The Sheriff of Zimbabwe and Rhine (Pvt) Ltd. and C. Gauche (Private) Limited

### Preamble
1
HMA 24/19
HC 41/19
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THE SHERIFF OF ZIMBABWE

And

RHINE (PVT) LTD.

And

C. GAUCHE (PRIVATE) LIMITED

HIGH COURT OF ZIMBABWE

MASVINGO, 13TH JUNE AND 3RD JULY, 2019

J. Mpoperi for the applicant

T. Gombiro for the claimant

L. Ngwenya for the judgment creditor

Opposed matter

WAMAMBO J.	Before me is an interpleader application.

The background of the matter is that the judgment creditor obtained judgment against one Roger Madangure under BULAWAYO HC 1404/17. Pursuant to the said judgment the applicant attached various items listed on the Notice of Seizure and attachment - Annexure “C”. Annexure “C” lists the following property: -

A black water tank

A Mercedes Benz vehicle AAP 4499

An FG Wilson Generator

Eng Byo Mill

Ingersoll Rand Compressor

Scrap

Weights

Osborn Tel Swith with fan belt

Gems table

Gems table of complete mill

Septic Tank

Electric Grinder

Shoe leg

Weights assorted

Bundle plastic pipes assorted

Sulmaoosa machine

Two green jojo tanks

Office desk and 2 chairs

Refrigerator

Metal frame

The claimant lays claim to all the attached goods above. Further the claimant contends that the said goods are for purposes of a mining operation at its Manyama Mine, Masvingo. The claimant avers that the said goods were attached at its Manyama Mine. The Notice of Seizure and attachment Annexure “C” does not reflect the address where the attachment took place. The judgment creditor raises no issues with the claimant’s assertion that the attachment occurred at Manyama Mine (the mine).

The claimant avers that it bought the mine at an auction sale in 2013 and attaches proof thereof. It further avers that it bought the mine with all its mining equipment which property includes the compressor, scrap metal, weights, Osborn Mill, septic tank and plastic pipes.

The claimant attaches what they refer to as Annexure “B” series, copies of receipts/invoices reflecting that claimant purchased some of the attached goods.

When specifically referring to the Mercedes Benz vehicle claimant avers that the registration book is in its name but it was misplaced and that efforts to obtain same at the Central Vehicle Registry have so far seem unsuccessful. The claimant promises in paragraph 6.1.4. of the Opposing Affidavit that it will strive to obtain the necessary papers and bring same to Court at the hearing for production with the leave of the Court. The long and short of it is that no such documentation was produced or attempted to be produced at the hearing.

The said B series referred to in claimant’s Opposing Affidavit is not included in the index. What I took to be the B series are two invoices emanating from A.B.J. General Engineering (Pvt) Ltd. of Cowden Road, Steeldale in Bulawayo. The first invoice appearing at page 25 of the record reflects the description of goods as follows: -

Complete set 4 x 3 lines

96 bolts and nuts

96 washers

96 grommets

2 white metal bearings

1 drum feeder 4 x 3

1 feed throat liner

1 discharge throat liner

1 x 6.8 meters insertion rubber

The second invoice at page 26 of the record reflects the following goods:-

1 new 4 x 6 ball mill complete with motor and

1 duplex concentrator

The delivery address for the goods under these invoices is reflected as No. 1 Hawkmoor Road, Umwinsdale, Harare.

The judgment creditor’s position is that the property attached does not belong to claimant. They give a number of reasons for this stance as follows: -

There is a false impression or illusion created by claimant to the effect that there is no connection between it and the judgment debtor. The correct position is that the judgment debtor is actually a Managing Director of the claimant. Court process under HC 592/15 is attached as Annexure “B” and reflects the connection between the Judgment debtor and the claimant.

According to the judgment creditor – Oniro Resources (Pvt) Ltd purchased the mine and not the claimant. Annexure “C” is correspondence attached to support the Judgment creditor’s allegation that claimant is not the one that bought the mine.

Annexure “C” is a letter from the Judicial Service Commission dated 13th April 2013 reflecting in essence that a Provincial Magistrate, Manyika L. certified that the sale of property under HC 2678/12 was properly conducted. Further that the purchaser is Oniro Resources (Private) Limited of 108 West Road, Suite 37 Avondale West, Harare.

