Ndlovu, Bvekerwa and Company Chartered Certified Accountants v Goldfix (Private) Limited and Jotham Mnaba and The Registrar of Deeds NO

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HH 74-2013
HC 424/12
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NDLOVU, BVEKERWA AND COMPANY

CHARTERED CERTIFIED ACCOUNTANTS

versus

GOLDFIX (PRIVATE) LIMITED

and

JOTHAM MNABA

and

THE REGISTRAR OF DEEDS NO

HIGH COURT OF ZIMBABWE

KUDYA J

HARARE, 12 March 2013

Opposed Application

C Mucheche, for the applicant

The first and second respondents in default

KUDYA J: The applicant partnership filed an application on 16 January 2012 seeking payment of US$31 249-24 from the first and second respondents failing which it sought an order against second respondent for him to register a first mortgage bond on stand number 62 Carrick Greagh of Carrick Greagh Township Section 4 of Borrowdale Estate held under Deed of Transfer Number 2995/2009 and if he failed, the deputy sheriff was to do so on his behalf. It also sought to interdict second respondent from disposing of, alienating, encumbering or in any way dealing with the immovable property in question and costs of suit on the scale of legal practitioner and client.

The application was opposed. The first and second respondents were served with the applicant’s heads of argument on 15 May 2012. They did not file any heads, even up to the date of the hearing of this matter. They were accordingly barred.

On 27 November 2009, the applicant represented by Norman Ndlovu executed an acknowledgment of debt with the first respondent represented by Jonakis Munaki. The loan amount was limited to US$50 000-00 and was to be disbursed directly to suppliers of the first respondent and the Zimbabwe Revenue Authority. It was to be repaid in full 90 days after disbursement. The agreed interest rate was 8% per month. A delinquency fee equivalent to the rate of interest was to be levied on any amount unpaid on due date. The first respondent agreed to provide security of a piece of land in the district of Salisbury measuring 6 869 square metres, being 62 Carrick Greagh Township, Section 4 of Borrowdale Estate, which would be specially executable.

On the same day, the second respondent, the registered owner of the security and a director in the first respondent, signed a special power of attorney authorising any duly appointed officer of the applicant to pass a first mortgage bond over the property or cause its transfer to Piniel Investments (Pvt) Ltd in the event of default in the repayment of the loan by the first respondent. It was witnessed by J Munaki and Graham Chindu. Again on the same day, the second respondent signed a suretyship and co-principal debt agreement for the sum of US$31 920-00 in which he surrendered the immovable property.

In the founding affidavit, Norman Ndlovu failed to disclose the amount paid by the first respondent in reduction of the loan amount. He agreed with the averment by Jonakis Munaki, the managing director of the first respondent that the first respondent repaid US$22 000-00 to the applicant being US$5 000-00 on 23 March and US$17 000-00 on 10 May 2010. The facts that emerged from the answering affidavit were that the first disbursement of US$2 000-00 was made on 29 November 2009 for transport costs. A further US$22 720-00 was paid directly to the first respondent’s supplier, Amplux (Pty) Ltd on 10 December 2009 while a final disbursement of US$7 200-00 was paid on 12 December 2009. In para 12 of his answering affidavit on p 31, Norman Ndlovu stated inter alia that: “The respondents paid $22 000-00 on the capital sum of $31 920-20 leaving a capital amount of US$9 920-00 plus interest on the capital sum and arrears which presently add up to $32 249-23.”

In my view, though the applicant is not a registered money lender, it was engaged in a substantially money lending operation as defined in s 19 of the Moneylending and Rates of Interest Act [Cap14:14]. Its activities dovetail with the definition of lender in s 2 of that Act.  It therefore fell under the purview of that Act. In terms of s 8 (1) of the Act it could not, even by agreement, levy interest in excess of the prescribed rate of interest. Any interest levied in excess of the prescribed rate of interest per annum was therefore illegal. It cannot be enforced. See Niri v Coleman & Ors 2002 (2) ZLR 580 (H) at 587B-G.

The amount outstanding from the first and second respondent jointly and severally is the sum of the unpaid capital of US$9 920-00 together with interest at the prescribed rate and not the amount claimed of US$31 249-24. The applicant will be granted judgment in the amount equivalent to the outstanding capital together with interest at the prescribed rate.

In my view the alternative claims sought by the applicant are incompetent. The party who was obliged to register the first mortgage bond was not the second respondent but the applicant. It did not explain why it failed to do so. It cannot be permitted to benefit from its own failure to act. Its failure to act resulted in a third party registering an XN caveat 312/2010 in ignorance of the parties pre-existing arrangement. I do not see the necessity of prejudicing the rights of the XN caveat holder. The applicant has also failed to establish the basis for its fear that the second respondent seeks to dispose of the property. It is unclear on the papers why the applicant believes it will not be able to enforce the order if the first and second respondents fail to voluntarily abide by the order to pay the outstanding debt.

Accordingly, it is ordered that:

The first and second respondents shall jointly and severally the one paying the other to be absolved pay to the applicant:

The sum of US$ 9 920-00 together with interest at the prescribed rate of interest per annum from 12 March 2010 to the date of payment in full;

Costs of suit at the scale of legal practitioner and client.

Matsikidze and Mucheche, Applicant’s legal practitioners