Hello Projects Developers V Telememo Investments

### Preamble
1
HH 624-18
HC 6962/18
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HELLO PROJECTS DEVELOPERS

versus

TELEMEMO INVESTMENTS

HIGH COURT OF ZIMBABWE

MUZOFA J

HARARE, 27July & 10 October 2018

Urgent Chamber Application

G. Sithole, for the applicant

R. Mabwe, for the respondent

MUZOFA J: This urgent application for an interim interdict was referred to me on 26 July 2018 and I heard it on 27 July 2018. I dismissed the application. On 17 September 2018, a request was made by the applicant’s legal practitioners for the reasons, these are they.

The facts of this matter are straight forward. The applicant and the respondent entered into a joint venture agreement “the agreement”. In terms of the agreement the applicant was to provide land development services to the respondent a landowner of stand 1 and 2 Haydon Township of Haydon. It was a material term of the contract that the applicant shall be given the sole and exclusive mandate to develop the land. The total work was valued at $300 000 which was to be liquidated by release of 28 stands measuring about 1000m2 each. According to the applicant, after the commencement of work another developer began working on the same project despite the exclusivity clause. The applicant inquired from the respondent on these developments and was advised that the contract between the parties had been cancelled by the respondent which letter was written on the day the applicant inquired about the second developer but deliberately backdated. The applicant demanded specific performance in terms of the agreement and payment for the work done. Parties engaged but they could not agree. The matter was referred to arbitration on 5 July 2018. The applicant seeks that the respondent be interdicted from proceeding with any development pending the determination of the arbitration dispute in the following terms.

‘TERMS OF THE FINAL ORDER SOUGHT

The respondent be and are hereby barred and or interdicted from carrying out any developmental works as defined in clause 3 of the Joint Venture Agreement between Applicant and the Respondent in respect of stand number 1 Haydon Township , Haydon, measuring 75.1 hectares , pending finalisation of the arbitration proceedings between Applicant and Respondent which are currently taking place before the Honourable Arbitrator Mr Lloyd Mativenga Mhishi.

That Respondents pay costs on the scale of legal practitioner and client.

INTERIM RELIEF GRANTED

That pending (sic) of this matter on the return date ,1st and 2nd Respondents and all those acting through them be and are hereby interdicted from accessing ,continuing ,commencing and proceeding with the developmental works of stand number 1 and 2  Haydon Township of Haydon ,measuring 75.1 hectares.’

In passing I note that in the provisional order applicant referred to the first and second respondents yet only one respondent is cited in this matter. The founding affidavit and the interim order refers to stand number 1and 2 of Haydon Township yet the final order refers to stand 1 of Haydon Township.

According to the founding affidavit the respondent has to be interdicted from proceeding with development work because the applicant stands to lose out on the 28 residential stands that the respondent committed to pay for the work done. The applicant has a prima facie right based on the agreement.

The application was opposed. Two points  in limine were taken at the outset that the application was improperly before the court as it was not on Form 29 as set out in rule 241 (1) of the rules. Secondly, that the matter was not urgent. I dismissed both points in limine. The respondent did not show how the application was materially different from Form 29 especially considering that the rules allow for appropriate modifications of Form 29. I was satisfied on urgency.

In the main, respondent submitted that the applicant has no prima facie right stemming from the agreement since the agreement was cancelled. There is no irreparable harm that would be occasioned on the applicant, because the applicant demanded payment of the alternative remedy in damages. Besides the respondent as a landowner still holds stands that can be used to pay off the applicant. To that extent the applicant will not suffer irreparable harm.

The requirements of an interim interdict were lucidly stated in the case of Eriksen Motors (Intelkon) Ltd v Protea Motors and Anor 1973 (3) SA 685 A @ 6911 as follows:

‘1.	A prima facie right

2.	A well-grounded apprehension of irreparable harm if the relief sought is not

granted.

3.	The balance of convenience favours the granting of an interim interdict.

4.	The applicant has no other remedy.

See also Econet (Pvt) Ltd v Minister of Information, Posts and Telecommunications 1997 (1) ZLR 342 (H).

