BERE J: The plaintiff issued out summons against the
defendant out of this court on 13 march 2008 claiming delivery of twenty
thousand (20 000) litres of diesel. The defendants rigorously defended this
claim. On 13 of June 2008 the plaintiff withdrew action against the second
defendant. Consequently the action that remained before the court was against
the first defendant.
At
the conclusion of the hearing I issued out an order out of this court framed as
follows:-
“It
is ordered
1.
That
judgment be and is hereby granted in favour of the plaintiff.
2.
That
the first defendant be and is hereby ordered to deliver to the plaintiff twenty
thousand (20 000) litres of diesel within 14 days from the date of this order.
3.
That
the first defendant pays costs of suit”.
I indicated at the time that my
reasons for judgement would follow. Here they are.
THE ISSUES
On 24 November 2008 the parties drew
up a joint pre-trial conference which identified
the issues for referral of the matter
for trial as follows:-
1. Whether the plaintiff and defendant
entered into an agreement of sale in respect of the fuel and whether Maswere
Haulage was party to such an agreement.
2.
Whether
the defendant was coerced into executing the settlement agreement.
3.
Whether
plaintiff is the legal owner of the fuel, and
4.
Whether
defendant is obliged to deliver the fuel to plaintiff.
THE EVIDENCE
In support of its case the plaintiff
called the evidence of Dominic Musengi, the
plaintiff's erstwhile Managing Director
while the first defendant led evidence from its Chief Executive Officer and
Chairman Alex Kudakwashe Mahuni, Stephen Gahadzikwa and Cephas Macdonald
Muswere. Both parties produced quite a number of documentary exhibits whose
significance will be analysed together with the rest of the evidence in this
judgment.
It
was the plaintiff's evidence that sometime in August 2007 his company was
approached by a prospective client Muswere Haulage Dynamics ('MHD') to enter
into an agreement to facilitate the execution of a food distribution contract
under the United Nations World Food Programme. MHD had vehicles to use but
needed fuel in the execution of this contract hence its overtures to the
plaintiff. The plaintiff's evidence was that the result of the discussions
between the plaintiff and MHD was the drawing up of a joint venture agreement
between the two parties. Exhibit 1 was produced to confirm the existence of
such a venture.
As
the trial unfolded, it was clear that there was disagreement between the plaintiff
and the first defendant plus MHD on one side as to whether exh 1 was a joint
venture agreement or a loan agreement a position adopted by the first defendant
and MHD. The court noted that the first defendant, despite not having been
privy to this agreement was in the forefront in rigorously pushing this
argument.
A
simple perusal of exh 1 will show that despite it having been titled “re: $6
BILLION ORDER FINANCE FACILITY” the agreement was indeed a joint venture
agreement. The body of the whole document supports this observation. In the
court's view, if this document was a loan agreement as advocated by the first
defendant and MHD, it would have contained specific clauses indicating the rate
of interest and a specific time within which that loan was supposed to be
repaid. There is no loan agreement which contains provisions of how profit
should be shared as what is contained in clause 9 of this agreement. It was
quite curious to the court that the first defendant's representative was in the
forefront in pushing the argument in favour of a loan facility when the first
defendant itself was not party of the formulation of exh 1.
In
any event, the plaintiff's representative's uncontroverted evidence was that by
operation of law his institution was specifically precluded from issuing loans
as they were not licenced to do so.
So
much was said about the bonding of MHD's properties pursuant to this agreement
which it had with the plaintiff. In the court's view, the security of those
properties must not be looked at in a vacuum. One needs to look at the total
document and in this regard I am certain as passionately argued by the
plaintiff's counsel that clause 12 of exh 1 was slotted in to guarantee the due
performance by MHD to ensure that plaintiff would get its 65% as its profit
share in the whole arrangements.
