SMM Holdings (Pvt) Ltd & Anor v Marisa Washington

### Preamble
1
HB 281/20
HC 1099/17
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SMM HOLDINGS (Pvt) Ltd

And The Administrator – Afaras Mtausi Gwaradzimba

Versus

MARISA WASHINGTON

HIGH COURT OF ZIMBABWE

TAKUVA J

BULAWAYO 7 FEBRUARY AND 26 NOVEMBER 2020

Opposed Application

Mrs P Chigariro, for the applicant

C Ndlovu, for the respondent

TAKUVA  J:		This is a court application for summary judgment.

Applicants issued and served respondent with a summons commencing action on 2nd March 2017.  Upon receipt of summons, respondent entered appearance to defend.  It is applicant’s view that the appearance to defend has been done solely for purposes of delaying the inevitable as the respondent has no bona fide defence against the applicant’s claim for his eviction from the company house following the termination of his employment contract.

The facts of this matter are largely common cause.  The respondent was employed by the applicant SMM Holdings (Pvt) Ltd until he resigned from work on 9 January 2012.  The resignation effectively terminated his employment with the applicants  During the subsistence of his employment contract the respondent was as part of his benefits allocated a residential homestead being house number 3 Rhino Drive Zvishavane.  Upon his resignation from work, respondent was required to vacate the house within a period of 30 days in terms of section 12 of the Labour Act Chapter 28:01 and S.I 152/90 – Collective Bargaining Agreement, Mining Industry (General Conditions).  Respondent failed to vacate the company house and has been occupying it free of charge for a period of 6 years prompting the applicants to file this application.

SMM Holdings (Pvt) Ltd was placed under a Reconstruction Order after failing to operate viably and after failing to meet its financial obligations and liabilities to its numerous creditors of whom employees are a part.  The applicant is under no legal obligations to continue providing residential accommodation to the respondent since his right to occupy such accommodation no longer exists.  Accordingly, respondent has no bona fide defence to a claim for his eviction from the applicant’s house.  Applicant prayed for summary judgment to be granted in terms of the Draft Order.

Respondent filed a Notice of Opposition and an opposing affidavit to the application for summary judgment.  The gravamen of the opposition is that applicant cannot evict the respondent when the former still owes the latter salary arrears.  Respondent averred that he has a bona fide defence with the following triable issues;

“(i)	whether I have a lien over the house.

(ii)	whether it is not contrary to public policy for the applicant to evict me and withhold payment of my terminal benefits?

(iii)	whether the applicant can rely on section 12 in view of the provisions of the Reconstruction of State Indebted Insolvent Companies Act Chapter 24:27.”

On these grounds respondent prayed that the application for summary judgment be dismissed with costs.

Surprisingly on the day of the hearing Mr Ndlovu for the respondent raised a point in limine which he termed a point of law namely that applicant’s C.E.O one Chirandu Dhlembeu lacked capacity to depose to the affidavit in support of the application for summary judgment.  The argument is that the Administrator authorized Chirandu Dhlembeu to “institute and prosecute claims against SMM Holdings (Pvt) Ltd and to defend claims against SMM Holdings (Pvt) Ltd in all disputes emanating from employment …” (my emphasis).  This according to respondent means that Chirandu Dhlembeu was never authorized to institute and prosecute claims on behalf or in favour of SMM (Pvt) Ltd.  Respondent further contended that since the application for summary judgment is a claim in favour of the company, it is therefore not covered by the affidavit.

In casu the point in limine which was raised at the eleventh hour under the guise of it being a point of law is totally devoid of merit.  The application for summary judgment is an offshoot process arising from the main action matter instituted by the Administrator himself.  The question of the actual words used in Gwaradzimba’s authorising affidavit is one of semantics.  The clear intention is to permit Dhlembeu to represent the applicant in this application which involves a dispute emanating from employment.  In my view paragraph 3 of Gwaradzimba’s affidavit authorising Dhlembeu to act on behalf of SMM Holdings (Pvt) Ltd is poorly drafted in that it is contradictory, ambiguous and confusing.  The offending words are “to institute and prosecute claims against SMM and to defend claims against SMM (Pvt) Ltd in all disputes emanating from employment issues between SMM (Pvt) Ltd and its employees.  Ordinarily when one is defending he or she is not dominus litis.  To institute and prosecute implies that one is pushing and presenting his or her case not necessarily defending claims against you.

