African Century Limited v Megalink Investments (Private) Limited & 2 Ors

### Preamble
Judgment No. SC 124/20
1
Civil Appeal No. SC 35/16
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REPORTABLE:       (116)

AFRICAN     CENTURY     LIMITED

v

(1)     MEGALINK     INVESTMENTS     (PRIVATE)     LIMITED     (2)     OWEN     PETER     MURUMBI     (3)     THERESA     MUSINA

SUPREME COURT OF ZIMBABAWE

HLATSHWAYO JA, PATEL JA & ZIYAMBI AJA

HARARE, JULY 20, 2017 & OCTOBER 6, 2020

H. Mutasa, for the appellant

T. Magwaliba, for the respondents

HLATSHWAYO JA: This is an appeal against the whole judgment of the High Court of Zimbabwe handed down on 13 January 2016 under judgment number HH 24/16 of case number HC 2899/15, in terms of which the respondents' application for stay of execution was granted.

The material facts of this case are common cause. The respondents entered into a lease finance facility with the appellant and the former subsequently defaulted in making payments thereon. As a result, the appellant instituted legal proceedings against the respondents on 17 June 2014, for the recovery of the same. On 10 September 2014, a judgment in default was granted in favour of the appellant for the sum of US$ 88 225.14 together with interest, being the amount claimed against the respondents. In terms of the obtained order, specified equipment belonging to the respondents was declared executable by the court.

Pursuant to the obtaining of the judgment in default by the appellant, the respondents made two payments to the appellant in the sums of US$ 50 000.00 and US$ 38 000.00 respectively. In total, the amount paid to the appellant in fulfilment of the court order was US$ 88 000.00, leaving an outstanding balance of US$ 225.14 plus interest.  In approaching the court a quo, the respondents sought a stay of execution against certain properties, being buses in their possession that had been attached and declared executable in terms of the default judgment.

The matter was initially heard as a chamber application but was subsequently referred to the ordinary court roll upon opposition by the appellant. At the hearing, the appellant indicated that it had neglected to file heads of argument due to the belief that the matter related to a chamber application, and as such did not require the filing of heads of argument.  However, the court a quo and the respondents viewed the application for stay of execution as an ordinary court application, in terms of which heads of argument were necessary.  All the same, in the absence of any objection from the respondents, the court a quo proceeded to hear oral submissions from both the appellant and the respondents.  In other words, the appellant was not barred for failure to file heads of argument.

It was argued by the respondents that save for the outstanding US$ 225.14 and interest, the court order obtained by the appellant had been satisfied.  In that vein, the respondents undertook to pay the full outstanding amount, including interest, upon the calculation thereof.  In opposition, the appellant contended that respondent's buses were executable, as the payments effected towards the court order were appropriated towards other indebtedness incurred by the respondents. The said indebtedness, in some instances, was accrued pursuant to the issuance of process.

It was the position of the appellant that is was empowered to appropriate any payments from the respondents towards the settlement of all indebtedness due to it, on the strength of a clause (clause seven) contained in the lease agreement between the parties.  In terms of clause seven, the lessor, being the appellant, was entitled to, at its discretion, appropriate any payments received from the respondents in satisfaction of any indebtedness due to it.

In deciding to grant the respondents' application for a stay of execution, the court a quo determined that the payments effected by the respondents were towards the fulfilment of the obtained court order.  Therefore, the court held that the appellant could not execute for the full sum of the judgment debt, which debt had been substantially settled by the respondents.  It was further held that any indebtedness attributed to the respondents, beyond the scope of the court order, was to be claimed through the institution of a separate action.

Aggrieved by the decision of the court a quo, the appellant has filed the present appeal on the following grounds:

The court a quo erred when it determined that the appellant was obliged to file heads of argument in the circumstances of the present matter despite the fact that the respondents had brought its claim by way of a chamber application.

The court a quo erred when it determined that the appellant was obliged to apportion the respondents’ payment of US$ 88,000.00 towards settling the judgment debt despite the fact that the debt to which that payment had been allocated by the appellant was not being disputed by the respondents.

In any event, the court a quo erred when it determined that the issuance of summons by the appellant meant that the appellant could not apportion any payments received from the respondents to any debt outside that in respect of which the summons had been issued.

Should the appeal succeed, the appellant seeks the following relief:

WHEREFORE appellant prays that the appeal be allowed with costs and the judgment of the court a quo be set aside and substituted with the following:-

"The application be and is hereby dismissed with costs."

Although the present appeal is based on three grounds of appeal, it is apparent that the sole issue for determination before this Court is whether or not the appellant was entitled to apportion payments made towards the fulfilment of a judgment debt, to an indebtedness not claimed in terms of the same.

The reason for so stating is that the first ground of appeal is misplaced given the fact that the court a quo did not penalize the appellant for failure to file heads of argument by holding it barred. It is evident that in spite of the absence of heads of argument by the appellant, the court a quo went on to hear oral submissions from both the appellant and the respondents and a determination was made thereafter. The judgment a quo was therefore derived from a consideration of the merits of the case, rendering the first ground of appeal irrelevant.  The second and third grounds of appeal concurrently speak to the aforementioned sole issue for determination that is before this Court.

