondent was of the view, that, he was acting in breach of the terms of his appointment.

Lastly, the fourth respondent alleged collusion between the appellant's legal practitioners and its liquidator and prayed for costs de bonis propriis to be granted against the legal practitioners.

Regarding the merits of the case, the appellant submitted, that, the liquidator had acted in terms of section 276 of the Companies Act which empowered him to recover and take the assets of the appellant under liquidation.

The appellant submitted, that, as the transfer of the property to the third respondent had not taken place, the property was still owned by the appellant.

In addition, the appellant argued that the first respondent had not notified its directors, at the material time, of the sale of the property before confirming it, and this nullified the whole procedure as it was done contrary to the rules of the court. The appellant also argued, that, the sale was invalid because it was not given fifteen (15) days notice within which to object to the confirmation of the sale in terms of the rules.

Lastly, the appellant asserted that in terms of section 213 of the Companies Act, transfer of the property could not proceed without the leave of the court.

Per contra, the third and fourth respondents argued that the judicial attachment of an immovable property creates a judicial mortgage, and, because of this, the appellant was deprived of any rights over the property.

The respondents also submitted, that, when the property was attached, it became vested in the first respondent and nothing could be done without the first respondent's consent or authority.

Furthermore, the respondents were of the view that, as the second respondent had ceded the debt to the third respondent, the third respondent assumed the position of caveator whose interests in the property were protected by the caveat. The appellant therefore should have sought the consent of the third respondent before selling the property.

Moreover, the respondents submitted that the Deposit Protection Corporation had the right to restrain dealings with the mortgaged property until payment of the debt and interest in full. As such, the disputed property could not be sold without the consent of the Deposit Protection Corporation.

The court a quo dismissed the points in limine raised by the third respondent.

It found, that, the preliminary point of lis pendens was devoid of merit as the litigation in HC11023/17 did not involve the same parties as those in the application before it.

The court also dismissed the point, that, the appellant should have sought leave to institute proceedings against the third respondent which is a peregrinus. The court a quo held, that, the conduct of the third respondent showed that it had submitted to the jurisdiction of the court.

Furthermore, the point in limine to the effect that there was a material non-joinder of Mr Manyika was also dismissed as the court found that such non-joinder was not fatal to the application.

On the merits, the court a quo found that the application by the appellant sought the setting aside of the sale of the property to the third respondent - which property had already been declared specially executable by the High Court.

It was the court's observation, that, such an order could not be sought without first seeking the setting aside of the order which declared the property specially executable.

In reference to the appellant's claim, that, the sale of the property to the third respondent was not perfecta, the court a quo held that the judicial sale had been completed by the time the appellant was declared to be under provisional liquidation on 9 August 2017.

The court further noted, that, the appellant purported to sell a property that the first respondent had already sold to the third respondent in the execution of a judgment debt. Likewise, the court a quo held that there was a judicial caveat on the property which the appellant ought to have respected.

In addition, the court a quo was of the view that the appellant's conduct frustrated the transfer of the property to the third respondent when the sale was perfecta. The court held, that, the attachment of the property by the Sheriff vests a real right in the judgment creditor which means the property cannot be disposed of without the judgment creditor's consent. As such, the appellant could not deal with the property as it pleased.

It was the court's finding, that, in light of the appellant's failure to set aside the order that declared the property specially executable, or nullifying the writ which attached the property, the disputed property did not form part of the appellant's assets. The application was subsequently dismissed for lack of merit.

It is against this decision that the appellant has noted an appeal on the following grounds:

GROUNDS OF APPEAL

The grounds of appeal are as follows:

1. The court a quo erred in holding, that, the contention of the appellant was that the sale was not perfecta and should be set aside because transfer had not been effected and proceeded to accept that the first respondent had followed and fulfilled the correct procedure.

2. The court a quo erred and grossly misdirected itself in not finding that the first respondent failed to follow due process when conducting and confirming the sale thereby rendering the sale not perfecta.

3. The court a quo erred in holding, that, the third respondent had become the owner of Stand 666 Marlborough Township despite the fact that no transfer had been effected by way of registration of title at the Deeds Registry.

The relief sought by the appellant is as follows:

“RELIEF SOUGHT

WHEREFORE, the appellant prays for the following relief:

1. That, the instant appeal succeeds.

2. That, the order of the High Court be and is hereby set aside and substituted with the following:

“(a) That, the immovable property, namely, a certain piece of land situated in the District of Salisbury called Stand 666 Marlborough Township Extension 5 of Subdivision A of Strathmore held under Deed of Transfer No. 8810/2003 forms part of the assets of the applicant company in liquidation.

(b) That, the first and third respondents deliver the original copy of the Deed of Transfer No. 8810/2003 in terms of which applicant holds a certain piece of land situated in the District of Salisbury called Stand 666 Marlborough Township Extension 5 of Subdivision A of Strathmore to the applicant within ten (10) days from date of service of this order.”

Before this Court, the following submissions were made:

APPELLANT'S SUBMISSIONS

Counsel for the appellant submitted, that, the effect of the order placing the appellant under liquidation was the creation of a common law principle known as concursus creditorum which is codified in terms of section 212 of the repealed Companies Act. He submitted, that, section 213 of the repealed Companies Act provided for the stay of any proceedings against the property of a company under liquidation. As such, the property in question became part of the company's estate upon the granting of the order of liquidation.

Furthermore, counsel submitted that ownership of the property remained vested in the appellant in whose name the title deed was registered.

Counsel for the appellant also submitted, that, the judicial sale of the property was not perfecta as a sale only becomes perfecta upon registration with the Deeds Registry.

Moreover, counsel argued that the judicial attachment of the property created a judicial mortgage (pignus judiciale) which did not have greater powers than an ordinary mortgage and had no effect on the liquidation proceedings.

SECOND RESPONDENT'S SUBMISSIONS

In response, counsel for the second respondent submitted that it would abide by the decision of the court as it had no direct and substantial interest in the matter and the relief sought did not affect it.

THIRD RESPONDENT'S SUBMISSIONS

Counsel for the third respondent submitted, that, by the time the appellant was placed under liquidation, the judicial sale of the property was perfecta. Due to this, section 213 of the repealed Companies Act was inapplicable as the property did not form part of the assets of the appellant which the liquidator had the power to recover.

Counsel further submitted, that, registration of a title deed in one's name was not the sole proof of ownership of immovable property. He stated that there are special circumstances where the court goes beyond the title deed to ascertain the true owner of the property.

He averred, that, in casu, the judicial sale of the property and payment of the purchase price, were special circumstances that warranted a finding by the court a quo that ownership of the property had passed to the third respondent.

FOURTH RESPONDENT'S SUBMISSIONS

The fourth respondent submitted, that, section 213(b) of the repealed Companies Act makes an exception to the provision that anything done after liquidation proceedings have commenced is void.

He further submitted, that, the court a quo had resolved the matter on the basis of equity as the sale had been confirmed and the third respondent had paid the purchase price and all that was outstanding was the transfer of the property and registration of the title deed in its name at the Deeds Registry.

ISSUES FOR DETERMINATION

The issues for the determination of this appeal are as follows:

1. Whether or not the court a quo erred by finding that the third respondent is the owner of Stand 666 Marlborough Township.

2. Whether or not the court a quo erred in finding that the judicial sale was perfecta.

APPLICATION OF THE LAW TO THE FACTS

WHETHER OR NOT THE COURT A QUO ERRED BY FINDING THAT THE THIRD RESPONDENT IS THE OWNER OF STAND 666 MARLBOROUGH TOWNSHIP

The issue of whether or not the court a quo erred in finding, that, the third respondent is the owner of Stand 666 Marlborough Township is central to the determination of what prevails over the other between a liquidation and a judicial attachment.

Counsel for the appellant argued, that, in terms of section 213 of the repealed Companies Act, all actions and proceedings against a company in liquidation cannot to be proceeded with without the leave of the court. As the transfer of the property had not been done when the appellant was placed under final liquidation, he submitted that the third respondent had to seek leave from the court for the transfer to be effected.

In addition, counsel for the appellant maintained that the appellant holds a real right over the property whereas the third respondent only has a personal right.

The thrust of these submissions is that since the appellant had been placed under liquidation, the liquidator had the authority to dispose of the appellant's assets despite the fact that there was a judicial attachment or caveat operating against the property in question.

The term 'real right' is defined in section 2 of the Deeds Registry Act [Chapter 20:05] as “any right which becomes a real right upon registration.”

In the case of Mavhundise v UDC Ltd & Ors 2001 (2) ZLR 337 (H)…, the court held that:

“Ownership of land can only be acquired by transfer of the ownership from the previous owner, and such transfer must be registered in the Deeds Registry.”

In light of the above, it is clear that a real right in an immovable property is established by the registration of that right in the Deeds Registry.

Nonetheless, this Court, in the case of CBZ Bank Limited v (1) David Moyo (2) Deputy Sheriff, Harare SC170-18, stated the following:

“In any event, the registration of transfer in the Deeds Registry or registration of cession at the offices of a local authority or Deeds Registry does not always reflect the true state of affairs. A title deed or registered cession is therefore prima facie proof of ownership or cessionary rights which can be successfully challenged. When the validity of title or registered cession is challenged, it is the duty of the court to determine its validity in order to make a ruling which is just and equitable.”

From the above, it is pertinent to note that there are instances where the registration of a real right to an immovable property at the Deeds Registry can only be prima facie proof of ownership. This prima facie right is subject to challenge by any other person who may claim to have a real right over the same property.

These special circumstances were explained by this Court in CBZ Bank Limited v (1) David Moyo (2) Deputy Sheriff Harare SC170-18 in the following manner:

“Special circumstances exist where a purchaser has failed to have the property registered in his name, when he and the seller have demonstrated a clear intention to effect transfer, and when there was no legal impediment to such transfer or the impediment does not justify the refusal to grant protection to the purchaser.”

In the case of Van Niekerk v Fortuin 1913 CPD 457, the Court highlighted that:

“It seems to me that the plaintiff, being a judgment creditor, and the property being still registered in the name of the defendant, prima facie the plaintiff has the right to ask that the property shall be seized in execution, unless the party interested can show that there are special circumstances why such an order should not be granted.”

Based on the above, the court a quo found that the sale of the property to the third respondent had been completed before the appellant was placed under liquidation, hence, there was no legal impediment affecting the sale.

This finding cannot be faulted.

In addition, the first respondent had attached the property in question and issued a writ of execution against it. The appellant did not challenge the attachment and the writ of execution was not set aside.

The writ is still extant and valid.

The effect of a judicial attachment of immovable property was dealt with by the court in the case of Cold Chain Zambia Limited v Kingsley (nee Nehonde) & Ors HH370-20 as follows:

“The attachment in execution of property, at the instance of the judgment creditor, creates a real right in favour of the judgment creditor in the property in question.”

The above puts to rest the contention by the appellant, that, the court a quo erred by declaring that the third respondent had become the owner of the property in the absence of transfer from the appellant and registration of ownership at the Deeds Registry.

Moreover, in the case of The Sheriff for Zimbabwe & Anor v Willdale Limited t/a Willdale Bricks HH387-17, MAKONI J…, cited with approval the case of Liquidators Union and Rhodesia Wholesale Limited v Brown & Company 1922 AD 549…, as follows:

“…,. While an ordinary arrest of the 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 judgement 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.”…,.

In light of the above authority, I am of the view that the appellant cannot claim to have a right over the disputed property as it is no longer part of its assets.

The appellant tried everything so that the property could not be attached.

The property is vested in the first respondent and awaiting transfer, whilst the third respondent has a real right of ownership over it. It is on this basis, that, I am inclined to remark that since judicial attachment took place first, it prevails over liquidation.

Therefore, the appellant is not the owner of the property.

WHETHER OR NOT THE COURT A QUO ERRED BY FINDING THAT THE JUDICIAL SALE WAS PERFECTA

The appellant contends, that, the court a quo erred by failing to find that the first respondent did not follow due process in conducting the sale in execution. The appellant argues, that, the court a quo did not make a determination on the issue of whether or not the first respondent confirmed the sale without giving the appellant the requisite notice.

It is on this basis, that, the appellant submits that the appeal ought to succeed as the court a quo misdirected itself in a way that vitiates the proceedings a quo.

The issue of whether or not the appellant was duly notified of the sale of the property before it was confirmed by the first respondent is fundamental to the determination of whether or not the sale in execution was perfecta at the time the appellant was declared to be under liquidation.

This issue can be resolved by determining whether or not sufficient evidence was placed before the court a quo to support its finding.

The relevant provision in terms of which notification of a judicial sale is given to interested parties before confirmation is Rule 352 of the repealed High Court Rules 1971 which states the following:

“The sheriff shall appoint a day and place for the sale of property, such day being, except by special leave of the court, not less than one month after service of the notice of attachment upon the execution debtor; and he shall cause the sale to be advertised at least once in the Gazette and in a newspaper circulating in the district in which the property is situated and in such other manner as he may deem to be necessary. The sheriff shall also send to each holder of a mortgage over the property, by registered letter addressed to his last known address, or to his attorney, notice of the date and venue of the sale.”

From the above, it is evident that the appellant ought to have been notified of the sale of the property by the first respondent.

As the first respondent was not active in the proceedings a quo, no such evidence was produced to counter the appellant's claim that it was not notified of the sale.

Instead, the evidence that was before the court a quo was in the form of a notice which showed that the third respondent had been notified of the sale before it was confirmed. The appellant was also copied this notice advising the parties of the sale of the property.

The third respondent made reference to a letter dated 24 July 2017 written by the appellant's legal practitioners to the first respondent in which the appellant proposed to settle in full, the debt due to the third respondent, against the release of the property from attachment. The third respondent argued, that, this letter was proof that the appellant had been notified that the property would be sold in execution.

The court a quo held that there was nothing amiss in the manner in which the first respondent conducted the sale in execution.

I am inclined to agree with the finding of the court a quo.

This is because the evidence adduced by the third respondent before the court a quo demonstrated, that, the appellant was notified and was aware that the property was being sold in execution. The fact that the appellant wrote a letter to the first respondent, proposing to settle the debt in full so that the property would not be disposed of, buttresses the fact, that, it was aware that the property was up for sale. It is probable that the appellant was served with the notice of the sale of the property before the sale was confirmed.

It is trite law, that, an Appellate Court is slow to interfere with the exercise of discretion by a lower court. In the case of Barros & Anor v Chimphonda 1999 (1) ZLR 58 (S), GUBBAY CJ…, said:

“These grounds are firmly entrenched. It is not enough that the Appellate Court considers that if it had been in the position of the primary court it would have taken a different course. It must appear that some error has been made in exercising the discretion. If the primary court acts upon a wrong principle, if it allows extraneous or irrelevant matters to guide or affect it, if it mistakes the facts, if it does not take into account some relevant consideration, then, its determination should be reviewed and the Appellate Court may exercise its own discretion in substitution provided always it has the materials for so doing.”

It is my considered view that the decision of the court a quo, that the sale of the property was perfecta, cannot be faulted. The property was sold in accordance with the provisions of the law and the purchase price was duly paid by the third respondent.

In light of this, the appellant's grounds of appeal lack merit. There is no need to depart from the practice that costs follow the cause.

DISPOSITION

Accordingly, it is ordered that the appeal be and is hereby dismissed with costs.

SSC65-23 : KASSAM SHIRAAJ vs THE STATE
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

This is an appeal against the judgment of the High Court (the court a quo) granting the respondent leave to appeal to the High Court against the appellant's discharge at the close of the State case at the Magistrate's Court.At the conclusion of the hearing, we dismissed the appeal and ...

This is an appeal against the judgment of the High Court (the court a quo) granting the respondent leave to appeal to the High Court against the appellant's discharge at the close of the State case at the Magistrate's Court.

At the conclusion of the hearing, we dismissed the appeal and indicated that our reasons will follow. These are the reasons.

FACTS

The appellant was arraigned before the Magistrate Court charged with:

1. Contravening section 3(1)(a) of the Precious Stones Trade Act [Chapter 21:06] and;

2. Contravening section 3(1)(a) of the Gold Trade Act [Chapter 21:03].

In the first count, it was alleged that the appellant was found in possession of 3,309.37 carats of diamonds and 1,506.41 grams of emeralds without being a holder of a permit or licence in respect of the said stones.

In the second count, it was alleged that the appellant was found in possession of 1,345.99 grams of gold granules, five (5) smelted gold bars weighing 3,990.45 grams, two (2) smelted gold rods weighing 29.78 grams, and two (2) smelted gold buttons weighing 10.31 grams all with a combined weight of 5,453.43 grams without being a holder of a permit or licence in respect of the gold.

At his trial in the Magistrate's Court, it was common cause that the pieces of minerals, as described above, were all recovered from the appellant at Exquisite Jewellers, Shop Number P14, Westgate Shopping Complex, Bluff Hill, Harare. The appellant is the Director of Exquisite Jewellers.

The appellant admitted to possession of the aforesaid minerals.

His defence was that his possession of the said minerals was lawful by virtue of the fact, that, he was an employee of a holder of a mining location, Carmel Mining, in Bindura, and those minerals had come from that mine.

As regards the gold, he contended that these pieces of gold were handed to him by his employer for him to ascertain what type of minerals they were, after they had been discovered by the employer at the mining location.

His defence was thus, that, his possession was permitted under section 3(1)(d) of the Precious Stones Trade Act and section 3(1)(d) of the Gold Trade Act.

The respondent called four witnesses and tendered numerous exhibits, as evidence, after which it closed its case.

The appellant applied for discharge at the close of the State's case, which application was granted.

Dissatisfied by the magistrate's decision, the respondent applied to the High Court for leave to appeal, in terms of section 198(3) of the Criminal Procedure and Evidence Act [Chapter 9:07].

The application was opposed.

FINDINGS IN THE COURT A QUO

The court a quo, after hearing submissions and a consideration of the proceedings from the Magistrate's Court, granted leave to appeal as sought by the respondent.

In granting the application, the court a quo accepted the explanation for the delay in filing the application as reasonable given the circumstances of the case.

On the merits of the application, the court a quo held, that, the respondent had established an arguable case and the issues to be raised were not frivolous. The judge also found that there were prospects of success on appeal.

The effect of the granting of leave was to pave the way for the appeal to be placed before the High Court for consideration.

BEFORE THIS COURT

The appellant was aggrieved by the decision of the court a quo hence this appeal. The grounds of appeal were couched as follows:

“1. The honourable court a quo grossly misdirected itself in finding, that, the respondent had proved a prima facie case when the evidence on record corroborated the appellant's version that he was duly authorised to possess the minerals in question.

2. The honourable court a quo grossly misdirected itself on a point of law in interfering with the discretion of the trial court on its findings on the credibility of the appellant's version in dismissing the circumstantial evidence adduced by the State. Issues of assessment of credibility of evidence are a preserve of the trial court.

3. The honourable court a quo further grossly misdirected itself in finding, that, the explanation given by the respondent for the 9-month long delay prior to seeking leave to appeal was reasonable in the absence of any evidence to that effect having been placed before it.”

The application before the court a quo was for leave to appeal. It was not the appeal itself.

At that stage, the judge is required to ascertain whether the applicant deserved to be heard on appeal or not. He acts as a gate keeper to ensure, that, only deserving cases are allowed to pass through.

In that regard, the court a quo condoned the delay in filing the application, after considering the circumstances of the case, and proceeded to consider whether there were prospects of success on appeal.

In as far as the judge was acting as a gate-keeper, his decision to grant the application simply allowed the appeal to be filed and be placed before an Appeal Court for determination on the merits. It was not a determination on the merits of the appeal itself.

The judge was imbued with judicial discretion to grant or not to grant leave to appeal.

In the exercise of such discretion, the judge considers, inter alia, the prospects of success on appeal: see Attorney-General v Steyl & Others 2005 (1) ZLR 269 (S).

In casu, the exercise of the discretion was not challenged as being grossly unreasonable, capricious, or mala fide....,.

The exercise of judicial discretion can only be overturned on limited grounds such as, inter alia, the decision is grossly unreasonable, or the judicial officer acted on wrong principles, allowed irrelevant or extraneous considerations to affect its decision: see Barros & Anor v Chimphonda 1999 (1) ZLR 58 (S).

In casu, there were no such allegations.

SC66-23 : NATIONAL PHARMACEUTICAL COMPANY vs DRAX CONSULT SAGL
Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

This is an appeal against the whole judgment of the High Court (the court a quo) sitting at Harare, dated 30 November 2021, setting aside paragraph 84A of the arbitral award given under the hands of arbitrators retired Justice A.M. Ibrahim, retired Justice M.H. Chinhengo, and Advocate F. Girach on 1 March 2021.

Under paragraph 84A of the award, the arbitrators declared that the agreement of procurement entered into between the parties did not have the prior approval of the Procurement Regulation Authority of Zimbabwe (PRAZ) as required by section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act [Chapter 22:23] (the Act).

It is that declaration that was reviewed and set aside by the court a quo.

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

THE PARTIES

The appellant is a company incorporated in terms of the laws of Zimbabwe. The Government of Zimbabwe is its major shareholder. Its objects and functions are defined in section 4 of the Government Medical Store (Commercialisation) Act No.13/2000 and they include the purchase and sale, dealing in and storing medicines, medical equipment and other goods and articles for use in hospitals, clinics, pharmacies and other medical establishments.

The respondent is a foreign company established in terms of the laws of Switzerland.

FACTUAL BACKGROUND

On 11 December 2019, the parties entered into an agreement in terms of which the respondent was to supply to the appellant certain medicines and medical sundries under Tender number NAT DP 19/2019.

The respondent delivered medical supplies worth US$2,733,480 to the appellant.

Of the above figure, the appellant refused to take delivery of some medicines to the value of US$210,000 arguing that the contract was concluded in contravention of section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act which provision reads as follows:

“15(1) A procurement entity shall not initiate or conduct any procurement requirement proceedings in which the value of the procurement requirement is at, or above, the prescribed threshold, unless such procurement entity has been generally authorized by the Authority to conduct such proceedings.

(2) Authorization in terms of subsection (1) shall be given in writing.”

It was for that reason, that, the appellant refused to pay for the medicines and medical sundries supplied to it by the respondent - even though it had taken delivery of the bulk of the medicines and proceeded to consume same.

The appellant formally cancelled the above quoted tender for the supply of medicines and sundries. It did so on 9 June 2020.

The respondent's view was that the cancellation was unlawful.

The arbitrators found, that, the contract was illegal on the grounds that it was concluded without the authority required in terms of the Public Procurement and Disposal of Public Assets Act.

Displeased with that finding, the respondent approached the court a quo with an application for the setting aside of that arbitral award. It did so under Article 34 of the first schedule to the Arbitration Act.

The court a quo granted the application and proceeded to set aside the arbitral award for being in conflict with the public policy of Zimbabwe.

It is that decision that is the subject of this appeal.

GROUNDS OF APPEAL

The appellant relies on four grounds of appeal as follows:

“1. The High Court grossly erred in finding that paragraph 84A of the award issued by Justice A.M. Ebrahim (Rtd), Justice M.H. Chinhengo (Rtd), and Advocate Firoz Girach, dated 1 March 2021, was contrary to the public policy of Zimbabwe and proceeding to set it aside when no authority to enter into the contracts in issue had been given by the Procurement Regulatory Authority of Zimbabwe in accordance with section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act [Chapter 22:23].

2. The High Court further erred in considering the approval of the contract by the Special Procurement Oversight Committee, in terms of section 54 of the Act, to have been sufficient for purposes of section 15 of the Act when it was clear that the two legal provisions served different purposes.

3. The High Court further grossly misdirected itself in taking into account irrelevant factors in interpreting the letter of 6 November 2019 and concluding, that, the said letter had been issued by the Procurement Regulatory Authority of Zimbabwe in accordance with section 15 of the Act.

4. The High Court further erred in relating to an interpretation of the letter of 6th November 2019, taking into account factors which had neither been pleaded nor argued by the parties, and proceeding to make a finding against the appellant on the basis of such factors.”

RELIEF SOUGHT

The appellant seeks the following relief:

“The present appeal be allowed with costs and the judgment of the High Court be set aside and substituted with the following:

(1) The application in case number HC2713/21 be and is hereby dismissed.

(2) The applicant shall pay the costs of suit.”

ISSUES

The grounds of appeal only raise one issue, namely, whether or not the contract of procurement was approved by the Procurement Regulation Authority of Zimbabwe (PRAZ) in terms of section 15(1) of the Public Procurement and Disposal of Public Assets Act.

Surprisingly, the grounds of appeal do not challenge the substantive finding of the court a quo, namely, that the arbitral award was contrary to the public policy of Zimbabwe.

ANALYSIS

After considering case law as to how the High Court should exercise its powers under Article 34 or 36 of the Arbitration Act, the court a quo correctly came to the following conclusion:

“From the above decision, the settled position of the law is that an arbitral award ought to be set aside if its enforcement would offend the public policy of Zimbabwe.”

See Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S).

The court a quo also correctly stated the law in so far as the converse position is acceptable, that is, an arbitral award should not be set aside unless the arbitrator's reasoning or conclusion is so flawed as to violate some fundamental principle of law or morality or justice.

See Delta Corporation (Pvt) Ltd v Origen Corporation (Pvt) Ltd 2007 (2) ZLR 81 (S).

The court a quo further observed, that, an award may be set aside as being contrary to the public policy of Zimbabwe if it is so outrageous in its defiance of logic or recognized moral standards that a sensible and fair-minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award: see Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S).

It is also trite, that, the mere faultiness or incorrectness of an arbitral award cannot, on its own, be the basis upon which an award may be set aside. The award must, in addition, offend the public policy of Zimbabwe.

PUBLIC POLICY

It is necessary to define public policy in the context of the present case.

The public policy of Zimbabwe, in cases of this nature, is defined by section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act, namely, that, a State procurement authority shall not entertain the procurement of goods or services whose value is equal to, or exceeds, the prescribed threshold without the prior approval of the regulatory authority, the Procurement Regulation Authority of Zimbabwe (PRAZ).

Thus, section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act constitute both the law and the public policy of Zimbabwe in cases of this nature.

If, for example, procurement is made without the requisite authority, such procurement would be deemed contrary to the law and the public policy of Zimbabwe. Conversely, if the procurement entity obtains the Procurement Regulation Authority of Zimbabwe (PRAZ) approval and enters into a legally binding contract, it would be contrary to the law and the public policy of Zimbabwe to declare such contract illegal and proceed to set it aside.

DECISION OF THE COURT A QUO

The court a quo found in favour of the respondent on the basis of a letter dated 6 November 2019 written by the Chief Executive Officer of the Procurement Regulation Authority of Zimbabwe (PRAZ) addressed to the Managing Director of the appellant.

The appellant argued, that, the letter does not constitute authority given in terms of section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act.

It argued, that, the letter was written on behalf of the Special Procurement Oversight Committee (SPOC), a subcommittee of the Procurement Regulation Authority of Zimbabwe (PRAZ), which cannot exercise the powers of PRAZ.

The respondent argued to the contrary, insisting that the letter originates from the Procurement Regulation Authority of Zimbabwe (PRAZ) itself.

The relevant part of the letter reads as follows:

“Your minute dated 29 October 2019 refers.

At the Special Procurement Oversight Committee (SPOC) round robin meeting held on 6 November 2019:

Members observed the following:

(i) The direct procurement method has been done to address the urgent need of the requirements in view of the current crisis at medical institutions countrywide.

(ii) The current requirements are a stop gap measure to address the current crisis.

(iii) On the medicines, the accounting officer is proposing to award all 85 costs except for 32 imipramine 25mg tablets that has been recommended for cancellation since the drug is no longer being used in public health institutions.

(iv) On medical sundries, the accounting officer proposed to award 15 items out of the 18 items as follows:

…,.

…,.

Therefore, the accounting officer's recommendations are consistent with the provisions of the PPDPA Act.

Accordingly, SPOC resolution 0519 of the same date, having reviewed the Accounting Officer's submission, in terms of section 54(10) of the Public Procurement and Disposal of Public Assets (PPDPA) Act, resolved on the founder as follows:

To award Tender NAT DP 19/20 for the supply and delivery of registered medicines and surgical sundries to Natpharm regional stores to Drax Consult SAGL.

…,.

…,.

You are therefore advised to proceed as follows:

1. Take all necessary steps as directed by the resolution.

2. In all communication, please quote the above SPOC resolution number and the date.

N. Chizu
Chief Executive Officer
PROCUREMENT REGULATORY AUTHORITY OF ZIMBABWE”

This letter was the subject of intense scrutiny by the court a quo. It noted, in particular, what it referred to as “four crucial points” in need of attention:

(i) Firstly, it was observed that the letter was written on the Procurement Regulation Authority of Zimbabwe (PRAZ) letter head. Effectively, reasoned the court a quo, that meant that PRAZ “had unequivocally assumed ownership of the letter.”

(ii) Secondly, the court a quo observed that the letter had been written and signed by the Chief Executive Officer of the Procurement Regulation Authority of Zimbabwe (PRAZ), which makes it clear that the letter had been written on behalf of PRAZ itself and the Special Procurement Oversight Committee (SPOC), its sub-committee.

(iii) Thirdly, it was noted that the letter gave Natpharm (the appellant) authority to procure medicines and surgical sundries from Drax Consult Sagl (the respondent).

(iv) Fourthly, in the letter, the Chief Executive Officer advised the respondent to “take all necessary steps as directed by the resolution” and to quote the above SPOC resolution number and the date.”

Based on these observations, the court a quo came to one conclusion – that, the letter emanated from the Procurement Regulation Authority of Zimbabwe (PRAZ) not the Special Procurement Oversight Committee (SPOC), and that the letter, whose wording is clear and un-ambiguous, constitutes the PRAZ authority required under section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act.

That finding of fact, on the part of the court a quo, cannot be faulted. It is based on the evidence placed before it.

This court will not interfere with the finding of fact made by the court a quo save under the parameters described in Reserve Bank of Zimbabwe v Granger and Anor SC34-01 where this Court held:

“An appeal to this Court is based on the record. If it is to be related to the facts, there must be an allegation that there has been a misdirection on the facts which is so unreasonable that no sensible person who applied his mind to the facts would have arrived at such a decision. And misdirection of facts is either a failure to appreciate a fact at all, or a finding of fact that is contrary to the evidence actually presented. See Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S) at p670 and S v Pillay 1977 (4) SA 531 (AD) at p353C-E.”

In casu, the appellant argues that the letter of 6 November 2019 originated from the Special Procurement Oversight Committee (SPOC) and could not have been the authority required under section 15 of the Public Procurement and Disposal of Public Assets Act.