The
Managing Director of MHD, while giving evidence under cross–examination
conceded that he had signed many loan agreements and that this agreement could
not possibly have been a loan agreement. The relevant questions and answers in
this regard went along the following;
Q. You
have signed many loan agreements before excluding this one:
A. Yes
Q. You would know a loan agreement would
contain an interest clause, repayment and other things
A. Yes your Honour.
Q. These essentials are not there in this
agreement
A. They are not there your Honour”.
Really, and without any hesitation I
make a specific finding that the status of exh 1
must be
answered in favour of the plaintiff. The unified position adopted by the first
defendant
and MHD was
calculated to cloud issues.
DID THE PLAINTIFF AND DEFENDANT
ENTER INTO AN AGREEMENT OF SALE
IN RESPECT OF THE FUEL AND WHETHER MHD WAS PARTY TO SUCH AN AGREEMENT?
The plaintiff's contention was that
it directly purchased the fuel in issue and under
cross-examination the MHD managing
director had no option but to concede this point. In this regard the Managing
Director of MHD was asked the following questions and proferred the following
responses:
“Q. What
do you want to do with the fuel now?
A. I would not dictate anything because the
fuel arrangement was done on MHD behalf between Genesis ('plaintiff')
and Rolmay ('first defendant') without MHD being privy to the details of
the agreement.
Q. In other words the agreement of the
purchase of fuel was between Rolmay and Genesis without your involvement?
A. In terms of the specific details, yes
your Honour.
Q. At the time when the fuel was acquired
did you give any instructions to Rolmay concerning how the fuel was going to be
drawn by yourself?
A. No specific operational instructions
were given to Rolmay. The only specific instruction was as per exh 10 in
response to his letter of 14 October 2007”.
It
will be noted that the actual payment for the diesel which forms the subject
matter of these proceedings was made pursuant to the issuance of a proforma
invoice marked exh 4 which specifically described the customer or purchaser as
the plaintiff. The original invoice (exh 3) that had initially been presented
to the plaintiff bore the name of the customer or purchaser as MHD. It is
common cause that this invoice (exh 3) was rejected by the plaintiff hence its
amendment to clearly spell out the name of the purchaser of the diesel as the
plaintiff. It was only after it had been amended that the plaintiff paid for
the diesel.
As
expected, the first defendant (as if it was the spokesperson for MHD) argued
that the purchase of the fuel was done by MHD despite the latter specifically
acknowledging that it knew nothing about the purchase of the fuel except that
it was done by the plaintiff.
The
first defendant desperately tried to argue through its Chief Executive Officer
that when a Mr Maredza attended to exh(s) 3 and 4 he was acting on behalf of
MHD. In the court's view that argument has no merit because of the following
reasons:-
Firstly,
it would be contrary to the very clear evidence of MHD's Managing Director Mr
Muswere that his company was not privy to the arrangement between the plaintiff
and the first defendant in the acquisition of the diesel. See the questions and
answers, supra.
Secondly,
exh(s) 3 and 4 bear the first defendant's letter heard implying the first
defendant directly invoiced the plaintiff for the fuel in issue.
Thirdly
and more importantly, Mr Maredza could not possibly have acted as MHD's agent
when his principal was not aware of such agency as per Muswere's testimony.
What is clear is that Mr Maredza was acting as the first defendant's agent in
order to ensure that payment was effected by the plaintiff.
Having
laid this background one needs to focus on other pointers that tend to further
the plaintiff's position that indeed it purchased the diesel.
Exhibits
number 5 and 7 clearly demonstrate that the plaintiff was exerting its control
on the purchased diesel. The two exhibits made it abundantly clear that the
first defendant would only allow MHD access to this fuel on conditions set out
by the plaintiff. With its eyes wide open, the first defendant through its
Chairman, Mr Mahuni committed itself to be bound by the conditions set out. The
two exhibits are quite explicit and they require no interpretation. Is it not
logical that if MHD had control over ownership of the fuel in question it
should have been expected to give directives to the first defendant? It is
buffling how the first defendant would attempt to argue that the diesel
belonged to MHD, a position which is not even supported by MHD's Managing
Director, Muswere.
