Tanganda Tea Company v Darlington Mutsitukwa

### Preamble
Judgment No. SC 123/22
1
Civil Appeal No. SC 191/21
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REPORTABLE (106)

TANGANDA     TEA     COMPANY

v

DARLINGTON     MUTSITUKWA

SUPREME COURT OF ZIMBABWE

BHUNU JA, CHIWESHE JA & MWAYERA JA

HARARE: 18 NOVEMBER 2021 & 11 NOVEMBER 2022

A. Dracos, for the appellant

T. Gombiro, for the respondent

CHIWESHE JA:	This is an appeal against the whole judgment of the High Court given at Harare on 26 May 2021 dismissing the appellant’s application for a declaratur in terms of s 14 of the High Court Act [Chapter 7:06]

THE FACTS

The appellant avers that on  a date prior to 1 January 2018 it entered into an agreement with the respondent in terms of which the appellant agreed to sell tea products valued at USD 47 493.17 to the respondent for resale in Malawi.  The appellant proceeded to deliver the tea products to the respondent in Malawi at 1220 Kenneth Kaunda Avenue, Blantyre, Malawi. For purposes of ensuring that such export delivery could be done, the appellant declared such exportation through CDI forms obtained from the Reserve Bank of Zimbabwe.  The appellant was required by law to repatriate the export earnings to the Reserve Bank of Zimbabwe in foreign currency.

When the respondent failed to remit the foreign currency so earned to the appellant for onward transmission to the Reserve Bank of Zimbabwe, the appellant instituted action in the court a quo seeking payment of the sum of USD 47 593.17 plus interest thereon at the prescribed rate from 7 September 2018 until date of payment in full, as well as costs of suit.  It did so under case number HC 9854/18.  The respondent entered appearance to defend that action.  Being of the view that appearance to defend had been entered solely for purposes of delay, the appellant filed an application for summary judgment under case number HC 10306/18.  The application was granted on 5 December 2018. A writ of execution was issued and the sum of ZW$5 876.38 was realised.  In a bid to recover the balance of the debt, the appellant lodged summons for civil imprisonment against the respondent.  The respondent reacted by immediately paying the amount of ZWL$25 717.70 into the appellant’s legal practitioners’ trust account. A further amount in the sum of ZWL$ 16 000.00 had similarly been so deposited on a prior date.  The total amount paid by the respondent was thus ZWL$47 594.08.

It was at that point that the appellant protested the mode of payment, insisting that the debt be paid in United States dollars and not in the local currency.  It argued that the judgment debt, being predicated on a foreign obligation, should be liquidated in foreign currency as prescribed in s 44C (2) (b) as read with s 44C (10) (d) of the Reserve Bank of Zimbabwe Act [Chapter 22:15].   To the contrary, the respondent contended that he had properly liquidated the judgment debt by the tender of Zimbabwean dollars in line with the decision of this Court in the case of Zambezi Gas (Pvt) Ltd v N.R Baber (Pvt) Ltd SC 03/20.

In order to resolve this dispute as to the currency of payment, the appellant approached the court a quo seeking a declaratory order couched as follows:

“1. The judgment debt of USD$47 493.17 against respondent be and is hereby declared to be a foreign obligation and payable in United States dollars in terms of s 44C (2) (b) as read with s 44C (10) (d) of the Reserve Bank of Zimbabwe Act [Chapter 22:15]

2. 	Respondent be and is hereby directed to liquidate the judgment debt of US$ 47 493.17 “in forma specifica”.

3. 	Respondent shall pay costs of suit on a legal practitioner client scale.

Applicant be and is hereby granted leave to levy its costs of suit on the amount deposited by respondent’s legal practitioners into applicant’s legal practitioner’s Trust Account upon agreement on the quantum with respondent or failing that, based on the award given by the taxing officer.”

The court a quo dismissed the application with costs.  Dissatisfied with that decision, the appellant noted this appeal on eight grounds.

GROUNDS OF APPEAL

“The Court a quo erred in fact and law in making a finding that there were material disputes of fact in circumstances where both party (sic) had taken this point and no submissions had been made in relation thereto.

The Court a quo erred in fact and law in making a finding that appellant’s right was unclarified in circumstances where same was clear on the papers and was not an issue, and at any rate, in circumstances where the Court had been referred to the record under HC 10306/18 which would clarify this.

The Court a quo erred in fact and law in making a suggestion that an oral application had not been moved in accordance with Rule 449 of the High Court Rules, 1971.

The Court a quo erred in law in making a finding that appellant was obliged in law to make a chamber application in circumstances where Rule 449 of the High Court Rules, 1971 permits the making of an oral application, as was moved by appellant’s counsel.

The Court a quo erred in law, in failing to have regard to the records in the matter under HC 10306/18 for purposes of considering the oral application made in terms of Rule 449 of the High Court Rules, 1971.