This view is not supported by the evidence.

As correctly observed by the court a quo, the letter originated from the Procurement Regulation Authority of Zimbabwe (PRAZ). The fact that the letter makes reference to the Special Procurement Oversight Committee (SPOC) resolutions does not alter the fact, that, it was the Chief Executive Officer of PRAZ who wrote on behalf of that authority.

There was no misdirection on the part of the court a quo - certainly not of the magnitude referred to in Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S) warranting interference on the part of this Court.

SC81-23 : DISCENT BAJILA and FRANK MHLANGA and ADELAIDE MHLANGA and SANPOULOS MAPLANKA and OTHERS vs TATENDA MADZIRASHE and RAMSON CHINGWARA and LINDA MPOFU and OTHERS
Ruled By: UCHENA JA, CHITAKUNYE JA and MWAYERA JA

The four appeals are against parts of the High Court's Judgment HB157-23 (“the court a quo”) which was handed down on 27 July 2023.

The appeals are against the decision of the court a quo setting aside the thirteenth respondent's decision to accept the appellants nomination papers as candidates for the impending harmonised general elections.

The four appeals SCB59/23, SCB60/23, SCB61/23 and SCB62/23 were consolidated and heard by this Court on 2 August 2023.

On 3 August 2023, we issued the following order:

1. The appeals be and are hereby allowed with costs.

2. The judgment of the court a quo be and is hereby set aside and substituted as follows:

'The applications be and are hereby dismissed with costs.'

3. The reasons for the court's decision will follow in due course.”

We undertook to furnish reasons for our disposition. These are they.

FACTUAL BACKGROUND

On 21 June 2023, the fourteenth respondent constituted a Nomination Court to receive submissions for the nominations of candidates for the election of constituency members to the National Assembly for the Bulawayo Metropolitan Province. This was in accordance with Proclamation 4 of 2023, gazetted under S.I. 85 of 2023 by the President.

The determinant facts of this appeal emanate from the events that transpired on 21 June 2023 at the Nomination Court.

The appellants appeared before the Nomination Court for their nominations as candidates for elections scheduled for 23 August 2023. The nomination officer accepted their nominations and registered them as candidates.

The respondents, except for the thirteenth to fifteenth respondents, applied to the court a quo for the setting aside of the appellants (respondents a quo) nominations. They alleged, that, their nomination papers were in disarray. They further alleged that when the appellants lodged their papers, before 4pm, they were advised to correct them. The respondents further alleged, that, the appellants thereafter filed their corrected papers out of time, after 4pm, in violation of the Electoral Act [Chapter 2:13] (“the Act”). They further alleged that, by 4pm, the appellants were outside the courtroom frantically trying to rectify their nomination papers. They further asserted, that, such nominations were null and void.

In response, some of the appellants asserted that their papers were in order and that they lodged them with the nomination officer who accepted them before 4pm. The other appellants stated, that, their papers had errors which were pointed out by the Nomination Court and were corrected and filed with the nomination officer before 4pm. Some of the appellants maintained, that, they were in court with their corrected papers which were accepted before 4pm.

In his opposing affidavit, the 13th respondent, Innocent Ncube, in his official capacity as the Provincial Elections Officer, and, for and on behalf of the Zimbabwe Electoral Commission (“ZEC”) and the Chairperson of ZEC, indicated that the nomination papers were procedurally and timeously lodged between 10am and 4pm. He also pointed out that the designated courtroom could only accommodate 12 to 15 people at any time. During the proceedings, at 3:55pm, he announced that all prospective candidates who were queuing outside because of his administrative decision (to allow 12 to 15 people at any time) should hand over their nomination papers to the police officer as the court was due to close at 4pm. The police officer collected all the nomination papers and handed them over to the thirteenth respondent before 4pm. Thereafter, the nomination officer would call in those whose papers he would be processing.

In respect of the form, Annexure “B” relied upon by the applicants a quo, he pointed out that it was a register in which the secretary captured the times when the nomination forms were inputted into the Zimbabwe Electoral Commission's (ZEC) records. In other words, he stated that the form was for the purpose of data capture into ZEC's system and not a record reflective of the time when the nomination papers were lodged with the nomination officer.

On the basis of the above facts, the court a quo found for the applicants a quo (now respondents). It held that the appellants nominations had been lodged after the stipulated cut-off time of 4pm. It, therefore, declared the nominations of the appellants as null and void.

PROCEEDINGS BEFORE THE COURT A QUO

The parties made submissions on both the preliminary points and the merits before the court a quo, after which the court a quo rendered a composite judgment for all the applications, which had been consolidated by consent.

Counsel for the thirteenth, fourteenth, and fifteenth respondents raised a preliminary point, that, the court a quo had no jurisdiction. He submitted that all the applications ought to have been filed in the Electoral Court.

Counsel for the first to the sixth appellants associated himself with the submissions made by counsel for the thirteenth, fourteenth, and fifteenth respondents on jurisdiction.

He further submitted, that, there was no application before the court because the first to twelfth respondents had irregularly truncated the dies induciae. Counsel also argued that the respondents had no locus standi and that the applications were based on hearsay evidence. He submitted that the first to twelfth respondents had not attended the Nomination Court but sought to rely on social media reports and a document, Annexure “B” which was differently interpreted by the Electoral Commission.

He also argued in limine, that, there were material disputes of fact that could not be resolved on paper.

He further submitted, that, there was a material non-joinder of Citizens Coalition for Change party (CCC) which had sponsored some of the appellants. In support of this assertion, he contended that the party would be prejudiced in obtaining proportional representation seats.

Finally, on preliminary points, counsel submitted that the applications were an abuse of the court process.

Counsel for the seventh to twelfth appellants in SCB59/23 associated himself with the preliminary points raised by counsel for the thirteenth, fourteenth, and fifteenth respondents and counsel for the first to the sixth appellants. He emphasised that the applications were based on hearsay evidence and that only the Electoral Court had exclusive jurisdiction to hear the applications.

Counsel for the first to fourth appellants in SCB61/23 associated himself with submissions made by counsel who addressed the court before him.

Counsel for the appellants in SCB60/23 also associated himself with submissions that had been made by counsel before him.

Per contra, counsel for the first to twelfth respondents opposed all the preliminary points raised, characterising them as meritless.

He relied on the case of Kambarami v 1893 Mthwakazi Restoration Movement Trust and Others SC66-21 for the proposition, that, the court had jurisdiction. Regarding the validity of the applications, he submitted that the parties had attended a case management meeting and agreed on truncating the dies induciae.

On locus standi, he submitted that the respondents had a legitimate interest in the nomination proceedings because they had a direct and substantial interest in the outcome of the process. In relation to the applications being based on hearsay evidence, he contended, that, the respondents relied on public information and that there was Annexure “B” which supported their position. He further submitted that there were no material disputes of fact. A robust approach would resolve the matter.

Counsel for the first to twelfth respondents further submitted, that, the applications a quo were not an abuse of the court process given the substantial interests which the respondents had in the nomination of candidates for the constituencies where they were registered voters.

Finally, in relation to the non-joinder of Citizens Coalition for Change party (CCC) he argued that the party had no direct and substantial interest in the acceptance of the nomination papers.

The court a quo deferred the determination of the preliminary points to the end of the hearing and sought to be addressed on the merits.

Counsel for the first to twelfth respondents submitted, in support of the applications, that, the nominations ought to be nullified since they were accepted after 4pm in defiance of section 46 of the Electoral Act [Chapter 2:13]. He further submitted that the nomination officer unlawfully opened the court to specifically allow the affected candidates to present their papers out of time. He argued that the police officer who collected the papers was not a nomination officer. Annexure “B” confirmed that the nomination papers were filed out of time.

Counsel for the thirteenth to fifteenth respondents submitted that Annexure “B” was not a document reflective of the times when the nomination papers were lodged with the nominations officer. Further, he submitted, that, the nomination papers were submitted and received before the cut-off time of 4pm on the day in question. He emphasised that the officers of the Zimbabwe Electoral Commission (ZEC) who placed evidence before the court, through their supporting affidavits, spelt out that no nomination papers were submitted after 4pm. Finally, he submitted that there was no breach of section 46 of the Electoral Act.

Counsel for the first to the sixth appellants in SCB59/23 submitted, that, the respondents were relying on hearsay evidence that the social media was awash with; information that the appellants nomination papers were in disarray and filed out of time. He pointed out that the appellants filed their papers in compliance with section 46 of the Electoral Act before 1600 hours. Further, in opposing the allegations, he relied on the Zimbabwe Electoral Commission (ZEC) and the nomination officer's evidence that Annexure “B” was not a document indicative of the lodgement of nomination papers, but, that the time reflected on it related to the time of data capture.

Counsel for the seventh to twelfth appellants in SCB59/23 was also critical of Annexure “B” and he agreed with submissions by counsel for the first to the sixth appellants in SCB59/23 on it. He submitted that the respondents were relying on hearsay evidence and that they failed to discharge the onus and to prove the factual basis of their allegations. Their evidence was speculative as they relied on social media assertions.

Counsel for the appellants in SCB60/23 associated himself with submissions made by counsel who addressed the court before him. He emphasised, that, his clients submitted their nomination papers on time. He further added that the collection of nomination papers by the police officer, at the instruction of the nomination officer, did not amount to contravening section 46 of the Electoral Act.

Counsel for the first to fourth appellants in SCB61/23 associated themselves with counsel for the other appellants submissions.

DETERMINATION OF THE COURT A QUO

The court a quo gave a composite judgment. It dismissed all the preliminary points and made a finding that Annexure “B” was a document prepared by a Zimbabwe Electoral Commission (ZEC) official and that it spoke for itself, that, the nomination papers were submitted after 4pm. It found that the submission of papers from the appellants, through the police officer, was unlawful. It thus declared the nominations as null and void and issued the following order:

“IT IS DECLARED THAT:

1. That, the decision of the 1st Respondent, sitting as a nomination court at Bulawayo on 21 and/or 22 June 2023 to accept the following Respondents nomination papers and candidature in the elections scheduled to be conducted on 23 August 2023 was in contravention of section 46(7) & (8) of the Electoral Act [Chapter 2:13].

2. That, the decision of the 1st Respondent, sitting as a Nomination Court at Bulawayo on 21 and/or 22 June 2023, to accept the following Respondents nomination papers and candidature in the elections scheduled to be conducted on 23 August 2023 is declared null and void and is hereby set aside.

ACCORDINGLY, IT IS ORDERED THAT:

3. 1st Respondent is prohibited from including the names of the following Respondents in the preparation of ballot papers to be used in the general elections scheduled to be conducted on 23 August 2023.

4. Respondents shall jointly and severally pay the costs of suit.

OBERT MANDUNA; ERECK GONO; DOUGLAS NCUBE; GIFT SIZIVA; SANPOULUS MAPLANKA; PRINCE DUBE; NQOBIZITHA NDLOVU; DESMOND MAKAZA; BAJILA COLLINS DESCENT; SICHELESILE MAHLANGU; DESIRE MOYO; ALELAIDE MHLANGA; NOMPILO BHEBHE; SURRENDER KAPOIKILU; RAPHAEL PASHOR SIBANDA; NTANDOYENKOSI MINENHLE GUMEDE; FRANK MHLANGA.

5. The application against Zvikwete Innocent Mbano be and is hereby dismissed with costs.

6. The application against ADMORE GOMBA, NIGEL NDLOVU, SONENI MOYO, DINGILIZWE TSHUMA, STRIKE MKANDLA & ALBERT MHLANGA be and is hereby withdrawn.”

GROUNDS OF APPEAL

Aggrieved by the judgment of the court a quo in all the four applications, the appellants in SCB59, 60, 61 and 62 of 2023 launched appeals with this court on more or less similar grounds. All the appellants grounds of appeal can be summarised as captured in SCB59/23 except for ground 5 which is specific to candidates for Citizens Coalition for Change party (CCC).

Ground 5 speaks to non-joinder of Citizens Coalition for Change party (CCC). It reads as follows:

“(5) Having found that the Citizens Coalition for Change political party was adversely affected by the proceedings before it, the court a quo erred in relating to and affording an application which adversely affected its interests without affording the concerned political party the opportunity of being heard.”

The grounds of appeal which are similar for purposes of these appeals, as discerned from the record, are as follows:

(1) Having heard the argument on points in limine, including critical point (sic) on the jurisdiction, the court a quo grossly misdirected itself and erred in proceeding to hear the argument on the merits of the matter without making a determination on the points taken before it in limine litis.

(2) The court a quo erred in assuming jurisdiction over a matter which is by constitutional and statutory command subject to the exclusive jurisdiction of the Electoral Court and so erred in entertaining a review disguised as a declaratur.

(3) The court a quo erred and misdirected itself having invented their own dies induciae in violation of the rules and of superior court authority and so erred in condoning a fatal defect and where no application for condonation had been made.

(4) The court a quo erred in granting relief to parties who had no locus standi in judicio, who could not swear positively to the “facts” they relied upon and who sustained their cause on the basis of objectively established falsehoods.

(5)…,.

(6) The court a quo, having found that there was a dispute of fact material to the resolution of issues before it, erred in purporting to resolve such dispute in the absence of any work tools for such resolution and so erred in making credibility findings, on motion, that were unsupported by the evidence placed before it.

(7) The court a quo erred in not finding that matters factual stood to be resolved on the basis of the position given by the Electoral Commission as well as appellants who were physically in attendance at the Nomination Court and which positions could not be gainsaid by the first to twelfth respondents hearsay evidence.

(8) The court a quo erred in not concluding that appellants had timeously presented their papers, had an absolute right to have them processed, and, accordingly, had been properly declared duly nominated by the Nomination Court.

SUBMISSIONS BEFORE THIS COURT

(1) Submissions on the Merits

Counsel for the first to sixth appellants, in SCB59/23, submitted that the High Court had no jurisdiction to hear the matter. He submitted that section 161 of the Electoral Act as read with section 5 of the Judicial Laws Amendment (Ease of Settling Commercial and Other Disputes) Act 2017 constituted the Electoral Court as a specialised division of the High Court, and, therefore, now has jurisdiction to hear an application for a declaratur.

He further argued, that, the relief sought was worded in the form of a review relief.

Further, he submitted, that, the authority of Kambarami v 1893 Mthwakazi Restoration Movement Trust and Others SC66–21, relied upon by the court a quo, was rendered per incuriam and, thus, it was inapplicable.

It was also counsel for the first to sixth appellants in SCB59/23 submission, that, there were no valid applications before the High Court. He argued, that, the court a quo disregarded two binding authorities of this Court to the effect that an applicant cannot specify a dies induciae other than the one that is set out in the rules. He proceeded to argue, that, the court a quo compounded its error of adjudicating over an invalid application by proceeding to grant condonation where such had not been applied for.

On the merits of the applications that were before the court a quo, he further submitted that section 46(7) of the Electoral Act, which the court a quo relied on, was not properly engaged. He also submitted, that, the decision of the court a quo was wrong and contrary to the evidence adduced. To illustrate his point, counsel for the first to sixth appellants in SCB59/23 mentioned the case of Zvikwete Innocent Mbano who was also a respondent in the same matter but treated differently by the court a quo despite his circumstances being identical to those of the appellants.

He submitted, that, his clients had filed their papers before 4pm.

In any event, the thirteenth respondent (nominations officer), had, before 4pm, requested for all prospective candidates queuing outside awaiting their turn to file nomination papers, to hand in their papers through the police officer attached to the Nominations Court.

By so doing, the thirteenth respondent enabled everyone in the queue outside the small courtroom to submit their papers within the prescribed time.

He further submitted, that, the thirteenth respondent acted in terms of section 24(1) of the Interpretation Act [Chapter 1:01].

He also submitted, that, the appellants evidence established that they had lodged their papers before 4pm. He further submitted that there was no evidence that his clients papers were collected through the police officer. He thus argued that these facts were at variance with the conclusion of the court a quo.

In respect of Annexure “B” counsel contended, that, the times set out in that document were the times of inputting data as opposed to the time for filing nomination papers with the thirteenth respondent.

Finally, counsel argued that the applications were based on hearsay evidence from social media as deposed to by the respondents. This disregarded the fact, that, the appellants papers were presented in open court as required by section 46 of the Electoral Act.

He, therefore, prayed that the appeal be allowed with costs.

Counsel for the seventh to twelfth respondents submitted, that, there were no valid applications filed by the respondents before the court a quo. He associated himself with submissions made by counsel for the first to sixth appellants in SCB59/23. He further submitted, that, the respondents cases were based on hearsay evidence, which issue was not resolved by the court a quo. Counsel submitted that the conclusion reached by the court a quo was indefensible.

He prayed that the appeal be allowed with costs.

Counsel for the first to fourth appellants in SCB61/23 associated himself with submissions made by counsel for the first to sixth appellants in SCB59/23 and counsel for the seventh to twelfth respondents. He, however, further pointed out that the court a quo erroneously took all the respondents who were before it to be Citizens Coalition for Change party (CCC) sponsored candidates when this was not correct as some of the respondents were affiliated to different political parties and others were independent candidates. To demonstrate his point, he quoted the portion of the judgment a quo which mentioned that if one read one affidavit, he would have read all.

In respect of one of his clients, Adelaide Mhlanga, counsel for the first to fourth appellants in SCB61/23 submitted that she averred that she was in the court at all material times. To counsel, there was no evidence that the papers were collected after 4pm from persons who were outside.

In his submissions, counsel for the first to fourth appellants in SCB61/23 intimated that the court a quo took a casual approach to the evidence of the appellants and that of the nominations officer and the Zimbabwe Electoral Commission (ZEC). He stated that the court a quo regarded the appellants averments as merely bald denials. The court a quo was also accused of making sweeping statements against the electoral authority. For instance, it is said to have referred to the majority of the respondents, but, without specifying who they are.

He prayed for the appeal in SCB61/23 to be allowed with costs.

Counsel for the sixteenth appellant in SCB59/23 and the appellants in SCB62/23 submitted, that, the court a quo had no jurisdiction to deal with the matter because the Electoral Court exercises the general jurisdiction of the High Court in any matter before it. In addition, counsel moved the Court to depart from Kambarami v 1893 Mthwakazi Restoration Movement Trust and Others SC66–21…, as, in his view, it conflicted with section 171(1) of the Constitution and section 161 of the Electoral Act. He associated himself with submissions made by counsel for the appellants who addressed the Court before him.

He further submitted, that, the matter was disposable on the one question of whether or not the nomination papers were received by 4pm.

He finally submitted, that, section 46 of the Electoral Act simply requires papers to be received by a nomination officer, and, it does not prohibit any person from delivering the forms. Thus, to the extent that section 46(7) of the Electoral Act did not prohibit a police officer assigned by the nominations officer from receiving nomination papers from any person before 4pm, the conduct cannot be said to be illegal as it is not forbidden by statute.

Counsel for the sixteenth appellant in SCB59/23 and the appellants in SCB62/23, therefore, prayed that the appeal be allowed with costs.

Counsel for the first to the twelfth respondents submitted, that, the seventh ground of appeal resolved the appeal. He submitted that the court a quo accepted the evidence of the thirteenth to the fifteenth respondents. He however said that what the court a quo rejected were the opinions of the Electoral Commission.

Counsel further submitted, that, in terms of section 46(5) and 46(6) of the Electoral Act, the Nomination Court is a public and open court that closes at 4pm, after which time it cannot accept nomination papers from new prospective candidates.

He further submitted, that, the evidence from the Commission was that the appellants were not in court. He also referred to the evidence of Tabeth Mwonzora, a secretary at the Nomination Court, to the effect, that, a police detail collected the papers. Relying on the definition of a nomination officer, counsel also submitted that the definition does not include a police officer. Thus, by directing the police detail to collect the nomination papers, the nomination officer acted unlawfully and his conduct was null and void. He referred the court to Muchakata v Netherburn Mine 1996 (1) ZLR 153 (S) in support of this proposition.

He submitted, that, the circumstances of this case warranted a declaration on the correct position of the law.

In respect of Annexure “B” counsel for the first to the twelfth respondents contended, that, it was a public document which is acceptable in terms of section 12 of the Civil Evidence Act [Chapter 8:01]. He further submitted that the document is a submission form from Bulawayo Province which sets out the times when the nomination papers were accepted. He stressed the point, that, all the appellants nominations were captured as having been accepted after 4pm.

On the question of jurisdiction, counsel for the first to the twelfth respondents submitted that Kambarami v 1893 Mthwakazi Restoration Movement Trust and Others SC66–21 was good law, having been decided after the adoption of the 2013 Constitution and the enactment of the Judicial Laws Amendment (Ease of Doing Business) Act 2017. He therefore submitted, that, the High Court has jurisdiction to grant a declaratur.

Regarding the issue of the validity of the applications a quo, counsel submitted that the High Court issued an order truncating the dies induciae. He further contended, that, Rule 59(6) of the High Court Rules 2021 does not specify that urgent applications must be filed with a modified dies induciae only after the High Court has granted such leave.

In respect of the first ground of appeal, he submitted that it was a bad ground at law as it challenged a decision on how the court should have conducted its proceedings. He argued that such a decision was not appealable.

In respect of the fifth ground of appeal, counsel for the first to the twelfth respondents submitted that the first to the twelfth respondents had locus standi. He relied on the decision in Stevenson v Minister of Local Government & Others 2002 (1) ZLR 498 (S).

On the issue of non-joinder of Citizens Coalition for Change party (CCC), counsel averred that it was not an interested party.

He prayed for the dismissal of the appeals with costs.

Counsel for the thirteenth, fourteenth, and fifteenth respondents submitted that his clients would abide by the decision of this Court. Accordingly, he did not make any submissions.

ISSUES FOR DETERMINATION

The issues which commend themselves for determination by this Court are as follows:

(i) Whether or not the court a quo erred and misdirected itself in dismissing the appellants preliminary points.

(ii) Whether or not the court a quo was correct in its findings, that, the appellants nomination papers were submitted to the nomination officer after 4pm.

THE APPLICABLE LAW

The appeals are all hinged on the law relating to the procedure for the nomination of candidates for election as Members of Parliament. Sections 46(6), (7) and (8) of the Electoral Act are central to the resolution of these appeals. They read:

“(6) The nomination officer, shall, in open court —

(a) Announce whether any candidate has lodged his or her nomination paper before the sitting of the court, and, if so, the name of every such candidate; and

(b) Receive any further nominations for election as constituency member of the National Assembly for the constituency for which he or she is the nomination officer.

(7) No nomination paper shall be received by the nomination officer in terms of subsection (6) after four o'clock in the afternoon of nomination day, or, where there is more than one nomination day for the election concerned, the last such nomination day: Provided, that, if at that time a candidate or his or her chief election agent is present in the court and ready to submit a nomination paper in respect of the candidate, the nomination officer shall give him or her an opportunity to do so.

(8) The nomination officer shall examine every nomination paper lodged with him or her which has not been previously examined by him or her in order to ascertain whether it is in order, and shall give any candidate, or his or her election agent, an opportunity to rectify any defect not previously rectified and may adjourn the sitting of the court for that purpose from time to time: Provided that the sitting shall not be adjourned to any other day that is not a nomination day.”

The Interpretation Act [Chapter 1:01], section 24(1) and (2), are also relevant and provide as follows:

“POWERS AND APPOINTMENTS

24. Statutory powers and duties generally

(1) Where an enactment confers a power, jurisdiction, or right, or imposes a duty; the power, jurisdiction or right may be exercised and the duty shall be performed from time to time as occasion requires.

(2) Where an enactment empowers any person or authority to do any act or thing, all such powers shall be deemed to be also given as are reasonably necessary to enable that person or authority to do that act or thing or are incidental to the doing thereof.”

In our view, the appeals can be resolved by a correct interpretation of section 46(6), (7) and (8) of the Electoral Act. The interpretation of section 24(1) and (2) of the Interpretation Act will also be considered in resolving the appeals.

Section 46(6)(a) of the Electoral Act permits a prospective candidate to lodge his or her nomination papers before the nomination day. On nomination day, the nomination officer must announce, in open court, the names of all candidates who lodged their nomination papers prior to the nomination day.

Section 46(6)(b) of the Electoral Act provides for the nomination officer's receipt of nomination papers on the nomination day.

Section 46(7) of the Electoral Act forbids a nomination officer from receiving nomination papers after 4pm on nomination day except for those candidates, or their election agents, who will be present in the courtroom and ready to submit their nomination papers by 4pm. Therefore, candidates, or their election agents, who will be in the courtroom will not be affected by the cut-off time of 4pm.

Section 46(8) of the Electoral Act mandates the nomination officer to attend to and examine all nomination papers lodged with him or her between 10am and 4pm, and give opportunities to candidates, or their agents, to rectify anomalies by adjourning the court to enable them to do so by not later than the end of the nomination day.

Section 24(1) of the Interpretation Act provides, that, where a statute gives a public officer power to perform a duty, such power includes the power to organise and perform as occasion requires.

Section 24(2) of the Interpretation Act gives a public officer powers to take reasonable steps that enable him or her to accomplish what the law mandates.

The principles of interpretation of statutes have been discussed by this Court in a number of cases. In the case of Endeavour Foundation and Anor v Commissioner of Taxes 1995 ZLR 339 (S)…, this Court held that:

“The general principle of interpretation is that the ordinary, plain, literal meaning of the word or expression, that is, as popularly understood, is to be adopted, unless that meaning is at variance with the intention of the Legislature as shown by the context, or such other indicia, as the court is justified in taking into account, or creates an anomaly, or otherwise produces an irrational result.”

See also Zambezi Gas Zimbabwe (Pvt) Ltd v N.R. Barber (Pvt) Ltd & Anor SC03–20…,.

According to case law on rules of interpretation, the use of the word “shall” in a statute denotes a mandatory intention by the legislature for the provision to be complied with. In the case of Shumba and Anor v ZEC and Anor 2008 (2) ZLR 65 (S)…, this Court held:

“It is the generally accepted rule of interpretation, that, the use of peremptory words such as 'shall' as opposed to 'may' is indicative of the legislature's intention to make the provision peremptory. The use of the word 'may' as opposed to 'shall' is construed as indicative of the legislature's intention to make a provision directory. In some instances, the legislature explicitly provides, that, failure to comply with a statutory provision is fatal. In other instances, the legislature specifically provides that failure to comply is not fatal. In both of the above instances, no difficulty arises. The difficulty usually arises where the legislature has made no specific indication as to whether failure to comply is fatal or not.”

Given that it is generally accepted that the use of the word “shall” in any enactment is understood as being indicative of the legislature's intention of making the provision peremptory, it becomes necessary to consider some hallowed principles of interpretation for determining the intended effect of non-compliance with a peremptory statute. There are principles that the courts resort to in order to determine whether or not the legislature intended non-compliance with a provision to be fatal.

Thus, in Shumba and Anor v ZEC and Anor 2008 (2) ZLR 65 (S)…, it was stated that:

“Francis Bennion, Statutory Interpretation submits that the courts have to determine the intention of the legislalture using certain principles of interpretation as guidelines. He had this to say at pp21-22:

'Where a duty arises under a statute, the court charged with the task of enforcing the statute needs to decide what consequence Parliament intended should follow from breach of the duty.

This is an area where legislative drafting has been markedly deficient. Draftsmen find it easy to use the language of command. They say that a thing 'shall' be done. Too often they fail to consider the consequence when it is not done. What is not thought of by the draftsman is not expressed in the statute. Yet, the courts are forced to reach a decision.

It would be draconian to hold, that, in every case, failure to comply with the relevant duty invalidates the thing done. So, the courts answer has been to devise a distinction between mandatory and directory duties. Terms used instead of 'mandatory' include 'absolute' 'obligatory' 'imperative' and 'strict'. In place of 'directory' the term 'permissive' is sometimes used.

Use of the term 'directory' in the sense of permissive has been justly criticised: see Craies, Statute Law, 7ed 1971, p61 n74.) However, it is now firmly rooted.

Where the relevant duty is mandatory, failure to comply with it invalidates the thing done. Where it is merely directory, the thing done will be unaffected (though there may be some sanction for disobedience imposed on the person bound). (As to sanctions for breach of statutory duty see section 13 of this Code (criminal sanctions) and section 14 (civil sanctions)).'

Thereafter, the learned author sets out some guiding principles for the determination of whether failure to comply with a statutory provision is fatal or a mere irregularity. One of those guiding principles is the possible consequences of a particular interpretation. If interpreting non-compliance with a statutory provision leads to consequences totally disproportionate to the mischief intended to be remedied, the presumption is that Parliament did not intend such a consequence, and, therefore, the provision is directory.'”

Similarly, in the case of Sibanda & Anor v Ncube & Ors; Khumalo & Anor v Mudimba & Ors SC158–20…, PATEL JA…, held that:

“The broad test for ascertaining the true nature of a statutory duty was enunciated more than a century ago in the case of Howard v Bodington (1877) 2 PD 203, at 211:

'…, in each case, you must look to the subject-matter, consider the importance of the provision and the relation of that provision to the general object intended to be secured by the Act, and, upon a review of the case on that aspect, decide whether the enactment is what is called imperative or only directory….,.'

A further aspect that may be relevant is the need to distinguish between those persons who are bound to perform the statutory duty and those who might be affected by its performance or non-performance: see Bennion, op cit, at p21.

In this context, the extent to which the former are in a position to exercise control over the latter may become a crucial consideration. This point was aptly elucidated in Montreal Street Railway Company v Normandin [1917] AC 170, at 174:

'When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in respect of this duty would work serious inconvenience or injustice to persons who have no control over those entrusted with the duty, and, at the same time would not promote the main object of the legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done.'”

These principles must be understood within the context of the law relating to electoral matters in general.

In Hove v Gumbo (Mberengwa West Election Petition Appeal) 2005 ZLR 85 (S) MALABA JA…, summarised some of the principles. At pp92B–E, it was held that:

“The law governing the manner and grounds on which an election may be set aside must be found in statute and nowhere else. In Nath v Singh & Ors [1954] SCR 892 at 895, MAHAJAN CJ said:

'The general rule is well settled, that, the statutory requirements of election law must be strictly observed and that an election contest is not an action at law or a suit in equity but is a purely statutory proceeding unknown to the common law and that the court possesses no common law power.

It is also well settled, that, it is a sound principle of natural justice that the success of a candidate who has won at an election should not be lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law.'

About twenty years later, the same principle was reiterated by CHANDRACHUD CJ in Sahu's case supra, where at p39 he said:

'The rights arising out of elections, including the right to contest or challenge an election, are not common law rights. They are creatures of the statutes which create, confer, or limit those rights. Therefore, for deciding the assertion whether an election can be set aside, on any alleged ground, the courts have to consult the provisions of law governing the particular election. They have to function within the framework of that law and cannot travel beyond it.'”…,.