It
is clear to the court that from the very beginning the fuel in question remained
the property of the plaintiff and that the first defendant was only going to
release the fuel to MHD on the specific terms and conditions laid down by the
plaintiff.
Other
than trying to promote what appears to be a dubious relationship with the MHD,
the first defendant had no mandate to deal directly with MHD as regards the
release of the fuel. The first defendant was bound to communicate with or take
instructions from the owner of the fuel, the plaintiff as dictated to it by
exh(s) 5 and 7.
WAS THE PLAINTIFF COERCED INTO SIGN
THE SETTLEMENT AGREEMENT?
It is common cause that for a long
time the plaintiff had tried to have the first defendant release the 20 000 litres
of diesel to it. This followed the collapse of the joint venture agreement
between the plaintiff and MHD. It should be appreciated that the release of the
diesel to MHD was conditional upon its ability to execute the United Nation
Food Programme contract. Its Managing Director Muswere conceded that that
arrangement did not take off the ground as it faced many challenges.
Exhibits
8, 8(a) and 13 must be seen within the context of the initiative taken by the
plaintiff and the first defendant's representative Mr Mahuni towards the
realisation of the objective of having the diesel released to the plaintiff.
No
sooner had the settlement agreement exh 8(a) been signed by the parties than it
met with controversy. The first defendant's representative alleged that “the
settlement was arrived at through unlawful intervention by Senior Assistant Commissioner
Chengeta who abused his office by ordering junior officers at the Central
Intelligent Unit to arrest him with a view to coercing him to release fuel to
the plaintiff” .
The
allegations raised by the first defendant's representative trigger interesting
legal issues and it is pertinent that those be considered before I deal with
the evidence led in this regard in this trial.
THE
LEGAL POSITION
Exhibit
8(a) being a signed agreement is governed by the caveat subscriptor
rule. This observation was observed and raised by the defendant's counsel in
his closing submissions.
Commenting
on this rule R.H Christie remarked as follows:-
“It is a matter of common knowledge
that a person who signs a contractual document thereby signifies his assent to
the contents of the document, and if these subsequently turn out not to be his
liking he has no one to blame but himself. This general principle is in our
law, usually traced back to Burger v
Central SAR 1903 TS 571 where the learned judge INNES CJ is reported to
have commented as follows at p 578:
“It is a sound principle of law that
a man, when he signs a contract, is taken to be bound by the ordinary meaning
and effect of the words which appear over his signature”
.
It is trite that duress and or undue
influence are some of the defences a party can
successfully raise in order to
repudiate a written contract. This is precisely what the first defendant has
sought to achieve in this trial.
The
position taken by Mr Mahuni on behalf of the first defendant cannot be looked
at in isolation. The witness's evidence must be put under scrutiny in the light
of the evidence of the other witnesses to see if indeed he signed the
settlement under duress.
There
are aspects of Mr Mahuni's testimony which I have already commended on which
cast serious doubt on the credibility of this witness's testimony. The
witness's strout effort to try and defend the agreement that was entered into
between the plaintiff and MHD in the witness's absence did not impress the
court. The witness strenuously conducted his defence as if he was a legal
practitioner paid to represent MHD. The whole record of proceedings will show
that the witness came out in full force to support and protect MHD even in
circumstances where he was not invited to do so. Not only this, but even in
circumstances where his evidence differed materially from the evidence of Mr Muswere
as I will demonstrate hereunder.
Throughout
Mr Mahuni's testimony when he was being led by his counsel, he gave the
impression that he still had in his possession the 20 000 litres of diesel in
his custody. Under cross-examination by the plaintiff's counsel, he revealed
for the first time that he had given MHD the diesel in question starting with
the first 100 litres, followed by the remaining quantity. The witness conceded
that in doing so he had acted in complete violation of the plaintiff's specific
instructions in releasing that diesel. The following questions and answers in
his cross examination demonstrate the limping nature of the witness's
testimony.
“Q. Did you release this fuel to MHD?
A.
