Samuel Mugano v Fintrac and ZFC Limited and Royal Bank of Zimbabwe

### Preamble
1
HH394-13
HC 1131/13
REF CASE NO. 14134/12
SAMUEL MUGANO
---------


==============================

REF CASE NO. 14134/12

SAMUEL MUGANO
versus
FINTRAC
and
ZFC LIMITED
and
ROYAL BANK OF ZIMBABWE

HIGH COURT OF ZIMBABWE
TSANGA J.
HARARE, 25 October 2013

Mrs D. Muunganirwa, for Applicant
Ms R Makamure, for first Respondent

TSANGA J. This is an application in which the applicant, Samuel Mugano seeks joinder to case Number HC 14134/12 of the first respondent, a registered Trust called Fintrac. It is a matter in which applicant (as defendant) is being sued by the second respondent ZFC, (as plaintiff) for a debt of US$58 034.45 for inputs received from it in the form of seed potato, fertilisers and chemicals some time on December 2011. Applicant is one of a group of 234 farmers called Bende Farmers, in Nyanga, who received these inputs from the second respondent.

Applicant is being sued on the strength of a surety document which he purportedly signed on behalf of the group of farmers in which he is described as lead farmer. He denies binding himself as surety on behalf of Bende group of farmers. He disputes ever signing the surety document and disagrees that the signature on the document is his. He further states that each farmer was to repay on an individual basis an agreed amount into the second respondent’s bank account depending on how much had been received in terms of supplied inputs. He attached receipts showing the payment which he made for his share which he says amounted to US$738.16

He has two primary reasons for seeking the joinder of the first respondent in this matter. The first is founded on his assertion that the matter in which he is being sued cannot be resolved without hearing the evidence of the first respondent. He alleges that it is the first respondent who initiated the relationship of all the parties involved in this matter. Applicant
 REF CASE NO. 14134/12 avers that the inputs were in fact received through the first respondent. His argument is that at all materials times, the farmers engaged with the first respondent through their employees, Innocent Masiwa and Moses Mutetwa.

The second reason for seeking joinder is stated to be that the surety document that the applicant is alleged to have signed, bears the signatures of first respondents’ above named two employees as witnesses. As such, applicant argues that the matter cannot be heard without hearing their evidence as to when and where they witnessed his signature. Applicant argues that he will suffer prejudice if the first respondent is not joined as he will be forced to pay a debt which he does not owe. Furthermore, he maintains through attached receipts, that he has paid his portion of the debt.

The third respondent, Royal Bank, comes into the picture in that it guaranteed as co-principal debtor with Seed Potato Coop in collaboration with Bende Farmers the debt to second respondent. The debt guaranteed was then stated as $73 625.16.

The first respondent objects to the joinder on the basis that it has no direct and substantial interest in the matter and neither does it have a legal interest. It concedes that it indeed approached farmers in the Bende area of Inyanga, but describes its role as having been strictly limited to offering assistance with technical support and identification of formal market linkages for their produce. This, it says is in line with its organisational mandate and it quotes one of its main objectives as being to:

“assist the development of the agricultural sector in Zimbabwe through increased productivity, incomes and market linkages of small holder farmers through access to new technologies and technical services.”

The first respondent also admits to organising a Bankers day in the Bende Community where it invited various Bankers to explain the services they offer to farmers. Amongst the Banks was the third respondent, Royal Bank. The first respondent further avers that the applicants chose to deal with the third respondent and that it was the latter that contracted the second respondent to avail the inputs. It maintains that it is not privy to the nature of agreements entered into by and between the farmers and the second and third respondents. Regarding the signatures of its employees, first respondent is of the view that any explanation, whatever it may be, can be obtained by having them subpoenaed as witnesses. It also states that the relief sought can be carried into effect without joining it to the action.


REF CASE NO. 14134/12

In making the application for joinder, the applicant places reliance on r 85 of the High Court Rules 1971 which permits two or more persons to be joined together in one action as plaintiff or defendant whether in convention or reconvention. This is where if separate actions were brought by or against each of them, as the case may be, the same common question of law or fact would arise in all the actions.

Both counsel for applicant and counsel for first respondent relied on overlapping cases in support of their contentions in their heads of argument. The case of Amalgamated Engineering v Minister of Labour 1949 (3) SA 637 was cited by the counsel for applicant in support of its argument that the first respondent has an interest in the matter and should thus be afforded an opportunity to be heard as a result of that interest. Counsel for first respondent drew strength from this case to put forward two tests from the case. Firstly, whether a third party would have locus standi to claim relief concerning the same matter. Secondly, where as a result of non-joinder, any order of court would be res judicata against the third party entitling him to approach the court again, concerning the same subject matter, and possibly obtaining an order irreconcilable with the order made in the first instance. Counsel argued that first respondents passed none of these tests.

The case of Total Zimbabwe (Private) Limited v Power Coach Express 2010 (2) ZLR 1 (H) was drawn on by the applicant to argue that joinder is necessary where there is a contractual bond between applicant and third party. Counsel for first respondent relied on the case to argue that there were no such rights or obligations in its relationship with Applicant. Both counsel also cited the case of Rodgers & Others v Miller & Others 2010 (1) ZLR 49 to argue that though non joinder is not fatal to the continuance of any matter, it does not absolve a litigant to cite relevant parties. Counsel for first respondent put the emphasis on the fact that the parties so cited would have to be relevant.