Mr Gombiro for the claimant in oral submissions submitted that the judgment creditor was making a shadowy attempt at lifting the corporate veil. He submitted that the judgment creditor was a director, an individual and separate from the claimant, a separate legal persona. He further submitted that there is no factual or evidential basis to link claimant to a fraudulent transaction or satisfying any of the other principles allowing for the lifting of the corporate veil. He cited the case of Deputy Sheriff, Harare and Trinpac Investments (Pvt) Ltd and Another HH 121/2011. He was also of the view that proof of ownership of moveable goods is found in possession. In other words, that because the property was attached at claimant’s mine, Manyama Mine thus the property belongs to the claimant, everything else being equal.

Mr Ngwenya for the judgment creditor was of the view that there is no hard and fast rule in interpleader proceedings when it comes to ownership. He cited the case of Deputy Sheriff, Marondera v Traverse Investment (Private) Limited and Anor HH 11-03. He also submitted that claimant has failed to prove ownership of the attached goods. He avers that Oniro and the claimant are separate legal personalities and thus while the Provincial Magistrate confirms that the mine was bought by Oniro that means claimant cannot also claim to have bought the same mine.

He attacked the reliability of the invoices relied on by claimant – Annexure “B” series and avers that they are just invoices and nothing more. He further avers that on the invoice at page 25 of the record there is none of the attached property reflected. He concedes that some of the attached property appears at page 26 of the record. He was of the sturdy conviction that claimant should have attached a Mining Certificate from the relevant authorities to prove it is the one mining and working on the mine.

Mr Ngwenya argued forcefully that the judgment debtor is the soul and mind of the claimant.

MAFUSIRE J in The Sheriff of the High Court vs Munyaradzi Yutini Majoni and Others HH 689 – 15 lays bare the approach in interpleader proceedings as follows: at pages 4 -5.

“In interpleader proceedings the approach seems straight forward.  By virtue of Order 30 the interpleader proceedings commence by way of a court application.  Interpleaders arise because two or more persons both or all claim ownership of the same property.  In the case of a judicial attachment the Sheriff or his deputy initiates the process of depositing the adverse claims with the court and deposing to an affidavit in support of the interpleader notice.  The Sheriff eventually drops out only retaining an interest for his costs.  The claimants are left to fight it out between or amongst themselves.

The Court makes a determination on the papers.  Where it is unable to do so by reason of irreconcilable dispute of fact, it may refer the matter for trial with specific directives.  It can direct, who, between or amongst the claimants shall be plaintiff/s and who defendant/s.  It ensures as much as possible that no party should carry an advantage or disadvantage when it gives directives on who the duty to begin falls, who the onus of proof lies on and which specific issue should be referred to trial: see Zandberg v Van Zyl 1910 AD 258, Green field NO v Blignant & Ors  1953 SR 73, Bruce NO v Josiah Parkes & Sons (Rhod) (Pvt) Ltd and Another 1971 (1) RLR 154 (G) and Phillips NO National Foods Ltd and Anor 1996 (2) ZLR 532 (HC), Deputy Sheriff Marondera v Traverse Investments (Private) Limited & Anor HH 11 -03”.

Other principles emanating from the case of The Sheriff of the High Court vs Munyaradzi Yutini Majoni and Others (supra) without exhausting them are summarised below.

the onus is on the claimant to prove ownership

where goods are found in possession of the judgement debtor a presumption arises that they belong to him.

claimant should lay bare facts and allegations to prove ownership.

the court will seek to decide the matter on the papers as much as possible.

a dispute of fact raised must be a real one not a fanciful one.

the court will engage a robust and not an over fastidious approach.

the court should not hesitate to decide the issue on the affidavit just because it is difficult to do so.

it is prudent to adopt a high degree of circumspection where claimant and judgement debtor have a close relationship be it by blood or marriage or where they are close business or social partners or associates.

It is not possible to lay down hard and fast rules as to what to consider as constituting enough proof of ownership of the goods at the centre of the dispute.

A company is a separate legal entity from its members. See the well - known case of Salomon v Salomon and Co Ltd (1897) AC 22 (HL).

I, will therefore address the matter on the basis of the above guidelines.

In a bid to prove ownership of the attached property claimant asserts that the property at pages 25 and 26 of the record belongs to it.  As judgement creditor correctly pointed out none of the attached property is reflected at page 25. I also do not see any similar property reflected at page 26 as part of the attached property.  I hasten to add that the property may appear on the attached property list under a different description.  I say this because amongst the attached property is an Eng Byo Mill and a gems table of complete mill.