Yes
Q.
When
was this?
A.
I
am not sure but he wanted to buy an ERF truck and he asked for 100 litres of
fuel for MHD.
Q.
Did
you advise the plaintiff of that development?
A.
No.
Q.
Why?
A.
I
did not see any reason to advise the plaintiff.
…..
Q.
All
in all how many litres of diesel did you release to MHD?
A.
I
believe at the end of the day MHD accessed the whole facility during the time
this matter became the subject of this litigation
Q.
Did
you seek any written prior authority from the plaintiff?
A.
No”.
To appreciate the fallacy of the
position taken by Mr Mahuni one needs to look at the
evidence of Mr Muswere on the same
issue of the alleged release of the fuel to MHD. Mr Muswere was categoric that
not a single drop of the diesel was released to him by Mr Mahuni and this is
what Mr Muswere had to say in this regard:
“Q. Do you know whether Rolmay (first
defendant) has delivered the fuel to plaintiff?
A.
I
am not aware.
Q.
Did
they not deliver the fuel?
A.
No.
Q. Mr Mahuni told this court that he
delivered all the fuel to you in October-November after you had indicated your
property had been used to secure the fuel, was he lying?
A. Exhibit 10 is self explanatory. He
never delivered the fuel to us. If he said so the facts will not be true”.
In the
court's assessment of the conflicting evidence given by the two witnesses, the
court is more inclined to believe
the evidence of Mr Muswere as it was consistent with the evidence of the
plaintiff especially on the ownership of the fuel and the manner in which the
draw down of that fuel was supposed to be made.
I
make a specific finding that Mr Mahuni must not be believed when he alleged he
had released the fuel in issue to MHD. The conduct of Mr Mahuni makes the court
doubt if at all he had the fuel in issue at the time his company was paid by
the plaintiff.
It is this same man who has soiled
his credibility in the eyes of the court who alleges that when he signed the
settlement agreement in the comfort of his legal practitioner's office, he did
so either under duress or undue influence. It is necessary at this stage to
closely examine the circumstances under which the settlement agreement was
drafted and eventually signed by the plaintiff's representative and Mr Mahuni
himself.
By
his own admission, Mr Mahuni was trained as a prosecutor and subsequently
worked as a public prosecutor. He is the Chief Executive Officer and Chairman
of the first defendant. He is certainly not an unsophisticated man.
The
witness told the court that he was telephoned by Detective Inspector Tuwe who
invited him to C.I.D. Headquarters at Morris Depot which place he visited the
following day. Upon seeing Tuwe he was advised of the issue relating to the
subject matter of these proceedings. Mr Mahuni went on to say that he was
advised that if he did not deliver the diesel he would be detained. Commenting
on the arrival of Mr Musengi (the plaintiff's representative) at the police
station after Mr Mahuni himself had invited him this is what he said:-
“Mr Musengi eventually came to where
I was seated and the policeman told him I had come and wanted to talk. We
talked and I asked Mr Musengi that if they wanted the diesel, they should cede
the security they were holding from Mr Muswere to me and he declined saying
they would have problems. I asked what we could do to resolve the matter and he
suggested a settlement plan and I said I preferred my lawyers to do the draft
settlement plan. He left for his office on the understanding that I would be
calling him later to peruse the settlement plan.
……….
Mr Gahadzikwa (first defendant's
legal practitioners) came to C.I.D. Headquarters,
Morris Depot and duly asked if it
was in order for me to leave the police station to prepare the settlement
agreement at his offices which permission was granted. I gave instructions
to Mr Gahadzikwa to prepare the settlement agreement. The document was
forwarded to Genesis for the attention of Mr Musengi. The same was returned
with material alterations to both the text and content. I am sure Mr Gahadzikwa
will have the altered document when he comes.