Although this relates to the setting aside of an election, it applies with equal force to setting aside nominations of candidates for the National Assembly constituencies as in the present case.

APPLICATION OF THE LAW TO THE FACTS

On the merits, the Court makes the following observations:

It is common cause, that, on the nomination day, the court commenced at 10am. It is also not in dispute that the designated Nomination Court was a small courtroom and the nomination officer could only allow 12 to 15 people at a time. The rest of the candidates and/or agents queued outside the courtroom. At 3:55pm, the nomination officer announced that all prospective candidates were to hand over their nomination papers to the police officer attached to the Nomination Court.

The police officer complied and directed, from the end of the queue, that, nomination papers be handed to the police officer at the door who then handed over the nomination papers to the nomination officer before 4pm.

A reading of section 24(1) and (2) of the Interpretation Act shows, that, the nomination officer, as a public officer, has the power to employ such appropriate administrative tools to accomplish his duty: see Shumba and Anor v ZEC and Anor 2008 (2) ZLR 65 (S).

He accepted lodgement of nomination papers within the prescribed time limits in compliance with section 46(6) as read with section 46(7) and 46(8) of the Electoral Act.

Evidence from the thirteenth to fifteenth respondents confirms, that, the nominations lodged on the nomination day were lodged before 4pm and that Annexure “B” was not an official document indicating the times of lodgement of nomination papers in the Nomination Court.

It appears, that, the court a quo turned a blind eye to the responsible authority's evidence and relied on the first to twelfth respondents evidence, which was heavily borrowed from social media, and, that is hearsay.

A close examination of Annexure “B” reveals that it is a submission form, without specification as regards what was submitted and to whom. Further, the form only starts recording at 1300 hours and the recordings are randomly captured at different times, some of which were prior to 1300 hours. It was therefore speculative for the court a quo to ascribe the unsystematically recorded form as proof of the times of lodgement of nomination papers.

The court a quo thus erred in dismissing the Electoral Commission's evidence as regards the use of Annexure “B” when it relied on its own interpretation of the document as opposed to the evidence presented by the nomination officer and all the other officials who deposed to supporting affidavits.

It is important to note, that, the nomination officer deposed the opposing affidavit on behalf of the Zimbabwe Electoral Commission (ZEC) and its Chairperson who had authorised him to do so. His deposition must therefore be understood to be the evidence of ZEC and its Chairperson…,.

In our view, the court a quo should have exercised caution in dismissing the Zimbabwe Electoral Commission's explanation of the form because one cannot lightly dismiss the responsible authority's explanation of the purpose for which the form is used in the absence of cogent evidence to the contrary. It is up to an Administrative Authority to devise administrative tools to function efficiently.

In any event, Annexure “B” is not clear.

It does not, on the face of it, reflect that it is proof of the time of lodgement of nomination papers with the nomination officer. It is just headed as a submission form with mixed time slots.

The sweeping remarks by the court a quo to the effect, that, the thirteenth to fifteenth respondents came up with exculpatory explanations upon realizing that they were on trial were unwarranted and can be characterised as unfortunate considering the unreliable hearsay evidence the respondents relied on.

Even if we were to consider the facts of the case, as deposed to by the first to twelfth respondents, that, some of the appellants came to the Nomination Court in time, and, when their papers were found not to be in order, they were requested to go and correct them, they came back before 4pm.

The question of having failed to comply with the 4pm deadline would not arise.

Further section 46(8) of the Electoral Act allows a person who is required to correct his or her papers to do so during adjournments taken within the nomination day.

In the circumstances, even if for some of the appellants had to correct their nomination papers after 4pm, they still lodged them with the nomination officer in compliance with section 46(8) of the relevant Act.

We are alive to the fact, that, an Appellate Court should be loathe to interfere with factual findings of the trier of fact: see Mangwende v Zimbabwe Newspapers SC71-20. However, in circumstances where the decision of the court a quo is not anchored on evidence on record and is based on a wrong principle, interference is warranted.

In casu, whilst the court a quo acknowledged that there was a challenge as regards what exactly happened at the Nomination Court, on the nomination day, it nevertheless proceeded to declare the nomination of the appellants a nullity.

The challenge with regard to what occurred at the Nomination Court emanated from the fact, that, the first to twelfth respondents were not in attendance. They had no first-hand information. They relied on what they said was awash on social media.

Further, whilst being alive to the relevant provisions of the Electoral Act, section 46(6), (7) and (8), and acknowledging that candidates and/or agents could lodge nomination papers with the nomination officer, who was mandated by the law to allow those with anomalies to rectify the same, it made a finding against the appellants.

At the same time, without any justification for differential treatment, the court a quo allowed the nomination of one Zvikwete Innocent Mbano's nomination to stand - even though he admitted to having corrected and submitted his corrected nomination papers after 4pm.

In the absence of proof on a balance of probabilities, the respondents assertions that the nomination papers of the appellants were filed out of time remains speculative.

It is trite, that, he who alleges has the onus to prove: see Tetrad Investment Bank Limited v Bindura University of Science Education & Another SC05-19.

In the circumstances, and, in view of the misdirections by the court a quo on assessment of the facts and the applicable law, interference by this Court is warranted....,.

Regarding costs, they are at the discretion of the Court. We find no reason to depart from the general principle that costs follow the cause.

DISPOSITION

It is for these reasons that we allowed the appeals with costs and issued the aforementioned order.

SC93-23 : AUGUR INVESTMENTS and DOOREST PROPERTIES vs FAIRCLOT INVESTMENT and THE SHERIFF and THE REGISTRAR OF DEEDS
Ruled By: BHUNU JA, CHIWESHE JA and MWAYERA JA

This is an appeal against the whole judgment of the High Court (the court a quo) sitting at Harare, handed down on 9 May 2023, dismissing the first appellant's application for a declaration under case HC5989/19 and granting the first respondent's application to set aside the second respondent's decision to uplift judicial attachment on Stand 654 Pomona Township, under case HC10315/19.

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

The Facts

The first respondent obtained an arbitral award against the first appellant in the sum of US$4,800,000 excluding interest. The award was granted on 19 March 2015.

The first appellant appealed the arbitral award, which appeal was dismissed on 11 February 2019.

The award was ultimately registered as an order of the court a quo on 26 June 2019.

A writ of execution was issued by the first respondent leading to the attachment of Stand No.654 Pomona Township held under Deed of Grant No.2884/10 (“the property”).

Thereafter, the first appellant paid the sum of RTGS $4,800,000 as the judgment debt and RTGS $1,078,040=21 as interest thereon.

Following these payments, the second respondent advised the judgment creditors (ie the first respondent) that the debt had been discharged and he was thus proceeding to remove the property from judicial attachment.

He did so through letters to the first respondent dated 21 and 25 November 2019, respectively.

The first respondent protested this move, arguing that the property should not be removed from attachment as the judgment debt had not been extinguished because the amount should be paid at the prevailing inter-bank rate between the US$ and the RTGS, and not at the rate of 1US$ to 1RTGS$.

The second respondent did not heed that advice.

It was then that the first respondent approached the court a quo, under HC10315/19, for an order setting aside the second respondent's decision to remove the property from attachment. It also sought consequential relief.

At the close of submissions, the court a quo found in favour of the first respondent who had sued, under HC10315/19, for the setting aside of the second respondent's decision to remove the property from attachment.

Under HC5989/19 the court a quo dismissed the first appellant's application for a declaration that the judgment debt be extinguished at the rate of 1:1 between the US$ and the RTGS$.

For convenience, the two applications were heard together.

The appellants appeal the decisions of the court a quo on the following grounds:

“GROUNDS OF APPEAL

1. The court a quo erred in failing to hold that the Arbitral Award dated 19 August 2015, granted in favour of the first respondent, constituted a liability affected by the provisions of section 4(1)(d) of Statutory Instrument 33 of 2019 (subsequently section 22 of the Finance Act No.2 of 2019).

2. Concomitantly, the court a quo also erred in determining that the Arbitral Award issued on the 19th of March 2015 only became effectual upon its registration on the 26th of June 2019. At law, an arbitral award constitutes a binding obligation as at the date of its grant and not its registration.

3. With respect, the court a quo also grossly misdirected itself in holding that the first appellant's RTGS payments did not fully discharge its indebtedness to the first respondent in respect of the registered arbitral award dated 19th March 2015. Such payments fully discharged what was lawfully due.

4. The court a quo also erred in determining that the second respondent had acted unlawfully in uplifting the judicial attachment on Stand 654 Pomona held under Deed of Grant 2884/10. The voiding of such uplifting was anomalous at law given that the first appellant had discharged its indebtedness, thereby obviating the continuation of execution.

5. Additionally, the court a quo erred in cancelling 'any and all' transfers effected on Stand 654 Pomona Township in circumstances where the second appellant had received title by operation of an extant Deed of Settlement and court order handed down by the court a quo under HC4528/19.

6. The court a quo also erred in ordering the advertisement and sale in execution of Stand 652 Pomona Township held under Deed of Grant No.2884/10 after the cancellation of all subsequent transfers. Such determination is anomalous, in that, after the aforesaid cancellation of subsequent transfers, the land reverts to being State land, incapable of being sold in execution.”

The appellants seek the following relief:

“1. That, the instant appeal succeeds with costs.

2. That, the order of the court a quo be set aside and be substituted with:

Case No. HC5989/19

(i) The application for a declaration order be and is hereby granted.

(ii) The liability arising from the Arbitral Award dated 19th March 2015, in favour of the first respondent, be and is hereby declared executable in RTGS dollars at the rate of one to one to the United States dollars in accordance with section 4(1)(d) of Statutory Instrument 22 of 2019.

(iii) The first respondent to pay costs of suit.

Case No. HC10315/19

(i) The application is dismissed with costs.”

The grounds of appeal raise only one issue, that is, whether the arbitral award in issue, is subject to the provisions of SI 33 of 2019 in terms of which all assets and obligations denominated in United States dollars immediately before the effective date of 22 February 2019 shall be redeemed at the rate of 1US$ to 1RTGS$.

If that question is answered in the affirmative, then, the appeal should succeed. If not, then, the appeal stands to be dismissed....,.

APPELLANTS SUBMISSIONS IN THIS COURT

It is now trite, that, all assets and liabilities that were denominated in United States dollars immediately before 22 February 2019, must, on or after that date, be valued in RTGS dollars on a one is to one rate. This is the effect of section 4(1)(d) of SI 33 of 2019, and, subsequently, section 22 of the Finance Act No.2 of 2019.

This position was confirmed by MALABA CJ in the seminal case of Zambezi Gas Zimbabwe P/L v N.R. Barber P/L and Anor SC03-20.

The appellants submit, that, the court a quo erred in interpreting the above provisions in that it treated a judgment debt as if it was separate from the definition of “debt”.

It also erred in taking the date of registration of the arbitral award as if it was the date on which the debt came into existence. It failed to appreciate, that, prior to the registration of the award, a debt already existed, as confirmed by the arbitration award of 2015, paving the way for enforcement. This debt arose before 22 February 2019, the effective date under S.I.33 of 2019.

The court a quo also erred in treating an arbitration award as of no force or effect as long as it was not registered. It misunderstood the existence of an award embodying a debt and its enforcement.

The appellants further submitted, that, the law is clear that the registration of an award in the court a quo is purely for purposes of execution through the Sheriff. To that end, the registration of an award, as an order of the court a quo, does not create a new debt nor does it, at law, change the status of the debt.

The appellant relied in this regard on the words of BHUNU JA in the case of Gwanda Rural District Council v Botha SC174-20 wherein he had this to say:

“Before delving into the merits or otherwise of the grounds of appeal, l pause to observe that when presiding over the registration of an arbitral award, the court a quo had very limited jurisdiction. This is mainly because its function was merely to register the arbitral award for purposes of enforcement. To that end, it did not, in the main, exercise its appellate or review jurisdiction.”

Accordingly, argue the appellants, the High Court does not enquire into anything when registering an award. It is merely permitting the applicant access to its enforcement mechanism.

The court a quo was thus in error when it held, that, an arbitral award, dated 19 March 2015, only became effective when it was registered by the court a quo on 26 June 2019 - well after the effective date fixed under Statutory Instrument 33 of 2019.

The appellants reiterate that such registration by the court a quo was for purposes of execution only.

It was because of that error that the court a quo determined, that, the arbitral award was not affected by the provisions of section 4(1)(d) of SI 33/2019, a finding contrary to law.

The appellants further relied on the case of Air Zimbabwe Holdings v Chiweshe and Others 2019 (1) ZLR 311 (S) where GOWORA JA had this to say by way of dicta:

“Once rendered, an arbitral award is binding upon everyone to whom it pertains until set aside.”

In other words, the first appellant's liability to pay arose on the date of issue of the award, that is, on the 19th March 2015 and not on the date of registration in the court a quo.

Reliance was placed on the case of Dudka & Ors v Cheni Investments (Pvt) Ltd 2011 (1) ZLR I where MAKONI J…, remarked that:

“An award takes effect upon its grant. Its execution has no effect on whether it is binding or not. A party can choose to obey an award, such that there would not be need for the award to be registered.”

The court a quo, according to the appellants, was wrong when it held that the first appellant was only obligated to pay the respondent after the arbitral award was registered.

Further, under our law, the registration of an arbitral award does not turn such an award into an order of the High Court. Arbitral awards are registered and enforced as is without being transformed into court judgments: see Thornton v Mckenzie 2006 (2) ZLR 91 (H)…,.

The registration of an arbitral award does not create new obligations, further submitted the appellants.

In Ropa v Reosmart Investments (Pvt) Ltd 2006 (2) ZLR 283 (S)…, the finality of arbitral awards was explained by GWAUNZA JA…, in the following terms:

“In addition to this, I found to be persuasive the submission made by the respondent, that, the effect of the arbitral award is to bring to finality the dispute between the parties.”

At law, therefore, no new rights and entitlements are obtained by the holder of an arbitral award upon recognition and enforcement.

Accordingly, submit the appellants, the registration of the 19 March 2015 arbitral award did not create a new liability or circumstances that allowed it to escape the jaws of section 4(1)(d) of SI 33/19.

The appellants further argue that “the novation upon registration” that the first respondent refers to is erroneous at law. It is that submission that led the court a quo astray.

Counsel for the Sheriff (the second respondent) filed heads of arguments titled:

“SECOND RESPONDENT'S/CROSS APPELLANT'S HEADS OF ARGUMENTS INCORPORATING SECOND RESPONDENT'S HEADS OF ARGUMENTS IN RESPECT OF THE MAIN APPEAL”

Counsel for the Sheriff (second respondent) stated in his heads of arguments, that, the second respondent had been served with the Notice of Appeal filed by the appellants on 12 May 2023. The second respondent filed a cross-appeal in terms of Rule 45(1) as read with Rule 45(2) of the Supreme Court Rules 2018 on 22 May 2023.

The cross appeal is on three critical errors of law and fact made by the court a quo:

(i) Firstly, the court a quo grossly misdirected itself and erred in failing to consider or address, in its judgment, the Sheriff's report which had been filed of record on 23 June 2020, at pages 373-374 of the record. The report was filed in case No. HC10315/19 and bears the full citation of the case.

The second respondent contends, that, it is a valid Sheriff's Report compiled, and filed, in terms of the rules of the court a quo. The report is comprehensive in that it sets out the background of the matter, the steps taken by the Sheriff, and the reasons therefor. It explains how the amount of RTGS4,800,000 had been paid out, and how the property had been transferred to the second appellant. The report is quoted from p8 as follows:

“8. We proceeded to uplift the caveat and transferred the property to Doorest Properties as per court order by Justice Mushore.

9. Our actions led to Messrs Mutumbwa Mugabe Legal Practitioners filing the current application as they believed we failed to execute our mandate properly.

10. It is our belief that the $4,800,000 paid constitutes the judgment debt in full.

11. Our decision to act in the manner we did was informed by the legal position prevailing with regards to execution of court orders denominated in USD dollars, in light of SI 33/2019 and Finance Act 2 of 2019.

12. If our position was wrong, it was because of the lack of clarity with regards to the interpretation of the relevant statutes.

13. The matter was once directed to the Judicial Service, as a complaint, and the position taken was that the Sheriff had not acted improperly.

14. We believe our decision was not irrational. The case arises from different interpretations of available statutory instruments. We are now aware of the Supreme Court judgment which vindicates the position that we took.

15. We pray that no costs are levied against the Sheriff as we believe we acted reasonable in terms of the law.

M. Madhega, Sheriff of the High Court of Zimbabwe, Harare.”

Thus, the Sheriff's report constitutes a full and proper response to the issues raised by the first respondent in the court a quo. It does not, argues the second respondent, in any way constitute disrespect of the court proceedings nor a failure to respond nor is it an improper pleading.

The second respondent asserts, that, the application in the court a quo, under HC10315/19, was, to all intents and purposes, a review of the action taken by the Sheriff. The Sheriff was thus functus officio. The Rules do not require him to file opposing affidavits. He is only required to file a report informing the court as to what he did and the reasons therefore.

In such situations, the Sheriff is not a litigant but an officer of the court, charged with the execution of court orders.

The Sheriff's report having been tendered to the court a quo, in conformity with its Rules, should have been given due regard before the court a quo arrived at its decision. If the court a quo had applied its mind to this report, it would have arrived at a different decision.

That the application before the court a quo was for review of the second respondent's decision is confirmed by the court a quo when it states:

“The applicant in the first instance, Fairclot Investments, seeks a review of the decision of the second respondent, of 21 November 2019, to uplift the judicial attachment of Stand 654 Pomona Township….,.”

The second respondent further argues, that, it is common cause that the Sheriff gave notice to all parties that the judgment debt had been discharged in full, and, for that reason, he was removing the attachment.

Nothing was done clandestinely or maliciously as all concerned were informed beforehand.

In the circumstances, there was no basis for the levying of costs against the Sheriff (which, on its own, is unusual on an officer of the court) let alone on the legal practitioner and client scale.

The court a quo misdirected itself on the facts when it held:

“Given the history of the case, and the manner in which the Sheriff handled the case, refusing to heed the call not to uplift the caveat, when advised that the writ had not been satisfied, the defiance requires a sanction be imposed upon the Sheriff. Most disturbing is the fact, that, despite being cited in an application where costs are claimed on the attorney/client scale, the Sheriff made no effort to defend himself/herself.

Without any submission from the Sheriff as to why costs on a higher scale should not be imposed, the court is left with no option but to accede to the prayer for costs against the Sheriff.”

Clearly, the court a quo, argues the second respondent, did not take into account the contents of the Sheriff's report giving reasons why the court should not levy costs against it. The finding on costs is therefore without basis.

With regards the interpretation of SI 33/2019 as read with the Finance Act 2/2019, the second respondent agreed with the first and second appellants, that, the award granted in March 2015 is payable in RTGS$ at the rate of 1 to 1 with the US$, and, further that the registration of the award in the court a quo was only for purposes of execution. Such registration does not novate or change the status of the arbitral award.

SUBMISSIONS BY THE FIRST RESPONDENT

On the merits, counsel for the first respondent submitted, that, an arbitral award does not become final as long as it is being challenged. He submitted further, that, it does not become final if it has not been recognized (ie registered as an order of the court a quo) or the party against whom it is made has not paid in accordance with its terms.

In other words, although in casu the arbitral award was granted in 2015, it was not final until the challenges brought against it, by the first appellant, had been resolved, and it had been registered by the court a quo.

Reliance was placed in this regard on the provisions of Article 34(4) of the Model Law which provides:

“The High Court, when asked to set aside an award, may, where appropriate, and so requested by a party, suspend the setting aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal's opinion will eliminate the grounds for setting aside.”

For that reason, it is argued, that, for as long a party has challenged an award, finality cannot be achieved. Matters will remain fluid until the award has been finally recognized.

It is further argued, that, Article 36 of the Model Law sets out the grounds upon which the court a quo may decline to register an award. This is a clear sign that the arbitral award is not final until it is registered.

The gravamen of the first respondent's argument is that because of the continued litigation, at the instance of the first appellant, there was still a live dispute between the parties such that the debt could not have been affected by the provisions of SI 33 of 2019.

For this proposition, the first respondent has relied on the cases of Lock v Lock and Another SC127-22 and Lugalulu Investments and Another v National Railways of Zimbabwe SC43-22.

It must be noted, that, these cases dealt with High Court judgments (therefore judgments debts) as opposed to arbitral awards.

The first respondent submits, that, since the award in casu was registered after the effective date, in terms of SI33 of 2019, the award is not affected by the provisions of that statutory instrument. In other words, the debt is payable in United States dollars converted to RTGS at the prevailing bank rate.

The first respondent concedes, that, an arbitral award is not a judgment debt. It submits, however, that once registered as an order of the court a quo it becomes a judgment debt.

ANALYSIS

Both parties have cited authorities tending to show, on behalf of the appellants, that an arbitral award is final upon its grant, and, on behalf of the first respondent, that it is not final until it is registered.

We note that there is no legislative provision that says that the filing of a challenge to an arbitral award suspends the operation of the award.

That being the case, we would agree with counsel for the first and second appellants, that, an arbitral award is effective upon its grant until it is set aside.

In any event, it does not matter when the arbitral award may be regarded as being final. The point is, whether, at the time of ultimate registration in the court a quo, such an award becomes a judgment of the court a quo.

We agree with counsel for the first and second appellants, that, registration of an award in the court a quo does not change the status of the award. The award is registered simply for the purpose of execution. The court a quo, at registration, does not determine the rights and obligations of the parties. These have already been determined by the arbitrator. The court a quo does not, and cannot, determine the matter on the merits.

For that reason, the order for registration does not become a judgment debt because it is not a judgment of the court a quo. The fact that the court a quo may refuse to register an award, on any of the grounds set out under Article 36 of the Model Law, is irrelevant to the issue at hand, namely, whether the registration of an arbitral award transforms it into a judgement debt.

The rights and obligations of the parties were determined by the arbitrator in 2015. The award/debt is fully covered by the provisions of S.I. 33 of 2019 notwithstanding its registration after 22 February 2019 (the effective date).

The position would have been different if proceedings in a court of law had been instituted in 2015 but concluded after the effective date. The order given would be a judgment debt. In such a scenario, the rights and obligations of the parties would have been determined by a court after the effective date, and, therefore, the judgement debt so arising would be payable in Unites States dollars converted to RTGS at the prevailing bank rate.

An arbitral award granted in 2015 cannot assume a similar status merely because it was registered by the court a quo after the effective date.

The court a quo therefore misdirected itself in treating the order for registration of the award as a novation of the arbitral award giving rise to a judgment debt. Having so misdirected itself, it wrongly concluded, that, the debt was not covered by SI 33 of 2019 and disregarded the payment in full in RTGS dollars made by the first appellant.

There is no evidence in the judgment of the court a quo, that, it took into account or noted the Sheriff's report filed of record. There is absolutely no reference to it. If it had had regard to the Sheriff's Report, it would not have issued an order for costs against him on the higher scale, or, indeed any costs at all.

As already indicated, the Sheriff is an officer of the court, not a litigant. He is not required to file opposing papers. His report is sufficient to inform the court, and the parties, as to his actions and the reasons therefor.

We agree that the Sheriff, when in doubt, should seek directions from the court. He should have done so.

As it turns out, however, he was right in his assertion that the debt had been fully discharged in RTGS at the prescribed rate of one is to one to the United States dollar.

For that reason, the order granted against him cannot stand.

SC110-23 : CHINHOYI MUNICIPALITY vs TENDAI MUSONZA
Ruled By: MAVANGIRA JA, CHIWESHE JA and MUSAKWA JA

This is an appeal against the whole judgment of the High Court (the court a quo) sitting at Harare, handed down on 16 June 2021, dismissing the appellant's claim for an order ejecting the respondent and all those claiming occupation through him from Plot 16340, Chinhoyi (the Plot), payment of holding over damages in the sum of $300 per month for illegal occupation of the appellant's Plot from 13 December 2013 to date of ejectment or vacation and interest at the prescribed rate and costs of suit.

Aggrieved by the decision of the court a quo, the appellant has noted this appeal to this court.

THE PARTIES

The appellant is a local authority established in terms of the Urban Councils Act [Chapter 29:15].

The respondent resides within the area under the jurisdiction of the appellant. He is a former councillor of the appellant.

THE FACTS

Between 2008 and 2013, the respondent was a councillor of the appellant. The appellant alleges that, at some point during his tenure as councillor, the respondent created a false rates account in his name, with the help of an unknown council employee, and took occupation of the Plot.

It further alleges, that, the respondent never acquired the Plot in question as it was reserved for a motor cross course which could not be reduced to a residential Stand.

The appellant states, that, the respondent had occupied the Plot in the name of Leengate Investments (Pvt) Ltd and that the respondent never purchased the Plot.

On the other hand, the respondent argues that he was entitled to the plot as he had purchased it from the appellant.

After a full trial, the court a quo dismissed the appellant's claim with costs. The appellant appeals against that decision on the following grounds:

“GROUNDS OF APPEAL

1. The court a quo erred in concluding that there existed an agreement of sale between the defendant and Mr Maregere, verbally, and that such agreement was binding on the plaintiff contrary to the clear provisions of section 152 of the Urban Councils Act [Chapter 29:15].

2. The court a quo erred by ignoring a claim of rei vindication, and, instead, placed onus on the plaintiff where onus was to be on the defendant to prove acquisition.

3. The court a quo erred, grossly, in requiring the plaintiff to prove the narrative that the defendant had no valid agreement of sale and that he did not pay for the land.

4. The court a quo erred by ruling that the plaintiff ought to have pleaded the law on sale of public land owned by plaintiff, which sales are all governed by section 152 of the Urban Councils Act [Chapter 29:15].

5. The court a quo exhibited bias by believing the defendant and holding him to be a credible witness, contrary to the evidence placed on record.

6. The court a quo erred grossly by relying on plan approval process to authenticate an alleged sale where there existed no single evidence of the sale itself or the proper allocation and agreement of sale of public land.

7. The learned Judge grossly erred in arriving at a conclusion which was not in any manner supported by the facts or evidence and law that were placed before her.”

RELIEF SOUGHT

The appellant seeks the following relief:

“1. That the appeal succeeds with costs.

2. That the judgment of the court a quo be and is hereby set aside and in its place the following is substituted:

'(a) Judgment be and is hereby entered for the plaintiff.

(b) The defendant be and is hereby ordered to vacate Plot 16340, Chinhoyi within 7 days of this order, failing which the Sheriff be and is hereby ordered to evict him and all those claiming occupation through him from the said property.

(c) The defendant is ordered to pay holding over damages to the plaintiff in the sum of US$300 per month for illegal occupation with effect from the 13th December to the date of ejectment or vacation of the property by the respondent.

(d) The defendant shall pay interest thereon at the prescribed rate.

(e) The defendant shall pay the appellant's costs of suit.'”

THE ISSUES

The grounds of appeal raise three issues:

(a) Whether the respondent purchased the Plot in question.

(b) Whether the appellant is entitled to evict the respondent.

(c) Whether the respondent should pay holding over damages.

PROCEEDINGS IN THE COURT A QUO

The matter was referred to trial on two issues, vis:

“(i) Whether the defendant lawfully acquired the property called Plot 16340, Chinhoyi.

(ii) Whether the defendant is liable to pay holding over damages for the unlawful occupation of plaintiff's land.”

During the trial, each party called only one witness.

The appellant called one Marshal Johanne who was employed by it as a Revenue Accountant. He told the court, that, he had been in the appellant's employ for 4 years; 2 years of which he was employed as a Credit Controller.

His evidence was that the Plot was owned by the appellant and that it was used for motorbike sports until 2009. The Plot was then offered to a Mr Chayne. He did not take the Plot citing lack of title.

In June 2010, an entity called Leengate Investments applied to lease or acquire the Plot.

An offer to lease was extended to that company, but, nothing materialised as the company failed to meet the conditions stipulated by the appellant.

The witness accused the respondent of having been in cahoots with Leengate Investments.

He averred that the respondent sat in the Committee that had recommended leasing the Plot to Leengate Investments, without declaring his interest.

The witness stated, that, no Agreement of Sale was ever entered into between the respondent and the appellant concerning this Plot. In fact, according to this witness, there are no Council records confirming the alleged sale of the Plot to the respondent or any other purchaser.

He explained, that, whenever the appellant intended to sell land to anyone, a resolution to that effect must first be made.

When the offer is not being made to an individual, an advertisement is placed in the newspaper inviting prospective buyers to apply. Thereafter, an offer is made to the successful applicant. This is then followed by an Agreement of Sale or lease agreement.

He denied that the respondent paid the sum of $36,080 as there are no records to that effect.

He explained that estate accounts have a unique serial number and same is created from an Agreement of Sale. Thus, when payment is made, it goes into that estate account.

The witness conceded that the respondent's plans had been approved, but, he was unable to identify the persons who did so.

He insisted that the respondent had neither the Agreement of Sale nor lease, despite the approval of his building plans.

The witness maintained, that, all other payments or subsequent approvals by various departments cannot stand in the absence of the source documents, that is, the Agreement of Sale or lease.

The witness stated, that, his department was the custodian of all Council records and his search did not yield any source documents in favour of the respondent.

The court a quo found this witness evasive in that he denied, for example, a document clearly marked “arrear rentals” as being what it is - a paper outlining arrear rentals. The same was observed with a document showing payment of rates. He kept referring to the relationship between Leengate Investments and the respondent until it was pointed out to him, that, in its papers, the appellant had indicated that it later found out that there was no link between the respondent and Leengate Investments.

The court a quo assessed the credibility of this witness as follows:

“Rather than give his evidence in a truthful manner, acknowledging where necessary, that he had no knowledge of the facts, the witness struck the court as a hired gun who was bent on ensuring that the plaintiff wins at all costs.”

ANALYSIS

1. Whether the respondent purchased the Plot in question

It appears that the court a quo based its assessment of the credibility of this witness on peripheral matters. It however lost sight of the crux of the witness evidence, namely, that, his department is the custodian of the appellant's records and that he had established that there was no record of any Agreement of Sale or lease of the Plot to the respondent. For that reason, the Plot remained the property of the appellant.

In this regard, the witness was not shaken nor did the respondent adduce evidence to contradict that position.

The respondent has not produced any documents purporting to be the Agreement of Sale entered into by the parties.

What he relies on are various inputs to do with the respondent's departments, for example, the assessment of rates and the approval of building plans pertaining to the Plot.

However, it is common cause that all these processes and activities could only be embarked upon once there was a Council resolution and an Agreement of Sale.

