Jabulani Matembudze v Grain Marketing Board

### Preamble
1
HH 271-12
HC 1226/12
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JABULANI MATEMBUDZE

versus

GRAIN MARKETING BOARD

HIGH COURT OF ZIMBABWE

MTSHIYA J

HARARE, 21 June, 2012

C. Daitai, for the applicant

P Makuwaza, for the respondent

MTSHIYA J:  This is an application to execute an order of this court pending an appeal to the Supreme Court.

It is common cause that in terms of an agreement entered into on 1 November 2007 between the applicant and the respondent the applicant, a farmer at farm No. 30 Chipangayi, Chipinge District in Manicaland Province, would deliver 65,52 tonnes of wheat to the defendant. The purchase price would be paid as follows:-

50% in Zimbabwe currency amounting to ZW$2 349 958 125-00

50% in foreign currency amounting to US$ 8 179-63 payable through the Reserve Bank of Zimbabwe.

The farmer duly delivered 65,413 tonnes of wheat to the respondent and was

paid the 50% purchase price in the Zimbabwean currency. He was later paid US$1 600-00 by the Reserve Bank of Zimbabwe as part of the 50% payment in foreign currency. That left a balance of US$6 576-63 of the payment in foreign currency.

The applicant instituted court proceedings for the recovery of the balance of the foreign currency component and on 21 October 2011, after a full trial, the applicant obtained an order from this court in the following terms:-

“1.	That judgment in the sum of US$6 576-63 be and is hereby entered in favour of the plaintiff and against the defendant together with interest from February 2009 to date of payment in full.

2.	The defendant pays costs of suit”.

On 9 November 2011 the respondent filed an appeal in the Supreme

Court against the above order. The respondent’s grounds of appeal are these:-

“1.	The Court a quo erred in placing liability to pay the respondent on the appellant when the appellant had no authority to pay in foreign currency at the time of transacting.

2.	The Court a quo misdirected itself by coming to a conclusion that in undertaking to pay the respondent in foreign currency the Reserve Bank of Zimbabwe was merely acting as an agent of the appellant when in fact the agreement between the parties clearly stated the obligation of the Reserve Bank that is to pay the respondent.

3.	The Court a quo erred by not giving weight to the position that the Reserve Bank of Zimbabwe had acknowledged liability by paying part of the money and acknowledgment of the obligation in writing”.

The respondent’s appeal suspends the execution of this court’s order of

on 21 October 2011 and hence this application to execute pending appeal.

The applicant has raised a point in limine relating to the respondent’s opposing affidavit. The applicant argues that there is no evidence that the deponent to the opposing affidavit has authority from the respondent to depose to the said affidavit.

I note that the deponent to the said affidavit is the Corporate Secretary of the respondent. I believe that is a managerial post which would expose him to the operations of the respondent and thus equipping him with personal knowledge relating to matters in casu.  He can therefore competently depose to the affidavit. Rule 227(4)(a) of the High Court Rules 1971 allows for that.

I would therefore find it difficult to uphold the point in limine. The respondent’s opposing papers are therefore properly before the court.

In the main it is the applicant’s submission that the appeal was noted mala fide. He argues that execution of this court’s order will not lead to irreparable harm on the part of the respondent but instead the applicant himself will suffer irreparable harm because his farming business is dependant on the proceeds of what he produces at the farm and sells (such as his wheat in casu). He further argues that the respondent has no prospects of success in its appeal and therefore the appeal is intended merely to buy time.

The applicant submitted that, as determined by this court, the Reserve Bank of Zimbabwe was not a party to the agreement. It was merely an agent of the respondent. That therefore leaves the respondent liable as found by this court in its earlier judgment.

The respondent, on its part, submitted that it is the Reserve Bank of Zimbabwe that should be held liable for payment. To that end, it was argued, the Reserve Bank of Zimbabwe had admitted liability through payment of part of the foreign currency directly to the applicant – with a promise of further payments. The respondent also argues that if execution is carried out, it will suffer irreparable harm because it cannot proceed against the Reserve Bank of Zimbabwe – whose obligation is to the applicant.