Be that as it may these proceedings were properly commenced by the Administrator.  Later he delegated his authority to Dhlembeu the C.E.O. to finalise.  In such circumstances, it is neither here nor there that the affidavit authorising Dhlembeu refers to “claims against.” For these reasons I find that the point in limine has no merit and it is hereby dismissed.

On the merits, respondent argued that he has a lien over the property since he is owed salary arrears and benefits.  Section 12 (6) of the Labour Act Chapter 28:01 provides as follows;

“whenever an employee has been provided with accommodation directly or indirectly by his employer, the employee shall not be required to vacate the accommodation before the expiry of a period of one month after the period of notice specified in terms of subsection (4) (5).” See also section 25 (2) (a) (b) of SI 152/90.

The law as provided in this section makes it mandatory for respondent to vacate dwellings within the stipulated period.  The only permissible defence is that the stipulated period has not expired.  Respondent has also argued that applicant cannot seek shelter in section 12 (6) of the Labour Act whilst violating section 13 of the same Act which makes it mandatory for an employer to pay its employees outstanding salary and benefits.  This argument has no legal leg to stand on in that applicant is not violating the law by failing to pay its employees outstanding salaries and benefits.  The applicant was legally placed under a Reconstruction Order by this court in 2004.

Section 28 (2) of the Reconstruction of State Indebted, Insolvent Companies Act Chapter 24:27 states;

“28 (1) The provisions of the Labour Act Chapter 28:01 with respect to the retrenchment, dismissal or termination of the employment of employees shall not apply to any employees of a company under reconstruction whom the Administrator retrenches, dismisses or otherwise does not retain in the employment of the company.

(2) For the avoidance of doubt, it is declared that section 103 of the Insolvency Act Chapter 6:04 shall apply to the salary or wages of any employee of the company under reconstruction when the Administrator retrenches dismisses or does not retain in the employment of the company.”(my emphasis)

In essence, the above provision specifically ousts the specific provisions of the Labour Act not the Act itself.  Therefore, there is nothing arbitrary nor contrary to public policy about the actions of SMM Holdings in failing to pay its former workers – see SMM Holdings v Minister of Justice 2010 (1) ZLR 286, African Resources Ltd & Ors v Gwaradzimba & Ors 2011 (1) ZLR 105, Dorothy Mapimhidze & Ors v SMM Holdings HH 144-15.

Further, respondent sought to rely on the defence of a lien.  However this defence is not bona fide in that respondent has not complied with a mandatory statutory provision namely section 6 (B) of the Reconstruction of State Indebted Act.  This section makes it mandatory that any litigant who seeks to bring legal proceedings against a company under reconstruction “shall first seek and obtain the leave of the Administrator before doing so.  Respondent did not bother to do this before “attaching” the applicant’s house.

There are other reasons why lien as a defence must fall by the wayside.  In Arundel School Trust v Petting Rea 2014 (1) ZLR 596, It was held that;

“A claim of right, in general is a valid claim which is enforceable at law against the registered owner of the property sought to be vindicated.  Where vindication is sought in the context of a labour dispute, it is my view that a claim of right is a right which is vested in an employee and which is enforceable against the employer who owns property to be vindicated which may be delivered from the contract of employment…..  That assets which form part of the conditions of service may be retained until the contract of employment is conclusively terminated, as long as the contract of employment remains extant, the employee’s rights remain vested in the employee.” (my emphasis)

In casu, the resignation by the respondent conclusively terminated the contract of employment stripping him of any legally enforceable rights.

The other reason why the defence of a lien cannot rescue the respondent arises from the very definition of a lien.  The learned author, Sir A.F.S Maarsdorp in his book Maarsdorp’s Institute of South African Law Volume 11 “The Law of Property” 9th Edition – Juta & Co. Ltd. defined a lien thus;

“A right of retention or lien is the right which a person who is in possession of goods belonging to someone else acquires possession to keep the goods in his possession until he is compensated for the expenses incurred or labour done by him to those goods.”