In devoting its assessment of the witness's credibility on peripheral issues, some of which occurred before the witness was employed by the respondent, the court a quo lost the essence of the inquiry that it should have embarked upon.

The respondent has alleged a verbal agreement of sale entered into between him and the appellant's employee, namely, the Director of Housing.

That is confirmation of the witness's evidence that there are no records of the sale.

The appellant's position is unassailable. It did not sell the property to the respondent - there are no records to that effect.

SC120-23 : COLLINS MANGENJE and GODWIN MANGENJE vs ISAAC TICHARWA (executor, estate Kennedy Mangenje) and MANGENJE BROTHERS (PVT) LTD (In liquidation) and CECIL MADONDO (liquidator, Mangenje Brothers)
Ruled By: BHUNU JA, CHIWESHE JA and CHATUKUTA JA

This is an appeal against the whole judgment of the High Court (the court a quo) wherein it confirmed a provisional order against the appellants.THE PARTIESBoth appellants are directors and shareholders of the second respondent, a company under liquidation, duly registered in terms of the laws of Zimbabwe. The first ...

This is an appeal against the whole judgment of the High Court (the court a quo) wherein it confirmed a provisional order against the appellants.

THE PARTIES

Both appellants are directors and shareholders of the second respondent, a company under liquidation, duly registered in terms of the laws of Zimbabwe. The first respondent is the executor dative of the estate of the late Kennedy Mangenje who was a founder and director of the second respondent company. The third respondent is cited in his official capacity as the liquidator of the second respondent, whereas the fourth respondent is the Sheriff of the High Court of Zimbabwe cited in his official capacity as well.

FACTUAL BACKGROUND

The first respondent brought an application in the court a quo for the provisional liquidation of the second respondent in terms of section 5(1)(b)(iii) of the Insolvency Act [Chapter 6:07] (the Act). The section authorizes one or more members of a company to apply for an order to wind up a company in circumstances where it is just and equitable that the company be liquidated.

Section 4(1) of the Insolvency Act clothes the first respondent, in his capacity as executor, with the authority to apply for the liquidation of the second respondent as a debtor of the deceased estate.

The first respondent brought the application in a bid to protect the interests and rights of the deceased estate for the benefit of its beneficiaries. The appellants, in turn, countered by seeking to prove the quantum of damages they suffered, placing reliance on section 8 of the Insolvency Act [Chapter 6:04] (the Act).

The court a quo granted the provisional order on May 2022. A final liquidation order was granted on 28 September 2022 in the following terms:

“IT BE AND IS HEREBY ORDERED THAT:

1. The first respondent, MANGENJE BROTHERS (PRIVATE) LIMITED be and is hereby finally wound up.

2. Subject to section 41 of the Insolvency Act [Chapter 6:07], CECIL MADONDO is hereby appointed as the final liquidator of the first respondent company with the powers set out in Part X of the Insolvency Act.

3. The first respondent shall meet the costs of this application and the liquidation proceedings.”

The court a quo found that the appellants, as interested parties, could not claim for damages in terms of section 8 of the Insolvency Act. Consequently, it ruled that the provision exclusively permits a debtor to claim the relief sought by the appellants. It therefore ruled, that, the express mention of debtor excludes all other parties to claim damages with the exception of a debtor.

The outcome of the confirmation proceedings did not go down well with the appellants, hence this appeal. They accordingly mounted the appeal on the following nine grounds:

GROUNDS OF APPEAL

“1. The court a quo grossly misdirected itself and erred at law in failing to find, as it ought to have done, that the provisional order issued on 4 May 2022 was a legal nullity on account of the application's fatal non-compliance with the mandatory provisions of section 5(4) of the Insolvency Act.

2. The court a quo erred at law and grossly misdirected itself in failing to find, as it ought to have done, that the application before it was fatally defective and could not be granted due to first respondent's failure to attach a statement of affairs of the company as contemplated by section 5(4) of the Insolvency Act.

3. The court a quo erred in finding that the two paged statement of assets and liabilities and statement of liabilities, attached to the application, constituted a statement of affairs of the 2nd respondent as required in terms of section 5(4) of the Insolvency Act.

4. The court a quo grossly misdirected itself when it held, that, the appellant refused to supply the requisite information for the sake of compliance with the statute, when there was never any such request made by the Provisional Liquidator as required in terms of the law, and in circumstances where the 1st respondent was in possession of the company documents.

5. The court a quo erred at law and grossly misdirected itself when it held that appellant did not show that they were prejudiced by the nature of the application mounted by the 1st respondent without complying with Rule 59(1) of the High Court Rules notwithstanding the clear demonstration made that the 2nd respondent was not given any chance to oppose the application before the granting of the provisional order, and that once the provisional order was granted, the appellants lost a right to oppose that application before the granting of the provisional order, and that, once the provisional order was granted, the appellants lost a right to oppose the liquidation on behalf of the 2nd respondent which prejudice could not be cured by costs.

6. The court a quo erred and grossly misdirected itself in finding, that, the minutes of proceedings of the first meeting of the creditors of the 2nd respondent was the Master's report thereby proceeding without the requisite Master's report as required in terms of the law.

7. The court a quo erred in failing to find, that, by leasing out its properties, the 2nd respondent was actually trading and carrying on business as its memorandum of association authorised it to do so.

8. The court a quo erred and grossly misdirected itself in finally winding up the 2nd respondent when there was no just and equitable cause for its winding up, yet, the court never got to relate to the merits of all the other grounds which the appellants had resisted the success of the application, save for the issue concerning first respondent's non-compliance with section 5(4) of the Insolvency Act.

9. The court a quo erred at law and grossly misdirected itself in winding up the company on the basis that it was now defunct when there was never any evidence led or submissions made to the effect that the company was defunct. In so doing, it went on a frolic of its own.”...,.

ISSUES FOR DETERMINATION

The grounds of appeal raise two pertinent issues for determination. These are:

(a) Whether or not the court a quo erred in finding that there was compliance with section 5(4) of the Insolvency Act.

(b) Whether or not the court a quo erred in dismissing the appellant's claim for damages.

Whether or not the court a quo erred in finding that there was compliance with section 5(4) of the Insolvency Act

The appellants contention is that the court a quo ought not to have confirmed the provisional order in circumstances where the first respondent had failed to comply with the mandatory provisions of section 5(4) of the Insolvency Act.

The section requires that every such application must be accompanied by:

“(a) A statement of affairs of the debtor corresponding substantially with Forms A of the First Schedule.

(b) A certificate of the Master issued not more than 14 days before the date on which the application is to be heard by the Court that sufficient security has been given for the payment of all costs in respect of the application that might be awarded against the applicant.”

The court a quo found, that, it was not disputed that a request for the second respondent's statement of its state of affairs was made on 12 June 2019. It further found that a two paged statement was availed by the second respondent's legal practitioners, hence, the first respondent complied with the mandatory provision of section 5(4) of the Insolvency Act.

It found that the second respondent could not benefit from its wrong by providing a scanty document then turn around to challenge it on the basis of its inadequacy.

As regards the Master's Report, it ruled that the Master's report, though scanty, was availed.

These being findings of fact, the appellants came nowhere near discrediting the court a quo's factual findings in this regard.

The finding that it was common cause that these documents had been sought, and availed, was particularly damning to the appellant's case.

The evidence tabled before the court shows, beyond question, that, it is the second respondent's legal practitioners who supplied the document showing the second respondent's state of affairs. The appellants, being directors of the company, must be taken to have had a hand in the preparation of the scanty document.

They cannot now be allowed to challenge the document and benefit from their own wrong....,.

The respondents, having amply demonstrated that there was compliance with the mandatory provisions of section 5(4) of the Insolvency Act, we are constrained to determine issue number one in the respondents favour.

SC122-23 : BERNARD KUJINGA vs OLD MUTUAL LIFE ASSURANCE (PRIVATE) LIMITED
Ruled By: MAVANGIRA JA, CHIWESHE JA and MUSAKWA JA

This is an appeal against the whole judgment of the Labour Court (the court a quo) handed down on 4 June 2021 wherein the court upheld the appellant's dismissal from employment by the respondent on the basis that he had engaged in misconduct which was contrary to the express and ...

FACTUAL BACKGROUND

The appellant is a former employee of the respondent, which is a company duly incorporated under the laws of Zimbabwe and operates in the insurance and financial services sector. He was employed by the respondent as an Accounts Administrator based at Old Mutual Gardens, Emerald Hill, Harare.

He was also a workers representative in the Old Mutual Workers Committee (the Workers Committee).

On 24 July 2019, the appellant was suspended from work on the basis that his employer had good cause to believe that he had committed acts of misconduct in terms of the Old Mutual Code of Conduct and Grievance Procedure (the Code).

The events leading to the charges of misconduct are as follows:

A Works Council meeting was held on 8 July 2019, and it was attended by members of the Workers Committee. At the meeting, management advised that it had resolved to increase the employees salaries by 45 percent; which salary increase was communicated, via email, to all workers, by the Group Chief Executive (the GCE) on the same day.

Disgruntled by the resolution on the salary increment, four of the respondent's employees from the Workers Committee went to see the Human Capital Consultant (the HCC) on the morning of 9 July 2019 and stated that the workers were demanding to see the Human Capital Executive (the HCE) in relation to the salary increment.

The appellant was alleged to have made common cause with these four employees, in that they misrepresented to, and mobilized, the rest of the employees to gather in the staff canteen under the guise that the Human Capital Executive (HCE) wanted to address them on the issue of salaries.

The issue of the sit-in reached the Group Chief Operating Officer (the GCOO), who convened an urgent meeting with the management and the members of the Workers Committee.

The appellant and his colleagues were directed to disperse the employees gathered at the canteen whilst management dealt with the issue of the salary increment.

The appellant, and his colleagues, are said to have refused to leave the Human Capital Executive's office, and, instead, demanded that she addresses the employees gathered in the canteen.

The employees only dispersed after the Designated Agent from the National Employment Council read to them a memorandum drafted by management, which instructed them to return to work or risk disciplinary action.

The employees had, however, spent the greater part of the day congregated in the canteen.

In light of these events, the appellant was suspended from work, in terms of section 12.2 of the Old Mutual Code of Conduct and Grievance Procedure, and investigations into his conduct were instituted.

On 1 August 2019, the appellant was charged with contravening section 15.9.1 of the Old Mutual Code of Conduct and Grievance Procedure for “failure to fulfil the express or implied conditions of the contract of employment or any breach of the employment contract.”

This charge was grounded on clause 8 of the appellant's contract of employment, which provides, that, the employee should perform his/her duties in the best interests of the respondent and refrain from any action which could, in any manner, harm the good name and reputation of the respondent.

A disciplinary hearing was conducted.

Evidence was led against the appellant to the effect that he had misrepresented to the Human Capital Executive (HCE) that employees were demanding to be addressed by him in the staff canteen. He was also alleged to have misrepresented to the employees that the HCE wanted to address them in the canteen.

In addition, the appellant was alleged to have instigated an illegal collective job action by encouraging the employees to stay in the canteen on the premise that the Human Capital Executive (HCE) was coming to address them.

The respondent claimed that the appellant's actions had tarnished its image.

Per contra, the appellant denied that he misrepresented facts to the Human Capital Consultant (HCC) as the elements of misrepresentation were not established.

He argued that the CCTV video evidence produced by the respondent did not confirm that he had mobilised employees to assemble in the canteen, but, rather, that the employees had already started moving out, and that he was not part of the delegation that went to the Human Capital Consultant (HCC).

The appellant also argued, that, he had acted within his mandate, as a Workers Committee member, when he approached the Human Capital Executive (HCE) and subsequently communicated to the employees their employer's response to the issue of salary increment.

The appellant contended, that, the respondent was victimizing him for executing his duties as a Workers Committee member.

In addition to the above, the appellant denied instigating an unlawful collective job action. Instead, he claimed to have acted upon the employer's request for a meeting with the respondent's executives which he duly attended.

The appellant claimed that his conduct was not inconsistent with the terms of his contract of employment. In addition, the appellant argued that as he had heeded the call to return to work, or face disciplinary action, the charges against him should have been withdrawn.

The Hearing Officer found that the appellant had misrepresented facts and directed the employees to gather in the canteen for an address by the Human Capital Executive (HCE). He further held, that, the CCTV video evidence established that the employees started going to the canteen after the workers representatives had met with the HCE. It was further held, that, the appellant and his colleagues had staged a sit-in in the Human Capital Executive's personal assistant's office after the HCE's refusal to address the employees in the canteen, and, as a result, they had stayed away from their work stations and had withdrawn labour.

This was held to be contrary to the appellant's express or implied terms of his employment contract.

The Hearing Officer also found, that, after being told that the Human Capital Executive (HCE) would not address the employees, the appellant failed, neglected and/or refused to give such feedback to the employees, which failure abetted the continued illegal withdrawal of labour by the employees.

In addition, the Hearing Officer held that the appellant had assisted in the instigation of collective job action, which was illegal as there was no compliance with section 104(2)(a) and (b) of the Labour Act [Chapter 28:01].

Nevertheless, the Hearing Officer held that the appellant was being charged with 'failure to fulfil the express or implied conditions of the employment contract or any breach of the employment contract' which arose from his gross lack of honesty and integrity by misrepresenting facts to management and other employees, thereby putting the respondent's name into disrepute.

In conclusion, the Hearing Officer held that the appellant's conduct was unacceptable to the employer as it went to the root of his employment contract, thus ruining the relationship with the employer.

The Hearing Officer found him guilty as charged and terminated his employment with the respondent with effect from 26 July 2019.

The appellant lodged an internal appeal against the Hearing Officer's decision, raising 12 grounds of appeal.

In the determination handed down on 2 October 2019, the Appeals Officer made a preliminary finding that the appeal was dismissible from the onset on the basis that the appellant failed to challenge some critical findings made by the Hearing Officer.

On the merits, the Appeals Officer found that some of the appellant's grounds of appeal were repetitive. He also found that there was no specific ground of appeal challenging what had transpired in the Human Capital Executive's office.

In summary, the Appeals Officer found that the Workers Committee members lied to both the employer and employees about a proposed meeting in the canteen.

The Appeals Officer upheld the verdict of the Hearing Officer and also found, that, the issue of sentence was at the discretion of the employer. Consequently, the appeal was dismissed.

The appellant noted an appeal to the Labour Court (the court a quo).

He submitted that the respondent had failed to address the employees who gathered in the canteen, which inevitably led to loss of production. Thus, the appellant contended that the respondent was the author of its own misfortunes.

The appellant further argued, that, it had not been established that he had misrepresented facts to both the employer and the employees. He contended that the elements of misrepresentation had not been proven.

In addition, the appellant contended that the allegation that he was acting in concert with his fellow colleagues was unfounded and not supported by any evidence on record.

The appellant also argued, that, the memorandum read out by the Designated Agent was a waiver of the respondent's right to discipline him.

He thus argued that the respondent was estopped from proceeding with the disciplinary hearing against him.

The appellant also argued, that, he had complied with the dictates of the memorandum. and thus contended that, the Appeals Officer had grossly misdirected himself when he failed to note that the Disciplinary Committee was improperly constituted.

He further argued, that, he was being victimized for exercising his rights as a Workers Committee member.

In conclusion, the appellant argued that the penalty of dismissal was punitive as he was not guilty of the offence he was charged with.

Regarding the first ground of appeal, the court a quo held that it lacked clarity. As a result, that ground was struck out.

In relation to the second ground, which challenged the factual findings which had been upheld by the Appeals Officer, the court a quo found that the appellant played an integral part in planning and executing the scheme of gathering employees at the canteen and have management address them there.

The court a quo thus held, that, there was no basis for overturning the Appeals Officer's decision to uphold the Hearing Officer's findings.

In relation to the third ground of appeal, the court a quo held that the Appeals Officer had correctly found that the appellant had been dismissed from employment, not because of collective job action, but, on the basis of the misrepresentations he had made which led to the gathering.

The court a quo also held, that, being a Workers Committee member did not insulate the appellant from disciplinary action, hence, his claims that he had been dismissed from employment, as victimisation for being a Workers Committee member, were held to be meritless.

In addition, the court a quo held that the appellant's conduct demonstrated a high level of dishonesty and disrespect for authority, went to the root of the employment contract, and made the continuation of the working relationship untenable.

As a result, the court a quo held that it could not interfere with the penalty of dismissal imposed by the respondent. Consequently, the appeal was dismissed.

It is this decision which the appellant now seeks to set aside on the following grounds of appeal:

“GROUNDS OF APPEAL

The appellant's grounds of appeal are as follows:

1. The court a quo made a gross misdirection in holding, despite compelling evidence to the contrary, that appellant was excluded from the waiver granted by the employer concerning the alleged unlawful ensemble, whereas appellant was covered as the waiver covered all employees.

2. The court a quo erred in law in upholding the dismissal of appellant for alleged dishonest conduct inconsistent with his contract of employment, whereas, in the circumstances, appellant was lawfully and bona fide executing his role as a workers representative.

3. The court a quo erred in upholding the penalty of dismissal, whereas, in the circumstances, the exercise of discretion in favor of dismissal by the lower tribunal was unfair and irrational, regard being had to:

(i) That, applicant was exercising a workers representative role in circumstances of an industrial emergency.

(ii) Appellant's favorable mitigation submissions and record of service.”

Before this Court, the following submissions were made.

APPELLANT'S SUBMISSIONS

At the hearing of the present appeal, counsel for the appellant submitted, that, he would not persist with the first ground of appeal, under which it was contended that the respondent had waived its right to discipline the appellant through a notice read out to the employees by the Designated Agent.

This was in light of this Court's decision in the similar case of Chabvamuperu v Old Mutual Life Assurance (Pvt) Ltd SC12-23, that there was no waiver from disciplinary action given by the respondent.

In relation to the second ground of appeal, counsel for the appellant submitted that whilst in Chabvamuperu v Old Mutual Life Assurance (Pvt) Ltd SC12-23, the Workers Committee members had been found guilty of mobilizing the employees and making misrepresentations to both the respondent and the employees, the appellant in casu was not involved in the initial meeting which resulted in the employees gathering in the canteen.

Counsel submitted, that, the appellant only got involved in the two-hour sit in and attended the subsequent meeting with the Group Chief Operating Officer in pursuance of his duties as a Workers Committee representative.

Counsel for the appellant argued, that, the appellant had relative immunity from disciplinary action in terms of section 65(2) of the Constitution of Zimbabwe, as he was bona fide executing his duties as a Workers Committee representative.

He argued, that, the appellant had only acted basing on what his fellow members of the Workers Committee had told him.

In addition, counsel submitted that the mitigatory circumstances of the appellant ought to have been taken into account during sentencing, in line with section 12B(4) of the Labour Act [Chapter 28:01].

Counsel for the appellant contended, that, in the circumstances of the case, the penalty of dismissal was harsh.

RESPONDENT'S SUBMISSIONS

Per contra, counsel for the respondent argued that the appellant had not appealed against the finding that he was guilty of dishonesty arising from misrepresentations and misleading the other employees and management, and that, he merely claimed that he was exercising his role as a Workers Committee member.

Counsel further submitted, that, the appellant had ample opportunity to disengage from further lying to management and the employees when management repeatedly informed him and his colleagues that they had not called for an address and that the gathering by the employees was unlawful.

Additionally, counsel for the respondent contended that section 65(2) of the Constitution of Zimbabwe did not clothe Workers Committee members with absolute immunity from disciplinary action as they are expected to execute their duties in a lawful manner.

APPLICATION OF THE LAW TO THE FACTS

Whether or not the court a quo erred by upholding the appellant's dismissal from employment

The above issue emanates from the second and third grounds of appeal.

It is the appellant's contention, that, the court a quo failed to find that the conviction and dismissal of the appellant was tantamount to victimization for exercising his role as a Workers Committee member.

In addition, the appellant is of the view that the court a quo did not weigh the evidence before it to determine whether it established that the appellant had made misrepresentations to the respondent and the other employees.

In respect of the third ground of appeal, counsel for the appellant submitted, that, the court a quo erred in upholding the penalty of dismissal as the court had authority to interfere with the penalty in terms of section 12B(4) of the Labour Act. He further argued that the penalty was harsh and unfair in the circumstances.

The court's considered view is that the issues raised in the second and third grounds of appeal can be resolved by determining whether or not the court a quo correctly found that the appellant was guilty of the acts of misconduct he was charged with.

It is trite that the degree of proof in labour issues is on a balance of probabilities.

In the case of British American Tobacco Zimbabwe v Chibaya SC30-19 the court cited the case of Miller v Minister of Pensions [1947] 2 AII ER 372, 374 wherein the following was said regarding proof on a balance of probabilities:

“It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say 'we think it more probable than not' the burden is discharged, but, if the probabilities are equal it is not.”

In casu, the evidence on record established that the appellant was not involved in the initial Workers Committee meeting in which the members resolved to misrepresent to the respondent that the employees wanted to be addressed by management on the issue of the salary increments, and to the employees, that management wanted to address them.

This was the appellant's testimony during the disciplinary hearing, which testimony was supported by the evidence of Mr Nzombe, Basil Machocho, and Don Chabvamuperu.

That notwithstanding, the appellant was part of the delegation that staged a sit-in in the Human Capital Executive's office and refused to leave until management had addressed the employees gathered in the canteen.

Although the appellant might not have been part of the misrepresentations in the beginning of the scheme, he did participate in continuing to misrepresent to management that the employees were demanding to be addressed when that was, to his knowledge, an unfounded lie.

In the case of Anthony Makintosh v The Chairman, Environmental Management Committee of City of Harare & Anor SC12-14…, this Court held that:

“An Appeal Court will only interfere with a decision which involves the exercise of discretion by a lower court in very limited circumstances. These were set out by this Court in Barros & Anor v Chimphonda 1999 (1) ZLR 58 (S) at p62-63, where the court said:

'The attack upon the determination of the learned judge, that, there were no special circumstances for preferring the second purchaser above the first, one which clearly involved the exercise of a judicial discretion, may only be interfered with on limited grounds: see Farmers Co-operative Society (Reg.) v Berry 1912 AD 343 at 350.

These grounds are firmly entrenched.

It is not enough that the Appellate Court considers, that, if it had been in the position of the primary court, it would have taken a different course. It must appear that some error has been made in exercising the discretion. If the primary court acts upon a wrong principle, if it allows extraneous or irrelevant matters to guide or affect it, if it mistakes the facts, if it does not take into account relevant some consideration, then, its determination should be reviewed and the Appellate Court may exercise its own discretion in substitution, provided always has the materials for so doing.

In short, this court is not imbued with the same broad discretion as was enjoyed by the trial court.'”

An analysis of the facts leads to the conclusion, that, there was no misdirection by the court a quo in upholding the decision of the Appeals Officer. Accordingly, the court a quo cannot be faulted for upholding the finding that the appellant misrepresented facts to the respondent and to the respondent's workforce.

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE
Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

This is an appeal against the whole judgement of the High Court (the court a quo) sitting at Harare, dated 11 January 2023, wherein it declared that the procurement contract entered into between the appellant and the respondent was valid and binding between them. The court a quo proceeded, consequently, to grant an order of specific performance of the contract.

It also dismissed the appellant's counter claim and ordered that the appellant pays the respondent's costs in the claim in reconvention.

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

THE FACTS

On 23 October 2015, the parties entered into a Public Procurement Engineering, Procurement and Construction Contract (the contract). In terms of that contract, the respondent was required to construct one solar Photovoltaic Power Station to the capacity of 100MV in Gwanda (the project).

A dispute arose during the implementation of the project.

The respondent issued summons in the court a quo seeking the following relief:

“1. An order declaring that the procurement contract for the Engineering, Procurement and Construction (EPC) of the 100 MV Gwanda Solar Project (ZPC 304/2015) between the parties, as amended, is valid and binding between the parties.

2. Consequent to the declaration of the validity of the EPC contract, an order for specific performance.

Alternatively:

Damages in the sum of US$25,000,000 (twenty five million United States dollars) for repudiatory breach of the EPC contract by the defendant.

3. Costs of suit at the attorney and client scale.”

In its declaration, the respondent amplified its claim as follows:

The agreed contract price for the project was US$172,848,597=60 exclusive of taxes. The respondent was to secure and facilitate the funding of the project as well as bear most of the risks associated with the construction of the plant up to the point of commissioning.

The contractual terms were derived from the FIDIC Silver Book (General Conditions of Contract for EPC/Turnkey Project) 1999, First Edition. The General Conditions were applicable to the extent that they were amended by the Particular Conditions of contract agreed to by the parties.

The appellant was to borrow the funds sourced by the respondent in its name, superintend over both the construction works, and facilitate payments due to the respondent.

The appellant would only take over the risk and liability in the power infrastructure upon successful completion of the solar plant, that is, at the “turn of the key”.

The commencement of the contract was subject to certain suspensive conditions which were to be satisfied or achieved by both parties within a period of 24 months reckoned from 23 October 2015, the date of signature of the contract. The period within which the suspensive conditions were to be satisfied (the Conditions Precedent Satisfaction Period”) could be extended by a period of 6 months through an amendment to the contract. Such extension was to be done before the expiry of the tenure of the conditions precedent satisfaction period.

Beyond the conditions precedent satisfaction period, either party became entitled to terminate the contract, provided that the party seeking to terminate the contract was not responsible for the delays in the fulfilment of the conditions precedent.

Before the expiry of the conditions precedent satisfaction period, on 23 October 2017, the parties agreed to enter into an addendum to the contract, the terms of which would allow the appellant to pay some of the respondent's subcontractors directly in order to carry out the pre-commencement works at the project site.

The arrangement was in anticipation of the commencement of the contract.

The addendum was executed on 21 September 2017, prior to the expiry of the conditions precedent satisfaction period set for 23 October 2017.

The addendum set different timelines for the conclusion of the pre-commencement works. The appellant undertook to pay for that work.

The appellant, however, failed to pay for such works, and, as a result, these were not executed at all or were not executed timeously.

The appellant sought to extend the conditions satisfaction period by a period of six months, on 29 November 2017. The extension was to be reckoned from 23 October 2017.

The respondent objected to the extension, which it regarded as a breach of the contract, given the new terms of the addendum to the contract and the appellant's failure to perform its obligations under the addendum.

According to the respondent, the appellant unilaterally demanded that the suspensive conditions be completed on or before 23 April 2018, a demand that the respondent viewed as a material breach of the express provisions of the contract.

By way of notices dated 10 April 2018, 6 July 2018, and 31 July 2018, the appellant informed the respondent that the contract had expired by operation of law.

All contractual obligations between the parties were, in terms of these notices, terminated.

The appellant insisted on such termination despite its admission that it had failed to perform its obligations to pay the respondent's sub-contractors.

The respondent further contended, that, the termination was also unlawful in view of the appellant's direct liability in causing delays in the fulfilment of the conditions precedent within the agreed time frames.

It was thereafter that the respondent approached the court a quo, by way of application, seeking a declaration of validity of the contract and an order for specific performance.

The application was granted on 13 December 2018 under HC8159/18.

The appellant appealed that determination to this Court under SC39/21.

In the meantime, the respondent applied for leave to execute judgment pending appeal.

The court a quo granted that application on 19 June 2019 under HC2425/19.

The respondent claims, that, during the two year period in which the parties awaited the outcome of the appeal at the Supreme Court, the parties implemented the contract, as amended, and engaged in a series of meetings that culminated in the drafting of an amended and restated contract.

On 13 May 2021, this court upheld the appellant's appeal and set aside the judgment of the court a quo. This Court determined, that, the matter was replete with material disputes of fact which could not have been resolved on the papers before the court a quo.

It was for that reason that the respondent returned to the court a quo and instituted action procedure, seeking the same relief.

In its plea in the court a quo, the appellant raised two points:

(i) Firstly, it contended that the contract never took off because the conditions precedent were not fulfilled. There was thus no basis at law for the respondent to seek the declaration of validity.

(ii) Secondly, it averred that this court had dismissed the respondent's claim. It therefore pleaded res judicata.

The appellant also filed a counter-claim seeking an order in the following terms:

“(a) An order that the EPC contract, and the Addendum entered into by the parties, did not commence due to the plaintiff's failure to meet the prescribed conditions precedent.

(b) Damages for breach of contract and misrepresentation in the sum of US$96,673,236=30 (ninety-six million six hundred and seventy-three thousand two hundred and thirty-six United States dollars thirty cents.”

The matter was referred to trial on the following agreed issues:

In respect of the main claim:

“(a) Is the procurement contract entered into by and between the plaintiff and the defendant, dated 23 October 2015, valid and binding on the parties?

(b) Depending on the conclusion reached on the above question, did the plaintiff suffer damages, and what is the quantum thereof?

In respect of the claim in reconvention:

(a) Was the agreement entered into by and between the parties induced by misrepresentation on the part of the plaintiff?

(b) If the plaintiff breached the agreement, then, did the defendant suffer damages as pleaded by it or at all and what is the quantum?”

At the commencement of the trial in the court a quo, the appellant abandoned the claim in paragraph (b) of its prayer, that is, the claim for damages for breach of contract and misrepresentation action in the sum of US$96,673,236.

The appellant, however, persisted with the claim for US$3,330,736=30, being the advance payment made to the respondent in respect of the pre-commencement works.

PROCEEDINGS BEFORE THE COURT A QUO

The Respondent's Evidence

The respondent's sole witness was its Managing Director, Wicknell Munodaani Chivhayo. His evidence was summarized by the court a quo as follows:

He told the court, that, when the tender for the project was flighted, the appellant had no funds for the project. For that reason, the appellant was looking for a contractor that would also assist it in raising funds for the project.

The respondent's partner, CHINT, was roped into the project to bring in the required funds. He told the court, that, CHINT had the required financial and technical capacity to execute the project.

The contract price was US$172,848,597=60.

Mr Chivhayo said, that, the commencement of the contract was subject to the satisfaction of the conditions precedent set out in clause 5 of the contract. These included the sourcing of the funds for the project and the completion of the feasibility studies. The appellant was responsible for funding the pre-commencement works and the respondent was required to assist with the fundraising.

To that end, the respondent had engaged financial consultants and financial partners such as the China Exim Bank and the Ministry of Finance and Economic Development. These engagements were done before the commencement of the project.

The witness blamed the appellant for the collapse of the engagements that were intended to birth the necessary financial agreements.

China Exim Bank required that the Government of Zimbabwe guarantees the loan facility.

The witness approached the Ministry of Finance on behalf of the appellant. The Ministry indicated its interest to support the project and had agreed, at the witness's suggestion, that the project be given national status.

