Paarklip Trading CC and Elkse Burger v Arnold Taruvinga and Proud Mutuso and David Mhiribidi and Langton Masunda

### Preamble
1
HB 127.20
HC 2502/18
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PAARKLIP TRADING CC

(a company duly incorporated in terms of

the Laws of South Africa)

And

ELKSE BURGER

Versus

ARNOLD TARUVINGA

And

PROUD MUTUSO

And

DAVID MHIRIBIDI

(All trading as Mutuso, Taruvinga & Mhiribidi

Legal Practitioners)

And

LANGTON MASUNDA

IN THE HIGH COURT OF ZIMBABWE

MOYO J

BULAWAYO 24 FEBRUARY AND 25 JUNE 2020

Opposed Application

Professor W Ncube, for the applicant

T Tavengwa, for the respondents

MOYO J:	The applicant in this matter seeks as against the respondents an order as follows:-

“1.	That the 1st, 2nd and 3rd respondents be and are hereby directed to release a sum of  USD58 000 belonging to applicants within 24 hours of service of this order upon them.

That 1st, 2nd and 3rd respondents be and are hereby directed to pay costs of suit on an attorney and client scale jointly and severally with one paying and the other to be absolved.”

The background of this matter per applicant’s version is that applicant and 4th respondent entered into an agreement wherein 4th respondent would sell applicant 4 sub adult elephants.  It was a term of their agreement that applicant deposits a sum of USD58 000 into the trust account of 2nd and 3rd respondents’ law firm.  Applicants then failed to capture the elephants allegedly due to non availability.  The parties had  agreed that if by 31st July 2018, applicant still failed to find elephants on 4th respondent’s farm, then applicant would be refunded its dues.  On 9 August 2018 applicant demanded its refund since it was now past the refund deadline of 31 July 2018.  Several demands were made to the respondents with no action on respondents’ part.

Respondents then filed an Urgent Application on 16 August 2018, seeking to attach the sun of USD58 000 to confirm or found jurisdiction against applicant.  An order was subsequently obtained by consent to the effect that applicant consented to the jurisdiction of this court and that the sum of USD58 000 held by 3rd and 4th respondents’ firm could not be attached to confirm or found jurisdiction.  Respondents then wrote to applicant’s legal practitioners of record stating that they are holding onto the money in terms of Clause 1 of Article 11 of the agreement between the parties which provides that should the purchasers fail to make payment or carry out their obligation in terms of the agreement the seller shall cancel the agreement and retain the amounts received by them from the purchasers and deduct damages from same.

Applicant argues that Article 11 applies where the purchaser is in breach and the seller cancels the agreement following on that breach and not when it is the seller that has breached the agreement.  The applicant alleges that it is the one that cancelled the agreement consequently upon the seller’s breach.  The respondents raised a point in limine on resolution passed by applicants’ directors regarding authority to prosecute this matter and proof of same.  Respondents stated that applicants’ demand was being made in terms of Clause 5 of the contract and that Clause 5 does not place a duty on them with regard to the USD58 000.  That Clause 5 gives applicant a right to demand the money should a condition in the contract be breached.  That there is no corresponding duty on them to pay back the money.  Respondents also state that even if cancellation comes with restitution, and do confirm that the agreement was cancelled by the parties, and that 4th respondent has instituted proceedings claiming restitution in the sum in excess of USD88 000.  They aver that in the circumstances, 4th respondent instructed that a refund should not be made to the applicant as he had elected to exercise his contractual right as prescribed in Article 11 (2) of the parties’ agreement.

4th respondent in his founding affidavit refuted that there were no elephants to capture in the first place and averred that the relevant authorities were never going to issue a permit for the capture of non-existent elephants.

Those were the material facts of this case.

At the hearing of the matter, respondents raised some points in limine being that there was no valid resolution to enable the institution of proceedings in applicants’ name as well as that 2nd applicant had no locus standi as he is not a party to the contract.  Respondents’ counsel argued that the resolution at page 97 of the record of proceedings having been executed in South Africa should have been notarized for validity.

Applicants’ counsel argues that it is settled through decided cases that where there is no valid reason to believe or show that there is no authority to act, such lack of authority does not vitiate the proceedings.  A case in point was cited as that of African Banking Corporation of Zimbabwe Ltd v PWC Motors Pvt Ltd & Others 2013 (1) ZLR 376 where the court held that where the deponent of an affidavit states that he has authority of the company to represent it, there is no reason for the court to disbelieve him unless evidence is shown to the contrary.  Where no such evidence is produced, the omission of a company resolution cannot be fatal.  The case of Tian ZE Tobacco Pvt Ltd v Muntuyedwa HH 626-15 is precedent for the same point as well.  In this case no evidence has been shown to support the notion that there was no resolution.  In fact it is supplied with the answering affidavit.

Respondents’ counsel then moves on to attack its validity.  I hold the view that on the basis of the precedents alluded to above, if it is not fatal to omit the resolution altogether, then it cannot be fatal to file an extra-territorial one that is not notarized.  Again, respondents’ counsel cited the Supreme court case of Stand Five Four Nought Pvt Ltd v Salzman CT CIE SA SC 30-16 as authority for the proposition that an extra-territorial resolution that is not notarized is invalid.  In that case though the problem was not lack of notarization, but various issues relating to the mandate given therein and the errors that were contained in the said document.  The Supreme Court in that case held that a document must be properly executed or else it becomes of no legal value.  It is important to note however, from that case that the Supreme Court itself did not then consider the issues of authentication as having been fatal to the case, because one of the grounds of appeal before it was that the respondent (in the High Court) was not properly before court as the deponent to the opposing affidavit was not properly authorized.  This ground was not held to be the decisive point as the Supreme Court, although it canvassed at great length the issues of authority and authentication of the power of attorney, it nonetheless dismissed the appeal as being devoid of merit.  In other words, respondents’ contention that the authentication of the power of attorney was held to vitiate proceedings is a misreading of that judgment.

