Jimmy Gazi v Mbalabala Properties (Pvt) Ltd

### Preamble
1
HB 151/21
HC 2033/16
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JIMMY GAZI

Versus

MBALABALA PROPERTIES (PVT) LTD

IN THE HIGH COURT OF ZIMBABWE

KABASA J

BULAWAYO 26 MAY AND 18 AUGUST 2021

Application for Absolution from the Instance

Advocate L Nkomo with J Tshuma, for the plaintiff

N. Mazibuko, for the defendant

KABASA J: 	The plaintiff got acquainted with one of the Directors of the defendant, Enos Mzondi Nkala in the 1980s.  The two subsequently became friends. During the course of that friendship Nkala needed financial assistance, which the plaintiff provided. Mr. Nkala was unable to pay back what he had been given by the plaintiff and that saw the parties later agreeing on a business arrangement. Sometime in 2007 they entered into an oral Memorandum of Understanding wherein Mr. Nkala’s indebtedness to the plaintiff comprising of the following:

a)	payment of tuition fees and other charges for Nkala’s daughter who was studying at Solusi University.

b)	Delivery of a Nissan Terrano vehicle.

c)	Delivery of 30 head of cattle

d)	Delivery of 16 sheep.

e)	payment of GBP 2 000 and ZAR 30 000 was agreed to be the extent of what the plaintiff had given to Nkala.  On his part, Mr. Nkala was to procure the survey and subdivision of a property known as Lot 1 of Swaite which is situated in the Umzingwane district.  Lot 3 of Lot 1 of Swaite measuring 45,4835 hectares was then to be identified from the whole and thereafter Mr Nkala was to secure a Certificate of No Present Interest from the Zimbabwean Government. The aforementioned payments were to serve as the full purchase price for the land. The parties were then to sign a formal Memorandum of Sale of that subdivided property before the same’s transfer to the plaintiff.

The plaintiff performed his end of the bargain and the defendant, through Mr Nkala obtained the subdivision permit, procured a survey for the purposes of identifying the proposed subdivision and procured the Certificate of No Present Interest.  In 2013 the parties approached Legal Practitioners so as to have a formal Memorandum of Agreement of Sale drawn up.  This was duly done and same was to be signed by Mr Nkala.  However, Mr Nkala fell ill and efforts to get him to sign the Agreement of Sale hit a snag.  The Agreement was never signed as Mr Nkala did not recover from his illness and subsequently died before signing the Sale Agreement.

The death of Mr Nkala marked the beginning of the plaintiff’s woes as Mr Nkala’s widow, a co-director of the defendant was not prepared to finalise the transaction.

The plaintiff then decided to look to the courts for relief and that saw him issuing summons on 17 August 2016, wherein he claimed the following: -

1.	An order compelling the defendant to pass transfer, to the plaintiff or his nominee, of a certain immovable property, being Lot 3 of Lot 1 of Swaite, measuring 45,4835 hectares, situate in the district of Umzingwane.

2.	An order directing the defendant to, within 21 days of the date of this order, execute all documents, and take all steps necessary to procure the transfer of the above-described property to the plaintiff, and authorising the Sheriff to execute all documents and take all actions in the defendant’s place and stead, should the defendant fail to comply.

3.	Costs of suit.

The defendant defended the action and mounted a multi-faceted defence to the plaintiff’s claim; viz:

1.	No agreement was ever entered into with the plaintiff and if any was entered into by Mr Nkala, it was in his personal capacity as he had no authorisation to do so.

2.	All the transactions done with Mr Nkala, re: - the procuring of the Certificate of No Interest, the survey of the property with a view to identify the subdivision, the attendance at the offices of the Legal Practitioners for the drawing up of an Agreement of Sale are all of no force or effect as Mr Nkala’s personal actions were not binding on the defendant.

3.	In the alternative, should it be held that such agreement exists, the cause of action arose more than 3 years ago and so the claim has prescribed.

4.	The verbal Memorandum of Agreement having been concluded in 2007 which was before the property was subdivided, falls foul of section 39(1)(b)(i) of the Regional Town and Country Planning Act (Chapter 29:12) thereby rendering the agreement illegal and consequently unenforceable.