The court a quo erred in law in making a finding that since a declarator was sought under Section 14 of the High Court Act [Chapter 7:06], Appellant was not entitled to consequential relief and that in any event, no consequential relief is permitted under those provisions.

The Court a quo erred in law and fact in making a finding that Respondent had established waiver in circumstances where no clear evidence had been led and established.

The Court a quo erred in fact and law in making a finding that the contract between the parties did not, in the circumstances, create a foreign obligation.”

The appellant seeks the following relief:

“1. 	That the instant appeal succeeds.

2.       That the judgment of the court a quo is set aside and in its place and stead be     substituted the following:

‘The application is granted with costs’.”

ISSUES FOR DETERMINATION

The following issues arise out of the grounds of appeal.

(a) Whether the contract between the parties created a foreign obligation.

(b) Whether appellant was entitled, in an application for a declaratur in terms of section 14 of the High Court Act, to consequential relief and whether in any event, consequential relief is permitted under section 14 of the High Court Act.

(c) Whether the respondent had established waiver on the part of the appellant.

(d)  Whether there were disputes of fact which could not be determined without hearing viva voce evidence.

(e)  Whether an oral application had been made in terms of   Rule 449 of the High Court   Rules, 1971 and if so, whether such application was permissible in terms of the Rules.

PROCEDURAL IRREGULARITY

During the preparation of this judgment it came to our attention that a procedural irregularity had occurred in the court a quo. At p 2 of the cyclostyled judgment (page 7 of the record) the court a quo made the following finding:

“The above stated set of circumstances creates a material dispute of fact. The same cannot be resolved on the papers which the parties placed before me. Even taking a robust approach of the case cannot assist in the resolution of the parties’ dispute.”

When a court makes this kind of finding to the effect that it is unable to resolve the dispute between the parties on the papers before it (without hearing viva voce evidence or the adduction of further evidence – although the court a quo did not express itself to that extent) it cannot proceed to hear and determine the matter on the merits.  It would be contradictory for the court to say on the one hand there are disputes of fact which cannot be resolved on the papers before it, and, on the other hand proceed to hear and determine the matter on the merits.  The effect of such a finding is simply that because of the intractable disputes of fact the court is unable to decide the merits of the matter without hearing oral evidence.

Having made that finding the court a quo should not have determined the application on the merits.  The procedure to be followed is outlined in the South African case of Ardbro Investment Company Ltd v Minister of the Interior 1956 (3) SA 345 (AD) at 350A where the court made the following remarks:

“Where the facts are in dispute the Court has a discretion as to the future course of the proceedings. It may dismiss the application with costs or order the parties to go to trial or order evidence in terms of any Rule of Court.  The first course may be adopted when the applicant should have realised when launching his application that a serious dispute of fact was bound to develop.”

See also Masukuse v National Foods Ltd & Anor 1983 (1) ZLR 232 (H), Supa Plant Investments (Pvt) Ltd v Chidavaenzi 2009 (2) ZLR (H).

In its submissions the appellant argued that contrary to the court a quo’s finding, there were no disputes of fact.  It did not raise the impropriety or otherwise of the procedure followed thereafter as indicated above.

DISPOSITION

We find therefore that the court a quo committed a material procedural irregularity when it proceeded to hear and determine the merits of the application contrary to its earlier finding that it was unable to do so in view of the material disputes of fact which could not be resolved on the papers.

Section 25 (1) and (2) of the Supreme Court Act [Chapter 7:13] bestows this Court with powers of review. It reads:

“25 Review Powers

Subject to this section, the Supreme Court and every Judge of the Supreme Court shall have the same power, jurisdiction and authority as are vested in the High Court, respectively, to review the proceedings and decisions of inferior courts of justice, tribunals and administrative authorities.

The power, jurisdiction and authority conferred by subsection (1) may be exercised whenever it comes to the notice of the Supreme Court or a judge of the Supreme Court that an irregularity has occurred in any proceedings or in the making of any decision notwithstanding that such proceedings are, or such decision is, not the subject of an appeal or application to the Supreme Court.”

We shall accordingly render in the exercise of our review powers, such order as will correct this procedural irregularity. For that reason we must allow the appeal.

As the irregularity is one arising from the decision of the court a quo and not raised by either party, it would not be appropriate in our view that an order for costs be made against either of the parties.

Accordingly, it is ordered as follows:

The appeal is allowed.

The decision of the court a quo dismissing the appellant’s application with costs be and is hereby set aside.

The matter be and is hereby remitted to the court a quo for it to determine at its own discretion whether to dismiss the application with costs, to direct that oral evidence on the disputed facts be adduced before it or to refer the matter for trial.

There be no order as to costs.

BHUNU JA		:	I agree

MWAYERA JA	:	I agree

Honey & Blanckenberg, appellant’s legal practitioners

Chimwamurombe Legal Practice, respondent’s legal practitioners