At the outset, it is necessary to consider the case Mupini v Makoni 1993 (1) ZLR 80 at p 80D-E wherein it was stated:

"Execution of a judgment is a process of the court and the court has an inherent power to control its own processes and procedures, subject to such rules as are in force. In the exercise of a wide discretion, the court may set aside or suspend a writ of execution or cancel the grant of a provisional stay. It will act where real and substantial justice so demands. The onus rests on the party seeking a stay of execution to satisfy the court that special circumstances exist. Such special circumstances can be more readily found where the judgment is for ejectment or the transfer of property, because the carrying into operation of the judgment could make restitution of the original position difficult." (Emphasis added)

Further to that, Erasmus Superior Court Practice at B1-330 to B1-330A is persuasive wherein the principle is stated as follows:

"As a general rule the court will grant a stay of execution where real and substantial justice requires such a stay or, put otherwise, where injustice will otherwise be done. Thus the court will grant a stay of execution where the underlying causa of the judgment debt is being disputed or no longer exists, or when an attempt is made to use for ulterior purposes the machinery relating to the levying of execution. It has been held that, in particular circumstances, the court could in the determination of the factors to be taken into account in the exercise of its discretion under this rule, borrow from the requirements for the granting of an interim interdict, namely that the applicant must show (a) that the right which is the subject of the main action and which he or she seeks to protect by reason of the interim relief is only prima facie established though open to doubt; (b) that there is a well-grounded apprehension of irreparable harm to the applicant if the interim relief is not granted and he or she ultimately succeeds in the establishing of his or her right; (c) that the balance of convenience favours the granting of interim relief; (d) that the applicant has no other satisfactory remedy." (emphasis added)

From the foregoing, it is evident that the court a quo exercises a wide discretion in determining whether or not to grant a stay of execution.  This discretion involves a variety of considerations that assist the court to appropriately administer justice between the litigating parties.  Ever mindful of this fact, this Court, as an appellate body, does not generally act to usurp the discretion of a lower court unless it is proven that the discretion has been improperly exercised. A plethora of cases have upheld this principle, in particular, the case of Barros & Anor v Chimphonda 1999 (1) ZLR 58 (S) at 62G-63A wherein Gubbay CJ stated the following:

“These grounds are firmly entrenched. It is not enough that the appellate court considers that if it had been in the position of the primary court, it would have taken a different course. It must appear that some error has been made in exercising the discretion. If the primary court acts upon a wrong principle, if it allows extraneous or irrelevant matters to guide or affect it, if it mistakes the facts, if it does not take into account some relevant consideration, then its determination should be reviewed and the appellate court may exercise its own discretion in substitution, provided always it has the materials for so doing. In short, this Court is not imbued with the same broad discretion as was enjoyed by the trial court.” (Emphasis added)

In the circumstances, the appellant contends that court a quo failed to appreciate that it was entitled to apportion payments received from the respondents towards any indebtedness due to it in terms of clause seven of the lease agreement between the parties, which clause states:

"The lessor may appropriate at his sole discretion any payments received from the lessee to any indebtedness due by the lessee to the lessor, the lessee waives his rights to appropriate payments to any other debt or account of his choice."

With respect, the argument is fundamentally flawed in that it fails to take into account that a judgment is a process of court that is obtained upon a claim being brought for determination before the court. The appellant instituted a claim for US$ 88 225.14 together with interest, which claim was granted by the court a quo in default of appearance by the respondents. The respondents subsequently made payments amounting to US$ 88 000.00 towards the judgment debt, which left an outstanding amount of US$ 225.14 and interest. That the payments made by the respondents were made towards the fulfilment of the judgment debt was not rebutted or disputed by the appellant, establishing the issue as settled.

The argument advanced by the appellant is problematic in that it essentially amounts to an abuse of court process. In approaching the court a quo, the appellant had the opportunity to bring all claims of indebtedness it had against the respondents before the court. It apparently did not, electing instead to bring a claim in the aforementioned terms. Having done so, the appellant cannot then seek to collect other indebtedness it believes it is entitled to, on the back and strength of a judgment debt that does not relate to the same.

Any claims the appellant believed it was entitled to in terms of clause seven should have been brought in the same or a separate action. Having failed to do so, the appellant is only entitled to recover the amount specified in terms of the judgment debt. It appears to me that the balance of convenience, given the position of the respondents, would dictate that a stay of execution be granted. This is so because the judgment debt had been substantially extinguished and that the outstanding amount and interest was to be tendered upon the calculation thereof. Giving due regard to the circumstances, I am not satisfied that there are justifiable grounds for interference with the decision of the court a quo. The costs of this appeal should follow the outcome as is the norm.

Accordingly, the appeal being devoid of merit, it be and is hereby dismissed with costs.

PATEL JA:			I agree

ZIYAMBI AJA:		I agree

Gill, Godlonton & Gerrans, appellant’s legal practitioners

Hove & Associates, respondents' legal practitioners