This is an application for summary judgment in the sum of US$86,927=90 said to represent arrear rates for the period spanning from June 2012 to June 2014.

The statement for the bill for what the applicant contends is owed was attached to the founding affidavit as annexure “A”.

The founding affidavit was deposed to by one Spekiwa T. Guta, who, in paragraph 1 thereof stated:

“1. I am the city legal officer of the applicant in this matter and all the facts I depose hereto are to the best of my knowledge true and correct.”

Over and above the amount claimed stated above, the applicant, in the draft order, also seeks an order for collection commission on the said amount; interest at the prescribed rate; costs of suit on an attorney-client scale.

The application was opposed on the following grounds:

1. The deponent to the founding/supporting affidavit did not establish authority to depose to the affidavit or that the facts she deposed to are with her knowledge;

2. The relief sought for collection commission is incompetent;

3. In the draft order, the applicant is seeking interest at the rate of 5% per annum yet annexure “A” shows that interest was being charged on the account at 6% per month. In the result, the interest that was levied on the account was therefore unlawful; and

4. The claim is defective for want of compliance with Rule 13(4) of Order 3 of the High Court Rules 1971 in that it does not set out separately the interest component from the capital sum.

1. The respondent has a bona fide defence as advanced in the preceding points in limine;

2. Via publication in the press, the applicant offered a special dispensation whereby if the respondent paid off half the amount owed, the other half would be written off. The respondent accepted the offer and the arrangement became binding on the parties and the agreement is still to run its course;

3. The calculations in annexure “A” are flawed. They are effective from February 2009 to July 2014 yet the claim avers that the period runs from June 2012 to June 2014 and is for arrear rates only, but annexure “A” factored in water levy, rates, road levy, sewage, solid waste and monthly interest of 6%. This informs on the question of whether or not part of the claim has not prescribed as well as the accuracy of the computation of the amount due.

It is proposed to deal first with the points raised in limine....,.

Rule 13(4) of the High Court Rules provides as follows:

“(4) Subject to sub-rule (5), where the amount claimed includes capital and interest on the capital, the particulars endorsed on the summons in terms of subrule (1) shall state clearly –

(a) The capital amount claimed; and

(b) The total amount of interest claimed on the capital as at the date of the summons or as at an earlier date specified in the particulars; and

(c) Whether or not interest is claimed on the total amount of capital and interest referred to in paragraph (a) and (b), and, if not, the amount in respect of which any interest is claimed and the date which interest is to run.”

It is not disputed that the claim, as particularized in the summons, does offend against the provisions of Rule 13(4) of the High Court Rules quoted above.

The amount of interest claimed on the capital is not stated, and, also, the effective date from which interest is supposed to run.

In a judgment handed down in January 2014, the court a quo upheld the plea of prescription raised by the respondents, and, consequently, dismissed the claim against the respondents with costs.

Against that order, the appellant now appeals to this court.

In October 2012, the appellant, as plaintiff, issued summons against both respondents before the High Court, Harare, claiming payment of the sum of $30,094=98 being arrear rentals in respect of the respondents tenancy of premises known as Shop 5, Zimre Centre, Corner Kwame Nkrumah Avenue and Leopold Takawira Street, Harare.

The second respondent had bound himself as surety and co-principal debtor in respect of the first respondent's indebtedness.

In their plea, the respondents, as defendants, raised the defence of prescription. More specifically, they averred, that, in instituting proceedings on 19 October 2012, more than three years after the debt became due, the claim had become time-barred.

The plea was not set down for hearing. Instead, the defendants pleaded over to the merits in the same plea.

In its replication, the appellant denied that the claim had prescribed. It averred, that, the first defendant had, on 22 October 2009, acknowledged the debt and had undertaken to pay the outstanding amount in full by 10 November 2009.

There was no rejoinder by the respondents.

In a joint pre-trial conference minute, the parties agreed, that, the issues requiring determination at trial were:

(a) Whether the plaintiff's claim had prescribed;

(b) Whether the first respondent had breached the lease agreement by failing to pay rental and other costs;

(c) Whether the respondents were liable to pay the sum of US$30,094=98 together with interest and costs of suit;

(d) Whether there had been mutual termination of the agreement between the parties and whether the appellant had unlawfully and unilaterally ejected the respondents from its premises; and

(e) Whether such conduct had resulted in the respondents suffering damages “in respect of the first respondent's assets and business” and, if so, the quantum thereof.

At the hearing of the matter, the respondents, through their lawyer, sought the leave of the court to deal with the issue of prescription first and lead evidence on it.

Despite opposition from the appellant, the court a quo decided that the issue of prescription be determined first, and, thereafter, depending on the outcome, the court would again hear evidence on the remaining issues.

In its judgment, the court a quo was of the view, that, the issue that fell for determination was the authenticity of the letter purportedly written by one Annet Mbedzi on behalf of Saintcor Holdings in October 2009.

In this regard, it made a number of observations.

The letter was not written on any letterhead, unlike in previous correspondence; it reflected the appellant's postal address; the letter was also written on behalf of Saintcor Holdings, a company both parties were agreed does not exist and was not a party to the lease agreement; the letter was addressed to a Mr Muringani, but, the name had been cancelled in black ink and in its place the name Muringi inserted; nowhere in the letter is it suggested that Saintcor Holdings was acknowledging indebtedness on behalf of Saintcor (Pvt) Ltd.

On a consideration of all these features, the court a quo concluded, that, the letter had not been written on behalf of the first respondent.

Consequently, the court upheld the plea of prescription and dismissed the plaintiff's claim with costs, hence this appeal.

In its grounds of appeal, the appellant has attacked the decision of the court a quo on the basis that it:

(a) Erred in fact and at law in holding that the appellant's claim had prescribed;

(b) Misdirected itself by holding that the letter that was received by the appellant on 22 October 2012 was not authentic;

(c) Misdirected itself by making a finding that the author of the letter that was received by the appellant on 22 October 2009 did not have authority to author the same.

It is apparent from the above grounds, that. it is the conclusion reached by the court a quo, that the letter in question had not been written on behalf of the respondent that the appellant is challenging.

In their heads of argument, the respondents raised two points in limine:

(i) The first was that the judgment of the court a quo reflects three different dates as the dates when the judgment was handed down.

The date of the judgment reflected in the Notice of Appeal is at variance with the date appearing ex facie the judgment itself, and, consequently, there has been no compliance with Rule 29 of the Rules of this Court.

(ii) Secondly, the relief sought is defective as it seeks to substitute the decision of the court a quo with one referring the matter back to the court a quo itself.

In his response, counsel for the appellant drew the attention of the court to a letter from the Registrar of the High Court which states, that. the ex-tempore judgment was handed down on 10 February 2015, which is the date appearing in the Notice of Appeal.

On the prayer, he conceded, that, the wording was inelegant but argued that the relief sought was clear. He submitted that the inelegance does not invalidate the appeal as ultimately the court will make an order it deems appropriate in the circumstances.

After hearing argument on the two preliminary issues, this court was of the view, that, the issues be rolled over for determination together with the issues that arise on the merits.

In both his heads of argument and oral submissions, counsel for the appellant raised the following issues:

(i) First, that the judgment of the court a quo does not derive from the pleadings.

(ii) Second, the appellant's cause of action was predicated upon a valid cancellation of the lease agreement. Such cancellation was effected on 18 November 2009 and the cause of action would have accrued on that day. Therefore, when the appellant issued summons on 22 October 2012, the debt had not prescribed.

(iii) Third, that the appellant would have had no reason to cause the letter of 22 October 2012 to be generated. Once it had accepted that the letter had not been generated by the appellant, the court should have concluded that the letter had indeed been authored by the respondents.

(iv) Fourth, that the second respondent knew how to contact Annet Mbedzi, the author of the letter in question. Annet Mbedzi had been involved in the goings-on at the premises of the first respondent, and yet both respondents had not found it proper to call him.

(v) Lastly, counsel for the appellant submitted, that, it was improper for the court to have heard evidence piecemeal. Once the plea of prescription had not been set down and the respondent had then proceeded to plead over to the merits, the court should have heard evidence on all the issues and an assessment of the credibility and integrity of the witnesses undertaken only after all the evidence had been led.

In response, counsel for the respondents made the following submissions:

(i) First, that, what is being attacked by the appellant are findings of fact which cannot be interfered with on appeal in the absence of a finding of irrationality on the part of the trial court.

(ii) Second, that, the court a quo was correct in its findings that the letter received by the appellant on 22 October 2009 had not been written by or for the respondents. This is because the appellant had admitted that, by that date, the first respondent had been evicted from the premises, and, consequently, the first respondent would not have used that address in correspondence with the appellant.

(iii) Third, that, the appellant has not established a lawful basis for the suggestion that the judgment does not derive from the pleadings as no leave of the court had been sought to advance argument on this ground, contrary to the Rules of this court. In any event, the respondents, in their plea, had placed prescription in issue.

(iv) Lastly, that, the debt did not become due on cancellation since rent was due monthly in advance, and, therefore, the cause of action arose whenever such rental was not paid on due date. The appellant had, in any event, evicted the first respondent in August 2009 for non-payment of rent and the “debt” included outstanding rentals up to the date of such eviction.

It is clear from the above, that, a number of issues arise before this court. These will be dealt with in turn....,.

It was counsel for the appellant's submission, that, the appellant's cause of action in the court a quo was predicated upon a valid cancellation of the lease agreement. Put differently, he sought to argue, that, the debt which was sought to be recovered would have become due upon cancellation of the lease agreement.

In my view, this contention also lacks merit.

It was common cause, that, rental payments were due and payable monthly in advance. Indeed, following the failure by the first respondent to pay rentals on due date, the appellant caused the eviction of the first respondent in August 2009.

In the circumstances, I agree with the respondents, that, the debt became due each time the first respondent failed to pay rent on due date and that the debt would include all rentals owing up until eviction in August 2009.

The appellant has attacked various findings made by the court a quo on the facts, and, in particular, the finding that the letter received by the appellant on 22 October 2009 was not authentic and that the author of the letter did not have authority to write the same.

The court a quo made the following findings of fact:

(i) First, that the letter was written for and on behalf of an entity called Saintcor Holdings and not Saintcor (Pvt) Ltd.

(ii) Second, the name of the addressee had been incorrectly spelt.

(iii) Third, the letter was not written on the first respondent's letter head.

(iv) Fourth, the appellant's address, reflected in the letter, was incorrect.

(v) Fifth, the letter of acknowledgment had been written in October 2009 and yet purported to use the same address from which the first respondent had been evicted.

(vi) Sixth, the company that the author, Annet Mbedzi, purported to represent in the capacity of Financial Director does not in fact exist, and the company does not, in any event, purport to act on behalf of the first respondent.

On the basis of the above observations, the court reached the conclusion, that, the letter had not been written on behalf of the first respondent and that the letter did not specify which debt was being acknowledged.

The above conclusion cannot be said to be irrational: nor can it be said that it is not supported by the evidence.

The position is now settled, that, an Appellate Court will not interfere with the findings of fact made by a trial court unless the court comes to the conclusion, that, the findings are so irrational that no reasonable tribunal, faced with the same facts, would have arrived at such a conclusion.

Where there has been no such misdirection, the Appeal Court will not interfere.

This position was aptly captured by this court in Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S). At 670, KORSAH JA remarked:

“The general rule of 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 that no sensible person who had applied his mind to the question to be decided could have arrived at such a conclusion….,.”

In my view, this appeal lacks merit and must therefore fail.

The appeal is accordingly dismissed with costs.

The plaintiff issued summons for civil imprisonment against the defendant for failure to pay a debt in terms of an order granted against him.

On 29 November 2017, the plaintiff obtained judgment against the defendant for payment of US$360,000 together with interest at the rate of 12% per annum plus US$8,625 together with VAT thereon. Upon execution, the Sheriff returned a nulla bona return prompting the plaintiff to file for civil imprisonment.

The plaintiff's case is that the tobacco growing loan giving rise to this debt was financed using offshore funding and is payable in United States dollars in terms of applicable legal instruments. The plaintiff insists that the defendant ought to pay the outstanding debt in United States dollars and refutes that the defendant has paid back the loan in full.

The defendant has refused to pay the debt in United States dollars and insists that the loan ought to be paid in RTGS dollars.

The defendant resists civil imprisonment on the basis that he paid the debt in full.

According to the defendant, he has paid a sum of $426,325=69 and an additional $50,0000. He submitted that the plaintiff has sought to apply a rate of exchange to repayments made on 18 September 2019 and 18 June 2020 respectively in violation of the law which is that all debts that existed prior to 22 February 2019 are payable at the rate of 1:1 to the RTGS dollar and this includes judgment debts.

He contended, that, the claim for civil imprisonment is misguided as the plaintiff has no cause of action against him and urged the court ought to dismiss the summons for civil imprisonment.

A summons for civil imprisonment calls upon a debtor to show cause why he should not be imprisoned for failure to pay a debt.

The new High Court Rules 2021, published under Statutory Instrument 202 of 2021, SI202 of 2021, make provision for imprisonment for a debt in Rule 73.

In terms of Rule 73(4) of the High Court Rules, before a court makes an order for civil imprisonment, it should satisfy itself that the judgment debt has not been paid. In most civil imprisonment proceedings, liability is not an issue, in which case the court's enquiry is limited to the debtor's ability to service the debt and the appropriateness of civil imprisonment.

Where a debtor challenges civil imprisonment proceedings on the basis that he does not owe a contractual obligation or has cleared it, it is incumbent upon the court to resolve the dispute regarding liability first before delving into appropriateness of civil imprisonment.

In these proceedings, the issue is whether the balance due and outstanding by the defendant, as at 22 February 2019, was due in RTGS dollars at the rate of 1:1 and whether the respondent has discharged his liability for the debt.

The court must resolve, first, the question of the applicable currency and decide whether the defendant has cleared the debt. If this question is answered in the affirmative, that is the end of the matter.

If the court finds that the defendant owes in terms of the court order granted against him and has neglected and failed to pay in terms of the order, the court will be required to enquire into the respondent's ability and willingness to pay the debt in compliance with section 49(2) of the Constitution of Zimbabwe.

The new rules make specific reference to section 49(2) in Rule 73(1), unlike Rule 370, its predecessor, thereby giving guidance on the subject.

Section 49(2) of the Constitution stipulates as follows:

“(2) No person may be imprisoned merely on the grounds of inability to fulfil a contractual obligation.”

The Constitution bars imprisonment of a person simply on the basis of a failure to fulfil a contractual obligation. Section 49(2) of the Constitution protects the right to personal liberty and enjoins a court dealing with a summons for civil imprisonment, where it is satisfied that the debtor has not paid the amount due, to enquire into the question of the judgment debtor's failure to pay the amount due.

What this entails is that an indigent person will not be imprisoned for a debt simply because she owes.

In terms of Rule 73 of the High Court Rules, it must be shown, that, the debtor has the means to pay, earn the amount due, and that his failure or refusal to pay the amount due is wilful.

The fact that a debtor owes a contractual obligation does not necessarily call for his civil imprisonment.

Civil imprisonment is a drastic measure which should be resorted to only as a last resort and only in instances where a debtor is able to service the debt but has shown an unwillingness to discharge the obligation. It is for this reason that the court is enjoined to carry out an enquiry to establish the financial position of the debtor and attitude to payment of the debt. The manner in which the debt will be cleared is considered in a case where the debtor is able to service the debt and shows a willingness to settle it.

The plaintiff is in the business of financing tobacco growing projects. Sometime, in May 2013 and July 2014, the defendant was advanced money and crop inputs in terms of a tobacco grower contract agreement. It obtained exchange control approval for the 2013-2014 and 2014-2015 tobacco growing seasons and was able to source foreign currency and purchase inputs to advance to tobacco growers: see Annexure C1and C2.

The defendant failed to pay back the grower debt. The loan advanced to the respondent was offshore funds advanced in United States dollars and is a foreign obligation denominated in foreign currency.

There are a number of instruments that permit tobacco merchants to recover tobacco growing loans advanced in United States dollars.

Financing and repayment of tobacco production is regulated by section 4(1)(a) of the Exchange Control (Tobacco Finance) Order, 2004, SI61 of 2004 which states, that, all auction and contract tobacco shall be paid for in United States Dollars. Section 5(3) provides that where a contractor has financed a tobacco grower by accessing offshore funds for that purpose, the amount used to finance the grower may be set off against the price of tobacco sold to the contractor by the grower.

The purpose of the Exchange Control Order is to ensure that where offshore funds are used to finance tobacco production, the contractor is able to recover the money from growers, in foreign currency, to enable the contractor to repay the foreign loan. A repayment in United States dollars or set off against the price of tobacco sold to the contractor enables the tobacco merchant to recoup his United States dollar investment.

The Zimbabwean dollar was re-introduced on 24 June 2019 in terms of SI142 of 2019.

On 29 July 2019, the Reserve Bank issued the Clarification to the Tobacco Industry, Circular No.7 of 2019, states in section 2 as follows:

“2. Treatment of US$ Denominated Inputs Advanced to Growers:

2.1 Tobacco merchants have the option to use foreign currency sourced from local banks (through global facilities) or offshore financing to procure inputs for distribution to tobacco growers under contract arrangements.

2.2 Where tobacco growers receive US$ input loans, repayment to the tobacco merchant shall be in foreign currency in order to protect the tobacco merchant's investment.”

Circular number 7 was issued in terms of section 35(1) of the Exchange Control Regulations, SI106 of 1996.

Section 2 of Circular No.7 states, that, a tobacco grower who obtains USD denominated input loans from a tobacco merchant is obligated to pay back in foreign currency.

The purpose of the section is to provide clarification on payment to tobacco merchants, by growers, where a tobacco merchant has accessed offshore funding to finance the tobacco growing. The rationale of section 2 of the Clarification to the Tobacco Industry, Circular No.7 of 2019 is to protect a tobacco merchant's investment. It would be absurd to expect that the merchant recovers the loan in RTGS when he obtained a USD-denominated input loan himself to finance the tobacco growing.

The legal framework available entitles a tobacco merchant, who has advanced United States dollars denominated input loans to a tobacco grower, to recover the loan in foreign currency.

Section 4(1)(d) of Statutory Instrument 33 of 2019, SI33 of 2019 deems all assets and liabilities, including judgment debts denominated in United States dollars, immediately before 22 February 2019, to be valued in RTGS dollars at a rate of 1:1: see Zambezi Gas Zimbabwe (Pvt) Ltd v NR Barber (Pvt) Ltd SC03-20.

There was agreement over the import of this section.

The parties disagreed over the applicability of this section to this case.

The defendant 's contention, that, upon the introduction of the RTGS dollar, on 22 February 2019, all assets and liabilities that were expressed in United States dollars were converted to RTGS at the rate of 1:1 and therefore that this particular loan is payable in RTGS lacks merit.

The defendant lost sight of the fact, that, there are instances when this section does not apply.

Finance Act No.2 amended the Reserve Bank of Zimbabwe Act [Chapter 22:15] and introduced section 21(1) as section 44C. Section 21(1) of Finance Act No.2 of 2019 makes it clear that the conversion at the rate of 1:1 does not apply in the case of foreign loans and foreign obligations denominated in any foreign currency and stipulates as follows:

“(a) Foreign loans and foreign obligations denominated in any foreign currency, which shall continue to be payable in such currency.”

All these instruments ought to be read in harmony with the Finance Act.

The defendant submitted, that, Exchange Control (Tobacco Finance) Order, S.I.61 of 2004 being subsidiary legislation, has the undesirable effect of overriding the provisions of Finance Act No.2 of 2019, being the enabling legislation.

It is a fundamental rule of law that the purpose of subsidiary legislation is to supplement primary legislation. Subsidiary legislation must not be ultra vires the enabling Act. Subsidiary legislation must not conflict with, run counter to, or replace enabling legislation.

Whilst debts pre-existing 22 February 2019 are payable at the rate of 1:1 in RTGS, foreign obligations are ring-fenced under section 21 of Finance Act No.2 of 2019. Foreign loans and obligations are an exception.

The Exchange Control (Tobacco Finance) Order makes provision for foreign loans and foreign obligations denominated in any foreign currency and provides that these shall continue to be payable in the currency involved.

This setup is contemplated under the Finance Act.

Consequently, the Exchange Control (Tobacco Finance) Order, SI61 of 2004 supplements Finance Act No.2 of 2019 and has no effect of breaching its provisions or replacing it. The two pieces of legislation are not in conflict with each other and ought to be read in harmony.

In Zimbabwe Leaf Tobacco (Pvt) Ltd v Valentine T. Mushayakarara HH220-20, the court dealt with a matter with similar facts to this case. The court considered the implications of section 4(1)(d) of S.I.33 of 2019, Finance Act No.2 of 2019, the Exchange Control (Tobacco Finance) Order of 2004, and Exchange Control Circular No.7 of 2019 and held, that, where a tobacco contractor has utilised offshore funds to finance tobacco growers, he is entitled to recover the loan in United States dollars.

The decision of the court was upheld on appeal.

In casu, the plaintiff does not dispute, that, the plaintiff sourced offshore funds in United States dollars and advanced United States dollar-denominated inputs to the defendant. The respondent did not refute that the money advanced to the defendant was part of a foreign loan obtained by the plaintiff in accordance with the 2013-2014 and 2014-2015 tobacco farming season with exchange control approvals.

In Breastplate Service (Pvt) Ltd v Cabria Africa PLC SC66-20, the court zeroed in on issues regarding the intention of the parties in a contract and held, that, where the parties have agreed and expressed their intention that payment must be made in foreign currency, a court must give effect to that intention.

The defendant entered into an agreement well aware of the nature of the agreement he was binding himself to. The contract defines “grower debt as the value of the crop finance.''

It expressly states, that, payment to the plaintiff would equate to the crop finance.

The defendant signed an acknowledgment of debt, in June 2015, acknowledging owing sums in United States dollars.

The issue of value and recovery has always been within the parties minds.

The nature of the debt entitles the plaintiff to recover the loan in United States dollars. There is a correlating foreign obligation to repay a foreign loan in United States dollars. The loan advanced, being a foreign obligation, the defendant is expected to pay the money back in United States dollars. This obligation is payable in United States dollars and is an exception to section 4(1)(d) of S.I.33 of 2019 which is not applicable to the circumstances of this case.

I must conclude, that, based on Zimbabwe Leaf Tobacco (Pvt) Ltd v Valentine T. Mushakarara HH220-20, the defendant was required to pay back the loan in United States dollars because the tobacco growing contract was financed from off-shore funds. The defendant has an obligation to pay the debt in foreign currency. The plaintiff has an entitlement to insist on payment in United States dollars.

The plaintiff denied that the defendant has discharged the judgment debt in full and submitted, that, what appears on p13 of the record is a repayment plan and that the debt has not been discharged.

This assertion was not disputed.

The summons for civil imprisonment is for USD$360,000. The plaintiff's explanation for claiming the entire debt, despite that the defendant has been servicing the debt, is that the repayment plan is silent on the issue of interest, which has not been paid and hence claims the entire sum granted in terms of the order.

The repayment plan produced shows instalments due, payments made, and the balance outstanding.

It shows, that, the plaintiff continued to receive payments after the order was granted.

As at 23 July 2018, the balance outstanding was US$193,844=31. The defendant claims that he had paid a total of UD$161,355 as at this date. The defendant submitted, that, entries of Z$50,000 instalments of 31 December 2018 and 31 December 2019 were made in error.

The defendant needed to show that the payments made after this cleared the debt.

On 18 September 2019, the defendant paid Z$25,000 which was converted to US$1,804=34. On 18 June 2020, Z$190,000 (9,600) was paid. On 25 June 2020 the defendant paid Z$50,000 and it is not known how much this amount translated to in United States dollars as at that date. This amount does not, even if one takes into account the Z$50,000 paid later on and the Z$100.000 purportedly paid in error, clear the debt.

The amounts paid, albeit in RTGS dollars, reduce the balance but are not sufficient to discharge the debt in full.

The appearance is that the defendant still owes the plaintiff part of the debt which he has failed to pay.

According to the plaintiff, there is a balance of USD$182,414.

The defendant has failed to show that he settled the debt in full. The court has considered, that, in addition to the capital debt, it has not been shown that the interest, VAT, and additional sum of US$8,625 has been paid.

The defendant contended, that, because the plaintiff accepted payment in RTGS, it is estopped from claiming in United States dollars.

No authority was advanced for the proposition, that, because the plaintiff accepted payment in RTGS dollars, it is estopped from claiming payment in United States dollars.

The fact remains, that, the debt is a foreign obligation liable to be paid in foreign currency.

The law permits settlement of debts in RTGS dollars for obligations sounding in United States dollars at the interbank rate.

In any event, the applicant is amenable to receiving payment in RTGS dollars at the interbank rate.

The parties are to set down the matter for an enquiry to be carried out in terms of the Rules.

It is at this hearing that the court will determine how much has been paid so far, consider how much the interest component of the debt is, and determine the exact figure owed.

Accordingly, it is ordered as follows:

1. The parties are to set the matter down for an enquiry to be conducted in terms of Rule 370 of the High Court Rules, 1971.

2. Costs shall be in the cause.

The answer sought in this appeal is whether, the appellant, a foreign registered company is liable to pay value added tax in Zimbabwe.

The appellant disputed liability for value added tax (VAT) arising from the purported importation of goods into and the carrying on of trade in Zimbabwe and appealed against a contrary determination of the respondent.

The appellant is an International Business Company incorporated on 19 May 2005 in the British Virgin Islands in Guernsey in the Channel Islands but is not permitted to trade in that jurisdiction. The respondent is a body corporate responsible for the collection, amongst other imposts, of value added tax in Zimbabwe.

The original intention of the appellant in Zimbabwe, prior to 1992, was to invest in property and participate in the construction of the Chitungwiza road…,.

Instead, the appellant became a supplier of basic commodities to local companies that included the WG (hereinafter referred to as the holding company).

It concluded an agency agreement with D & T, a subsidiary of the holding company, in 1992.

By 1999, it was supplying basic commodities under a US$10 million line of credit registered with the Reserve Bank of Zimbabwe to the holding company and other local customers…,.

On 1 October 2007, the Governor of the Reserve Bank of Zimbabwe unveiled the Basic Commodities Supply Side Intervention, BACOSSI, facility designed to end the chronic shortages of basic commodities in Zimbabwe…,.

The facility commenced in May 2008 and continued until the introduction of the multi-currency regime on 29 January 2009.

In May 2008, officials of the Reserve Bank of Zimbabwe (RBZ) amongst whom was the Governor and the Senior Division Chief Strategic Planning and Special Projects (SDC) visited the warehouse of D & T in Chitungwiza. The RBZ was referred to the appellant by D & T.

The appellant and the Reserve Bank of Zimbabwe (RBZ) commenced negotiations which culminated in the purchase of the non-Bacossi basic commodities that were in the D & T warehouse valued at US$7,987,207=54. The two parties also concluded an agreement in which the appellant supplied basic commodities to the RBZ, in Zimbabwe, the bacossi goods, valued at US$11,698,174 between July and September 2008.

The Baccossi Agreement was reduced to writing…, but was not signed by the parties apparently because the appellant was unhappy with the preamble to the agreement.

A verbal agreement, purportedly concluded between the Reserve Bank of Zimbabwe (RBZ), represented by the Governor, and the appellant, represented by a named Ukrainian lady, governed the supply relationship between them.

The respondent conducted a tax investigation of the purchases, in foreign currency, of the Reserve Bank of Zimbabwe from the appellant for the period between May 2006 and September 2008. The investigations revealed non-payment of value added tax (VAT) on the supplies made in that period…,.

They also revealed that D & T was paid commission, in terms of an agreement between them, on the invoiced supplies from 1 January 2006 to 31 January 2009.

On 9 February 2009…, the respondent made written demand on the Finance Director of the holding company, who was also the public officer of D & T, for the payment of value added tax (VAT) on the invoiced income paid to the appellant during that period.

On 13 February, a meeting was held at the Reserve Bank of Zimbabwe (RBZ) between the Senior Division Chief Strategic Planning and Special Projects, the investigators of the respondent, and the liaison officer of the appellant, who was also the Sales and Marketing Director of the holding company of D & T, the appellant's agent.

On 12 March, the respondent appointed the CEO of the holding company of D & T as the public officer for the appellant in terms of section 61 of the Taxes Act on the ground that his company was closely linked and connected to the appellant's local trading activities.

The CEO objected to the appointment on 17 and 20 March 2009 on the ground, that, he was not an agent, employee, director, or signatory to the bank account of the appellant; but, the respondent did not relent in its demand.

On 20 March 2009, at the respondent's offices, a meeting was held between three representatives of the respondent and two tax advisors from a local firm of accountants.

In reply to counsel for the respondent's oral submissions, counsel for the appellant disputed that the appellant was represented at the meeting and suggested that the tax accountants represented D & T.

