Munash Shava v African Banking Corporation (BancABC) and Chirimuuta and Associates

### Preamble
1
HH 742-18
HC 3622/13
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MUNASHE SHAVA

versus

AFRICAN BANKING CORPORATION (BancABC)

and

CHIRIMUUTA AND ASSOCIATES

HIGH COURT OF ZIMBABWE

MUSHORE J

HARARE,10 & 17 July and 14 November 2018

Opposed Application

Advocate Saraya, for the applicant

O.T. Gasva, for the respondents

MUSHORE J: This is an application for rescission in terms of Order 49 r 449 (1) (a) of the High Court rules, 1971. On or around the 27th December 2011, the applicant, Munashe Shava, took out a loan with the respondent bank, for US$36,700-00 under a group loan facility. The effect of the agreement was that the respondent would disburse money to the applicant upon applicant’s request to the maximum limit of US$36,700-00.  Interest was to be levied on the loan at the rate of 23% per annum. Repayments on the loan were set at US$2922-00 per month. Full payment of the loan was to be effected on or before the 26th March 2013.

At some stage, applicant fell into arrears and when his indebtedness to the first respondent reached US$44,870-60, the respondent then sued out for payment of its debt in matter number HC 3622/13. On the 2nd April 2014, this court gave the following order as prayed:-

“IT IS ORDERED THAT:

The defendant shall pay:-

The sum of UD$44,873-60; being capital; US$37,594-14 and interest US$7,179-46 and bank charges US$100-00.

Interest at 25% over and above the 23% interest rate from the 26th March 2013 to the date of payment in full.

Collection commission of 10% as per Law Society By-Laws

Costs of suit on an attorney client scale”

According to the applicant, and not disputed by the respondent, applicant managed to pay off the US$44,873-00. However, when he received the bill for collection commission and costs, he immediately asked for the bill to be taxed. The respondent consented to the bill being taxed. After that, on the 15th September 2017, applicant filed the present for rescission of variation of the order granted in HC 3622/13 on the basis that he should not be made to pay the respondent collection commission and costs because applicant believes that the agreement is silent on that issue. Applicant attached the Facility letter to his affidavit.

Secondly applicant argued that collection commission is only available to a creditor who extinguishes the debt prior to an order of court.

Respondent supposed the application on the basis that collection commission and costs are catered to in the Standard Terms and Conditions agreement, which is respondent alleges is binding on the which, respondent submitted that applicant of fully aware of. Respondents also argued that collection commission is claimable even by a court order as long as the parties agreed to such payment in terms of the loan agreement entered into.

I stood the matter down during the hearing in order to enable the first respondent’s counsel to produce the Standard Terms and Conditions document, which had not been annexed to first respondent’s affidavit. I asked that the document be placed before me through the Registry to enable me to peruse and that after perusing the document in my Chambers, I would then properly determine the application. First respondent’s counsel complied with my request.

I have since then inspected the document, in particular clause 13.3 which I find is binding upon applicant and which reads as follows:-

“All costs and other charges necessarily incurred by the Bank and arising out of, or by reason of the grant or the recovery of this loan, including legal charges on a legal practitioner/client scale as well as collection commission which the Bank may incur both at pre-litigation and in taking action for the recovery of any amount(s) due to it, will be recoverable by the Bank, on demand from the Borrower. Similarly all charges incurred in registering, recording or maintaining any security required in terms of this loan shall be borne by the Borrower”

I disagree with the submission made by the applicant that the respondents should not be granted an order for the payment of collection commission, due to the fact that the debt was not extinguished prior to the court order being obtained. There are a plethora of decided cases which hold that as long as the debtor bound himself in contract to be liable for payment of collection commission, then in upholding the contract, the court will bind the debtor to perform in terms of the contract.

See: CBZ Bank Limited v Chelsy Auto (Pvt) Limited and Ors HH 67/16

I also agree with the respondent that the delay in making this application by some 3 and a half years is not only inordinate but an abuse of court on the part of the applicant. Applicant deliberately omitted to annex the terms and conditions document to his founding affidavit with the intention of trying to obtain an unjust order of court. The abuse of process warrants an order of costs on a higher scale against the applicant.

In the result, I find that the applicant has not made out a case to have the court order in HC 3622/13 varied or rescinded.

Accordingly I order as follows:-

“Application is dismissed with costs.”

…………………………., applicant’s legal practitioners

…………………………., respondent’s legal practitioners