Zimbabwe Consolidated Diamond Company (Private) Limited v Grandwell Holdings (Private) Limited & 2 Ors

### Preamble
Judgment No. SC 144/20
1
Civil Appeal No. SC 159/17
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DISTRIBUTABLE   (135)

ZIMBABWE     CONSOLIDATED     DIAMOND     COMPANY     (PRIVATE)     LIMITED

v

GRANDWELL     HOLDINGS     (PRIVATE)     LIMITED                              (2)       COMMISSIONER-GENERAL     ZIMBABWE     REPUBLIC     POLICE         3)     MBADA     DIAMONDS     (PRIVATE)     LIMITED

SUPREME COURT OF ZIMBABWE

GOWORA JA, GUVAVA JA & MAVANGIRA JA

HARARE: MARCH 20 2018 & OCTOBER 27, 2020

C. Mucheche with W. Mandinde, for the appellant

S. Moyo, for the first respondent

No appearance for the second and third respondents

GUVAVA JA:     This is an appeal against the whole judgment of the High Court sitting at Harare dated 24 February 2017 in which the court a quo granted an interim interdict sought by the first respondent on behalf of the third respondent.

BACKGROUND FACTS

The brief facts of the matter may be summarised as follows:

The first respondent owns a 50 percent shareholding in the third respondent. The other 50 percent shareholding is held by Marange Resources (Private) Limited which is, in turn, owned wholly by Zimbabwe Mining Development Corporation, a government entity. Zimbabwe Mining Development Corporation wholly owns the appellant.

On 16 March 2016, the first respondent, acting on behalf of the third respondent, obtained a court order under case number HC 1977/16 (HH 193/16) against the appellant.  The order was to safeguard and secure its assets at Chiadzwa Diamond Concession. Paragraph 7 of the order stated as follows:

“For the purposes of safeguarding assets, all of the fifth respondent’s security personnel, with all their chain of command, shall be entitled, authorised and empowered to remain at the fifth respondent’s mining site at Chiadzwa Diamond Concession, as directed in paragraph 2 of the order of this Court on 29 February 2016, until the resolution of this matter.”

The assets included diamond ore and unprocessed diamonds that were kept in a vault. The first respondent’s security personnel at the diamond site were removed at the instance of the appellant. On the basis of para 7 of the above order, the first respondent made an urgent chamber application on 13 February 2017 seeking an interdict against the appellant, second respondent and all those acting on behalf of the third respondent in the following terms:

“Pending confirmation of the final order, it is ordered that:

The 1st and 2nd Respondents, their agents and those acting on their behalf, be and are hereby ordered to cease and desist from entering the third respondent’s mining site in the Chiadzwa concession area, removing stockpiles of diamond ore, conducting any operations within the said concession area, or otherwise interfering with the third respondent’s possession of same.”

The first respondent alleged that the appellant and second respondent acting in common purpose illegally and forcefully dispossessed the third respondent of its assets including, and not limited to, valuable diamond ore and unprocessed diamonds. The first respondent further alleged that the appellant and second respondent interfered with its security personnel which was protecting the aforesaid assets which actions were in contempt of the extant order granted on 16 March 2016.

It was the first respondent’s allegation that the appellant through its officers led by one Reggie Nyashanu and officers of the Zimbabwe Republic Police unlawfully removed stockpiles of diamond ore from the third respondent’s red zone. The first respondent further alleged that its security personnel were forcibly removed from the mining site by the appellant and the second respondent, resulting in massive looting of its diamond ore and this resulted in major losses on its part.

The appellant opposed the first respondent’s urgent chamber application and raised preliminary objections to the effect that the first respondent had cited the appellant as ‘Zimbabwe Consolidated Diamond Company Limited’ which is a non-existent legal entity. The appellant’s second point in limine was to the effect that the matter was not urgent. The third point was to the effect that the first respondent had no locus standi to act on behalf of the third respondent. The fourth point was to the effect that the order dated 16 March 2016, which the first respondent based its claims in making the application for an interdict, had been appealed against before the Supreme Court and as such the order was inoperative. Fourthly, the appellant submitted that the first respondent could not make any valid claim for possession over the Chiadzwa concession as it did not have any valid mining permit for the concerned area.

On the merits, the appellant averred that the first respondent did not possess any diamond ore at Chiadzwa as it did not have a valid mining license. The appellant further averred that the first respondent and the third respondent were not entitled to restoration or possession of diamond ore which they had never possessed. The appellant also averred that they were not in contempt of the order dated 16 March 2016 as the first respondent had failed to show its ownership of the diamond ore and control of the Chiadzwa concession.

