John Lennos Makoni and Hinplough (Private) Limited v Fairful Investments (Private) Limited

### Preamble
1
HH 89-18
HC 9903/17
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JOHN LENNOS MAKONI

and

HINPLOUGH (PRIVATE) LIMITED

versus

FAIRFUL INVESTMENTS (PVT) LTD

HIGH COURT OF ZIMBABWE

TAGU J

HARARE, 8 February and 28 February 2018

Opposed Matter

J Dondo, for applicants

M T Rujuwa, for respondent

TAGU J: The first applicant woke up from his slumber on 17 October 2017 when he was personally served with summons for Civil Imprisonment in case number HC 9035/17. He and the second applicant then mounted this application for rescission of a default judgment that had been granted against them in HC 9883/15 on 11 March 2016. This application is being made in terms of r 63 of the High Court Rules 1971.

The salient facts of this case are as follows:

The first applicant is a sole Shareholder and Director of the second applicant. The respondent is a Company duly incorporated in accordance with the laws of Zimbabwe. Sometime on 1 September 2009 the applicants and the respondent entered into, and signed a memorandum of lease agreement the terms of which the respondent agreed to let and the applicants agreed to hire  a certain farmland known as Danros Farm in Glendale, various farming plant, equipment, tools irrigation infrastructure and farming inputs. It was one of the terms of the agreement that the lessee (applicants) shall pay to the lessor (respondent) as rent, without deductions, for the land and equipment an amount that is equivalent to (ten) 10% of gross turnover of Hinplough (Pvt) Ltd (the respondent). In terms of clause 19 of the lease agreement it was expressly agreed that any notices to be given hereunder to the lessee shall be deemed to have been sufficiently given or served if sent by registered letter addressed to the lessee at the leased premises, which the lessee elected as his domicilium citandi et executandi in all actions arising out of this lease. The second applicant chose number 6 Wellington Avenue.

Sometime in March 2010 the first applicant left for Mozambique after having obtained employment with a company called MOZ FOODS based in Maputo. Consequently, the lessee breached the terms of the lease agreement incurring a debt to the tune of US$68 000.00. The first applicant, and on behalf of the second applicant signed an acknowledgment of debt acknowledging its indebtedness and proffered a payment plan which it also breached. As a result of the breach the respondent issued summons against both applicants claiming the sum of US$68 000.00 for arrear rentals. The summons and declaration were duly served at 119 Broadlands Road, Emerald Hill, Harare on 19 October 2015 by affixing to the outer black letter box after diligent search per the Sheriff’s return of service. Apparently 119 Broadlands Road, Emerald Hill, Harare was the place of residence of the first applicant. From the papers at the time of institution of the action proceedings under case number HC 9883/15 the second applicant was no longer operating from 6 Wellington Avenue. The premises had been vacated as shown by the supporting affidavit by one Learnmore Machingura who stated that by 2013 the second applicant had unceremoniously vacated 6 Wellington Avenue, Belvedere, Harare. This prompted the respondent to serve both applicants at the first applicant’s residence.

In para 8 of his founding affidavit the first applicant confirmed that indeed 119 Broadlands Road, Emerald HILL is a place of residence he occupied up to March 2010 as a tenant before he left for Mozambique. He further averred that there was no way he and the second applicant could have been aware of the Summons commencing action because he was in Mozambique. He only became aware of the proceedings when he was later served with Summons for Civil imprisonment. To that extent he averred that he was not in willful default and has a bona fide defense to the proceedings per case number HC 9883/15. However, be that as it may the first applicant in paras 15 and 16 of his founding affidavit he stated that in 2013 he met with Mr Peter Mbizvo of the respondent who persuaded him to pay something more towards the loss that respondent had incurred as a result of the unsuccessful agricultural venture to which the first applicant paid US$3 600.00 at a monthly rate of US$300, but the said Mbizvo did not advise him about proceedings per case number HC 9883/15. He therefore had a genuine belief that he was amicably settling a dispute as between second applicant and the respondent.

In his opposing affidavit PETER MANASA MBIZVO a sole shareholder and director of the respondent averred that the applicants knew of the existence of the default judgment well before the Summons for Civil Imprisonment was issued out. He said the first applicant was informed of the existence of the judgment against him by way of a letter dated 12 August 2016. The letter in question reads as follows:

“Dear Mr Makoni

RE: Fairful Investments (Pvt) Limited v Hinplough (Pvt) Limited & John Lennos Makoni-HC9883/15

I refer to the above matter.

I advise that we have not relented in our attempts to recover the debt you owe to us and hereby inform you that our legal practitioners have since obtained judgment. We take this opportunity to enquire from you as to how you intent to extinguish the debt. We would prefer to settle this matter amicably hence our engagement at this stage. We now wait to hear from you

Yours faithfully

Dr PM Mbizvo.”

Mr Mbizvo further submitted that the first applicant has always known of the debt and he proposed to extinguish his indebtedness through various correspondences. He said for the first applicant to plead ignorance of the existence of the court proceedings would be dishonesty and misleading at the very least. To that extent he submitted that the applicants have no bona fide defense to the claim at all. To support his contention he referred the court to some emails between him and the first applicant. Some of the emails read as follows:

“Peter Mbizvo to John Makoni

11 September 2012: 11:24

Mr Makoni, I am still waiting for your response to my e-mail of last week reference the above subject. I need to know where you stand so that I can make decisions on how to proceed.

