Metallon Gold Zimbabwe (Private) Limited & Anor v Collen Gura

### Preamble
Judgement No. SC 93/20
1
Civil Appeal No. SC 306/18
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REPORTABLE: (86)

(1)     METALLON     GOLD     ZIMBABWE     (PRIVATE)     LIMITED

(2)     METALLON     CORPORATION     PLC

v

COLLEN     GURA

SUPREME COURT OF ZIMBABWE

GARWE JA, MAKARAU JA & GOWORA JA

HARARE: MARCH 14, 2019 & JULY 2, 2020

F Girach, for the appellants

T Magwaliba, for the respondent

GOWORA JA:

[1]	The appellants belong to the same group of companies. The respondent was employed by the first appellant from 1995 to 2010 in various capacities, firstly as its Finance Manager, Finance Director and last as its Executive Chairman. From     1 April 2010 he was employed by the second appellant as the Group Chief Executive Officer until 30 June 2011 when he resigned from employment.

[2]	On 1 June 2015, the appellants issued out summons in the High Court Harare against the respondent claiming various sums from him arising out of various alleged unlawful acts and directions to staff within the employ of the appellants. A precis of the sums claimed is set out hereunder:

An amount of USD 279 549.00 being PAYE due by respondent allegedly not deducted by staff on his instruction and which appellants paid to ZIMRA.

An amount of USD 25 000.00 allegedly fraudulently claimed by respondent as relocation expenses.

An amount of USD 312 442.00 expended in the purchase of a motor vehicle for the respondent without board approval, or in the alternative the return of the motor vehicle.

An amount of USD 2 298 000.00 paid to ZIMRA in consequence of a payment made to respondent arising out of an agreement of restraint of trade between the parties.

An amount of USD 851 419.00 paid to respondent in the erroneous belief that a terminal package had been agreed.

[3]	In response to the claims the respondent raised two preliminary points. In the first he filed a special plea that all five claims had prescribed prior to the issuance and service of summons on him. He prayed for the dismissal of the claims on that premise. In the second, he raised a special plea of lis alibi pendens in respect of the fifth claim. He alleged that he had filed a claim of unfair labour practice on 23 February 2012, in which he alleged a failure on the part of the appellants to pay to him an agreed sum of USD 4 200 000.00 as terminal package. He alleged that the issue of whether or not he was entitled to the terminal benefits was before the Labour Court which was yet to make a determination. To this end, the High Court could not deal with that issue.

[4]	The High Court upheld the pleas of prescription in respect of claims 1 to 4. It dismissed those claims with costs. The court also upheld the plea of lis alibi pendens in relation to the fifth claim. Costs were ordered against the appellants jointly and severally, with one paying and the other being absolved.

[5]	The appellants approach this Court on appeal on the following grounds:

The court a quo erred in failing to find that the running of prescription had been interrupted.

The court a quo erred in failing to find that the completion of the period of prescription had been delayed by the arbitration proceedings.

The court a quo erred in upholding the plea of lis alibi pendens in respect of claim 5.

[6]	Ground 1 is vague. However, since it raises the same issue as ground 2, the court considers that the appeal could be determined essentially on the basis of that ground. Only two issues arise for determination in this appeal. The first is whether the court a quo was correct in its finding that the first four claims had prescribed at the time that proceedings were instituted. Aligned to that issue is whether or not the institution by the respondent of a claim for unfair labour practice in response to which the appellants filed a counter-claim served to interrupt the running of prescription in relation to all the claims. The second issue is whether the court properly upheld the defence of lis alibi pendens in relation to the last claim.

[7]	Mr Girach, on behalf of the appellants, attacked the judgment of the court a quo on several fronts. He contended that the first issue for determination by the court a quo should have been when prescription started running. As a result, the judge in the court a quo erred in not examining the question as to when the debt became due. In relation to the claim for        USD 279 549, his contention was that the debt could only have become due after payment to ZIMRA. This date was not ascertainable ex facie the papers.

[8]	In relation to the relocation expenses, his argument was that a debt does not become due and payable on its own accord. The debtor must be placed in mora. In this instance, there was no indication that demand was ever made before process was issued against the respondent.

[9]	As regards the third claim, Mr Girach argued that demand for the return of the vehicle is when the defendant would have been placed in mora. In casu, there is no indication ex facie the papers as to when demand was made thus placing the respondent in mora.

[10]	In relation to the fourth claim, which related to the payment made to the respondent based on an agreement between the parties in restraint of trade, it was his contention that the loss was incurred when the appellants made the payment to ZIMRA of the PAYE due by the respondent and not the payment itself to the respondent. The dates when payment was made to ZIMRA were not requested when the respondent filed a request for further particulars. The same considerations were pertinent to claim five. There was need for evidence at to when the amount of USD 851 419 was actually paid.

