Village Properties (Pvt) Ltd v Reggie Francis Saruchera (in his capacity as the Liquidator of the respondent) And J W Jaggers Wholesalers (Pvt) Ltd (in liquidation)

### Preamble
1
HB 212/19
HC 2006/14
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VILLAGE PROPERTIES (PVT) LTD

Versus

REGGIE FRANCIS SARUCHERA

(in his capacity as the Liquidator of the respondent)

And

J W JAGGERS WHOLESALERS (PVT) LTD (in liquidation)

IN THE HIGH COURT OF ZIMBABWE

BERE J

BULAWAYO 27 JANUARY 2017 & 9 JANUARY 2020

Opposed Application

K. I. Phulu for the applicant

C. Nhemwa for the respondent

BERE J:	This is an application for leave to sue a company in liquidation brought under section 213 of the Companies Act [Chapter 24:03] by the applicant against the respondents.

The applicant is a company duly incorporated and registered in terms of the laws of Zimbabwe.

The first respondent is cited as the provisional liquidator of the second respondent.

The second respondent is a duly incorporated company which is currently under liquidation with the first respondent as the liquidator as a result of the order of this court of 1 November 2012.

The detailed background to this case is stated hereunder.

In or about January 2009, the applicant and the second respondent entered into a lease agreement where under the second respondent took on lease premises situate on stand number 16386 and 16387, Belmont, Bulawayo on a fixed and stated rental.

Further, in or about the same time the applicant and the second respondent entered into a second lease agreement but concerning the applicant’s premises situate on stand number 2790 Kwekwe.

It is not in dispute that it was a term of the two lease agreements that on termination of the lease agreement the lessee (second respondent) was entitled to remove its fixtures and fittings and return to the applicant its premises in the same condition as at commencement, fair wear and tear excepted. It is also not in dispute that the fixtures and fittings were not identified in the lease agreement.

The applicant’s case is that there is now a dispute regarding the ownership of certain fixtures and fittings between the applicant and the second respondent, with the first respondent claiming that all the fixtures and fittings belong to the second respondent and that they ought to be disposed of to protect the rights of competing creditors.

The applicant has annexed to its application a detailed list of the fixtures and fittings which it alleges belongs to it and argues must not be lumped together with the second respondent’s own items referred to in clauses 4.3 and 4(iii) of the lease agreements earlier own alluded to.

The applicant’s position is that the issue of who owns what between the applicant and the second respondent is an issue which can only be interrogated in a fully fledged trial hence this application for leave to prosecute its case against the respondents.

In their notice of opposition deposed to by the first respondent, the respondents initially opposed the application by raising points in limine which were however not pursued during argument in this court.  The abandoned points shall therefore not be considered.

On merits the respondents sought to argue that clauses 4.3 and 4(iii) of the lease agreements which gave ownership of the fixtures and fittings to the second respondent were exhaustive and conclusive enough and needed no further interrogation.

The respondents further argued that the applicant had not established a good cause for leave to prosecute its case and that the application was motivated by a desire to defraud the second respondent of its fixtures and fittings and that consequently the creditors would be prejudiced by the conduct of the applicant.

Mr Nhemwa who appeared for the respondents indicated to the court that he was abandoning the points in limine that had been raised by the first respondent in the notice of opposition and instead sought to rely on the judgment of my brother MAKONESE J which he argued had disposed of the matter.

Mr Nhemwa argued that after MAKONESE J’s judgment delivered under HB-257-16 the parties had engaged each other leading to the applicant paying for the fittings and fixtures in Bulawayo and partly those in Kwekwe to avoid the items being disposed of by way of auction through the first respondent.

Mr Nhemwa concluded his argument by alleging that MAKONESE J’s judgment had rendered this case res judicata as the court had made certain pronouncements on the merits of this case.  Counsel then sought to have the matter dismissed with costs at an attorney and client scale.

Mr Phulu, for the applicant responded to Mr Nhemwa’s argument by indicating to the court that the judgment by MAKONESE J dealt exhaustively with an application for an interdict as opposed to making a definitive pronouncement on the issue of ownership of the fixtures and fittings in issue and that that judgment ought to have referred to an application for an interdict, viz, HB-2005-14 and not HB-2006-14.

Mr Phulu further argued that reliance on clauses 4(3) and 4(iii) of the lease agreements was not of any assistance because the fixtures and fittings were not specified or defined leading to the now live dispute over ownership of such items hence the need to have such issues properly ventilated once leave has been granted.

This court takes a very simple view of this matter.  This is an application for leave by the applicant to sue the respondents to have the dispute over ownership of the fittings and fixtures resolved once and for all.  The judgment by MAKONESE J was restricted to the issue of an interdict which was formally placed before him to determine.  The evidential burden in an application for an interdict is much lighter than in an application where ownership has to be determined.

In an interdict, the right though prima facie established remains open to some doubt.  There is a plethora of authorities that have dealt with the law in this regard.  See ZESA Pension Fund v Mushambadzi, quoted in MAKONESE J’s judgment.

In determining ownership, the court has to go much further than it does in application for an interdict.  The parties are expected to lead and provide evidence that the court has to weigh on a balance of probabilities before pronouncing a definitive finding on such ownership.  The evidence will certainly not be restricted to interpreting clauses 4(3) and 4(iii) of the two lease agreements for the simple reason that these two clauses did not define or specifically identify the type of properties involved or constituting the fixtures and fittings belonging to the second respondent.  There can be no doubt in my view that Mr Phulu was on very firm ground in emphasizing this point.

It does seem to me that although MAKONESE J made some comments in his judgment on merits, these comments could not have been conclusive or render this case res judicata because he was not called upon to determine ownership of the fixtures and fittings but to deal with an application for an interdict.

It is settled in this jurisdiction and beyond that in dealing with an application for leave to bring proceedings, the court has to consider whether there is good and sufficient cause for the applicant to be granted such leave.

The shortcomings apparent in the two lease agreements which manifest themselves in failing to identify the fixtures and fitting in those two agreements, scream for a proper investigation to identify the exact property that belongs to the two competing parties.

This strikes me as a simple application which unfortunately the respondents have unnecessarily tried to complicate for reasons that can only be read to mean a stout effort to obstruct the truth from coming out.

The dispute over ownership of the property between the parties is a live one which cannot be wished away.  In order for justice to be realised in this matter it is imperative that the ownership of the property in issue be properly interrogated in a fully fledged trial.  It is a critical process amongst the parties.  See Room Hire Co. v Jeppe Street Mansions and Soffiantini v Mould

The first respondent’s opposing affidavit does not help in resolving the contentious issue amongst the parties – who owns what in respect of the fixtures and fittings?

It is for these reasons that I feel obliged to grant the following order.

It is ordered:

That the applicant be and is hereby given leave to institute proceedings against the 1st respondent for an order declaring applicant to be the legal owner of the items referred to the schedule filed as annexure A to the applicant’s founding affidavit for this application.

That the proceedings be filed within fifteen (15) days from the date of this order.

That the first respondent pays costs of this application.

Phulu & Ncube, applicant’s legal practitioners

C. Nhemwa & Associates, 1st and 2nd respondents’ legal practitioners