We then debated on the way forward,
that is myself and Mr Gahadzikwa. What we weighed was the possibility of allowing the threat and arrest
to go through and facing it in court and also the threat of publicity in the
light of the fabricated story earlier told by the police. In my own
experience I was sure at the request for remand the police could allege
anything, true or false but it was my wish that particular damage be by all
means avoided. I also gave Mr Gahadzikwa the peace of information I had gathered
about the involvement of a senior police officer to junior officers handling
the matter to detain me. He (Mr Gahadzikwa) advised me we would take the risk
of signing but would also then make the necessary complaint against the conduct
of the particular senior officer and to see that the matter would be completed
without bad publicity that would affect my business” (my emphasis).
In
his evidence in chief, Mr Musengi for the plaintiff expressed total surprise
that Mr Mahuni was alleging that he had been coerced into signing the
agreement. As far as Mr Musengi was concerned the agreement was entered into
when Mr Mahuni was out of custody and going about his business after Mr Mahuni
himself had taken the initiative to have such settlement put in place. The
witness further emphasized that he did not draft the settlement agreement but that
it was drafted by Mr Mahuni's lawyer on the specific instructions of Mr Mahuni
who was better positioned to know the time required to effect delivery of the
diesel which he proposed in the agreement stretching from 18 January 2008 to 8
February 2008. The witness denied any form of coercion on his party or on the
party of the police in bringing about the settlement agreement.
The
position of Mr Musengi on this issue is firmly supported by the cross
examination of Mahuni himself which tended to exonerate the police and Mr Musengi
himself of any wrong doing. The cross-examination of Mr Mahuni in this regard went along the following:-
“Q. You called Mr Musengi to the police
station?
A.
Yes.
Q.
That
was your volition?
A.
It
was put to me the complainant was willing to listen to my settlement proposals.
Q.
Did
you do it at your own volition?
A.
Yes.
Q.
When
he came to station where did you and Mr Musengi carry out your discussion?
A.
In
one of the offices at C.I.D. Headquarters
Q.
Was
your discussion carried out in the presence of the Investigation Officer?
A.
No.
Q.
Was
there any police officer in that room?
A.
No.
……..
Q. How do you know about publicity?
A.
I
knew it would – the police are in the habit of inviting the press. My fear was
not speculative”
It is very clear to the court that Mr
Mahuni was not subjected to any form of threat into
signing the settlement agreement.
Even if one were to accept everything Mahuni said about the manner in which the
settlement agreement was signed one would still find it impossible to conclude
that the settlement agreement was a product of duress.
The
duress that is sufficient to vitiate a contract must not be fanciful or imagined.
It must be some real and serious threat and the totality of the evidence put
forward by Mr Mahuni and his counsel Mr Gahadzikwa did not come anywhere nearer
to this. On his own party Mr Gahadzikwa did not hear any police officer or Mr Musengi
threatening to cause the incarceration
of Mr Mahuni in the event of failing to
reach a settlement. The lawyer relied on the instructions given by Mr Mahuni
whose fear in the court's view was merely fanciful and unsupported by the
circumstances under which the settlement agreement was prepared and signed.
My
assessment of evidence on the settlement agreement would not be complete if I
do not comment on exh(s) 11 and 12. Exhibit 12 is a replication of exh 11, the
only difference being that the exhibits were addressed to the Attorney General
and the Commissioner of Police respectively. The theme in both letters is
basically two-fold; to castigate Senior Assistant Commissioner Chengeta for
alleged abuse of office by ordering junior officers to arrest Mr Mahuni and to
try and provide a historical background of the dispute between Mr Mahuni and
Genesis Ventures (the plaintiff).
In
the court's view and in the light of the findings of the court deriving from
the assessment of all the evidence tendered, the attack on Chengeta was most
unfortunate and uncalled for. Mr Mahuni was invited to the police station for
questioning and subsequently offered on his own volition to resolve the matter
amicably. The evidence as assessed does not support any form of coercion
against him by either Chengeta or any of the officers. This is borne out by the
evidence of Mahuni, Gahadzikwa and Musengi as seen by the court.