The respondent further argues that at the material time it was only the Reserve Bank of Zimbabwe that could transact in foreign currency and hence the clause in the agreement between the parties. The clause allowed for the foreign currency component to be paid through the Reserve Bank of Zimbabwe. The respondent therefore rejects the court’s finding that the Reserve Bank of Zimbabwe merely acted as its agent (i.e agent of the respondent).

I form the impression that this is a straightforward matter that allows for no delay in making a decision.

In entertaining that impression, I derive great comfort from the fact that, to a large extent, both parties are agreed on the factors that the court should consider in determining an application for execution pending appeal as in casu.

Both parties referred me to the case of Net-One Cellular (Pvt) v Net One Employees and Anor 2005 ZLR(1) 275(S) where the following factors are stipulated:-

“(i)	The potentiality of irreparable harm or prejudice being sustained by the appellant on appeal (respondent in this application) if leave to execute were to be granted.

The potentiality of irreparable harm or prejudice being sustained by the respondent on appeal (applicant in the application) if leave to execute were to be refused.

The prospects of success on appeal, including more particularly the question as to whether the appeal is frivolous or vexatious or has been noted not with the bona fide intention of seeking to reverse the judgment but for some indirect purpose e.g. to gain time, to harass the other party, and

Where there is the potentiality of irreparable harm or prejudice to both appellant and respondent, the balance of hardship or convenience as the case maybe…”.

As submitted by the respondent’ legal practitioners, I agree that the above

factors should be considered collectively and that in the exercise of its discretion, the court must take into account the circumstances of the case before it. I wish to do exactly that.

The respondent correctly captures the circumstances of this case.

The circumstances of this case are that at the material time (i.e before the introduction of the multicurrency regime) it was only the Reserve Bank of Zimbabwe that could grant authority to anyone to transact in foreign currency. It therefore makes legal sense for the parties in casu to have noted that in their agreement. The foreign currency payable to the applicant in casu could only be transacted through the Reserve Bank of Zimbabwe. Both parties were fully aware of that and hence the clause in their agreement. The foreign currency was part of the purchase price for the wheat delivered to the respondent. The wheat was not delivered to the Reserve Bank of Zimbabwe but the Reserve Bank of Zimbabwe could only release payment to the applicant upon being told to do so by the respondent. That was as per arrangement between the respondent and the Reserve Bank of Zimbabwe. The applicant was not privy to that arrangement. My view is that, if indeed the respondent believed, from inception, that the Reserve Bank of Zimbabwe was a party to the agreement, the respondent should  have vigorously fought for a joinder. I do not see evidence of that from the papers. It appears there was no such application and indeed rightly so because the Reserve Bank of Zimbabwe, as determined earlier by this court, was merely an agent of the respondent. Liability could not therefore shift from the respondent. That fact alone erases any prospects of success in the respondent’s appeal.

I believe that it is the applicant who stands to suffer irreparable harm if there is a delay in executing this court’s order. He relies on money to carry out his farming activities. The applicant can only remain in farming on the basis of the proceeds of his farming activities. The respondent has recourse to its agent and if indeed it had purchased the requisite foreign currency from the Reserve Bank of Zimbabwe at the time of the transaction, as I should reasonably assume, it can still recover same from the Reserve Bank of Zimbabwe, less the amount already paid to the applicant.

In view of the foregoing, my finding is that there are no prospects of success in the respondent’s appeal and as such a delay in the execution of this court’s order of 21 October 2011 would render irreparable harm to the applicant. It is therefore proper to grant the relief sought.

I therefore order as follows:-

Execution of judgment handed down by Justice BERE on 21 October 2011 under Case No. HC 3609/09 pending appeal under Case No. 282/11 be and is hereby allowed.

Respondent to pay costs of suit on the ordinary scale.

Magwaliba & Kwirira, applicant’s legal practitioners

Sinyoro & Partners, respondent’s legal practitioners