The Sheriff of Zimbabwe v Jena Mines Private Limited and Jethro Ndlovu

1
                                                                                HH 529/18
                                                                               HC 3940/18
                                                                      REF CASE HC 9033/17

THE SHERIFF OF ZIMBABWE
versus
JENA MINES PRIVATE LIMITED
and
JETHRO NDLOVU



HIGH COURT OF ZIMBABWE
TSANGA J
HARARE, 11 & 12 September 2018



Opposed application


N Chidembo, for the applicant
JR Tsivana, for the claimant
CT Chivandire, for the judgement creditor


       TSANGA J: This was an interpleader application in which Jethro Ndlovu obtained a
judgment in case No. HC 9033 /17 against his former employer, the Zimbabwe Mining
Development Corporation (ZMDC).The judgment was payment of a sum of $47 619.32 with
interest at the rate of 5% per annum from date of summons to date of final payment. After
efforts to attach property in fulfilment of the debt had yielded negative results, he had
proceeded to attach property at Jena Mines (Private) Limited (Jena Mines) in fulfilment of
that debt. His justification for so doing was that following the judgment, some payments
towards the settlement of the debt had been paid on behalf of the judgment debtor by Jena
Mines in which the judgment debtor is a 50% shareholder. It was also argued that there was
no separate legal entity between the judgment debtor and the claimant as claimant was one of
the conduits through which the judgment debtor was carrying on its business, Whilst agreeing
that the judgment was against ZMDC which is located in Harare and that Jena Mines is an
entity located in Kwekwe, the gist of his argument was that the court should lift the corporate
veil and refuse to grant Jena Mine’s claim to the property.
       The claimant resisted the claim on the basis of being a separate legal entity in which
the judgment debtor is a mere shareholder. Moreover it was pointed out in the founding
affidavit by the company’s legal secretary that there is actually a scheme of arrangement in
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                                                                                 HH 529/18
                                                                                HC 3940/18
                                                                       REF CASE HC 9033/17

place for Jena Mines protecting its assets against execution. Suffice it to say by way of
illustration, that the stay of proceedings has been interpreted in cases of judicial management
to relate to proceedings in existence at time of the provisional order and not to mean that
institution of proceedings is prohibited. See ZFC Ltd v KM Financial Solutions (Pvt) Ltd &
Anor 2015(1) ZLR 63 (H). However, it would obviously make little sense to permit the
institution of new proceedings that seek to execute property when other creditors who were
on the scene earlier have specifically agreed to an order to stay all proceedings and to a court
ordered scheme of arrangement binding all creditors. In this instance, the scheme of
arrangement binding all creditors has been confirmed by the court. It is hard to see how that
could simply be cast aside to bring in a new creditor.
       In any event the real issue in this case was whether the judgment creditor has a
legitimate claim against the claimant as being one with the judgement debtor. This was
clearly not a case where separateness is only being asserted as a result of facing interpleader
proceedings. In this instance the claimant does indeed operate as a separate entity from the
judgment debtor. There was nothing placed before this court to suggest that the company is
wholly controlled by the judgement debtor. The judgment debtor owns 50% of the company
and the other 50% belongs to an entity called Trillion Zimbabwe (Pvt) Ltd. These two are
mere shareholders in the entity called Jena Mines.
       It cannot not be said that the judgment debtor was in any way acting fraudulently or
where any refusal to pierce the corporate veil would deprive an innocent victim of redress for
an injury caused by them. It was not a case. The case is clearly distinguishable from The
Sheriff & Ors v Dube & Ors 2014(2) ZLR 688 (H) where there the directors were found to
have failed to observe separateness of the legal entity themselves.
       In this instance the circumstances under which the payments were made on behalf of
the judgment debtor were explained as a loan. It cannot not be said that this was not a
satisfactory explanation specially since the evidence placed before the court was that the
payments made to the judgment creditor had only been on limited occasions following the
judgment. In other words, there was nothing to show an earlier pattern of overlap and
morphing of ZMDC and Jena Mines prior to this occasion.
       It is true that in interpleader proceedings the property found on the pemises is
assumed to belong to the judgment debtor. In this instance it must be emphasised that the
property attached was not attached at the judgnment debtor’s premises. It was attached at the
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                                                                                 HH 529/18
                                                                                HC 3940/18
                                                                       REF CASE HC 9033/17

premises of a separate entity to that of the judgment debtor. It is for these reasons that I find
the claimant to have a valid claim to the property and accordingly grant the order in favour of
the claimant as follows:
        It is ordered that:
   1.   The claimant’s claim to all the property which is listed in the Notice of Seizure and
        Attachment dated 5 March 2018, which were placed under attachment in execution of
        order in case HC 9033/17 be and is hereby granted.
   2. The above mentioned property attached in terms of the Notice of Seizure and
        Attachment dated 5 March issued by the Applicant is hereby declared not executable.
   3. The judgment creditor is to pay the claimant and applicant costs.




Kantor and Immerman, applicant’s legal practitioners
Sawyer and Mkushi, claimant’s legal practitioners
Messrs Chinganga and Company, judgment creditors legal practitioners