Mogola Enterprises (Private) Limited v Old Mutual Property Investment (Private) Limited

### Preamble
Judgment No. SC 26/20
1
Civil Appeal No. SC 272/17
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REPORTABLE:      (23)

MOGOLA     ENTERPRISES     (PRIVATE)     LIMITED

V

OLD     MUTUAL     PROPERTY    INVESTMENT     (PRIVATE)     LIMITED

SUPREME COURT OF ZIMBABWE

GOWORA JA, HLATSHWAYO JA & GUVAVA JA

HARARE, OCTOBER 19, 2017

L. Madhuku, for the appellant

T. Mpofu, for the respondent

GUVAVA JA: 	This is an appeal against the decision of the High Court granting the respondent rescission of judgment in case number HC 7509/15 and ordering that the respondent file its answering papers to the appellant’s claim in case number HC 7509/15 within ten days of the granting of the order.

After hearing arguments from both parties, the appeal was struck off the roll.  It was indicated that reasons for the decision would follow in due course.  These they are.

BACKGROUND FACTS

The appellant caused summons to be issued against the respondent for the sum of US$304 168.50 plus interest at fourteen percent per annum from the date of issuance of the summons to the date of payment in full and costs of suit. The appellant and respondent were lessee and lessor, respectively, during the period from 1 July 2005 to 13 September 2012 at shop number 14, 15 and 16 Borrowdale Brooke Complex. The appellant installed a Kohler 63 KVA diesel generator on 1 January 2006 at the respondent’s shopping complex where appellant was a tenant.

Appellant allowed respondent to use the generator for a fee and it was agreed, in turn, to credit the appellant’s operating account with the fees paid for use of the generator. A dispute arose when the appellant was evicted from the shopping complex by the respondent. Appellant claimed monies from the respondent for use of the generator. The dispute was referred to arbitration in terms of the lease agreement between the parties.

The arbitrator in his award determined that respondent’s auditors, acting as experts, would calculate the operating costs incurred for the use of the generator and come up with a figure. The award was registered as an order of the High Court under case number HC 13801/12. The respondent however did not request its auditors to determine the operating costs of running the generator. The appellant instituted summons against the respondent. The appellant stated in its declaration that the failure by the respondent to undertake the audit for the operating costs of the use of the generator prejudiced it in the sum of US$304 168. 50.

The respondent did not enter an appearance to defend the summons issued by the appellant. On 11 November 2015 the appellant applied for default judgment before the High Court. The High Court granted the application on 18 November 2015.  Pursuant to the grant of the default judgment, appellant caused a writ of execution to be issued against respondent’s movable property. On 4 and 7 December 2015, the Sheriff, acting on the appellant’s instructions, served notices of seizure and attachment on bank accounts at CABS and Standard Chartered Bank in respect of the respondent’s accounts with the two institutions.

PROCEEDINGS BEFORE THE HIGH COURT

The respondent approached the court a quo in terms of r 63 of the High Court Rules, 1971 seeking an order for the rescission of the default judgment. Before the court a quo the respondent argued that it had not seen the appellant’s summons. The respondent stated that it was not in willful default but only became aware of the default judgment because of the service of the notices of attachment.  It also submitted that it had a bona fide defence to the claim on the basis that it had prescribed. The respondent also submitted that in any event the debts had arisen before the adoption of the United States Dollar currency regime and thus the appellant could not make its claim in United States Dollars.

The appellant opposed the application for rescission. It contended that the respondent had failed to prove the essential elements for rescission as it had failed to provide a reasonable explanation for its default despite being served with the summons. The appellant also argued that the respondent had no prospects of success on the merits of the matter. The court a quo in determining the matter, found that the respondent had a bona fide defence to the claim and had bona fide reasons for its failure to file its appearance to defend. The court a quo rescinded the order granted in case number HC 7509/15 and ordered the respondent to file opposing papers against the appellant’s claim within ten working days from the date of the granting of the order.

Aggrieved by the decision of the court a quo, the appellant noted this appeal.

PROCEEDINGS ON APPEAL

At the commencement of the hearing the counsel for the respondent raised an objection in terms of r 41 of the Supreme Court Rules, 1964. The respondent’s objection was based on the point that the judgment of the court a quo granting rescission of the judgment was interlocutory in nature as it did not have the effect of resolving the dispute between the parties. As a result the appellant should have sought leave to appeal from the court a quo before noting the appeal.

The appellant opposed the preliminary point raised by the respondent and submitted that the judgment of the court a quo was not interlocutory and therefore no leave was required before an appeal could be filed.

The issue before the court is whether or not the judgment granting rescission in case number HC 7509/15 is an interlocutory order. If the order granting rescission for the judgment was interlocutory in nature, then the appellant ought to have sought leave to appeal before making this appeal and this appeal will be improperly before us. If the order was not interlocutory in nature then the appellant could appeal as a matter of right without seeking leave to appeal.

Mr Mpofu for the respondent based his argument on s 43(2)(d) of the High Court Act [Chapter 7: 06] which provides as follows:

“(2) No appeal shall lie –

(d) from an interlocutory order or interlocutory  judgment made or given by a judge of the High Court, without the leave of that judge or, if that has been refused, without the leave of a judge of the Supreme Court, except in the following cases-

(i) where the liberty of the subject or custody of minors is concerned;

(ii) where an interdict is granted or refused

(iii) in the case of an order on a special case stated under any law relating to arbitration.”