In the case of United Watch & Diamond Co & Others v Disa Hotels LTD & Anor 1972 (4) SA 409 (C) CORBETT J summarised the position on joinder emerging from various case law as follows:

“It is settled law that the right of a defendant to demand the joinder of another party and the duty of the court to order such joinder or ensure that there is a waiver of the right to be joined, (and this right and this duty appear to be co extensive) are limited to cases of joint owners, joint contractors and partners and where the other party has a


REF CASE NO. 14134/12 direct and substantial interest in the issues involved, and the order which the court may make. In Henri Viljoen (Pty) LTD v Awerbuch Brothers 1953 (2) SA 151 (O)

HORWITZ AJP analysed the concept of “direct and substantial interest” and after an exhaustive view of the authorities, concluded that it connoted ….. (see at page 169)

‘an interest in the right which is the subject matter of the litigation and not merely a financial interest which is only an indirect interest in such litigation’.

He also reiterated the emphasis in such cases where joinder is being sought, on the need for a *legal interest* in the subject matter of the action which stood to be affected by the judgement of the court.

I now examine the facts before me in light of the law and legal authorities commencing with the Applicant’s first set of reasons for seeking joinder. Essentially, these reasons touch on the direct and substantial interest of the first respondent as a consequence of its role in setting in motion the events that led to the contractual relationship between the Applicant and the second and third respondents. It is said that it is first respondent who approach Royal Bank the third respondent. It is also said that it is the first respondent who advised the farmers that they would repay by depositing the money in second respondent’s account. It is also said that it is the first respondent who played a crucial role in distributing the inputs, although this aspect was challenged together with the rest of the averments by the first respondent.

There is no evidence at all from the facts and documents presented of a contractual link between the first respondent and the second or third respondents. The first respondent is not being sued at all by the second respondent in the matter.

In our context, NGOs and charitable Trusts such as the first respondent have come to play various types of developmental roles in their work with rural communities. The facts alleged by applicant in my view, can be said to exemplify difficulties that arise when such developmental initiatives and projects are seen by the recipient communities as being initiated, influenced and driven by outsiders, albeit with them as beneficiaries. There appears to have been some misunderstanding at least on the part of the applicant and possibly the rest of the other farmers, regarding transactional and negotiating roles and ultimate responsibility for risks. The first respondent does concede to having played what it terms as a ‘facilitative role,’ which the applicant views as having been more akin to ‘a major driving force’ behind
 REF CASE NO. 14134/12 the whole initiative. To the extent that there appears to have been such misunderstanding first respondent cannot entirely plead ‘Teflon’ like qualities in the sense that nothing must stick to it because of its mere facilitative role. As communicator and facilitator, it shoulders some responsibility for poor communication flows regarding implications of its initiative.

However, the facilitative role of the first respondent cannot be said to amount to a legal interest in the matter nor to having a direct and substantial interest in the contract that was subsequently entered into by the farmers with the second and third respondents in a manner that would require its joinder. I think in this regard there is a need to distinguish between the type of legal interest that is required under the law to justify joinder and the type of mutual interest on the part of the Applicant, the rest of the farmers, and the first respondent that stems from each of their activities. The kind of interest involved here is symbiotic in nature as opposed to being one stemming from a contractual relationship, joint ownership or legal partnership of those involved. No doubt if the project had been a success the first respondent would have capitalised on its facilitative involvement in the development sense of ‘partnership.’

The joinder sought here by the applicant is premised on a contractual nature to an agreement to which the first respondent was not an actual party. The effect of joinder would be to bind the 1st respondent to the outcome of the litigation. From a legal perspective I do not see anything in the facts that suggests that they were actual parties to the contract in the sense that requires them to be bound. Any pronouncement by the court in the main matter would in my view, have no bearing in the first respondent. The legal reality is that the first respondent is not party to the contract.

Applicant also sought to join the first respondent on the grounds that its two employees would be able to explain the disputed document as to when it was signed since they are said to be signatories there to in their capacity as witnesses. The first respondent has indicated its willingness to avail its two employees as witnesses as it is unable to deny whether or not they witnessed the document in question. It rightly asserts in my view that this can be done without the necessity of joinder.

Furthermore, since applicant says he never signed the surety document in question and says the signature is not his, I would imagine that the case calls the need to have the
 REF CASE NO. 14134/12 expert opinion of an experienced document examiner. Again since all the personalities that have signatures on that document are available, including the applicant, samples of their signatures using documents from before, during, or after the alleged signing of the disputed document can presumably be obtained by such expert for comparative purposes. Such a procedure would not rest on joinder.

For the reasons I have analysed above, I come to the conclusion that the application for joinder cannot succeed. The applicant’s quest for joinder, though without legal merit, was not totally out of the ordinary bounds of reason. I say so given the misunderstandings that often arise in projects of this nature in rural communities that are often seen by ordinary men and women, as initiatives of outsiders. As such, as regards costs for this application, each party is to bear their own costs.

The application for joinder is accordingly dismissed and each party to bear its own costs.

Sinyoro & Partners, Applicants Legal practitioners
Kantor & Immerman, 1st Respondent’s Legal Practitioners
--- END OCR FALLBACK ---