[11]	In all these instances, the onus to show that the claims had prescribed was firmly on the respondent.

[12]	Turning to the defence of lis alibi pendens, Mr Girach submitted that the arbitration process relied on in the defence had not been determined on the merits. Such determination would render the matter moot.

[13]	Mr Magwaliba, argued that it is not in every case that evidence is required in the determination of a plea of prescription. Rule 104(2) provides for the need for a replication to a plea of prescription. This serves to afford the defendant an opportunity to admit or deny an allegation that a claim has prescribed.

[14]	He contended that the respondent had made very specific allegations on each claim in relation to the plea of prescription. The duty was on the appellants to deny facts pleaded in the special plea. These facts were not denied. As a consequence, there was no need for evidence as there was no dispute of fact as to when the debts in the respective claims would have fallen due for payment. He countered that once appellants alleged that prescription had been interrupted the onus shifted to them to establish facts showing that indeed there had been such interruption.

[15]	He further submitted that in upholding the defence of lis alibi pendens, the court a quo properly exercised its discretion and it cannot be impugned for the proper exercise of such discretion. He added that even it was being criticized for the exercise of such discretion it had not been alleged that the exercise by the court had not been injudicious.

[16]	In this case there is no issue as to whether what the appellants sued on were debts, the only issue being whether or not the pleadings ex facie the papers disclosed sufficient facts as to when the debt in each respective claim would have become due.

[17]	It is a trite principle that a debt begins to run as soon as it becomes due. The exception this is in circumstances where the debtor willfully prevents the creditor from knowing the existence of the debt. This is not the case in this appeal. According to the Prescription Act [Chapter 8:11], an ordinary debt generally becomes prescribed within three years from the date it became due and payable. In the case of NECI v Zimbabwe Nantong Int (Pvt) Ltd 2015 (2) ZLR 228, this Court stated:

“As a general rule, exceptions taken by a defendant must be limited to objections or defences that arise ex facie the declaration itself. These would include averments that the declaration or part thereof does not disclose a valid cause of action or is vague and embarrassing. On the other hand, where the point taken constitutes a special defence, such as absence of jurisdiction, res judicata or prescription (cf. the pleas referred to above, as discussed by Herbstein & van Winsen, loc. cit), the procedure to be followed is by way of special plea. These are instances where the defence relied upon is not evident ex facie the declaration and involves the averment of some new fact or facts to be proved with fresh matter. The procedure by way of special plea enables the plaintiff to rebut the defence raised by replication and the adduction of further evidence where necessary. In exceptional cases, however, where the special defence in question is apparent ex facie the declaration itself, the court may allow the matter to be decided on exception. This is subject to the qualification that the plaintiff has nothing to adduce in rebuttal and will not be prejudiced by a decision being taken on exception.”

[18]	The critical question is whether or not the defence raised in the instant matter lends itself for treatment in the manner suggested by PATEL JA in the above authority. In other words is the defence relied upon evident or apparent ex facie the declaration filed in the instant case. In support of his contention that no evidence was required, Mr Magwaliba made reference to paras 1.3 and 1.4 of the special plea, wherein he submits are contained specific allegations of fact as to when the causes of action are alleged to have arisen. He added that these submissions as to the facts of when the causes of actions are alleged to have arisen are pertinent for claims 1 through to 5.

[19]	The special plea contains the following averments in respect of each of the claims:

CLAIM 1

1.3 The plaintiffs were aware or are deemed to have been aware of the facts from which the debt of USD 279 549.00 arose in or about April 2010 when they carried out the alleged unlawful instruction and paid the amount of USD 279 549.00

1.4 In any event, according to the plaintiffs’ own admission, the cause of action arose on 1 January 2011. The plaintiffs are claiming interest from 1 January 2011, interest may only be calculated from the date when the cause of action arose and in this case, according to the plaintiffs the cause of action arose on the 1 January 2011.

CLAIM 2

2.3 The plaintiffs were aware or are deemed to have been aware of the facts from which the debt of USD 25 000.00 arose in or about May 2011 when the defendant was allegedly paid the amount of USD 25 000.00 for relocation but the defendant did not relocate.

2.4 In any event, according to the plaintiffs’ own admission, the cause of action arose on 1 June 2011. The plaintiffs are claiming interest from 1 June 2011, interest may only be calculated from the date when the cause of action arose and in this case, according to the plaintiffs, the cause of action arose on 1 June 2011.

