1 HH HC10222/12 Ref Case No. HC6273/10. DEPUTY SHERIFF, KAROI versus EDWARD CHIGANGO & 55 OTHERS and FRESH BAKERY, KAROI and DAVID GOVERE
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1 1 DEPUTY SHERIFF, KAROI versus EDWARD CHIGANGO & 55 OTHERS and FRESH BAKERY, KAROI and DAVID GOVERE HIGH COURT OF ZIMBABWE TSANGA J HARARE, November & 18 June 2014 Opposed Application Applicant in person N. Bvekwa, for claimant B. Magogo, for Judgement Creditor TSANGA J: This was an application for an interpleader lodged by the Deputy Sherriff of Karoi against Edward Chigango & 55 others as first respondents and judgment creditors. Fresh Bakery, Karoi were second respondents and judgment debtors. David Govere was the third respondent and claimant. The order I granted in this matter on 1 November was as follows: 1. The application by the Deputy Sheriff Karoi to amend the citation of David Govere who is already duly authorised to represent Noxon Investment as Director, with the citation of Noxon Investments (Pvt) Ltd, as 3 rd Respondents is granted. 2. The claimant s claim, Noxon Investments (Pvt) Ltd to the goods placed under attachment in execution of Judgment Case No. HC6273/10 is hereby dismissed. 3. The goods set out in the notice of seizure and attachment dated 26 October 2011 issued by Applicant are declared executable 4. The claimant is ordered to pay the costs of the Judgement Creditor and Applicant. My reasons for the above order were as follows:
2 2 An application to amend the citation of David Govere was made by the applicant. With regards to incorrectly cited parties, case law and legal authorities are clear that such amendments are permissible. As Herbstein and Van Winsen 1 explain at p145: Where a party has been cited incorrectly, the citation can be amended. It is important to distinguish between situations where the person cited is a non-entity and where an existing entity has been incorrectly cited. It is also important to distinguish the correction of citation of a party and the substitution of a new party. A court can allow the substitution of a party by way of an amendment provided that no prejudice results to the other parties to the proceedings. In casu I was not faced with the substitution of a new party altogether but the correction of an incorrectly cited party. I allowed the application to amend the citation of David Govere with that of Noxon Investments and proceeded to hear the matter to finality for the following reasons. From the evidence in the papers filed in support of the interpleader application and from the affidavit of David Govere himself, it was clear at all times that he was being cited as David Govere in his capacity as Director of Noxon Investments. The first evidence of this is from the detail in the summons themselves. The issue therein was outlined as follows: You are summoned to appear before this court on the 26 th day of September 2012 at 10 am /pm to have it determined and declared whether certain movable property listed in annexure hereto, attached and removed on the 8 th of August 2012 by the messenger of Court, Karoi by virtue of Warrant of executing issued by this court of the 12 th day of October 2011, in an action in which you the said Edward Chigango and 55 others, obtained a judgment in the sum of $ plus interest thereon at the rate of 5% per annum from 31 July 2010 against Fresh Bakery, Karoi, which said property David Govere, in his capacity as Director of Noxon Investments ( Pvt ) Ltd claim to be his company s property. (My emphasis) follows: Secondly, the applicant s founding affidavit in para 4 also referred to David Govere as The 3 rd Respondent is David Govere in his capacity as Director of Noxon Investment Pvt Ltd whose address is c/o of Bvekwa Legal Practitioners, 5 th Floor Dolphin House, 123 Leopold Takawira Street Harare. 1 Herbstein and Van Winsen The Civil Practice of the High Courts and the Supreme Court of Appeal of South Africa Volume 1 (Juta & Co, 2009) 5 th edition at p 145
3 3 Again it is clear from the above that he was cited in his capacity as representing Noxon Investments. The amendment sought among those relating to the citation was to change this particular to read as follows: The 3 rd Respondent is Noxon Investments (Pvt) Ltd, a corporate body duly registered in terms of the laws of Zimbabwe being represented by its Managing Director, Mr David Govere whose address is care of Bvekwa Legal Practitioners, 5 th Floor Dolphin House, 123 Leopold Takawira Street Harare Thirdly the third respondent himself deposed in his interpleader affidavit in this capacity as follows: I DAVID GOVERE, do hereby take oath and state as follows: 1. I am a director of Noxon Investments. In this capacity I have authority to swear to this affidavit. The facts I depose to are to the best of my knowledge and belief true and correct. The rest of his affidavit then details in that capacity why he says the property belongs to Noxon Investments. It was thus very clear to me at all times that Noxon Investments was being represented by David Govere and that he had been authorised to represent Noxon. There was no reason not to grant the application to amend and not to proceed with the case as Noxon Investments already had filed papers stating their claim through their legal representative David Govere. Case authorities also make it clear that an amendment is in order unless it is made mala fide or it is prejudicial to the other party which prejudice cannot be compensated for by an order for costs, or by some other suitable order such as postponement. (Lixivia (Pvt) Ltd v Gray Security Services (Pvt) Ltd 2001 (4) SA at 215H- 225G and Four Towers Investments (Pvt) Ltd v Andre s Motors 2005 (3) SA 39 at p 43). There was no prejudice to Noxon Investments in this case who were already familiar with the claim and had deposed through their Director with regards to their claim to the property. The application to amend the citation of David Govere also did not prejudice him as it was designed to avoid any prejudice that would result from citing him in his personal capacity. His subsequent objection to this improper citation, as well as the application s quest to rectify this error through an amendment were proper in my view. However, the amendment did not merit the call by David Govere that the applicant should withdraw the entire application and issue a fresh one. This, there was positively no need for other than to merely