5.	Such verbal agreement could not legally be entered into with the defendant as it is a corporate legal entity.  Without a written agreement such verbal agreement is not binding.

6.	Even assuming but without admitting any of the plaintiff’s averments, the defendant denied that the plaintiff fulfilled any of the obligations he had to meet entitling him to the relief he seeks.

With the closure of pleadings, the parties attended a Pre-Trial Conference and the following issues were referred for trial: -

1.	Whether the parties entered into an Agreement of Sale of certain immovable property being Lot 3 of Lot 1 of Swaite measuring 43.4835 hectares situate in the district of Umzingwane.

2.	If agreement was indeed entered into as above stated, whether the plaintiff’s claims are prescribed.

3.	If the parties did enter into the Agreement of Sale as above stated, what were the exact terms and conditions of the Agreement and whether the plaintiff fulfilled its side of the bargain.

4.	If the Agreement was entered into as above stated in the year 2007, whether the Agreement was legal and enforceable.

5.	If an Agreement was concluded as above stated which included the payment of the foreign currency by the plaintiff to or on behalf of the defendant or the late Mr Nkala, whether that rendered the agreement void and unenforceable.

6.	Whether the plaintiff is entitled to transfer of the disputed property.

At the commencement of the trial the parties agreed to the amendment of the plaintiff’s claim so it reflected the prayer as shown in the plaintiff’s declaration.  This is the prayer captured at the beginning of this judgment.

With that amendment, the plaintiff took the witness’s stand.  He was the first of a total of 4 witnesses.

The gist of the plaintiff’s evidence was that after he became friends with Mr Nkala, he came to know him as the major shareholder and Secretary of the defendant.  He also used to meet him at a fuel station situated in Mbalabala where bulk fuel was stored for farmers.  The plaintiff is also a farmer and the fuel station is owned by the defendant.

BP Shell which owned the assets at this Filling Station offered to sell the assets to the defendant.  The defendant lacked the finances and so reached out to the plaintiff who eventually directly negotiated with BP Shell and subsequently bought the assets.  The offer to the defendant by BP Shell, the plaintiff’s counter offer and BP Shell’s offer to the plaintiff were produced through the witness and marked Exhibit 1, 2 and 3.  The payment for the assets which was through an electronic transfer advice was produced and marked Exhibit 4.

Having purchased BP assets, the plaintiff was desirous to run the Filling Station and so reached out to Mr Nkala as defendant’s Director so they could find ways to address the aspect of the land upon which the Filling Station was situated.  Mr Nkala agreed to sell that portion of land to him, measuring 7,9274 hectares.  He was subsequently shown the diagram showing the extent of that land.  This diagram was produced as Exhibit 5.

The parties then discussed the purchase price.  However, during the course of their friendship Mr Nkala had borrowed money from the plaintiff, including a vehicle he was driving.  He (Mr. Nkala) therefore decided to sell a bigger piece of land to the plaintiff as he was in no position to pay back what he owed.  In all the plaintiff discharged his obligations towards the purchase price of this bigger piece of land, which was then subdivided and became Lot 3 of Lot 1 of Swaite measuring 45,4835 hectares, through surrendering the 4 X 4 Nissan Terrano SUV that Mr Nkala was already driving, GBP 2000, ZAR 30 000, 30 head of cattle, 17 sheep and payment of ZW2,5 billion tuition fees for Mr Nkala’s daughter, who was studying at Solusi University.

The plaintiff decided to involve his lawyers as he realised that the issues were getting complicated.  With the advent of the lawyer onto the scene, which was early 2008 and before the discharging of the obligations towards the purchase of the land, the subdivision of the immovable property and all the attendant procedures were then activated by Mr Nkala.  This entailed the procurement of a Board resolution authorising Mr Nkala to apply for a replacement of a lost Certificate of Title of the immovable property (Exhibit 6), an application for a Subdivision permit (Exhibit 8), which permit was then obtained in March 2009 (Exhibit 9).  One Mr Sigogo, who the plaintiff volunteered to run around for purposes of procuring the requisite papers paid for the permit and obtained a receipt thereto (Exhibit 10).  This process was done before the negotiation of the purchase price whose payments were as shown earlier on in this judgment.  The proof of payment of GBP 2000 and proof of delivery of part of the livestock were produced and marked Exhibit 11 and 12.  The British pounds were from the plaintiff’s account which he holds with a UK bank where his family is based.  The ZAR 30 000 was paid at a time when Zimbabwe had in place a multi-currency regime.