However, the claimant was unable to single out the specific property on the attached property that appears at both pages 25 and 26.  I am aware that the claimant has the onus to prove ownership.

The claimant in the opposing affidavit at paragraph 6.1.4 avers that it will seek to produce documentation in relation to the attached Mercedes Benz vehicle at the hearing.  At the hearing no such documentation was produced or sought to be produced.  This is inspite of the fact that the opposing affidavit was sworn to on 13 January 2019 while the hearing date was 13 June 2019.

The claimant has averred that the water tanks, refrigerator, grader, table and chair, weights and metal frame belong to him though there are no receipts to prove the same.

There is no proof that any of the attached property was bought at the same time with the mine as claimed in the claimant’s interpleader affidavit.

Annexure “D” reflects that the mine was bought by the claimant trading as Oniro Resources.  Although the Judgement Creditor appears to take issue with the claimant’s trade name, the quotation sale invoice is very clear.  I did not hear the judgement creditor to claim that Annexure ‘D’ is a forgery.  In any case the confirmation letter by the Provincial Magistrate appearing on page 60 reflects Oniro Resources as the buyer of the Mine, albeit with a different address from that of claimant.

The judgement creditor clearly does not allege that Annexure “D” is a forgery for it asserts that the cell phone number appearing under claimant company on Annexure “D” is actually for the judgement debtor (see page 90).

I turn to deal with the lifting of the corporate veil which was raised by the parties.

In The Sheriff for Zimbabwe v Robert Tindwa and Anor HH 54-18

CHITAKUNYE J dealt with the issue of the lifting of the corporate veil extensively.  At page 4 the learned Judge makes the following pertinent observations.

“It is also trite that the courts are reluctant to pierce the corporate veil as to do so would negate or undermine the policy and principles that underpin the concept of separate corporate personality and its legal consequences.  There are however exceptions that have of late been alluded to as justifying the piercing of the corporate veil”.

The veil of incorporation may be pierced when there is proof of fraud, dishonesty or other improper conduct in the establishment or use of the company or in the conduct of its affairs.

In T Sibanda v HM Sibanda SC 7-14 at p 11 GWAUNZA JA aptly noted that:

“While it is accepted that there are no hard and fast rules on the circumstances that justify the lifting or piercing of the corporate veil with each case generally having to depend on its own facts and merits I find this dictum from the case of Mkombachoto v Commercial Bank of Zimbabwe & Anor 2002 (1) ZLR 21 at p 26 E-D to be opposite.

“In my view the court has no general discretion to disregard the company’s separate legal personality wherever it considers it just to do so.  The court may lift the veil only where otherwise as a result of its existence fraud would exist or manifest justice would be denied”.

Also see the Sheriff of Zimbabwe v Maseko Manyise & Anor HH 64/19.

In this case the judgement debtor is the Managing Director of the claimant.  He is an active participant in the affairs of the claimant.  The attached case of HC 1646/12 reflects the judgement debtor as the active Director in the proceedings.  In the instant case the judgement debtor’s cell phone number is the only one reflected on Exhibit “D” which is the auction sale invoice.  The impression created by the claimant is that Manyama mine is the mine bought as per Exhibit “D”.  The judgement debtor is clearly linked to the mine as is clearly reflected above. There is the distinct mark of the judgement debtor in the attached property in the circumstances.

As already observed there is no proof that claimant is the owner of any of the attached property. Even in circumstances where it could easily be done for instance in the case of the Mercedes Benz, no such proof has been presented.

The irresistible conclusion is that there has been a failure by claimant to prove ownership of the same.

Further, after piercing the veil what is behind the claimant is the judgement debtor as more fully appears above. Manifest justice would be denied in the circumstances if I turned a blind eye on the misuse and improper conduct of the affairs of the claimant company by the judgement debtor.

In the circumstances I find that the claimant has failed to prove ownership of the attached property.

To that end, I make the following order:-

The claimant’s claim to the various properties which were placed under attachment in execution of the judgment in Bulawayo High Court HC 1404/17 is hereby dismissed.

The various properties attached in terms of the Notice of Seizure and attachment issued by applicant under Bulawayo High Court HC 1404/17 are hereby declared executable.

The claimant shall pay the judgment creditor and applicant’s costs on the ordinary scale.

Saratoga Makausi Law Chambers, applicant’s legal practitioners

Chimwamurombe Legal Practice, Claimant’s legal practitioners

Mathonsi Ncube Law Chambers, Judgment Creditor’s legal practitioners