Parlweb Investments Private Limited (under corporate rescue) v Hwange Local Board

### Preamble
1
HH 492-25
HCH 5807/24
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PARLWEB INVESTMENTS PRIVATE LIMITED

and

HWANGE LOCAL BOARD

HIGH COURT OF ZIMBABWE

CHITAPI J

HARARE, 12 December 2024, 15 January and 2 September 2025

Unopposed Court Application for Default Judgment

R Mutero, for applicant

CHITAPI J: This matter was one of several matters set down on the unopposed roll of 12 December 2024 as an application for default judgment founded upon the failure by the defendant to file an appearance to defend the plaintiff’s summons. The application was not in order because there was no accompanying application seeking default judgment. Several other matters on the default judgment applications list did not contain such application.  I decided to deal with the inadequacy by explaining to all legal practitioners that all applications for default judgment, which did not contain a formal application stating the basis for setting down the matter and for the relief sought were not in order and were susceptible to removal from the roll. Counsel who were advised to, postponed their matters to rectify their papers by including the application. I then postponed their matters where requests were made to 15 January 2025 on which date I was again scheduled to preside motion court.

The problem which afflicted the applications for default judgment, including the one in casu was that the applicants did not have a written request or application for default judgment. The paginated papers comprised essentially the summons or the founding application as the case may be, together with the returns or certificates of service of the process. There was nothing written to motivate why the matter was set down or what the court was being requested to do. The practice as one legal practitioner submitted in another case which was afflicted with the same deficiency was said to be that the applications for default judgment are motivated or moved orally and judges grant them. It was clear to me that if such was the practice as indeed other legal practitioners confirmed, it left a lot to be desired because a record in which an order is made by the court must in as much as the court is a court of record be self-contained. In other words, if such record is perused, there should be a self-speaking or explanatory paper trail to show that the court granted an order in default because it was moved to by the plaintiff or applicant who based the application on grounds which must be stated or outlined in the application.

For simplicity of the process, where the plaintiff or applicant seeks a default judgment order on the unopposed roll, there must be a separate pleading filed which states that an application is being made for default judgment or other relief as the case may be and the grounds thereof. For simplicity and direction, the application for default judgment should take the format of Form No 25 which can be used for either court or chamber applications with necessary changes. The form simply states, “Application is hereby made for an order in terms of the draft order annexed to this application on the grounds that…….” The form should be addressed to the Registrar. In this way the request for judgment on the unopposed roll is placed in the proper paper trail format. The court will therefore appreciate why the matter is enrolled on the unopposed motion roll and the legal practitioner moving for an order will not have to relate orally to the reasons for seeking judgment orally. The magic words by the counsel which they stand up to say “I submit that my papers are in order” will be easy to appreciate since the background to and reasons for seeking judgment we have been covered ex facie the application.

In this matter, the plaintiff sought default judgment on a claim for damages for loss of business in the sum of (US$17 000 000.00) seventeen million United States dollars with interest thereon and costs on the higher scale. The basis for seeking default judgment was that the defendant did not despite being served with the summons in Case Number HCH 4791/24 enter appearance to defend. The plaintiff is Parlweb Investments Private Limited (under cooperate rescue) it is a limited liability company registered in terms of the laws of Zimbabwe. It is under corporate rescue. Following a query which I raised on whether the proceedings were authorized by the corporate rescue practitioner, such authority was supplied and filed on 30 July 2025. The defendant is Hwange Local Board, a local authority founded in terms of the Urban Councils Act [Chapter 29:15]. It is responsible for the management of Hwange town area. The plaintiff in claiming payment of the said amount pleaded that the defendant was liable to the plaintiff arising out of a breach of agreement. The circumstances of the agreement and its breach were pleaded as follows:

“a) that the plaintiff flighted an invitation to treat in terms of which through an advertisement in the Chronicle newspaper, the defendant acting in terms of section 152 of the Urban Councils Act advertised to interested parties for allocation, a property called Stand number 7011 Industrial site Hwange for utilization for construction of a coke oven battery

the plaintiff reacted to the invitation and was successful in that it was allocated the property

that the defendant by letter dated 29 August 2022 invited the plaintiff to purchase the property for the sum of US$24 045.00

that the plaintiff duly paid the purchase price aforesaid by bank transfer into the defendants ZB account

that the defendant confirmed that the plaintiff had complied with council requirements, and that processing of title deeds was in process

that upon attempting to commence construction, the defendant stopped the construction in the absence of an environmental impact assessment report which the defendant subsequently obtained and submitted the defendant

that the defendant made a turn around and issued an invoice for the purchase of the land in the sum of US$1,479,269.56 (one million four hundred and ninety-seven thousand two hundred and sixty-nine dollars and fifty-six cents) and indicated that the amount of US$24,045 represented a commitment fee

that in so conducting itself the defendant unlawfully reneged on the sale agreement to the plaintiff’s prejudice. The plaintiff claimed to have hired expects to construct and set up the construction of the coke oven plant

that the plaintiff lost anticipated business income in a whooping sum of US$17 000 000.00 (seventeen million united states dollars)”