The purpose of the meeting was to get the respondent's version on the value added tax (VAT) issues pertaining to both the appellant and D & T.

The VAT head from the tax advisors provided the respondent with two letters of his firm's mandate to represent the client.

It is inconceivable that he would not have received full instructions from his client, as he indicated, were that client D & T.

I am satisfied, from the heading of the minutes minuted by the tax advisors, that, they represented the appellant and not D & T.

In any event, the briefing given him by the respondent related to the alleged activities of the appellant, including the payment of 0.1% commission on the gross sales of the appellant in Zimbabwe to D & T.

On 30 March, the public officer of D & T disputed the legality of the appointment of his CEO as a public officer for the appellant. He, nonetheless, compiled and delivered the monthly breakdowns of the income received by D & T during the period from January 2006 to 31 January 2009 requested in the letter of 9 February.

On 25 March 2015…, the appellant wrote to the respondent objecting to the appointment of the public officer outside its registered place of business in Guernsey and to the tax liability claim.

The basis of the objection was that it did not maintain offices nor employ staff nor was it a value added tax (VAT) registered operator obligated to charge VAT on goods purchased from its foreign based operations and supplied to clients in Zimbabwe.

The relevant part of the letter reads:

“We object to your claim that we have a tax liability in Zimbabwe as we do not have a self-established presence in the country. Our involvement with Zimbabwe clients, and the West Group, is limited to the supply of our stock to agents who operate on a commission basis to store and handle our stock that we hold in Zimbabwe, for which we have always operated with Reserve Bank Approval.”

The objection by the appellant, of 25 March, and the further objection of its compulsorily appointed public officer, were dismissed by the respondent on 31 March 2009.

On 1 April, the respondent proceeded to appoint the holding company, and its subsidiaries, as an agent for the collection of value added tax (VAT) due from the appellant, purportedly in terms of section 48 of the Value Added Tax Act…,.

On 3 April 2009, the appellant, through its authorised signatories, wrote to the CEO of the holding company appointed as its public officer and copied the letter to the head of investigations of the respondent, and the Senior Division Chief Strategic Planning and Special Projects on the tax enquiry conducted by the respondent disputing tax liability on two grounds:

(i) The first was that it was not the importer; and

(ii) The second was that the sale to the importer, the Reserve Bank of Zimbabwe (RBZ), took place outside Zimbabwe.

I believe exhibit 2 may have been written by the compulsorily appointed public officer for the appellant between May 2009 and 17 June 2009, and not on 15 April 2008, as it is highly unlikely that the author possessed prescient powers to predict the events that were to take place between January and May 2009.

It was addressed to the prospective external legal practitioner of the Reserve Bank of Zimbabwe (RBZ).

The writer summarised the history of the relationship between the appellant and the holding company and one of its subsidiaries, D & T, before and during the bacossi period. He also dealt with the relationship between these parties and the Reserve Bank of Zimbabwe and exonerated the appellant from value added tax (VAT) liability.

In response, on 17 June 2009, the external legal practitioner of the Reserve Bank of Zimbabwe (RBZ) wrote a six page legal opinion to the Senior Division Chief on the US$4m tax dispute….,.

The legal practitioner in question had apparently held a meeting, on 21 April, with the Senior Division Chief of the central bank and two representatives of the holding company. He believed, that, his mandate to protect the interests of the Reserve Bank of Zimbabwe (RBZ) coincided with the interests of the appellant. He had engaged the lawyers of record of the appellant.

He identified the common problem to be the demand for value added tax (VAT) on the appellant in respect of the supply of Bacossi goods and its agent on commission received from the appellant.

Apparently, the appellant declined to supply him with information on its business profile, shareholders and directors, summary of significant business activities in the 12 months to the date of the letter and on the nature and extent of its business activities in Zimbabwe, its certificate of registration, any Board resolutions on Bacossi transactions, and its local call account.

In the absence of this information, he could not state, with certainty, that the appellant was not conducting local trading activities nor exclude it from value added tax (VAT) liability other than on the mere say so of its agent, D & T.

He advised that the Reserve Bank of Zimbabwe (RBZ) was liable for the payment of value added tax (VAT), in local currency, on the basis of the bills of entry that identified it as the importer.

He urged the Reserve Bank of Zimbabwe (RBZ), for strategic reasons that he set out in the opinion, to tender the duty in local currency hoping, that, if the respondent accepted the payment, the appellant would automatically be exempted from liability.

On 1 July 2009, the Senior Division Chief wrote to the appellant's legal practitioner of record. She confirmed the importation of Bacossi goods and the acceptance of liability for value added tax (VAT) by the Reserve Bank of Zimbabwe (RBZ)….,.

On 20 August 2009, three members of the respondent investigations team held a meeting with four RBZ employees at the RBZ amongst whom was the Senior Division Chief (SDC).

In that meeting, the Reserve Bank of Zimbabwe (RBZ) repudiated the concession made by the Senior Division Chief (SDC) and laid liability at the doorstep of the appellant.

However, in view of the national importance of the project and the profile of the major beneficiaries, the Reserve Bank of Zimbabwe (RBZ) resolved to seek exemption for payment of value added tax (VAT) on these goods from the Ministry of Finance by 25 August 2009.

A further meeting was held on 7 October 2009, in the Governor's boardroom at the Central Bank, between the Reserve Bank and the holding company, to discuss the appellant/RBZ value added tax (VAT) liability of US$3.2m….,.

In attendance were the Governor, his advisor, bank secretary, and a strategic planning executive for the Reserve Bank of Zimbabwe (RBZ) and the Sales and Marketing Director, indicated in exhibit 2 as the liaison officer of the appellant, and another officer of the holding company.

Notwithstanding that the respondent was not claiming value added tax (VAT) from the central bank, the Governor prevaricated on whether the Reserve Bank of Zimbabwe (RBZ) accepted liability or not. In one vein he accused the Senior Division Chief (SDC) of erroneously accepting liability for the central bank without his express authority, and, in the other, he was prepared to pay the VAT as long as it was charged in Zimbabwe dollars.

The Sales and Marketing Director for the holding company declined to answer for the appellant insisting that D & T acted as liaison for the appellant as the foreign supplier and local buyers.

The underlying suggestion from her contribution was that the appellant was not liable for value added tax (VAT).

In addition, the concluding remarks of the meeting suggested the existence of minutes of meetings between the Reserve Bank of Zimbabwe (RBZ) and the appellant.

The investigation prompted the respondent to raise against the appellant schedules for outstanding value added tax (VAT) on both the non-Bacossi and Bacossi transactions, initially on 17 March and later on 15 July 2009, in the sum of US$6,302,712=13 inclusive of interest and penalties, which it corrected by the exclusion of zero rated products on 13 October 2009 by reducing the amount to the sum of US$6,249,496=70.

The computations of the principal value added tax (VAT) due in each month for the non Bacossi commodities were in the sum of US$1,198,081=13. The respondent added an equal amount in penalties and a further amount of US$206,799=52 in interest and requested payment of US$2,602,961=79 for the non-Bacossi commodities.

In regards to the Bacossi commodities, it claimed a principal sum of US$1,754,726=10 and a penalty in an equal amount and interest from 21 July 2008 to 23 October 2009 in the sum of US$137,082=72 totalling US$3,646,534=92….,.

The appellant lodged an objection to the assessment in terms of section 32 of the Value Added Tax Act [Chapter 23:12] through its legal practitioners of record on 25 September 2009.

It also applied for condonation from the Commissioner for filing the objection outside the normal time limits. It set out four grounds for condonation and eight grounds of objection.

The respondent dismissed the condonation and disallowed the objection.

The appellant appealed both decisions to this Court on 12 October 2009. The respondent filed its reply on 12 November 2009.

In the objection, the appellant denied ever doing business in Zimbabwe and indicated, that, the local transactions were imports carried out by the holding company, the Reserve Bank of Zimbabwe (RBZ), and other local companies.

It averred, that, the appellant was authorised by the Reserve Bank of Zimbabwe (RBZ) to sell the goods in foreign currency using free funds from non-resident entities.

It supplied goods in bond to its local agent, D & T, for commission.

The local buyer took delivery of the goods after paying the appellant from free funds.

On receipt of payment, the appellant instructed D & T to pay duty and value added tax (VAT) before releasing the goods.

The appellant averred, that, the value added tax (VAT) claim on non-Bacossi goods constituted a double claim for VAT already paid by D & T.

The appellant called the evidence of the founder and chairman of the holding company and director of D & T.

He confirmed the foreign status of the appellant and its relationship with D & T before the Reserve Bank of Zimbabwe came onto the scene.

The holding company, D &T, and the appellant, were not related companies.

The contact between the appellant and D & T was facilitated by his Russian partners in 1992.

The relationship between the appellant and D & T was one of principal and agent.

The Central Bank appeared on the scene in May 2008. At that time, the agent, D & T, imported the goods into Zimbabwe that were supplied by its principal, the appellant.

The Central Bank concluded two agreements with the appellant:

(a) The first related to the purchase of the goods stored in the warehouse that had been imported by D & T, referred to in the appeal as the non Bacossi goods.

(b) The second agreement concerned the Bacossi goods under which the Central Bank directly imported in excess of 400 truckloads of goods from South Africa between July and September 2008.

At Beitbridge, the goods were checked against the bill of entry before they were taken to the bonded warehouse, and, unlike direct home consumption imports, the bill of entry was not surrendered at that stage.

D &T stored the Bacossi goods for the Reserve Bank for a fee.

The relationship between the appellant and D & T was suspended during the duration of the Bacossi imports.

The goods were received and secured by the Reserve Bank of Zimbabwe (RBZ).

The Reserve Bank of Zimbabwe (RBZ) would take the goods from the warehouse once D & T received a release order from the appellant confirming receipt of the purchase price, and, after D & T had paid duty and value added tax (VAT) for the goods.

The clearing agent invoiced D & T for clearance fees; D & T, in turn, added these to the storage fees for the account of the Reserve Bank of Zimbabwe.

He identified the South African export documents and the Zimbabwean import documents encompassing pp33-90 of exhibit 1. Amongst these documents were local bills of entry that identified the importer as the Reserve Bank of Zimbabwe.

The witness confirmed his managing director's assertion, in the letter of 30 March to the respondent, that, D & T was not paid commission by the appellant during the subsistence of the Bacossi imports.

It was on the basis of this evidence, that, counsel for the appellant submitted, that, the sole witness was credible and reliable in all material respects.

I do not agree with the contention by counsel for the appellant, that, the witness was a credible and reliable witness who gave his evidence well.

Under cross examination, he contradicted material parts of his evidence-in-chief.

He abandoned his earlier version that the relationship of principal and agent between the appellant and D & T was suspended during the Bacossi imports. He categorically stated, in cross-examination, that, the relationship did not change for both the Bacossi and non Bacossi imports as the appellant continued to pay D & T, in foreign currency, commission at the rate of 1% of the value of each transaction.

The appellant maintained its grip on the goods in the warehouse and directed its agent to pay duty and value added tax (VAT), and, thereafter, release the goods after confirming receipt of the transaction value of each consignment from the Reserve Bank of Zimbabwe.

He incorrectly stated that value added tax (VAT) was paid for the non-Bacossi goods.

That VAT was never paid was demonstrated by the abandonment of the double claim ground at the hearing of this appeal.

He did not participate in the discussions that culminated in the agreement between the appellant and the Central Bank. He was not privy to the terms and conditions of the agreement. He did not interact with any of the directors and authorised signatories of the appellant.

He had met an officer of the appellant whose name appears in the last paragraph on p112 of exhibit 1 once in Harare.

He was not a director, employee, or official of the appellant or the clearing agent.

His version on the motivation of the clearing agent to invoice D & T rather than the Reserve Bank of Zimbabwe (RBZ) was not confirmed by evidence from the clearing agent or the Central Bank.

He did not produce any evidence to show that D & T included the charges of the clearing agent in the storage fees levied on the Central Bank.

The evidence of the sole witness left gaps that could only be filled by the directors, employees, officials, or agents of the appellant.

His averments preceding the incorporation of the appellant, on 19 May 2005, underscored his unreliability and the need for the testimony of the active officers or agents of the appellant.

It is simply incomprehensible how he could have dealt with the appellant before it was incorporated.

The respondent's investigation established that the Reserve Bank of Zimbabwe (RBZ) purchased non Bacossi goods between May 2006 and June 2008 contrary to his testimony that the purchase started in May 2008.

I am satisfied that he was not a credible and reliable witness.

The respondent did not file Rule 5(c) documents within 14 days of entering his reply as required by Rule 5.

The material correspondence contemplated by Rule 5(c) would consist of the notice claiming the outstanding value added tax (VAT), the letter of objection, and the Commissioner's response to the objection.

Rather, at the hearing, and soon after the appellant had closed its case, counsel for the respondent produced the purported documents from the bar.

The documents consisted of a letter of objection dated 21 October 2014, a set of original value added tax (VAT) assessments issued by the respondent against the appellant on that date for the period May 2006 to August 2008, the letter of objection of 25 September 2009, and the unsigned agreement on the supply of basic commodities between the appellant and the Reserve Bank of Zimbabwe.

It did not file the ruling dismissing the condonation sought and disallowing the objection.

In the letter of objection, the appellant refers to “assessments, the last of which are dated 15 July 2009.”

The earlier assessments of 17 March and 22 May and the letters of 24 June and 10 September 2009, referred to in the notice of appeal, were not produced in evidence nor did they form part of the Rule 5(c) documents or the pleadings.

The respondent must simply comply with the law to obviate unnecessary delays associated with his failure to abide by the law in this regard.

The documents constitute a type of record of proceedings, which helps this Court understand the real dispute between the parties and the basis on which the determination appealed against was made.

That the objection was dismissed on the ground that it was filed out of time was only disclosed in the respondent's reply to the notice and grounds of appeal.

Rule 5(c) documents are simple documents that the respondent always has in its possession - even before filing his reply. This kind of dilatoriness on its part is totally inexcusable.

The respondent is directed to comply with Rule 5(c) in all future cases.

At the pre-trial hearing of 17 September 2014, by consent of the parties, the delay in the filing of the notice of objection by the appellant and the failure to file Rule 5(c) documents timeously by the respondent were condoned.

The four issues referred for appeal were:

(a) Was the appellant the importer of the goods in question into Zimbabwe?

(b) Does the appellant operate a business in Zimbabwe?

(c) In terms of section 6 of the Value Added Tax Act [Chapter 23:12] who was responsible for the payment of value added tax (VAT) on the imported BACOSSI goods, and, separately, on the imported non-BACOSSI goods?

(d) Was the appellant liable to pay any outstanding value added tax (VAT) in foreign currency?

I proceed to resolve each issue in turn....,.

In his written heads, counsel for the appellant contended, that, the respondent used an arbitrary exchange rate to convert Rand denominated transactions to United States dollar values.

The respondent averred, in paragraph 13 of the reply, that, the invoice values were supplied by the appellant's agents in both Rands and United States dollars together with the appropriate conversions.

Counsel for the appellant submitted, that, the respondent had failed to establish how it converted the Rands into United States dollars.

It seems to me, that, the respondent bore no such onus. Rather, the onus was on the appellant to establish that the conversions were arbitrary.

The appellant did not lead any evidence in this regard.

McNALLY JA said, that, in Deweras Farm (Private) Limited & Ors v Zimbabwe Banking Corporation (Private) Limited 1988 (1) ZLR 368 (SC), had the applicants put forward an authoritative affidavit explaining detailed errors in calculation by the Bank, accompanied by a fresh calculation showing the “correct” amount due; and had they then consented to judgment in the admitted amount and asked simply that the issue of the disputed amount go to trial, he, like the learned trial judge 'would have been hard put to refuse their request, despite what might well be described as their wilful default'.

On 21 January 2015, the respondent obtained judgment in its favour against the applicant under case number HC1548/13. The judgment is for the payment of $35,873 with interest at the rate of 5% per annum from 1 January 2013, and legal costs in the sum of $2,500.

The judgment debt led to the attachment of the applicant's dwelling, namely, Stand 907 Mt Pleasant Heights, Mt Pleasant, Harare.

The applicant received the notice of attachment on 18 January 2016 and filed this application on 29 January 2016.

The applicant wants the sale of the dwelling suspended because, firstly, if the sale is allowed to proceed, her family will suffer great hardship. Secondly, the applicant says she is making a reasonable offer to settle the debt at the rate of $1,000 per month.

The following is the relief that she is asking for:

“Terms of final order sought

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

1. The sale in execution of the said dwelling is suspended on condition that the applicant carries out fully the terms of the offer of settlement made above, and, if applicant defaults on any one instalment, execution shall proceed.

2. No order as to costs.

Interim relief granted:

Pending determination of this matter, the Applicant is granted the following relief:

1. The Deputy Sheriff shall suspend the action towards the sale in execution of the said dwelling.

2. A copy of this order shall be served on the respondent's legal practitioners.”

The history of the case is as follows:

The applicant was in the employment of the respondent, as Human Resources Director, for 12 years before 2010. In 2010, she sought to leave the respondent's employment due to harsh economic conditions that were prevailing at the time.

On 10 September 2010, she made an application to the respondent for a voluntary retrenchment package which was being offered by the respondent which she found attractive. In response, the respondent persuaded her to stay with a staff retention proposal of a housing loan of $120,000.

The same offer was extended to the Chief Executive Officer and the Finance Director.

According to the housing loan offer, the title deeds of the house that she would purchase would be surrendered to the respondent as security.

The repayment of the loan was going to be upon separation; in other words, upon the applicant's termination of employment.

During her tenure, she was only supposed to pay interest of $600 per month.

Upon termination of employment, the applicant was supposed to repay the loan using her terminal benefits.

The applicant was persuaded to stay by the housing loan offer and took the loan on 23 October 2010.

This staff retention proposal was signed by the Chief Executive Officer, C Mutasa, and the Board Chairman, P.F Timba.

The applicant stated that in 2012, there was a change of management at chairman and CEO levels of the respondent.

She said that relations were not good between herself and them. She further stated, that, it became clear to her that the employment relationship could not continue.

On 17 December 2012, she tendered her resignation from employment in acknowledgement of the breakdown of the relationship.

She said that upon her resignation, her terminal benefits went towards settling the loan - but it was not extinguished.

It was only reduced from $67,124 to $35,172.

She said that she failed to agree with the respondent's new managers as to how the balance was to be settled.

As a result, litigation ensued resulting in the parties signing a Deed of Settlement in December 2014, and the respondent obtaining judgment which gave rise to the attachment of her dwelling.

The applicant stated, that, if the house is sold her family will likely suffer great hardship.

She said that she has always acknowledged her indebtedness to the respondent and has always intended to pay the debt; but, because she was not employed from January 2013 to June 2015 she was unable to pay anything.

She said that now that she is in employment she is making an offer to pay off the debt at the rate of $1,000 per month which offer she says is reasonable.

The applicant attached proof to show, that, from July 2015, when she took up employment with Pan African Mining (Pvt) Ltd, she had only managed to pay $4,000 to the respondent.

The amount was not disputed by the respondent.

Although the applicant does not state in her application that she is making this application in terms of Order 40 Rule 348A(5a), I do agree with the respondent, that, looking at the nature of the application, it is indeed being made in terms of Order 40 Rule 348A(5a) which deals with applications for the postponement or suspension of the sale of a dwelling where that dwelling has been attached and is occupied by the execution debtor or members of his family.

The execution debtor is empowered to make a chamber application for the postponement or suspension of the sale of the dwelling or eviction of its occupants. The application should be made within 10 days of notice of attachment of the dwelling.

Once such an application is made, the Registrar of this court shall submit the chamber application to a judge who shall consider the papers forthwith: per Rule 244 of the High Court Rules, 1971.

In terms of Rule 348A(6), an application made under Rule 348(A)(5a) shall be treated as urgent and set down urgently, without delay.

However, even if the application is treated urgently, the order that is granted by the court is a final one.

This is supported by Rule 348A(5e) which states, that, if the judge is satisfied that there is good ground for postponing or suspending the sale of the dwelling concerned or postponing or suspending the eviction of the occupants, he may order the postponement or suspension of the sale or eviction subject to terms and conditions he may specify.

The Rule does not say that the order that is granted is a provisional one.

Even the Form 45 upon which this chamber application is made shows that the order which is sought by the applicant is final in nature.

The relevant portion of the Form reads as follows:

“The applicant seeks an order in the following terms:

The sale in execution of the said dwelling is postponed until…,. (date)

OR ALTERNATIVELY:

The sale in execution of the said dwelling shall proceed subject to the condition that the above mentioned occupants are permitted to remain in occupation until…,. (date)

OR ALTERNATIVELY:

The sale in execution of the said dwelling is suspended on condition that the applicant carries out fully the terms of the offer of settlement made above.”

It is apparent therefore, that, in this matter, the applicant ought to have made a chamber application and not an urgent chamber application as she did.

It will be futile to grant a provisional order suspending or postponing the sale.

Once this is done, there will not be anything to confirm on the return day as the provisional order that she is seeking is final in nature and has the effect of a final order. In fact, there will not be any need for confirmation of the provisional order on the return day.

Considering that the applicant is a self-actor who is not well versed with the rules of this court, I will condone her adoption of the wrong procedure.

This is in light of the fact, that, the respondent did not make it an issue.

It is just an observation that I made as the court.

In any case, the applicant made her application within 10 days of having been served with the notice of attachment of the dwelling.

The respondent has not suffered any prejudice, because, before the hearing, it was served with the application and got the chance to file its notice of opposition and opposing affidavit.

The requirement of Rule 348A(5C)(b) which says, that, upon the filing of the chamber application, the Registrar, shall, without delay, serve a copy of the application on the judgement creditor, was therefore complied with.

So, in the event that I am satisfied that the applicant has made a good case for herself I will award an order in terms of Rule 348A(5e) which order will be final.

Where a judgment debtor applies, under Order 40 Rule 348A(5a), for the postponement or suspension of the sale in execution or eviction, the judge may grant the application in terms of Rule 348A(5e) which reads:

“If, on the hearing of an application in terms of subrule (5a), the judge is satisfied —

(a) That the dwelling concerned is occupied by the execution debtor or his family and it is likely that he or they will suffer great hardship if the dwelling is sold or they are evicted from it, as the case may be; and

(b) That —

(i) The execution debtor has made a reasonable offer to settle the judgment debt; or

(ii) The occupants of the dwelling concerned require a reasonable period in which to find other accommodation; or

(iii) There is some other good ground for postponing or suspending the sale of the dwelling concerned or the eviction of its occupants, as the case may be; the judge may order the postponement or suspension of the sale of the dwelling concerned or the eviction of its occupants, subject to such terms and conditions as he may specify.”

What it means is that the judge may postpone or suspend the sale of the dwelling if he is satisfied, that, the execution debtor or his family are in occupation of the house and will likely suffer great hardship if the dwelling is sold.

In addition to showing that great hardship is likely to be suffered, the execution debtor should make a reasonable offer to settle the debt.

If a reasonable offer is made, the judge will postpone or suspend the sale to enable the execution debtor to pay off the debt.

If the execution debtor cannot make a reasonable offer to settle the debt, he should, in addition to showing that he or his family will likely suffer great hardship, show that he or his family needs a reasonable period to secure alternative accommodation.

In that case, the judge will postpone or suspend eviction for a reasonable period to enable him or his family to find alternative accommodation before they can vacate the dwelling.

If the execution debtor, after showing that he or his family will likely suffer great hardship, neither offers a reasonable offer to settle the debt nor shows that he or his family needs a reasonable period to acquire alternative accommodation, but advances some other good ground which persuades the judge, the judge may postpone or suspend the sale or the eviction on conditions he thinks fit.

Put differently, for a judgment executor to succeed in his application, it is imperative in every case that he shows;

(i) Firstly, that there is occupation of the dwelling by him or his family; and

(ii) Secondly, that he or his family will likely suffer great hardship.

This is the first requirement the execution debtor has to satisfy or meet in terms of Rule 348A(5e)(a).

After satisfying the first requirement, the second requirement that he ought to satisfy is in terms of Rule 348A(5e)(b); under subparagraph (i) by making a reasonable offer to pay the debt; or under subparagraph (ii) by showing that he or his family needs a reasonable period to find alternative accommodation; or under subparagraph (iii) by advancing some other good ground which persuades the judge to find in his favour.

It is my understanding, that, Rule 348A(5e)(a) and Rule 348A(5e)(b) should be read conjunctively because of the use of the word 'and' instead of 'or' between them.

In casu, it is not disputed that it is the applicant, who is the execution debtor, who is in occupation of the dwelling together with her family.

She has averred, in her application, that, the family will likely suffer great hardship if the sale is allowed to proceed and she has made an offer to settle the debt which she says is reasonable.

I have to make a determination on whether she has shown that the family will likely suffer great hardship and whether her offer is indeed reasonable.

On great hardship which will be suffered by her family if the house is sold and they are evicted, the applicant made the following submissions:

They will be rendered homeless and end up on the streets as she will not be able to spare any money for rentals since the family is operating on a very tight budget. The children, especially the two who are in school, will be affected in their studies. The trauma of losing a home and friends will leave or cause permanent psychological scars that may affect their mental health and development.

She said that the one in Form 4 will be affected the most since he will be sitting for his examinations this year.

She also said that since the house was constructed by her husband, the sale will put a strain on their relationship as he is already blaming her for the loss that they are about to suffer.

The applicant said that the house's estimated open market value is $300,000, but, a forced sale will cause it to fetch much less.

She said that this will be worsened by the harsh economic conditions prevailing in the country which make potential buyers unable to offer fair value.

The applicant said that the family will therefore suffer a huge financial loss.

The husband attached a supporting affidavit stating that he is the one who borrowed money from Time Bank to finance the construction of the dwelling and subsequently caused the title deeds to be issued in both his names and the applicant's.

He said that they never use this house as security in borrowing money because it is their only dwelling house.

He said that he is currently unemployed and has been trying to establish a farming business for the past few years, but, unfortunately, the business has not performed well and he has lost money.

He attached proof to show that he indeed took a loan from Time Bank in respect of the property.

By 6 November 2003, the loan was paid up.

In response, the respondent, citing the case of Masendeke v CABS 2003 (1) ZLR 65 (HC), submitted that great hardship is hardship which is more than the ordinary hardship faced by individuals who have been deprived of their dwelling.

The respondent said that an inconvenience in finding and paying for alternative accommodation, or the need to relocate to another residential place, is just ordinary hardship which cannot be categorised as great hardship.

The respondent further stated, that, if the open market value is around $300,000, a forced sale value may be slightly less.

It further said that the proceeds thereof are likely to far exceed the judgment debt, and, the surplus from the sale will be available to the applicant to seek alternative accommodation.

It said that the fact that the applicant is now employed means that she can afford to seek alternative rented accommodation whilst she secures an alternative property to buy with the net proceeds.

The respondent further stated, that, in any case, the applicant ought to have used the loan to purchase a house and secured the loan with the title deeds of the purchased house.

It said that it is now suffering because the applicant did not use the loan for its intended purpose.

In Masendeke v CABS 2003 (1) ZLR 65 (HC)…, CHINHENGO J said:

“In my view, the hardship must be more than ordinary hardships which persons deprived of their place of residence ordinarily suffer such as the attendant inconveniences in finding and paying for alternative accommodation or the need to relocate to another residential place such as a rural home or a rented accommodation. The hardship must be great in that it results in the execution debtor being rendered homeless.”

The same sentiments were echoed by MAKONI J in Zwidza & Anor v Mudoti & Anor HH349-15.

In the circumstances of this case, I make a finding that if the sale is allowed to proceed the applicant and her family will suffer great hardship. This is in view of the following reasons:

The applicant is the sole breadwinner.

Although she has secured another job and is earning a salary of $5,000 per month, the letter of confirmation of employment from her new employer states, that, it (the new employer) is experiencing cash flow problems. As a result, it cannot pay its employees their full salaries at once at the end of the month. It has resorted to paying them in cycles.

The applicant gets her salary every three (3) weeks, and, even then, she does not get her full salary, but $1,800 per cycle.

The letter further states, that, as it is, the employer already owes the applicant salary arrears of two (2) months salary.

The applicant produced a breakdown of her family expenses which shows that they use $1,800 per month.

This is clear evidence that indeed the applicant and her family are operating on a very tight budget as she said. As things stand, the applicant cannot afford rented accommodation.

I do not find the respondent's argument, that, the applicant can afford to buy another house using the surplus from the sale of the house appealing for the following reasons:

To begin with, this is a house which is registered in the names of both the applicant and her husband. The husband therefore has his half share.

The sale of the house basically means that the husband is forced to sell his share, even if he will recover his share from the net proceeds of the sale.

The bottom line, however, is that he would have lost his house.

When the applicant obtained the loan, she did not register a mortgage bond over this house in favour of the respondent. In other words, she did not use this house as collateral security.

