Spellbound Investments (Private) Limited v Tabeth Tawonameso

### Preamble
1
HH 183-13
HC 8294/11
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SPELLBOUND INVESTMENTS (PRIVATE) LIMITED

versus

TABETH TAWONAMESO

HIGH COURT OF ZIMBABWE

MATHONSI J

HARARE, 4 June 2013 and 12 June 2013

F. Siyakurima, for the plaintiff

F. Ngwerume, for the defendant

CIVIL TRIAL

MATHONSI J:  The plaintiff, an incorporation engaged in the business of selling electrical accessories, computers and wholesale cellular airtime at No. 83 Kaguvi Street, Harare, sued the defendant, a business woman operating a shop with her Nigerian husband at No. 2 Park Street Harare for US$15 000-00 in terms of an acknowledgement of debt signed on 14 January 2011.

In its particulars of claim, the plaintiff averred that the defendant had signed the acknowledgement of debt on 10 May 2010 but went on to attach a document signed on 14 January 2011 aforesaid.  In terms of that acknowledgment of debt, the money was lent and advanced to the defendant at her special instance and request.  She undertook to repay it in monthly instalments of US$1 000-00 without any interest whatsoever from 28 February 2011 until the full amount was paid.  She was therefore required to pay it over a stretch of 15 months.

In the event of a default, the defendant was liable for any tracing charges, 10 % collection commission plus tax and attorney and client costs.  She was also liable to pay the costs of preparation of the acknowledgment of debt.  In its summons, the plaintiff did not claim collection commission or attorney and client costs as provided for in the acknowledgment of debt settling for interest at the prescribed rate from the date of summons to date of payment and costs of suit on an ordinary scale.

The defendant vehemently contested the action averring in her plea that she had only borrowed from the plaintiff a sum of US$5 000-00 which accrued an agreed interest of US$3 000-00 giving a total liability of US$8 000-00 which she paid in full to the plaintiff.  The defendant averred further that while she signed the acknowledgment of debt it was signed under duress and she did not owe the plaintiff any money at all.

The issues for trial were agreed as:

Whether or not the defendant is indebted to the plaintiff as claimed and if so how much is due and payable.

Whether or not the defendant signed the acknowledgment of debt under duress.

The plaintiff led evidence from its 2 directors namely Clapparton Kariwo and Damson Kumirai, both of whom signed the acknowledgment of debt as witnesses.

It was the evidence of Clapparton Kariwo that he knows the defendant as they used to share business premises rented by the defendant in Kwame Nkrumah street Harare.  Sometime towards the end of October 2010, the defendant wanted to embark on a trip to China and needed money.  She then approached the plaintiff seeking a loan of US$15 000-00 which the plaintiff readily advanced to her without any written acknowledgment because it was not the first time that she had taken a loan from the plaintiff.  She had done so on a number of occasions previously and had dutifully repaid the loans.  For that reason coupled with the fact that they had shared business premises, the loan was advanced on the basis of mutual trust.

The witness stated that himself and his co-director Kumirai had advised the defendant that they could only give her the money after hours when they had closed their shop.  He and his co-director had driven to some place in the Avenues area of Harare at around 6pm where they met the defendant and handed over the money.

The parties agreed that the debt would be repaid by the end of October 2011 but the defendant defaulted advising the plaintiff’s representatives that she had no money as she needed to sell her stock before she could repay.  They readily allowed her time as they trusted her.

Much later they called the defendant to their office so that she could sign an acknowledgment of debt to safeguard the huge amount of money the plaintiff had advanced to her.  The defendant duly attended at their offices located at No. 122 Harare Street and was archered into the office which is at the back of a shop manned by a number of their employees.  Those present during the signing ceremony were the defendant, the witness and his co-director Kumirai.

As the defendant was already aware of the purpose of her visit, the witness quickly referred to the template of an acknowledgment of debt which was served on the computer.  The defendant supplied him with her personal details which he typed onto the document.  Although they wanted the money to be paid as quickly as possible in instalments of at least $3 000-00 per month, they eventually settled for $1 000-00 per month at the request of the defendant.  They did not levy interest because the defendant had already failed to repay the capital amount.  All they wanted was to recover their money.

Kariwo testified that after printing the document they got the defendant to enter her address and her next of kin on it before she signed it.  They gave him her own copy.  After the signing of the document which he and Kumirai witnessed, they discussed other business interests with the defendant before giving her R10 000-00 to purchase on their behalf some accessories from South Africa.  The defendant was due to travel to that country on business.

The witness denied that any undue influence was brought to bear upon the defendant as the atmosphere in the office was good and there were other employees in the front shop.  They treated the defendant like a sister and her husband as a brother.

Under cross examination, Kariwo conceded that $15 000-00 was a lot of money and stated that at that time the plaintiff’s company would take less than a month to make a profit of that amount.  He could not give any meaningful explanation as to why no receipt, invoice or any other book keeping record was made for the money given to the defendant.

Kariwo could not explain why the signing of the document was not witnessed by an independent witness other than himself and his co-director especially as there were other employees of the plaintiff who were far less conflicted than the directors.