The second respondent also opposed the urgent application. The second respondent raised two preliminary points.  The first was that the matter was not urgent. The second was that first respondent had failed to comply with r 241 (1) of the High Court Rules, 1971 (‘High Court Rules’). The second respondent averred the first respondent failed to comply with the provisions of r 241 which provides that all applications which are to be served on an interested party shall be in Form 29B. The second respondent prayed that the application be dismissed as the first respondent had failed to comply with a peremptory rule.

On the merits, the second respondent argued that the first respondent had to prove that the officers of the Zimbabwe Republic Police used force to remove the first respondent from Chiadzwa Mining Concession. The second respondent further averred that police officers stationed at the Chiadzwa concession were carrying out their duty to safeguard properties and assets at the concession. In terms of s 219 of the Constitution of Zimbabwe Amendment (No. 20) Act 2013 (‘Constitution of Zimbabwe’) the second respondent was mandated to preserve internal security and secure lives and property of people. The second respondent thus averred that the physical presence of officers of the Zimbabwe Republic Police at Chiadzwa was to give effect to the provisions of s 219 of the Constitution of Zimbabwe.

The court a quo, in dealing with the application, found that the first respondent had made an application for the amendment of the citation of the appellant and the amendment had been granted by consent of all the parties.

The court a quo dismissed the preliminary points raised by the second respondent. The court held that the application was urgent.  In respect to the point that the first respondent had failed to comply with r 241 of the High Court Rules, the court held that it was in the interest of justice to invoke r 4C of the High Court Rules to condone a departure from the rules where the facts of the matter permitted it to do so. The court also held that the heart of the application was an order for spoliation involving undisclosed quantities of diamonds and as such the court found that it was in the interest of justice that emphasis should not be placed on technicalities. The court in its view thought that this was an appropriate case to invoke the provisions of r 4C (a) of the rules and condone the first respondent’s failure to use the proper form in making the application.

On the merits of the matter, the court held that the rights of the parties with regards to the ownership of the mining site and diamond ore was not before it but was an issue to be determined on appeal of the order granted in case number HC 1977/16 before the Supreme Court.

The court further held that para 7 of the order granted under HC 1977/16 gave the first respondent a basis to seek an interdict against the appellant, second respondent and all those acting on behalf of the third respondent. The court also found that the facts of the matter justified that the first respondent had satisfied the requirements for an interdict. In the result the court granted the interim order as prayed.

Aggrieved with the court a quo’s findings the appellant noted an appeal to this Court. At the hearing, counsel for the appellant abandoned four grounds of appeal and motivated the appeal on the basis of the following grounds:

“The court a quo erred in condoning the first respondent’s breach of rule 141 (sic) of the High Court Rules, an indulgence that had not been sought by the first respondent.

The court a quo erred in not finding that paragraph 7 of the order of the High Court of the 16th of March 2020 in case number 1977 of 2016 did not authorise the first respondent to possess diamond ore and that the first respondent could not lawfully possess diamond ore and was thus not in peaceful and undisturbed possession thereof.

The court a quo erred and misdirected itself in finding that the appellant had resorted to self-help, not holding that the first respondent had misconceived its remedies in that to the extent that it complained of the breach of an order of court ad factum praestandum the appropriate remedy would have been an application to hold the parties to whom the order speaks to be in contempt of court.”

ISSUES FOR DETERMINATION

In my view, one issue arises for determination from the three grounds of appeal and submissions made by counsel before this Court. The determination of this issue has the effect of disposing of the appeal. The issue to be determined by this Court is whether or not the court a quo erred in condoning mero motu, the first respondent’s breach of r 241(1) of the High Court Rules.

SUBMISSIONS BEFORE THIS COURT

The second respondent was not in attendance on the day of the hearing of the appeal and informed the Court in writing that it would abide by the Court’s decision.

In motivating the appeal, the appellant argued that the court a quo erred in condoning the first respondent’s breach of r 241(1) of the High Court Rules in circumstances where the first respondent had not applied for any indulgence from the court for condonation. Appellant averred that the court a quo correctly noted that the first respondent had failed to comply with r 241(1) in that the first respondent had failed to use form 29 B as mandated by the Rules. The court a quo in its judgment then mero motu granted condonation for the non-compliance of the rules. The appellant submitted that the court grossly misdirected itself in exercising its discretion to grant such indulgence in these circumstances.

The first respondent in response argued that the court a quo correctly exercised its discretion to mero motu invoke r 4 C of the High Court Rules in condoning its non-compliance with r 241(1) of the Rules.

APPLICATION OF THE LAW TO THE FACTS

Whether or not the court a quo erred in condoning mero motu, the first respondent’s breach of rule 241(1) of the High Court Rules and granting the application for an interdict in the result.