The Ministry of Finance undertook to provide the Government guarantees required by China Exim Bank and had written a letter, dated 10 March 2016, addressed to the Export-Import Bank of China, undertaking to issue a sovereign guarantee for the project in the sum of US$147,000,000.

However, the Government of Zimbabwe had been blacklisted for defaulting on a loan of US$400 million. For that reason, the China Export and Credit Insurance Corporation (China Sinosure), a state funded insurance company established to support China's foreign and trade development co-operation, refused to secure the loan.

Thereafter, the parties mooted other sources from which to raise capital.

One of these was the proposed raising of energy bond through the CBZ Bank. This proposal had the full support of the SPB (State Procurement Board). However, the appellant was not interested, even after its own Ministry directed it to pursue that route.

The witness further told the court, that, the appellant frustrated the signing of the financial arrangements, contrary to the spirit of clause 5(a) of the contract.

The witness had this to say about the advance payment demand guarantee:

During meetings with the appellant's officials, feasibility studies had been carried out and the appellant owed the respondent funds for the work done. There was no need for such guarantee once work had been completed and payment now due to the plaintiff. The advance payment received was therefore in respect of the feasibility studies that had been performed.

With regards the performance security, the witness said it was not provided for, partly because the appellant still had some outstanding amounts still to be paid, and that, at any rate, it had not been asked for.

He also confirmed, that, the appellant had carried out its due diligence in terms of clause 5(f) of the contract.

Both parties representatives travelled to China for the purpose of evaluating the respondent's partner, CHINT. Both parties were aware that CHINT had successfully carried out some projects in Zimbabwe.

The witness stated, that, the production of the Environmental Impact Assessment was the responsibility of the appellant. It was only produced through his intervention, when he directly engaged the responsible Ministry.

The land for the project was also acquired through his efforts when he approached the Ministry of Lands.

He confirmed that both parties had secured the necessary authorizations as required by clause 5(f) of the contract.

Only one condition remained outstanding, that is, the financing agreements.

He said that the amendments of the contract, through the addendum, were occasioned by the loss of time.

In terms of the agreement, as re-affirmed by the addendum, the total cost of the pre-commencement works was US$5,111,224=50. The respondent was supposed to contribute to that amount in the sum of US$1,000,000 with the appellant contributing the remainder.

The respondent did not pay its contribution as it was only required to perform work of an equivalent value.

He said that after the payment of the feasibility studies, and part of the fee for the pre-commencement works, the appellant still had an outstanding liability in the sum of US$1,232,322=87 for part of the pre-commencement works carried out.

The respondent's sub-contractors were to be paid from that outstanding amount.

He stated that the appellant caused his arrest by ZACC officials for non-performance of the contract. He wrote to the appellant's Managing Director complaining about the unfounded allegations of corruption. His arrest negatively affected the execution of some of the works by the respondent's subcontractors.

He insisted that the conditions precedent satisfaction period was extended by the parties, and yet, the appellant went on to raise a criminal complaint for non-performance.

He made reference to clause 5(i) of the contract which provided, that, if the conditions precedent were not satisfied on or before 24 months after the date of signature of the contract, the parties should meet, and, if need be, the appellant could, in its sole discretion on or at any time before the lapse of the 24 month period, elect to extend the conditions precedent satisfaction period by a further six months.

He referred to a letter from the appellant to the respondent, dated 29 November 2017, in terms of which the period was extended by a further 6 months from 23 October 2017 to 23 April 2018.

The witness made reference to various correspondences between the parties, and other stakeholders, tending to show that the appellant was responsible for the failure to sign financial agreements during the extended period.

He averred, that, in terms of clause 5(i) of the contract, the appellant was estopped from relying on its own breach to cancel the contract.

He said that the respondent declared a dispute between the parties in terms of the contract. The dispute was declared through a letter dated 15 January 2018. In terms of the contract, the dispute was to be adjudicated by the Dispute Adjudication Board, which was duly constituted.

The appellant's attitude was that there was no need for the constitution of the Board as the parties could meet and resolve the dispute.

The respondent then sought to refer the matter to arbitration, but, the appellant objected saying that it was not an arbitration matter. It was then that the respondent approached the court a quo for an order of specific performance, alternatively, damages.

It succeeded in its quest for specific performance. The appellant appealed that decision to this Court.

Pending the hearing of the appeal, the respondent applied in the court a quo for an order to execute the judgment of that court pending appeal. That application was granted, but, the appellant did not comply with it.

In the meantime, according to the witness, the Ministry of Energy directed that the parties further engage in order to give effect to the contract. The directive was contained in a letter dated 15 June 2020.

As a result, the parties prepared an amended contract which they are yet to sign.

That development was seen by the witness as dispelling the notion that specific performance was no longer possible.

Thereafter, various engagements were initiated by the Ministry of Energy to iron out the problems bedeviling the implementation of the contract. On 6 July 2020, the Minister of Energy wrote to the Executive Chair of ZESA Holdings intimating to the Chair that his office was required “to urgently conclude the drafting of all the pertinent agreements and financial instructions necessary for the available financier to avail the funds required to implement the project.”

This letter was copied to the witness.

The witness asserts, that, the Government of Zimbabwe, through the Ministry of Energy, as the shareholder in the appellant, wanted the project to be implemented without delay. It was for that reason, that, the Ministry had intervened calling on both parties to implement the project.

However, the appellant remained defiant.

The witness indicated, that, in July 2020, the parties arranged a joint visit to the site. The purpose of the visit was to assess the work done and that which remained to be done, since both parties were negotiating a revised contract.

Thereafter, the parties prepared a report, comprising pictures and video evidence, demonstrating their findings on the ground. The report was jointly signed by the parties representatives. The appellant was represented by its project manager, Mr Mugwagwa, and its officials Mr Fambi and Mr Chinho. On the other hand, the respondent was represented by the witness, its project manager, Mr Magweza, and an official called Mr Mubviri. The witness participated in both the joint visit and in the compilation of the joint report.

The witness opined, that, the exercise was an indication that the contract was temporarily on hold.

The witness stated, that, the appellant's counter claim for the sum of US$3,310,736=30 was devoid of merit if considered in the context of the joint report. It was made on the premise that the pre-commencement works were not carried out, yet, the report showed otherwise. The report confirmed that the appellant owed the respondent some money for work done at the conclusion of the pre-commencement works. It also confirmed that the advance payment guarantee was no longer necessary.

He was adamant that the objective of the pre-commencement activities, as set out in the contract, were satisfied. In that regard, he was of the view that the appellant was being malicious in suggesting that the contract was not implemented at all.

The witness justified the respondent's alternative claim for damages as follows:

The respondent had incurred expenses to do with the tendering process as well as the due diligence exercise when the parties had to travel to countries such as China and India. That included the cost of air fares of the appellant's personnel that had to be covered by the respondent. The respondent also claimed risk, occupational damages, and damages for reputational loss occasioned by the negative publicity caused by the appellant. The witness also stated, that, the respondent's security guards were kicked off the project site by the appellant at a time the respondent was prepared to carry on with the project.

Under cross examination, he insisted that discussions for a new contract started in earnest in 2020 after the new Minister of Energy had assumed office.

He said the Minister was unhappy over the delays in implementing the project. The Minister was displeased with the appellant's failure to comply with CHITAPI J's order granting the respondent leave to execute the High Court judgment pending appeal.

The parties met again to discuss the way forward - with no positive results.

He insisted that there were financiers ready to fund the project, but, for the obstinacy of the appellant; a fact he communicated to the Minister. He said that the execution of the Amended and Restated Contract Agreement was not an admission that the respondent had failed to perform. The idea was simply to kick start the project, with the respondent required to source funds for the initial phase of 10MW with the rest of the MW coming later as provided in the contract.

He said it was the EPC contract that is sought to be enforced and not the Amended Restated Contract.

The respondent had even offered to reduce the price to demonstrate its commitment to the implementation of the contract.

Asked whether a guarantee was provided by the respondent, as required by the contract, the witness stated that CHINT wrote to the appellant advising that they had the guarantee in place, but the appellant dithered. The offer was not accepted by the appellant because it had no money.

However, the appellant did make payments for the feasibility and pre-commencement works without an advancement payment guarantee.

This was justifiably so because the respondent had delivered those activities.

He insisted that the appellant's letters of 7 and 10 April 2018 and 6 July 2018, which confirmed the non-extension of the condition satisfactions period beyond 23 April 2018, prevented the respondent from fulfilling the conditions precedent as set out in clause 5a. This was because the appellant failed to pay the respondent's sub-contractors, and, as a result, the pre-commencement works could not be completed.

He further stated, that, although the actual project had not yet commenced, save for the pre-commencement works, the respondent needed only 6 months to complete the first 10MW once it secured the necessary funding.

He accepted that the respondent had revised the project costs downwards in the Amended and Restated Contract because the costs of solar products had generally gone down on the international market.

He dismissed the ADB integrity report on the debarment of CHINT on the basis, that, the respondent was not seeking funding from ADB. In any case, the debarment was lifted as CHINT was never found guilty of any fraudulent conduct.

Asked how the project could be implemented since the appellant did not have financial resources, he responded as follows:

The respondent had presented to the appellant China Exim Bank as a willing financier in 2015. The respondent could not access the funding set aside by China Exim Bank because the appellant's shareholder owed the bank's export credit insurance adviser, Sinosure, and its account was in arrears; China Exim Bank said it could still lend the money using other insurers. There were alternative funders that did not even require underwriters. The respondent introduced other local financiers, such as CBZ and the African Transmission Cooperation (ATC), as prospective funders. The Ministry of Energy even approved the funding proposal by ATC in June 2020.

The appellant was mandated to amend and restate the terms of the contract to give effect to the new funding model but it failed to do so.

The witness said he had also approached NSSA, on behalf of the appellant, requesting assistance in raising US$25,927,289.

The offer was also not taken up by the appellant.

The witness stated, that, the annexure to the joint report prepared during the joint visit to the site, dated 13 July 2020, was part of the main report prepared by the parties representatives. He said that the report, together with the annexure, was actually sent to the respondent by the appellant after the joint visit.

The Appellant's Evidence

The appellant called one witness, Cleopas Fambi, its Assistant Project Manager.

During the period 2015-2017, his duties included the management of the project between the appellant and the respondent. He was involved in the tendering stage, contract negotiations, and the pre-commencement works. His evidence was to the following effect:

Sometime in 2013, the appellant, through the State Procurement Board (SPB), floated a tender for the construction of 3 x 100MW photovoltaic solar plants at Gwanda, Insukamini and Munyati.

The respondent was awarded the tender to construct the solar plant at Gwanda.

The parties concluded the contract on 23 October 2015. The contract was to commence in full force and effect after the satisfaction of the conditions precedent stipulated in the contract.

The respondent failed to fulfil the conditions precedent under clause 5 of the contract and the conditions remain unfulfilled to this date. As a result, the contract did not commence because of the respondent's failure to fulfil those conditions.

He stated that the addendum to the contract dealt with the pre-commencement works listed in schedule 11 of the contract. The appellant paid for the pre-commencement works in advance. The respondent, however, failed to provide the bank guarantee for the advance payments. It also failed to provide its portion that it was meant to contribute to the pre-commencement works. The respondent also misrepresented its capacity to perform the contract.

The witness said, that, he was part of the joint team that visited the project site on 13 July 2020. The visit took place in the context of a proposal to implement the project in phases. The works had been partially completed on the ground. No maintenance or repairs had been carried out since July 2020.

With regards the documentation attached to the joint report showing the various activities of the pre-commencement works undertaken on site and the bill of quantity amounts, the witness said that he was seeing these papers for the first time in court.

He said that the amount of US$2,031,230 representing the value of the ground site clearing was overstated since there was still need to carry out ripping of the top soil, clearing, and site levelling.

He dismissed the allegation that the appellant did not wish to implement the project, saying that the appellant's conduct was consistent with a desire to see the project completed. It was for that reason that the appellant had paid for the pre-commencement works.

Under cross-examination, the witness admitted that the appellant was a State commercial entity and therefore subject to the law governing procurement by State entities.

He agreed that according to the law, the appellant's accounting officer was its Managing Director who was wholly responsible for the administration of the project.

He conceded that he could not account for the project within the contemplation of the law as he was not the appellant's accounting officer. The accounting officer was the person with the complete records of all the transactions.

Asked whether he could provide insight on the issue of financing agreements, he stated that his insight was limited. He could not comment as to why there was no financial closure because he did not have the required information. He could also not comment on whether the appellant deliberately frustrated the financial closure as alleged by the respondent. He could not deny that CHINT had procured funding from China since he was not the accounting officer. Neither could he deny that the respondent had, as an alternative, engaged domestic funders to finance the project and that its efforts had been frustrated by the appellant's ambivalence. He could also not deny that CHINT had offered a US$52 million guarantee but the appellant had not embraced it because it did not have the required funds.

He said the best person to comment would be the accounting officer since all correspondence was directed to him.

The witness admitted, that, the parties did not refer their dispute to a consultant or engineer because there was no disagreement on the value of the pre-commencement works carried out.

The witness was also part of the team that carried out a site visit in July 2020. The parties agreed that the fence was erected and completed. He agreed that the appellant therefore received value at the conclusion of that part of the project. He also agreed that the feasibility study had been done and completed. Repairs and maintenance works had also been carried out.

Although he denied the value delivered, ascribed to the pre-commencement works, in the sum of US$3,382,697 as recorded in the bill of quantities report, he conceded that he could not tell the value that had been delivered to date.

Further, he could not comment on how the sum of US$3,310,736=30 representing the appellant's counterclaim was arrived at. It would require the accounting officer, his team, and the contractor to confirm how the figure was arrived at.

He also admitted that, at some point, the appellant had ordered the respondent's workmen off the site.

The witness could not comment on the Ministry's directive that the project be completed.

His attention was drawn to the fact, that, on 6 July 2020, the minister had, by letter of that date, communicated Government's position to the chairperson of ZESA Holdings. Another letter, dated 15 June 2020, had been written to the ZESA chairperson by the minister. In it, the minister had reiterated Government's desire for the parties to move with speed to implement the project without delay.

The witness could not deny that the contract was still capable of performance and that the respondent could still secure funding to achieve financial closure. He also admitted, that, the appellant was desirous of addressing power shortages. That desire is what had given impetus for the project.

SUBMISSIONS IN THE COURT A QUO

At the end of the trial, the parties filed written closing submissions.

The respondent submitted, that, the only issue that remained for determination was whether or not the contract remained valid and capable of performance. As to the counter claim, it submitted that the issue to be determined was whether the respondent was liable for the advance payment made for the pre-commencement works. The respondent submitted, that, no evidence had been adduced to support the counter-claim. The respondent submitted that it was ready to perform the contract and that it had the capacity to perform the contract.

It also submitted that it was able to provide the required finances. It relied on the case of His Holiness Acharya Swami Dasji (1996) 4 SC 526 for that contention.

The respondent argued, that, the onus rested on the appellant to show that performance was no longer possible.

It contended, that, at law, where one party to a contract repudiated the agreement, the innocent party could elect to claim specific performance of the contract or damages in lieu of specific performance.

It submitted that specific performance was in the court's discretion and that its case had to be determined on its own merits.

The respondent cited the case of Benson v SA Mutual Life Assurance Society 1986 (1) SA 776 (A) where it was held, that, the plaintiff had the right to elect whether to hold a defendant to his contract and claim performance by him of what he bound himself to do or claim damages for the breach. On the other hand, the defendant did not have that right of election.

According to the respondent, the appellant did not lead any evidence to show that specific performance was impossible. It contended that the appellant could not rely on evidence in prior litigation because it had not led that evidence in the present matter.

The respondent submitted, that, the evidence showed that it had done enough to secure the finances required for the project but the appellant failed to come to the party. It further blamed the conduct of the respondent's shareholder, the Government of Zimbabwe, as being partly to blame for the appellant's failure to perform.

The respondent dismissed the evidence given by the appellant's sole witness as ineffectual because the witness admitted that he was not competent to testify on matters which only the appellant`s CEO could shed light on. This witness was, according to the respondent, unable to give evidence proving the value of the pre-commencement work done, nor could he dispute the contention that it was the appellant that actually owed the respondent.

The respondent insisted, that, the addendum to the contract was not a separate document running parallel to the main agreement as contended by the appellant. Rather, the addendum should be interpreted as an integral part of the main agreement.

Further, the respondent contended that the appellant had frustrated the financing agreements, and, for that reason, the court should deem the condition precedent to have been fulfilled in line with the doctrine of fictional fulfilment.

Reliance was placed on the case of Scott & Anor v Poupard & Anor 1971 (2) SA 373 (A) wherein the factors to be established in order to invoke the doctrine of fictional fulfilment were set out as follows:

(i) Non fulfilment of the condition;

(ii) The defendant's breach of his duty with intent to frustrate the fulfilment; and

(iii) A causal link between the non-fulfilment and the defendant's intentional frustration of the fulfilment of the condition.

The respondent averred, that, generally, the court does not have a discretion to refuse to enforce a term contained in a lawfully concluded agreement. In determining whether or not to enforce such a term, the court will be guided by the dictates of public policy.

It submitted, that, the evidence adduced showed that the appellant had frustrated the conclusion of financial agreements. The appellant, argued the respondent, should not be allowed to benefit from its own wrongdoing.

The appellant had not placed before the court the FIDIC document, despite its plea that the agreement should be read in light of the provisions thereof. For this reason, the respondent contends that the FIDIC cannot be a factor in the interpretation of the agreement.

The appellant's closing remarks were to the following effect:

It submitted that Mr Chivhayo's evidence was unreliable and thus the respondent had failed to discharge the onus on it to prove its claim. It accused this witness of changing his evidence when it suited him. It said that his evidence was inconsistent with contemporaneous documents, and that he referred to non-existent documents.

The appellant also made reference to the proceedings in case number SC 39/21 and submitted, that, in that case, this Court made a finding that the respondent had failed to meet the conditions precedent set out in clause 5 of the contract.

This Court, according to the appellant, had established that the respondent had conveniently avoided the action procedure in a bid to stay away from the truth and hoodwink the court.

The appellant also argued that in its evidence, the respondent based its claim on contentious issues raised by the appellant in its replication and not based on its own declaration. The appellant argued, that, the respondent ought to have amended its declaration to incorporate the claims that were never pleaded in the declaration.

The areas of evidence of concern included the China-Exim Bank financing issue, the CBZ and ATC funding and the allegation that the appellant filed fictitious and malicious charges of fraud and corruption against Mr Chivhayo.

The appellant also submitted that the letters of 10 April, 6 July and 31 July 2018 which were alleged to constitute a breach of the contract in the respondent's declaration were never referred to in the examination in chief of the respondent's witness.

The court a quo observed that the matters complained against in this regard are matters of evidence which would not ordinarily be set out in the pleadings but in the evidence.

The appellant further submitted, that, it was common cause that the conditions precedent satisfaction period expired on 23 October 2017 and that the purported extension of that period, by six months, after that date, though not in accordance with the contract, was not a nullity as the respondent could have accepted it.

It averred, that, although its notice to terminate was not delivered in a letter headed “Notice of Termination” it remained a valid notice.

It contended that the issue is not about the absence of notice, but, rather, whether the appellant had the right to terminate the contract, it being alleged that it (the appellant) was responsible for the delay in the satisfaction of the conditions precedent.

The appellant submitted, that, the respondent alleged a breach of Addendum 1, which breach would only affect Schedule 11 of the contract but not clause 5 of the contract.

It submitted that the respondent had failed to indicate when these breaches had occurred.

It further contended, that, Addendum 1 was only executed one month before the expiry of the conditions precedent satisfaction period, or 23 months after signature of the contract. An alleged breach of Addendum 1, it is contended, could not explain the failure to complete the conditions precedent in the preceding 23 months.

The appellant argued, that, this was not a proper case in which the court could exercise its discretion in granting specific performance because the present position was at odds with the parties original position.

The original intention was that the project would take four years. It is contended that the construction and hand over of the solar plant would thus have been completed by October 2019.

The appellant argued, that, if specific performance were to be granted, as requested, the project would be implemented between March 2029 to 2034 - 10 to 15 years later than originally projected.

In any event, argued the appellant, the project was no longer viable because the cost of constructing the plant had decreased due to advances in solar technology. As a result, the respondent stands to make an additional USD33 million profit should specific performance be granted.

The appellant further argued, that, the fact that the parties negotiated a new contract after the judgment of the court a quo, in case number HC8159/18, was testimony to the fact that the parties had realized that the present contract was no longer viable.

It was for that reason that the parties carried out a joint visit to the project site on 13 July 2020.

The Minister of Energy had urged the parties to implement this amended contract. The appellant averred that the Ministerial report related to the amended contract and not the original contract.

Another reason for negotiating the new contract was that the African Development Bank had debarred CHINT for fraudulent practices.

Further, the appellant averred that the introduction of a new currency regime, in February 2019, had implications on the funding of the project as all transactions in USD terms done before February 2019 were now valued in RTGS dollars at the rate of one to one with the USD.

It was also the appellant's argument, that, the respondent had failed to plead relief relating to fictional fulfilment and the factual basis upon which the court could grant the relief of fictional fulfilment.

The appellant further argued, that, fictional fulfilment would not make sense because the project needed to be funded, and that, in any event, the appellant would not be able to pay the contractual amount.

It was submitted by the appellant, that, its Board could not authorise the commencement of the project knowing fully well that it was not going to be funded.

The appellant also argued, that, if fictional fulfilment were granted, there would be implications on third parties in line with the definition of “financial agreements.”

It was, for example, a requirement that the Government of Zimbabwe be a co-signatory to the financial agreements. That requires that the Government be a fictional party to the fictional finance agreement. It was submitted, that, there was no basis upon which the court could exercise jurisdiction over Government when it was not cited as a party to the present proceedings.

The appellant denied that it intended to frustrate the project, citing its actions in paying the sum of USD5.6 million to the respondent and in extending, through its letter dated 29 November 2017, the conditions precedent satisfying period.

It argued, that, it was the one that took steps to secure funding for the project by communicating with key stakeholders such as Ministry of Finance, the Procurement Board and NSSA. It had also carried out all the conditions precedent which required its attention, such as the feasibility studies, due diligence, getting the Environmental Impact Assessment Certificate, and acquiring land for the project.

On the contrary, the appellant submitted that the respondent had failed to provide an Advance Payment Guarantee and the performance security as required in terms of the contract. The appellant also blamed the respondent for the collapse of the China Exim Bank funding stating, that, if the respondent had done its due diligence, it would have known, from the beginning, that, the financial institution would not be in a position to assist in view of the Government of Zimbabwe's arrears with the financial institution.

With regards the respondent's claim for the sum of US$3 million for expenses incurred, the appellant submitted that no evidence had been led to prove that it was responsible for causing the damages complained of. It argued, that, it cannot be held liable for the expenses incurred by the respondent during the tendering process. Such expenses could be recovered through performance of the contract when profit is then earned.

The appellant also denied liability for the respondent's loss of profit arguing, that, such a claim is only tenable where the appellant had terminated the contract. In casu, the respondent avers that the contract was not terminated. There is therefore no basis upon which it could raise such a claim.

Concerning its claim in reconvention, the appellant submitted that it provided the respondent with an advance of US$5.6 million. Of this amount, the sum of US$2.3 million went towards the feasibility studies. Its claim is for the balance in the sum of US$3,310,736=30.

The respondent was required to contribute the sum of US$1 million towards pre-commencement works. The contribution was to be done through the carrying out of works, with no cash payments. However, the appellant avers that the pre-commencement works were not completed, as indicated in the joint site visit report, hence the claim for US$3,310,736=30.

Alternatively, the appellant was willing to be compensated in terms of the respondent's own computation which puts the figure at US$2,299,563=13.

It was on that basis, that, the appellant moved for dismissal of the respondent's claim. It also prayed that its claim in reconvention be granted with costs.

FINDINGS OF THE COURT A QUO

The court a quo found in favour of the respondent and dismissed what remained of the appellant's counterclaim. Its specific findings on the issues before it were as follows:

1. The Supreme Court judgment in SC39/21

The appellant had raised the defence of res judicata premised on the decision of this Court in SC39/21. That proved untenable as the papers clearly showed, that, the appeal was determined on a technicality, namely, that, the application in the court a quo had been replete with material disputes of fact which could not be determined without hearing viva voce evidence. The court a quo held, that, this Court had not delved into the merits of the matter as alleged by the appellant. No decision on the merits had been made, and, therefore, the appellant's claim to the contrary was rejected.

2. Whether the EPC contract remained valid and binding on the parties

The court a quo noted, that, the appellant had abandoned its claim to the effect that the contract had been induced by fraudulent misrepresentation on the part of the respondent. That being the case, the court a quo noted, that, in the absence of the appellant's assertion to the contrary, it must be presumed that the validity of the contract is no longer in contention.

That being the case, the court a quo took the view that the only issue left for determination was the status of that contract. It observed, that, the status of the contract was the central issue upon which the consequential reliefs sought by the respective parties would be determined.

The respondent's contention was that the amended contract remained valid and binding, hence its claim for consequential relief in the form of specific performance. On the other hand, noted the court a quo, the appellant sought a declaratur to the effect that the contract never commenced as a result of the respondent's failure to meet the prescribed conditions precedent.

The appellant also averred, that, it had cancelled the contract as a result of that breach on the part of the respondent.

It further claimed (falsely in the opinion of the court a quo) that the cancellation had been confirmed by this Court under SC39/21.

The court a quo reiterated its earlier findings, namely, that, this Court had merely upheld the appellant's preliminary point to the effect that the court a quo should have proceeded not by application, but by action, as there were material disputes of fact which could not be resolved on the papers. It did not determine the merits of the matter, let alone confirm the appellant's cancellation of the contract.

The court a quo proceeded to consider the clauses of the contract which the respondent alleged had been breached.

Clause 5 provided that the contract would commence in full force when the conditions listed in paragraphs (a) to (i) were satisfied. These conditions precedent were to be satisfied within a period of 24 months after signature of the contract.

It was common cause that this period would expire on 23 October 2017.

The appellant could, at its sole discretion, on or at any time prior to that date, elect to extend the conditions precedent satisfaction period by a further 6 months by giving notice to the respondent.

More importantly, clause 5 of the contract provided as follows:

“If the conditions precedent are not satisfied on or before the expiry of the CP satisfaction period (as may have been extended), either party may elect to terminate the contract by notice to the other provided that if a party is causing a delay to the satisfaction of any of the conditions precedent, as at the date on which it seeks to terminate, such party shall not be entitled to exercise such right of termination while such cause of delay subsists.”

The court a quo noted the implications of the above provisions, particularly with regards the right of termination.

Clause 5 of the contract also provided for the waiver of conditions precedent as follows:

“Each party shall use its reasonable endeavours to ensure the satisfaction of the conditions precedent set out above, provided that:

(a) The employer may waive the contractor conditions precedent and such waived contractor condition(s) precedent will be deemed satisfied for the purposes of this Agreement;

(b) The contractor may waive the employer conditions precedent and such waived employer conditions precedent will be deemed satisfied for the purposes of this Agreement; and

(c) Except where a party has failed to use its Reasonable Endeavours to ensure the satisfaction of such conditions precedent, neither party shall be liable in any damages to the other in respect of any failure to satisfy any of its conditions precedent.”

The court a quo analysed and took note of these provisions.

Of significance to the status of the contract, the parties signed Addendum 1 to the contract. The court a quo noted, that, in paragraph 2 of the preamble to the Addendum 1, the parties expressed their wish “to amend the contract through this addendum.”

More importantly, clause 4 of the Addendum provided that “the parties agree and acknowledge, that, with effect from the effective date of this Addendum, that the contract shall be amended in accordance with this Addendum and that the provisions of the contract, except as amended by this Addendum, will remain in full force and effect.”

The court a quo concluded, that, the Addendum amended the contract and that the two documents must be read together.

The court a quo analysed the nature and scope of the amendments to the original contract brought about by the provisions of Addendum 1. It observed as follows:

At the time that the parties signed the Addendum, on 21 September 2017, they were aware that, in terms of the original contract, the period during which the conditions precedent were to be fulfilled was to lapse on 23 October 2017, a month after the date of signature of the Addendum.

However, the addendum gave lead times of the various pre-commencement works well beyond 23 October 2017.

In other words, the new lead times exceeded the effective date of 23 October 2017, when all conditions precedent should have been met, and, hopefully, the main works would have commenced.

From the above facts, the court a quo concluded, that, by their conduct, the parties waived not only the commencement date of the contract, but, by the same token, the date of the accomplishment of the conditions precedent upon which the commencement date was predicated.

It was for this reason that the court a quo held, that, it would defy logic for the appellant to insist on the termination of the contract on the grounds that the respondent had failed to satisfy the conditions precedent when, only a month before the expiry date, the parties had agreed to certain contractual obligations that further tied them.

The court a quo concluded, in the circumstances, that, the conditions precedent satisfying period did not lapse on 23 October 2017 as submitted by the appellant.

The parties must be regarded as having waived their right to enforce that date as previously provided in the original contract before the Addendum 1 was signed, amending it.

The parties had set their eyes beyond 23 October 2017 concluded the court a quo.

Indeed, the appellant had written to the respondent, on 29 November 2017, purporting to extend the conditions precedent satisfying period by a further six months in terms of clause 5 of the main contract.

The court a quo noted that such correspondence confirmed that the appellant did not regard that this period ended on 23 October 2017, contrary to its assertions.

Secondly, the correspondence wrongly ignored the provisions of the Addendum 1, amending the contract thus disregarding the effective date, of 23 October 2017, the date originally set for the expiry of that period.

Thirdly, in terms of section 5 of the original contract, such election by the appellant, to extend such a period by a further six (6) months, was to be done in terms of clause 6 of the contract, which provides that the contract may only be amended by a written document duly executed by the parties.

In this case, the appellant acted unilaterally, there being no evidence of the parties agreement to such an amendment.

Further, any such election could only be effected on or before 23 October 2017. In casu, the appellant's election came on 29 November 2017 - well out of time.

The court a quo also noted, that, in terms of clause 5(i) of the contract, if the conditions precedent were not satisfied within twenty-four (24) months from the date of signature of the contract, the parties were to meet and review progress towards the satisfaction of those conditions.

Thus, the court a quo found that the election to extend the satisfaction period by a further six (6) months could only be exercised after the parties had reviewed their progress towards the satisfaction of those conditions precedent.

No such meeting was proved to have taken place, and, accordingly, no valid election to extend the period could have been exercised.

For these reasons, the court a quo found that the purported extension of the conditions precedent satisfying period, by the appellant, was inconsistent with the provisions of the contract, and, consequently, null and void.

Accordingly, the court a quo ruled that the contract remained valid and extant.