When the applicant took the loan, she never anticipated that she was putting her family house at the risk of being sold for she was supposed to use her salary and terminal benefits to repay it.

If the respondent's managers had not forced the applicant out of employment, the applicant would have continued servicing the debt using her salary.

Now, if the house is going to be sold in a forced sale, it is going to fetch much less, especially in view of the prevailing harsh economic conditions. Chances of getting fair value for the house are very slim.

The family is therefore likely to suffer a huge financial loss, even if it will remain with a surplus after the debt has been paid.

Finding alternative accommodation with the surplus will present its own challenges.

Whilst this might be viewed as ordinary hardship consequent to losing a house, it ought to be weighed against the fact, that, the applicant estimates the open market value of the house to be $300,000.

The question is: is it fair to dispose of a house worth this much just to recover a debt of $36,000 in a situation where the execution debtor has since secured employment and is willing to pay the debt?

The other question is: will this not cause unnecessary great hardship to the family?

In my considered view, in a situation such as the current one, where the execution debtor has since secured employment and is willing to pay off the debt, a debt of $36,000 does not warrant the disposal of a house worth $300,000.

The inconveniences that the applicant's family will suffer, taken cumulatively, will, in my view, constitute great hardship.

The inconveniences include looking for rented accommodation, which, from the look of things, the family cannot afford; relocating; suffering a huge financial loss from the forced sale of the house in the current harsh economic conditions; and trying to purchase another house.

Having been satisfied that the family will suffer great hardship, I have to consider if the offer to settle the debt is reasonable.

The applicant said that she only took up employment with Pan African Mining (Pvt) Ltd in July 2015, and is earning a monthly salary of $5,000. She attached a letter of confirmation of employment and salary.

She said that having taken up employment she is now in a position to service the judgement debt.

The letter of confirmation of employment and salary, from Pan African Mining (Pvt) Ltd, which was signed by the Chief Executive Officer, states that due to inadequate cash flows, the company is currently owing the applicant almost two (2) months salary arrears.

The letter further states, that, the company is currently paying 50% of salaries in cycles of three (3) weeks, and that salary transfers to the applicant's bank are at a rate of approximately $1,300 per payment cycle.

The applicant also attached a breakdown of her monthly expenses which stands at $1,800.

It is in light of the foregoing that the applicant is offering to extinguish the debt at the rate of $1,000 per month.

During the hearing, she said that if she is stretched to the limit, in order to save her dwelling, she can offer to pay a maximum of $1,300 per month to the respondent.

She said that she is unable to pay anything beyond that amount as she is the sole breadwinner of the family. She said that she has three (3) children aged 20, 16 and 8 years old, two (2) of whom are still in school.

She attached their birth certificates.

She said that she also stays with her mother in law and attached her national identification document.

She said that she also stays with her husband who is unemployed at the moment.

In response, the respondent said that the total debt, inclusive of interest and costs of suit, now stands at $36,166=65.

It said that if the applicant is going to be paying $1,000 per month, it will take her 36 months, which is three (3) years, to pay the debt in full.

It argued that, that cannot be said to be a reasonable offer considering that this debt has already been outstanding for the past three (3) years.

It argued, that, if the applicant is allowed to settle the debt, at the rate of $1,000 per month, it means that all in all it would have taken the respondent a total of six (6) years to get its money back, which is too long a period.

The respondent even refused to accept the increase of the offer from $1,000 to $1,300 which the applicant made during the hearing.

It stated, that, it can only accept an offer to settle the debt at the rate of $3,000 per month.

The respondent said that the balance of convenience favours it since the debt has been outstanding since February 2013.

What is pertinent about the present matter is that the applicant did not borrow money from a bank, but from her then employer.

To begin with, she is not the one who took the initiative to ask for the money. She had decided to resign and get a retrenchment package at a time when the respondent, her then employer, was offering retrenchment packages to those who wanted to take the offer.

In a bid to keep her for her services, the respondent offered her a loan as an incentive to retain her.

She was not the only one, the Chief Executive Officer and the Finance Director were offered the same incentive.

Shortly after the applicant had taken the loan, there was new management staff for the respondent who made working conditions for the applicant unbearable to the extent that she opted to resign.

Although the respondent says that she resigned mero motu, I buy the applicant's story, that, the working conditions had become very difficult for her and this forced her to tender her resignation.

This is evidenced by the fact, that, having taken the loan on 23 November 2010, on 7 December 2012 she tendered her resignation - just two (2) years later.

When she did so, she had not found alternative employment.

From January 2013 to June 2015 she was not employed.

I do not believe that if all was well at the respondent's, the applicant would have resigned without having obtained alternative employment - especially when she knew that she had not yet paid up the loan.

The loan agreement that she had signed, in 2010, stipulated that in the event of termination of her employment with the company, for whatever reason, the company would withhold any monies due to her from her terminal benefits and pension fund.

At the time of termination, her terminal benefits were indeed withheld and her balance on the loan came down to $35,172 from $67,124.

Therefore, when she left employment, she knew that she still owed the respondent that much.

She also knew that she had no job from which she could get a salary and pay off the balance of the debt with.

With this, I do not believe that she is a person who can be said to have left employment on her own volition, freely, and voluntarily.

Circumstances at work forced her to leave.

It is clear, that, with no job for two and a half years, the applicant found it difficult to service the debt.

Her failure to pay it off, even though she had signed a Deed of Settlement in 2014 promising to have paid it off by May 2015 is understandable.

It cannot be said that she willfully chose not to pay.

Her unemployment explains why three (3) years went by with her having failed to pay it off.

Now that the applicant is employed, she is asking to be given a chance to pay the debt using her salary to save her house which was attached by the Sheriff.

Whilst I agree that a total period of six (6) years is indeed too long, what are worth considering are the circumstances which caused the applicant to fail to service the debt in the first place.

If the respondent's new management had not made the working conditions difficult for the applicant, this matter would not have come to where it is today.

The applicant would have continued in employment and serviced her debt using her salary.

With the offer the applicant has made, yes, it might take her another three (3) years to pay off the debt; but, these three (3) years are going to be different in the sense, that, this time around it will be three (3) years towards the liquidation of the debt.

Monthly, the applicant will be paying some money towards extinguishing the debt.

Three (3) years to repay a debt of $36,000 is, in my view, not unreasonable. Generally, for this amount of money, that is the repayment period the banks normally give.

In any case, the respondent is not a bank, whose business depends on lending money to clients and getting profits therefrom. The respondent is into tourism and survives on tourism, so the delay in getting its money back from the applicant does not in any way affect its operations or business.

Moreover, if the applicant had continued in employment she would have been repaying the debt at the rate of $600 per month which is much less than what she is offering now.

The respondent cannot really cry foul for the other three (3) years that the applicant spent without paying the debt because it was due to its managers that the applicant had to quit employment when the debt still owed and when she did not have an alternative source of income with which she could service the debt.

In her application, the applicant said that she wants the sale suspended on condition that she carries out, fully, the terms of the offer of settlement, and, that if she defaults on any instalment, execution should proceed.

Here, she is showing total commitment to paying the debt. She is putting her head on the block.

I am persuaded by her attitude, that, she needs to be given a chance to save her family home. Once she loses it, the family will not be able to purchase a similar house.

My sense of justice disallows me from sanctioning the sale of this house at this moment in time when things have just turned for the better for the applicant who happens to be the sole breadwinner of her family.

During the hearing, the applicant increased her offer to $1,300.

I will hold her to that amount.

The applicant did not ask for costs. This is a case where I believe that each party should bear its own costs.

In the result, it is ordered that:

1. The sale in execution of Stand 907 Mt Pleasant Heights. Mt Pleasant, Harare be and is hereby suspended on condition the applicant pays to the respondent monthly instalments of US$1,300 with effect from 31 March 2016 until the outstanding debt is extinguished.

2. If the applicant defaults on any one instalment, the respondent shall be entitled to proceed with the sale in execution of the property mentioned in paragraph 1 above.

3. Each party is to pay its own costs.

The facts of this matter, being common cause, the counsels agreed to proceed by way of a Special Case. Consequently, they filed a statement of agreed facts and heads of argument.

The agreed facts are as follows:

On 10 October 2008, the defendant, and one Samuel Raymond Manatsa (hereinafter called Manatsa) entered into an agreement of sale in terms of which the defendant sold to Manatsa a Nissan Hardbody 2.7 litres diesel truck.

On 8 October 2008, the plaintiffs had agreed to act as guarantors for Samuel Raymond Manatsa in the event that he failed to meet his obligations towards the defendant.

The plaintiffs surrendered their title deed, being Deed of Transfer 6291/1998 for a property known as Stand 2846 Highfield Township, Harare as security.

The purchase price of the motor vehicle was US$22,000.

At the time Samuel Raymond Manatsa and the defendant entered into the agreement, they had not sought statutory approval authorising payment in foreign currency as required by the provisions of Statutory Instrument 109/1996, SI109 of 1996.

Samuel Raymond Manatsa failed to perform his obligations in terms of the agreement with the defendant. He failed to pay the purchase price.

As a result, the defendant instituted legal proceedings against him and obtained judgment in case number HC1640/2010 on 17 November 2010.

The judgment was obtained in default.

On 15 December 2010, the defendant instituted legal proceedings against the plaintiffs, under case number HC9295/10, seeking the following order:

“(a) The 1st and 2nd respondents are jointly and severally liable with Samuel Raymond Manatsa to pay and shall pay the sum of US$22,000 jointly and severally to the applicant within ten (10) days of service of this order.

(b) The property known as Stand 2846 Highfield Township held under Deed of Transfer No. 6291/1998 is specially executable by writ of execution in terms of this order and also in terms of the order in Case No. HC1640/2010.

(c) The respondents shall pay the costs of this application on the legal practitioner and client scale.”

The application was opposed by the plaintiffs.

On 18 February 2015, the application was dismissed for want of prosecution under case no. HC105/2015.

On the other hand, another court, unaware of the dismissal that had been granted, granted the application under case number HC9295/10, in June 2015, as a default judgement.

The plaintiffs made an application for its rescission which was granted in default under case number HC9174/15.

The defendant has since made an application for the rescission of that default judgment under case number HC2692 B/2016 which application is still pending.

On 4 April 2011, the plaintiffs had instituted the current proceedings against the defendant seeking the following order:

“(a) Delivery of title deed of property No.2846 Highfield Township, Harare within 7 days of being served a copy of the order.

(b) Costs of suit.”

The defendant opposed the claim and made a counter claim seeking the following order:

“(a) An order that the plaintiff pays the defendant the sum of US$22,000 jointly and severally each paying the other to be absolved.

(b) An order that Stand 2846 Highfield, Harare to be declared specially executable.

(c) Costs of suit on a legal practitioner and client scale.”

At the pre-trial conference, the parties agreed on the issues for trial and the matter was referred to trial; but, on the date of the trial, counsels agreed to proceed by way of a Special Case.

They agreed on the following issues for determination:

1. Is the agreement between the plaintiffs and defendant null and void for want of requisite statutory clearance and authority to transact in United States dollars?

2. In the event that the court finds it unlawful, can the agreement be saved by the legal exceptions that apply in such cases?

3. Whether or not the defendant's counter-claim is res judicata?

4. If the counterclaim is not res judicata, whether or not the prayer should be granted?

I will now turn to deal with these issues one by one.

The plaintiffs counsel submitted as follows:

Section 4 of the Exchange Control Regulations, S.I.109/1996, outlawed any dealings in foreign currency by Zimbabwean residents without the requisite exchange authority. He went on to cite the provision which reads as follows:

“Dealings in foreign currency

1. Subject to subsection (3), unless permitted to do so by an exchange control authority –

(a) No person shall, in Zimbabwe -

(ii) Buy any foreign currency from or sell any foreign currency to any person than an authorised dealer; or

(ii) Borrow any foreign currency from or lend any foreign currency to or exchange any foreign currency with any person other than an authorised dealer.”

Counsel for the plaintiffs submitted, that, from the facts of the present matter, it is common cause, that, section 4 of the Exchange Control Regulations, SI109 of 1996 was breached, and, as such, the sale agreement that the defendant and Samuel Raymond Manatsa entered into, for the sale of a motor vehicle, was illegal.

He said that, equally, the agreement that the plaintiffs entered into with the defendant, to act as guarantors for Samuel Raymond Manatsa, was illegal.

Citing the cases of Mlambo v Chikata 2015 (1) ZLR 206; Mega Park Zimbabwe (Pvt) Ltd v Global Technologies Central Africa (Pvt) Ltd 2008 (2) ZLR 195 H; and Dube v Khumalo 1986 (2) ZLR 103…, counsel for the plaintiffs argued, that, an illegal contract is unenforceable at law by virtue of operation of the maxim ex turpi causa non-oritur actio which stipulates, that, no action arises from an illegal contract.

In other words, one cannot seek to enforce an illegal contract.

Counsel for the plaintiffs submitted, that, consequently, the loss lies where it falls (the in pari delicto rule applies).

He further submitted, that, the in pari delicto rule is only relaxed where a rescission of the contract is sought on equitable grounds, otherwise the courts will never enforce an illegal contract.

Counsel for the plaintiffs argued, that, upholding the guarantee will be an act of enforcing the two (2) illegal contracts that were entered into on 8 and 10 October 2008.

He submitted, that, if the principal contract is illegal, the surety is not bound to the creditor: as per the case of Muchabaiwa v Grab Enterprises (Pvt) Ltd 1996 (2) ZLR 691 (S)…,.

He further referred to the case of Albert v Papenfus 1964 (2) SA 713…, wherein it was held that:

“It is common cause and trite law, that, if the main obligation is unenforceable as being tainted with illegality, the guarantor's obligation is equally unenforceable.”

Counsel for the plaintiffs submitted, that, in view of the illegality of the two contracts that were entered into, the plaintiffs should be granted the relief that they are seeking for the return of their title deeds by the defendant.

He submitted, that, the defendant is not going to be prejudiced by this order because he has already obtained a default judgment against Samuel Raymond Manatsa under case number HC1640/16; so his recourse lies with enforcing that judgment for the recovery of his money.

He said that, in any case, the motor vehicle that was sold was delivered to Samuel Raymond Manatsa and not to the plaintiffs, so the issue of unjust enrichment to the plaintiffs does not even arise.

In response, counsel for the defendant submitted, that, the argument by counsel for the plaintiffs, that, the agreements were null and void for non-compliance with Statutory Instrument 109/1996, the Exchange Control Regulations is baseless.

He said, that, in 2008, before the adoption of the multi-currency, nothing in the law prohibited the making of an agreement denoted in United States dollars. He said that the issue was dealt with extensively in a string of cases. He said that what was an offence was paying in foreign currency without acquiring the relevant authority, but nothing stopped people from making agreements denoted in foreign currency.

He went on to cite a number of cases which include the case of McCosh v Pioneer Corporation African Limited HH164-10 and Barker v African Homesteads SC18-03 which cases specifically dealt with section 4 of the Exchange Control Regulations, S.I.109/1996, which prohibited dealings in foreign currency without the permission of the exchange control authority.

McCosh v Pioneer Corporation African Limited HH164-10 involved a labour dispute between a former Financial Director, Mr McCosh, and his former employer, the defendant company.

Mr McCosh was seeking payment of arrear salaries and other benefits arising from a contract of employment concluded between the parties in September 2004 and was terminated in March 2007 before the adoption of the multi-currency in February 2009.

In July 2007, the defendant's Group Chief Executive Officer had acknowledged liability on behalf of the defendant for the sum of US$70,000.

One of the issues that the court dealt with was the interpretation of section 4(1)(a)(ii) of the Exchange Control Regulations, SI109 of 1996.

The question was whether or not it was lawful for a Zimbabwean registered company to pay its employees in foreign currency for work performed in Zimbabwe without exchange control authority.

KUDYA J held, that, payment of an employee's salary, in foreign currency, before the adoption of the multi currency, would have contravened section 4(1)(a)(ii) of the Exchange Control Regulations, S.I.109 of 1996; but, the act of entering into an agreement to pay the salary in foreign currency was not prohibited by the Exchange Control Regulations.

To quote him verbatim, he said:

“It seems to me that the payment of an employee's salary in foreign currency, at the time, would have contravened section 4(1)(a)(ii) of the Exchange Control Regulations. Both CHINENGO J and GOWORA J held in separate cases of Jumvea Zimbabwe Ltd & Anor v Matsika 2003 (1) ZLR 71 (H) at 74G and Gambiza v Tavaziva HH109-08 at p4 of the cyclostyled judgment, respectively, that payment of foreign currency, whether inside or outside Zimbabwe, would amount to an exchange and thus be in violation of section 4(1)(a)(ii) of the Exchange Control Regulations.

In the present case, the defendant did not make any payment but entered into an agreement to pay.

Mr Magwaliba was therefore correct that such an agreement was not prohibited by the exchange control regulations.

This is what McNALLY JA had in mind in the Macape case, supra, when he said at p321A-B:

'The contract to pay is lawful. Actual payment in pursuance of the contract is unlawful, without permission. There is no reason why the court should not order payment; subject to the condition that authority is obtained. I must make it clear that this judgment in no way inhibits the Reserve Bank in the exercise of its discretion. It is entirely for the Reserve Bank to decide whether or not to authorise the payment. If it decides not to do so the payment may not be made. The contract remains lawful. Payment will then have to await a change either in the law or in the policy of the Reserve Bank.'

I hold that the contract to pay the plaintiff in foreign currency did not contravene any Exchange Control Regulations.”…,.

Counsel for the defendant also made reference to the case of Macape (Pty) Ltd v Executrix Estate Forretser 1991 (1) ZLR 315 (S) which was also referred to in McCosh v Pioneer Corporation African Limited HH164-10.

What comes out in the cases that counsel for the defendant referred to is that, under the Exchange Control Regulations, the entering into agreements to pay in foreign currency was lawful. What was unlawful was making the actual payment in pursuance of the agreements without first obtaining permission from the exchange control authority.

So, even if authority was subsequently declined or refused, that did not nullify the agreement itself.

In Macape (Pty) Ltd v Executrix Estate Forretser 1991 (1) ZLR 315 (S), McNALLY JA said that if authority was not granted, payment would then have to await a change either in law or in the policy of the Reserve Bank.

In casu, the plaintiffs cause of action is the alleged contravention of section 4(1)(a)(ii) of the Exchange Control Regulations which prohibited dealing in foreign currency with an unauthorised dealer without first obtaining permission.

Looking at the section, it clearly did not prohibit the entering into agreements or contracts denoted in foreign currency. All it did was prohibit persons in Zimbabwe from dealing in foreign currency with un-authorised dealers without first obtaining authority from the exchange control authority.

So, dealing in or exchanging foreign currency with a person who was not an authorised dealer was not prohibited per se. All that was needed was to obtain permission before exchanging the foreign currency.

With this analysis, I fully associate myself with the case authorities that counsel for the defendant referred to above.

I am therefore in agreement with the arguments and submissions made by counsel for the defendant, that, the agreement that the defendant and Samuel Raymond Manatsa entered into, in 2009, for the sale of a motor vehicle in foreign currency, was not illegal.

What would have been illegal was for the payment of the money to have been made without the parties, or the defendant, having first obtained permission to receive such payment from the Exchange Control Authority. Clearly, that would have contravened section 4(1)(a)(ii) of the Exchange Control Regulations.

The principal agreement that the defendant and Samuel Raymond Manatsa entered into, being legal, it follows, therefore, that the guarantee agreement that the plaintiffs entered into with the defendant is also legal and enforceable.

So, the plaintiffs are bound by it.

They cannot, therefore, claim for the return of their title deed from the defendant on the basis that the guarantee agreement was unlawful for want of statutory clearance to transact in foreign currency.

I will therefore dismiss their claim.

Since I have made a finding that the agreements were lawful, it means that the issue with regards to legal exceptions that are applicable in cases of illegal contracts falls away. Consequently, I will not determine it.

It is common cause, that, the defendant's counterclaim in the present matter is similar to the claim that he made under HC9295/10.

In both matters, the defendant wants the plaintiffs to be ordered to pay him US$22,000 being the purchase price of the motor vehicle that he sold to Samuel Raymond Manatsa for which the plaintiffs acted as guarantors. He also wants the plaintiffs Stand, for which he holds title deeds, to be declared specially executable. He further wants them to pay costs of suit on a legal practitioner and client scale.

It is not in dispute, that, at the moment, HC9295/2010 is still pending.

The plaintiffs obtained a default judgment dismissing it for want of prosecution and the defendant has since made an application for its rescission under case number HC2692B/2016.

Counsel for the plaintiffs, citing the case of Kawondera v Mandebvu 2006 (1) ZLR 1105, submitted that the requisites for a successful plea of res judicata are that the prior action:

(i) Must have been between the same parties or their privies;

(ii) Must have concerned the same subject matter;

(iii) Must have been founded on the same cause of action.

Counsel for the plaintiffs also cited the case of Towers v Chitapa 1996 (2) ZL 261 submitting, that, in that case, it was held that a default judgment previously handed down could pose as an insuperable obstacle to a claim in the future based on the application of the principle of res judicata.

Counsel for the plaintiffs argued, that, in light of the authorities he had cited, the defendant's claim is res judicata and should therefore be dismissed.

On the other hand, counsel for the defendant submitted, that, the defendant's counter-claim is not res judicata.

He submitted, that, the requirements for a successful plea of res judicata have been laid out in a number of cases such as Tobacco Sales (Pvt) Ltd v Eternity Start Investments 2006 (2) ZLR 293 (H); Flowerdale Investments (Pvt) Ltd and Another v Bernard Construction (Pvt) Ltd and Others 2009 (1) ZLR 110 (S); and Banda & Ors v Zisco 1999 (1) ZLR 340 (SC).

Counsel for the defendant went on to submit, that, the essential elements of res judicata are:

(i) The action in respect of which judgment has been given must concern the same parties.

(ii) The action or judgment must involve the same subject matter.

(iii) The action in which judgment is given must be founded in the same cause of action or complaint.

(iv) With respect to requirement of the judgment, it must be a final and definitive judgment.

It was counsel for the defendant's argument, that, in casu, whilst the parties are the same; the action involves the same subject matter; and the cause of action is the same; the two judgments that were granted in HC9295/2010 are not final and definitive.

He said that the plaintiffs obtained judgment by way of an application for dismissal for want of prosecution which is not a definitive and final judgment.

He also said that the defendant also obtained judgment in default of appearance by the plaintiffs.

Counsel for the defendant submitted, that, as a result, the requirements for res judicata have not been met.

The special plea of res judicata means, that, the same matter has been decided in another court of competent jurisdiction and may not be pursued further by the parties. The matter would have been judged on the merits, and, as such, it may not be re-litigated.

This plea is a declinatory plea meaning, that, it is meant to quash or put an end to the proceedings.

I am in agreement with the essential elements of res judicata as enumerated or outlined by counsel for the defendant, because, he made mention that there should be judgment in the matter and the judgment must be a final and definitive judgment.

The doctrine of res judicata is meant to bar or preclude continued litigation of a case on the same issues between the same parties. It means, that, the matter cannot be revised again, either in the same court or in a different court.

Put differently, the doctrine means that the same matter cannot be reconsidered by the same court or by a different court. It is a legal concept that is meant to prevent -

(i) Injustice to the parties of a case supposedly finished.

(ii) Unnecessary wasting of resources in the courts.

(iii) Future judgments from contradicting earlier ones.

In casu, it has been stated, in the Statement of Agreed Facts, that, pursuant to a default judgement that the plaintiffs obtained, the defendant applied for its rescission and that application is still pending.

To begin with, a default judgment is a court judgment that is granted in favour of either party when the opposing party fails to respond. It can spell the end of a lawsuit and become a final judgment if the opposing party does not seek to reverse it.

However, if the opposing party seeks to reverse it, by making an application for its rescission, it does not become a final judgment.

In HC9295/10, the defendant has since made an application to have the default judgment, which was obtained by the plaintiffs dismissing his claim, rescinded.

This means, that, the default judgment that the plaintiffs obtained is not yet a final judgment.

It will only become a final judgment if the defendant's application for rescission fails, or, if the defendant withdraws the application for rescission.

Therefore, at this juncture, the counter claim cannot be said to be res judicata.

One of the requirements or elements of res judicata, being the need for there to be a final judgment, has not yet been met.

Although counsels put this as an issue for determination, none of them addressed it in their heads of argument.

I would not know if the omission was an oversight or deliberate.

Be that as it may, I realized that it was an issue that I could determine without recalling counsels to address me on.

After a research, I came to the conclusion, that, although the counter claim is not res judicata, I cannot grant it for the reason, that, it is pending in this court under case no. HC9295/10 as I have already discussed above.

The matter is therefore lis alibi pendens.

Since it is already pending under a different case number, I cannot determine it in the present matter. The risk or danger is that I might reach an inconsistent decision from the one that will be reached in HC9295/10.

With lis alibi pendens, the factors to be considered are as follows:

(i) Litigation is pending elsewhere;

(ii) Between the same parties or their privies;

(iii) Based on the same cause of action;

(iv) In respect of the same subject matter.

See Eravin Construction CC v Twin Oaks Estate Developments (Pty) Ltd (1573/10) [2012] ZANWHC 27.

Lis alibi pendens, just like res judicata, is also a special plea that can be pleaded by the opposing party.

Whilst res judicata is a plea in bar; lis alibi pendens is a plea in abatement.

The difference in the two special pleas is that with res judicata, the matter would have been decided and there would be a final and definitive judgment; whereas, with lis alibi pendens, the matter would still be pending, awaiting determination. In other words, there would not be a final and definitive judgment in existence yet.

Since both parties have lost in their claims, I will order that each party pays their own costs.

Therefore, it be and is hereby ordered that:

1. The plaintiffs claim is dismissed.

2. The defendant's counter claim is dismissed.

3. Each party is to bear its own costs.

Section 49(2) of the Constitution of Zimbabwe (Amendment No.20) is express in that:

“No person may be imprisoned merely on the ground of inability to fulfil a contractual obligation.”

This constitutional provision establish constitutional protection upon the doctrine of sanctity of contracts...,.

For reasons which are not apparent from the papers placed before me, the first respondent sued the first applicant in the Magistrate's Court of Harare in case number 19780/13 for payment of the sum of $73,577=93 together with interest of 5% per annum and costs of suit on the scale of legal practitioner and client and obtained judgement on 7 November 2013.

I say the reasons are not apparent because a claim of that magnitude would ordinarily be made in this court; the Magistrates Court's civil jurisdiction being currently limited to only $10,000.

On 12 November 2019, the court sitting at Mutasa Magistrates Court granted a judgment in favour of the respondent herein and ordered as follows:

1. That the defendant be ordered to pay US$314,112=68.

2. That the defendant be ordered to pay interest at a present rate.

3. That the defendant pays costs of suit.

On 18 November 2019, the appellant noted an appeal against the whole final judgment and outlined the grounds of appeal as follows:

“GROUNDS OF APPEAL

1. The court a quo's finding is grossly erroneous in that it orders the appellant to pay interest twice to the respondent, contrary to the basic tenets of the law.

2. The award of 0.1% on the gross revenue to the respondent, by the court a quo, is erroneous and ought to be impeached on the following basis:

(a) That it was not sought and pleaded in the summons; and

(b) There is no evidence that supports the award.

3. The court a quo committed a gross misdirection in calculating 10% commission based on an incorrect figure.

4. The court a quo erred and committed a gross irregularity in failing to make a finding that the respondent was in breach and thus was not entitled to the commission awarded to it.

5. The court a quo erred and grossly misdirected itself in making a finding that the respondent reduced the tax obligation of the appellant to Zimbabwe Revenue Authority for the year 2013.

6. The court a quo grossly erred in awarding the claim in the denomination of United States Dollars instead of Real Time Gross Settlement denomination.

7. The court a quo erred in misinterpreting the meaning of 10% of the reduced debt.

8. The court a quo erred in making a finding a fact that the appellant was liable to pay to the respondent, a position of the various amounts claimed contrary to evidence on record that the respondent did not have expertise to carry out such works and that there was non-compliance by the respondent to cause a certificate to be issued by the respondent's accountants certifying reasonable terms of the amended agreement of service.”

The appellant prayed that the appeal succeeds and the order of the court a quo be set aside and substituted by one dismissing the plaintiff's claim with costs.

On 28 November 2019, the respondent filed a cross-appeal and sets out the grounds of the cross appeal as follows:

“GROUNDS OF APPEAL

1. The court a quo grossly misdirected itself in terms of the law wherein it granted costs of suit on ordinary scale despite the parties having agreed, that, in the event of litigation, costs were to be granted on attorney-client scale.

2. The court a quo grossly misdirected itself at law by failing to grant interest of 5% per month from the date of default to date of full payment which interest had been agreed by the parties.

3. The court a quo grossly misdirected itself in terms of the law by failing to grant the respondent the sum of US$500 being the agreed amount for monthly service fees which the respondent had proved to be due to it and appellant had not contested.