Damson Kumirai is another director of the plaintiff.  He tried to corroborate the evidence of the first witness without much success.  He stated that the defendant had come to the plaintiff’s office at 83 Kaguvi Street and not 122 Harare Street to collect the $15 000-00 sometime in October or November 2010 in the morning at around 10am.  This sharply contradicted the evidence of Kariwo who said they had driven to the Avenues area of Harare at about 6pm to hand over the money to the defendant.

He stated that he is the one who called the defendant to come to the plaintiff’s office to sign an acknowledgment of debt although he did not remember the exact words that he used.  They had not secured the signature of the defendant at the time she received the money because they trusted her.  As to what had become of that trust on 14 January 2011 when they insisted on the signing of the document, he did not explain.

The witness was not sure whether the defendant was given time to consider the document before signing it.  He was not even sure if she took it away with her before signing it.  As to why they did not levy interest he stated that this was because they expected the money to be repaid without delay, this despite the fact that the document provided for a repayment period of 15 months.

Kumirai prevaricated a lot when asked if the plaintiff kept a record of the transaction involving the $15 000-00.  Although he initially claimed to have the records which, of course were not produced in court, he turned round to say “you see when you know someone you do not have to get her to sign.”

The 2 witnesses who testified on behalf of the plaintiff did not make good witnesses.  For one thing, their story is difficult to follow and is highly improbable.  Their demeanour was extremely bad and they presented testimonies with an air of fiction in them, if not outright fabrication.  They simply did not strike me as truthful witnesses.  I have already alluded to the manner in which they glaringly contradicted each other on the most important part of the case, the handing over of the money.  One said it happened in a vehicle at the Avenues at about 6pm as the defendant was about to leave for China while the other said it happened at the plaintiff’s office at 83 Kaguvi Street at about 10am.  If they cannot agree between themselves as to the location and time of the hand over of the money, one is left wondering as to whether the money was ever handed over.

No satisfactory explanation has been given for the plaintiff’s failure to secure a written acknowledgment of debt from the defendant at the time the money was allegedly handed over or indeed why it took about 3 months to get the defendant to append her signature.  What is even more amazing is the fact that when the defendant was finally made to sign a document and she had already defaulted by 3 months, the plaintiff did not find it necessary to levy interest on such a huge sum of money and was content with having the debt repaid over a stretch of 15 months.  Such benevolence is in explicable.

I take judicial notice of the fact that the plaintiff is a modest, if not small business, engaged in selling among other small things cellular airtime.  I find it very unlikely that it could afford to part with such a huge sum of money without any interest and indeed, without even a written acknowledgement of debt for almost 3 months.  It has also not escaped my notice that although they claim that they were not in the business of money lending the plaintiff’s representatives kept “a template” of an acknowledgement of debt in their computer.  Just why this was necessary has not been explained raising serious doubt on their bona fides.

Although both directors insisted that they wanted the debt to be repaid as quickly as possible, it is intriguing that they accepted instalments of $1 000-00 to be paid over a lengthy period of 15 months.  Equally strange is the decision to entrust a further R10 000.00 to a defaulting debtor.  Although they claimed to have had numerous other dealings with the defendant involving the borrowing of money, not a single document was produced as proof of those transactions.  The same goes for the failure to secure an independent witness to sign the acknowledgement of debt.

With all these unanswered questions and doubt, the testimony of the defendant becomes exceedingly refreshing to the extent that it provides some answers and attempts to resolve the jig saw puzzle.  She is a business woman married to a Nigerian national and they sell cellphone accessories and weaves at No. 2 Park Street Harare, premises which they are renting.  At one point her husband brought Kariwo and Kumirai (whom she has always known as “Mr Golkins” as he presents himself as such, in fact she only heard his real name for the first time in court during these proceedings) and they sublet part of their shop to them.

During that time Golkins approached her saying they had some money they were lending out at a profit.  It was $5 000-00 which would be repaid after 1 month with interest of $3 000-00. She fell for it and took the loan in August 2010.  About the end of August or beginning of September 2010, she was able to repay the capital of $5 000-00 and requested time to pay the $3 000-00.  She succeeded in doing so at the end of September 2010.  That is the only financial deal she ever had with the plaintiff or its directors.  She denied taking a loan of $15 000-00 from the plaintiff.

Her story is that after she had repaid the loan to Golkins, he did not waste time because in October 2010 he started making sexual advances to her which she found very unpalatable.  She reported the issue to her husband who quickly kicked the plaintiff and/or its directors out of the shop they were sharing with the defendant and her husband. Riled by the eviction, Golkins started making endless telephone calls to her.  He would call the defendant anytime, including in the middle of the night, making threats.  He would call and tell her where she would be and that she was even aware of the school that her children attended, a real stalker.

Golkins complained that the defendant had prejudiced their business by reporting his sexual advances to her husband leading to their eviction.  As a result they had lost all the clientele they had built and the money that goes with it.  He wanted compensation from her.  In the event that she did not compensate them, Golkins threatened to cause the deportation of her Nigerian husband as he was well connected and his uncle was a member of the Central Intelligence Organisation.