This definition precludes the respondent from claiming a lien as a defence because he never incurred any expenses nor performed any labour on the possession for which he now wants compensation on.

According to Sir Maarsdorp our law recognizes the defence of a lien only in the following scenarios;

(a)	Salvage liens

(b)	Improvement liens

(c)	Debtor and creditor liens which are created by agreement

Salvage and Improvement Liens

It arises out of storage or preservation of such goods.  The nature of a lien may be determined either by the nature of the expense or the labour applied or by the terms of the agreement.  If a person has incurred expenses in respect of property of another, and such expenses were either necessary or useful, he has a salvage or improvement lien which is available against the owner, even if he was not a party to the contract.  These parties are entitled to retain possession of the property until the money expended by them has been refunded or the value of their labour paid to them, e.g builders of a house.

The learned author defines an improvement lien as;

“The right of retention is also available to a bona fide possessors of land which does not belong to them for compensation to which they are entitled for improvements made by them upon the land to the extent to which such land has been enhanced in value by them.  Lessees of land have no right of retention for improvements made.”

Quite clearly the respondent is disqualified from holding on to the company house in the basis of the improvement lien over the property.

Debtor Creditor Lien

This is created by agreement.  Again, the respondent is disqualified from relying on this kind of lien as it is created only by agreement of the parties.  In casu, the parties did not enter into an agreement wherein respondent would acquire the right to hold on to the company house as a lien in the event of non-payment of salaries or benefits.  I agree with Ms Chigariro for the applicant that by conducting himself in the way he has done, respondent has simply resorted to “self help law of the jungle.”

The respondent has failed to show that he has a plausible defence against the applicants’ right to its immovable property.  It is trite that in summary judgment application while a defendant need not deal exhaustively with the facts and evidence relied on to substantiate them, he must disclose his defence and lateral facts upon which it is based with sufficient clarity and completeness to enable the court to decide whether the affidavit disclosed a bona fide defence.

See Maharaj v Barclays National Bank Ltd 1976 (1) 8A 101

Kingstons Ltd v I.D Ineson (Pvt) Ltd 2006 (1) ZLR 451

Chindori Chininga v National Council For Negro Women 2001 (2) ZLR 305 (H)

Jena v Nechipote 1984 (1) ZLR 29

On the merits, I take the view that the defendant has no bona fide defence against a claim for eviction.  Respondent’s case rises or falls on the affidavits filed in the main application.  Where a defence is averred in a manner which appears in all circumstances needlessly bald, vague or sketchy, that will constitute material for the court to consider in relationship with the requirements of bona fides.  The respondent’s affidavit does not disclose any solid facts, real issues or a bona fide defence against the relief being sought by the applicants to warrant this matter to proceed to trial.

As regards section 28 (1) (2) of the Reconstruction of State Indebted, Insolvent Companies Act, I take the view that this section does not bar the respondent from recovering his salary and benefits post his resignation.  Respondent is at liberty to apply for leave from the Administrator to bring legal action for any grievances he has related to unpaid salaries and wages to the Labour Court or simply bring an ordinary civil claim for payment of those claims.

In terms of our law, all benefits which accrued in connection with a contract of employment fall away upon resignation or termination of the contract of employment –

see Hwange Colliery v Savanhu 2013 (1) ZLR 555.

Riva v NSAA 2002 (1) zlr 412

Zimbabwe Broadcasting Holdings v Gono 2010 91) ZLR 8 (H)

In the circumstances, it is ordered that;

1.	The application for summary judgment be and is hereby granted.

2.	The respondent and all those claiming a right through him are ordered to vacate house No. 3 Rhino Drive Advalorem, Zvishavane within 48 hours (2 days) of the service of this order upon the respondent.

3.	Respondent is ordered to pay costs of suit.

Chigariro Phiri & Partners c/o Dube-Tachiona & Tsvangirai, applicant’s legal practitioners

Ndlovu & Hwacha c/o Kenneth Lubindi & Partners, respondent’s legal practitioners