4. The court a quo grossly misdirected itself at law by failing to grant collection commission in terms of the Law Society By-Laws which the parties had agreed upon and respondent had claimed in the summons.

5. The court a quo grossly misdirected itself by erroneously calculating the 10% tax reduced fees for the year 2013.”

The respondent prays, in its cross-appeal, that, the cross appeal be upheld and that the relevant part of the judgment of the court a quo be set aside and substituted with the following:

“(a) The appellant be and is hereby ordered to pay costs of suit on attorney-client scale.

(b) The appellant be and is hereby ordered to pay interest at rate of 5% per month from the date of default until the date of full and final payment of the debt as agreed between the parties.

(c) The appellant be and is hereby ordered to pay US500 to respondent being the outstanding service fees for monthly returns VAT, PAYE and QDP.

(d) The appellant be and is hereby ordered to pay collection commission in terms of the Law Society By-Laws as agreed between the parties.

(e) The appellant be and is hereby ordered to pay for the tax reduction fees in the sum of the amount of US$40,848=21 for the year 2013.”

The plaintiff (now respondent) is Clearsky (Private) Limited trading as Fool-vest Financial Services, a company duly registered in terms of the law of Zimbabwe. The defendant (appellant) is Ayan Trading (Private) Limited, a company incorporated in terms of the laws of Zimbabwe whose registered business office is 113 Herbert Chitepo Street, Mutare.

Sometime in 2016, the appellant instructed the respondent, a tax accounting services contract and entered into a written agreement and key to the agreement:

(i) The respondent was to offer tax accounting service to the appellant.

(ii) The tax management fees for tax year 2009 to 2013 would be charged at 10% of the tax debt reduced for each year under audit.

(iii) The appellant would pay US$500 per month as services fees for monthly returns of VAT, PAYE and QPD.

(iv) Preparation of ITF12C Returns, including amended ITF12 for the previous years would be charged at 0.1% of Annual Gross Revenue.

(v) US$25 per hour would be charged for attending meeting and preparation of reports or any other correspondences.

(vi) That 5% interest per month shall accrue against any outstanding amount in the event of default of payment by the appellant.

(vii) That, in the event of termination of services, the respondent shall charge fees for service rendered until such termination and the appellant shall be liable to pay 10% of the tax debt reduced at the time of termination which shall be due and payable forthwith.

The respondent rendered its services to the appellant from the date of the agreement until 26 June 2017 when the appellant terminated the contract.

During the term of the contract, the respondent would raise its fees from time to time, but, the appellant defaulted payment such that interest, at the rate of 5% per month, had been accruing on the outstanding amount.

At the time of termination of the agreement, the appellant was cumulatively liable to the respondent in the sum of US$554,065=93 inclusive of default interest for services which had been rendered to the appellant.

In terms of the agreement between the respondent and the appellant, the parties agreed, that, the appellant shall be liable to pay costs of suit on a legal practitioner-client scale together with collection commission in terms of the tariff of the Law Society of Zimbabwe.

The respondent claimed for the following:

(a) Payment of US$554,065=93 by the appellant, being the outstanding fees for the services rendered to the appellant by the respondent.

(b) Collection commission in terms of the Law Society by-laws.

(c) Costs of suit on legal practitioner-client scale.

(d) 5% interest per month to be calculated on the outstanding amount on 27 June 2017 until full payment of the outstanding amount.

The appellant, in its plea to the respondent's claim, denied entering into any agreement with the respondent.

It further denied, that, the respondent was in the business of offering tax accounting services and lacked technical expertise to carry out such tax accounting services.

It denied that the respondent satisfied its mandate towards the appellant.

The appellant also denied that there was never any reduced tax debt after audit by Zimbabwe Revenue Authority (ZIMRA) during the period in question which entitled the respondent to a 10% charge on reduced debts.

The appellant contended, in its plea, that, the respondent did not specifically plead such reduced tax debts to justify the amount of $50,000; the appellant also blamed the respondent for miscalculating the amount.

The applicant further denied that the respondent rendered services to it.

The appellant pleaded, that, the respondent did a dis-service for it and contemplated a counter claim.

The agreement alluded was relating to provision of financial services as opposed to attending to Zimbabwe Revenue Authority (ZIMRA) tax matters.

It denied that any invoices were raised and denied owing the respondent any money.

It stated in its plea, that, the respondent was liable to it in the sum of US$6,000,000 (six million dollars).

It prayed that the respondent's claim be dismissed with costs on attorney-client scale.

It is necessary to briefly look at the respondent's evidence.

Daniel Mahonye, testifying for the respondent, told the court a quo, that, in 2016, the respondent was engaged by the appellant to do tax services; the operative agreement was signed on 1 April 2016 but was to become effective with effect from 1 July 2016.

He reiterated the terms of the agreement, that, the appellant was going to pay a premium of 10% of the reduced tax debt for the period stretching from 2009 to 2013. The appellant also agreed to pay the $500 per month for the services performed by the respondent in meeting the appellant's obligations towards the Zimbabwe Revenue Authority (ZIMRA).

The respondent prepared ITF12C as well as amended ITF12C returns and reiterated, that, the appellant undertook to pay 0.1% of the gross revenue for year accruing to the appellant, and, according to his evidence, the total for such gross revenue from 2010 to 2016 totalled $295,070=11.

Interest on that capital debt due to the respondent from the annexed schedule attached to the respondent's summons added up to $149,956=60.

In 2013, the Zimbabwe Revenue Authority (ZIMRA) raised a debt of $408,482=08 and the respondent's charges, according to the agreement, was 10% which computes to an amount of $40,848=20 due to the respondent.

Much of Mr Mahonye's evidence on these figures was not controverted by the appellant during trial and we take it as issues of common cause and should not detain us....,.

The appellant submitted, that, the respondent did not plead to the issue of 0.1% of the annual gross revenue in its summons. Its claim was for $554,065=93 being the outstanding fees for the services rendered to the appellant; hence, the court erred in granting the amount of US$295,070=11.

The appellant further added, that, the court a quo could not have granted that relief mero motu, hence, in doing so, it committed a gross misdirection.

It was further submitted on behalf of the appellant, that, the court erred in granting an order where the respondent had not disclosed any cause of action. There was no evidence in the plaintiff's bundle of documents to show the gross revenue upon which 0.1% was calculated from.

The respondent opposes that ground of appeal.

It contends, that, the amount of $554,065=93 owed to it included the 0.1% gross revenue; the 0.1% annual gross revenue was cumulatively included. The respondent added, that, on p31 of its bundle of documents, it shows how the amount of $295,070-11 was arrived at.

The respondent went on to lead evidence, in court, to prove that amount; it submitted the matter of 0.1% gross revenue was debated from the start, stretching to the closing submissions of both parties, and, hence, the trial court had to make a decision in that aspect as argued by the respondent.

The respondent also alluded to the judgment of the court a quo, on p20 of the record of proceedings, where it dealt with the 0.1% gross revenue.

The question for determination is whether the court a quo granted a relief which had not been pleaded by the respondent, or, alternatively, whether there was no evidence adduced by the respondent to be relied upon by the trial court?

On p31 of the record of proceedings is an annexure attached to the respondent's summons commencing action; the first column of that document shows a computation of how the amount of $295,070=11 was arrived at.

Paragraph 3 of the agreement between the appellant and the respondent provides for the ITF12C and amended ITF12C returns from 2010 to 2013 where the respondent was entitled to 0.1% of the annual gross revenue.

Page 20 of the record, the judgment of the court a quo, extensively dealt with that aspect.

The bundle of documents discovered by the respondent shows the type of work done by the respondent and the annual gross revenue for each year from 2010.

On page 386 of the record, during the re-examination of Mr Nyabvure, by the appellant's counsel, the following exchange occurred:

“Q: How was plaintiff supposed to be paid by the defendant?

A: $6 million of 10% for tax reduced, 0.1% of annual gross revenue, $25 per hour for attending meetings at ZIMRA and $500 per month.”…,.

The $295,070=11 is the total of the annual gross revenue claimed by the respondent in its papers and admitted by the appellant.

The summons, the declaration, as well as the annexures of the respondent refer to the amount.

The appellant's plea is poorly drafted, in our respectful view, and it is but a bare denial.

The appellant did not ask questions to Mr Mahonye about the 0.1% of gross revenue - if it did, it did not seriously do so.

So, we conclude, that, what is not challenged is indeed admitted: see Tetrad Investments Bank Limited v Bindura University 2009 WSC–5 and Fawcett Security Operations (Private) Limited v Director of Customs & Excise & Ors 1993 ZLR 121 (S).

The appellant pleaded to the respondent's declaration without asking for further particulars, more particularly, asking the respondent how that amount of $554,065 was arrived at.

We infer that it had understood the respondent's nature of claim: see Sakunda Energy (Private) Limited & Anor v Mayor Logistics (Pvt) Ltd HH226-18.

The appellant proceeded to make submissions relating to that claim and the court a quo believed the respondent and awarded the order relating to that aspect.

We failed to understand the basis upon which the appellant attacked the trial court. The second ground of appeal, we conclude, lacks merit.

The tax audit for 2013 was $408,482=08; the respondent contends that its commission was 10% of this amount which would come up to $40,848=20.

The appellant contends, that, what was due to the respondent is 10% of the $40,848=20 which would be the figure of $4,084=82 on p20 of the record.

It now becomes a matter of rendition in our view.

Clause 3(1) of the agreement provides that:

“Tax management fees for tax year 2009 to 2013 is 10% of tax debt reduced for each year under audit…,.”

On p31 of the record of proceedings, the respondent clearly indicates, under the 5th column 'Tax Debt Reduced' the amount of $408,482=08 and Amount Due to the respondent under column 6 is $40,848=21.

The court a quo correctly granted the 10% collection commission, but, committed a miscalculation of 10% of the tax debt reduced coming out with the figure of $4,084=82.

We agree with the respondent in its cross appeal, that, there was a mathematical calculation error and conclude that the correct amount of collection commission due to the respondent is $40,848=21 not $4,084=82.

The appellant's third ground of appeal fails and the respondent's cross-appeal on that aspect ought to succeed....,.

We now deal with the grounds of the cross-appeal filed by the respondent.

Ground 2(b) on the issue of the 5% per month interest has since been dispensed with when dealing with the main appeal. This equally applies to the $40,848=21 for the year 2013 on ground 2(e) of the cross appeal....,.

This amount was claimed by the respondent and not disputed by the appellant. The trial court ought to have granted it.

As already indicated by this court hereinabove, Mr Nyabvure, at p368, acknowledged that the respondent was to be paid $500 for attending Zimbabwe Revenue Authority (ZIMRA) meetings and the court a quo, on p19 of the record, listed that amount as one of the respondent's claims.

It is not clear on record why no decision was made by the court relating to the claim for $500.

The respondent had managed to prove, on a balance of probabilities, the amount of $500 fees outstanding and that ground of cross-appeal has merit in our view.

This is an appeal against the whole judgment of the High Court handed down on 8 September 2020, declaring “that payment by the applicant (respondent) of the sum of RTGS$235,620=99 together with interest at the prescribed lending rate calculated from 19 February 2020 to the date of final payment shall be the full and final settlement of the respondent's (appellant's) debt.”...,.

The appellant is Homelink (Private) Limited, a registered money-lender in terms of the law. The respondent is a Zimbabwean national living in the diaspora.

On 17 August 2018, the parties entered into a loan agreement which came into effect on 30 October 2018. In terms of the agreement, the respondent was granted a loan in the sum of US$450,000 to purchase an immovable property, being a certain piece of land situate in the district of Salisbury called the remainder of Stand 251 Helensvale Township measuring 8,242 square metres in extent also known as 2 Denys Close, Helensvale, Harare.

The same Stand was also to be used as security for the loan. A mortgage bond was accordingly registered in favour of the appellant in the sum of US$450,000.

The parties also agreed that the interest applicable to the loan “shall be at a variable rate currently pegged at 10 percent per annum or at such rate as shall be determined by the Lender from time to time.”

Furthermore, that the interest “shall be calculated on the outstanding balance (at all times expressed in United States Dollars) at the prevailing interest rate.”

It was also agreed that repayments would commence on 30 October 2018 and that “the principal balance, interest, and charges accruing thereon shall have been paid in full by 30 September 2033.”

The parties also agreed, in clause 10, as follows:

“10 CHANGES IN CIRCUMSTANCES

10.1 If by reason of:

10.1.1 The introduction of any change in any applicable law or regulation, or any change in the interpretation or application thereof; or

10.1.2 Compliance by the Lender with any directive, request or requirement (whether or not having the force of law) of any Central Bank, Government, fiscal, or other authority;

10.1.3 It becomes unlawful or it is prohibited or it is contrary to such directive, request or requirement for the Lender to maintain the Loan or to give effect to any of its obligations, as contemplated by this Agreement, then, the Lender may notify the Borrower and the Borrower shall promptly prepay the Loan, together with all interest costs and expenses accrued thereon.”

At the time that the loan agreement was concluded, the United States dollar was the dominant legal tender along with other multi currencies.

Although the loan was expressed in United States dollars, it was disbursed in two parts or tranches.

US$5,685=85 was disbursed on 13 September 2018. The greater part of the loan, in the amount of US$444,341=15 was disbursed on 16 November 2018 - after the separation of the RTGS dollars and nostro foreign currency bank accounts and it was disbursed in RTGS dollars or local currency at the rate of one-to-one to the United States dollar.

The reason for disbursement of the greater part of the loan in RTGS dollars is unexplained in the papers.

In its opposing affidavit a quo, the respondent merely states as follows:

“The correct position is that S.I.33 of 2019 came into force on 22 February 2019. The sum of US$444,341=15…, was disbursed on 16 November 2018 as stated above.”

In his application in the court a quo, the respondent stated the crisp issue before the court as follows:

“The legal issue is whether or not the loan agreement, or the liability arising therefrom, falls within the ambit of section 4(1)(d) of S.I.33/2019 now incorporated in terms of section 22(1)(d) the Finance (No.2) Act 2019 and is therefore deemed to be in RTGS dollars at a rate of one-to-one to the United States dollar.”

As stated at the commencement of this judgment, the court a quo found in the respondent's favour. The court stated, at p8 of its judgment:

“The difficulty of the dispute of the parties is exacerbated by the fact that neither the Principal Act nor the Finance (No.2) Act of 2019 appears to have defined the phrase foreign loan and/or obligation.

However, insights into the same can be gleaned from what the Cambridge Dictionary states on that issue: dictionary.cambridge.org defines a foreign loan as a loan to, or from, a Government or an organisation in another country. The Longman Business Dictionary defines foreign loan as a loan to a country or organisation made by a foreign Government or financial institution.

It is evident, from the definitions which have been examined, that, the loan which the respondent advanced to the applicant does not fall under the definition of a foreign loan. Nor can the obligation which arises from the contract of the parties be classified/defined as a foreign obligation to the applicant. The loan has all the characteristics of a domestic loan which falls under the ambit of the provisions of the Act.”

The court found, at p9:

“The loan cannot, by any stretch of imagination, be defined as a foreign loan. It is, to all intents and purposes, a local loan which is classified as such because of the characteristics which are apparent on its face. It is, accordingly, properly covered under the provisions of the Act.”

The appellant was aggrieved by the court a quo's decision granting the declaratur sought by the respondent and it filed this appeal on the following grounds:

“1. The court a quo erred and misdirected itself in not giving effect to the parties agreement, namely, that, all repayments would be made in United States Dollars. Consequently, the court a quo made a contract on the parties behalf;

2. The court a quo erred and misdirected itself in not finding that the parties loan agreement was a foreign obligation within the contemplation of section 21(2)(b) of the Finance (No.2) Act 2019 and therefore continued to be payable in foreign currency.”

The appellant prayed for the success of his appeal and for the setting aside of the decision of the court a quo and the substitution thereof with an order dismissing the application with costs.

Counsel for the appellant submitted, that, the issue arising from the appellant's second ground of appeal is dispositive of this matter; the narrow issue being whether the court a quo was correct in finding that the loan agreement was not a foreign loan, within the contemplation of section 21(2)(b) of the Finance (No.2) Act of 2019, that continued to be payable in foreign currency.

It was his submission, that, the first ground of appeal will either be upheld or fall away depending on the finding thus made regarding the nature of the loan agreement. If it is a foreign loan, the first ground of appeal must succeed, but if not, then the first ground falls away, so he contended.

Counsel sought to buttress the appellant's stance, that the loan is a foreign obligation, by submitting that the loan in casu was issued on the strength of exchange control approval given by the Reserve Bank of Zimbabwe. He referred the court to a document at p65 of the record.

It is a letter dated 2 August 2019 authored by the Deputy Director, Foreign Investment, at the Reserve Bank of Zimbabwe and addressed to the Managing Director of the appellant. The body of the letter reads:

“Thank you for your letter dated 09 July 2019 regarding the request to continue issuing diaspora mortgages in foreign currency. We wish to advise that Homelink (Pvt) Ltd can continue to issue mortgages denominated in foreign currency to diaspora clients as authorised under Exchange Control authority GR4268 dated 26 October 2016.”…,.

To his credit, counsel readily conceded that the appellant's failure to attach to its papers the authority referred to as GR4268 placed the court a quo, and, by extension, this Court, in an invidious position as its contents are and remain unknown.

Counsel argued, that, the court a quo ought to have accepted and adopted a wider and more generous definition of a foreign loan or foreign obligation and that if it had done so, it would have found that the loan agreement in casu was a foreign obligation on the part of the respondent and that it therefore continued to be payable in United States dollars.

It was also counsel's submission, that, the disbursement of the loan in local currency was immaterial to the determination of the dispute as that was in accordance with the dictates of the agreement which clearly stipulated that repayments were to be made in United States dollars.

He placed reliance for this submission on the case of Magodora & Ors v Care International Zimbabwe 2014 (1) ZLR 397…, SC24-14 where this Court held that:

“In principle, it is not open to the courts to rewrite a contract entered into between the parties or to excuse any of them from the consequences of the contract that they have freely and voluntarily accepted, even if they are shown to be onerous or oppressive. This is so as a matter of policy.”

Counsel for the respondent, on the other hand, submitted that the appellant's second ground of appeal relates to findings of fact and the conclusion made by the court a quo that the loan was a domestic loan. That being so, the principle relating to appellate courts not lightly upsetting findings of fact by lower courts applies.

Counsel submitted, that, the factual findings made by the court a quo were based on and supported by the evidence that was placed before the court.

He further submitted, that, on an application of the definitions that the court a quo had regard to and applied to the facts, one of the parties to the contract had to be a foreigner, and, in casu, neither of the parties was a foreigner.

Although the respondent was working in Ethiopia, the mere fact of him coming home to enter into the contract showed that it was a domestic loan. Furthermore, the respondent's domicilium citandi et executandi did not change his Zimbabwean domicile.

He further submitted, that, the agreement having been signed in Harare, Zimbabwe, by a Zimbabwean national and a Zimbabwean moneylender, for the sole purpose of the purchase of an immovable property in Zimbabwe, the loan was undoubtedly not a foreign loan.

Counsel argued, that, the disbursement of the greater part of the loan in RTGS dollars was another telling factor, further justifying and fortifying the court a quo's findings.

He submitted, that, there was thus nothing to warrant a finding by this Court that the court a quo's findings were irrational and therefore called for interference.

Regarding the appellant's first ground of appeal relating to sanctity of contract, counsel submitted, that, by enacting section 22(1)(d) of the Finance (No.2) Act, Parliament abrogated the said common law principle.

For convenience, the provision is reproduced hereunder:

“That, for accounting and other purposes (including the discharge of financial or contractual obligations), all assets and liabilities that were, immediately before the first effective date, valued and expressed in United States dollars (other than assets and liabilities referred to in section 44C(2) of the principal Act), shall, on the first effective date, be deemed to be values in RTGS dollars at a rate of one-to-one to the United States dollar.”

The issue for determination by this Court is whether or not the loan agreement entered into by and between the parties is a foreign loan which gave rise to a foreign obligation payable in foreign currency by the respondent.

This stated issue is dispositive of the appeal. This is so because, as rightly pointed out by the court a quo at pp10-11 of its judgment:

“Where the law speaks in clear and unambiguous terms about the substance of any matter, the intention of the Legislature should be respected as well as given respect to. That intention takes precedence over the parties intention as expressed in their contract.”

Section 4 of S.I. 33/2019 provides in relevant part:

“4(1) For the purposes of section 44C of the principal Act, as inserted by these regulations, the Minister shall be deemed to have prescribed the following with effect from the date of promulgation of these regulations (“the effective date”) –

(a)…,.

(b) That, Real Time Gross Settlement system balances expressed in the United States dollar (other than those referred to in section 44C of the principal Act) immediately before the effective date, shall, from the effective date, be deemed to be opening balances in RTGS dollar at par with the United States dollar; and

(c)…,.

(d) That, for accounting and other purposes, all assets and liabilities that were, immediately before the effective date, valued and expressed in United States dollars (other than assets and liabilities referred to in section 44C(2) of the principal Act), shall, on and after the effective date, be deemed to be values in RTGS dollars at a rate of one-to-one to the United States dollar.”

The provisions in section 4(1)(d) of SI 33/2019 (supra) were incorporated in the Finance (No.2) Act 2019, section 22(1)(d) of which provides:

“(1) Subject to section 5, for the purposes of section 44C of the principal Act, the Minister shall be deemed to have prescribed the following with effect from the first effective date -

…,.

(d) That, for accounting and other purposes (including the discharge of financial or contractual obligations), all assets and liabilities that were, immediately before the first effective date, valued and expressed in United states dollars (other than assets and liabilities referred to in section 44C(2) of the principal Act) shall, on the first effective date, be deemed to be values in RTGS dollars at a rate of one-to-one to the United States dollar.”…,.

The Finance (No.2) Act 2019 further provides, in section 22(4)(a), that:

“(4) For the purposes of this section -

(a) It is declared for the avoidance of doubt, that, financial or contractual obligations concluded or incurred before the first effective date, that were valued and expressed in United states dollars (other than assets and liabilities referred to in section 44C(2) of the principal Act), shall, on the first effective date, be deemed to be values in RTGS dollars at a rate of one to one to the United States dollar.”…,.

The appellant contends, that, by virtue of the provisions of section 44C(2)(b) of the principal Act, the respective assets and liabilities of the parties in casu are excluded from the effects of section 4(1)(d) of SI 33 of 2019.

Section 44C(2) of the principal Act (the Reserve Bank of Zimbabwe Act [Chapter 22:15] provides as follows:

“(2) For the avoidance of doubt, it is declared that the issuance of any electronic currency shall not affect or apply in respect of -

(a) Funds held in Nostro foreign currency accounts, which shall continue to be designated in such foreign currencies; and

(b) Foreign loans and foreign obligations in any foreign currency, which shall continue to be payable in such foreign currency.”

In Zambezi Gas Zimbabwe (Pvt) Ltd v N.R. Barber (Pvt) Ltd & Anor SC03-20 (Zambezi Gas), at p9, this Court concluded:

“In interpreting section 4(1)(d), regard should be had to assets and liabilities which existed immediately before the effective date of the promulgation of S.I.33/19. The value of the assets and liabilities should have been expressed in United States dollars immediately before 22 February 2019 for the provisions of section 4(1)(d) of SI33/19 to apply to them.

Section 4(1)(d) of S.I. 33/19 would not apply to assets and liabilities, the values of which were expressed in any foreign currency other than the United States dollar immediately before the effective date….,.

It is the assessment and expression of the value of assets and liabilities in United States dollars that matters.

Section 4(1)(d) of SI 33/19 is specific as to the type of assets and liabilities that are excluded from the reach of its provisions. The origin of the liabilities is not a criterion for exclusion….,.

What brings the asset or liability within the provisions of the statute is the fact that its value was expressed in United States dollars immediately before the effective date and did not fall within the class of assets and liabilities referred to in section 44C(2) of the Reserve Bank of Zimbabwe Act [Chapter 22:15] (“the principal Act)….,.”

It is without doubt, that, Zambezi Gas Zimbabwe (Pvt) Ltd v N R Barber (Pvt) Ltd & Anor SC03-20, having interpreted and clarified the law, the appellant can only succeed in this appeal if it can show, that, the loan agreement in casu is a foreign loan and that the court a quo therefore erred and misdirected itself in coming to a contrary conclusion.

The inescapable facts that the court a quo properly paid regard to are that the lender and the borrower in the loan agreement were both Zimbabweans, albeit an institution and an individual; the loan agreement was executed in Zimbabwe; the sole purpose of the loan was the purchase of an immovable property situated in Zimbabwe; the loan was largely disbursed in local currency, except for a small portion that was disbursed earlier in United States dollars at a time when the United States dollar was one of the legal tender currencies.

Sight is not lost to the fact, that, the above are factual findings made by the court a quo.

No irrationality was alleged or shown in the making of such findings. No specifics were provided as to the nature and source of the “generous” or 'wider' definition of “foreign loan” or 'foreign obligation' that the court a quo is criticised for not having had regard to.

The contention, that, the exchange control approval that was given by the Reserve Bank of Zimbabwe (RBZ) was proof that this was a foreign loan was not supported by documentary evidence. No explanation was proffered as to why the alleged document, which does not form part of the papers, was not relied on and availed by the appellant.

In any case, it is beyond the scope of the Reserve Bank of Zimbabwe (RBZ) to convert what is factually a domestic loan into a foreign loan.

In view of the strenuous submissions made in urging this Court to consider this aspect favourably for the appellant, this would appear to be an omission by the appellant of a crucial document.

It is trite, that, a court decides a matter on the basis of the evidence that is placed before it.

It therefore follows, that, the court a quo cannot be faulted for failing to take into account evidence that was not placed before it. The court a quo would face severe criticism if it had done so.

The court thus correctly found, that, the loan agreement was not a foreign loan and did not create a foreign obligation on the respondent's part.

In Breastplate Service (Private) Limited v Cambria Africa PLC SC66-20, at pp9-10, this Court stated:

“Section 44(C)(2)(b) of the Reserve Bank Act, as inserted by section 3(1) of the 2019 Regulations, makes it clear that the issuance of any electronic currency, i.e. RTGS dollars, shall not affect or apply to any foreign obligation. This is reinforced by section 4(1)(d) of the Regulations which explicitly excludes foreign obligations valued and expressed in United States dollars from the deemed parity valuation in RTGS dollars.”

With the factual finding made a quo, that, the loan agreement was not a foreign loan which created a foreign obligation, and the appellant having failed to show the error or misdirection therein, the appellant must accept and submit to the clear dictates of the law.

No basis having been established for this Court to upset the court a quo's findings and consequent conclusion, it is our view that this appeal has no merit.

The emphasis on motivating the appellant's second ground of appeal, and the submission that the first ground would only become relevant if the appellant succeeded on the second ground of appeal effectively translates to the above discourse sealing the appellant's fate.

Notably, it would also be absurd for the appellant to be paid United States dollars for a loan that it largely disbursed in local currency.

The argument that it must be so because the loan agreement stipulated that repayments were to be in United States dollars is a roundabout way of surreptitiously resorting to the first ground of appeal which the appellant clearly realized did not stand scrutiny.

Costs will follow the cause.

We are not satisfied that they should be on the scale of legal practitioner and client as urged by the respondent. In our view, there is no legal basis that has been given that would warrant an award of costs on a higher scale.

It is accordingly ordered as follows:

The appeal be and is hereby dismissed with costs.

This is an opposed chamber application for condonation of non-compliance with the rules and extension of time in which to appeal in terms of Rule 43(1) of the Supreme Court Rules 2018 (the rules).

The application was filed on 6 October 2021.

The applicant intends to appeal against the whole judgment of the High Court handed down on 12 December 2019 under HB196-19.

The following facts are largely common cause.

On 11 January 2019, the applicant signed an acknowledgment of debt in favour of the respondent in the sum of USD$384,177. The applicant undertook to pay the amount by 20 March 2019.

He failed to pay the debt.

The respondent issued summons against the applicant on the basis of the acknowledgement of debt.

On 12 December 2019, summary judgement was entered in the respondent's favour for payment of the sum of US$384,177 or its equivalent, with interest, at the prevailing interbank rate.

The applicant timeously noted an appeal against that judgment to this Court on 17 December 2019 under SCB48/19.

On 6 February 2020, the respondent was granted by the High Court leave to execute the summary judgment pending the appeal....,.

Leave to execute had in fact been granted unopposed.

On 13 March 2017, the plaintiff issued summons claiming against the defendants, jointly and severally, one paying the other to be absolved, payment of:

(a) US$368,706=62 being capital;
(b) US$20,654=10 being interest;
(c) Interest on the sum of US$368,706=62 at the rate of 18% per annum subject to change from time to time with effect from 26 of November 2016 to date of payment;
(d) Costs of suit on a legal practitioner and client scale and collection commission as provided for under the law society of Zimbawe by-laws (1982).