[20]	It is not necessary in my view to repeat the specific averments made in the special plea in respect of all five claims. I will just summarize what the plea avers. In respect of the third claim the averment is made that the claim arose in September 2010, however the plaintiffs are alleged to have admitted that it arose on 1 October 2011 which is the date from which they claim interest.  In para 4.3 of the plea, the defendant alleges that the plaintiffs are deemed to have been aware of the facts from which the fourth claim of USD 312 442.00 arose but that in any event they have admitted that the debt arose on 1 June 2011 which is the date from which they claim interest. In respect of the last claim, the date upon which the debt of USD 851 419.00 is said to have arisen in August 2011, but it is alleged that the plaintiffs admitted that it arose on 1 August 2011 being the date from which interest a tempore morae is claimed.

[21]	As is apparent from the above, there was a need for the appellants, as plaintiffs, to replicate to the plea of prescription in detail in view of the specific allegations made as to the dates when the respective causes of action arose. Where a party alleges that there was an interruption of the running of prescription there exists an obligation for the plaintiff to file a replication. In Nexbank Investments (Pvt) Ltd & Another v Global Electrical Manufacturers (Pvt) Ltd & Another 2009 (2) ZLR 270, the court emphasized the need to replicate in the case of a counter averment of interruption on the running of prescription. The court said:

“There was no replication to the special plea.   Nevertheless, the learned Judge in the court a quo said the following at p 3 of his judgment:

“The applicants argue that the cause of action arose in 2003 and that in 2007 the claim had prescribed.   The respondents countered this proposition by stating that even assuming the cause of action arose in 2003, the running of prescription was interrupted by an express or tacit acknowledgement of liability by the applicants in 2005. (Section 18(1) of the Prescription Act [Cap 8:11]).   It is my view that prescription was interrupted as submitted by the respondents.   Accordingly, the special plea fails.”

In concluding that the running of prescription had been interrupted in 2005 the learned Judge relied upon a submission made to him by the legal practitioner who appeared for Global, which submission was not supported by any averment in the pleadings, as no replication had been filed.   I have no doubt in my mind that in this regard the learned Judge erred.

If Global wished to rely upon the alleged interruption of the running of prescription, it should have filed a replication to the special plea.   In the absence of a replication, the issues between the parties were to be found in the pleadings as they stood.   Those issues did not include the issue of whether the running of prescription had been interrupted.

The importance of carefully pleading one’s case cannot be over-emphasised. As KUMLEBEN JA et NIENABER JA stated in Imprefed (Pty) Ltd v National Transport Commission 1993 (3) SA 94 (A) at 107 C-E:

“At the outset it need hardly be stressed that:

‘The whole purpose of pleadings is to bring clearly to the notice of the Court and the parties to an action the issues upon which reliance is to be placed.’

(Durbach v Fairway Hotel Ltd 1949 (3) SA 1081 (SR) at 1082).

This fundamental principle is similarly stressed in Odger’s Principles of Pleading and Practice in Civil Actions in the High Court of Justice 22nd ed at 113:

‘The object of pleading is to ascertain definitely what is the question at issue between the parties; and this object can only be attained when each party states his case with precision.’”

In the present case, as it was common cause that Global had not filed a replication to the special plea, the learned Judge should have ignored the submission by Global’s legal practitioner that the running of prescription had been interrupted, and should have upheld the special plea and dismissed the claim by Global and Mahlatini.”

[22]	In casu, the appellants did file a replication. However, instead of replicating to the averments as to the dates when the causes of action are supposed to have arisen, they filed a composite replication making reference to a counter-claim filed in the arbitration proceedings. They alleged that the sums claimed in the counter-claim are similar to the claim in the summons. They alleged that the filing of the counter-claim interrupted the running of prescription. The appellants submitted that on the authority of Mbatha v Zizhou SC 69/18, this Court ought to find that there was an interruption to the running of prescription by the reference of the counter-claim to arbitration. In that case the court said at p 4:

“In casu, there are two critical factors that are not in dispute. Firstly, one of the questions referred to the arbitrator for determination was “whether or not sexual harassment was perpetrated on R. M. Mbatha by F. B. Zizhou in his capacity as Confederation of Zimbabwe Industries Chief Executive Officer”. Secondly, in March 2014, the arbitrator found that the appellant had been sexually harassed and ordered the respondents to compensate her for the damages she had suffered. However, as I have already indicated, the arbitrator subsequently referred the parties to the High Court to adjudicate the appellant’s claim for damages for sexual harassment, as that was a matter that fell outside his jurisdictional remit. In any event, the arbitrator’s finding that the appellant had been sexually harassed remains extant. It has not been appealed against or otherwise challenged.”