It was not in dispute that before the court a quo the first respondent failed to comply with r 241 (1) of the High Court Rules. It was also common cause that the court a quo condoned the first respondent’s non-compliance with the rules when the first respondent had not sought such indulgence. It was apparent from the judgment of the court a quo that it invoked the provisions of r 4C of the High Court Rules and applied its discretion in condoning the first respondent’s non-compliance with the rules. The question which arises is whether or not the court a quo was correct to proceed in such a manner when the first respondent had not applied for the indulgence.

Rule 241 (1) of the High Court Rules provides as follows:

“(1) A chamber application shall be made by means of an entry in the chamber book and shall be accompanied by Form 29B duly completed and, except as is provided in subrule (2), shall be supported by one or more affidavits setting out the facts upon which the applicant relies:

Provided that, where a chamber application is to be served on an interested party, it shall be in Form No. 29 with appropriate modifications.”

Rule 241 (1) makes it peremptory that a chamber application which is to be served on interested parties shall be made in Form No. 29. In Marick Trading (Private) Limited vs Old Mutual Life Assurance Company of Zimbabwe (Private) Limited and The Sheriff of Zimbabwe MAFUSIRE J carried out a detailed survey on the importance of compliance with the rules of the court and stated the following:

“An application, like a summons commencing action, is the founding process by which a matter is brought to court for determination. If the application is incurably defective, as it was in this case, then there cannot be anything before the court to sit over in judgment. The purported application is simply a nullity and must be struck off the roll.

Presumably, owing to the attitude that it had taken, namely that its format was in substantial compliance with the Rules, the applicant probably felt constrained to apply for condonation. I need not deal with this aspect in any depth. The respondent railed against the applicant for its failure or reluctance to apply for condonation. What triggers the exercise of discretion by a court or a judge to grant or refuse condonation is the application: see Forestry Commission v Moyo. The court does not just do it of its own accord.”(emphasis added)

In the case of Richard Itayi Jambo vs Church of the Province of Central Africa & Others HH 329/13 the court stated the following:

“This Court has stated in a number of judgements… that parties are obliged to comply with the rules. Where there is non-compliance the applicant must apply for condonation and give reasons for such failure to comply with the rules. (See also Jensen vs Avacalos 1993(1) ZLR 216 SC).

In this case the applicant’s legal practitioner made no effort to comply with this rule despite the fact that the point was raised in the respondent’s opposing affidavit. The request to the court to condone the non-compliance was made cursorily at the hearing as if the grant of such condonation is always there for the asking. It seems to me that legal practitioners must be reminded that there is an obligation to comply with the rules of this Court.…

Clearly where a party fails to comply with the rules there must be a plausible reason why there has been a failure to comply. In this case the attitude of the applicant was that such non-compliance must be granted by the court even though no explanation has been proffered for such failure. The applicant’s counsel merely submitted that the defect was not material enough to vitiate the application. In my view this is not sufficient and on this basis alone would dismiss the application” (emphasis added)

See also Zimbabwe Open University v Mazombwe HH 43/09

In casu, the first respondent failed to comply with a mandatory rule. Having become aware of its non-compliance and after being informed through the opposing papers of the second respondent, it sat back and neglected to seek condonation for its non-compliance with the rules. It is quite clear from the judgment of the court a quo that it accepted that the first respondent’s application was defective. The court a quo thereafter decided to exercise its discretion in terms of r 4C of the High Court. It was the court’s view that it should not be unduly detained by procedural irregularities. It is my view that the court a quo grossly erred in exercising its discretion in these circumstances.

A proper reading of r 4C is that it ought to be read with r 229 of the High Court Rules. Rule 4C provides as follows:

“4C. Departures from rules and directions as to procedure

The court or a judge may, in relation to any particular case before it or him, as the case may be –

(a) direct, authorize or condone a departure from any provision of these rules, including an extension of any period specified therein, where it or he, as the case may be, is satisfied that the departure is required in the interests of justice;

(b) give such directions as to procedure in respect of any matter not expressly provided for in these rules as appear to it or him, as the case may be, to be just and expedient.”

Rule 229 C of the High Court Rules provides as follows:

“229C. Adoption of incorrect form of application

Without derogation from rule 4C but subject to any other enactment, the fact that an applicant has instituted –

(a)  a court application when he should have proceeded by way of a chamber application; or

(b)  a chamber application when he should have proceeded by way of a court application; shall not in itself be a ground for dismissing the application unless the court or judge, as the case may be, considers that –

(i)  some interested party has or may have been prejudiced by the applicant’s failure to institute the application in proper form; and

(ii) such prejudice cannot be remedied by directions for the service of the application on that party with or without an appropriate order of costs.”