After fulfilling all his obligations, the plaintiff visited Mr Nkala at his home and on the first visit he obtained the Certificate of No Interest which he duly submitted to his lawyer.  On that visit, where he was accompanied by his sister, Mrs Nkala tried to get Mr Nkala to revert to the initial agreement where only 7 hectares were to be sold but her plea fell on deaf ears.  After all the paperwork was in place, the plaintiff, with his sister in tow, visited the Nkala home for the second time.  The purpose was to have the Agreement of Sale signed.  This time access to Mr Nkala was denied and when Mrs Nkala failed to have a private conversation with the plaintiff, she hurled insults at the visitors.  That second visit did not achieve the intended purpose and in August 2013 Mr Nkala gave up the ghost.

In his evidence the plaintiff sought to establish that the agreement with Mr Nkala was above board, both as a director of defendant and also in that such agreement was concluded after the procurement of the requisite subdivision permit.  The issuance of summons followed the breakdown of the on-going process as a result of Mr Nkala’s death in 2013.  Summons was issued in 2016.

The plaintiff sought corroboration of his testimony from his sister and two of his farm employees.  The sister, Sitholakele Dewa was the second witness.  She confirmed accompanying the plaintiff to the Nkala home where her brother was given the Certificate of No Present Interest by Mrs Nkala.  She also confirmed the conversation Mrs Nkala had with her husband as she tried to talk him out of selling a larger portion of the land.  She recalled that Mr Nkala told his wife that full payment had been received for that land and they were not in a position to reimburse the plaintiff.

On the second visit she again accompanied her brother who had documents he wanted to present to Mr Nkala.  On this occasion they were denied access to him by Mrs Nkala who thereafter hurled insults at them when her brother refused to accede to her request to have the witness leave the room so Mrs Nkala could talk to the plaintiff.  The purpose of that visit was then aborted as the witness left with her brother.

The third witness was Bernard Sigogo who confirmed being the runner who obtained what turned out to be the subdivision permit and the Certificate of No Present Interest.  He also took the surveyor to the land in question where he observed him conducting measurements.  This witness also appended his signature to the document which signalled the fulfilment of all the plaintiff’s obligations towards what was owed to Mr Nkala.

The last witness was employed as a cattle herder at the plaintiff’s farm.  He witnessed the delivery of the livestock from plaintiff’s farm to Mr Nkala, that is the sheep and cattle and this happened between 2009-2010.

After this witness’s evidence, the plaintiff closed his case.  Counsel for the defendant then applied for absolution from the instance.  Counsel’s argument is that the plaintiff had not proved a prima facie case, the paucity of the case does not call for the defendant to defend the action any further than the filed pleadings.  Counsel cited CHIGUMBA J’s judgment in Sibanda v Chikumba and Another 2014 (1) ZLR 219 (H) where the learned Judge posed the following questions: -

“Could this court find for the plaintiff on the basis of the evidence which he led? … Was it sufficient?  Did it support the plaintiff’s averments with sufficient clarity and particularity?”

Mr Mazibuko’s argument was that the plaintiff’s evidence speaks of an agreement, whatever its true nature, concluded in 2007.  In 2007 there was no subdivision permit and so whatever agreement the parties entered into is a nullity as it fell foul of the provisions of the Regional Town and Country Planning Act.  Counsel cited McNally JA’s decision in X-Trend-a-Home (Pvt) Ltd v Hoselaw Investments (Pvt) Ltd 2000 (2) ZLR 348 (S) in support of the proposition that whatever agreement the parties entered into, for as long as such agreement was meant to change ownership of the land, such agreement was prohibited.  It mattered not that there was a suspensive condition speaking to the procurement of a subdivision permit.

