Hothfield Enterprises (Pvt) Ltd & Anor v Matebeleland Engineering (Pvt) Ltd & Anor

### Preamble
1
HH 670-18
1. HOTHFIELD ENTERPRISES (PVT) LTD
HC 12773/16
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1. HOTHFIELD ENTERPRISES (PVT) LTD				HC 12773/16

versus

MATEBELELAND ENGINEERING (PVT) LTD

2.TONY RENATO SARPO							HC 12792/16

versus

MATEBELELAND ENGINEERING (PVT) LTD

3. TONY RENATO SARPO							HC 12790/16

versus

YAGDEN ENGINEERING (PVT) LIMITED

HIGH COURT OF ZIMBABWE

CHIKOWERO J

HARARE, 2 & 24 October 2018

Trial

T Zhuwarara, for the plaintiffs

M P Chinzou, for the defendant

CHIKOWERO J: These three matters were consolidated at the Pre-trial Conference stage.

Because all three raised similar issues, largely involved the same parties and called for evidence from the same witnesses the consolidation for the purposes of a single trial was clearly justified.

I will refer to each, for convenience, as the “first”, “second” and “third” matter.

Also for convenience, I will on occasion refer to the companies involved as Hothfield, Matebeleland and Yagden.

Two witnesses gave evidence for the plaintiffs. These were Sabriana Sarpo and Tony Sarpo.

These two are siblings. Tony is the plaintiff in the second and third matters. He also gave evidence as the representative of the plaintiff in the first matter. He is a director thereof.

Tony is also a shareholder and director in Matabeleland and Yagden. So is Wayne Williams.

Wayne gave evidence for Matebeleland and Yagden.

Sabriana was employed by Hothfield as a bookkeeper at the material time.

All in all, she has been a bookkeeper since 1986 working for Tony and Hothfield. She is forty nine years old.

At times relevant to these matters she also worked as an Administration manager for Matebeleland. Her duties involved oversight of office administration. It was her responsibility among other duties to ensure that creditors and suppliers were paid, she checked bank accounts on a daily basis and attended to statutory returns.

Matebeleland and Yagden were sister companies. They not only shared the same shareholders and directors. The two entities were so intricately connected to such an extent that they shared the same bank accounts, stationery and amenities. Consequently, Sabriana’s duties extended to Yagden.

Sabriana was a good witness. Her evidence was simple and straightforward. She was not shaken under cross examination. Most important of all, her oral testimony was corroborated by the documentary evidence, produced through and explained by herself. She had intimate knowledge of the documents because she interacted with them in the course of her bookkeeping and administration duties.

I record that Sabriana was not cross-examined on the second and third matters. I therefore accept her evidence, being unchallenged, in respect of matters two and three.

The half-hearted attempt to challenge her evidence via the cross-examination of Tony was therefore clearly misconceived. If her evidence was disputed, then such disputation had to be directed at her, while she was still in the witness box. In this respect, although a foreign decision was cited I agree with Advocate Zhuwarara that it is grossly unfair and improper to let a witness’ evidence go unchallenged in cross-examination only to make an about turn and seek to argue afterwards that the witness should not be believed: Small v Smith 1954 (3) SA 434 (SWA).

As for Wayne Williams, he did not do the defendants’ cause any good at all. While a bare denial was tendered by way of a plea in respect of each and every one of the three matters, he, in his own words, effectively pulled out a surprise from under his sleeve at the trial.

Instead of persisting in denying the loan transactions and putting the plaintiffs to the proof thereof, he effectively admitted the transactions but contended that the same were fraudulent acts by the plaintiffs. This contradicted the defence pleaded.

Further confusion was to follow. In addition to raising the new defence of fraud only while giving evidence, Wayne admitted that he did not know anything about the financial affairs of Matabeleland and Yagden at the material time. This position is inconsistent with the averment of fraud.

In a nutshell, the defendants’ case, typified by the single evidence of Wayne, was simply hopeless.

No single document was produced by the defendants. Resultantly, the defendants had no documentary evidence to either contradict or compete with the plaintiffs’ documentary testimony.

In these circumstances, I had no reason not to accept the plaintiffs’ oral evidence. It was not only unchallenged to the extent I have already referred to. It was buttressed by clear documentation. The plaintiffs’ witnesses themselves impressed me. Sabrina did not cook documents to improve the cause of the plaintiffs when she was clearly strategically positioned to do so had she been so minded.

Tony, who was not involved in the bookkeeping affairs of the plaintiffs and the defendants, made appropriate and sensible concessions under cross-examination.

I find that the absence of written loan agreements is satisfactorily explained by the friendship of Tony and Wayne. As at the time of the trial the two had been friends for over twenty years.  When persons trust each other, have been friends for that long and are both shareholders and directors in the same companies, it is inevitable that a certain level of laxity creeps in when it comes to preparing loan agreements.

With the foregoing analysis in mind, I briefly examine each of the three matters in turn.