Secondly,
the solution proposed or advocated by Mr Gahadzikwa in exh 11 was as a result
of information he gathered from his client Mr Mahuni and in the light of the
court's findings that information was not a true reflection of what had
transpired. In the light of the court's findings, it is not entirely true that
the actions of Mr Mahuni made him immune from prosecution and even the
settlement agreement he signed did not rule out Mr Mahuni's prosecution. See
para 3 of exh 8(a)
To
say that the police should not have questioned Mr Mahuni on a charge of either
fraud or theft by false pretences was not correct. There was nothing wrong
which Chengeta did to warrant his stinging criticism by Mr Mahuni through his
legal practitioner.
The
exhibits referred to as 11 and 12 must be seen as a well calculated scheme by Mr
Mahuni to cloud issues in this matter in order to camouflage what appears to be
his fraudulent conduct in dealing with the plaintiff. I attribute the conduct
to fraud because he misled the court into believing he had released the fuel to
MHD when there is overwhelming evidence suggesting he never did so. Such
conduct is deplorable and it made Mr Mahuni a good candidate for prosecution at
the time he signed the settlement agreement. The charge of either theft by
false pretences or fraud could have been sustainable. So, in essence nothing
really turns on exh(s) 11 and 12.
The
decision by Mr Mahuni to invite Mr Musengi to the police station when
confronted by the police is not without significance. Throughout these
proceedings Mr Mahuni tried to give the impression that the diesel belonged to
MHD and logically it should have followed that when called by the police to
account for that diesel his first port of call should have been MHD (whom he
had always argued had the legitimate claim to the diesel). One is left to
wonder why Mr Mahuni did not seek to reach a settlement with the “real owner”
of the diesel MHD (that is, according to him). It would have been very easy for
Mr Mahuni to call Mr Muswere of MHD to give a statement to the police in order
to have him exonerated. By opting to discuss the issue with Mr Musengi, Mr Mahuni
was clearly signifying his acknowledgment that the plaintiff was indeed the
owner of the fuel and not MHD.
THE
ALLEGED NON-JOINDER OF MHD
It
was strenuously argued by the first defendant's counsel that the plaintiff
ought to have cited MHD as a party to these proceedings and that failure to do
so was fatal to the plaintiff's case. I am not persuaded by this argument.
Firstly, it completely misses the import of order 13 r 87 which for the
avoidance of doubt reads as follows:
“87.(1) No cause or mater shall be
defeated by reason of misjoinder or non-joinder of any party and the court may
in any cause or matter determine the issues or questions in dispute so far as
they affect the rights and interests of the person who are parties o the cause
or matter”.
Secondly
and more importantly, the court has already made a finding that MHD was not the
owner of the diesel in question but the plaintiff. There was therefore no need
to cite or join MHD in these proceedings. The point was sufficiently canvassed
by the plaintiff's counsel. I agree with his position.
Thirdly
and equally important it should be noted that in terms of order 13 r 87(2)
the court is enjoined to join a party “either of its own motion or on
application” by the party who feels they have an interest in the proceedings.
In the court's view, this provision is not meant to come to the aid of a party
who is fully aware of the proceedings but for some reason consciously decides
not to protect their interest. A party that feels it has an interest in the
proceeding before the court must take the initiative at the earliest
opportunity to protect itself.
MHD
has been watching proceedings in this case from the fence. The evidence led in
this trial suggests that as far back as October 2007, MHD was aware of the
dispute involving this fuel. It got to know about the summons commencing action
issued out of this court on 13 March 2008. Its director participated in these
proceedings. MHD did completely nothing to have itself joined in the
proceedings. Surely it cannot be heard to cry fowl.
In
the court's view MHD decided not to join in the proceedings because it had no
interest in the matter. It fully appreciated it had nothing to do with the
dispute between the plaintiff and first defendant. It must be commended for its
professional stance.
It
was for theses reasons that I granted judgment with costs in favour of the
plaintiff.
Sawyer & Mkushi, plaintiff's legal practitioners
Scanlen
& Holderness, first defendant's
legal practitioners