Although her husband reported the matter to the police post at Fife Avenue, nothing was done about the threats.  In fact when they went to the station to complain, they were rebuffed by a very unco-operative investigation officer.  This made her believe that indeed Golkins had influence in high places including the police.  The witness genuinely feared for her family and was living in constant fear of what Golkins could do to her and her family.

As if to give credence to the threats made by Golkins, her husband was called by Immigration Officers in December 2010 who started interrogating him about the couple’s marriage although his papers had always been in order.  She did not hesitate to think that Golkins was behind that harassment.  It was immediately after that curious conduct of the Immigration Department that Golkins struck.

On the morning of 14 January 2011 the witness had just dropped her children at school when she was called by Golkins who demanded her immediate presence at his office.  He insisted that if she disobeyed that directive, he would cause the deportation of her husband the very next morning.  She was forced to find her way to that office where upon arrival, she was forced to sign the acknowledgment of debt.  She was simply told by Golkins that she had to sign it if she did not want trouble.  She believed the threats because in that office, there was Golkins (Kumirai); Kariwo and a third man who was introduced to her as Golkins’ C I O uncle.

The defendant stated that she was not allowed to read the document which had already been printed.  The 2 directors of the plaintiff commanded her to enter the name of her sister Mrs Madzire as her next of kin because the 2 already knew her as they used to rent her Supermarket in Ashdon Park.  Trembling with fear and psychologically harassed and run down the witness says she signed the document.  She was not given a copy and she denied being given R10 000-00 to purchase accessories for the plaintiff.  She also denied sharing any other premises with the plaintiff except No. 2 Park Street, Harare.

According to the defendant her signature was secured through threats against her family and was not made freely and voluntarily.  It does not represent any money advanced to her.  The defendant’s story reads like a fictious novel or something extracted from the movies but it was presented very well by a witness who struck me as truthful.  She passed as a troubled woman who has endured a lot of abuse from individuals who appear very shadowy indeed.  I believe her.

I am fortified in my belief by the fact that the plaintiff’s case itself has serious difficulties and, for the reasons I have given above, it is completely improbable.  This lends more credence to the defendant’s case.  There is no doubt in my mind that no money exchanged hands between the parties as alleged in the acknowledgment of debt.

Mr Siyakurima for the plaintiff made reference to J.W.Wessels, The Law of Contract in South Africa, Vol 1 2nd Ed, Butterworths & Company to make the point that the constituents for duress to vitiate a contract have not be established in this case.  I do not agree.  Wessels states at para 1165 p 360 that:

“If, at the moment when a contracting party expresses his consent to a contract, he is acting under the physical or moral constraint of the other party or of some third person, the contract is voidable at the instance of the party coerced.  In other words, the consent to a contract if given under the influence of violence, duress or fear, is not such consent as will establish a binding contract.”

The learned author goes on in the same page at para 1167 to set out the elements for setting aside the contract as:

“In order to set aside a contract on the ground of violence or fear, our law requires the following elements:-

Actual violence or reasonable fear----

The fear must be caused by the threat of some considerable evil to the party or his family -----

It must be the threat of an imminent or inevitable evil ----

The threat or intimidation must be contra bonos mores ----

The moral pressure used must have caused damage ----”

Professor R.H Christe, Business Law in Zimbabwe, 2nd Ed, Juta and Company Limited p 83 also makes the critical observation that:

“The threat must be of an imminent or inevitable evil, meaning that it cannot be averted otherwise than by agreeing to the contract. But a party who agrees to the contract in the agony of the moment should not be judged by the standards of the armchair critic.”

Here is a woman who was constantly harassed on the telephone even at night by a person claiming to be well connected in high offices including the Central Intelligence Organisation.  A loving mother and wife of a foreigner incessantly told not only of the vulnerability of her primary school going children but also of the imminent break up of her family by the deportation of her husband. Who was subjected to unexplained interrogation by the Immigration Department even as her husband’s immigration papers were in order and then summoned by this shadowy figure masquerading as “Golkins” when his real name is Damson Kumirai, in the presence of a so-called C I O operative uncle and instructed to sign a document if she wanted to have peace.

For Mr Siyakurima to argue that the threat was not directed at her and that her husband who was the subject of the threat did not believe in it, is to fall under the standard of an armchair critic. In my view sufficient fear was brought to bear on the defendant.  At that stage she would have signed anything.

I am satisfied that all the elements for setting aside a contract on the basis of duress or fear have been met.  I have already made a finding that no money exchanged hands in this matter.  The plaintiff belongs to that category of dubious companies which are mushrooming in our midst at the moment and survive on illegal deals targeting vulnerable members of society.  It is a culture that must be suppressed resolutely before it progresses out of hand.

In the result, I make the following order, that

The acknowledgment of debt signed by the defendant on 11 January 2011 is hereby set aside.

The plaintiff’s claim is hereby dismissed with costs.

Sawyer & Mkushi, plaintiff’s legal practitioners

Hamunakwadi, Nyandoro & Nyambuya, defendant’s legal practitioners