At the commencement of trial, on 27 August 2018, by consent of all the parties, the claim was amended in paragraph 16 of the declaration as follows:

(i) By the deletion of the Capital amount of US$368,706=62 and the substitution thereof with the amount of US$361,034=23.

(ii) By the deletion of the interest amount of US$20,654=10 and the substitution thereof with the amount US$28,246=49.

The total amount being claimed by the plaintiff coming up to US$389,362=72.

The plaintiff's claim, as amplified in the declaration, is premised on the following synopsis:

“9. In or about November 2015, at Harare, Plaintiff and first defendant entered into an agreement in terms of which plaintiff extended to first defendant a loan of US$373,000. The loan was accessed through first defendant's operating account.

10. Interest was to accrue on the facility at the rate of 12 per cent per annum subject to change from time to time, but, in the event of first defendant defaulting on making due and punctual payment of any installment, the arrears were to attract interest at the rate of 18 per cent per annum subject to change from time to time, further, first defendant agreed to pay bank charges regarding the administration of the account.

11. The loan advanced of US$373,000 was repayable to plaintiff as follows:

(a) US$2,000 on the 30 of November 2015;
(b) US$1,500 on the 30 of December 2015;
(c) US$2,000 on the 30 January 2016; and, thereafter, US$15,200 per month with effect from the 28 of February 2016 until full payment.

12. It was a term of the agreement that in the event of first defendant defaulting on making due and punctual payment of any instalment, the total outstanding amount thereunder would immediately become due and payable.

13….,.

14. Second, third, fourth, fifth, sixth and seventh defendants bound themselves jointly and severally as sureties and co-principal debtors with first defendant for payment of any and all monies due to plaintiff by first defendant.

15. On diverse occasions, defendants defaulted on making due and punctual payments under the agreement resulting in the total outstanding amount under the agreement, as at the fifth of November 2016, in the sum of US$389,360=72 falling due and payable on the 25th of November 2016.”

All the seven defendants deny that the amount of US$373,000 the plaintiff claims arises from the loan agreement.

The first defendant denies that it is liable to the plaintiff for the capital sum of US$361,034=23 (as amended), or at all, arising out of the loan agreement signed on 16 November 2015 because only US$350,000 in capital was actually lent and advanced to the first defendant and the entire capital debt was repaid in full on 30 December 2015 - less than two months after 16 November 2015.

The agreement terminated in sixty (60) days in terms of the loan or facility agreement.

And the agreement does not have a survival clause.

Paragraph 24 of the facility cancels all previous agreements and this meant that even the balance on the first defendant's account is not covered by the agreement in question.

The first defendant denies liability under the facility and contended that the plaintiff actually recovered more interest than was lawfully due to it.

The first defendant also denies liability for any legal costs as it does not owe the plaintiff any money under the facility in question, and, if the plaintiff is successful, it would only be entitled to normal costs.

The defendants contend that all the suretyship deeds are void for vagueness in that they cover unlimited liability. The liability under suretyship must contain a limit in monetary terms.

The defendants further challenge the validity of the suretyship for they were not all authorized by the second defendant's Board of Directors. The second defendant challenges the company resolution for having been signed by an incompetent company representative.

The acknowledgement of debt alluded to by the plaintiff is challenged by the first defendant because it was not typed by its representatives. Equally so, the resolution signed by Ms Blumears was a nullity, the second defendant avers.

The first defendant denies defaulting payment. It denies owing the plaintiff any amount and also deny being liable to payment of the plaintiff's claims.

On 30 May 2017, the defendants sought to amend their pleas.

They added, that, if at all, the first defendant was liable ex contractu the loan agreement of 16 November 2015, the first defendant will dispute the amount owing since provisionally, as at the end of 2016, the first defendant's credits against debits had brought the first defendant's debit balance to less than US$109,000.

The defendants further contend, that, either the purported acknowledgement of debt or the loan agreement, or both, contravene section 12 of the Money Lending and Rates of Interest Act and consequently invalid and unenforceable.

The second defendant further pleaded that its act of suretyship fails to comply with the requirements of section 12 of the Money Lending and Rates of Interest Act for an instrument of debt as defined in that Act and the purported act of suretyship is therefore of no force or effect as an instrument of debt.

The second defendant's act of suretyship had expired by reason of the effluxion of time, having been signed more than three years before the grant of the loan as claimed for; it was signed on 23 May 2012.

The second defendant further pleaded, that, neither of the mortgage bonds filed reflect that they were surety bonds for debts owing by the first defendant to the plaintiff and accordingly do not bind the second defendant to the plaintiff for this purpose. Further, the mortgage bonds filed amount to a disposal of the whole or a greater part of the second defendant's assets in the absence of formal approval of a general meeting of shareholders as required by the Companies Act, and, for that reason, they are of no force or effect.

It reiterated that the registration of the mortgage bond in favour of the plaintiff was not authorised by the second defendant and that the plaintiff, as lender, clearly over-reacted and unlawfully requested the mortgage bonds.

The third, fourth, fifth, sixth and seventh defendants challenged the suretyships and validity of the mortgage bonds and contravention of the Money Lending and Rates of Interest Act.

Some of the suretyships were also signed long back, in February 2011; they had expired, the defendants aver.

The defendants pray for the plaintiff's claim to be dismissed with costs.

Due to the invalidity of the suretyships alleged in the pleas, the defendants pray that their respective purported suretyships be declared null and void and of no force and effect.

The second defendant, in its counter-claim, also prays that the plaintiff be ordered to issue formal consent according to deeds registry requirements for the cancellation of mortgage bonds registration nos 1557/2013 and 1656/2013 allegedly passed by the second defendant in favour of the plaintiff, and, with the said documents of consent, to release to the second defendant the deeds of the said mortgage bonds and deed of transfer no.1998/1975 made in favour of the second defendant on 7 May 1975.

The third and fourth defendants further pray that the plaintiff be ordered to issue formal consent, according to deeds registry requirements, for the cancellation of mortgage bonds reg nos. 2416/2011 and 4889/2011 allegedly passed by the third and fourth defendants in favour of the plaintiff, and, with the said documents of consent, to release to the third and fourth defendants the deeds of the said mortgage bond and deed of transfer no. 8573/95 made in favour of the third and fourth defendants on 15 December 1995.

The defendants jointly further pray for costs of suit in respect of this claim in reconvention.

The plaintiff, in its plea to the defendants claim in reconvention, contends that the defendants executed open guarantees which are valid, lawful, and enforceable.

It further avers, that, the second defendant's suretyship was and is properly constituted and was extended premised upon a valid resolution by the defendant company.

The acknowledgement of debt was also properly executed by the first defendant and is valid.

The plaintiff added that due process was equally provided in the execution on the guarantee by the second defendant, and the plaintiff was unaware that the third and fourth defendant's daughter unlawfully signed the guarantee and does not admit same.

The plaintiff denies that its representatives interfered in the execution of the guarantee by the second defendant. It argues that the guarantee is hence valid and enforceable.

The plaintiff contends further, that, due process was followed in the registration of the two bonds.

According to the plaintiff, the second defendant's resolutions were made and powers of attorney issued. The bonds were properly registered and are valid. As a result, according to the plaintiff, there is no legal basis on which the second defendant's guarantee and mortgage bonds should be cancelled.

The plaintiff prays for the dismissal of the defendant's claim in reconvention with costs.

1. Whether or not the first defendant is indebted to the plaintiff in the sum of US$361,024 as capital and US$28,246=49 as interest under and in terms of the loan agreement signed by the parties and dated 2 November 2015.

2. Whether or not the second, third, fourth, fifth, sixth and seventh defendants are jointly and severally liable together with first the defendant for the capital and interest amount claimed under and in terms of their respective deeds of suretyship.

3. Whether or not the second defendant's first and second mortgage bonds numbers 1557/13 and 1655/13, in favour of the plaintiff, are valid and enforceable, and whether or not the said bonds be declared null and void and cancelled.

On 27 August 2018, the plaintiff opened its case by calling Cuthbert Gunundu. He is a university graduate holding a Bachelor of Business Studies, a Masters Degree in Business Administration, a holder of a diploma certificate in Institute of Bankers of Zimbabwe, and is employed by the plaintiff as an Account Relationship Manager.

He has been employed by the plaintiff since January 2008.

His job entails managing customers account, more particularly the customer's operating account, receiving credit applications for borrowing to assess credit worthiness of the borrower and make recommendations to the Credit Committee, to approve or reject a credit application.

Once a resolution to lend to the customer is made, he will monitor performance of that client's account to ensure that the borrower performs in line with the terms of the facility.

When there is a deviation by the borrower, the witness would make recommendations for call up or otherwise of the debt.

These are the major roles of his job.

He knows the first defendant as a long outstanding customer of the plaintiff. The second to seventh defendants are guarantors to the first defendant. He testified, that, since 2011, when he was assigned to manage the first defendant's account, the plaintiff demanded the requirement of guarantees to safeguard its moneys loaned out.

From 2011, the plaintiff received guarantees, in terms of security guarantees as well as mortgage bonds against the third and fourth defendants properties. The security guarantees proferred by the third and fourth defendants were for unlimited lifespans until the defendants have paid their debts in full.

In 2013, the witness told the court that the first defendant approached the plaintiff for further borrowing and the first defendant's directors were advised, by the plaintiff, that, the plaintiff would need further security. At that stage, the third defendant indicated that it had associates to cover and provide security for the debt.

Sometime in 2015, the first defendant submitted an application to get assistance from the plaintiff through a loan to pay off its existing debt.

At that stage, the witness stated that the first defendant had failed to meet its obligations.

The first defendant then approached the plaintiff to access a loan whose proceeds the first defendant would then use to pay off its existing debts. That fresh application, of 2015, culminated into a fresh loan agreement which is the agreement dated 2 November 2015.

As at the date of the loan agreement, the witness told the court that the first defendant owed the plaintiff a total of US$373,000.

The terms of that loan agreement was that the Bank had to be secured, and, in terms of clause 6 of the agreement, the security was already in the hands of the plaintiff.

As a result of the 2 November 2015 agreement, the plaintiff advanced a loan to the first defendant to pay off the debt, a loan draw down of $350,000; and, that amount was to pay off the first defendant's outstanding debt.

On 30 December 2015, the second entry on the bank statement shows that there was a loan repayment of $350,000 and the witness told the court that to the plaintiff it was a debit to show that it was a new loan account.

The witness denies that the first defendant repaid the amount on 30 December 2015; there was no settlement on the account.

The witness denied the assertion made by the defendants, that, the plaintiff had sued under the wrong agreement.

He further added, that, the first defendant was using its operating account.

The witness also explained, that, the customer signed an acknowledgment of debt cited on pp10-12 of the plaintiff's bundle of documents, p202 of the record of proceedings. The document, the witness said, was executed by the third defendant and did so on behalf of the first defendant. He added, that, although the loan agreement shows a figure of $373,000 and the acknowledgement of debt bears an amount of $377,299=70 the two (2) documents relate to the same transaction.

Asked by the plaintiff's lawyer to explain, the witness stated that by 6 November 2015 the first defendant owed the plaintiff $377,299=70, the facility letter dated 2 November 2015 showed $373,000, and the acknowledgement of debt, dated 16 November 2015, was the date the acknowledgment of debt was executed.

The acknowledgment of debt was sent to the first defendant on 31 October 2015, and, by that date, the amount due to the plaintiff from the first defendant was $377,299=20; from time to time, the first defendant was periodically depositing money into the operating account and this resulted in gradual reduction of the first defendant's obligation.

However, from 2 November 2015 the first defendant failed to meet its obligations.

The witness further explained to court, that, the defendants provided two forms of security, the guarantees and mortgage bonds, contained on pp67-69 of the plaintiff's bundles.

The second defendant executed it for registration.

In 2012, the borrower applied for an increase to its loan facility and that is when the security was made.

The witness insisted that all the documents were properly executed and the resolution on p69 of the bundle was authentic and valid.

Mr Gunundu was cross-examined by counsel for the first, third, fourth, fifth, sixth and seventh defendants and was put to task to explain the capital debt of $373,000 and the $361,024 and also $350,000 and he had difficulties to explicitly define such figures.

Tasked to explain why the plaintiff would write on its statement that the second entry on the statement of 30 December crediting the first defendant's account with an amount of $350,000, the witness stated that it was a “confirmation” of the loan advanced to the first defendant.

Further, under cross examination, the witness averred that the loan agreement of 2 November 2015 permitted the plaintiff to factor in the old debts.

Pressed to explain clause 12 of the facility letter, on p16 of the record; that clause 12 cancels and invalidates all previous agreements, the witness admitted that the plaintiff was bound by that clause.

He could not produce a letter or application to show that the first defendant applied to the plaintiff for a loan to facilitate funding an existing debt.

Commenting on clause 2 of the facility letter relating to “working capital requirements” he testified that a letter application for a loan to pay off existing debt includes or encapsulates working capital requirements.

He failed to explain precisely the purpose of the loan, he could not satisfactorily explain the purpose of $350,000 whether it was for settling previous debts or was for working capital requirements; if it was for payment of old debts, then, it ceased to be for working capital.

On the aspect of surety, he agreed that the surety agreements violated section 12 of the Money Lending and Rates of Interest Act [Chapter 14:14] but insisted that they are valid.

The defendants, after signing the 2 November 2015 loan agreement, did not provide securities to cover the new loan.

On the aspect of the in duplum rule schedule, the witness computed the figures starting from 1 October 2015 and did not commence on 2 November 2015. The calculation patently included past debts and recapitalised the interest and he could not answer the question put to him, whether it was not proper to calculate the figures with effect from the date of the new loan.

He denied that the amount due to the plaintiff is at least $108,000 however the entries on the bank statement were debited based on the new loan not on the old debts.

He also admitted that the acknowledgment of debt, on p9 of the plaintiff's bundles was prepared by the Bank using a blank form which is later completed by the customer and the customer provides handwritten information to an existing format and the figure on the acknowledgement of debt $377,499=70 was written by the plaintiff.

He had difficulties of explaining the signature on the acknowledgment of debt.

The witness was referred to p6 of the bundle by counsel for the second defendant and asked to comment on the aspect of the declaration by the plaintiff, that, the plaintiff's claim is based on the 2 November 2015 agreement and no other, and he agreed.

He agreed with the second defendant's defence lawyer that the whole cause of action is premised on the 2 November 2015 agreement.

He agrees further that the $350,000 was for working capital.

He could not, however, agree that on 30 December 2015 the first defendant paid off the borrowed $350,000 clearly acquitted by the narrative.

He confirmed that the 2 November 2015 agreement is a stand-alone agreement and cancels all previous facility letters.

On the security and mortgage bonds, he concurred with counsel for the second defendant, that, the amounts of $437,500 was not registered for the 2015 November loan agreement but were meant for loans for 2013.

The mortgage bonds were executed for the 2013 agreement not for the 2 November 2015 agreement.

There was no accompanying resolution by the second defendant authorising the third defendant to represent the second defendant in any capacity, yet the 2013 agreement was totally distinct from the 2015 loan agreement.

The resolution captured on p70, the resolution by the second defendant's directors, was prepared by the plaintiff Bank and it does not authorise a power of attorney to pass a mortgage bond. It also does not provide for registration of a continuing covering bond, nor does it identify any property which is going to be covered by the mortgage bond.

Relating to the causa of the mortgage bond, he admitted that the second defendant was not indebted to the plaintiff.

On p99 of the record, it is clear that the second defendant was not granted any loan by the plaintiff and the $375,000 was not loaned to the second defendant by the plaintiff.

On p105, the clauses on the surety bonds do not reflect the truth about the entire transactions, the witness confirmed under cross-examination, because it appears that the surety bond was passed by the debtor itself.

The witness does not know as to who signed the documents and was not there when such documents were signed.

He was at pains in marrying the documents prior to November 2015 with the 2015 loan agreement which is the cause of action for the plaintiff.

He sought to rely on the clauses of the mortgage bond which speak of continuing cover and failed to explain the practicality of clause 12 of the 2 November 2015 agreement.

The witness had difficulties to explain what transpired relating to figures and signature on documents and legality of the documents contained on the plaintiff's bundle.

He did not impress as a good witness, moreso when he was subjected to a protracted cross-examination by the defendants legal practitioners. He did not fare well in evidence in chief and under cross examination.

He did not know much, even on basic issues of practices and interpretation of a simple loan agreement.

If clause 12 of the loan agreement cancelled all past agreements, how can the witness resort to previous debts to calculate the capital debt?

How can the witness “confirm” a loan facility after a month from the date the loan was signed and then enter into its own books the inscription “loan repayment $350,000?”

The capital sum of $373,000 keeps changing and no comprehensive statement to explain that continuous change of figures was produced and no good explanation by the plaintiff's witnesses was proferred.

This court cannot prepare a contract for the parties, it will interpret what is on paper and draw conclusions from such.

The duty to clarify the terms of the agreement lies with the plaintiff through its witness; Mr Gunundu left a lot of issues hanging.

The second witness to be called by the plaintiff was Mr V.S. Nyangulu, a registered legal practitioner, a Conveyancer and Notary Public.

He was conveyancer in the registration of the second defendant's first and second mortgage bonds (numbers 1557/13 and 1655/13) in favour of the plaintiff.

According to the witness, valid and proper resolutions were passed authorising him to attend to the bond registration process which was executed by the second defendants representatives. He added, that, all due process was followed pertaining to the registration of the mortgage bonds and there is no legal basis for their setting aside.

The witness also pointed out, that, on instructions, the Bank would normally send an e-mail stating that it wants to have a bond registered by him; the Bank will forward the copy of the title deed then he prepares the relevant papers. He would then prepare a power of attorney to pass a bond, a resolution by the company borrower, and send the papers back to the client Bank via email.

The Bank will download the documents, print them out, and send to client borrower for signing.

After all the papers are signed, the Bank submits them, together with the requisite on original title deeds, to the conveyancer who then lodges them with the Registrar of Deeds.

He is the one who prepared and registered all the documents on p294 of the record and the one on p293. Otherwise, all the other processes were done by the plaintiff.

He is the one who prepared the power of attorney which he filed with the Registrar of Deeds, including the mortgage bond on p303. He also prepared the resolution accompanying the power of attorney.

He admitted that the documents before the court, attached to the plaintiff's bundle, are mortgage bonds and not surety mortgage bonds; however, they are relevant to the loan under consideration and they are a continuous cover, the borrower will continue to draw money from the lender, and, according to Mr V.S. Nyangulu, paragraph 2 of Schedule of the Mortgage Bond provides for a continuing cover.

After the witness evidence, counsel for the first, third, fourth, fifth, sixth and seventh defendants did not have questions to the witness.

Counsel for the second defendant questioned the witness about the legal requirements of a mortgage bond as well as surety bonds, more particularly on the aspect of the causa which can either be a loan or a surety.

The witness acknowledged, that, the causa on both documents was not accurately captured and admitted that once the causa is defective the entire document is a nullity.

He was also put to task on the authenticity or otherwise of a power of attorney and/or a resolution and again admitted that the documents before the court had shortcomings.

A power of attorney must accurately describe the causa and prepared by an authorised person for a specific purpose. The resolution of a company must be prepared and signed by the appropriate agents and Directors of the body corporate.

The power of attorney on p293, the witness admitted, was not authorised. He also admitted that the second defendant, as a company, cannot execute any document and has to do that via an agent by power of a resolution and name a natural person, and, the plaintiff has failed to prove all these essential elements.

He further acknowledged, that, the power of attorney on p293, which authorized to pass a mortgage bond in the sum of $375,000 becomes the causa to pass a mortgage bond and not to pass a surety mortgage bond.

On p302 of the record, the witness does not know the identity of the person who executed the document, and, the power of attorney at p293 does not pass the test of a valid document.

At p294, the mortgage bond itself on the causa, the identity of the debtor is not correct; one cannot be both surety and borrower.

On p295, the declaration, which is the basis of the acknowledgment of debt, is falsely stated. Both the declaration and the causa are incorrect.

The effect is that the documents are a nullity and also subsequently invalidates the mortgage bond.

The witness also admits, that, on p302 of the record, authority that is given to a legal practitioner to pass a mortgage bond and not a surety mortgage bond. He also admitted on p303 the debtor shown there is not the correct one. The same applies to the declaration on p309. Both are invalid. He finally admitted that the power of attorney had shortcomings that go to the root of the documents.

The effect of the cross examination completely resulted in the destruction of the mortgage bonds, surety bonds, and requisite powers of attorney to pass mortgage bonds, more particularly, relating to the 2 November 2015 loan agreement.

The plaintiff then closed its case.

The first and third to seventh defendants indicated that they wished to make an application for absolution for instance. The second defendant also made the same indications.

In their application for absolution the first and third to seventh defendants argue that the issues for determination in this mater are:

(i) Whether or not the plaintiff led sufficient evidence, on the face of it, to establish its case against the defendants in respect of the pleaded cause of action.

(ii) Whether or not the plaintiff's evidence prima facie established valid sureties and mortgage bonds for that pleaded cause of action.

The cause of action pleaded by the plaintiff, the defendants submitted, against the first defendant is that in or about November 2015, at Harare, the plaintiff and the first defendant entered into a loan agreement in terms of which the plaintiff loaned and advanced to the first defendant the amount of $373,000 through the first defendant's operating account with the plaintiff and that the first defendant defaulted on making due and punctual repayment in terms of the agreement resulting in the first defendant owing the total sum of $389,360=72 made up of the capital sum of $361,034=23 and interest of $28,246=49.

The cause of action against the second and seventh defendants was pleaded as arising out of them having bound themselves jointly and severally, as sureties and co-principal debtors with the first defendant for the due payment of any and all monies due to the plaintiff by the first defendant under the loan agreement.

The plaintiff attached to its summons a statement of account pleaded to reflect the transaction history of the loan account. That statement of account showed that on 15 November 2015 the plaintiff credited the first defendant's operating account with the amount of $350,000 described as “loan draw down” under reference number LD 1532 460482, and, further, on 30 December 2015 the operating account was credited with the same amount of $350,000 described as “payment of principal” under the same reference number LD 1532460482.

The defendants submit, that, the net effect of these entries was to restore the first defendant's previous overdrawn overdraft facility.

The plaintiff also attached copies of surety agreements with the third to seventh defendants all of which predated the pleaded loan agreement having been made:

(a) By third defendant on 25 February 2011;

(b) By fourth defendant on 25 February 2011;

(c) By fifth defendant on 25 February 2011;

(d) By sixth defendant on 25 February 2011;

(e) By seventh defendant on 25 February 2011;

Further, the plaintiff's cause of action against the third and fourth defendants, the plaintiff attached mortgage bond numbers 2416/2011 and 4889/2011, dated 19 April 2011 and 4 August 2011 respectively, by the third and fourth defendants against a property they co-own as a certain piece of land situate in the District of Salisbury, called Stand 7 Greencroft Township Ascot of Subdivision A and B of Mabelreign measuring 2392 square metres.

The respective mortgage bonds contain the same causa clause stating that “the Appearer” declared that whereas that mortgagors have been granted certain loan credit and/or other facilities by NMB Bank Limited in respect of the mortgage bonds.

The two mortgage bonds also contain the same declaration stating that “the Appearer hereby acknowledged the mortgages to be truly and lawfully indebted and held firmly bound into and on behalf of the Bank in the capital sum arising from and being money lent and advanced or to be lent and advanced or re-advanced.”

The defendants submitted, that, Cuthbert Gunundu contradicted in material respects the particulars of the plaintiff's claim as pleaded and as amplified by the documentary evidence attached to the summons and declaration.

Under cross-examination by the defence, the witness insisted that the loan agreement was not to finance the first defendant's working capital needs but to refinance existing indebtedness; he could not, however, produce the written application made by the first defendant to refinance existing debt.

To Mr Gunundu, the loan described in the agreement of 2 November 2015 as being to refund working capital requirements meant the same thing as the refinancing of existing debt, and, further, that the narration on 31 December 2015 (there was debit entry of payment of principal) was a mere confirmation of the loan amount which had been credited on 20 November 2015.

According to the defendants, the documentary evidence produced by the plaintiff shows that the loan amount was repaid and narrated as such on 31 December 2015.

The defendants further submitted that the 2 November 2015 loan agreement was repaid and what may be owed to the plaintiff, by the first defendant, may be from the old debt.

The defendants argued that the plaintiff is estopped from disputing that the loan advanced on 2 November 2015 was repaid on 31 December 2015 and cited cases for that submission.

Similarly, the plaintiff is estopped from disputing that the loan was for funding the first defendant's working capital requirements.

The defendants went on to argue, that, the plaintiff cannot claim the amount of $361,034=23 as capital arising out of the loan agreement of 2 November 2015 because only $350,000 was credited to the first defendant's account under the loan agreement and the rest of the amount up to $361,034=23 relates to monies advanced earlier in terms of prior credit facility agreements otherwise not pleaded as part of the plaintiff's cause of action.

The amount of $361,034=23 being claimed relates to money advanced earlier than 2 November 2015 in terms of some other agreements, which amount clearly includes both old capital and old interest in circumstances where the plaintiff has not provided the in duplum schedule relating to those agreements.

The defendants also argue, that, the acknowledgement of debt, dated 6 November 2015, does not take the plaintiff's case any further.

In the declaration, the plaintiff has not pleaded any cause of action founded on the acknowledgement of debt. Secondly, as an instrument of debt, the acknowledgement of debt does not bind the first defendant because no evidence was led as to any resolution of the first defendant authorizing the acknowledgement, the acknowledgement does not bear the name of any official of the first defendant authorised to execute it, and who so executed it, and the acknowledgement was not executed by any official of the first defendant authorised or otherwise as it does not bear any such official signatures.

As a result of the foregoing, the third to seventh defendants argue that the plaintiff has not managed to prove their liability to it of the principal debt given that their liability is pleaded and arising out of them having stood as surety to the first defendant's indebtedness.

As the application for absolution relates to the registration of continuing covering mortgage bond which was not outlined, the third to seventh defendants submitted that the plaintiff produced a Board resolution dated 21 May 2012 which allegedly authorized it to register a mortgage bond against the second defendants property; that authority was not for a continuing covering mortgage bond.

None of the defendants ever authorised the plaintiff to register a continuing covering mortgage bond. The plaintiff was only authorised, by the surety mortgage bond, to register just one surety mortgage bond in respect of the loan that was advanced to the first defendant in 2012 and not any time thereafter.

The plaintiff's purported rights, arising from the registration of a continuing mortgage loan that was not authorised, cannot be saved from the inevitable consequences of invalidity; the defendants argued and they cited Elsie v Johnson ZW SC49-17.

The sureties executed by the third to seventh defendants were all executed on 25 February 2011 in respect of some facility arrangement availed to the first defendant in 2011 but in respect of which the plaintiff gave absolutely no evidence.

The plaintiff seeks that these sureties be held to bind the third to seventh defendants in respect of the loan agreement of 2 November 2015.

The defendants argued, that, the surety agreements cannot found a valid cause of action against the third to seventh defendants on account of the fact that having been executed on 25 February 2011 the underlying indebtedness arising out of them, as of that date, prescribed three years after 25 February 2011, that is, on 25 February 2014 by virtue of section 15(d) of the Prescription Act [Chapter 8:11].

The fact that the surety agreements are invalid because they contravene section 12 of the Money Lending and Rates of Interest Act [Chapter 14:14] in that they did not state the amount actually lent to the borrower.

Thirdly, the fact that the plaintiff did not obtain the consent of the third to seventh defendants when the terms of the first defendants indebtedness were materially altered when the plaintiff and the first defendant entered into the loan agreement of 2 November 2015 which was materially different from the overdraft facilities in respect of which they were or equally given in 2011.

On the issue of mortgage bonds, the third to seventh defendants submitted that a mortgage bond which contains a false causa and a false declaration is invalid, of no force or effect, and unenforceable; they referred the court to MHISHI M.L a Guide to the Law and Practice of Conveyance in Zimbabwe, 2004…,.

Mr Nyangulu did not refer to mortgage bonds executed over the property of the third and fourth defendants.

However, the defendants urge the court to equally apply the principle of the law relevant to the third and fourth defendants property which were executed or registered by Mr Sobusa Gula Ndebele who was not called by the plaintiff to give evidence.

The third to seventh defendants contend, that, the mortgage bonds relied upon in respect of third and fourth defendants are the same as those relied upon as against the second defendant.

Both bonds contain false causa and false declaration since they state that they are for monies lent and advanced to the third and fourth defendants when it is common cause that no monies were lent and advanced by the plaintiff to the third and fourth defendants.

Hence, the third and fourth defendants are that the mortgage bonds that were registered by Mr Gula-Ndebele, at the behest of the plaintiff or in favour of the plaintiff, as against the third and fourth defendant's Mabelreign immovable property, are invalid and of no force or effect and unenforceable against the two defendants.

