Antioch Kuraone v Phineas Chihota

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                                                                HH 5-2012
                                                               HC 9367/10
ANTIOCK KURAONE
versus
PHINEAS CHIHOTA

HIGH COURT OF ZIMBABWE
PATEL J

Opposed Application

HARARE, 20 September 2011 and 19 January 2012

I. Mataka, for the applicant
T.Z. Mazhindu, for the respondent


      PATEL J:    The applicant in this matter claims the sum of
US$40,000 in terms of a loan agreement concluded with the
respondent on 31 August 2010. The respondent was to repay the
amount lent by way of four instalments of US$10,000 from September
to December 2010. He has failed to do so despite several demands.
The applicant seeks repayment of the full amount together with
interest, collection commission and costs on a higher scale.
      The respondent states that he is the Chairman of Wallace
Laboratories (Pvt) Ltd which is presently under judicial management.
The money in question was lent to the company through its Managing
Director (Mabuwa) to pay staff salaries. The respondent further avers
that he was duped into signing the loan agreement by a legal
practitioner (Nhemwa) who is a friend of the applicant and Mabuwa.
He never received any part of the loan to Wallace Laboratories.
      The applicant denies any dealings with Wallace Laboratories or
Mabuwa and relies on the clear terms of the loan agreement, clause 1
of which states that the sum lent has already been received by the
borrower. The applicant asserts that the respondent is a Member of
Parliament and the Chief Executive Officer of two large corporations
and, therefore, a person that could not have been duped into signing
the loan agreement.
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      On 13 April 2011 the respondent was granted leave to file a
supplementary opposing affidavit, which was then filed on 4 May
2011. In this affidavit, the respondent raises the defence that,
notwithstanding clause 1 of the loan agreement, he received no value
from the purported loan. He did not renounce the benefit of the
exceptio non numeratae pecuniae and the onus therefore lies on the
applicant to prove that the respondent did in fact receive the money in
question. In support of his averments, the respondent relies on a
power of attorney and affidavit lodged by the applicant on 15
November 2010 with the judicial manager of Wallace Laboratories in
support of his claim for US$40,000 from the company. The
respondent also relies upon the applicant’s affidavit to the police,
sworn on 22 November 2010, in which the applicant states that he
lent money to Mabuwa on several occasions under a guarantee from
Wallace Laboratories. He further states that, because Mabuwa was
unable to repay, the respondent opted to take over part of the debt,
i.e. US$40,000, leaving a balance of US$17,280 for Mabuwa to settle.
      At the hearing of this matter, the applicant was directed to file a
further supplementary affidavit in response to the defence raised by
the respondent. In his affidavit, filed on 30 September 2011, the
applicant persists with his reliance on the express terms of the loan
agreement. However, he does not adduce anything to show that any
part of the purported loan was in fact given to or received by the
respondent. Nor does he dispute the fact that the amount of US40,000
referred to in his affidavits to the judicial manager and the police is
the same amount as is referred to in the loan agreement in casu.


Extrinsic Evidence and the Exceptio Non Numeratae Pecuniae
      The general rule in the interpretation of contracts is that the
parties are bound by the terms of their agreement and cannot rely
upon extrinsic evidence in order to disregard, modify or deviate from
the agreed terms. Any other contemporaneous documents may only be
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                                                               HH 5-2012
                                                              HC 9367/10
considered where the original contract is part of a larger transaction.
See Maparanyanga v Sheriff of the High Court & Others 2003 (1) ZLR
325 (S).
      In the instant case, the applicant’s position is fortified by
clauses 5 and 6 of the loan agreement. Clause 5 provides that the
agreement constitutes the entire agreement between the parties and
supersedes all prior agreements, representations, warranties and
undertakings. Clause 6 stipulates that no modification or variation of
the agreement shall be binding unless it is executed in writing and
signed by the parties.
      Notwithstanding these clauses, it seems fairly obvious that the
loan agreement is part of a larger transaction involving not only the
parties herein but also Mabuwa and Wallace Laboratories. This
appears quite clearly from the applicant’s affidavit to the police, which
shows that the applicant lent a total of US$57,280 to Mabuwa, under
guarantee from Wallace Laboratories, and that the respondent
undertook to pay part of the total debt in the sum of US$40,000.
Accordingly, as was accepted in Maparanyanga’s case, I take the view
that the respondent may legitimately refer to the power of attorney
executed by Wallace Laboratories and the affidavits deposed by the
applicant as contemporaneous documents which explain the loan
agreement in the context of that larger transaction.
      In addition, despite the general principle of caveat subscriptor,
the respondent is not necessarily bound by the fact of having affixed
his signature to the loan agreement. As was explained in Sonfred (Pty)
Ltd v Papert 1962 (2) SA 140 (W) at 145, a defendant is not bound by
the mere fact that his signature appears upon a document of debt.
When he is sued upon that document, the cause of action is not his
signature but his acceptance of liability with the intention of binding
himself. Where he denies his liability or intention to be bound, the
cause of action must be proved by the plaintiff as it is the foundation
of the whole claim.
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         In any event, even if the parties were to be confined to the
express terms of the loan agreement, I do not think that this
precludes the respondent from invoking the exceptio non numeratae
pecuniae in this case. This is because the exception goes to the very
root of the loan agreement and negatives its fundamental premise of
any money having been received by the respondent as a loan from the
applicant.
         In essence, the exception is a plea by a debtor that money has
not been paid to him by way of a loan. It may be pleaded by the
debtor, whether or not he has renounced its benefit. The effect of
renunciation is to place upon the debtor the onus of proving that he
did not receive the money in respect of which he acknowledged his
indebtedness. Where the exception has not been expressly renounced,
the burden remains with the creditor to prove that the money was
paid to the debtor. See Venture Capital Co. of Zimbabwe Ltd v
Chirovero Investments (Pvt) Ltd 2000 (2) ZLR 30 (H) at 33-34.
         In the present matter, the respondent has not specifically
renounced       the   benefit   of   the    exception.   Consequently,
notwithstanding the terms of the loan agreement signed by the
parties, the onus lies upon the applicant to show that he did in fact
pay the US$40,000 in question to the respondent. He has failed to do
so and the documentary evidence adduced herein patently contradicts
any assertion to the contrary. The respondent’s exception must
therefore be upheld and the application is accordingly dismissed with
costs.




Matsikidze & Mucheche, applicant’s legal practitioners
Mutezo & Mugomeza, respondent’s legal practitioners