I accordingly align myself with all the cases referred to herein and I am of the view that in the absence of real evidence pointing towards lack of authority I cannot find as such.

On the issue of 2nd applicant’s locus standi, obviously, the answer is in the agreement of sale which puts 2nd applicant as a co-purchaser .  The names of the 2nd applicant are there on the very first page of the agreement as the “buyer” together with 1st applicant’s name.  It could have been a question of poor drafting but the agreement should have been specific as to whether Elske Burger was representing Paarklip Trading CC only.  It is therefore difficult for this court to dismiss 2nd applicant’s interest and capacity in the agreement on the mere say so of the respondents when the agreement itself is not very clear.  I take note that the preamble to the agreement also names Paarklip only as the buyer without Elske Burger, but the last page again, puts Elske Burger and Paarklip on the signature page.    It is not very clear from the agreement itself meaning that this court cannot interpret it restrictively against any party.  I will take it that both names feature due to poor drafting on the explicit capacity of each, but because both names are there I cannot dismiss 2nd applicant’s assertions.

Respondents’ counsel also raised a point in relation to the Closed Corporations Act 69/84 that 1st applicant had to attach its Certificate of Incorporation.  He said that is in terms of section 54 of that Act.  Asked to elaborate further he submitted that, that is a South African statute.  I sit in this court to apply the laws of Zimbabwe and those International Conventious and treaties that Zimbabwe is a signatory to.  I do not import laws into Zimbabwe and start applying them.  Zimbabwe is run per its own laws and I am not aware of such a requirement in terms of our law.  The submission is therefore misplaced.

I then proceed to deal with the merits.

From the facts of this matter, it appears money was paid into the trust account of the 2nd and 3rd respondents, to allow for the agreement to be brought to fruition, in essence the capturing of the elephants by the applicants whereupon the money would then be released to the 4th respondent by 2nd and 3rd respondents’ law firm.  It appears the contract went wrong when the applicant could not capture the elephants as according to them, there were none at 4th respondent’s conservancy.  Applicants have attached Annexture B to the founding affidavit which is a report on the hunting expedition that yielded nothing.  4th respondent has attached its permits from the relevant authorities with an annexture on the animal population.  However, a closer look at the document at page 73 of the court record would show that in 2018, the estimate by the owner on elephant population is 200.  Then there is ZPWMA which I believe stands for the Zimbabwe Parks and Wildlife Management Authority estimate which is written migratory with no number stated by the authority.  This to an extent substantiates applicant’s failure to locate and hunt any elephants in my view as the authority did not estimate that there are elephants like they did with the other animals.

I have noted the affidavits of Mandindi and Cosmas but I hold the view that their evidence is unreliable in that, they did sign the visit report, both of them and the report was to the effect that there were no elephants located but now they turn around and say they saw many elephants.  The immediate question that would then arise is if applicant came all the way to hunt for 4 elephants and then did find plenty of them as alleged after raising a sum of USD58 000 and paying it to 2nd and 3rd respondents’ firm, why would they not capture the elephants then.? That defies logic.  The only safe conclusion to make on this point is that Cosmas and Vincent are blowing hot and cold and can therefore not be trusted.  I find that applicants are correct in that they could not locate any elephants for capture in the circumstances and should therefore have been refunded their money.  The question of breach by applicant in my view is therefore not present.  It is the seller who failed to meet his part of the bargain as there were no elephants located for hunting by the applicants.  The population of 200 was his estimate which however was not supported by the regulatory authority’s own estimate where it stated that the elephants were migratory.  I take note from that table that the authority does put an estimate on those animals it believes are present at 4th respondent’s land.

I accordingly find that the sum of USD 58 000 being funds paid in trust to be held until the occurrence of an event that has failed to occur as the seller could not avail the elephants as agreed, is a sum that should be paid back to its owner.  I believe the whole essence of paying the funds into a trust account was to cater for such an eventuality.  I also find that the sum so payable is claimable in foreign currency as it was so paid and it is a foreign debt in terms of section 44 (c) (ii) of the Finance Act which was inserted through section 4 (1) (c) of S.I 33/19 that excluded foreign debts from being payable in the RTGS currency on a 1:1 basis.  It is a foreign debt as the applicants are clearly South African and obviously the funds were invested from there.  In fact that is applicants’ case.  I noted that applicant din its letter after the hearing, presumably to provide citation of a case in point, went on to provide more than the authority and that respondents’ counsel took issue with that.  I have to put it on record that I did not allude to any further submissions.  I only used what was properly before me (i.e the citation provided) to determine the matter.  The further submissions must in fact be expunged from the court record.

I accordingly grant an order in terms of the draft, that is to say;

IT IS ORDERED THAT:-

The 1st, 2nd and 3rd respondents be and are hereby directed to release a sum of  USD58 000 (fifty eight thousand United States dollars) belonging to applicant within 7 days of service of this order upon them.

The 1st, 2nd, 3rd and 4th respondents are hereby directed to pay costs of suit, jointly and severally with one paying the other to be absolved.

Mathonsi Ncube Law Chambers, applicant’s legal practitioners

Mutuso, Taruvinga & Mhiribidi, 1st – 4th respondents’ legal practitioners