The bonds allegedly also contravene section 45 of the Deeds Registries Act [Chapter 20:05] in that even therein there are continuing bonds, the third and fourth defendants liability under each of them is uncapped.

In any event, the unlimited surertyship agreement from which they are founded is contrary to public policy for its attempt to provide an unlimited surety.

The first and third to seventh defendants pray for absolution and also pray for the cancellation of the two (2) mortgage bonds registered against their Mabelreign property.

The second defendant also applied for absolution, and, in addition, it prays for the grant of its counter claim at the close of the plaintiff's case on the basis that the facta probanda has been resolved in its favour at the close of the plaintiff's case, and, as such, the second defendant believes that there is no need for evidence to establish the same.

According to the second defendant, the plaintiff's evidence has established the following:

1. That there was resolution to pass a mortgage bond in respect of the first bond;

2. That both mortgage bonds are generally covering bonds as opposed to surety mortgage bonds;

3. That the causa is money lent and advanced;

4. That the plaintiff never in fact lent and advanced any money to the second defendant;

5. That the causa in respect of the bonds is in fact false; and

6. That one cannot be a surety for one's own debt.

The second defendant further added, that, the plaintiff relies on the mortgages. The plaintiff had the onus of establishing that the mortgages were complete and regular on the face thereof. An incident of this onus was the duty to begin. The plaintiff failed to discharge this onus, it meant that the only material before the court is the second defendant's admitted claim.

The second defendant prays for a judgment in its favour.

The second defendant associates itself with the first and third to seventh defendants facts laying the basis for the application for absolution, inclusive of the submissions made by the first and third to seventh defendants.

However, the second defendant added that the plaintiff's case is that it entered into a facility agreement. That agreement resulted in the first bond, which was intended to be a surety mortgage bond.

The truth, according to the second defendant, is that no surety mortgage bond was registered, but a continuing general covering bond predicated on money lent and advanced.

It is common cause that no money was lent and advanced. The plaintiff never related with the second defendant.

The plaintiff testified, that, the first arrangement was not honoured; the result was a refinancing agreement, but, from the evidence led by the plaintiff, it did not consult the second defendant on the plaintiff's own case, there was novation, but it was novation without recourse to the surety discharges, the surety, and all security.

In any event, the plaintiff admitted that a new arrangement came into place, it would therefore not sue on the old arrangement.

On the face of the documentary evidence, the money advanced to the principal debtor was paid off within just over a month of the advance. The second defendant contends that the net effect of the evidence on the principal debt and alleged sureties is:

(a) The agreement between the plaintiff and the principal debtor was novated;

(b) The plaintiff's claim had been compromised as between the plaintiff and the principal debtor;

(c) The obligations between the plaintiff and the principal debtor were materially and prejudicially altered;

(d) There was prejudicial extension of time within which to meet the alleged conditions of the contract as between the plaintiff and the principal debtor;

(e) There was prejudicial agreement not to enforce as between the plaintiff and the principal debtor.

A guarantee extends to the obligations which flow from the contract itself, the suretyship agreement could not apply to that new agreement - a novation by the agreement between the parties.

The plaintiff's claim was grounded on the fact, that, this novation agreement between the plaintiff and the principal debtor was not effected as desired, but, a novation releases the surety.

The plaintiff is opposing the application for absolution.

The plaintiff submits that its claim against the first defendant is based on a credit facility agreement dated 2 November 2015. The amount available under the agreement was not exceeded US$373,000 and the repayment made was provided.

The credit facility cancelled all the previous agreements between the plaintiff and the first defendant and is the only source of any obligations currently due to the plaintiff by the defendants.

The plaintiff further contends, that, the first defendant was indebted to the plaintiff from a previous facility at the time the agreement dated 2 November 2015 was executed.

Mr Gunundu told the court the facility was availed to the first defendant to settle the previous debt which was now due. The plaintiff cites clause 12 of the agreement (2 November 2015) which cancelled all previous agreements.

It argued, that, the defendants are estopped from alleging the existence of any other valid agreement apart from this one - the cause of action.

According to the plaintiff, the credit facility dated 2 November 2015 was executed to enable the first defendant to settle a previously existing debt.

On the issue of clauses 2 and 3 of the agreement which states that the facility is for working capital requirements, the plaintiff submitted, that, there is a standard definition of the term 'Working Capital Requirements'.

To the plaintiff, such a term includes debt refinancing; the debtor would be freed from the obligation of settling a debt at once, thereby releasing funds for working capital.

The plaintiff admits that it credited the first defendant's account with a sum of US$350,000 on 20 November 2015. These were the loan proceeds from the agreement dated 2 November 2015. The same account was debited with a sum of US$350,000 on 30 December 2015 under the narration of “payment of principal”. To the plaintiff, it was a confirmation of the loan and the first defendant's debt under the agreement dated 2 November 2015.

The plaintiff insists that it has established a case on what it can and should succeed. It moves the court to put the defendants to their defence and explain their offer of $108,000, $250,000 and $292,000.

The plaintiff also contend, that, the acknowledgment of debt is not the cause of action but was of requirement of 2 November 2015 agreement and the acknowledgment reflects that the first defendant's name signed off on the acknowledgment, it is witnessed, and the witnesses are known, the amount of debt is reflected. The third defendant (Rodney Gallaghan) has to explain why he signed off the acknowledgment by writing “Formscaff (Private) Limited” and the witnesses have to explain.

On the issue of the third to seventh defendants suretyship agreements, the plaintiff argued that even though the suretyships were executed in 2011 they all cover current and future debts, they cover unlimited amounts, and they have unlimited lifespan hence the suretyship agreements are valid and enforceable.

To the plaintiff, the issue of prescription does not arise at all and the date of execution does not matter.

The plaintiff adds, that, section 12 of the Money Lending and Rates of Interest Act does not apply to the suretyships; they are not instruments of debt.

The plaintiff dismisses the defendants suggestion by all sureties, that, they should be released from suretyships because there was a material variation of the principal obligation.

It says that this point was not pleaded by the defendants and thus should not be considered.

The plaintiff urges the court to put the defendants to their defence so as to explain the signatures on the powers of attorney; the plaintiff makes the same averments relating to powers of attorney and the resolutions.

It wants the defendants to explain as to who signed the documents and relies on section 12 of the Companies Act.

The plaintiff further contends, that, the defendants attack on the causa on the mortgages bonds is misplaced and insist that the mortgage bonds are valid, and, further, submit that it may not be necessary to state the cause of debt in a bond.

It argues, that, there was no contravention of section 45 or any other provision of the Deeds Registries Act.

The mortgage bonds are continuing covering security.

To the plaintiff, clause 2 of each bond provides for continuing cover for the second, third, and fourth defendants liability to the plaintiff however arising, whether directly or indirectly. That would cover the second, third, and fourth defendants suretyships and such cover is to the value of each bond.

As for the counterclaim in respect of the second, third, and fourth defendants, the plaintiff submitted that the counter-claim cannot be granted in the absence of the establishment of their cause; they have to give evidence.

As a result, the plaintiff prays that the application for absolution be dismissed with costs since it is frivolous and misplaced.

An application for absolution from the instance is akin to and stands on much the same footing as an application for discharge for an accused person at the close of the case for the prosecution: see Gasycoyne v Paul & Hunter 1917 TPD 17 at 173; Supreme Service Station (1969) (Pvt) Ltd v Fox and Goldridge (Pvt) Ltd 1971 (1) ZLR (A)…,.; Walker v Industrial Equity Ltd 1995 (1) ZLR 87 (S)…,.

In the case of Supreme Service Station (1969) (Pvt) Ltd v Fox and Goodridge (Pvt) Ltd 1971 (1) ZLR (A) the court summed up the test in the following terms:

“The test therefore boils down to this. Is there sufficient evidence on which a court might make a reasonable mistake and give judgment for the plaintiff? What is a reasonable mistake in any case must always be a question of fact and cannot be defined with any exactitude than by saying that it is the sort of mistake a reasonable court might make, a definition which helps not at all.”

See also Dube v Dube 2008 (1) ZLR 326 (H)…,.

In United Air Charters v Jarman 1994 (2) ZLR 341 (S)…, GUBBAY CJ stated:

“The test in deciding an application for absolution from the instance is well settled in this jurisdiction. A plaintiff will successfully withstand such an application at the close of his case, if there is evidence upon which a court directing its mind reasonably to such evidence, could or might (not should or ought to) find for him.”

See also Walker v Industrial Equity Ltd 1995 (1) ZLR 87 (S)…,.; Manyange v Mpofu and Ors 2011 (2) ZLR 87 (H)…,.

Given the summary and extraordinary nature of absolution from the instance, the court will, where possible, lean in favour of continuing the case and hearing the defendant's evidence rather than dismissing the plaintiff's claim: see Standard Chartered Finance Zimbabwe Ltd v Georgias & Anor 1998 (2) ZLR 547 (H)…,.; Bailey N.O. v Trinity Engineering (Pvt) Ltd & Ors 2002 (2) ZLR 484 (H)…,.; Nestros v Innscor Africa Ltd 2007 (2) ZLR 267 (H)…,.; Manyange v Mpofu and Ors 2011 (2) ZLR 87 (H)…,.

In MC Plumbing (Pvt) Ltd v Hualong Construction (Pvt) Ltd 2015 (1) ZLR 134 (H) CHIGUMBA J succinctly outlined the test for absolution thus:

“My interpretation of the test to be applied to the question of whether to grant absolution from the instance to a defendant at the close of plaintiff's case is as follows:

1. The first question to be considered is whether there is any evidence, at the close of the plaintiff's case, upon which a court, directing its mind reasonably to such evidence, could or might find for the plaintiff?

2. The second question to be asked is whether there are any special considerations or reasons why the court should reject the evidence adduced on behalf of the plaintiff (for example, glaring inconsistencies or unacceptable variance with the pleadings filed of record).

3. The third question that may be asked is whether the plaintiff has failed to adduce any evidence or adduce insufficient evidence to establish an essential element of its claim.

4. Lastly, whether an overall assessment of all the evidence adduced on behalf of the plaintiff, the pleadings filed of record, the annexures, the exhibits, all the discovered documents, coupled with the viva voce evidence, fall short of establishing the plaintiff's case on the face of it (prima facie).”

The issues for determination in this application for absolution from the instance are:

(a) Whether or not the plaintiff led sufficient evidence, on the face, to establish its case against the defendants in respect of the pleaded cause of action.

(b) Whether or not the plaintiff's evidence prima facie established valid sureties and mortgage bonds for that pleaded cause of action.

(c) Whether the defendants counterclaims succeed once the application for absolution from the instance is granted.

The cause action pleaded by the plaintiff against the first defendant, that, in or about November 2015, the plaintiff entered into a loan and advanced to the first defendant the amount of US$373,000 through the first defendant's operating account with the plaintiff, and, that, the first defendant defaulted in terms of the agreement resulting in the first defendant owing the total sum of $389,360=72 made up of the capital sum of $361,034=23 and interest of US$28,246=49.

As already paraphrased herein above in the foregoing, the cause of action against third to seventh defendants was pleaded by the plaintiff as arising out of the five of them having bound themselves jointly and severally, as sureties and co-principal debtors, with the first defendant for the due payment of any and all monies due to the plaintiff by the first defendant under the loan agreement.

The 2 November 2015 loan agreement provided that the loan was repayable over a three year period expiring on 31 January 2018; the first defendant liquidating the debt in monthly installments.

Central to the application by the defendants is the statement of account reflecting the transaction history of the loan account. On that statement, shows that on 15 November 2015 the plaintiff credited the first defendant's operating account with the amount of $350,000 described therein as “loan drawdown” and on 30 December 2015, the operating account was credited with the same amount of $350,000 described as “payment of principal” under the identical reference number LD1532460482.

The problem arises as to the purpose of the $350,000.

The plaintiff's star witness, Mr Gunundu, told the court that the facility was availed to the first defendant to settle the previous debt which was now due, and, to the plaintiff, this is legally permissible; it cited the case of Commercial Bank of Zimbabwe v MM Builders and Suppliers (Private) Limited & Ors 1996 (2) ZLR 421 at 466D-E where GILLESPIE J stated;

“This is not necessarily to say that the parties are unable, ex post facto, that is once the 'debt' is called up to agree a novation of the debt.

That is, for instance, to contract a new loan in terms of which money is advanced by the creditor in an amount of the outstanding capital and accrued interest, up to the double, in order to permit of the repayment of the outstanding indebtedness; this new debt would then be repayable on agreed terms. This would be a true capitalization of the interest on the previous debt. It is the practice of Merchant Banks.

It is in conformity with the old Roman agreement as to anticismus.

If concluded knowingly by freely contracting parties, when the existing debt is called up, I can see no objection to that.

Whereas, an agreement in advance to waive the rule leaves the debtor exposed to precisely those perceived evils which the rule is formulated to combat; a novation after the event permits the debtor the informed choice of increasing his possible indebtedness or of taking advantage of the cessation of accrual of interest.”

On page 422C–D of the headnote the following appears:

“On the question of bank overdrafts, it was argued, per the Bank, that the in duplum rule did not apply to overdrafts. The basis of the argument was that each cheque drawn against the overdraft facility was in effect a separate loan, as is every debt arising out of charges, ledger fees, commission and the like. Each such 'loan' was totalled daily and interest accrued on the outstanding amount. At the end of the month, the interest itself was added to the total indebtedness. The interest was itself thus a loan and thus effectively capital. Alternatively, because interest is capitalized monthly it loses its identity as interest and becomes capital.

This argument was rejected on the grounds that debits from interest cannot be regarded as loans to customers and are jurisprudentially quite distinct from debits for advances or charges.”

Counsel for the plaintiff, in citing the above case, equated its scenario with facts of this matter, more particularly relating to the 2 November 2015 agreement.

I do not agree to that comparison.

The 2 November 2015 loan agreement was not dealing with a novation. The 2 November 2015 agreement pertains to the sum of $350,000 for working capital. There is no capitalization of interest mentioned in the 2015 November agreement which would have justified comparison of this matter to Commercial Bank of Zimbabwe v MM Builders and Suppliers (Private) Limited & Ors 1996 (2) ZLR 421.

The comparison is misplaced.

If the 2 November 2015 agreement was dealing with capitalization of interest, the agreement should have contained clauses to that effect, and the amount of such interest would have been computed and the extent of capitalization specifically spelt out.

The cause of action by the plaintiff relates to $350,000 loaned to the first defendant on 2 November 2015 and interest of US$28,246=49 calculated from the date of the loan.

Why would the plaintiff claim further interest if the interest was capitalized on 2 November 2015?

On the debiting of $350,000 on 30 December 2015, under the narration of “payment of principal” Mr Gunundu for the plaintiff testified, that, that entry was not a payment by the first defendant but a confirmation of the loan and the first defendant's debt under the agreement dated 2 November 2015.

The plaintiff's replication to the defendants plea, on page 26 of the record, does not show that the entry of $350,000 in the plaintiff's statements is a confirmation of the loan; the word confirmation appeared for the first time during hearing, when Mr Gunundu was giving evidence.

The first defendant, in its plea, had pleaded that it had repaid $350,000 on 30 December 2015 and the plaintiff, in its wisdom, did not see the importance of addressing that averment in its replication.

Why would the plaintiff wait for a month plus other days to 'confirm' the first defendant's loan? Why wait until 30 December 2015?

The witness, Mr Gunundu, as already outlined in the summary of the plaintiff's evidence above, had difficulties to explain this aspect in examination in chief and during cross-examination.

If it was a confirmation, why did not the plaintiff, on its entry, write the word 'confirmation' than to write 'repayment' which when ordinarily looked at by a lay person would mean that the first defendant repaid the $350,000.

I am convinced by the first defendant's submission that it repaid the $350,000 and the plaintiff's own books of account or statement conspicuously confirms that payment which tallies with the first defendant's plea.

That payment was made barely two (2) months after the date of the agreement and there was no need for calculation of the cost of the loan in the form of interest charges.

I do not agree with the plaintiff's contention that it was just a credit entry.

In any case, the evidence of Mr Gunundu, on that aspect, left a lot to be asked especially when the court looks at the narration accompanying that entry as well as the ledger entry number LD/532460482 bearing the amount of $350,000.

The evidence adduced on behalf of the plaintiff, the pleadings filed of record, the annexures, the exhibits, the viva voce evidence, the highlighted inconsistencies, and contradictions in the testimony of Mr Gunundu, fall short of establishing the plaintiff's case on the face of it.

The plaintiff submitted, that, the third to seventh defendants executed surety agreements, binding themselves jointly and severally as sureties and co-principal debtors with the first defendant for payment of the first defendant's debts to the plaintiff.

The plaintiff admits, unreservedly, that the suretyships were all executed well before the 2 November 2015 agreement - that was in 2011; but, however, avers that the sureties covered current and future debts, they covered unlimited amounts, and have an unlimited lifespan. As such, they were all valid and enforceable.

To the plaintiff, it does not see the question of prescription arising at all.

In this matter, the plaintiff further argues, that, the principal obligations, the credit facility dated 2 November 2015, the debt, will fall due on 25 November 2016. It is also argued by the plaintiff that section 12 of the Money Lending and Rates of Interest Act [Chapter 14:14] does not apply.

The suretyships signed by the third to seventh defendants were executed before the 2 November 2015 loan agreement was entered into, they do not form an instrument of debt, and do not have to comply with section 12 of the Money Lending and Rates of Interest Act, the plaintiff submitted.

On the other hand, the first and third to seventh defendants submitted, that, the sureties were all executed on 25 February 2011 in respect of some facility arrangement availed to the first defendant in 2011 but in respect of which the plaintiff seeks that these sureties be held to bind the third to seventh defendants in respect of the loan agreement of 2 November 2015.

They raise prescription computed from 25 February 2011 and expiring on 25 February 2014 by virtue of section 15(d) of the Prescription Act.

The third to seventh defendants also raise the invalidity of the sureties because they contravene section 12 of the Money Lending and Rates of Interest Act which provides that:

“Section 12(1) Every instrument of debt, other than a mortgage bond or general covering bond executed within Zimbabwe in respect of a loan of money, shall separately and distinctly set forth:

(a) That it is executed for money lent; and

(b) The amount actually paid to the borrower; and

(c) The rate of interest which is to be charged in respect of the loan.”

Section 12(2) of the Money Lending and Rates of Interest Act makes it a criminal offence for non-compliance.

It is clear that the 2011 sureties do not relate to the 2015 loan agreement, and, the alleged 2011 sureties which the plaintiff seeks to rely on for the 2015 agreement do not apply.

The amounts covered in the sets of documents, the sureties, and the loan agreement do not match. The sureties do not have a corresponding applicable rate of interest. The essential term of the suretyships have to be identified, included in writing, and these include the nature of the debt to be secured, its extent, and, these have to be embodied in the document, which is the suretyship.

In this matter, such a document or covenant is the 2011 suretyship agreement signed by the third to seventh defendants which apparently existed well before the 2015 loan agreement.

I conclude, that, the 2011 suretyships, signed by the third to seventh defendants, do not relate to the 2015 loan agreement.

I am also persuaded by the third to seventh defendants argument that section 15(d) of the Prescription Act applies to the suretyships.

CF FORSYTH & J T PRETORIUS, in Caney's The Law of Suretyship, 6ed…, had this to say:

“Prescription of the principal debt will extinguish that debt and thereby release the surety, this follows from the principle that the suretyship is accessory to the principal debt and that after its extinction there is nothing to support the suretyship.”

There is no averment in the plaintiff's pleadings that the first defendant failed to pay the principal debt loaned to it in 2011 leading to the third to seventh defendants signing those contracts, and, that the alleged breach was cured by the first defendant in entering into a fresh loan facility in 2015 so as to have a continuing cover emanating from the 2011 suretyships.

A suretyship must be for a definite period laid upon conditions agreed upon by all the parties and not to be inferred from previous documents at the option of a creditor.

The plaintiff also confronted challenges on the aspect of mortgage bonds.

Mr Nyangulu, the second witness called by the plaintiff, was placed in an embarrassing position when he was asked to comment on the legal effect of a false causa or false declaration in a mortgage bond: see MHISHI M.L. A Guide to the Law and Practice of Conveyancing in Zimbabwe, 2004…,.

Mr Nyangulu gave testimony in respect of mortgage bonds he had executed over the property of the third and fourth defendants. Those that were registered by Mr Sobusa Gula-Ndebele, and that witness, was not called.

However, the mortgage bonds contain false causa and false declarations. They refer to money lent and advanced to the third and fourth defendants, yet, no such money was lent and advanced to the third and fourth defendants by the plaintiff; hence, the third and fourth defendants Mabelreign immovable property's mortgage bonds are invalid.

I am persuaded by the third and fourth defendants argument that they also contravene section 45 of the Deeds Registries Act in that neither of them is uncapped.

The unlimited suretyship agreement from which they are founded is contrary to public policy for its attempt to provide an unlimited surety.

The second defendant agrees with the submissions made by the first and third to seventh defendants on the validity and legality of the suretyships and the mortgage bonds.

I have considered all the submissions made by the defendants and I am persuaded by them.

I am convinced, that, even though the plaintiff argues that there was novation, which have already been dismissed, novation without recourse to the surety discharges the surety and all security.

In any case, the 2 November 2015 loan agreement, clause 12 thereto, provides cancellation of all previous facilities and does not put a proviso or otherwise relating to the previous suretyships and/or mortgage bonds.

The plaintiff admitted, that, a new arrangement came into place and the plaintiff could not sue on the old arrangement.

In any case, the plaintiff's claim had been compromised as between the plaintiff and the principal debtor, the obligations between the plaintiff and the principal debtor were materially and prejudicially altered. There was a prejudicial extension of time within which to meet the alleged conditions of the contract as between the plaintiff and the principal debtor, and, finally, there was a prejudicial agreement not to enforce as between the plaintiff and the principal debtor.

In the matter of Webb v Shell Zimbabwe (Pvt) Ltd 1982 (1) ZLR 102 (SC)…, the court held that however wide and general a guarantee may be, it only extends to the obligations which flow from the contract itself.

As such, the suretyship agreement could not apply to that new agreement which was, in essence, a novation of the agreement between the parties; having entered into this novated agreement, the old obligation and all accessories thereto were destroyed and it was not open to the plaintiff to try to go back to such obligation to hunt for a surety thereto.

The other criticism of the plaintiff covers the power of attorney to register the mortgage bonds, and, Mr Nyangulu admitted to the shortcomings and there is no need to revisit such.

I have also examined the arguments advanced by the defendants pertaining to the counterclaims.

With respect to the third and fourth defendants, they are praying for cancellation of the two mortgage bonds registered against their Mabelreign property, and, the second defendant submits that Rule 437 of the High Court of Zimbabwe Rules lays down the principles to be applied in determining which party in a civil trial shall adduce evidence first.

The second defendant also avers, that, if the plaintiff's claim is dismissed there is no need for evidence to establish the same.

The second defendant goes on to submit, that, there has been a direct admission of the cause of action; the effect of the admission is that the plaintiff (in reconvention) does not have to prove that which is admitted.

In the matter of Mining Industry Pension Fund v DAB Marketing (Pvt) Ltd SC25-12, MAKARAU JA said that:

“The importance of the admission is that it is thus seen as limiting or curtailing the procedures before the court, in that, where it is not withdrawn, it is binding on the court, and, in its face, the court cannot allow any party to lead or call for evidence to prove the facts that have been admitted.”

The second defendant was entitled to judgment upon the plaintiff's confession of its claim in evidence.

The plaintiff relies on the mortgages.

It had the onus of establishing that the mortgages were complete and regular on the face of them. An incident of this onus was the duty to begin. If it failed to discharge this onus, it meant that the only material before the court is the second defendant's admitted claim.

The second defendant would thus be entitled to judgment.

In Nkambule v Minister of Law and Order 1993 (1) SA 848…, it was stated that:

“In my view, the defendant did not discharge the onus resting on him. I would uphold the appeal with costs and amend the magistrate's order to read as follows: 'judgment is granted in favour of the plaintiff….,.'”

In Rabinowitz & Anor NNO v Ned Equity Insurance & Anor 1980 DFA 403…, the court said that:

“In my view, therefore, the first defendant did not discharge the onus of proving that the death was covered by the aviation endorsement; consequently, the plaintiff's entitled to judgment against the first defendant for the amount claimed.”

It is on this basis that the second defendant, as the plaintiff in reconvention, contends, that, its claim in reconvention is admitted and there is no need to lead evidence on matters that are admitted, and, as such, are common cause or cannot be seriously controverted.

On this point, the plaintiff submitted that the second, third, and fourth defendants have filed counterclaims which cannot be granted in the absence of the establishment of their case.

They have to give evidence.

The plaintiff opted not to cite any case law authority to counter what the defendant had submitted on the aspect of the necessity to call evidence of the plaintiff in reconvention where the defendant in reconvention has only admitted the shortcomings of the suretyships and the mortgage bonds.

Furthermoreso where the principal cause of action by the plaintiff in convention has been dismissed.

All the defendants have laid both factual and legal basis for their application for absolution and prayer for judgments on the counter-claim.

I am satisfied that the plaintiff sued on a cause of action that was discharged in full on 30 December 2015. The current claim is hence both invalid as well as excipiable. The claim was void ab initio.

The plaintiff contends that it has proved a prima facie case.

I do not agree.

A judgment cannot be granted on the basis of a claim and cause of action that ceased to exist.

When the loan arising from November 2015 agreement was fully paid on 30 December, the liability of the principal debtor, arising from that loan, was effectively discharged.

Where the principal debtor is discharged or released, then, the obligation of the surety ceased to exist because a contract of surety is accessory to the main contract: see Kilroe–Daley v Barclays National Bank [1984] ZASCA 90 1984 (4) JA 609…,.

Not even the argument that there was novation or a compromise of the loan agreement for which the suretyships were given can resurrect the plaintiff's dead case because novation or compromise discharges all sureties as well: see SW Adef (Pty) Ltd v Dyke N.O. 1978 (1) SA 9128…,.

In the matter of Gordon Lloyd Page & Associates v Rireira & Anor 2001 (1) SA 88 (SCA)…, it was stated:

“The test for absolution to be applied by a trial court at the end of plaintiff's case was formulated in Claude Neon Lights (SA) Ltd v Daniel 1976 (4) SA 403 (A) at 409G–H in these terms:

'When its absolution from the instance at the close of plaintiff's case, the test to be applied is not whether the evidence led by the plaintiff established what would finally be required to be established but whether there is evidence upon which a court, applying its mind reasonably to such evidence, could or might (not should or ought) find for the plaintiff….,.'

This implies, that, the plaintiff has to make out a prima facie case in the sense that the evidence relating to all elements of the claim…, to survive absolution because, without such evidence, no court could find for the plaintiff.”

Where the plaintiff has failed to prove a prima facie case against the defendants, on the basis of which the court could or might find for the plaintiff, there is no need to put the defendants on their defence.

There is nothing before the court that warrants the defendants being called upon to rebut.

1. The application for absolution from the instance made by the defendants succeeds with costs.

2. The suretyships in favour of the plaintiff entered into by the 1st, 2nd, 3rd, 4th, 5th, 6th and 7th defendants be and are hereby cancelled.

3. The mortgage bonds passed by the 2nd, 3rd and 4th defendants in favour of the plaintiff, namely, Numbers 2416/2011, 4889/2011, 1557/2013 and 1656/2013 be and are hereby cancelled.

4. The plaintiff to pay costs of counterclaim to the defendants on attorney-client scale.

On 11 March 2015, the High Court granted part of the claim sought by Valentine Ziswa and his wife Margaret Ziswa (the cross appellants) against Graeme Shaun Chadwick and Landos (Pvt) Ltd (the cross respondents).

The court a quo dismissed the claims of the cross-appellants as against the second cross-respondent in their entirety and granted part of the claims as against the first cross respondent.

The cross appellants seek a reversal of the dismissal orders issued a quo.

The order issued by the court a quo reads as follows:

“In the result, it is ordered that:

1. The plaintiffs claims against the second defendant are hereby dismissed with costs.

2. The plaintiffs claim (a) against the first defendant succeeds only in the sum of $8,808 which the first defendant is directed to pay the plaintiffs.

3(a) The plaintiffs claim (e) partially succeeds to the extent of the 4km LTC Electric cable while the rest is hereby dismissed.

(b) The first defendant shall pay to the plaintiffs the sum of $84,000 being the replacement value of the LTC electric cable removed from the plaintiffs farm.

4. The first defendant shall pay the plaintiffs the sum of $780 being value of labour hired to clear tobacco stalks and related expenses.

5. The plaintiffs claims (b), (c), (d), (f), (g), (j) and (l) are hereby dismissed.

6. Absolution from the instance is granted in respect of plaintiffs claims (h) and (k).

7. The plaintiffs shall pay 20% of the first defendant's costs of suit.”

The first cross appellant is Valentine Ziswa (Ziswa) while the second cross-appellant is his wife, Margaret Ziswa. I will cumulatively refer to them in this judgment as the lessor.