In light of the above stated provisions the following is clear:

that a court has the power and may exercise its discretion and condone non-compliance with the rules.

Rule 241 (1) of the High Court Rules is a mandatory rule which ought to be complied with by litigants.

A litigant who fails to use the correct form in making an application must therefore seek condonation before such application can be determined by the court.

In CFI Holdings Ltd v Fidelity Life Assurance of Zimbabwe Ltd HH 571/14 the court held that:

“It is pertinent that a chamber application should be accompanied by Form 29B.  The applicant is still required by r 241 to state the grounds upon which the application is based in Form 29B.  In the instant case the grounds are only stated in the certificate of urgency and in the founding affidavit in violation of r 241.  Whilst the applicant is correct that I can in terms of r 4C condone any noncompliance with the rules by a litigant, it is also true that I can only exercise that discretion upon application.  That is not a discretion which I can exercise mero motu.  The applicant has not made any such application for condonation and I cannot condone that which has not been formally put before me.”

What triggers the court’s exercise of discretion is not merely a desire to overlook an irregularity and get to the merits of a case. There must be an application for condonation before it in order for the court to decide whether or not it should exercise its discretion in favour of a litigant. In the present case, the court a quo resorted to using its discretion to condone the first respondent’s non-compliance with the r 241 on the basis that it was in the interest of justice to do so. The court expressed its view as follows:

“…whilst it is critical for legal practitioners to follow rules, ultimately it may be in the interests of justice to use rule 4C which allows a condonation of departure from the rules where the facts permit. In casu where at the heart of the application is spoliation, involving undisclosed though evidently considerable sums of money since diamonds are involved, it would in my view be inane to insist on the technicality of a form when this is clearly an instance that calls for the justified use of r 4 C.”

Whilst the court would have been perfectly entitled to exercise its discretion in this manner it is pertinent to note that the court was not requested to do so by anyone. The court could only grant condonation after the first respondent had made an application for such indulgence. The remarks by GUBBAY CJ are pertinent. He stated in the case of Forestry Commission v Moyo 1997 (1) ZLR (S) at p 259 that;

“Insofar as the High court rules are concerned, rule 4C (a) permits a departure from any provision of the Rules where the court or judge is satisfied that the departure is required in the interest of justice.  The provisions of the rules are not strictly peremptory; but as they are there to regulate the practice and procedure of the High Court, in general strong grounds would have to be advanced to persuade the court or judge to act outside them….” (own emphasis)

Strong grounds to persuade a judge to depart from the rules can only be advanced by a litigant through an application for condonation. As such a court cannot simply exercise its discretion and mero motu condone a party which does not advance any reasons as to why it would have failed to comply with the rules.

The problem relating to the present matter is further compounded by the fact that the first respondent was advised in advance through the second respondent’s notice of opposition that its application was defective as it was in non-compliance with r 241. The first respondent did not make any efforts to remedy the defect. The first respondent did not seek condonation for its failure to adhere to the rules of the court. The first respondent seemed to adopt a laissez-faire attitude by failing to apply for condonation or to give a reasonable explanation for his non-compliance with the rules (See Puwai Chiutsi v The Sheriff of the High Court and Ors SC 2/19). Such attitude and conduct could not have been condoned mero motu by the court a quo in the exercise of its discretion. It is not for a court to make up a case for a litigant but for the litigant to persuade the court that its case is a proper one for indulgence to be granted.

The court a quo thus erred in condoning the first respondent’s failure to comply with r 241 in the absence of an application for condonation. It therefore follows that the court a quo erred in granting the interdict sought by the first respondent in the absence of a valid application before it.

With regards to costs, the appellant submitted that it was no longer pursuing costs on a higher scale. In my view the concession is proper as there is nothing that has been placed before the court to warrant the award of costs on a punitive scale.

DISPOSITION

The court a quo erred in condoning the first respondent’s non-compliance with the rules where such indulgence was never sought. The court a quo thus erred in dealing with the merits of the case where the application was defective. In such circumstances the court         a quo erred in granting the interim order sought by the first respondent.

The appeal must succeed on this basis.

It is accordingly ordered that: -

The appeal is allowed with costs.

The judgment of the court a quo is set aside and substituted with the following:

“The application be and is hereby struck off the roll with costs.”

GOWORA JA				I agree

MAVANGIRA JA				I agree

Caleb Mucheche & Partners Law Chambers, appellant’s legal practitioners

Scanlen and Holderness, 1st respondent’s legal practitioners