The onus is on the applicant to satisfy the court on the existence of all the requirements of an interim interdict.

The applicant has to demonstrate the prima facie right on a balance of probabilities see Econet (Pvt) Ltd case (supra). In this case the applicant relied on the agreement entered into between the parties. The respondent did not dispute that the agreement has an exclusivity clause which debarred the respondent from contracting another land developer to develop the land which was subject to the agreement. The respondent did not deny that it engaged another land developer to develop the land subject of the agreement that parties entered into.

Respondent proffered what it considered justifiable reasons and I am not persuaded by the respondent’s submission that the applicant ceased to be a holder of any right because the agreement between the parties was cancelled. A prima facie ‘right may arise out of contract or a delict, it may be founded in the common law or some statute, it may be a real right or a personal right’ see C. B. Prest, The Law and Practice of Interdicts, Juta Law 1993 at p 52.  In terms of clause 5 of the agreement the respondent was supposed to give a sixty days notice  to the applicant to remedy breach.  It was only after the sixty days had lapsed and the breach had not been cured that the agreement could be terminated.  I did not hear respondent relate to this clause.  The letter dated 7 June 2015 terminated the agreement with immediate effect. The facts are clear, the agreement was not properly terminated therefore the agreement remained binding between the parties.  It then is a natural consequence that applicant has a prima facie right based on the agreement.

The next inquiry is whether the applicant has shown that the respondent’s conduct has caused it actual loss or that they have a well grounded apprehension of irreparable harm.  In respect of irreparable harm, applicant submitted that it stands to lose the 28 stands that the parties agreed as payment for developing the respondent’s land in terms of the agreement if the contracted land developer continues doing the work on the land. The documents filed of record do not demonstrate irreparable harm.  Annexure 2 is a letter dated 15 June 2018 written by the applicant after the respondent engaged a second developer.  The letter in part reads;

“Re: Demand for specific performance

7.  We are therefore instructed as we hereby do to demand that you stop the other developers who are working on our client’s project with immediate effect, failure of which it is our client’s intention to proceed and (sic) its rights in terms of the agreement.

8. If we do not receive a positive response by Monday the 18th of June 2018, we will proceed and approach the relevant authorities to enforce our client’s rights, with subsequent costs being borne by yourselves in full”

On 20 June after the lapse of the deadline set by the applicant, the applicant wrote to the respondent the following letter:

“Re: Demand for payment for work done together with damages for breach of contract

2.  We note with concern that you committed an act of breach of contract when you engaged another developer on a project that was exclusively our client’s in terms of the agreement, which you signed-

11.	We are therefore instructed to demand as we hereby do, delivery of the 28 stands measuring approximately 100 square metres to our client within seven days of your receipt of this letter, covering the work done to date, damages for premature breach of contract and future profits that our client would have realized had it been that the agreement was not prematurely terminated.

12.	On top of this, you were also tasked with the processing of town planning, subdivision permit, development permits, cadastral survey but our client ended up taking it upon itself to obtain same as you were unnecessarily delaying the project. Our client must therefore be compensated as it suffered loss in ensuring that your project is successful.

13.	To compensate for such loss, our client claims an additional three stands approximately 1000 square metres or its monetary equivalent, calculated at the current market value, that is $30 per square metre to make a total of 31 stands or their monetary equivalent (underlining for my emphasis).

A reading of the extracts of the letters shows that the applicant had accepted that there was a breach and demanded payment of the agreed stands or the monetary equivalent. In my view even if the stands would not be available as a form of payment applicant has already placed itself to be paid  damages . In any event respondent submitted that it still has stands that can be used to pay the applicant. I did not hear applicant dispute that fact. What the law envisages in irreparable harm is that harm that is beyond repair or irreversible. I do not surmise any such harm to the applicant. The applicant has already demanded the monetary equivalent. It cannot then successfully argue that it will lose the 28 stands before the court.

In the absence of irreparable harm envisaged no interdict can be granted. For that reason I dismissed the application in the following terms;

The urgent chamber application be and is hereby dismissed with costs.

Bothwell Ndhlovu Attorneys At Law, applicant’s legal practitioners