The first cross-respondent is Graham Shaun Chadwick (Chadwick) and the second cross-respondent is Landos (Pvt) Ltd (the Company).

Graham Shaun Chadwick was a director in Landos (Pvt) Ltd, which he also used as his special purpose vehicle or agent to conduct his farming operations on Ziswa Farm (the farm) and on three other surrounding farms, namely, Gijima, Kelvin, and Landos.

On 20 March 2015, Graham Shaun Chadwick filed a defective Notice of Appeal against the cross appellants, which did not indicate the part of the judgment he sought to impugn.

He, thereafter, filed a contested chamber application for condonation and extension of time within which to appeal on 11 January 2018, which was dismissed with costs on 21 March 2018.

The effective disposal of the main appeal in this manner left the cross appeal pending.

On or before 1 September 2008, Valentine Ziswa and Graham Shaun Chadwick entered into a verbal agreement for the lease of the farm and the inventoried equipment. The description, quantities, and state of the leased equipment was recorded in the comprehensive inventory the parties drew in October 2008.

The tobacco season in Zimbabwe generally runs from September to August and sales generally take place between March and June.

Graham Shaun Chadwick was on the farm during the 2008-2009, 2009-2010, 2010-2011, and 2011-2012 seasons (hereinafter called the first, second, third, and fourth seasons, respectively).

On 9 January 2009, Valentine Ziswa and Graham Shaun Chadwick signed a 10-year lease agreement.

On the same date, Valentine Ziswa and his wife (the First Partner) executed a second “Joint Venture Agreement” (JVA) with Graham Shaun Chadwick (Second Partner) for the “long term development” of the farm.

The two agreements were backdated to 1 September 2008.

Graham Shaun Chadwick not only leased the farm and the inventoried property, but, in addition, undertook to erect permanent structures (in each season) of an equivalent value to the seasonal rental payable.

In terms of clause 1 and clause 2, Graham Shaun Chadwick leased “the land, together with all buildings and other permanent improvements and certain immovables” for the ten year period from 1 September 2008 to 31 August 2018 for the purpose of growing “30ha of tobacco, 40ha of maize, 20ha of wheat and any other crop agreed between the parties.”

In terms of clause 3, the rental payable would be “6 per cent on the US$ of the gross turnover of the crops produced on the said land inclusive of bonuses and hailstorm insurances.”

In respect of tobacco, the rent was to be paid into the lessor's FCA by stop order raised at the auction floor, and cash payments were to be made in respect of other crops.

In addition to the rental, Graham Shaun Chadwick would, in terms of clause 4(d), be responsible for the repairs and maintenance of tractors and the inventoried equipment leased to him with effect from 1 September 2008.

Lastly, clause 9 stipulated that:

“This agreement constitutes the entire agreement between the parties, and no representation or undertakings given by one of them to the other of them prior to the execution hereof, and no variation of the conditions hereof, shall have any force or effect unless recorded in writing and executed by the parties hereof.” (The underlining covers the handwritten portions of the otherwise typeset agreement).

The Joint Venture Agreement (JVA) substantially duplicates the lease agreement. Clause 3 thereof reads as follows:

“3. The rent payable by the lessee to the lessor shall be 6 per cent per centum of the gross turnover in respect of the crops produced on the said land, and payment of such rent/lease shall be secured by means of STOP ORDER given by the lessee in favour of the Company against proceeds of tobacco sold through TOBACCO SALES FLOOR. Such PAYMENT shall be executed and registered as soon (sic) may be after the signing of this lease. 31 MARCH, 3 APRIL, 6 END OF JULY. MAIZE 1.5 TON MONTHLY.” (The underlined words and figures are handwritten)

It was common cause that the two agreements are complementary and separate and distinct. The requirements of the Joint Venture Agreement (JVA) were additional to the rental payable.

It was also common cause, that, Graham Shaun Chadwick was an active councillor for the Zimbabwe Tobacco Association (ZTA) for six (6) years and had been its Vice-President for another two (2) years.

He introduced the Zimbabwe Tobacco Association (ZTA) proforma lease and Joint Venture (JV) agreements, and, together with Valentine Ziswa, supplemented and annotated the terms and conditions therein by hand.

Graham Shaun Chadwick grew maize during the first season only and abandoned it in subsequent seasons in preference to the more lucrative tobacco crop. He never grew wheat on the farm.

Graham Shaun Chadwick did not abide by the direct deduction method prescribed in the agreements. He did not disclose to the lessor his prior preferential stop order obligations to the Zimbabwe Leaf Tobacco Company (Pvt) Ltd.

By 10 May 2010, Graham Shaun Chadwick had repaired a weir, put in a pump and generator, laid underground irrigation pipes, erected a centre pivot, paid for the labour for the reconstruction of a burnt down tobacco barn “maintained” all 14 barns by putting in place the necessary appurtenances for curing tobacco, repaired furnaces and sheds, and, at a cost of US$2,700 constructed 11 two roomed staff houses.

By letter dated 22 February 2011, Graham Shaun Chadwick offered to increase lease rental to 8%.

The offer was not accepted.

Instead, the lessor made the counter offer proposed in the detailed draft agreement, which the lessor signed on 13 March 2011.

The counter-offer was, in turn, rejected by Graham Shaun Chadwick.

Between 10 January 2012 and 18 May 2012, the parties failed to amicably resolve the lessor's demands for arrear rentals, maintenance of the leased equipment, and the repatriation of leased property that Graham Shaun Chadwick allegedly took to other farms.

In frustration at the impasse, the lessor sought to exercise a lien over the tobacco produce that was on the farm.

They were, by consent, interdicted by Graham Shaun Chadwick and Landos (Pvt) Ltd, on 24 May 2012 in case No. HC5477/12.

On 10 June 2012, the Ziswas instigated the arrest of Graham Shaun Chadwick for theft of some of the 2008 inventoried property. The complete police docket, compiled by Sergeant N'andu (IO), was produced by consent as exhibit 5.

Sergeant N'andu (the IO) first attended at the farm on 12 June 2012. On 19 June 2012, he conducted a verification or “exit” inventory with Valentine Ziswa and a proxy of Graham Shaun Chadwick, at the direction of the Area Public Prosecutor for Rusape (APP).

By letter dated 2 July 2012, Graham Shaun Chadwick cancelled the lease agreement and immediately vacated the farm.

On 5 September 2012, the Area Public Prosecutor for Rusape declined to prosecute, adjudging the criminal complaint to be a civil dispute.

On 26 September 2012, the lessor issued summons against the defendants claiming an aggregate sum of US$456,699 under 13 heads. These comprised of the following claims:

(a) Arrear rentals of US$64,160 for the fourth farming season;

(b) A refund of rates and levies of US$1,980 paid to the Makoni Rural District Council for the fourth farming season;

(c) The lessor's share of the hailstorm insurance proceeds of US$5,500 in respect of the second farming season;

(d) The outstanding developments for the first three farming seasons, represented by the value of the centre pivot that was removed from the farm, in the sum of US$67,507;

(e) Other enumerated property valued at US$187,707 that was also removed from the farm;

(f) The estimated damages to recovered property of US$15,905;

(g) US$7,600 for the damage to the fence and gates on the farm;

(h) US$15,008 for the repairs to the damaged tobacco barns and flue pipes;

(i) US$780 for removing the fourth season tobacco stalks;

(j) US$26,313 for vandalized overhead water storage tanks, pipes, workers houses, electrical underground cables, dams, pump unit, boreholes, and transformer;

(k) US$15,000 for maize deliveries contractually due to the lessor during the second to fourth farming seasons;

(l) US$4,240 for the tobacco seedlings grown on the farm and sold to other farmers;

(m) US$45,000 damages for loss of income in respect of the 2012/2013 tobacco cropping season caused by the premature and abrupt termination of the agreements.

The lessor made the following contentions:

The two agreements had separate and distinct obligations. Landos (Pvt) Ltd had a direct and substantial interest in the two agreements, and was, together with Graham Shaun Chadwick, therefore liable for the various contractual breaches that gave rise to the 13 claims.

The lessor's documentary and oral evidence established both liability and quantum in respect of claim (a), (d), (e), (f), (g), (h), (j), (k) and (l) at the higher rate of 8 per cent and not at the 6 per cent in the two agreements.

The lessor abandoned claim (m) and conceded that Graham Shaun Chadwick and Landos (Pvt) Ltd be absolved from the instance in respect of claims (b), (c) and (i) on the ground that the lessor had failed to established the due amounts.

Graham Shaun Chadwick conceded that the annotations formed part of the terms agreed by the parties on 9 January 2009.

Counsel for Graham Shaun Chadwick argued, that, the lessor failed to establish both liability and quantum.

He submitted, on the authority of Agricultural Finance Corporation v Pocock 1986 (2) ZLR 229 (S), that, the oral variation of the rental rate from 6 per cent to 8 per cent in violation of the non-variation clause (Clause 9 of both agreements) of the agreements was inefficacious and invalid.

He also relied on the twin principles of privity and sanctity of contracts enunciated in CHRISTIE: The Law of Contract in South Africa, 6th ed, 2010 Lexis Nexis…, to call for the dismissal of all the claims sought against Landos (Pvt) Ltd.

Counsel, however, conceded that Graham Shaun Chadwick was liable for unpaid rental of US$8,808 for the fourth season and US$36,000 for the LTC line [falling under claim (e)] and not the respective US$64,160 and US$84,000 sought by the lessor.

He further contended, that, as the lessor had failed to establish liability or where liability had been established, the quantum thereof in respect of claims (b), (c), (d), the remainder of (e), (f), (g), (h) and (j), the claims fell to be dismissed.

Counsel requested the court a quo to discard the evidence of the valuator for the reason that it was unconventional and unprofessional.

He argued, that, the valuation was in breach of the 'objective' and 'appreciable help' standards expected of expert evidence that are propounded in Stock v Stock 1981 (3) SA 1280 (A)…,; Gentiruco AG v Firestone SA (Pty) Ltd 1972 (1) SA 589 (A)…,; and Menday v Protea Assurance Co. Ltd 1976 (1) SA 565 (E)…, and articulated in SCHWIKKARD & Van der MERWE's Principles of Evidence, Juta 2009…,.

He, therefore, prayed for the dismissal of claims (d) (e), (f), (g), (h) and (j), which rested on the valuator's computations.

Counsel further contended, that, the claims ought to be dismissed for the further reason that the lessor had not amended the quantum to reflect the new amounts touted by the valuator some of which were higher than the individual breakdowns set out in annexures 2 and 3 to the summons.

The court a quo made the following findings:

The only effectual agreements were the lease and the Joint Venture agreements dated 9 January 2009 and not the draft agreement of 13 March 2011.

The operational rental rate was 6 per cent and not 8 per cent. This was because the offer of 22 February 2011 had not been accepted nor had the non-variation clause been invoked.

Valentine Ziswa was an inconsistent, unreliable, untruthful, and greedy witness.

He prevaricated on whether the tenure of the agreements was 5 years, 8 years, or 10 years and whether the rental rate was 6 per cent, 8 per cent, or 10 per cent.

He was greedy because he unjustifiably claimed for municipal imposts, maize deliveries, seedlings, and hailstorm insurance proceeds, which were all not covered by the two agreements. He also demanded for the value of the centre pivot, which he had categorically rejected as constituting a permanent structure.

The court a quo also excoriated the valuator for flaunting his professional qualifications and experience at the expense of conventional valuation principles. It, therefore, discarded his depreciated replacement cost computations.

Graham Shaun Chadwick, whose demeanour was highly extolled, was found to be a truthful, good, and reliable witness.

His status as an accomplished tobacco farmer with 20 years experience, and who exuded confidence and conceded where he was liable, endeared himself to the court a quo at the expense of Valentine Ziswa whose penchant for renting out instead of farming on his own account was deplored by the court.

Notwithstanding the contrary general findings on credibility of Valentine Ziswa and the valuator, the court a quo believed Valentine Ziswa's oral testimony on the US$780 claim on tobacco de-stalking and the chartered accountant's valuation of the LTC line. It, however, dismissed the rest of their evidence on the valuation of all the other claims. It further held that seedlings were not a crop as they could not be sold at the auction floors.

The court a quo dismissed the claims against Landos (Pvt) Ltd on the twin basis of lack of privity of contract and sanctity of contracts.

It held, that, these cardinal legal principles could not be negated by Graham Shaun Chadwick's directorship of the company, his use of the company's letterhead in correspondence with the lessor and bank account to effect payment of his lease obligations.

It issued the order that I adverted to at the commencement of this judgment.

Aggrieved by the order granted a quo, the lessor appealed to this Court on the following grounds:

“1. The court a quo erred in not finding that the reduction of part of the agreement between the parties to writing and the existence of the non-variation clause notwithstanding, on the entirety of the evidence before the court, the agreement between the parties consisted in part of the written portion and in part of the oral agreement sworn to by the cross appellants.

2. The court a quo erred, for the stronger reason, in not finding that the second cross respondent was privy to the whole of the agreement between the parties and in dismissing the claim against it.

3. The court a quo erred in its treatment of the evidence and assessment of the cross appellants claim with the result, that, the court misdirected itself in its gratuitous conclusions on the first cross-appellant's demeanour and motives culminating in the rejection of the cross-appellants claims on this flawed basis.

4. The court a quo erred in not finding that the rent for the use of the cross-appellants farm varied from 6 per cent to 8 per cent of the gross annual turnover realised on the farm.

5. The court a quo erred, in any event, in accepting the appellant's bare testimony that the sum of US$21,000 paid to the cross appellants was towards the rental for the 2011-12 season and in deducting the same from the rental due and owing to the cross appellants.

6. The court a quo erred in its treatment of the evidence in concluding, that, the claim for the tonnage of maize was not within the parameters of the agreement of the parties and in rejecting the cross-appellants testimony regarding the quantum thereof.

7. The court a quo erred in holding, that, the claims for the centre pivot and generator did not fall within the parameters of the developmental agreement.

8. The court a quo erred in holding that the seedlings produced on the cross appellants farm, but sold elsewhere, were not produce for the purposes of the parties agreement, and in rejecting the cross-appellants quantification thereof.

9. The court a quo erred in finding, as it did, that there was no evidence to substantiate the cross appellants claim (e) (property removed and not returned) and claim (g) (removed and/or damaged fences and gates) and in finding the property could have been unusable.

The court a quo erred, in any event, in dismissing the said claims as opposed to granting absolution from the instance.

10. The court a quo erred in rejecting the evidence of Pange purely on the basis that he had used one as opposed to three quotations which had been sourced by the cross-appellants, and had applied the general accounting depreciation formulae without a physical examination of the property in question.

11. The court a quo erred in not awarding the claim for the irrigation pump, which the appellant conceded in his evidence and offered to compensate for the same.

12. The court a quo erred in accepting as true the appellant's testimony based solely on the fact that he managed to impress the judge in terms of his demeanour.”

The cross-appellants sought the success of the cross appeal with costs, the amendment of the judgment a quo by granting, jointly and severally, the one paying the other to be absolved:

(i) Arrear rentals of $67,502=40 for the 2011-12 season (being 8 per cent of gross realization of US$843,780 from sale of 205,800kgs at US$4=10 per kg);

(ii) Alternatively, judgment in the sum of US$50,626=80 being 6 per cent of the above gross realisation;

(iii) Judgment in respect of claims (d), (f), (j) and (i);

(iv) Judgment for the reduced sum of US$364,729 as particularised in exhibit 3; and

(v) Costs of suit against the cross respondents.

The issues that arise from the grounds of appeal are the following:

1. Whether the variation clause was waived by the parties to the lease agreement.

2. Whether the second cross-respondent was liable to the lessor's claims.

(a) Rentals for the fourth season (a portion of claim (a)).

(b) The value of the developments in lieu of the Centre Pivot (claim (d)).

(c) Damages for missing equipment (including the irrigation diesel pump whose liability was conceded) (claim (e)) and for damaged property and equipment on the farm (claim (f)).

(d) Repairs to tobacco barns (claim (h)).

(e) Vandalized overhead water tanks, reservoirs, boreholes, and staff houses and their connecting pump unit, cables, electrics, and pipes claim (j).

(f) Maize deliveries due for the second to fourth seasons (claim (k)).

(g) Value of tobacco seedlings (claim (l)).

3. Whether or not the court a quo properly exercised its discretion in respect of costs.

At the onset of his submissions before this Court, counsel for the lessor abandoned claims (b), (c) and (g).

He persisted with the appeal against the dismissal of the entire claim against the company, the part dismissed in respect of claims (a) and (e), and the dismissals against claims (d), (f) (h), (j), (k) and (l).

Counsel for the lessor contended, that, the dismissal of the lessor's claims against Landos (Pvt) Ltd was erroneous.

He argued, that, the resolution passed by Landos (Pvt) Ltd, on 18 May 2012, authorising Graham Shaun Chadwick to “represent the company in any legal matter against Mr and Mrs Ziswa” before the institution of action proceedings on 26 September 2012, showed that it had a direct and substantial interest in the two agreements.

He further argued, that, the main credibility findings in favour of Graham Shaun Chadwick and against Valentine Ziswa, upon which the court a quo premised its dismissal of the lessor's claims were, on the totality of the adduced evidence, irrational.

He argued, that, notwithstanding the embodiment of the non-variation clause in the lease agreement, the lessor had, contrary to the finding a quo, established that Graham Shaun Chadwick had, by conduct, waived the lease rental rate from 6 per cent to 8 per cent on the second and subsequent seasons.

He further argued, that, the valuation testimony of the chartered accountant had proved the damages suffered by the lessor as at the date Graham Shaun Chadwick cancelled the agreements and vacated the farm.

Lastly, he contended that the costs order granted a quo constituted a patent failure in the exercise of discretion warranting interference by this Court.

Per contra, counsel for Graham Shaun Chadwick and Landos (Pvt) Ltd vehemently supported the impugned findings and conclusions of the court a quo.

He argued, that, the claims against Landos (Pvt) Ltd were rightly dismissed because it was not privy to the lease agreements.

He strongly contended, that, having acted as an agent, it could not be sued either separately or together with its principal.

He further contended, that, the non-variation clause precluded the lessor from relying on any variation derived from an oral agreement or on the offer to increase the rate to 8 per cent which they did not accept.

He submitted, that, an oral agreement could not waive a non-variation clause.

He further contended, that, the court a quo had not relied on the demeanour of the witnesses only but also on the inconsistencies that characterized the evidence of the lessor's star witness, Valentine Ziswa.

Lastly, he contended that the valuator's testimony was rightly discarded for being both unconventional and unprofessional.

Counsel impugned his competence on two bases:

(i) The first was that he had relied on the quotations availed to him by Valentine Ziswa without conducting a physical inspection of the equipment.

(ii) The second was that he had further relied on internet sites, that he failed to disclose, in ascertaining the life span of some of the equipment listed in exhibit 3.

The appellant claimed rentals for the fourth season in the sum of US$64,160 as constituting 8 per cent of the gross proceeds of the tobacco produced on the farm in that season.

The duty to establish the gross tobacco realization lay with the lessor.

In the lease agreement, Graham Shaun Chadwick undertook to pay through a stop order system based on the tobacco sales sheet issued at the auction floor.

He did not honour the stop order payment method.

He was therefore unfaithful to his undertaking and falsely asserted that he abided by his contractual undertakings.

The lessor produced the 15 sales sheets availed to him by Graham Shaun Chadwick.

They relate to three (3) auction floors and cover the period between 6 February 2012 and 19 March 2012. Each auction floor issued the sales sheets in sequential order. The last in sequence captures the total number of bales “sold to date” their tonnage, average US$ price per kg, both the gross and net realization as at that date.

In respect of Tian Ze auction floor, sales sheet No.13 dated 19 March 2012 was the last in sequence. The total bales sold as at that date were 798 weighing 85,648kg at an average price of US$4=31 realising a gross amount of US$369,261=37.

The last sales sheet issued by the Tobacco Sales Floor was No.27 issued on 22 March 2012. The comparative figures were 823 bales weighing 70,211kg sold at an average price of US$2=59 and grossing US$182,002=08.

The single sales sheet from the Zimbabwe Tobacco Leaf was dated 12 March 2012. A total of 66 bales weighing 6,517kg were sold at USD4=11 per kg for a gross total of USD26,813=55.

The total tonnage sold as at 27 March 2012 was 162,326kg.

The rental computed at 6 per cent would have been US$34,684=59 while the rental at 8 per cent would have been US$46,246=13.

However, the import of case No. HC5477/12 was that Graham Shaun Chadwick still had unsold tobacco on the farm.

The thumb suck figures provided from the witness stand by Graham Shaun Chadwick, of 135,000kg sold at US$3=67 were a “monstrous” lie.

When he testified, he had the correct figures issued at the close of the fourth season. He chose not to disclose them at his peril.

The undisputed testimony of Valentine Ziswa, that, Graham Shaun Chadwick's section manager, Kerstell Gentenbach, advised him that the records on the farm showed that as at 19 June 2012, a total of 225,000kg had been baled was, in the circumstances plausible.

Valentine Ziswa, however, computed the rental due to the lessor on estimates of 205,800kg sold at an average price of US$4=10.

On these figures, a rental of US$50,626=80 would have been due at 6 per cent while US$67,502=40 would have been due at 8 per cent.

The court a quo erroneously accepted that US$21,000 was paid in respect of the fourth season rentals.

The evidence showed, that, Graham Shaun Chadwick did not have a history of making payment from the stop order sales. He appeared to have paid towards the closure of the selling season.

It cannot be coincidental that he paid US$21,000 between February and April 2012 after receiving the lessor's demand for payment in an equivalent amount.

It is apparent that the US$21,000 was paid to defray the outstanding rentals for the 2010-2011 season that had been demanded by the lessor.

I find that the lessor was entitled to 8 per cent of the established gross realization equivalent to US$67,502=40. However, after accounting for the US$8,808 ordered a quo in respect of this claim, the appellant would be entitled to US$58,694=40.

In the circumstances, the fifth ground of appeal is upheld....,.

In his evidence in chief, under cross-examination, and in re-examination, Valentine Ziswa consistently asserted that his claim for the delivery of 50 tonnes of maize was based on the written agreements.

In each instance, he however failed to locate the maize delivery clause in each of the two agreements.

Conversely, Graham Shaun Chadwick denied liability for the delivery of the 50 tonnes of maize on the basis that the claim was not located in any of the two agreements.

He testified that he invariably delivered 12 tons of maize to the lessor out of the largesse of his heart during the second and subsequent seasons that he was on the farm.

He estimated that the agreed 40ha of maize would have yielded 200 tons of maize from which the lessor would have been entitled (at 6 per cent thereof) to 12 tons.

Graham Shaun Chadwick's testimony in this regard, however, unwittingly confirmed the truthfulness of Valentine Ziswa's testimony regarding the existence of the maize delivery agreement.

The delivery of a specific quantity of maize to the lessor, contrary to the denials of Graham Shaun Chadwick and the findings of the court a quo, is embodied in clause 3 of the Joint Venture Agreement.

In terms of that clause, Graham Shaun Chadwick agreed, and, was therefore obliged, to deliver to the lessor 1.5 tons of maize each month, constituting an aggregate quantity of 18 tons per season.

The failure by the court a quo to found liability on the basis of this clause constitutes a clear misdirection.

I, however, agree with the alternative finding of the court a quo, that, the lessor failed to establish the value of his loss.

I also agree with counsel for the lessor, that, in the circumstances, the court a quo should have absolved the defendant from the instance instead of dismissing the claim.

This position will be reflected in the order that will ensue....,.

In his testimony, Graham Shaun Chadwick conceded, that, tobacco seedlings were a crop grown on the farm.

The court a quo agreed with him, that, since seedlings that were disposed of to other farms could not be subjected to the stop order payment system, they were not the type of tobacco crop envisaged in the lease agreements.

It was common cause, that, tobacco stolen on the farm or destroyed by hailstorm would have been subject to the rental clause, as long as it was produced on the farm notwithstanding that it could not be sold on the auction floor.

By parity of reasoning, it is illogical to exclude seedlings merely because they could not be subjected to a direct deduction at the auction floor.

The underlying reason for the rental payment was the production of a crop on the farm.

The claim for seedlings nursed on the farm, but sold or donated elsewhere, did not exclude them from the reach of the agreement.

While liability was thus established, it is clear that the quantum due was not established.

Again, the court a quo ought to have absolved Graham Shaun Chadwick from the instance and not dismissed claim (l).

The eighth ground ought to partially succeed.

The first plaintiff is a farmer who owns Ziswa Farm (“the farm”) otherwise known as Farm 23 of Lawrencedale Estate in the District of Makoni, Rusape which farm he prefers to rent out while staying on it, as he currently rents it out to his neighbour, he having rented it out to the first defendant prior to that and yet to another person before the first defendant came in.

The second plaintiff is his wife, who, apart from the fact that she was cited as a party along with the first defendant in a joint venture agreement concluded between the couple and the first defendant, on 9 January 2009, has been cited in these proceedings in extremely unclear circumstances.

The first defendant is a commercial farmer, a tobacco grower of note, conducting such business generally at Landos Farm, Halfway House in Headlands and is a director of the second defendant, a duly incorporated company.

The plaintiffs instituted proceedings against the defendant, and, in their summons and declaration, they set out an array of claims, thirteen (13) in all, arising out of a lease agreement signed between the first plaintiff and the first defendant on 9 January 2009 on which date a second agreement titled “Memorandum of Joint Venture Agreement” was also signed between the first and second plaintiffs on the one hand and the first defendant on the other hand.

The plaintiffs averred, that, sometime in 2008 they had entered into a long term development lease agreement with the defendants for the use of the farm and that although the first defendant had signed as the tenant, the actual farming was done through the second defendant.

In terms of the lease agreement, the defendants were expected to put up and maintain infrastructure at the farm, like the construction of 44 houses for workers, dam, and barn construction.

The relationship between the parties deteriorated over time resulting in the defendants cancelling the lease agreement on 2 July 2012 before vacating the farm without notice.

The plaintiffs averred further, that, when the defendants vacated the farm they unlawfully removed certain items of property belonging to the plaintiffs valued at US$186,701 which amount they claimed.

The defendants badly damaged the plaintiffs property valued at $15,905.

They removed fences and gates as they vacated, whose value is $7,600.

During the tenancy, the defendants damaged four (4) barns which were falling at the time they left, while two (2) barns were badly cracked and supported by poles. This was in breach of the agreement of the parties requiring the defendants to keep the barns in good and perfect condition and to repair them to usable state when vacating.

The plaintiffs claimed $5,008 being the costs of repairing the barns.

In further breach of the agreement, the defendants left the farm without removing and destroying tobacco stalks from the land and seed beds which exercise the plaintiffs had to undertake at a cost of $780 including a fine paid to the Environmental Management Agency.

The plaintiffs claimed a sum of $26,313 being the value of their property and machinery including overhead water storage tank and pipes, workers houses, underground cables, water reservoir, cast iron pipes, pump unit, electricals at boreholes and at transformers.

The plaintiff averred further, that, in terms of the lease agreement, the defendants were obliged to deliver to them certain quantities of maize but failed to deliver 50 metric tonnes of maize worth $15,000 which amount the plaintiffs claimed.

They claimed a sum of $45,000 damages for loss of income for the 2012-2013 farming season they would have realised if the defendants had not prematurely terminated the lease agreement and without notice.

A sum of $64,160 was claimed for arrear rentals for the 2011-2012 tobacco crop, being 8% of the gross turnover in respect of crops produced at the farm in terms of the agreement given that 220,000kgs of tobacco were produced during that cropping season.

A sum of $1,980 refund of what the plaintiffs paid for rates and levies to Makoni Rural District Council was claimed, which should have been paid by the defendants in terms of the lease agreement.

The plaintiffs claimed $5,500 being their share of the hailstorm insurance claim made by the defendants to their insurers for the 2009-2010 and 2010-2012 seasons.

A sum of $67,506 was claimed as the value of a centre pivot and generator, which, although purchased by the defendants, they should have left at the farm for the plaintiffs benefit as part of the long term development of the plaintiffs farm.

They claimed $4,240 being 8% of the tobacco seedlings grown on their farm by the defendants.

The defendants have contested the claims, and, in their plea, they took issue with the citation of the second defendant as a party to the proceedings given that there was no agreement, of whatever nature, between the plaintiffs and the second defendant.

In respect of the first defendant, they averred that he complied with all the terms of his agreement with the plaintiffs and denied owing the plaintiffs any money.

The relationship between the parties suffered as a result of the plaintiff's endless interference with farming operations and peaceful enjoyment of the property resulting in a court order being sought and granted interdicting such interference.

The first defendant had to cancel the lease agreement after the plaintiffs had preferred false and malicious criminal charges against him.