3. Fictional Fulfilment

Having determined that the contract was not terminated and remained extant, the court a quo considered the relief sought by the respondent, namely, whether there was fictional fulfilment of the contract, and, if so, whether it was appropriate to grant the remedy of specific performance.

It observed, that, the doctrine of fictional fulfilment was defined in case law. It relied on the definition in MacDuff & Company Limited v Johannesburg Consolidated Investments Company Limited 1924 AD 573 where the court stated as follows:

“I am therefore of the opinion, that, in our law, a condition is deemed to have been fulfilled as against a person who would, subject to its fulfilment, be bound by an obligation, and who had designedly prevented its fulfilment, unless the nature of the contract, or the circumstances, show an absence of dolus on his part.”

RH CHRISTIE in “Business Law in Zimbabwe”…, explains that dolus, in this context, does not allude to fraud or dishonesty, but, a deliberate intention to prevent the fulfilment of the condition, no matter how laudable the motive.

Based on both the documentary and viva voce evidence before it, the court a quo found that the appellant purposefully prevented, or frustrated, the fulfilment of the condition precedent pertaining to the signing of the financing agreements.

The court a quo also found the appellant's conduct to have been contrary to clause 5(i) of the contract, which required each party to use its “reasonable endeavours” to ensure the satisfaction of the conditions precedent.

The court a quo noted, that, the right to terminate the contract in terms of clause 5 was not absolute because the party responsible for frustrating the fulfilment of any of the conditions precedent was estopped from seeking the termination of the contract.

For that reason, having found that the appellant frustrated the fulfilment of the financing arrangements, the court a quo ruled that the appellant was precluded from asserting the right to terminate the contract on the grounds that the condition precedent concerned had not been met.

It was in that context that the court a quo held, that, the conditions precedent pertaining the financial arrangements had been fictionally fulfilled.

4. Specific Performance

In determining whether it could grant the relief of specific performance, as sought by the respondent, or, the alternative relief of damages, the court a quo relied, inter alia, on the decision in Grandwell Holdings (Pvt) Ltd v Zimbabwe Mining Development Corporation & 3 Ors SC05-20 where this Court had this to say:

“However, the right to claim specific performance is predicated on the concept that the party claiming it must first show that he or she has performed all his or her obligations under the contract or is ready, willing, and able to perform his or her side of the bargain. Even then, the court has a discretion, which should be exercised judicially, to grant or refuse a decree of specific performance. It follows, therefore, that, the court's discretion should not be exercised arbitrarily or capriciously.”

The court a quo also relied on the case of Minister of Public Construction and National Housing v Zescon (Pvt) Ltd 1989 (2) ZLR 311 (S) where…, this Court stated as follows:

“The law is clear. This is a remedy to which a party is entitled as of right. It cannot be withheld arbitrarily or capriciously.”

The court a quo noted, that, in exercising its discretion to grant an order for specific performance, it must look at the circumstances of this case, and, on that basis, map the way forward.

It observed, that, the appellant had not placed before it any evidence to show the measures it took in order to achieve financial closure. In other words, nothing had been put forward to show that specific performance was no longer achievable.

It noted, that, both parties had accepted that the question of funding was central to the implementation of the project.

The court a quo rejected the submission by the appellant, that, the project was no longer viable and that it would take years to complete. It referred to clause 1.1.3.3 of the contract which gave the time of completion to be 540 days.

It noted, that, it had ruled that the contract was still valid and not terminated, that Addendum 1 had amended the main contract and extended the conditions precedent satisfying period beyond the contemplated date. It further noted that clauses 5(ii) and 6 oblige the parties to meet and review progress on the project and effect such appropriate measures and amendments as may from time to time be required.

For that reason, the court a quo was of the view, that, any challenges arising from the effect of the changes to the currency regime can be similarly resolved by the parties in terms of clause 5(i) and clause 6.

In short, the court a quo dismissed the appellant's submissions against the grant of specific performance.

The court a quo noted, that, at some point, the parties could have agreed to implement the project in phases and that the respondent had obtained funds for the implementation of the initial phase. That position was captured in the draft Amended Restated Contract, which the parties are yet to sign.

It concluded its observations as follows:

“The point is that the question of the unavailability of funding is clearly not an excuse going by the evidence that was placed before the court.”

It was for these reasons that the court a quo ordered specific performance.

5. Whether the claim in reconvention had merit

The court a quo held, that, the counterclaim could only become relevant if it had held that the contract did not commence as a result of the respondent's failure to fulfil the conditions precedent.

In view of its finding that the contract remained valid and binding on the parties, the counter claim was no longer sustainable.

It noted that the amount paid towards the pre-commencement works was not entirely wasted and observed, that, this was an issue that the parties could discuss in terms of clause 5(i) of the contract. This clause provided for periodical performance reviews.

Consequently, the court a quo found in favour of the respondent and issued the following order:

“1. The procurement contract for the Engendering, Procurement and Construction (EPC Contract) of the 100 MW Gwanda Solar Project (ZPC 304/2015) between the plaintiff and the defendant, as amended, is valid and binding between them.

2. Consequent to the declaration of the validity of the EPC Contract, an order for specific performance of the said contract is hereby granted.

3. The defendant's claim in reconvention is hereby dismissed with costs.

4. The defendant shall pay the plaintiff's costs in the claim in convention.”

It is that order that the appellant appeals against on no less than 17 grounds as follows:

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE
Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

“GROUNDS OF APPEAL1. The court a quo erred in law in that it failed to consider the respondent's case as pleaded in its declaration and proceeded, instead, to determine the matter on the basis of issues not pleaded in the declaration.2. The court a quo erred in law by finding, ...

“GROUNDS OF APPEAL

1. The court a quo erred in law in that it failed to consider the respondent's case as pleaded in its declaration and proceeded, instead, to determine the matter on the basis of issues not pleaded in the declaration.

2. The court a quo erred in law by finding, that, the appellant had waived the conditions precedent satisfaction period and/or the requirements to fulfil the conditions precedent, when such a waiver was not pleaded by the respondent in its declaration.

3. The court a quo erred in fact by finding, that, the appellant had waived the conditions precedent satisfaction period and/or the requirements to fulfil the conditions precedent when the factual basis of such a waiver was not made out on the evidence.

4. The court a quo erred in law and fact by holding, that, the appellant had effectively waived the fulfilment of the conditions precedent by allowing some pre-commencement work to be carried out before the fulfilment of the conditions precedent.

5. The court a quo erred in law and fact by holding, that, when the parties entered into Addendum 1, they only had one month before the contract lapsed, in circumstances where the contract expressly provided that the parties could extend the conditions precedent satisfaction period.

6. The court a quo erred in law and fact by holding 'mero motu' that the activities set out in Addendum 1 “would certainly outlive the contract” in circumstances where neither party asserted this to be the case, nor introduced any evidence to that effect.

7. The court a quo erred in law and in fact by holding, that, the appellant had waived the application of the conditions precedent satisfaction period by attempting to extend that same satisfaction period.

8. The court a quo erred in law by relying on the appellant's purported extension as amounting to or evidencing a waiver, having found that the same purported extension was a nullity.

9. The court a quo, having correctly found that Addendum 1 obliged the respondent to provide an advance payment guarantee, erred in law and in fact by finding that the appellant had waived that condition precedent by entering into Addendum 1.

10. The court a quo erred in law by holding, that, the abandonment of the appellant's misrepresentation claim meant that the continued existence of the contract was no longer in issue, and, as a result, failed to consider the appellant's case relating to termination by notice.

11. The court a quo erred in law by finding, that, the conditions precedent (or some of them) were fictionally fulfilled, in circumstances where fictional fulfilment was not pleaded by the respondent in its declaration.

12. The court a quo erred in law by addressing only one particular condition precedent, relating to funding, and ignoring the other conditions precedent which the parties had expressly agreed.

13. The court a quo erred in law by finding, that, the conditions precedent, or some of them, were fictionally fulfilled, in circumstances where the respondent had admitted before the Supreme Court, that, the respondent had failed to meet the prescribed conditions precedent.

14. The court a quo erred in law by finding, that, the conditions precedent had first been waived and then subsequently fulfilled.

15. The court a quo erred in law by considering the actions and attitudes of third parties as relevant on the basis, that, those third parties were shareholders or ultimate shareholders of the appellant.

16. The court a quo erred in law and fact by granting specific performance of the contract in circumstances where the project had not been funded. Its performance would result in undue hardships and the respondent was not able of performing in accordance with the express terms of the contract.

17. The court a quo erred in law and fact by rejecting the appellant's claim in reconvention in circumstances where it received unchallenged evidence that the appellant had received no benefit from the pre-commencement works.”

RELIEF SOUGHT

The appellant seeks the following relief:

“1. The appeal succeeds with costs; and

2. The judgment of the court a quo be set aside and substituted with the following:

(a) The plaintiff's claim be and is hereby dismissed with costs.

(b) The defendant (read plaintiff) be and is hereby ordered to pay damages in the sum of USD3,310,736=30 with costs, being advance payment towards the pre-commencement works with costs.”…,.

Rule 44(1) of the Supreme Court Rules 2018, requires that an appellant's grounds of appeal be set out clearly, specifically, and concisely.

The grounds of appeal in casu appear not to have been drafted accordingly.

They are repetitive, inconcise, and seem to be aimed at every decision of fact or law made by the court a quo.

Counsel for the appellant, was, at the hearing of this appeal, asked to justify the state of the appellant's grounds of appeal, and explain why the appeal should not be struck off the roll for defective grounds of appeal.

Counsel for the respondent was not keen to go that route, preferring, instead, to have the matter decided on the merits.

Indeed, he did not persist with the objection he had lodged in the respondent's papers.

He was of the view that the grounds of appeal may be distilled to only four issues, namely:

(1) Was the judgment predicated on the pleaded case.

(2) Were the findings of fictional fulfillment predicated on the facts and evidence.

(3) Were the findings of waiver of the conditions precedent founded on the evidence.

(4) Was the counterclaim properly dismissed.

On his part, counsel for the appellant summarized the import of the grounds of appeal to be as follows:

1. That the court a quo erred by making a finding that was contrary to the position of the respondent in SC39/21 where the respondent admitted that it had not met the conditions precedent.

3. The court a quo incorrectly found that the appellant had waived its right to cancel the contract on the basis of unfulfilled conditions precedent.

4. The court a quo wrongly found that there had been fictional fulfilment of the terms of the contract.

5. The court a quo erred when it ordered specific performance of the contract.

Although both parties perceived grounds of appeal are largely similar, it is noted that counsel for the appellant has not included, in his summary of the grounds of appeal, ground 1 as proposed by counsel for the respondent which relates to the question whether the judgment was predicated on the pleaded case.

Further, counsel for the appellant did not include, in that summary, ground 4 as proposed by counsel for the respondent, namely, whether the counter-claim was properly dismissed.

As it is not clear whether, by doing so, counsel for the appellant was abandoning the grounds in question, this Court shall assume, as appears on the papers, that the issues raised therein are alive, requiring determination on the part of this Court.

This Court identifies the following, arising from the parties submissions, to be the grounds of this appeal:

1. That the court a quo erred by making a finding that was contrary to the position of the respondent in SC39/21 where the respondent admitted that it had not met the conditions precedent.

2. The court a quo incorrectly found, that, the appellant had waived its right to cancel the contract on the basis of unfulfilled conditions precedent.

3. The court a quo wrongly found, that, there had been fictional fulfilment of the terms of the contract.

4. The court a quo erred when it ordered specific performance of the contract.

5. That, the judgment was not predicated on the pleaded case.

6. That, the counter claim should not have been dismissed.

The issues for determination arise from the above grounds of appeal.

ISSUES FOR DETERMINATION

The grounds of appeal raise six issues, namely;

(1) Whether the court a quo made a finding which was contrary to the position of the respondent in SC39/21.

(2) Whether the court a quo erred in finding that the conditions precedent had been waived.

(3) Whether the court a quo erred when it held that fictional fulfilment of the contract had occurred.

(4) Whether the court a quo erred in ordering specific performance of the contract.

(5) Whether the judgment of the court a quo was predicated on the pleaded case.

(6) Whether the counter-claim was properly dismissed.

SUBMISSIONS BEFORE THIS COURT

The parties submissions before this Court were largely similar to the submissions they made in the court a quo.

Submissions by the Appellant

Counsel for the appellant submitted, that, the court a quo erred when it failed to consider the respondent's case as was pleaded in its declaration, and, instead, proceeded to determine the matter on the basis of issues not pleaded in the declaration.

Counsel for the appellant also submitted, that, the court a quo erred in law by finding that the appellant had waived the conditions precedent satisfying period, or the requirement to fulfil the same, when such a waiver was not pleaded by the respondent in its declaration.

He further submitted, that, in any event, the actual basis of such waiver had not been made out in the evidence.

He also criticised the court a quo for concluding, that, by allowing some pre-commencement works to be carried out before the fulfilment of the conditions precedent, the appellant had waived the fulfilment of those conditions.

He submitted, that, this conclusion runs foul to the provisions of the contract wherein it is provided that pre-commencement works could be undertaken prior to the satisfaction of the conditions precedent. He cited clause 8 of the contract which provides that the respondent was to carry out pre-commencement works as set out in Schedule 11 of the contract.

He said that the parties had agreed that pre-commencement works could be carried out prior to the satisfaction of the conditions precedent satisfying period. This was meant to shorten the contract period. It cannot be the basis for the inference of waiver of the conditions precedent satisfying period.

Further, it was submitted that the fact that the Addendum 1 was signed a month before the anticipated date of completion of the conditions precedent did not have a bearing on the contract. This is so because the parties could extend the conditions satisfaction period by a further six months.

Counsel for the appellant also attacked the court a quo for holding, that, the abandonment of the appellant`s claim of misrepresentation meant that the continued existence of the contract was no longer in issue, and, as a result, failed to consider the appellant`s case relating to termination by notice. For that reason, he maintained that the contract was terminated by operation of law, thereby effectively terminating the contractual obligations between the parties.

It was further submitted, that, the court a quo's finding of fictional fulfilment of the conditions precedent was without legal or factual basis.

It was observed, that, in its declaration, the respondent had not sought any declaration as to fictional fulfilment of the conditions precedent. For that reason, counsel for the appellant argued that the court a quo ought not to have entertained the argument that there was fictional fulfilment of any of the conditions precedent.

Further, he argued that the respondent had failed to plead the relevant factual assertions to merit a finding of fictional fulfilment. In particular, he argued that the respondent did not plead that the appellant intended to frustrate the fulfilment of any of the conditions precedent. Counsel further submitted, that, no evidence was led to prove that the appellant had intentionally frustrated the fulfilment of any condition precedent.

Fictional fulfilment implies fictional funding.

The appellant did not have the funds to pay out the contractor, and, therefore, fictional fulfilment was an exercise in futility. Besides, fictional fulfilment would bind third parties, such as the Government of Zimbabwe, which, in terms of the contract, was to be a co-signatory to the financing agreements. In any event, the appellant never intended to frustrate the project and had wished to deliver in terms of the contract.

Counsel for the appellant also made reference to SC39/21 alleging that, in that case, the respondent made an admission with regards the non-fulfilment of the conditions precedent and that this Court noted that the respondent had failed to meet the prescribed conditions precedent under clause 5(a) of the contract. He argued, that, in light of that finding by this Court, the court a quo could not have found that the conditions precedent had been fictionally fulfilled.

It was further submitted, that, having ruled that the conditions precedent had been waived, the same court a quo could not have found that the conditions precedent had been fictionally fulfilled.

The appellant was of the view, that, the court a quo should not have considered the actions of third parties in determining the issues before it. It was argued, that, although Government is a shareholder of the appellant, its actions and attitude cannot be visited on the appellant because the appellant is a different legal persona, separate from its shareholder.

Counsel for the appellant submitted, that, specific performance of the contract should not have been granted.

He cited authorities, such as the case of Grandwell Holdings (Private) Limited v Zimbabwe Mining Development Corporation & 3 Ors SC05-20, which outline the factors to be considered in granting the remedy of specific performance.

Firstly, specific performance is a discretionary remedy, and, in determining its grant, the court must look at all the relevant facts. The remedy will not be granted if compliance with the order is impossible or would cause undue hardship or where the plaintiff is not ready to carry out its own obligation under the contract.

Counsel for the appellant submitted, that, the project had not been funded and that its performance would result in undue hardship to the appellant. Further, the respondent was not able to perform in terms of the contract. For these reasons, he submitted that specific performance should not have been granted.

RESPONDENT'S SUBMISSIONS

Counsel for the respondent, submitted that the appellant's case, as presented in its heads of argument, is based on general principles of law, which principles the appellant failed to connect to the facts and the evidence.

He further submitted, that, the assertion by the appellant that the respondent's case was predicated on matters not raised in its declaration, but on matters only raised in its replication, was ill informed. In making that assertion, the appellant had identified the following issues as arising only in the respondent`s replication; the China Exim Bank issue, the CBZ and ATC funding, and the question of the malicious allegations against the respondent`s Managing Director.

Counsel for the respondent submitted, that, in doing so, the appellant had failed to recognise the distinction between the cause of action, the facts giving rise to the cause of action, and the issues as joined in the pleadings.

In particular, he submitted that the law requires that a party pleads the facts giving rise to the cause of action, not the evidence by which the facts are to be proved. Thus, the evidence is not a matter for the summons and declaration but for discovery and trial. The court a quo did relate to the pleadings, the issues, and the evidence and made a determination.

Counsel for the respondent was adamant that such determination could not be faulted.

He also dismissed the submission by the appellant, that, the claim was expanded in the replication and that the expansion is immaterial without an amendment to the declaration. In that regard, counsel for the respondent relied, inter alia, on the case of Shah v Kingdom Merchant Bank SC04-17, wherein this Court held that parties can extend their issues and that once an issue was before the court, the court has the prerogative to consider it.

Counsel for the respondent also relied on the case of British Diesels Ltd v Jeram & Sons 1958 (3) SA 605 (N) where it was held, that, the importance of pleadings should not be unduly magnified for “if it should appear that any substantial issue was duly canvassed in the court below, then, in my opinion, we ought to regard it as an issue to be decided between the parties, whether it has been formally pleaded or not.”

Similar sentiments were also expressed in Sentrachem Bpk v Wenhold 1995 (4) SA 312 (A).

With regards the question of whether or not the appellant had waived its right to rely on the non-fulfilment of the conditions precedent as a basis for termination of the contract, counsel for the respondent submitted, that, waiver is a legal principle which can be derived from the facts of the case.

In the instant case, he argued that the court a quo based its decision on the facts as presented to it. That finding of fact cannot be lightly interfered with in the absence of gross misdirection or irrationality. There being no allegation of such irregularity, the finding of fact by the court a quo was unassailable. He relied in that regard on the case of Hama v National Railways of Zimbabwe 1996 (1) ZLR 250 (S).

Similarly, counsel for the respondent argued that the grounds of appeal lack merit as the appellant failed to appreciate that the “ratio decidendi” was predicated primarily on the issues and findings of fact. It was for that reason, that, the agreement was found to be extant and specific performance found to be possible.

With regards the evidence adduced in the court a quo, counsel for the respondent noted that the court a quo made a finding of credibility in favour of the respondent's sole witness, Mr Chivhayo. He submitted that the evidence adduced by Mr Fambi, on behalf of the appellant, left a lot to be desired.

He chronicled Mr Chivhayo's evidence and noted, that, it was upon the respondent to raise the necessary funding for the project. He submitted that the evidence given by Mr Chivhayo shows how the appellant had frustrated the respondent's efforts aimed at financial closure for the project. Mr Chivhayo also told the court a quo that the respondent wished to conclude the project. Counsel for the respondent submitted, that, it was not shown that it was not possible to do so. For that reason it was appropriate for the court a quo to grant the remedy of specific performance.

He further submitted that any evidence elicited from Mr Chivhayo, under cross-examination, as to the meaning of the contractual documents, does not bind the court.

As regards the relationship between the appellant and the Government of Zimbabwe, counsel for the respondent submitted, that, the distinction that the appellant sought to make between the two was not tenable at law, as the Government exercises control over the appellant as its shareholder. He said it is common cause that the appellant is a State commercial entity. He relied on the decision in Transnet Ltd v Goodman Brothers (Pty) Ltd 2001 (1) SA 853 (SCA)…, where SHULTZ JA said:

“I do not think that anything can be made of the fact that Transnet is now a limited company. The government still owns all the shares in it and thus has ultimate control.”

Reliance was also placed on Grandwell Holdings Limited & Ors v Minister of Mines & Ors HH193-16 (a judgment upheld by this Court on appeal) wherein MAFUSIRE J concluded that the Minister of Mines, the Zimbabwe Mining Development Company and companies in which the State had an economic interest, were a single economic unit.

Thus, the positive or negative control of the shareholder cannot be divorced from the company. In short, therefore, the appellant cannot escape the negative conduct of its shareholder.

Counsel for the respondent submitted, that, the appellant's sole witness admitted that he was not involved in the process of financial closure as this was the preserve of the appellant's Managing Director. He was thus not in a position to challenge the evidence proffered by the respondent and its witness.

Further, while disputing the value of the pre-commencement works, neither the witness nor the appellant placed evidence of the value of the works that were carried out. On the contrary, the witness conceded that there was value in the works done and that same had been completed. He also confirmed that the respondent had been barred from the site and thus could not do repair work. He could not dispute that the appellant in fact owed the respondent.

Counsel for the respondent said that notice of this computation had been given in the respondent's plea to the appellant's counterclaim. The appellant's replication did not address, specifically, this allegation. Not having addressed this allegation, the appellant must be presumed to have admitted it.

Counsel for the respondent submitted, that, the court a quo correctly entered judgment for the respondent.

Counsel for the respondent further argued, that, fictional fulfilment of the financial conditions precedent flowed from the conduct of the appellant in frustrating the financial closure. This condition was, for that reason, presumed fictionally fulfilled.

The following cases were cited in support of that assertion: Mia v Verimark Holdings (Pty) Ltd 2010 (1) ALL SA 280 (SCA) and Standard Chartered Bank Zimbabwe Ltd v Matsika 1997 (2) ZLR 389.

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE
Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

ANALYSISAPPLYING THE LAW TO THE FACTS(2) Whether the court a quo erred in finding that the conditions precedent had been waivedAs already stated, the effect of the Addendum to the contract was that certain works, by their nature and scope, could not be completed by 23 October 2017 when the ...

ANALYSIS

APPLYING THE LAW TO THE FACTS

(2) Whether the court a quo erred in finding that the conditions precedent had been waived

As already stated, the effect of the Addendum to the contract was that certain works, by their nature and scope, could not be completed by 23 October 2017 when the conditions precedent satisfaction period was due to lapse. By signing this Addendum, the appellant must have waived, or, at least extended, that period beyond 23 October 2017.

The decision of the court a quo cannot be faulted.

(3) Whether Fictional Fulfilment Occurred

Fictional fulfilment is a doctrine that may be invoked under circumstances where a party to a contract deliberately frustrates the fulfilment of a condition stipulated in the contract.

In casu, the respondent submits that the appellant was guilty of such conduct with regards the financing arrangements. It invited the court a quo to deem the conditions to have been fulfilled in line with the doctrine of fictional fulfilment.

The invitation was accepted - and correctly so.

The respondent's sole witness gave evidence to the effect, that, various proposals for the financing of the project were brought to the table but the respondent showed disinterest and declined to engage the various would-be financiers, both local and foreign. The appellant's witness, one Fambi, confessed that he had no knowledge of the financing arrangements and how they had been handled. He told the court a quo that such arrangements were the preserve of the appellant's Chief Executive Officer.

The Chief Executive Officer was not called to give evidence.

For that reason, the evidence of the respondent's witness, one Chivhayo, was virtually uncontroverted.

It was on the basis of that witness's uncontested testimony, that, the court a quo found that the appellant had frustrated the implementation of the contract and invoked the doctrine of fictional fulfilment.

The appellant, in other words, could not be allowed to benefit from its wrong doing: see the dicta in Standard Chartered Bank Zimbabwe Ltd v Matsika 1997 (2) ZLR 389.

The case of Scott & Anor v Poupard & Anor 1971 (2) SA 373 sets out the factors to be established in order to invoke the doctrine of fictional fulfilment. The factors are:

(i) Non-fulfilment of the condition;
(ii) The defendant's breach of his duty, with an intention to frustrate the fulfilment; and
(iii) A causal link between the non-fulfilment and the defendant's intentional frustration of the fulfilment of the conditions.

The court a quo, in line with case law and the uncontroverted evidence of Chivhayo, found this an appropriate case in which the doctrine of fictional fulfilment should be invoked.

Its decision in this regard cannot be impugned.

(4) Whether specific performance should have been granted

The fourth issue is to do with the propriety of the decision of the court a quo in ordering specific performance.

The law on specific performance is well traversed.

In the case of Grandwell Holdings (Pvt) Ltd v Zimbabwe Mining Development Corporation & 3 Ors SC05-20, this Court remarked as follows:

“However, the right to claim specific performance is predicated on the concept that the party claiming it must first show that he or she has performed all his or her obligations under the contract or is ready, willing, and able to perform his side of the bargain. Even then, the court has a discretion, which should be exercised judicially, to grant or refuse a decree of specific performance. It follows, therefore, that the court's discretion should not be exercised arbitrarily or capriciously: see Minister of Public Construction and National Housing v Zescon (Pvt) Ltd 1989 (2) ZLR 311 (S), where, at 318G, this Court stated:

'The law is clear. This is a remedy to which a party is entitled to as of right. It cannot be withheld arbitrarily or capriciously.'”

In dealing with the question of specific performance, the court a quo was alive to the principles governing the grant or refusal of that relief. It correctly noted that each case must be determined according to its own circumstances, and that the court must exercise its discretion judiciously, without appearing to be making a contract for the parties.

In casu, it noted that the appellant had not placed any evidence before it showing the measures it took in its attempt to achieve financial closure. Its sole witness, Mr Fambi, was unable to shed any light on this crucial issue.

Resultantly, the court a quo correctly concluded that there was nothing to show that specific performance was unachievable.

On the contrary, Mr Chivhayo, the respondent's sole witness, had shown that the respondent could secure funding for the project, the procurement of funding being central to the implementation of the project.

The court a quo dismissed the appellant's assertions that the project is no longer viable. It held, that, any issues pertaining to the viability of the project, and the effect of the changes in the currency regime (as alleged by the appellant), must be left to the parties to take care of in terms of clause 5(i) of the contract.

In any event, clause 6 of the contract allows the parties to amend the contract should they so wish.

The court a quo made reference to an “Amended and Restated Contract” which would have seen the project being implemented in phases. The respondent had funding for the initial phase of 10MW. This contract was never signed, but, its existence shows that funding could be obtained.

At p47 of its cyclostyled judgment, the court a quo makes the following finding of fact:

“The point is that, the question of the unavailability of funding is clearly not an excuse going by the evidence that was placed before the court.”

That finding of fact cannot be impugned: see Hama v National Railways 1996 (1) ZLR 66.

Counsel for the appellant submitted, that, an order for specific performance would bring intolerable hardships on the appellant, as the appellant has no funds to implement the project.

We note, however, that Mr Fambi, the appellant's sole witness, did not say so in his evidence before the court a quo. Secondly, it is the duty of the respondent to source funding.

If there is any hardship to be borne at this stage, it has to be borne by the respondent and not the appellant.

The respondent has indicated that it is able to source funding for the project.

That being the case, there was no reason for the court a quo to deny the respondent the remedy of specific performance....,.

6. Whether the counterclaim was properly dismissed

The residue of the counter claim (after the abandonment of that part of it imputing misrepresentation to the respondent) relates to a refund due to the appellant in the sum of USD3,000,000. The amount had been advanced to the respondent to carry out pre-commencement works.

Through the testimony of Mr Chivhayo, the respondent resisted this claim on the basis that the pre-commencement works to that value, if not much more, was in fact carried out. For that reason, the respondent did not owe the appellant any money.

Mr Chivhayo relied primarily on the report of the joint visit to the project site, which showed that substantial progress had been achieved on the pre-commencement work.

On the other hand, Mr Fambi, the appellant's sole witness, was unable to substantiate the counterclaim because he did not have the material to do so, as such matters were the preserve of the appellant's CEO.

The CEO was not called to testify.

In the circumstances, the appellant failed to prove its counter-claim. The court a quo's decision to dismiss the counter claim cannot be faulted.

DISPOSITION

Despite counsel for the appellant's spirited efforts, the appellant's case is weak in three cardinal respects:

(i) Firstly, Mr Chivhayo gave detailed, factual evidence in support of the respondent's case. On the other hand, Mr Fambi, who gave evidence on behalf of the appellant, was literally at sea as he admitted that he had no useful information regarding the issues before the court. He referred all material issues to the respondent's CEO who was, surprisingly, not called to give evidence.

In essence, therefore, Mr Chivhayo's evidence was not controverted.

(ii) Secondly, the court a quo made a finding of credibility in favour of Mr Chivhayo. To all intents and purposes, therefore, the court a quo accepted the veracity of the evidence as given by Mr Chivhayo and rejected any evidence to the contrary.

It is trite, that, an Appeal Court will not lightly interfere with the findings of credibility of a trial court.

(iii) Thirdly, following from the above, the court a quo made findings of fact in favour of the respondent. There is no basis to interfere with those findings.

We are satisfied, that, the court a quo properly held that the contract between the parties was valid and extant and that same was properly amended by the Addendum to it which extended the period within which the conditions precedent should be fulfilled. It correctly found that its purported termination by the appellant was of no legal force or effect as such termination did not meet the requirements of the termination clause of the contract.

The court a quo exercised its discretion judiciously, in ordering specific performance of the contract, having found that the respondent was willing, and able, to source funding for the project.

In any event, no meaningful evidence was presented by the witness led by the appellant.

The witness was unable to lead satisfactory evidence with regards the appellant's counter-claim in the sum of US$3 million. The court a quo correctly found that the counterclaim had not been proved and proceeded to dismiss it.

In the circumstances, the appeal stands to fail. Costs shall follow the cause.

Accordingly, it is ordered that:

(1) The appeal be and is hereby dismissed.

(2) The appellant shall pay the costs of suit.

Appealed
SC04-17 : JAYESH SHAH vs KINGDOM MERCHANT BANK LIMITED
Ruled By: GWAUNZA JA, GUVAVA JA and MAVANGIRA JA

This is an appeal against the whole of the judgment of the High Court handed down on 22 May 2013. This was a matter in which the court granted the respondent leave to further amend its declaration.