4 4 delay the matter. The then cited third respondent, David Govere could have raised the issue of the incorrect citation whilst at the same time coming fully prepared to argue its case since the capacity of David Govere as acting on behalf of Noxon had already been clearly substantiated in the papers inclusive of his own affidavit. Thus in my view, when I allowed the amendment and proceeded to hear the application, it was in full appreciation of the reality that Noxon Pvt Ltd had already been informed of the proceedings and had already put forward their case through David Govere as their authorised Director. The request to issue a fresh application was merely a ploy to delay the matter further. This contrasts with the duty of the court to resolve disputes expeditiously and not to find prejudice where there is none. (See Muchenje and others v Stuttaford Removals Pvt Ltd HH 374/13). It was David Govere s choice as duly authorised Director of Noxon Investments Pvt Ltd, to come to court not fully prepared to argue its case. With regards to dismissing the third respondent s claim to the goods, i.e. Noxon Investment (Pvt) Ltd, once the application was granted, the evidence produced in the papers filed of record, failed in my view, to support the claim on a balance of probabilities. The third respondent asserted its claim on the strength of an agreement of sale of both business and assets, which it averred supported its stance that it had been sold the Bakery and all its equipment by Aroma Bakeries in The agreement attached detailed the effective date of the sale as being 1 July The property described 15 Fred Jameson Road Karoi, the address of the second respondent the judgement debtor. The first respondents challenged the authenticity of this claim through an attachment of a judgment of this court passed by CHITAKUNYE J in HC 5863/05 on 9 September This judgement, involving the very same premises i.e. Stand No 15 Karoi Township reveals that the owners of the property in that case were in fact Karoi Cash Bakery. They were suing Aroma Bakeries to whom they had leased the property for a nine year period, starting in February 1997 for breach of lease in that they had sublet the premises to Harambe Holdings. The premises had not been kept in good condition and the application was against both Aroma bakeries and Harambe Holdings to repair the premises to the condition they were before If Aroma Bakeries was being sued as lessee well after 2000 in terms of a lease agreement operational over a nine year period entered into in 1997, it is hard to see how it could have been the owner of premises in 2000 when it is alleged to have sold the premises to
5 5 Noxon Investments. As such the first respondent s claim that the sale agreement may not have been authentic seemed to have merit in light of this judgement. Also as was argued by Mr Magogo on behalf of the judgment creditors, the issue of assets not belonging to the judgment debtor was only raised when execution was imminent. It was also his averment that when the matter was still in the labour forum the judgment debtor filed for a stay of execution of the award on the basis that the figures calculated were wrong. There was no averment then that it did not own the property. It is also worth regurgitating the relevant paragraphs from the claimant s affidavit as regards the assertion of ownership in his interpleader affidavit since it further raised considerable doubt over its claim that it is entirely a separate entity whose property is caught up in the mix. Its claim in the applicable paragraphs reads as follows: 4. The goods belong to Noxon Investments (Private) Limited. They do not belong to Freshkabe (sic) Karoi Bakery. The judgment is against Freshbake, Karoi 5. I attach hereto a copy of the Agreement of Sale of business and assets in the name of Noxon Investments (Private) Limited, I mark it A. It shows that the business was sold to Noxon Investments directly from Aroma Bakeries. All the equipment therein also belongs to Noxon Investments (Private) Limited. Fresh Bake is renting the property. I must mention that this business was now being run by Trinpac Investments (Private) Limited. Noxon remained the owner of the assets and also continued to add some so that it could realise reasonable returns from Trinpac. In fact it is Trinpac that employed the judgment creditors. From the above, Noxon says it owns the property. However, it says that Trinpac, to which it admits a clear link was the one responsible for the Bakery and for employing the judgment creditors. In other words, the inference from the above paragraph is that Noxon and Trinpac, whom it says employed the judgement creditors at Fresh Bake, are all part of a single entity. This much was also averred to by the first respondents who maintained that the Director of Noxon Investments is also the Director of a group of companies in which second respondent i.e. Fresh Bakery is a subsidiary to. They are all in the same stable. In the case of Deputy Sherriff Harare & Trinpac Investment (Claimant) & Christopher William Barnsley (Judgment Creditor) HH PATEL J as he then was, emphasised through a number of case authorities, that while a company is a separate legal entity, courts will pierce the corporate veil where it is being used merely to defeat the course of justice.
6 6 (Cases cited in support of this averment included Lategan & Another v Boyes & Anor 1980 (4) SA 191 (T) at ; Van Nierkerk v Van Nierkerk & Ors 1999 (1) ZLR 421 at 427; Mawere v Minister of Justice 2005 (1) ZLR 317 (H) at 327). He put it thus: The exceptions to the general principle have been extended beyond the realm of fraudulent and improper conduct to the situation where a single economic entity owns all the shares in its subsidiaries and controls every aspect of its operation He also went further to explain as follows: The rationale for this extension, as I perceive, is that where the operation of an economic group are so close as to be virtually indivisible, considerations of policy tend to militate against any legal separation of its integral units, for to do so would be to perpetuate an essentially corporate fiction. Of course this may not invariably be the case, but the equities would certainly favour such an approach in dealings at arm s length with innocent outsiders. In that case the purported separation between Trinpac and its Holding Company, Harambe, was deemed to be no more than a subterfuge. In casu applicant says that it is Trinpac, one of its own that was running the Bakery and that employed the judgment creditors. I therefore did not see how it could distance itself from an association with Fresh Bake. Cumulatively, it was for the reasons that I have elucidated above that I dismissed the claimant s claim and ordered the applicant to proceed with the execution in favour of the judgment creditors. Bvekwa legal practitioners, Claimant s legal practitioners Sinyoro & Partrners, Judgement Creditors legal practitioners
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