Kasimboti Trading Private Limited & 3 Ors v ZB Bank Limited

### Preamble
1
HH 642-18
HC 11592/17
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KASIMBOTI TRADING PRIVATE LIMITED

ELLIOT KASU

PATIENCE VONGAI KASU

TINASHE RICARDO KASU

versus

ZB BANK LIMITED

HIGH COURT OF ZIMBABWE

MANZUNZU J

HARARE, 7 June 2018 & 11 October 2018

Opposed Application

T.P. Kawonde, for the applicant

O Mutero, for the respondent

MANZUNZU J:  This court application was filed on 14 December 2017 by the 4 applicants against the respondent under the heading:

“Court application for correction and or variation of a default judgment in terms of rule 449 (1)  (a) & (c) of the High Court Rules of Zimbabwe, 1971 and or for Debatement of an account.”

The applicants prayed for an order in the following terms which order has also been drawn in the alternative

“IT IS HEREBY ORDERED THAT:

1.  The application for variation of a default judgment under Case No. HC 3300/15 be and is hereby granted.

2.  The court’s judgment of the 7th of October 2015 under Case No. HC 3300/15 be and is hereby varied as follows:

“1.  As at the 28th of March 2017 the outstanding amount due to the Respondent stood at US$58 138.55.

2.  With the said amount in paragraph 1. Above having been paid to the Respondent, the 1st Applicant has made an interest overpayment to the Respondent in the sum of US$25 266.13.

3.  The Respondent be and is hereby ordered to credit the 1st Applicant’s account with the sum of US$25 266.13 together with interest thereon at the prescribed rate from the 1st of April 2017 up to the date of final  payment.

Alternatively,

3.  The Respondent be and is hereby ordered to credit the first applicant’s account with the sum of US$25 266.13 together with interest thereon at the prescribed rate from first of April 2017 up to the date of final payment.

4.  In the event that the respondent fails to credit the first applicant’s account with the sum of US$25 266.13 as ordered, respondent be and is hereby ordered to render an account of all the interest calculations for the period 30 December 2012 to 31 March 2017 within 7 days of the date of service of this order.

5.  It is ordered that the parties shall debate the accounts rendered in terms of paragraph 4 above, within 7 days of the date of delivery of the accounts to applicants’ legal practitioners.

6.  If agreement is reached, the respondent shall credit the first applicant’s account with the sum of US$25 266.13, within 3 days of the date of agreement.

7.  In the event that the accounts are not agreed within 14 days, it is ordered that either party appoint a chartered accountant from amongst its members to act as referee and intervener.

8.  The intervener appointed shall and is hereby fully empowered with unlimited access to all accounting, financial and all other documents as may be necessary for him/her to give effect to this order.  Such power shall include, but not limited to , access to any and all financial and banking records in Zimbabwe, and direct access to any transactions, information, or accounts in the custody  or control of the respondent or records held by it, which have a bearing on the account of first applicant with the respondent for the period 30 December 2012 to 31 March 2017. In discharging this order, the intervener shall be empowered to subpoena the parties, witnesses and to gather such oral evidence as may be necessary.

9. The intervener/referee shall upon due investigation, examination, assessment and consideration of the matter make a report to the parties, with a copy to this court, and determine the interest calculations for the period 30 December 2012 to 31 March 2017 within 14 days from the date of appointment.

10.  It is ordered that upon determination of the interest charged for the period 30 December 2012 to 31 March 2017 by the intervener, the respondent shall credit the first applicant’s account with the extent of the interest overcharge for the said period.

11. The applicant shall be entitled to file a chamber application to register the decision/quantification fixed by the referee/intervener as an order of the court for the purpose of execution.

12.  In the event that either party is in default of any of the time limits fixed in this order, where such limits have not been mutually extended by order of this court, the party not in default shall be entitled to apply by chamber application, on notice, for default judgment or other relief as may be appropriate.

In all events,

13.  The respondent pays the costs of this application, should it oppose the same.”

The respondent opposed the application.