The background to the matter may be summarised as follows:

On 6 July 2004, the respondent issued summons against the appellant and Saturn Trading and Investments Limited (“Saturn Trading”) jointly and severally and in solidum for payment of US$900,000 [Nine Hundred Thousand United States Dollars]. The respondent alleged, that, this amount represented overpayment of a loan advanced to Saturn Trading for onward lending to third parties.

In terms of their alleged agreement, the respondent purported that Saturn Trading would receive repayments directly from the third parties concerned, and, if any over-payment occurred, such would be refunded to the respondent.

Allegedly, in breach of the parties agreement, Saturn Trading failed to refund money which had been overpaid to it.

The respondent then sued Saturn Trading in the High Court, claiming, in its declaration, that, it had been unjustly enriched by the overpayment at the respondent's expense. Further in that suit, the respondent sued the appellant on the grounds that as director, agent, or alter ego of Saturn Trading, he was fully aware of the transactions in question, and, hence, had a duty of care towards the respondent. In breach of that duty, the respondent charged that the appellant had carried out Saturn Trading's business negligently, recklessly, fraudulently and without due care resulting in the respondent suffering loss in the amount claimed.

It is common cause that both Saturn Trading and the appellant defended the suit, disputing the existence and terms of the alleged loan agreement, the alleged over-payment, and any duty of care whatsoever towards the respondent, on the part of the appellant.

At the pre-trial conference which was held on 26 September 2006, the respondent obtained leave, with the consent of the appellant, to amend its declaration by the deletion of a certain paragraph and its substitution with another.

After the pretrial conference, the matter was set down for trial on 29 January 2007, but, for reasons which are not apparent from the papers, it was postponed sine die.

Some ten months later, on 30 November 2007, the respondent's legal practitioners wrote to the appellant's legal practitioners requesting their consent to further amend its declaration.

The appellant's legal practitioners did not accede to the request.

This prompted the respondent to file an application for leave to amend its declaration in terms of Order 20 Rule 132 of the High Court of Zimbabwe Rules 1971. According to the respondent, this was in order to clarify the existing causes of action.

The appellant opposed the application on the basis, that, the amendment had come late in the day, since it was being made four (4) years after the action was originally instituted, and, as such, the new causes of action which the amendment sought to bring had prescribed.

The court a quo granted the respondent leave to amend its declaration, and any other pleadings which they wished to have amended.

The appellant was aggrieved by this decision and filed this appeal.

Before I turn to address the issues raised by the appeal, it is important to note, that, in this appeal, the Court is being called upon to interfere with the exercise of a discretion by the judge a quo.

The judge correctly stated as follows in this respect:

“In our law, granting or refusal of leave to amend is a matter entirely in the discretion of the court.”

That the court has this discretion is evident in Rule 132 of Order 20 of the High Court Rules. The Rule provides, that, the court may allow a party, at any stage of the proceedings, to amend his pleadings and that:

“.., all such amendments shall be made as may be necessary for purposes of determining the real question in controversy between the parties.”

While Rule 132 of the High Court Rules is made subject to Rule 134, I do not find the latter Rule to be applicable to the circumstances of this case, since it specifically deals with an amendment to the pleadings that has the effect of including or substituting a cause of action arising after the issue of summons.

This has not been claimed in casu.

This court, however, has the power to interfere with the exercise of the court a quo's discretion in appropriate circumstances, as aptly explained as follows in HERBSTEIN & Van WINSEN, 5th ed…,.;

“The court, on appeal, will interfere where the exercise of the discretion has not been proper, or has been based upon a wrong principle, or upon a wrong view of the facts; where the court has purported to exercise its discretion without sufficient legal grounds for doing so….,.”

See also Barrows & Anor v Chimphonda 1999 (1) ZLR 58 (S)…,.

The appellant contends, that, the court a quo improperly exercised its discretion in granting the respondent leave to amend its declaration. This is because, he further contends, the court relied not only on wrong principles of the law, it also failed to take into account a crucial and relevant factor, that is, the issue of prescription.

As is evident from the appellant's grounds of appeal, the two issues on the basis of which it is alleged that the court a quo improperly excercised its discretion relate to the question of whether or not the proposed amendment raised new causes of action, and, if so, whether, in the circumstances of the case, the new causes of action had prescribed.

Whether or not the amendment brings about new causes of action

Counsel for the appellant argued, that, the court a quo should not have granted leave to amend the declaration for the reason that the amendment has the effect of introducing unjust enrichment, fraudulent misrepresentation, and theft, as new causes of action.

Counsel for the respondent, on the other hand, contends that leave to amend was correctly granted by the court a quo in terms of Rule 132 of the High Court Rules, which permits amendments in respect of any cause of action.

Despite his initial submission that all the allegations had been pleaded in the original declaration and that the amendment merely sought to clarify these allegations, counsel for the respondent, during the hearing, conceded that theft was indeed sought to be introduced as a new cause of action.

He argued, in respect of personal unjust enrichment of the appellant, and fraud, that the proposed amendment was aimed only at clarifying the claims originally made in the initial declaration.

The court a quo was persuaded by the submissions made in this respect for the respondent, as is evident from the following remarks on p6 of its judgment:

“The first respondent (appellant in casu)…, submitted that the averment that he was unjustly enriched personally was not contained in the original declaration, and that, its introduction at this stage is prejudicial to him because that claim has prescribed.

I do not agree.

The applicant's claim has always been for payment of $900,000 against the second respondents (sic) jointly and severally. The first respondent had already been roped in on the allegation of negligence, fraud and acting without due care. Unjust enrichment had already been pleaded, and, it is the clarity of that pleading which was lacking. To my mind, there is therefore a pressing need to effect an amendment that would properly ventilate the real dispute between the parties.”…,.

A closer look at the disputed claims of fraudulent misrepresentation and unjust enrichment, as articulated in the original declaration, would, in my view, assist in the determination of whether or not they constituted new causes of action.

The respondent (as plaintiff) in its declaration pleaded as follows:

“By reason of the said overpayment, the first defendant has been unjustly enriched in the sum of US$900,000 at the expense of the plaintiff.

At all material times, the second defendant (appellant in casu) was the director and/or agent for the first defendant and was fully aware of the aforesaid contract between the plaintiff and the first defendant.

In the exercise of his duties, the second defendant was negligent in one or more of the following:

(a) He carried first defendant's business recklessly; and/or

(b) He carried first defendant's business negligently; and/or

(d) He carried first defendant's business without due care.

By reason of the said negligence of the second defendant:

(a) The plaintiff suffered loss/damages in the sum of US$900,000 being overpayment to the first defendant; and/or

(b) The first defendant was unjustly enriched in the sum of US$900,000 being overpayment to the first defendant.”…,.

Fraudulent Misrepresentation

What is evident from this claim, on a strict interpretation of the simple meaning of the words employed, is that the basis for suing the appellant jointly and severally with Saturn Trading, in so far as the alleged fraudulent representation is concerned, was the perception that he was negligent by virtue of having 'fraudulently' run the business of Saturn Trading. Further, one may understand the words to evince a perception that the appellant was also 'negligent' by virtue of 'negligently' running the affairs of Saturn Trading.

There is, in my view, no doubt that this part of the claim was clumsily drafted.

It not only seeks to define fraudulent behaviour as 'negligence' it also nonsensically seems to suggest that one may be 'negligent' by acting negligently!

The respondent itself conceded this shortcoming on its part when it stated in its application in the court a quo, that, the claims had been 'insufficiently and imperfectly' pleaded in its original declaration.

Be that as it may, it is apparent that the question of fraudulent representation linked to the appellant was one that exercised the minds of both the respondent and the appellant, although it was not succinctly and clearly articulated in the declaration.

Evidence of the appellant's appreciation of the issue is found in the joint plea of the appellant and Saturn Trading a quo, where the former categorically denied that he had acted 'recklessly, negligently or fraudulently' in carrying out Saturn Trading's business 'as alleged or at all'.

Also evident from the papers is the fact, that, consequently, the respondent sought to hold the appellant jointly liable with the respondent for the amount sought. This much is particularised, firstly, in paragraph 13 of the respondent's declaration, and, secondly, in the relief sought therein.

Paragraph 13 read, in relevant part, as follows:

“By reason of the said breach of the term(s) of the contract by the first defendant and/or negligence of the second defendant and the consequential loss/damages and/or unjust enrichment the first defendant and the second defendant became liable to the plaintiff in the sum of….,.”…,.

The import of this paragraph, as well as of the relief sought, could not have been lost on the appellant. The relief sought read as follows:

“WHEREFORE, the plaintiff herein claims, against the first defendant and the second defendant, jointly and severally and in solidum the one paying the other to be absolved:

(a) Payment of the sum of US$900,000;

(b) Interest thereon at the rate of the Treasury Bills of the Federal Bank of the United States of America calculated from the 1st day of October 2002 to date of payment, both dates inclusive; and

(c) Costs of suit.”

Viewed from this whole perspective, I find there is little, if anything, to fault in the judge a quo's finding that the appellant had already been 'roped' in on the allegation of, among others, fraudulent misrepresentation.

Consequently, I do not find fault with the judge's finding that there was need to effect an amendment in this particular respect, in order to facilitate a proper ventilation of the real dispute between the parties.

The evidence before the court shows, that, the real dispute between the parties concerned the alleged joint liability of the appellant and Saturn Trading, arising from the appellant's performance of his duties as director of the latter, for the payment of the sum claimed.

Unjust Enrichment

As already indicated, the learned judge a quo took the view that unjust enrichment (of both the appellant and Saturn Trading') had 'already' been pleaded and all that remained was to clarify the said pleading.

The basis of this finding was paragraph 10 of the joint plea of the appellant and Saturn Trading, which was a response to the respondent's allegation (in its declaration) that the second defendant, Saturn Trading, had been unjustly enriched as a consequence of the appellant's conduct in running its affairs.

The appellant and Saturn Trading responded as follows in their plea:

“10. Ad Para 8 (Alternative Claim)

This is disputed. The defendants deny that they were enriched as alleged in the sum of USD900,000 or at all. The 2nd Defendant denies this and puts the Plaintiff to the proof thereof.”…,.

While, on the face of it, one may conclude that the appellant pleaded to a claim not made against him, I find the real significance of his response to be the insight it gave as to what, in the appreciation of the parties, was the real dispute between them.

As in the case of the alleged fraudulent misrepresentation, this appreciation could only have been buttressed by the relief that the respondent sought, jointly, against the appellant and Saturn Trading, which I have already cited above.

Counsel for the respondent invited the court to draw an inference, that, the claim of unjust enrichment against the appellant was pleaded in the first declaration, from the fact that the parties agreed that the issues to be put before the trial judge included the personal liability of the appellant.

He contends that such an agreement, reflected in the parties joint pre-trial conference minute ('PTC minute') suggests that the appellant had knowledge that the allegation of unjust enrichment was being made against him together with Saturn Trading.

I find there is merit in this contention, but, only to the extent that it gives an insight into what the appellant's perception of what the case confronting him, was.

The specific issue sought to be determined, in relation to unjust enrichment, as set out in the pretrial conference minute (PTC minute) read:

“(5)(a) Whether the Defendants have been unjustly enriched in anyway and whether the Plaintiff is entitled to recover any amount from them on the basis of unjust enrichment?”…,.

A joint pre-trial conference minute is not meant to form part of the evidence to be considered by the court in determining the matter before it. Agreements reached and recorded in a pre-trial conference minute are primarily concerned with what issues the parties have agreed the trial judge should consider and determine at the trial.

Thus, a pretrial conference minute's value lies in streamlining the issues relevant for a proper determination of the dispute between the parties.

While the agreed issues should, and must, arise from the facts alleged and/or disputed in the pleadings, the written evidence tendered, and the law that is said to be applicable, I find that implicit in the contents of the pre-trial conference minute (PTC minute) in casu, was the suggestion that the parties were ad idem as to the seemingly expanded nature of the real dispute between them.

This is because, on the basis of that minute, which they have not abandoned, the parties expected the court a quo to consider and determine aspects of the dispute that had not been properly articulated in the respondent's declaration.

While the need to address this anomaly between the pretrial conference minute (PTC minute) and the respondent's declaration may further justify the amendment sought, I find that that the amendment would also serve to properly align the PTC minute to the declaration, and other evidence, before the court, thereby facilitating a proper ventilation of the issues in dispute.

It appears to me, that, in respect of both the claim of fraudulent misrepresentation and unjust enrichment levelled against the appellant personally, the parties appear to have enlarged the scope of the dispute between them in a manner not matched by the specific issues alleged and pleaded to.

To bridge this gap, I find that the respondent properly resorted to Rule 132 of the High Court Rules, whose purpose, clearly, is to give the court the discretion to allow the amendment of pleadings for purposes of having the real dispute between the parties properly ventilated and determined.

I find in this respect, that, the following remarks are apposite:

“In this regard, NEWTON THOMPSON J remarked as follows in the case of Vos v Cronje and Dumminy;

'That the court is not bound by strict pleadings when the parties themselves have enlarged the issues is beyond argument….,.'”

See Power Coach Express (Pvt) Ltd v Martin Millers and Engineers HH121-10.

Applied to the circumstances of this case, I find that the parties expansion of the issues for determination, in the manner outlined above, was properly taken into account by the court a quo.

To the extent that one does not 'expand' on what is not already in existence, I am satisfied that these two claims did not constitute new causes of action.

Thus, the question of prescription, in so far as the fraudulent misrepresentation and unjust enrichment of the appellant were concerned, did not arise.

The claims were neither new causes of action, nor were they prescribed.

I am satisfied, that, the learned judge correctly applied Rule 132 of Order 20 of the High Court Rules, cited above, and that, in doing so, he did not make any error in exercising the discretion imposed on him.

Appealed
SC05-19 : TETRAD INVESTMENT BANK LTD (Under Judicial Management) vs BINDURA UNIVERSITY OF SCIENCE EDUCATION and THE SHERIFF OF ZIMBABWE
Ruled By: GWAUNZA JA, GUVAVA JA and MAVANGIRA JA

This is an appeal against the decision of the High Court granting the respondent leave to proceed with the execution of a judgment that it obtained against the appellant bank which is under judicial liquidation.

The appellant, Tetrad Investment Bank Limited (under Liquidation) is a bank duly registered under the laws of Zimbabwe. It was placed under provisional judicial management by an order of the High Court on 29 January 2015.

The first respondent, Bindura University of Science Education, is a university duly established under the Bindura University of Science Education Act [Chapter 25:22].

The second respondent is the Sheriff of Zimbabwe, cited in his official capacity.

The appellant and the first respondent were involved in a dispute which culminated in a judgment under HC2106/14, on 2 April 2014, in favour of the first respondent, for the payment of the sum of US$473,025=52 together with interest and collection commission. Thereafter, the appellant filed an urgent chamber application in the High Court for stay of execution of the said judgment. The application was removed from the roll on 17 April 2014 on the ground that the matter was not urgent. The appellant then filed an appeal against the decision of the High Court. The appeal was struck off the roll by this Court on 30 June 2014.

After the matter was struck off the roll, the first respondent issued a writ of execution for the attachment of the appellant's property on 16 September 2014.

Whilst the first respondent was attempting to execute on the appellant's property, the appellant filed an application for a scheme of arrangement which stayed all execution. The application was granted on 24 September 2014.

The appellant was placed under provisional judicial management on 29 January 2015.

Paragraph 1(f) of the order placing the appellant under provisional liquidation provides as follows:

“All actions and applications, and the execution of all writs, summons, and other processes against the Applicant shall be stayed and not proceeded with without leave of this court.”

The first respondent approached the High Court, on 18 November 2015, with an application for leave to execute its judgment against the appellant.

In its application, the first respondent submitted that it was just and equitable that it be granted leave to execute in view of the fact that it was in a unique position in comparison to other creditors as it had in its favour a court order which had been confirmed by the Supreme Court.

The amount that was owed to it was thus a confirmed amount, or figure, that was no longer open to contestation.

The first respondent further submitted, that, its operations were suffering and it was struggling to keep running many of them as they have been paralysed by lack of funds; which funds are held up in the appellant bank.

Furthermore, the first respondent averred that it was just and equitable for the court to grant it leave to execute as that would not result in the appellant suffering any irreparable harm.

The application was opposed by the appellant, who submitted that the first respondent cannot seek leave to execute its judgment for the reason that the appellant is a bank.

The appellant also disputed that the first respondent was on the brink of collapse.

The appellant further contended, that, it would suffer irreparable harm if leave to execute was granted in favour of the first respondent.

It prayed for the dismissal of the application for leave to execute.

The court a quo found in favour of the first respondent and granted leave to execute. The court found, that, it was just and equitable for the first respondent to execute its judgment against the appellant, particularly when consideration was given to the period that had lapsed since the placing of the first respondent under judicial management. The court also found, that, the granting of leave to execute would not defeat or frustrate the reason for the placement of the appellant under judicial management. It also considered that the appellant would not be going into liquidation.

The appellant was aggrieved by that decision and it filed this appeal on the following grounds:

1. The High Court erred in placing the onus on the appellant to prove why execution should not have been undertaken by the first respondent pending the judicial management.

2. The High Court grossly misdirected itself in granting the first respondent an advantage over other creditors simply because the appellant is a bank and the first respondent, an investor, which is a public institution.

3. The High Court further grossly erred in finding, that, the operations of the first respondent were hampered in any way in the absence of any evidence to that effect from the first respondent.

4. The High Court further grossly erred in the exercise of its discretion in finding, that, the first respondent was entitled to an order for leave to execute its judgment, there being no special circumstances justifying the grant of such leave.

Although the notice of appeal raises four (4) grounds of appeal, these grounds raise only one issue for determination by this Court. The issue is whether the court a quo erred in finding that the first respondent was entitled to execute its judgment.

During the hearing of the appeal, counsel for the appellant placed great reliance on the case of Samuel Osborn (SA) Ltd v United Stone Crushing Co. (Pty) Ltd (Under Judicial Management) 1938 WLD 229.

He submitted, that, although the court a quo exercised its discretion in granting the first respondent leave to execute its judgment against the appellant, the appellant took issue with the manner in which such judicial discretion was exercised.

Firstly, counsel for the appellant argued, the court a quo erred in placing on the appellant the onus to prove why execution should not be granted.

Secondly, he submitted, the court a quo erred in finding that the operations of the first respondent would be hampered if leave to execute was not granted.

He submitted, that, there was no evidence to show that the operations of the first respondent would be hampered if leave to execute was not granted.

He also submitted, that, the order granting leave to execute should be set aside because it gave the first respondent advantage over other creditors when no special circumstances justifying such an order have been proven.

In response, counsel for the first respondent submitted that the court a quo properly exercised its discretion in granting leave to execute.

He submitted, that, the court a quo considered all the circumstances of the case and properly exercised its discretion. On the issue of onus, he submitted that there had been no reversal because at all material times, the onus to prove that leave should be granted was upon the first respondent (who was the applicant in the court a quo).

As a result, counsel for the first respondent submitted, nothing had been shown to warrant this Court's interference with the exercise of discretion by the court a quo.

He accordingly prayed for the dismissal of the appeal.

From the submissions made, the parties are ad idem on the position of the law to the effect, that, an application for leave to appeal entails the exercise of discretion by the court in deciding whether or not to grant such leave.

In Mupini v Makoni 1993 (1) ZLR 80 (S) the court stated…,.:

“Execution is a process of the court, and the court has an inherent power to control its own process and procedures, subject to such rules as are in force. In the exercise of a wide discretion, the court may, therefore, set aside or suspend a writ of execution or, for that matter, cancel the grant of a provisional stay. It will act where real and substantial justice so demands. The onus rests on the party seeking a stay to satisfy the court that special circumstances exist. The general rule is that a party who has obtained an order against another is entitled to execute upon it.”

As noted from the above case, when the court a quo was called upon to determine whether the first respondent was entitled to execute its judgment against the appellant, who is under judicial management, the court was called to exercise its discretion.

As such, the principles relating to interference with the exercise of judicial discretion apply in this case.

This Court, as an Appellate Court, should be slow to interfere with the exercise of that discretional power: see the case of Barros and Anor v Chimphonda 1999 (1) ZLR 58 (S)…, where the court said that:

“The attack upon the determination of the learned judge, that there were no special circumstances for preferring the second purchaser above the first, one which clearly involved the exercise of a judicial discretion, may only be interfered with on limited grounds: see Farmers Co-operative Society (Reg.) v Berry 1912 AD 343 at 350.

These grounds are firmly entrenched.

It is not enough that the Appellate Court considers, that, if it had been in the position of the primary court, it would have taken a different course. It must appear that some error has been made in exercising the discretion. If the primary court acts upon a wrong principle, if it allows extraneous or irrelevant matters to guide or affect it, if it mistakes the facts, if it does not take into account relevant some consideration, then, its determination should be reviewed and the Appellate Court may exercise its own discretion in substitution, provided always has the materials for so doing.”…,.

On the basis of this position, which is settled at law, it is clear that, for this Court to interfere with the exercise of judicial discretion by the court a quo, it must be proved that some error was made in the exercise of that discretion in the manner enunciated in the case authorities. In this regard, it is necessary to consider whether the court a quo grossly misdirected itself in the manner in which it exercised its judicial discretion, as alleged by the appellant.

It is not in dispute, that, where a company is under judicial management, all processes which defeat the purpose of judicial management should be avoided.

Judicial management is defined in Feigenbaum & Anor v Germanis N.O. & Ors 1998 (1) ZLR 286 (H)…, in the following terms:

“Judicial management is an extraordinary procedure made available to a company by the court, in special circumstances, and for statutorily prescribed purposes: Silverman v Doornhoek Mines Ltd 1935 TPD 349.

The procedure is only adopted when the court is satisfied, on the facts contained in the application, that, there is a reasonable probability, that, if placed under judicial management, the company, which is unable to pay its debts, will be able to pay its debts in full, meet its obligations, and become a successful concern.”

The purpose of judicial management was explained in Cellular (Pvt) Ltd v Post and Telecommunications Corporation SC77-04 where the court said the following…,.:

“The object of judicial management is to obviate a company being placed in liquidation if there is some reasonable probability, that, by proper management or by proper conservation of its resources, it may be able to surmount its difficulties and carry on.”

Thus, the main goal of a judicial management order is to provide a company sufficient time to make a financial recovery and so avoid liquidation.

This is why judicial management has also sometimes been referred to as business rescue; see Energy Drive System (Pty) Ltd v Tin Can Man (Pty) Ltd & Ors 2017 (3) SA 539 (GP).

The effect of a judicial management order is that, subject to certain exceptions, a general moratorium on legal proceedings against the company comes into effect and the property and interests of the company are protected: see Diener N.O. v Minister of Justice & Ors 2018 (2) SA 399 (SCA).

However, in the case of Energy Drive System (Pty) Ltd v Tin Can Man (Pty) Ltd & Ors 2017 (3) SA 539 (GP) it was stated, that, the purpose and context of business rescue are not aimed at the destruction of the rights of a secured creditor.

This is why the law allows the court, when placing a company under judicial management, to order that all actions and proceedings, and the execution of all writs, summonses and other processes against the company, be stayed and be not proceeded with without the leave of the court: see section 301(1) of the Companies Act [Chapter 24:03]).

Thus, the law allows parties who wish to proceed against a company under judicial management to approach the court for leave to proceed against that company.

This is what the first respondent did in the present case.

Where a party applies for leave of the court to execute a judgment against a company under judicial management, the onus of satisfying the court, that, it should allow the institution of processes for the execution of the judgment, rests upon the applicant.

For the court to exercise its wide discretion whether or not to grant leave, the applicant must have a claim against the company. It is irrelevant whether the claim arose before or after the company was put under judicial management. The applicant also has to show to the court, that, it might suffer irremediable loss and that no injustice would be done if leave to proceed with the action were granted: see Samuel Osborn (SA) Ltd v United Stone Crushing Co. (Pty) Ltd (Under Judicial Management) 1938 WLD 229…, where the court held that:

“There is, however, great force in the contention advanced on behalf of the applicant, that, it is inequitable that, by the refusal of leave, the applicant should be deprived of the possession and use of the property, with at least the potential risk of depreciation, for the benefit of creditors, of whom it is not one when the applicant stands to gain nothing by the eventual success of the judicial management.”

In this case, it is alleged that the onus of proving that leave to execute must be granted was shifted to the appellant.

The appellant is not correct in this regard.

A reading of the record, and the judgment of the court a quo, shows, that, at all material times, the onus was upon the first respondent to prove the existence of special circumstances which justified the granting of leave to execute.

The first respondent alleged, that, it was suffering and that its operations were being paralysed because of lack of funds which were being held by the appellant. The first respondent also contended, that, if leave to execute was granted, the appellant would not suffer any irreparable harm.

The appellant relied on the order placing it under judicial management, and denied that the first respondent would suffer irreparable harm if leave to execute was not granted.

The order placing the appellant under judicial management cannot help the appellant in this case, simply because that order noted the need for the first respondent, and other creditors, to approach the court for leave to execute their judgment.

In addition, the order placing the appellant under judicial management was granted in 2015 and the court a quo heard the application for leave in 2017, a period of two years after the appellant was placed under judicial management. There has been a change of circumstances, and, therefore, the appellant cannot rely merely on factors which were considered when it was placed under judicial management.

As the first respondent approached the court a quo and applied for leave to execute its judgment, on the strength of the allegation that its operations were severely compromised, and that the appellant would not suffer any irreparable harm if leave was granted, it was for the appellant to have rebutted that allegation.

It is trite that he who alleges must prove.

In casu, the first respondent set out facts that entitled it to the relief sought. The facts that it alleged in support of its application, having stood unrebutted by the appellant, were, as provided at law, taken as accepted.

This is clearly articulated in the case of Chihwayi Enterprises (Pvt) Ltd v Attish Investments (Pvt) Ltd 2007 (2) ZLR 89 (S)…, where the court said the following:

“It is pertinent to note, that, the averments made by Patel in para 23 of the founding affidavit were not denied by the Hardware in its opposing affidavit. What that means, is that, the averments were admitted by the Hardware.”

As McNALLY JA said in Fawcett Security Operations (Pvt) Ltd v Director of Customs and Excise and Ors 1993 (2) ZLR 121 (S)…,.:

“The simple rule of law is that what is not denied in affidavits must be taken to be admitted.”

Given the allegations set out by the first respondent, we find that the first respondent established a prima facie case which was accepted by the court a quo. Such allegations ought to have been rebutted by the appellant with clear evidence. The appellant had a duty to rebut the respondent's averments and evidence.

It cannot be said that the court a quo shifted, from the first respondent, the onus of proving that leave to execute was warranted.

Contrary to the submission made by the appellant, that there were no special circumstances justifying the grant of leave to execute, we find that the first respondent managed to establish its entitlement to the relief that it sought.

The court a quo considered the duration of the judicial management, the effect of the order granting leave to execute on the stability of the appellant, and the interests of the first respondent, and, it found that it was just and equitable for it to grant leave to execute.

The court a quo assessed the evidence that was before it and found, that, the first respondent was entitled to leave to execute its judgment.

That assessment cannot be regarded as grossly unreasonable, and, thereby, empowering and enabling this Court to interfere. The court a quo applied the correct principles and exercised its discretion reasonably.

For these reasons, we find that the appeal is without merit. The settled grounds for interference with the exercise of judicial discretion have not been established in this appeal.

Accordingly, it is ordered as follows:

“The appeal is dismissed with costs.”

View Appeal
SC07-13 : CLADIUS CHENGA vs VIRGINIA CHIKADAYA and ZAKEYO CHIKADAYA and BEAUTY MPOFU and REGISTRAR OF DEEDS
Ruled By: GARWE JA, GOWORA JA and OMERJEE AJA

This appeal concerns a protracted legal dispute involving the rights, title and interest in an immovable property, namely, Stand No. 6058 Glen View 3 Township, Harare (hereinafter referred to as “the property”).

In 1980, the first respondent's husband purchased the rights, title and interest in the property from Kufa Oswin Danda. At the time of purchase, the first respondent's husband had acquired another property within the municipal jurisdiction of the City of Harare (“the City Council”).

It was the policy of the City Council, at the time, not to permit any person to acquire and register in his name more than one property within the municipal area.

The first respondent's husband agreed with the second respondent (his young brother) that the property would be registered in the latter's name. They also agreed that in due course it would be transferred and registered in the name of the first respondent's children.

On 26 January 1982, the City Council approved the cession of Kufa Oswin Danda's rights in the property to the second respondent.

On 19 May 1998, the first respondent's husband requested the second respondent to cede his rights in the property to his son, Lydman Chikadaya.

The second respondent refused to do so.

On 25 September 1998, the first respondent's husband then instituted proceedings in the High Court, in Case No. HC11678/98 against the second respondent and the City Council for the cession of rights in the property.

The second respondent contested the action.

On 1 March 2001, SMITH J non-suited the first respondent's husband on the basis of the “dirty hands” principle and dismissed his claim without a hearing as to the merits.

The first respondent's husband noted an appeal to the Supreme Court on 29 March 2001.

In Judgment No. SC58-01 delivered on 14 June 2001, the Supreme Court upheld the appeal, set aside the order of the High Court, and remitted the matter to the lower court for the continuation of the trial on the merits.

The subsequent trial was held on 3 and 4 September 2001.

On 20 February 2002, SMITH J granted the relief sought by the first respondent's husband in Judgment No. HH01-02.

In that judgment, the court ordered the second respondent to cede his rights, title and interest in the property to the first respondent's husband, failing which, the Deputy Sheriff was authorised to act in his stead.

The second respondent noted an appeal to this Court in Case No. SC85/02 against that decision.

The appeal was dismissed by this Court on 15 November 2004.

When the first respondent's husband sought to execute the judgement of 20 February 2002, he discovered, that, while the matter was still pending before the courts, the Council had already, under Deed of Transfer 1284/2001, transferred the property to the second and third respondents.

The second and third respondents had, in turn, sold the property to the appellant on 6 December 2000 and effected transfer of the property to the appellant on 14 February 2001.

When the first respondent's husband discovered that the property had been sold to the appellant, he filed a court application under Case No. HC12434/04 against the appellant, the second, third and fourth respondents respectively, seeking, inter alia, the cancellation of the sale, cancellation of transfer of the property to the appellant, transfer of the property to him, eviction of all parties claiming occupation through the appellant, and costs of suit on the scale of legal practitioner and client.

Only the appellant opposed the application in the papers filed. The other parties cited did not file any opposing papers in this matter.

On 24 March 2009, the first respondent's husband died before the trial of the matter.

The first respondent, in her capacity as the executrix, was substituted as the plaintiff in the matter.