The payments in foreign currency also fell foul of the Exchange Control Regulations, SI 109 of 1996 since the GBP 2000 was given to Mr Nkala in 2006 before the multi-currency regime.  This therefore rendered the agreement unenforceable due to its illegality.  (Barker v African Homesteads Touring and Safaris (Pvt) Ltd and Anor 2003 (2) ZLR 6 (S).  As for the ZAR 30 000 there was no proof that such amount was ever given to Mr Nkala, so counsel argued.

In opposing the application, Advocate Nkomo contended that the plaintiff adduced sufficient evidence and made out a prima facie case.

Counsel relied on the Supreme Court decision in Bakari v Total Zimbabwe (Pvt) Ltd SC 21-19 on the test applicable in such applications.  The test being:

“Is there sufficient evidence on which a court might make a reasonable mistake and give judgment for the plaintiff...”

The plaintiff adduced evidence showing the verbal agreement entered into and that this was so concluded at the end of 2009 after the subdivision permit was procured.  He also adduced evidence on the payments made in fulfilment of the agreement and at all material times the plaintiff was dealing with a director of the defendant.

The issues raised by the defendant, as regards Mr Nkala’s authority, the invalidity of the agreement due to the absence of a subdivision permit, the contention that the plaintiff’s claims have prescribed, the payment in forex without the requisite authority are all issues which the defendant cannot merely allege and not adduce factual evidence on and seek absolution without affording the court the opportunity of hearing both sides before making a determination, so argued counsel for the plaintiff.

With these submissions, the question I have to ask is whether the plaintiff’s case is so hopeless that it does not warrant allowing the trial to proceed.

In Tizai Chiswanda (in his capacity as father and guardian of Chidochashe Chiswanda) v OK Zimbabwe Limited SC 84-20 GOWORA JA had this to say as regards the test to be applied at this stage: -

“Crucially the test to be applied is not whether or not the evidence for the plaintiff establishes what would finally be required to be established to obtain judgment. The evidence required at this stage is whether or not the plaintiff has made out a prima facie case to prove the claim.  The correct approach to an application for absolution from the instance was set out in Gordon Lloyd Page & Associates v Rivera 2001 (1) SA 99 at pp 92-93 by HARMS JA.  He stated: -

“The test for absolution to be applied by a trial court at the end of a plaintiff’s case … is not whether the evidence led by plaintiff establishes what would finally be required to be established, but whether there is evidence upon which a court, applying its mind reasonably to such evidence, could or might (not should), nor ought to) find for the plaintiff.”

Turning to the facts in casu, has the plaintiff failed to adduce evidence upon which a court, reasonably applying its mind to such evidence, might find for him? I think not.

In Bakari v Total Zimbabwe (Pvt) Ltd SC 21-19, the Supreme Court had this to say: -

“The court should be extremely chary of granting absolution at the close of the plaintiff’s case.  The court must assume that in the absence of very special considerations, such as the inherent unacceptability of the evidence adduced, the evidence is true.  The court should not at this stage evaluate and reject the plaintiff’s evidence.  The test to be applied is not whether the evidence led by the plaintiff establishes what will finally have to be established.  Absolution from the instance at the close of the plaintiff’s case may be granted if the plaintiff has failed to establish an essential element of his claim.”

If what the plaintiff and the other 3 witnesses testified to, is to be accepted as the truth of the matter it would show that: -

1)	The plaintiff and defendant’s Director entered into an agreement in 2009.

2)	As at the time of such agreement a subdivision permit had been obtained.

3)	The plaintiff paid what had been agreed on as the full purchase price of the land in question.

4)	The parties’ engagement was on going until the death of Mr Nkala in August 2013.

5)	The issuance of summons came about as a result of the lack of headway with Mrs Nkala regarding the signing of the Agreement of Sale and subsequent transfer of the land to the plaintiff.

The plaintiff adduced evidence in respect of the four issues wherein the onus was on him.  Such evidence touched on all the essential averments upon which the plaintiff’s claim is premised.

The onus as regards the issue of prescription and whether the payment of a portion of the obligations in foreign currency was in violation of the law thus rendering the agreement illegal was placed on the defendant.  The defendant is yet to adduce evidence to sustain its contention that the claim has prescribed and is tainted with illegality.

