1

HH 24-16

HC 2899/15

Ref Case HC 4370/14

MEGALINK INVESTMENTS (PVT) LTD

and

OWEN PETER MURUMBI

and

THERESA MUSINA

versus

AFRICAN CENTURY LIMITED

and

SHERIFF OF ZIMBABWE

HIGH COURT OF ZIMBABWE

TSANGA J

HARARE, 25 November 2015 & 13 January 2016

Opposed application

T Magwaliba, for applicants

H Mutasa, for respondents

TSANGA J: The applicants entered into a lease finance facility with the respondents. They fell into arrears in terms of the lease agreement. On 10 September 2014, the respondents obtained a default judgment against the applicants for the payment of $88 225.14 together with interest at the rate of 25% per annum. In terms of the order, specified equipment was also declared executable. In October 2014, which was after the default judgment had been obtained, the applicants made a payment of US$50 000.00 and subsequently made another payment on 3 and 4 March 2015 totalling US$38 000.00. They therefore argue that save for $225.14, and interest, which they are willing to pay upon it being calculated, they have essentially satisfied the debt as per court order. They additionally argue that if respondents consider any other amounts as still due over and above the amount stipulated in the court order with interest, then they need to obtain another court order.

The first respondent, on the other hand, attached certain buses belonging to the applicants in January 2015 though they did not remove them. It continues to threaten removal in the face of the applicants’ refusal to sign a deed for settlement for what they deem to be still due. According to the first respondent’s opposing affidavit, despite the above mentioned payments being made, the $50, 000.00 went towards clearing arrear rentals which had accrued after the issuance of summons on 30 May 2014. Following this payment, it is stated therefore that applicants remained indebted in the sum of $82, 225.14 made up of arrear rentals and $50 000.00 for residual value for certain leased equipment. It is argued that the further payment of $38 000.00 went towards settling the residual value of $50 000, 00 leaving a balance for that at $12 000.00. They argue that the residual value fell due on 28 September 2014 when the lease agreement expired. The gist of their argument is thus that an amount of $82 948.60 to date remains due and it is this amount that they threaten to execute using the US$ 82 948.60 court order obtained in default. They rely on clause 7 of the lease agreement which allowed them to appropriate payment for any debt due. The clause they rely on reads as follows:

“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.”

The applicants initially instituted this matter as a chamber application in terms of Order 32 r 241 of the High Court Rules, 1971. The matter was opposed and the judge before whom the chamber application was placed accordingly referred the matter to the opposed roll. The applicants thereafter filed their heads of argument. The respondents did not. At the hearing, I enquired why heads of argument had not been filed and Mr Mutasa who appeared on behalf of the respondents argued that heads of argument were not necessary as the matter related to a chamber application. There was a lack of common understanding by both counsel on the exact nature of the application brought before me. The applicant regarded it as an application for stay of execution whereas the respondent appeared to regard as a confirmation of a provisional order despite the absence of any such provisional order. This matter was initially filed as an ordinary chamber application whereby in terms of r 243, such an application may be accompanied by heads of argument which justify the application being made without notice in support of the order sought. In this case, the application was not one without notice to the other party. The respondent was notified and opposed the application hence referral of the matter to the opposed roll as an opposed application. As such I do not see the basis upon which the respondent failed to provide heads as the matter was now being heard as an opposed application on the ordinary roll. The filing of heads was thus necessary. The applicant’s counsel however did not object to absence of heads of argument from the respondent presumably due to the applicant’s own stance in correspondence with the registrar that heads had not been necessary in the initial chamber application.

This judgment is on the merits after considering the arguments by both parties. If, as Mr Mutasa purported to argue in his oral submissions, that the respondent was entitled to apportion payment made towards any debt owing, then it stands to reason that by issuing summons for what respondent claimed had not been paid by the applicant, it thereby elected to apportion the payment it sought to the fulfilment of those arrears that were owing as at the time of issuance of summons. In their heads of argument the applicants drew on the dictum in the cases of Jossub v Tayob 1910 TS 480 and Swardiff Pty Ltd v Dyke N.O 1978 (1) SA 928 (A) at 942 regarding the proposition that a judgment of the court for alleged breach of an obligation discharges the obligation and converts the debt into a new debt by virtue of the judgment. However, the issue is not whether the judgment obtained wiped out the original contract between the parties. It was never brought as such nor is this the issue before me. In my view the simple issue for resolution herein is whether or not the applicants have paid the amount that was ordered by the court in HC 4370/14 as that is what the respondent obtained as their entitlement in terms of the judgment sought. Furthermore, it was claimed as what was due in arrears at the time.

The dispute which the respondent issued summons for was for the payment of $82 225.14. The first respondent obtained a judgment albeit in default for this amount on the basis that the applicants had failed to file their plea timeously. The judgment was therefore obtained on the basis of procedural neglect rather than on merits. Nonetheless, in so far as it had not yet been set aside albeit there is a pending application for its rescission, it continues to stand as the court’s pronunciation of the resolution of the dispute between the parties. It spells out the rights of the respondent to payment and the liability of the applicants to pay in the context of the dispute that had been placed before it. Therefore, in so far as the contested issue between the parties for which the judgment was obtained was for the payment of $ 82 225.14, the payment of US$ 50 000.00 and the additional payment of $38 000.00 having both been made after the date of the court order, could only have gone towards the satisfaction of the debt for which the first respondent had issued summons. The judgment specified with certainty the amount that was to be paid. It is thus amount as per order of the court that the applicants were entitled to satisfy. (See also Goldsearch Technical Services (Private) Limited v Taonga Mukonoweshuro & Anor HH 711/15). It matters not as the respondent tries to argue, that at the time that the payment was made, the applicants were actually not aware of the default judgment. Since the applicants have paid the amount stipulated save for a balance of $225.14, which they admit owing together with interest on the judgment amount as well as legal costs, they are correct that their payment was in terms of the court judgment. The first respondent cannot execute for the full sum on an order which has largely been fulfilled on the basis of the argument that there were other amounts owing. If the first respondent is of the view that it is still owed monies which arose after it instituted its claim, then it must institute a separate action for those claims. Furthermore, there is nothing in the order obtained or in the summons issued that seems to suggest that the equipment deemed executable was a separate issue from the fulfilment of the above debt.

            Accordingly it is ordered that:

1. The execution of the judgment of this honourable court in case HC 4730/14 be and is hereby stayed.
2. The second Respondent is hereby interdicted and stopped from removing into execution the property of the Applicants attached in execution in terms of the judgment of this court in case HC 4730/14.
3. The first Respondent shall deliver to the Applicants’ legal practitioner a statement of the balance due and outstanding in respect of the interest in terms of the judgment in case no. HC 4730 /14 within seven days of the date of service of this court order upon them where after the Applicants shall pay the said Respondents the amount of such balancing outstanding.
4. The first Respondent shall pay costs of this application.

Hove & Associates, applicants’ legal practitioners
Gill Godlonton and Gerrans, first respondents’ legal practitioners