The first matter

I accept Sabrina’s evidence that between January 2014 and April 2014 a verbal agreement was entered into between Hothfield and Matabeleland represented by Tony and Wayne, respectively, in terms whereof Hothfield lent and advanced US$40 000 to Matabeleland.

I have no reason not to accept that US$16 173.28 represents the interest component to bring the total claim to US$56 173.

Exhibit 1 is a breakdown of the sum of US$56 173.

Page 2 of Exhibit 2 is an online bank transfer of US$10 000 in favour of Matabeleland, effected on 2 April 2014.

Page 3 of exhibit 2 is Matabeleland’s bank statement confirming receipt of the transfer of US$10 000 from Hothfield.

Page 4 of exhibit 2 is evidence of an online bank transfer of US$15 000 from Hothfield to Matabeleland. It was effected on 7 April 2014.

This amount was received, per p 5 of exhibit 2, into Matabeleland’s account. Page 5 is Matabeleland’s bank statement of 20 November 2016 reflecting that the transfer aforesaid was captured on 8 April 2014.

Page 6 of exhibit 2 reflects two cash deposits of $5 000 and $10 000 made on 28 and 29 January 2014, respectively, into Matabeleland’s account.

All these then, make up the sum of $40 000-00.

The difference, as I have said, is the interest. It brings the aggregate to US$56 173-28.

The second matter

The first claim, in the sum of $16 654-67, was unchallenged.

Because the cross-examination of Sabrina did not cover the second matter, I shall accept that Tony lent and advanced $16 654-67 to Matabeleland.

Despite the defendant denying in its plea that the loan transaction of $8 398-49 occurred at all, and that the line boring machine was delivered, overwhelming documentary evidence was tendered by the plaintiff that Tony contributed a loan in the sum of $8 398-49 towards the purchase of the machine, that the machine was sourced and imported from Italy at the behest of Wayne himself, that it developed a fault and that Wayne attended to rectification thereof.

In fact, had Sabrina wanted to lie she could have inflated Tony’s contribution beyond $8 398-49. She truthfully put Wayne’s contribution at $23 000-00.

Again, sufficient documentary evidence was tendered to prove that Matabeleland owes Tony $70 497-74 being the cost price of Tony’s stock delivered and received by Matabeleland.The stock was moved from Chiredzi to Harare.

Mr Dzikati is defendant’s parts manager. He received the stock and signed to acknowledge such delivery. He did not give evidence. There was therefore no evidence to dispute the delivery.

The third matter

Just as under matter number two, the plaintiff’s key witness was not cross-examined in respect of this matter.

I accept the evidence in toto because it went unchallenged.

I accept that the defendant owes the plaintiff the sum of $6 200-00 for another reason.

It is this.

I find that the plaintiff arranged with his friend, Steve Schwarer, that the latter pays $6 200-00 in cash to defendant’s runner.

This was to enable that runner to buy spares for defendant in South Africa.

Plaintiff reimbursed Steve.

It was then left for defendant to repay the loan to plaintiff. This has not been done.

Page 1 of exh 4 is a memorandum by Tony to Sabrina. It is dated 8 April 2014. It reads:

“Don’t withdraw funds. I will give Steve cash, keep a record for future.”

Page 2 of exh 4 is proof, under defendant’s letterhead, that Achibald Makombe received a pre-payment of $6 200 for the purpose of buying spares in South Africa. Achibald signed to acknowledge receipt. He inked, in long hand, his national registration number and date of receipt of the payment.

Nothing was put before me to suggest that Yagden has repaid the $6 200.00.

Similarly, there was overwhelming documentary evidence that Tony lent and advanced a further amount of $29 000 to Yagden.

Pages 3 to 9 of exh 4 are apposite in this regard. These documents consist of a reconciliation reflecting a breakdown of the sum of $29 000 and the dates on which the constituent cash deposits were made into Yagden’s bank account; as well as copies of the cash deposit slips.

Costs

These three matters should never have been defended.

The pleas, if I may generously call them that, were simply frivolous and vexatious.

The cases put up by the defendants were hopeless.

It was a sheer waste of the court’s time.

An exemplary order of costs is merited: See Mahembe v Matambo HB 13/13; Puwayi Chiutsi v The Sheriff of the High Court and Others HH 604/18.

Disposition

All the claims were proved on a  balance of probabilities.

In the result, judgment is granted for the plaintiff against the defendant as follows:

In respect of case number HC 12773/16:

Payment of US$56 173.28 plus interest thereon at 12% per annum from 30 November 2016 to date of full payment.

In respect of case number HC 12792/16 payment of US$16 654.67, US$8 398.49 and US$70 497.74 plus interest at the prescribed rate on each of these three amounts from the date of judgment to the date of full payment.

In respect of HC 12790/16 payment of US$6 200.00 and US$29 000 plus interest on each of these amounts at the prescribed rate from the date of judgment to the date of full payment.

In respect of case numbers HC 12773/16, HC 127792/16 and HC 12790/16 costs of suit on the attorney and client scale.

Mutamangira & Associates, plaintiff’s legal practitioners

Chakanyuka & Associates, defendant’s legal practitioners