BACKGROUND

The four applicants who stood as defendants in Case No. HC 3300/15 were sued by the respondent, then the plaintiff, for a debt which was owing. In fact the applicants did not defend that action in which the respondent obtained judgment by default on 2 October 2015 in the following terms

“Judgment with costs on a legal practitioner and client scale to the extent that such costs are 	permitted in proviso (iii) to by law 70 (2) and collection commission thereon calculated in 	accordance with by law 70 of the Law Society of Zimbabwe by laws (1982) be and is hereby 	entered against 1st, 2nd, 3rd and 4th defendant jointly and severally one paying the other to be 	absolved for payment of:-

US$151 981,23 being capital

US$24 716,11 being interest

US$81,00 being bank charges

Interest on the sum of US$151 981,23 at the rate of 43,5% per annum subject to change from time to time with effect from time to time with effect from the 1st of April 2015 to date of payment.”

This application is said to be brought in terms of r 449 (1) (a) and (c) of the Rules of the High Court which reads:

“449. Correction, variation and rescission of judgments and orders

the court or a judge may, in addition to any other power it or he may have, mero motu or upon the application of any party affected, correct, rescind, or vary any judgment or order-

that was erroneously sought or erroneously granted in the absence of any party affected thereby; or

……; or

that was granted as the result of a mistake common to the parties.”

Alternatively, the applicants seek an order authorising a debasement of the first applicant’s account held with the respondent by an appointed intervener.

The applicants said they did not defend the action against them as a result of a mistaken belief that the calculations by the respondent were correct. The applicants had later engaged a company by the name Interest Research Bureau to revise the calculation of interest in their account and were informed that there was an interest overcharge of $25 266.13. At the time this exercise was done, the applicants had already settled the judgment debt together with interest with the respondent. Applicants allege that the default judgment was granted as a result of a mistake common to the parties.

In its opposition the respondent said r 449 (1) (a) and (c) relied upon by the applicants was not applicable in this case. Respondent denied that there was a mistake on its part warranting the revocation of r 449 (1) (a) and(c).

Respondent said the option available to the applicants was to apply for rescission of the default judgment in terms of r 63 if they were so advised.

Respondent further said the calculations by the Interest Research Bureau were wrong because they used wrong interest rates and such errors were pointed out to them. The respondent also alleged that applicants were trying to raise a defence on an otherwise concluded matter in which the court was already bound by the principle of res judicata. Respondent prayed for dismissal of application with costs on a higher scale. At the commencement of the hearing of this application Mr Kawonde who appeared for the applicants abandoned the main prayer by the applicants but moved argument for the alternative.

That decision was well informed because r 449 (1) (a) & (c) is apparently not applicable to this case.

In his argument Mr Kawonde relies heavily on a letter dated 3 April 2017 by the respondent to the 1st applicant which is marked  “without prejudice.” His argument is that the letter confirms an agreement between the respondent and the applicants to a debatement of the account. On the other hand Mr Mutero for the respondent argued that the letter was inadmissible as it was drawn on a without prejudice basis.

As a general rule, documents exchanged between parties on a without prejudice basis, are inadmissible. After hearing argument by both counsels I do not think this is a document which must enjoy admissibility. It is important to note that there is a judgment by this court granted in default of appearance to defend on 7 October 2015. This application is not independent from this judgment. It is certainly intended to interfere with the judgment in its award of interest. The main prayer was dropped on the day of hearing. The alternative prayer has been persisted with. There is no reasonable explanation as to why the applicants did not defend the main action against them at the relevant time. I agree with the position taken by the respondent that the applicants ought to have applied for rescission of the default judgment to open an opportunity to ventilate their defence to the action and not through the back door. This application has no merit. In respect to costs, there is a judgment against the applicants which was granted in default. The applicants thereafter settled the debt as per judgment. Two years later they bring this application which is devoid of merit. The respondent has been put out of pocket unnecessarily. The applicants cannot blame anyone other than themselves when they are visited with punitive costs.

IT IS ORDERED THAT:

The application be and is hereby dismissed.

Applicants to pay costs on an attorney and client scale jointly and severally the one paying the other to be absolved.

Kawonde Legal Services, applicant’s legal practitioners

Sawyer & Mkusi, respondent’s legal practitioners