The court a quo granted the relief sought by the first respondent. It is against that decision that the present appeal has been noted.

The appellant now appeals to this Court on the grounds that:

“1. The learned judge a quo erred and misdirected himself on the evidence presented to make a finding, that, the appellant was a mala fide purchaser. In particular, the learned judge ignored evidence which proved that the appellant was an innocent third party at the time he purchased the property and took transfer of the same.

2. The learned judge failed to appreciate, that, the first respondent was not entitled to the relief of rei vindicatio as against second respondent. In particular, the learned judge ignored the fact, that, second respondent, being the registered owner of the property, had proper title and dominium thereof.

3. The learned judge erred and misdirected himself in granting an order setting aside the sale and transfer of the property to the appellant when the facts of the case disclosed special circumstances in favour of non-cancellation of Deed of Transfer in favour of the appellant.

4. The learned judge ought to have made a finding, that, the first respondent was estopped from vindicating the property since the respondent did not take appropriate steps to protect her interests in the property, which situation resulted in appellant purchasing and taking transfer of the same in good faith.

5. The learned judge failed to appreciate, that, at the time of the trial herein, the property had passed from second respondent to appellant, and, hence, the principle of res litigiosa had no application to the extent warranting the cancellation of appellant's title to the property under circumstances shown by the facts of the case.

6. The learned judge erred and misdirected himself in awarding costs against the appellant on a legal practitioner and client scale.”

The appellant seeks the setting aside of the judgement of the court a quo, and for it to be substituted by an order dismissing the claim by the first respondent with costs.

Three issues arise for determination. I propose to deal with each of the issues in turn. These are:

(i) Whether the appellant in casu was a bona fide purchaser of the property in dispute.

(ii) Whether the first respondent (plaintiff in the court a quo) was entitled to the remedy of rei vindicatio under the circumstances.

(iii) Whether the contested rights were res litigiosa.

On the first issue, it was the submission of counsel for the appellant, that, the court a quo misdirected itself in finding, on the evidence adduced, that the appellant was a mala fide purchaser.

This was a finding of fact.

It is trite, that, an Appellate Court will not interfere with a decision of a trial court based on findings of fact, unless there is a clear misdirection or the decision reached is irrational.

In the case of Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S)…, KORSAH JA stated the following:

“The general rule of the law, as regards irrationality, is that an Appellate Court will not interfere with a decision of a trial court based purely on a finding of fact unless it is satisfied, that, having regard to the evidence placed before the trial court, the finding complained of is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at such a conclusion: Bitcon v Rosenberg 1936 AD 380 at 395-7; Secretary of State for Education & Science v Metropolitan Borough of Tameside [1976] 3 All ER 665 (CA) at 671E-H; CCSU v Min for the Civil Service supra at 951A-B; PF-ZAPU v Min of Justice (2) 1985 (1) ZLR 305 (S) at 326E-G.”

The onus to prove that the appellant was a mala fide purchaser rested upon the first respondent in the court a quo.

A careful analysis of the evidence of Virginia Chikadaya, the first respondent, in her capacity as executrix in the estate of the late Cyril Chikadaya, reveals that this witness failed to discharge the onus upon her.

She was unable to give reasons for claiming that the appellant was aware of the legal wrangle between her husband and the second respondent over the said property.

The trial judge correctly found, that, the first respondent had failed to prove that the appellant had been a tenant at the property prior to the purchase of the same.

The court a quo, however, found that the probabilities confirmed that the appellant must have been aware of the claims by the first respondent's husband to the property.

There was no evidence, whether direct or circumstantial, to establish that the appellant knew or should have known of the legal dispute between the first respondent's late husband and his brother over the property. There was a mere suspicion that he could have known about it, but, nothing more.

Furthermore, the appellant's assertion that he was not aware of the legal wrangle over the property was supported by the evidence of Chiedza Chimere who was a tenant at the property at the time. She testified, that, she never brought this issue to the appellant's attention at any time, but, confirmed seeing the appellant inspecting the property.

The first respondent failed to prove, that, the appellant was a mala fide purchaser.

She only relied on what she had been told by her husband, and, this was regarded as first hand hearsay by the court a quo.

That court admitted such evidence despite the fact, that, the late Chikadaya was an interested party and had an interest in this matter.

The appellant's evidence, that, he was unaware of the legal dispute as to the rights in the property, was supported and corroborated by two tenants who were residing at the property at the relevant time.

Having regard to the evidence adduced on record, it is clear that the first respondent failed to discharge the onus to prove that the appellant was a mala fide purchaser.

The court a quo erred and misdirected itself in coming to such conclusion on the evidence led. The appellant, on the evidence on record, was a bona fide purchaser.

However, the resolution of this issue does not determine the fate of this appeal. It is necessary to determine the two other remaining issues.

I turn to deal with the second issue, that is, whether the first respondent was entitled to the remedy of rei vindicatio.

The rei vindicatio is a common law remedy that is available to the owner of property for its recovery from the possession of any other person. In such an action, there are two essential elements of the remedy that require to be proved. These are:

(i) Firstly, proof of ownership; and
(ii) Secondly, possession of the property by another person.

Once the two requirements are met, the onus shifts to the respondent to justify his occupation.

Counsel for the appellant submitted, that, the remedy was not available to the first respondent because her late husband had never become the owner of the property. Prior to the transfer of the property to the appellant, the second respondent held rights, title and interest therein.

The judgment of SMITH J in Chikadaya v Chikadaya & Ors HH01-02, established that the first respondent's husband was the owner of the rights, title and interest in the property which his young brother, the second respondent, purported to dispose of to the appellant.

The second respondent purported to be the owner and disposed of the property, in the full knowledge that the property did not belong to him. He did so in order to cheat and defeat the true owner of his rights in the property.

In other words, he fraudulently sold the property to the appellant.

The second respondent disposed of the property before the merits of the matter had been determined by SMITH J.

When the trial commenced, he did not disclose the fact that transfer had already been effected to the appellant. He deliberately concealed this information from the court and proceeded to appeal to the Supreme Court against the decision of SMITH J, which had awarded the rights, interest and title to the first respondent's late husband.

WILLE and MILLIN's in their book “Mercantile Law in South Africa” by Phillip Millin and George Wille, 18th edition…, states that:

“If, however, a vendor knowing himself not to be the true owner of the thing, represents himself to be the owner of ascertained goods, and sells them to a person ignorant of the truth, so as to wilfully to expose the latter to the danger of having the possession taken away from him by the true owner, the law regards such conduct, on the part of the vendor, as fraudulent; and the buyer is entitled to repudiate the contract and sue the seller for damages even before he is evicted. This reflects the view of De Villers JA in Kleynhans Bros v Wessels's Trustee 1927 AD 271, and is submitted to be preferable to the contrary view of Wessels JA in that case – at least as regards the sale of a specific merx.”

These sentiments are pertinent to the present matter.

The agreement of sale between the appellant and the second respondent was null and void for lack of authority. The second respondent was not authorised, by the owner of the property, to dispose of it on his behalf. He purported to dispose of rights in the property which rights he did not have.

As was pointed out by LORD DENNING in Macfoy v United Africa Company Limited (1961) 3 All ER 1169 (PC)…,.:

“If an act is void, then, it is, in law, a nullity. It is not only bad, but incurably bad. There is no need for an order of court to set it aside. It is automatically null and void without more ado, though it is sometimes convenient to have the court declare it to be so. And every proceeding which is founded on it is also bad and incurably bad. You cannot put something on nothing and expect it to stay there. It will collapse.”

The same sentiments were also echoed by MAKARAU JP…, in Katirawu v Katirawu & Ors HH58-07…, when she said:

“…,. Nothing legal can flow from a fraud. His appointment was null and void ab initio on account of fraud. It is as if it was never made. It is a nothing and upon which nothing of consequence can hang.”

The first respondent has a right of vindication against the appellant, despite the fact that the appellant had become the registered owner of the property. The first respondent's right is derived from the common law principle memo dat quod non habet which means no one can transfer more rights to another than he himself has.

In the present case, the second respondent, who purported to sell the property to the appellant, was not the legitimate owner of the property, and, hence, could not transfer the right of ownership which he did not possess.

The court a quo correctly concluded, that, the first respondent, as the rightful owner of the property, was entitled to recover it from any person who had possession of it without his consent. The first respondent is entitled to the remedy of vindication as against the appellant....,.

The last issue that falls for determination is whether or not the principle of res litigiosa applies in the present case.

In Waikiki Shipping Company Limited v Thomas Barlaw and Sons (Natal) Ltd and Anor 1978 (1) SA 671…, the court defined “res litigiosa” as objects that are the subject matter of litigation.

In Zimbabwe Banking Corporation Ltd & Anor v Shiku Distributors (Pvt) Ltd and Ors 2000 (2) ZLR 11 (H)…, the court held that:

“…, a res litigiosa may not be sold after institution of action as there is no-one who can be enriched by the right as everyone has an equal right to prosecute it.”

It is trite, that, all personal actions have the effect of rendering their subject matter res litigiosa at the stage of litis contestatio. The relevant stage is not the time of commencement of action, but the time of litis contestatio.

In the case of Opera House (Grand Parade) Restaurant (Pvt) Ltd v Cape Town City Council 1986 (2) SA 656 (C), it was held that in a real action (action in rem) the land becomes res litigiosa on the service of summons while in a personal action, that status was achieved at the closure of pleadings.

I am in agreement with the findings of the trial judge, that, in the present matter, it was unnecessary to determine whether the rights in issue were real or personal rights, as, at the time of the alienation, summons had been served and pleadings closed.

It is common cause that the contested rights were res litigiosa.

It is now settled in our law, that, where an object is res litigiosa, this does not preclude or prevent it from being alienated or similarly dealt with, as long as the rights of the non-alienating litigant in the res are protected: see the cyclostyled judgment of Supa Plant Investments (Pvt) Ltd v Edgar Chidavaenzi HH92-09…,.

l conclude, that, the sale of the rights in the property, after the closure of pleadings, without protecting the first respondent's rights, rendered the sale a nullity.

The court a quo's findings in this regard cannot be faulted.

Accordingly, and for these reasons, it is ordered as follows:

The appeal be and is hereby dismissed with costs.

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Law Portal
Zimbabwe

Appeal re: Findings of Fact or Exercise of Discretion Made by Lower Court and Non Sequitur Reasoning iro Approach

SC23-20 : JOHN CHIKURA N.O. and DEPOSIT PROTECTION CORPORATION vs AL SHAMS GLOBAL BVI LTD
Ruled By: MAKARAU JA, HLATSHWAYO JA and MAKONI JA

SC24-18 : MEDLOG ZIMBABWE (PVT) LTD vs COST BENEFIT HOLDINGS (PVT) LTD
Ruled By: GARWE JA, GOWORA JA and GUVAVA JA

Appealed
SC42-15 : CRISPEN HATIVAGONE and AUDREY HATIVAGONE vs CAG FARMS (PVT) LTD and DBT PROPERTIES and REGISTRAR OF DEEDS
Ruled By: GARWE JA, GOWORA JA and PATEL JA

SC58-15 : ERICKSON MVUDUDU vs AGRICULTURAL AND RURAL DEVELOPMENT AUTHORITY
Ruled By: MALABA DCJ, GWAUNZA JA and PATEL JA

SC86-22 : CITY OF HARARE vs EVARISTO MUNGATE
Ruled By: GOWORA JA, MAKONI JA and BERE JA

View Appeal
SC43-13 : ECONET WIRELESS (PVT) LTD vs TRUSTCO MOBILE (PROPRIETARY) LTD and TRUSTCO GROUP INTERNATIONAL (PROPRIETARY) LTD
Ruled By: MALABA DCJ, ZIYAMBI JA and GARWE JA

Appealed
SC65-14 : AIR ZIMBABWE (PVT) LTD and AIR ZIMBABWE HOLDINGS (PVT) LTD vs STEPHEN NHUTA and DEPUTY SHERIFF HARARE and SHERIFF OF ZIMBABWE
Ruled By: ZIYAMBI JA, GARWE JA and PATEL JA

Appealed
SC65-14 : AIR ZIMBABWE (PVT) LTD and AIR ZIMBABWE HOLDINGS (PVT) LTD vs STEPHEN NHUTA and DEPUTY SHERIFF HARARE and SHERIFF OF ZIMBABWE
Ruled By: ZIYAMBI JA, GARWE JA and PATEL JA

Appealed
SC20-12 : ZIMBABWE OPEN UNIVERSITY vs GIDEON MAGARAMOMBE and DEPUTY SHERIFF HARARE N.O.
Ruled By: CHIDYAUSIKU, CJ

SC10-24 : ELPHAS MAPHISA vs CLEVER SIBANDA N.O. (as executor dative of the Estate of the late Melusi Sibanda) and OTHERS
Ruled By: GWAUNZA DCJ, MAKONI JA and CHITAKUNYE JA

SC10-24 : ELPHAS MAPHISA vs CLEVER SIBANDA N.O. (as executor dative of the Estate of the late Melusi Sibanda) and OTHERS
Ruled By: GWAUNZA DCJ, MAKONI JA and CHITAKUNYE JA

SC16-23 : ZIMBABWE PLATINUM MINES (PRIVATE) LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: BHUNU JA, UCHENA JA and CHATUKUTA JA

SC17-23 : RYDALE RIDGE PARK (PRIVATE) LIMITED vs RUTH MURIDZO N.O.
Ruled By: GUVAVA JA, MAVANGIRA JA and KUDYA JA

SC40-23 : JOHANNES MANYENGA vs PETROZIM (PRIVATE) LIMITED
Ruled By: MAVANGIRA JA, MAKONI JA and CHITAKUNYE JA

SC41-23 : CASSIAN MANUHWA vs SEEDCO ZIMBABWE (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, KUDYA JA and MWAYERA JA

Appealed
SC49-23 : PETROMOC EXOR (PVT) LTD vs KUDZANAI CHIMEDZA and CRANDID PETROLEUM (PVT) LTD and MINISTER OF LANDS, AGRICULTURE, WATER, CLIMATE and SHERIFF OF ZIMBABWE
Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

Appealed
SC56-21 : CHRISTOPHER SAMBADZA vs AL SHAMS GLOBAL BVI LIMITED
Ruled By: GOWORA JA, MAKONI JA and BERE JA

SC62-23 : GOLDLOCK INDUSTRIES 2003 (PVT) LTD vs SHERIFF OF ZIMBABWE and INTERFIN BANKING CORPORATION and AL SHAMS GLOBAL BVI LTD and JAYESH SHAH and OTHERS
Ruled By: MAVANGIRA JA, CHITAKUNYE JA and MUSAKWA JA

SSC65-23 : KASSAM SHIRAAJ vs THE STATE
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

SC66-23 : NATIONAL PHARMACEUTICAL COMPANY vs DRAX CONSULT SAGL
Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

SC81-23 : DISCENT BAJILA and FRANK MHLANGA and ADELAIDE MHLANGA and SANPOULOS MAPLANKA and OTHERS vs TATENDA MADZIRASHE and RAMSON CHINGWARA and LINDA MPOFU and OTHERS
Ruled By: UCHENA JA, CHITAKUNYE JA and MWAYERA JA

SC93-23 : AUGUR INVESTMENTS and DOOREST PROPERTIES vs FAIRCLOT INVESTMENT and THE SHERIFF and THE REGISTRAR OF DEEDS
Ruled By: BHUNU JA, CHIWESHE JA and MWAYERA JA

SC110-23 : CHINHOYI MUNICIPALITY vs TENDAI MUSONZA
Ruled By: MAVANGIRA JA, CHIWESHE JA and MUSAKWA JA

SC120-23 : COLLINS MANGENJE and GODWIN MANGENJE vs ISAAC TICHARWA (executor, estate Kennedy Mangenje) and MANGENJE BROTHERS (PVT) LTD (In liquidation) and CECIL MADONDO (liquidator, Mangenje Brothers)
Ruled By: BHUNU JA, CHIWESHE JA and CHATUKUTA JA

SC122-23 : BERNARD KUJINGA vs OLD MUTUAL LIFE ASSURANCE (PRIVATE) LIMITED
Ruled By: MAVANGIRA JA, CHIWESHE JA and MUSAKWA JA

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE
Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE
Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE
Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

Appealed
SC04-17 : JAYESH SHAH vs KINGDOM MERCHANT BANK LIMITED
Ruled By: GWAUNZA JA, GUVAVA JA and MAVANGIRA JA

Appealed
SC05-19 : TETRAD INVESTMENT BANK LTD (Under Judicial Management) vs BINDURA UNIVERSITY OF SCIENCE EDUCATION and THE SHERIFF OF ZIMBABWE
Ruled By: GWAUNZA JA, GUVAVA JA and MAVANGIRA JA

View Appeal
SC07-13 : CLADIUS CHENGA vs VIRGINIA CHIKADAYA and ZAKEYO CHIKADAYA and BEAUTY MPOFU and REGISTRAR OF DEEDS
Ruled By: GARWE JA, GOWORA JA and OMERJEE AJA

Categories

Law Portal Zimbabwe

Appeal re: Findings of Fact or Exercise of Discretion Made by Lower Court and Non Sequitur Reasoning iro Approach

SC23-20 : JOHN CHIKURA N.O. and DEPOSIT PROTECTION CORPORATION vs AL SHAMS GLOBAL BVI LTD Ruled By: MAKARAU JA, HLATSHWAYO JA and MAKONI JA

SC24-18 : MEDLOG ZIMBABWE (PVT) LTD vs COST BENEFIT HOLDINGS (PVT) LTD Ruled By: GARWE JA, GOWORA JA and GUVAVA JA

Appealed SC42-15 : CRISPEN HATIVAGONE and AUDREY HATIVAGONE vs CAG FARMS (PVT) LTD and DBT PROPERTIES and REGISTRAR OF DEEDS Ruled By: GARWE JA, GOWORA JA and PATEL JA

SC58-15 : ERICKSON MVUDUDU vs AGRICULTURAL AND RURAL DEVELOPMENT AUTHORITY Ruled By: MALABA DCJ, GWAUNZA JA and PATEL JA

SC86-22 : CITY OF HARARE vs EVARISTO MUNGATE Ruled By: GOWORA JA, MAKONI JA and BERE JA

View Appeal SC43-13 : ECONET WIRELESS (PVT) LTD vs TRUSTCO MOBILE (PROPRIETARY) LTD and TRUSTCO GROUP INTERNATIONAL (PROPRIETARY) LTD Ruled By: MALABA DCJ, ZIYAMBI JA and GARWE JA

Appealed SC65-14 : AIR ZIMBABWE (PVT) LTD and AIR ZIMBABWE HOLDINGS (PVT) LTD vs STEPHEN NHUTA and DEPUTY SHERIFF HARARE and SHERIFF OF ZIMBABWE Ruled By: ZIYAMBI JA, GARWE JA and PATEL JA

Appealed SC65-14 : AIR ZIMBABWE (PVT) LTD and AIR ZIMBABWE HOLDINGS (PVT) LTD vs STEPHEN NHUTA and DEPUTY SHERIFF HARARE and SHERIFF OF ZIMBABWE Ruled By: ZIYAMBI JA, GARWE JA and PATEL JA

Appealed SC20-12 : ZIMBABWE OPEN UNIVERSITY vs GIDEON MAGARAMOMBE and DEPUTY SHERIFF HARARE N.O. Ruled By: CHIDYAUSIKU, CJ

SC10-24 : ELPHAS MAPHISA vs CLEVER SIBANDA N.O. (as executor dative of the Estate of the late Melusi Sibanda) and OTHERS Ruled By: GWAUNZA DCJ, MAKONI JA and CHITAKUNYE JA

SC10-24 : ELPHAS MAPHISA vs CLEVER SIBANDA N.O. (as executor dative of the Estate of the late Melusi Sibanda) and OTHERS Ruled By: GWAUNZA DCJ, MAKONI JA and CHITAKUNYE JA

SC16-23 : ZIMBABWE PLATINUM MINES (PRIVATE) LIMITED vs ZIMBABWE REVENUE AUTHORITY Ruled By: BHUNU JA, UCHENA JA and CHATUKUTA JA

SC17-23 : RYDALE RIDGE PARK (PRIVATE) LIMITED vs RUTH MURIDZO N.O. Ruled By: GUVAVA JA, MAVANGIRA JA and KUDYA JA

SC40-23 : JOHANNES MANYENGA vs PETROZIM (PRIVATE) LIMITED Ruled By: MAVANGIRA JA, MAKONI JA and CHITAKUNYE JA

SC41-23 : CASSIAN MANUHWA vs SEEDCO ZIMBABWE (PRIVATE) LIMITED Ruled By: GWAUNZA DCJ, KUDYA JA and MWAYERA JA

Appealed SC49-23 : PETROMOC EXOR (PVT) LTD vs KUDZANAI CHIMEDZA and CRANDID PETROLEUM (PVT) LTD and MINISTER OF LANDS, AGRICULTURE, WATER, CLIMATE and SHERIFF OF ZIMBABWE Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

Appealed SC56-21 : CHRISTOPHER SAMBADZA vs AL SHAMS GLOBAL BVI LIMITED Ruled By: GOWORA JA, MAKONI JA and BERE JA

SC62-23 : GOLDLOCK INDUSTRIES 2003 (PVT) LTD vs SHERIFF OF ZIMBABWE and INTERFIN BANKING CORPORATION and AL SHAMS GLOBAL BVI LTD and JAYESH SHAH and OTHERS Ruled By: MAVANGIRA JA, CHITAKUNYE JA and MUSAKWA JA

SSC65-23 : KASSAM SHIRAAJ vs THE STATE Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

SC66-23 : NATIONAL PHARMACEUTICAL COMPANY vs DRAX CONSULT SAGL Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

SC81-23 : DISCENT BAJILA and FRANK MHLANGA and ADELAIDE MHLANGA and SANPOULOS MAPLANKA and OTHERS vs TATENDA MADZIRASHE and RAMSON CHINGWARA and LINDA MPOFU and OTHERS Ruled By: UCHENA JA, CHITAKUNYE JA and MWAYERA JA

SC93-23 : AUGUR INVESTMENTS and DOOREST PROPERTIES vs FAIRCLOT INVESTMENT and THE SHERIFF and THE REGISTRAR OF DEEDS Ruled By: BHUNU JA, CHIWESHE JA and MWAYERA JA

SC110-23 : CHINHOYI MUNICIPALITY vs TENDAI MUSONZA Ruled By: MAVANGIRA JA, CHIWESHE JA and MUSAKWA JA

SC120-23 : COLLINS MANGENJE and GODWIN MANGENJE vs ISAAC TICHARWA (executor, estate Kennedy Mangenje) and MANGENJE BROTHERS (PVT) LTD (In liquidation) and CECIL MADONDO (liquidator, Mangenje Brothers) Ruled By: BHUNU JA, CHIWESHE JA and CHATUKUTA JA

SC122-23 : BERNARD KUJINGA vs OLD MUTUAL LIFE ASSURANCE (PRIVATE) LIMITED Ruled By: MAVANGIRA JA, CHIWESHE JA and MUSAKWA JA

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

Appealed SC04-17 : JAYESH SHAH vs KINGDOM MERCHANT BANK LIMITED Ruled By: GWAUNZA JA, GUVAVA JA and MAVANGIRA JA

Appealed SC05-19 : TETRAD INVESTMENT BANK LTD (Under Judicial Management) vs BINDURA UNIVERSITY OF SCIENCE EDUCATION and THE SHERIFF OF ZIMBABWE Ruled By: GWAUNZA JA, GUVAVA JA and MAVANGIRA JA

View Appeal SC07-13 : CLADIUS CHENGA vs VIRGINIA CHIKADAYA and ZAKEYO CHIKADAYA and BEAUTY MPOFU and REGISTRAR OF DEEDS Ruled By: GARWE JA, GOWORA JA and OMERJEE AJA

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Law Portal
Zimbabwe

SC23-20 : JOHN CHIKURA N.O. and DEPOSIT PROTECTION CORPORATION vs AL SHAMS GLOBAL BVI LTD
Ruled By: MAKARAU JA, HLATSHWAYO JA and MAKONI JA

SC24-18 : MEDLOG ZIMBABWE (PVT) LTD vs COST BENEFIT HOLDINGS (PVT) LTD
Ruled By: GARWE JA, GOWORA JA and GUVAVA JA

Appealed
SC42-15 : CRISPEN HATIVAGONE and AUDREY HATIVAGONE vs CAG FARMS (PVT) LTD and DBT PROPERTIES and REGISTRAR OF DEEDS
Ruled By: GARWE JA, GOWORA JA and PATEL JA

SC58-15 : ERICKSON MVUDUDU vs AGRICULTURAL AND RURAL DEVELOPMENT AUTHORITY
Ruled By: MALABA DCJ, GWAUNZA JA and PATEL JA

SC86-22 : CITY OF HARARE vs EVARISTO MUNGATE
Ruled By: GOWORA JA, MAKONI JA and BERE JA

View Appeal
SC43-13 : ECONET WIRELESS (PVT) LTD vs TRUSTCO MOBILE (PROPRIETARY) LTD and TRUSTCO GROUP INTERNATIONAL (PROPRIETARY) LTD
Ruled By: MALABA DCJ, ZIYAMBI JA and GARWE JA

Appealed
SC65-14 : AIR ZIMBABWE (PVT) LTD and AIR ZIMBABWE HOLDINGS (PVT) LTD vs STEPHEN NHUTA and DEPUTY SHERIFF HARARE and SHERIFF OF ZIMBABWE
Ruled By: ZIYAMBI JA, GARWE JA and PATEL JA

Appealed
SC65-14 : AIR ZIMBABWE (PVT) LTD and AIR ZIMBABWE HOLDINGS (PVT) LTD vs STEPHEN NHUTA and DEPUTY SHERIFF HARARE and SHERIFF OF ZIMBABWE
Ruled By: ZIYAMBI JA, GARWE JA and PATEL JA

Appealed
SC20-12 : ZIMBABWE OPEN UNIVERSITY vs GIDEON MAGARAMOMBE and DEPUTY SHERIFF HARARE N.O.
Ruled By: CHIDYAUSIKU, CJ

SC10-24 : ELPHAS MAPHISA vs CLEVER SIBANDA N.O. (as executor dative of the Estate of the late Melusi Sibanda) and OTHERS
Ruled By: GWAUNZA DCJ, MAKONI JA and CHITAKUNYE JA

SC10-24 : ELPHAS MAPHISA vs CLEVER SIBANDA N.O. (as executor dative of the Estate of the late Melusi Sibanda) and OTHERS
Ruled By: GWAUNZA DCJ, MAKONI JA and CHITAKUNYE JA

SC16-23 : ZIMBABWE PLATINUM MINES (PRIVATE) LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: BHUNU JA, UCHENA JA and CHATUKUTA JA

SC17-23 : RYDALE RIDGE PARK (PRIVATE) LIMITED vs RUTH MURIDZO N.O.
Ruled By: GUVAVA JA, MAVANGIRA JA and KUDYA JA

SC40-23 : JOHANNES MANYENGA vs PETROZIM (PRIVATE) LIMITED
Ruled By: MAVANGIRA JA, MAKONI JA and CHITAKUNYE JA

SC41-23 : CASSIAN MANUHWA vs SEEDCO ZIMBABWE (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, KUDYA JA and MWAYERA JA

Appealed
SC49-23 : PETROMOC EXOR (PVT) LTD vs KUDZANAI CHIMEDZA and CRANDID PETROLEUM (PVT) LTD and MINISTER OF LANDS, AGRICULTURE, WATER, CLIMATE and SHERIFF OF ZIMBABWE
Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

Appealed
SC56-21 : CHRISTOPHER SAMBADZA vs AL SHAMS GLOBAL BVI LIMITED
Ruled By: GOWORA JA, MAKONI JA and BERE JA

SC62-23 : GOLDLOCK INDUSTRIES 2003 (PVT) LTD vs SHERIFF OF ZIMBABWE and INTERFIN BANKING CORPORATION and AL SHAMS GLOBAL BVI LTD and JAYESH SHAH and OTHERS
Ruled By: MAVANGIRA JA, CHITAKUNYE JA and MUSAKWA JA

SSC65-23 : KASSAM SHIRAAJ vs THE STATE
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

SC66-23 : NATIONAL PHARMACEUTICAL COMPANY vs DRAX CONSULT SAGL
Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

SC81-23 : DISCENT BAJILA and FRANK MHLANGA and ADELAIDE MHLANGA and SANPOULOS MAPLANKA and OTHERS vs TATENDA MADZIRASHE and RAMSON CHINGWARA and LINDA MPOFU and OTHERS
Ruled By: UCHENA JA, CHITAKUNYE JA and MWAYERA JA

SC93-23 : AUGUR INVESTMENTS and DOOREST PROPERTIES vs FAIRCLOT INVESTMENT and THE SHERIFF and THE REGISTRAR OF DEEDS
Ruled By: BHUNU JA, CHIWESHE JA and MWAYERA JA

SC110-23 : CHINHOYI MUNICIPALITY vs TENDAI MUSONZA
Ruled By: MAVANGIRA JA, CHIWESHE JA and MUSAKWA JA

SC120-23 : COLLINS MANGENJE and GODWIN MANGENJE vs ISAAC TICHARWA (executor, estate Kennedy Mangenje) and MANGENJE BROTHERS (PVT) LTD (In liquidation) and CECIL MADONDO (liquidator, Mangenje Brothers)
Ruled By: BHUNU JA, CHIWESHE JA and CHATUKUTA JA

SC122-23 : BERNARD KUJINGA vs OLD MUTUAL LIFE ASSURANCE (PRIVATE) LIMITED
Ruled By: MAVANGIRA JA, CHIWESHE JA and MUSAKWA JA

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE
Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE
Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

SC127-23 : ZIMBABWE POWER COMPANY vs INTRATREK ZIMBABWE
Ruled By: MAKONI JA, CHIWESHE JA and MUSAKWA JA

Appealed
SC04-17 : JAYESH SHAH vs KINGDOM MERCHANT BANK LIMITED
Ruled By: GWAUNZA JA, GUVAVA JA and MAVANGIRA JA

Appealed
SC05-19 : TETRAD INVESTMENT BANK LTD (Under Judicial Management) vs BINDURA UNIVERSITY OF SCIENCE EDUCATION and THE SHERIFF OF ZIMBABWE
Ruled By: GWAUNZA JA, GUVAVA JA and MAVANGIRA JA

View Appeal
SC07-13 : CLADIUS CHENGA vs VIRGINIA CHIKADAYA and ZAKEYO CHIKADAYA and BEAUTY MPOFU and REGISTRAR OF DEEDS
Ruled By: GARWE JA, GOWORA JA and OMERJEE AJA