GOWORA JA in the Chiswanda case (supra) quoted, with approval, BEADLE CJ in Supreme Service Station (1969) (Pvt) Ltd v Fox and Goodridge (Pvt) Ltd 1971 (1) RLR 1, at 5-6, where the learned CJ had this to say: -

“… I must stress that rules of procedure are made to ensure that there is justice between the parties, and, so far as is possible, courts should not allow rules of procedure to be used to cause an injustice.  If the defence is something peculiarly within the knowledge of a defendant, and the plaintiff has made out some case to answer, the plaintiff should not be lightly deprived of his remedy without first hearing what the defendant has to say.  A defendant who might be afraid to go into the box should not be permitted to shelter behind the procedure of absolution from the instance.  I might usefully quote here what was said by SUTTON J in Erasmus v Boss 1930 CPP 204 at 207: -

“In Theron v Behr 1918 CPD 443, JUTA J, at p 451 states that according to the practice in this court in later years judges have become very loath to decide upon questions of fact without hearing all the evidence on both sides.”

In casu, as regards questions of fact, since the plaintiff adduced evidence on the agreement, the payments, the procurement of the subdivision permit, the Certificate of No Interest and the events which occurred during the visits to the Nkala home, the defendant must controvert this evidence.  Without hearing the defendant, how is the court expected to dismiss the evidence led by the plaintiff and the three witnesses whose testimony was corroborative of the plaintiff’s?

I would say, as GOWORA JA observed in the Chiswanda case (supra), that the defendant did not file a bare denial to the plaintiff’s claims but sought to give its own explanation as regards the denial of liability.  If the certificate of no present interest was not procured in pursuance of the parties’ agreement, the defendant ought to state why it was procured and given to the plaintiff.

As regards the questions of law, i.e., the legality of the agreement, the legality of the payments in forex and the legality of a corporate legal entity to conclude a verbal agreement, these, to my mind, are not questions to be disposed of by way of an application for absolution.  That being so because factually the plaintiff adduced evidence seeking to establish that all that was done was above the law or within the dictates of the law.  A party who is of a different view must therefore adduce evidence to establish the illegalities it relies on in its defence.  In any event the onus on these issues is on the defendant. It cannot therefore seek absolution without discharging that onus, for it is trite that he who alleges must prove.  (University of Zimbabwe v Mutasa & Others SC 157-93).

Further, in Brooker v Mudhanda & Another SC 5-18 GOWORA JA had this to say: -

“At issue before the court a quo was whether or not the claims mounted against the appellants by the respondent had prescribed.  The party who alleges prescription must allege and prove the date of the inception of the period of prescription.  Generally, prescription starts to run as soon as the debt becomes due.

In order to determine the question of prescription the court first had to make a finding on the cause of action upon which the respondent’s claim was premised and when specifically, the cause of action arose.”

The defendant is the one who alleged prescription and must therefore prove the date of the inception of the period of prescription.  When did the cause of action arise and was plaintiff’s action commenced after the claim had prescribed?  The defendant alleged prescription and therefore has to adduce evidence to prove it.  This can only be done when the defendant takes the witness stand to adduce such evidence.  The defendant must therefore present evidence. It is consequently imperative to allow the trial to proceed.

In Beta Holdings v Rio Zim (Pvt) Ltd HH 397-17 the court held that: -

“The order should be granted when the plaintiff’s claim is hopeless at the close of the plaintiff’s case.”

I am unable to hold that the plaintiff’s case is hopeless, and

“In case of doubt at what a reasonable court might do, a judicial officer should always, therefore, lean on the side of allowing the case to proceed.”  (per SUTTON J in Erasmus v Boss as quoted by BEADLE CJ in Supreme Service Station (1996) (supra).

That said, I come to the conclusion that it is in the interests of fairness and justice to allow the trial to proceed.

This is not a case where I can say the plaintiff’s case is so hopeless that there is absolutely no chance of a court making a reasonable mistake and finding for the plaintiff.

As regards costs I am of the considered view that the issue of costs should be left until the conclusion of the trial.

In the result, I make the following order: -

1.	The application for absolution from the instance be and is hereby dismissed.

2.	Costs shall be in the cause.

Webb, Low & Barry (Inc. Ben Baron & Partners), plaintiff’s legal practitioners

Messrs. Calderwood, Bryce-Hendrie & Partners, defendant’s legal practitioners