The plaintiff filed an affidavit of evidence and heads of argument to support its claim and the granting of default judgment. In relation to the defendant’s default to enter appearance to defend, the plaintiff filed a return of service of the summons and declaration reference SMN111/ 24 dated 11 November 2024. The process in terms of the return of service was served on 11 November 2024 at 4 Sandalwood Crescent Baobab Hwange. The Sheriffs remarks endorsed thereon were as follows “Summons and plaintiff’s declaration served on Simbile Muringa who accepted the service on behalf of the defendant.” I was satisfied that there was valid service of the process, and that the defendant did not on record file appearance to defend. In consequence, the plaintiff was entitled as it did to seek default judgment.

Despite the default in filing appearance to defend the court must still consider whether a case for the judgment sought is established on the plaintiff’s pleadings. The claim for US$17 000 000.00 was supported by a statement of the financial position of the plaintiff as at 30 July 2024 coupled with income and expenditure projections for the company which showed a loss position attributed to lost expected revenue from the failed sale and delivery of foundry coke to the tune of 102 719 tonnes. The plaintiff was already in the business of selling foundry coke before the transaction in issue was secured and had traded at a loss. The lost opportunity is the one which would have result in lost trade income in the amount of US$17 348 421. The plaintiff opined that its financial position was adversely affected by the lost opportunity and expected income, which it claimed.

In the heads of argument, the plaintiff submitted that the damages for breach of contract are awarded on the basis that the innocent party must be placed in the position it would have been had the breach not occurred. Reliance for the proposition was placed on the case of Wynia Pvt Ltd v MBCA Bank Limited SC 27/14 wherein gowora JA (as then she was) stated on page 4 of the cyclostyled judgment that: “In a claim for damages arising out of breach of contract the plaintiff has to be placed in the same position he would have been in had the contract been properly performed” In the same judgment the learned judge noted that the plaintiff who claims damages must prove them because damages are not to be presumed. The learned judge also qualified the principle of proof of damages by stating at p 5 as follows “A plaintiff who sues for damages is required to prove his damages. A court will not presume damages in the absence of proof of such damages by the plaintiff. However, the principle that a plaintiff must prove his damages is not a strict rule. What is required of a plaintiff is to place before the court all the evidence that is reasonably available to him. Before this principle can come into effect, it must be established that the plaintiff has suffered some damages and that all that has to be established is the quantum of these damages. This was stated by selke J in the following terms: “but to make such dicta into inflexible rules, applicable in every instance, without regard to the circumstances of the parties in respect of the availability of evidence or to the precise nature of the claim, it seems to me, results not infrequently in injustice. There must be many types of claims due to breach of contract, which do not admit for various reasons of strict or detailed proof in terms of so much money. For example, loss of business, especially in relation to the future cf Bower v Sparks, Young and Farmers Meat Industries Ltd 1936 NDP 1 at p 23”

The damages claimed in this matter are elaborated in the projected income and loss statement filed to support the granting of judgment. The court does not have in its aid any information in rebuttal. The court cannot manufacture evidence to water down the claim. The defendant has itself to blame because the consequences of a non-defense to a claim are always dire especially so because the defendant’s side of the story is not placed before the court.

The claim in this matter being for loss of business is one where damages are general in nature. Exactitude is difficult to attain. The plaintiff should adduce sufficient evidence to enable the court to quantify the damages. The plaintiff did so and provided the income and loss statement. I am satisfied that in the absence of a challenge, the statement can be relied on as a source to show how the damages have been computed. In the circumstances, the plaintiff is entitled to the claimed damages.

At the hearing of the application, the plaintiff counsel requested the court to correct the draft order in para 1.1 where the figure of $1 700 000 appears instead of $17 000 000.00. The correction was noted on record. In the result, there will be judgment for the plaintiff as follows.

IT IS ORDERED THAT

Default judgment in case number HCH4791/24 is entered in favour of the plaintiff against the defendant

The plaintiff shall pay the defendant the sum of $17 000 000.00 in ZIG calculated at the interbank rate obtaining on the date of payment with interest thereon at the prescribed rate of 5% per annum from the date of judgment to the date of payment

Plaintiff to pay costs of suit.

Chitapi J:…………………………….

Tabana and Marwa Legal Practitioners, plaintiff’s legal practitioners