And later at p 6:

“While I accept that a cause of action is conceptually distinct from the overlying debt that is claimed, the latter cannot exist in vacuo and must be predicated on the underlying cause of action. In the instant case, the debt, being the claim for damages for sexual harassment, cannot be severed or divorced from the cause of action, which is the sexual harassment itself. The question that was submitted to the arbitrator for determination was whether or not sexual harassment was perpetrated on the appellant. This is the same cause of action from which the appellant’s claim for damages emanates. On this basis, it must be accepted that the debt claimed by the appellant, being the damages for sexual harassment, constitutes the subject matter of the dispute that was submitted to arbitration. It then follows that the running of prescription on the claim for damages was interrupted in accordance with the provisions of s 17(1)(d).”

[23]	As submitted by Mr Magwaliba, correctly in my view, Mbatha’s case is not applicable in this appeal. The facts are distinguishable from the present. The issues of sexual harassment which were referred to arbitration by the appellant in that case were directly linked with her employment. They occurred within the workplace and were covered under the Act. The submission to arbitration of the alleged sexual harassment as an unfair labour practice interrupted the running of prescription in that case.

[24]	In casu, whether or not the appellants filed a counter-claim in the arbitration process depends on the terms of reference agreed to by the parties. Perusal of the agreed terms of reference reveals that the issue for determination on the substance was whether or not the respondent was unlawfully dismissed, whether or not he was entitled to the terminal benefits claimed, whether or not the benefits were agreed between the parties and whether the employer committed an unfair labour practice by failing to pay. In Inter-Agric (Pvt) Ltd v Mudavanhu & Ors SC 9/15, this Court said:

“In addition, at law, the arbitrator was only competent to determine the dispute between such parties as had been referred to him by the labour officer.  Thus, he was confined to his terms of reference.  He had no mandate beyond that which had been referred to him.”

[25]	The above remarks apply with equal force to this appeal. The arbitrator was confined to determine the issues outlined above. The terms of reference did not include a counter-claim from the appellants. In any event, any counter-claim which is not related to labour issues between the parties for determination by the arbitrator solely in terms of the provisions of the Labour Act [Chapter 28:01] would not be lawfully before the arbitrator by reason of absence of jurisdiction. In this instance, the causes of action in claims 1 to 4 as pleaded by the appellants are premised either on contract or delict. According to the appellants’ own averments in the declaration, the claims are not premised on labour issues between the parties even though they arose in the workplace. The court a quo made a finding to this effect and there was no appeal against this finding. Indeed, the allegations in the declaration are based on alleged unlawful acts on the part of the respondent. There existed an employment relationship between the appellants and the respondent, but the genesis of those claims do not appear to spring from a breach of the employment relationship per se. Thus, they do not fall for determination or resolution in terms of the Labour Act. The view I take is that the appellants did not establish that there was an interruption to the running of prescription in relation to claims 1 to 4.

[26]    It only remains to deal with the replication to the issue of lis alibi pendens raised in relation

to the fifth claim.

[27]	The defence of lis alibi pendens filed by the respondent in respect of the fifth claim stated the following:

“6.1	The defendant filed a labour complaint in the Ministry of Labour against the plaintiffs for unfair labour practice on 23 February 2012. The unfair labour practice was failure by the plaintiffs to pay the agreed terminal benefits package of USD 4 200 000.00 and in the alternative failure to pay the terminal benefits package as per the contract of employment.

6.2 The subject matter under claim five of these proceedings is the same subject matter in the above proceedings which revolves around the question whether or not the defendant is entitled to the agreed terminal benefits of USD 4 200 000.00.”

[28]	The court a quo appears to have upheld the defence of lis alibi pendens. I say this because the court a quo opined that it would not exercise its discretion on this issue because it considered the issue to have been fully ventilated and completed during the arbitration proceedings. Ultimately, it issued an order in which it upheld the special plea of lis alibi pendens. The appellants concede in the replication that the issue of the terminal benefits claimed by the respondent is a matter for determination before the Labour Court. Undoubtedly, this is an issue pending before the Labour Court. The court a quo was correct in upholding that defence.

DISPOSITION

[29]	In the absence of a replication on the dates when the causes of action arose, it can be taken that the running of prescription as alleged by the respondent was not interrupted in relation to the first four claims. There was, as a consequence, no dispute of fact as regards the pleas of prescription. In other words, the appellants accepted the dates as to when the causes of action are said to have arisen as being common cause for the first four claims.

[30]	The defence of lis alibi pendens was not seriously challenged.

[31]	In the premises the appeal lacks merit and is dismissed with costs against the appellants jointly and severally, the one paying the other being absolved.

GARWE JA:			I agree

MAKARAU JA:   		I agree

Scanlen & Holderness, appellant’s legal practitioners

Dube, Manikai & Hwacha, respondents’ legal practitioners