The defendants averred that at the termination of the lease, a verification exercise was conducted by the parties which established that all the plaintiffs property had been accounted for, and, as such, none was removed or damaged.

In addition, the fact that the plaintiffs had forcibly taken possession of the farm and equipment, meant that the defendants could not be expected to account for the damage to any property during that period.

They denied vacating the farm secretly or removing fences and gates in the process, especially as the parties were aware of the termination and the defendants vacation of the farm. They denied vandalising any property and that the plaintiffs were entitled to any damages for loss of income.

The parties agreed on the issues for trial at the pretrial conference, which are captured in their joint pre-trial conference minute as:

(a) Whether there was an agreement between the parties as pleaded by the plaintiffs;

(b) Whether the defendants fully complied with the terms and conditions of the agreement;

(c) Whether some of the plaintiffs claims have prescribed, if so, which ones specifically; and

(d) Whether the plaintiffs are entitled to the claims set out in the summons.

Only the first plaintiff gave evidence while the second plaintiff chose not to. They also called witnesses, namely, Assistant Inspector Nixon N'andu, Canaan Nyamombe, and Fanuel Phange.

It was the evidence of the first plaintiff (Ziswa) that prior to the first defendant (Chadwick) approaching him in 2008 he had been leasing his farm to someone else, and that, after Chadwick left unceremoniously in July 2012, he again let out the farm to a neighbour of his, Mr Coleman of Mersy Farm, who, upon taking over, repaired the eight (8) barns which Chadwick had left in a falling condition.

Himself and Chadwick negotiated the lease agreement, which was reduced to writing; the latter having printed a standard form agreement obtained from the National Tobacco Association out of his computer.

He stated that they negotiated every clause, and, as they did so, they added annotations in long hand, which unfortunately were not initialled or counter-signed by the parties, although every page was initialled at the bottom.

After signing the lease agreement, they also prepared and signed a Joint Venture Agreement (JVA) at the instance of Chadwick who wanted it to be signed to protect the parties, given that politically leasing farms was unacceptable while joint venture agreements were tolerated.

As far as he was concerned, the real agreement between the parties was a lease and not a joint venture, which is why the Joint Venture Agreement (JVA) also spoke of a lease and rentals. He referred to both agreements which are part of exhibit 1.

Although both agreements were signed with Chadwick, the witness insisted that they were concluded with both Chadwick and the second defendant, Landos Farm (Pvt) Ltd (Landos) - a claim which is difficult to sustain given that Landos, as an incorporation, was not cited at all in both agreements.

He sought to hold Landos Farm (Pvt) Ltd liable because Chadwick introduced himself as its director and used its letterhead in correspondence.

Some payments were made by Landos.

His claim is based on both agreements.

He explained, that, while the written agreements were signed on 9 January 2009 he had already allowed the defendants to commence farming in August 2008 and that the written agreements only recorded what the parties had agreed.

It is significant that the lease agreement does not necessarily contain some of the necessary details, with the first clause omitting the name of the farm and its hectarage. It also omits the lease period and the date of commencement.

It only has the date of termination entered in pen.

On the various additions to the document, appended in barely legible ink, Ziswa said some were entered by himself while some were made by Chadwick as the two negotiated the terms of the agreement.

The lease provides, in clause 2, that the land was leased for purposes of growing tobacco on 30 hectares, maize on 40 hectares, 20 hectares of wheat or another crop agreed between the parties.

Ziswa said, practically, Chadwick only grew maize during the first year and did not do so for the remainder of the time he was on the farm, electing to concentrate on tobacco farming. He never grew wheat or any other crop for that matter.

The payment of rent is provided for in clause 3 which reads:

“The rent payable by the Lessee to the Lessor shall be 6% on the US$ of the gross turnover in respect of the crops produced on the said land, and, payment of such rent/lease shall be secured by means of direct payment into a FCA given by the lessee in favour of the Company against proceeds of tobacco sold through the Lessee's contract, and, in the case of other such as maize/wheat in equivalue (sic) it shall be executed and registered as soon as may be after the signing of this lease. An advance payment shall be discussed if necessary.”

Despite this provision, Ziswa testified that his claim was for 8% of the gross turnover which he justified by reference to a letter written by Chadwick, on a Landos letterhead, on 22 February 2011, which reads:

“Dear Mr Ziswa

I am writing to present my offer on the subject stated above. I am hoping my proposal will be acceptable to you and will be effective for the next three seasons.

I am proposing that I pay you 8% of the gross realisation from the tobacco sales as my joint venture offer. This will be for the sole use of your whole farm.

Please consider that this is the best that I can do. May I refer you to the cost of production document that I sent you earlier on. If I go beyond this offer, the whole enterprise ceases to be viable. I believe this offer presents a win win situation for both parties.

This really is the best that I can do. May you please inform me of your decision by or before 15 March so as to enable me to make preparations for the coming season.

Yours faithfully

Greame Chadwick”…,.

Although Ziswa said he accepted the offer, he did not say when and how this was done.

He did not produce any document of acceptance, neither did he expand on where the acceptance was communicated to Chadwick.

This gives credence to Chadwick's argument, that, his offer was never accepted and that the 6% contained in the lease agreement remained in force.

It is noteworthy that Chadwick appeared to have been writing in his personal capacity even though he used Landos's letterhead.

Ziswa said that the lease was to subsist for an initial period of 5 years but they then “moved to 8 years” and that it was “a developmental lease agreement” enjoining Chadwick to embark on improvements of a permanent nature on the farm, like the construction of dams, staff housing, improving barns and other infrastructural development.

He never did, except for the construction of 11 staff houses out of an agreed total of 44 houses. Even the 11 constructed were not completed. He only repaired one barn which had been burnt down prior to the commencement of the lease. Even in respect of that one, the parties did it together, with Ziswa providing the bricks. Chadwick, however, left the barns falling and supported by poles.

He said the failure to insert the lease period on the agreement was an oversight. So was the failure to insert the name of the leased farm and the date of commencement of the lease, but, it was 1 September 2008 while termination was at the end of August 2018 at the completion of 10 years.

It turns out it was not 5 years, neither was it 8 years, but, Ziswa did not explain when the lease period changed to 10 years.

He stated, that, at the commencement of the lease, they were to hand over to Chadwick their assets located at that farm which the latter was to use for his farming activities.

In that regard, and in the process of identifying and handing over those assets, they produced an inventory at entry point listing these assets. He made reference to p20 to 26 of exhibit 1, the inventory in question, saying all the listed assets were handed over in good working order.

The inventory has a column with the title “Quantity” which he says is where they endorsed not only the quantity of the items involved but also the condition of the items so that if the item was not in good order that would be stated in that column. The fact that there would be no comment on an item meant that it was in good order.

A look at that inventory shows only a couple of comments.

The first relates to diesel tanks with the comment “on stand”. The second relates to an MF tractor with the comments “1 No Wheels.” Other than the description of the disc harrow as “1 red in colour” nothing supports Ziswa's claims on the condition of the items whose state was not given throughout.

Both parties kept their copy of the inventory.

Ziswa went on to say, that, although most of his claims are not based on the written agreements, they had a lot of discussions which resulted in agreements not reduced to writing.

As far as he is concerned, a verbal agreement is also binding. He referred, in that regard, to the agreement on the construction of dams.

After going through the list of items which he said were handed over to Chadwick, including what he said were new “flue pipes not fitted to the barns but kept at the sheds” as well as his own stock of fertilisers not for use by Chadwick, Ziswa went on to say that the tenant had taken over the items and grew tobacco for four (4) years with him being paid due rentals for 2009, 2010, and 2011. He was however not paid anything for the last year the tenant was at the farm, which is 2012.

The claim for arrear rent therefore relates to the 2011 to 2012 tobacco growing season.

In arriving at the 8% of the tobacco produced for that season (as opposed to 6% stated in the agreement), he had to estimate using the sale sheets of Landos which he obtained.

He went through those sale sheets stating that he had to resort to estimation because the tenant did not give him the information.

Based on the sale sheets, and the other information on the tobacco that was produced, they computed that 220,000kgs of tobacco was sold during that year and his 8% of it is the sum of $64,160 being claimed as arrear rental for the 2011-2012 growing season.

When the plaintiffs wrote a letter of demand to Chadwick, on 23 July 2012, they stated that 205,800kgs of tobacco had been realized at the farm during that period, which had been sold at $4=10 per kg giving a gross of $843,780. They were entitled to 10% of it which is $84,378.

It is not clear where 10% cropped up from, but, they claimed it all the same.

In their summons, the claim was reduced to 8% of the gross turnover estimated at 220,000kgs giving the $64,160 being claimed.

Ziswa stated, that, in terms of the parties agreement, the tenant was obliged to pay rates and levies due to Makoni Rural District Council which, for the year 2011-2012, was $1,980. As the tenant did not pay in January 2012, he was forced to pay on their behalf. He would like to be reimbursed that amount.

He stated, that, although he received a receipt upon payment, he was unable to produce it.

In support of his claim, that the tenant was obliged to pay rates, Ziswa made reference to a letter written by Chadwick, again on the Landos letterhead, on 9 November 2010, which reads, in relevant part, as follows:

“Dear Mr Ziswa

1. Landos Farm agrees to make a payment of: $1,440 (that had been paid for rates); $750 (for 50 cords of wood @ $15); $350 (barn fire); Total 2,540.

The money will be paid in on Wednesday the 10th of November 2010. The proof of payment will be on the farm on Thursday the 14th of November 2010 as well as for you to collect.”

Unfortunately, Ziswa did not see the need to produce the letter of 5 November 2010 which was being responded to.

He however maintained that the payment of rates was the responsibility of the tenant - even though the lease agreement had no such provision.

In respect of the claim for $5,500, Ziswa stated that the tenant was obliged to insure the tobacco crop against hailstorm destruction. In the event that the tobacco crop is destroyed by hailstorm, the insurer would pay for it.

Hailstorm destroyed the tobacco crop and the tenant claimed from his insurance and was paid, but he did not transmit to him 8% share due in terms of the lease agreement. He is entitled to a percentage of the gross turnover and would also be entitled to the same percentage of insurance payment made for destroyed crops. He is not aware of the exact amount involved because Chadwick refused to give him the figures.

He has had to estimate the figure based on the investigations which he carried out involving his discussions with the employees of the insurer who came to the farm for an inspection.

He did not disclose what those investigations revealed, only stating that he estimated the figure based on his experience and the damage he observed on the crop - an explanation not helpful at all.

Asked as to why the claim for hailstorm insurance, involving a 2009-2010 crop, would be made by summons served on 26 November 2012, outside the prescriptive period of three (3) years, Ziswa dithered.

He then said that “in the heat of things” there was a typing error in the summons because his hailstorm claim is for the 2011-2012 cropping season and not 2009-2010 claimed in the summons.

Significantly, no attempt was made to amend the pleadings.

Pressed by counsel on how he could possibly justify a claim in which he had no figure, Ziswa offered to withdraw the hailstorm claim accepting that it could not be proved.

In respect of the claim for the replacement value of the centre pivot and generator, Ziswa had a difficult time indeed.

He said that the tenant had purchased these movable assets and brought them to the farm for use during the tenure of the lease. He had, however, taken them away at the end. As far as he is concerned, these items fall under the long term development provision of the parties agreement, meaning that they should accrue to the farm. As such, they should be returned or their value paid.

As to how such items should qualify for permanent improvements, he could not explain.

His problems were compounded by the fact, that, he had, through a letter written on his behalf by his legal practitioners, on 12 April 2012, written to Chadwick, stated in part that:

“Of essence, the agreement was that of long term development partnership in terms of which you are obliged to undertake permanent structural development on the farm, such as construction and other infrastructure development. We have noted with concern that you have failed to meet your side of the bargain. You undertook to built (sic) 44 houses for the workers, however, only 11 have been constructed to date. You have bought a centre pivot for irrigation. However, it does not qualify as long term development because it depreciates in value. Also, there is a huge list of farm equipment that has broken down which you have not bothered to repair.”

There you have it.

The plaintiffs themselves did not regard the centre pivot as a long term developmental addition, and, by any stretch of the imagination, the generator cannot be said to be either.

The plaintiffs themselves understood long term to apply to construction of workers houses, dam, and barn construction, and other infrastructural development.

Nothing more needs to be said about that.

On the value of the property either allegedly removed from the farm and not returned, or those damaged by the tenant and not repaired, Ziswa reiterated that all the property given to the tenant, at commencement, was not only usable but also in good working order.

He pointed out, that, at no time did they make life difficult for the tenant because he had free access to the farm at all times and had guards looking after the farm.

It was only after he discovered that they were removing his property from the farm and refusing to return it, and failing to pay to him what was due in terms of the agreement, that he moved in with three (3) of his own guards and closed the barns to prevent the tenant from removing any tobacco produce.

The tenant removed an electricity line running from the first to the second dam, wires and poles were all removed. The implements listed in the pleadings were also removed, including underground pipes.

He produced exhibit 2, an album of photographs showing the state of some of the items which had been given to the tenant at the commencement of the lease agreement. The photographs were taken by his wife, the second plaintiff, and their legal practitioner, in the presence of police inspector N'andu at the time that the defendants vacated the farm.

Unfortunately, none of the photographs depicts the appearance of any of the items at the commencement of the lease agreement, and would, naturally, be unhelpful standing on their own, for comparison.

Ziswa stated, that, Chadwick had used most of his equipment during the lease but broke down most of them with some of the damage being inflicted deliberately.

For more than two (2) years, Chadwick had not repaired the damaged equipment.

He made reference to a list of items, p15 of exhibit 1, which he said was property stolen and removed from the farm, and another list, p18, which he said was property removed and returned in a damaged state.

Although in the summons he was claiming sums of $187,707 as the value of the property removed and not returned, $15,905 as the value of property removed and returned in a damaged state, $7,600 as the value of fences and gates removed or badly damaged by the tenant, and $15,008 being the cost of repairing the damaged tobacco barns, Ziswa said he has since seen the light.

He now realizes that he cannot sustain those claims given that the items involved were not new at the time the tenant took them.

He is therefore not claiming the values contained in the summons but would now defer to the testimony of an expert witness, Fanuel Phange, an accountant who penned exhibits 3 and 3a representing the depreciated values of all the items involved.

He said that he is the one who gave Phange the list of all the items involved and their description. He used the original inventory to do so. He gave Phange the quantities and the quotations for the cost of each unit, which he had sourced himself.

With all that information, he instructed Phange to depreciate the values of the items using international accounting standards. He did, and came up with a grand total of $385,943 which he now craves.

On the claim for $708 for labour hired to clear tobacco stalks from the fields and seed beds, as well as the penalty paid to the Environmental Management Agency (EMA), Ziswa said he hired 10 or 15 casual workers at $4 a day for one week. He hired a tractor for $200, bought diesel for $150 and paid a fine of $150 to EMA.

He could not properly break it down.

If he hired 10 workers for 7 days (assuming that is the number of days as opposed to 5 working days), he would have paid each one of them $28 per week and all of them $280. If he hired 15, the figure would be much higher by $140 meaning he paid $420. Working on the lesser figure, he would have paid $780 under this head. The higher figure would yield a total of $920.

Ziswa said, in terms of the parties agreement, which again is not captured in the written lease and Joint Venture Agreement (JVA), the tenant owes him 50 metric tonnes of maize.

They had agreed that Chadwick would deliver to him 18 tonnes of maize in the first year, 12 tonnes the second year and then moving to 18 tonnes annually from the maize he was required to grow at the farm. He therefore owes 50 metric tonnes valued at $15,000.

In arriving at the value, he inquired from GMB what the value of the maize was, and was told that it was $300 per tonne adding to $15,000 he is claiming.

Again, he does not have a quotation to support the claim.

Ziswa testified, that, during the final year that the tenant occupied his farm, he had grown tobacco seedlings at the farm. He used these seedlings to grow the main crop of tobacco from which he is claiming a share. Chadwick also took some of the seedlings to his other farms and sold some to unnamed individuals in unknown quantities.

According to him, seedlings constitute a crop, and, as the agreement stated that he was entitled to a percentage of the crop grown at his farm, he was therefore entitled to 8% of all the seedlings not used to grow the main crop at the farm.

He stated, that, he had established that seedlings were sold for $200 during the 2011-2012 cropping season. He counted the number of seed beds at the farm over and above what was required at the farm to come up with a claim that would turn William Shakespeare's Shylock “The Merchant of Venice” very green with envy.

Regrettably, he did not tell us what amount of seedlings were required at the farm, how many seed beds were there, how the figure claimed is arrived at, and, more importantly, how “the young one” of a tobacco crop could qualify for a crop and found a basis for a monetary claim.

He however conceded, that, prior to the 2011-2012 season he had not been paid for seedlings and had not submitted a claim, stating that in previous seasons he had not asked for payment for seedlings because relations had not soured.

It is therefore a claim not based on the agreement, but clearly actuated by malice and a strong desire to claim virtually everything, especially considering that the initial claim under this head was $10,200 made in the letter of demand, which was pruned down to the $4,240 now being claimed.

The final claim of $45,000 for loss of income and damages allegedly sustained as a result of the premature termination of the lease, was withdrawn by Ziswa in his evidence in chief.

He said after consultation with his lawyers, he has decided to abandon that claim because he “wants this claim to be clean on things damaged and money not paid.”

It is a concession properly made in light of the abundance of evidence, including a court order granted by this court, by consent, pointing to interference with farming activities by the plaintiffs which led to the termination of the lease.

Under crosss examination, Ziswa conceded that the lease agreement that he relies upon contains a non-variation clause. Clause 9 reads:

“This agreement constitutes the entire agreement between the parties and no representation or undertakings given by one of them to the other of them prior to the execution hereof, and no variation of the conditions hereof, shall have any force or effect unless recorded in writing and executed by the parties hereof.”

The provision itself admits of no other interpretation but what it states, and Ziswa conceded as much.

He also admitted that he tried hard to get Chadwick to sign an improved lease agreement during the tenure of the lease, without success, and that the one signed on 9 January 2009 remained effectual throughout, governing the relationship between the parties.

He also conceded, that, he was paid a sum of about $21,000 in 2012 being rent due to him, although he was of the view that such payment was for arrears that had accrued during the 2010/11 cropping season, forgetting of course that in his evidence in chief he had said that he had been paid all his dues for all the years except the 2011-12 season.

Ziswa also admitted, under cross-examination, that Chadwick had brought his own equipment which he used at the farm and that he repaired a barn that had been burnt down, among other improvements at the farm.

When confronted about other improvements effected by Chadwick, he became evasive, only saying he could not remember some of them.

Valentine Ziswa did not make a good witness at all. His demeanour was extremely bad and he was given to wild exaggerations of his claims. He struck me as someone actuated by an improper motive and determined to maximise on what he can recover from the tenant at all costs, thereby reducing the claim to ridiculous levels. He just tried too hard.

A few examples should suffice.

He prevaricated a lot on the duration of the lease agreement and the level of his percentage share of the gross turnover. He is the same witness who testified that the lease agreement was for 5 years, he changed to say it was for 8 years, and then for 10 years. At the end, one is left without a determinable duration period.

He produced an agreement providing for rentals of 6% of the gross turnover. Although admitting that the initial agreement remained as the governing covenant of the parties, he claimed 8% of the gross turnover but failed to justify the basis of it. He also produced a letter of demand wherein he fixed his share at 10%, all the time suggesting that he had this fixation about extracting more and more from the defendants which he could not justify.

There is also the question of the tonnage of maize that he claims. It was not enough that the claim for delivery of the maize could not be found in the agreement, he premising it on the remote reference to production of maize at the farm (maize which was not even produced except during the first year); he claimed 12 tonnes per year, then 18 tonnes, succeeding in creating confusion and giving substance to the allegation that his claims were always changing every year.

The same acquisitive tendency is exhibited in his claim for the center pivot and generator. As to how these items could be classified as constituting permanent long term development projects, even when he himself stated earlier that one of them did not, remains a mystery of gigantic proportions.

His problems were also compounded by the poorly drafted lease agreement with endless un-initialled annotations as well as blank portions of important clauses.

He was then reduced to base his claims on alleged verbal agreements not contained in the lease which he said constituted the basing of his claim; a lease with a provision excluding anything agreed but not reduced to writing and executed by the parties.

It is therefore difficult to impute the existence or incorporation of such alleged provisions negotiated outside the written agreement.

While relying on a document signed with Chadwick, Ziswa insisted that the second defendant, a separate legal person from Chadwick, was also liable to him.

This is because Chadwick had introduced himself as its director, had used its letterhead in correspondence, he knew him before as being a director, several payments were made by Landos, and he personally made visits to Landos.

None of these would make a company liable for the debts of its director contracting in his personal capacity.

Regarding the claim for arrear rentals, his summons claims rent for 2011/12.

In his evidence, he admitted being paid for 2009, 2010 and 2011 and not being paid for 2012. When his attention was drawn to the payment of $21,000 made in 2012, which he admitted, he found himself in trouble. He swiftly changed to say the payment related to arrears:

Which arrears, when he had been paid for the years before 2012?...,.

His claim for hailstorm insurance, apart from confirming fears that he would claim anything, is comical to say the least.

Here is a person claiming a percentage (which is exaggerated) of a crop allegedly destroyed by hail and covered by insurance. He does not even begin to set out the particulars of the claim but still insists on an order being granted to him in respect of an arbitrary figure. The amount of tobacco destroyed is not known, so is the value of the insurance and the gross amount paid to the defendant is also not known.

I have already commented on the claim for seedlings, which, again, confirms my conclusion on Ziswa's attitude, which is inclined towards enrichment at all costs. He never received or claimed for seed production until at the end of the lease. It is a claim that is laughable by all accounts.

In respect of the repairs to a barn by the tenant. He initially agreed that indeed one burnt down barn was repaired. He then changed to say that he provided the tenant with material to repair the barn. The question: is why he would do that?

He initially agreed that Mr Coleman, the new tenant, had re-constructed the barns damaged by the defendants. Realising that this would impact negatively on his claim, he again changed to say he had to pay the new tenant for those repairs....,.

The first defendant, Graeme Shaun Chadwick, said that, for the 2011–12 cropping year, he had paid $21,000 to Ziswa as rent although he realized about 135,000kgs of tobacco which were sold at $3=67 per kg giving a gross turnover whose six percent is therefore $29,808 of which only $21,000 was paid to Ziswa, leaving a balance of $8,808.

Chadwick denied being liable to pay rates to the local authority, asserting that the written lease agreement governing their relationship did not provide for that. In any event, he would have no reason to pay rates for Ziswa's farm.

There was a time when he paid the rates on Ziswa's behalf but this was to bail him out after the RDC had attached his Isuzu motor vehicle for sale in execution after Ziswa had failed to pay rates. Even then, it was agreed he would offset that from rent at the end of the year. This explains the contents of his letter to Ziswa, p31 of exhibit 1.

In respect of the hailstorm claim, Chadwick agreed that they had a hail strike during that year, but, stated that it was so minor that the insurer advised him against making a claim as what would have been paid was so insignificant it was not worth the trouble. He therefore did not make a claim and did not receive anything, meaning that there was unfortunately nothing for Ziswa either....,.

Chadwick readily admitted failing to clear tobacco stalks before he left, although he insisted that seed beds were cleared. He said this was caused by the acrimonious manner in which he was kicked out of the farm, which meant that there was no time to do so.

The situation at the farm had been rendered untenable and dangerous after Ziswa's son had pointed a firearm at his employees, forcing them to beat a hasty retreat without clearing the stalks.

He did send a tractor to the farm to perform that exercise much later, but, it was again denied entry.

We are therefore left with the plaintiff's claim of $780 for hired labour to remove the stalks and the EMA penalty, which, although not adding up, the defendant has to refund in some way....,.

Chadwick rubbished the claim for maize saying it is not provided for in the agreement which only required him to grow 40ha of maize. Instead of doing so, he had increased tobacco production from 30ha to 40ha which meant that Ziswa would get more income from the proceeds of the tobacco. However, out of the goodness of his heart, and, at times, after duress, he had given Ziswa maize the first and second years at the farm. He had no obligation to do so but understood, that, as a traditional man, he needed it for his home.

On seedlings, Chadwick said that he produced them on both Ziswa Farm and Kelvin Farm and it is advisable to rotate seedlings between farms. He had used seedlings from Ziswa Farm at Kelvin Farm and vice versa.

As is customary, he would give away to neighbours seedlings that were surplus to requirement for free. He never sold any seedlings.

In all his 20 years as a tobacco farmer he has never heard of a claim for seedlings. It's simply untenable because it amounts to a double claim. One would claim seedlings and then crop of it.

The agreement provided for payment of rent from the sale of the final product, not seedlings.

Under cross-examination, Chadwick admitted that there was an understanding for maize which he said was merely an expression of gratitude not enforceable by the plaintiffs....,.

I have stated that the first plaintiff maintains that their claim is based on the two (2) written agreements complementing each other which contain a non-variation clause.

Writing about the subject of restriction and non-variation clauses, the learned author K.H. CHRISTIE, in his book Business Law in Zimbabwe, ed 2, Juta & Co Ltd…, said:

“The parties may restrict their own power to vary or discharge their contract by subsequent, and some such restriction is very desirable in any contract between the parties, such as companies that may be represented by any one of a number of authorised agents, in order to reduce the scope for argument about whether a formal written contract has been subsequently varied or discharged. The restriction may be in the form of a restriction clause providing that no subsequent agreement between the parties on a specified topic (e.g. subletting, cancellation) shall be valid unless it is in writing, or it may be in the form of a non-variation clause providing that no variation of any of the terms of the contract, including the restriction clause, if any, and the non-variation clause itself shall be valid unless it is in writing.

After some years of controversy, the effect of such clauses was settled by the South African Appellate Division in 1964: SA Centrale Ko-op Graanmaats Chappy Bpk v Shifren 1964 (4) SA 760 (A).

In the result, effect will be given to a restriction clause, but it may be cancelled or varied by express agreement, formal or informal, unless entrenched by a non-variation clause which may be cancelled or varied only by the formal method it specifies.”

SA Centrale Ko-op Graanmaats Chappy Bpk v Shifren 1964 (4) SA 760 (A) is in Afrikaans, but, its ratio, that a non-variation clause could not be altered verbally, was adopted by this court in Fillanion v Esat & Anor HB106-03.

In my view, the moment the plaintiffs decided to rely on the written agreements of the parties, they brought themselves under the provisions of those agreements - including the non-variation clauses.

They could not, in the same breath, seek to import further intricate provisions, imagined or real, not contained in the written agreement which were purportedly concluded in breach of the formal method of doing so contained in the non-variation clause.

They simply cannot have it both ways or have their cake and eat it at the same time.

I therefore agree with counsel for the defendants, that, any claim which is not provided for or is not in terms of the written agreement, should, of necessity, fail....,.

Claim (b) for a refund of $1,980 paid to Makoni Rural District Council, claim (c) for $5,500 hailstorm insurance, claim (k) being $15,000 value of 50 metric tonnes of maize, and claim (l) being $4,240 value of tobacco seedlings, are based on alleged agreements falling outside of the letter of the written covenant of the parties and are therefore hit by the non-variation clause.

In addition, I have already expressed my views about the evidence led to try and prove those claims. It is woefully inadequate, unreliable, and, at times, contrived and clearly cannot, on a balance of probabilities, sustain the claims.

They will have to be dismissed.

The plaintiffs have made a claim for rent arrears in the sum of $64,160 for the 2011/12 farming season.

On the evidence that has been led, that claim has not been proved either, except for what is apparently admitted by the first defendant, whose evidence I have embraced as truthful.

Counsel for the defendants has also conceded, that, as the first defendant produced 135,000kgs of tobacco during that season, taking into account the $21,000 paid for that year, a sum of $8,808 remains outstanding.

It should be paid....,.

The plaintiffs have also proved, on a balance of probabilities, claim (i) the $780 expended on clearing tobacco stalks, which the first defendant should have cleared before vacating the farm, and ancillary expenditure related thereto. My reservations about the failure to balance the figures do not tip the scales against the plaintiffs.

That claim should succeed....,.

Counsel for the plaintiffs conceded, that, the plaintiffs have not made a case for the relief sought in three (3) of the plaintiffs claims, namely, claim (c) for $5,500 hailstorm insurance; claim (b) the refund of rates and levies paid to Makoni Rural District Council in the sum of $1,980; and claim (i) $780 for the removal of stalks.

I have stated that claims (b) and (c) must fail along with others, while I am prepared to accept the evidence led on the removal of stalks on a balance of probability....,.

1....,.

2. The plaintiffs claim (a) against the first defendant succeeds only in the sum of $8,808 which the first defendant is directed to pay to the plaintiffs.

3....,.

4. The first defendant shall pay the plaintiffs the sum of $780 being value of labour hired to clear tobacco stalks and related expenses.

5. The plaintiffs claims (b), (c)..., are hereby dismissed.