David Ephragenyasha Muchinguri and Darryl Nyasha Muchinguri and Sagnol International (Pvt) Ltd v Frank Buyanga and Zimcor Trustees Ltd and Cont River Investment (Pvt) Ltd and Registrar of Deeds, Companies and Intellectual Property NO

### Preamble
1
HH 651-25
HCH 3039/23
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DAVID EPHRAGE TAFANGENYASHA MUCHINGURI

and

DARRYL NYASHA MUCHINGURI

and

SAGNOL INTERNATIONAL (Pvt) Ltd

versus

FRANK BUYANGA

and

ZIMCOR TRUSTEES LTD

and

CONT RIVER INVESTMENT (PVT) LTD

and

REGISTRAR OF DEEDS, COMPANIES AND INTELLECTUAL PROPERTY NO

HIGH COURT OF ZIMBABWE

MHURI J

HARARE, 18 August and 21 October 2025

Special Plea- Prescription

Mr W Chagwiza, for the plaintiffs

Mr N Mugandiwa with Ms R Chikwanha, for the 3rd defendant

No appearance for the 1st, 2nd and 4th defendants

MHURI J:  Plaintiffs caused the issuance of summons against the defendants seeking a declaratur and consequential relief.

Third defendant the only defendant who entered appearance to defend the claim, raised a special plea of prescription.  It is this special plea that I am called upon to determine.

The facts upon which this claim is based are that on 1 December 2008, first plaintiff obtained a loan of US$20 000 from the second defendant.  It is averred that because second defendant was not a registered money lender, the parties entered into a simulated agreement of sale of third respondent’s shares valued at ZWL 1 trillion.  It is further averred that thereafter first defendant fabricated shareholding and directorship documents and fraudulently sold stand 1860 Marlborough Township to the third defendant in July 2009.  It is averred further that a fraudulent capital Gains Tax Clearance Certificate was also used to effect transfer.

As a result, plaintiffs are seeking the following relief:-

An order setting aside the simulated agreement of sale entered into by and between the first plaintiff and the second defendant dated 1 December 2008.

An order declaring null and void and therefore, setting aside the purported transfer of shareholding in and change of directorship of the third plaintiff effected by the first defendant.

An order declaring null and, therefore, setting aside the purported sale and subsequent transfer of stand 1860 Marlborough Township to the third defendant.

An order directing fourth defendant to revive third plaintiff’s ownership of stand 1860 Marlborough Township of Marlborough held under Deed of Transfer No 2884/2002 and cancellation of Deed of Transfer No 3033/2009 in terms of s 8(2) of the Deeds Registries Act [Chapter 20:05].

The first, second and third defendants to meet costs of the reversal of transfer of ownership.

The first, second and third defendants to pay costs of suit on the attorney and client scale.

Third defendant’s plea in bar is based on the ground that plaintiffs claim is prescribed as it is based on an agreement of sale of the entire issued share capital in third plaintiff entered into between first plaintiff and second defendant on 1 December 2008 and that plaintiff is seeking the setting aside of the agreement as well as several actions stemming therefrom.  In that regard, any claims based on the agreement must have been brought on or before 1 December 2011.

It further averred that plaintiffs seek an order declaring the sale and transfer of stand No 1860 Marlborough Township 23 of Marlborough from third plaintiff to the third defendant a nullity whereas the transfer took place on 8 July 2009, as such a claim for the setting aside of the said transfer must have been brought on or before 8 July 2012.  The summons were only filed in May 2023 which is a period in excess of 12 years based on the agreement of sale and 10 years of the transfer of the property.

It was third defendants’ prayer that the claim be dismissed as it has prescribed in terms of s 14 and 15 of the Prescription Act [Chapter 8:11].

In replication, plaintiff denied that their cause of action is based on the agreement of sale but that it is based on fraud.

Thay also denied that the claims has prescribed it being a claim for a declaratory relief which declaratory order does not prescribe.

The facts which are common cause in casu, are that the first plaintiff entered into a loan agreement with second defendant wherein first plaintiff borrowed a sum of US$20 000 from the second defendant.  It was not disputed that because second defendant was not a registered money lender in Zimbabwe, (it being a Co registered in the UK according to the address on the agreement of sale) the first plaintiff and second defendant duly represented by first defendant entered into a simulated agreement (sham agreement) of sale in respect of the entire shareholding of the third plaintiff, for the sum of ZWL 1 Trillion.

Also not disputed or commented upon was plaintiff’s averment that, subsequently after the simulated sale agreement, first defendant prepared fake documents which were used to sell and transfer stand 1860 Marlborough Township 23 of Marlborough.  It was also not disputed nor commented upon that a fake Capital Gains Tax Certificate was used to transfer the property to third defendant.

It is noted that first and second defendants did not file any plea to the claims by plaintiffs.

It is also common cause that the property was then transferred to third defendant in July 2009.

On the basis of the above facts which are common cause, it is my finding that the agreement of sale of the third plaintiff’s shares between first plaintiff and second defendant was rooted in dishonesty and deceit and therefore a fraud.  Does a suit based on fraud prescribe? the answer in my view as submitted by plaintiff is in the negative.

Accepted is the current legal position that a claim for a declaratur which seeks a declaration of rights can be subject to prescription under the Prescription Act.  It is also the position that while a declaratur itself is a remedy and not a debt the substance of the claim that gives rise to the need for a declaratur is often a debt or obligation that is subject to prescription.  If the underlying claim has prescribed the related declaratur claims may also be time-barred.

See: Catherinc Nguluwe & Anor v Doris Dewa nee (NGULUWE) & 4 Ors HH 387/23

Dhliwayo & Ors v Bere N.O & Ors HHC 163/2024.

In casu, the parties entered into a loan agreement.  This is what they intended to.  This would be the binding contract between them.  It is however, not the contract the claim is based on.  The parties entered into a sham agreement of sale which was not their main intention.  it is this sham agreement, I have found to have been a fraud which led to all the subsequent transactions.  In my view nothing stands on a fraud.  A fraud is a nullity and therefore can not prescribe.  If the agreement of sale was not a sham but a genuine agreement entered into, it would follow that suing on this agreement, will be futile as the cause of action will have prescribed and consequently the declartur would also be time barred.

I have no hesitation, in view of my findings to borrow from Lord Denning in the case of McFoy v United Africa Company Limited 1961 (3) ALL ER 1169 @ 1172.

the remarks that:

“If an act is void, then, it is in law a nullity…”

and also from the remarks by Makarau J (as she then was) in KATIRAWU & Ors HHC 58/2007 that nothing legal can flow from a fraud …It is a nothing and upon which nothing of consequence can hang.

As submitted by plaintiffs, claims based on fraud are not debts and do not prescribe.  Fraud is an illegality and anything based on an illegality is a nullity.

Having found that the claim is based on a fraudulent agreement and fraudulent subsequent transactions, which fraud does not prescribe, it is also my finding that the special plea was not well taken and cannot be upheld.

It is therefore ordered that the special plea be and is hereby dismissed with costs.

Mhuri J:……………………..

Kwenda & Chagwiza, plaintiff’s legal practitioners

Kantor & Immerman, third defendant’s legal practitioners