Counsel argued that an interlocutory order does not resolve the dispute but actually gives the parties the opportunity to deal with the dispute. He further argued that an order granting rescission could not be said to be final and definitive as it did not resolve the dispute between the parties.

Mr Madhuku, for the appellant submitted that the real principle behind s 43 of the High Court Act is to allow an automatic right of appeal against every decision of the High Court that has real and substantive consequences. Counsel further argued that decisions with such consequences are those specifically excluded in s 43 (2). He submitted that the rescission of judgment that had been granted had real and substantive consequences and thus could not be an interlocutory order.

ANALYSIS

The test to be applied in determining whether or not an order is interlocutory has been discussed by this Court in a number of cases. In Trust Merchant Bank Limited v Mako Properties Construction (Private) Limited t/a Msuna Safaris and Travel SC 73/02 the court remarked that:

“It is clear from its form and effect that the order made by the learned judge is an interlocutory order within the meaning of s 43(2) (d) of the Act.   In Steytler N.O. v Fitzgerald 1911 AD 295 at 304 LORD de VILLIERS CJ said that the test whether or not an order was interlocutory was: - “Whether on the particular point in respect of which the order is made the final word has been spoken in the suit, or whether in the ordinary course of the same suit, the final word has still to be spoken.”   In the same case INNES J (as he then was) said at 313:- “It is not desirable to attempt an exhaustive definition.   A number of tests to ascertain whether a decree is definitive are given in the books.   It is sufficient for the purposes of this case to say that when an order incidentally given during the progress of litigation has a direct effect upon the trial issue, when it disposes of a definite portion of the suit, then it causes prejudice which cannot be repaired at the final stage, and in essence it is final, though in form it may be interlocutory.” (my own emphasis)

In Blue Ranges (Pvt) Ltd v Muduviri and Another 2009 (1) ZLR 368 (S) Malaba DCJ (as he then was) made the following remarks in discussing the difference between interlocutory orders and final orders.

“To determine the matter one has to look at the nature of the order and its effect on the issues or cause of action between the parties and not its form. An order is final and definitive because it has the effect of a final determination on the issues between the parties in respect to which relief is sought. An order for discovery or extension of time within which to appeal, for example is final in form but interlocutory in nature. The reason is that it does not have the effect of determining the issues or cause of action between the parties.”

The scholars Herbstein and Van Winsen, Civil Practice of the High Courts of South Africa (5th ed, Juta and Co Ltd, Cape Town) at p. 1204 define an interlocutory order as:

“…an order granted by a court at an intermediate stage in the course of litigation, settling or giving directions with regard to some preliminary or procedural question that has arisen in the dispute between the parties.”

From the above authorities it is not in dispute that an interlocutory order is one which is granted before proceedings are determined to finality. Such an order is not definitive as it does not dispose of the dispute between parties.

The decision of the court a quo granting rescission of judgment did not dispose of the dispute between the appellant and the respondent. The rescission of the judgment only necessitated that the respondent file its opposing papers and that the matter be heard on the merits to finality.

The need to curb frivolous litigation and settling of matters to finality can never be over emphasised. Orders granted before proceedings come to finality therefore require leave to appeal so as to ensure that appeals brought before this Court are based on matters determined on the merits and to finality by the court a quo.

The court in Schreiner JA in Pretoria Garrison Institutes v Danish Variety Products (Pty) Ltd 1948 (1) SA 839 (A) stated the importance of the need for litigants to seek leave to appeal when appealing against interlocutory orders. The court stated that:

“A wholly unrestricted right to appeal from every judicial pronouncement might well lead to serious injustices. For, apart from the increased power it would probably give the wealthier litigant to wear out his opponent, it might put a premium on delaying and obstructionist tactics. This latter consideration has, I imagine, been the predominant one in leading legislators to try and restrain the bringing of appeals from orders of a preparatory or procedural character arising in the course of a legal battle. The chief object has naturally been to bring about a just and expeditious decision of a major substantive dispute between the parties…But desirable as it would be to ensure that all such orders are properly made, it has been widely felt, in different ages and countries that, a line between appealable and non-appealable orders for this preparatory or procedural character ought to be drawn somewhere, for if they were none of them appealable the injustice resulting from wrong orders might be intolerable.”

Clearly the submission by counsel for the appellant that when a court grants rescission of judgment it makes a final order is thus not supported by authority. Without an order granting leave to appeal the appellant is improperly before this Court.

The appellant failed to obtain leave to appeal before approaching this Court. This rendered the appeal a nullity

DISPOSITION

It was for the above reasons that this Court came to the conclusion that the appeal was improperly before it. Although the respondent has sought costs on a legal practitioner and client scale there was no basis for such an award of costs on a punitive scale.

Accordingly the appeal was struck off the roll with costs.

GOWORA JA:			 I agree

HLATSHWAYO JA:		 I agree

Mundia & Mudhara, appellant’s legal practitioners

Wintertons, respondent’s legal practitioners