Your expediency in responding to this issue would be appreciated.”

“John Makoni replies to Peter Mbizvo

11 September 2012: 12:08.01

I am just going thru some tough board meetings this week give me time. Something has to happen but we need to look at it comprehensively.”

Another letter by first applicant to respondent read as follows:

“John Makoni to Peter Mbizvo

8/7/13

Pursuant to our meeting today this serves as a commitment to give a proposal for the repayment of the above matter.

The proposal awaits developments that are happening in my business which is expected to have been concluded by August 31’13

The proposal will be given irrespective of the developments mentioned above.

Yours faithfully

J L Makoni.”

On 9 April 2014 the respondent sent another e-mail to first applicant couched in the following terms:

“I am not sure if you have been avoiding direct contact with me or not, but I have noticed that you are still dropping off $300.00 when the debt is so high. At the current rate this means that you will only be able to pay off the debt after 16 years or so and that’s unacceptable.

Please get in touch as soon as possible.

Best

PM”

The first applicant replied on the 14th April 2014 at 08:21:46 GMT +2 as follows:

“Hello Doc

Have been busy please send me your SA bank account. I can’t meet you at the moment maybe early May. The spirit is still the same.

Regards

John”

The reason for quoting all these correspondences is to show that the applicants and the respondent have been in touch and that the applicants were aware of their liability. For the applicants to turn around now and say they have a bona fide defense to the respondent’s claim in case HC 9883/15 is with the greatest of respect an act of dishonest and misleading as suggested by the respondent. Nowhere in the correspondences that I cited did I see where the applicants disputed liability.

Having said the above I am cognizant of the fact that this is an application for rescission of a default judgment granted in case number HC 9883/15. The application has been brought in terms of r 63. The following are the factors that a court ought to consider in determining whether an applicant has shown good and sufficient cause:

The applicant‘s explanation for the default;

The bona fides of the application to rescind the judgment and

The bona fides of the applicant’s defence on the merits of the case. The court will consider all these factors in conjunction with one another. See GD Haulage (Pvt) Ltd v Mumugwi Bus Services (Pvt) Ltd 1979 ZLR 447 (AD); Roland & Anor v McDonnell 1986 (2) ZLR 216 (S) and Georgias & Anor v Standard Chartered Finance Zimbabwe Ltd 1998 (2) ZLR 488 (S).

In casu the applicants allege that they did not see the Summons in HC 9883/15. The reason being that the first applicant had long left his residential address for Mozambique and the second applicant was not served at the address of service.

Order 5 rules 39 (2) and r 40 provide the manner of service of processes. It reads as follows:

“(2) Subject to this Order, process other than process referred to in subrule (1) may be served upon a person in any of the following ways-

by personal delivery to that person or his duly authorized agent;

by delivery to a responsible person at the residence or place of business or employment of the person on whom service is to be effected or at his chosen address for service;

in the case of process other than summons or an order of court by delivery to that person’s legal practitioner of record;

in the case of process to be served on body corporate-

by delivery to a responsible person at the body corporate’s place of business or registered office, or

……….

40. Service where person to be served prevents service or cannot be found

Where any process is to be served, and –

the person upon whom it is to be served keeps his residence, place of business or employment, address for service or registered office closed and thus prevents the process from being served; or

the person seeking to effect service of any process is unable, after diligent search at the residence, place of business or employment, address for service or office of the person to be served, to find that person or a responsible person referred to in paragraph (b), (d), (e ) or (f) of subrule (2) of rule 39

it shall be sufficient service to leave a copy of the process in a letter –box at or affix to or near the outer or principal door of, or in some other conspicuous position at, the residence, place of business or employment, address for service or office, as the case may be.”

In casu the Summons and declaration in case HC 9883/15 were served by affixing to the outer black letter box of the first and second applicants after unsuccessful diligent search. The first applicant accepted that this was his residential address and that he had left for Mozambique. The second applicant had unceremoniously vacated its business address. The first applicant being the sole shareholder and director of the second applicant, it was reasonable, in my view to serve the processes at his known address. On the face of it this was a valid form of service. When the first applicant left for Mozambique he did not advise the respondent. In any case the two had been in constant touch as evidenced by the e-mails I cited above. In my view the applicants failed to show good and sufficient cause. They appeared to have been avoiding the respondent. As far as their defence is concerned as I demonstrated above they do not have a bona fide defence to the respondent’s claims.

In the result there is no justification for rescinding the default judgment granted in HC 9883/13 as the applicant failed to satisfy the prerequisites necessary to succeed in an application of this nature and the application for rescission ought to be dismissed with costs.

IT IS ORDERED THAT:

The application for rescission of default judgment granted in HC 9883/15 is hereby dismissed.

The applicants to pay costs.

Dondo & Partners, applicants’ legal practitioners

Mtetwa & Nyambirai, respondent’s legal practitioners