REPORTABLE (5)

Judgment No. SC. 7/05

Civil Appeal No. 112/02

BEVERLEY BUILDING SOCIETY v

GODFREY GODWIN RGWAFA

SUPREME COURT OF ZIMBABWE

SANDURA JA, ZIYAMBI JA & GWAUNZA JA

HARARE, FEBRUARY 7, 2005

J C Andersen SC, for the appellant

F Chimbaru, for the respondent

SANDURA JA: This is an appeal against a judgment of the High Court which granted an ex parte application, filed by the respondent (“Godfrey”) in terms of s 51(2) of the Serious Offences (Confiscation of Profits) Act [Chapter 9:17] (“the Act”), for an order directing the appellant’s general manager to produce to Godfrey certain documents alleged to be in the appellant’s possession or control. The documents were to be produced within forty-eight hours after service of the order on the general manager.

After counsel for the respondent conceded, quite properly in my view, that the appeal ought to be allowed, the following order was made:

“1. The appeal is allowed with costs on the legal practitioner and client scale.

2. The order of the court a quo is set aside and the following is substituted –

‘The application is dismissed with costs’.”

Before setting out the reasons for granting that order, I would like to indicate that on 13 December 2004 a court application was filed in this Court on behalf of the appellant (“Beverley”) seeking leave to place additional evidence before this Court. The evidence was in the form of an affidavit sworn to by Miccah Moyo (“Moyo”), Beverley’s managing director.

The application was not opposed and, consequently, we granted it with costs, having been satisfied that the basic requirements which must be met by an applicant in such application were present. See S v Kuiper 2000 (1) ZLR 113 (S) at 115G-116D.

Having said that, I wish to set out the background facts in this matter. They are as follows.

A company called Bernwin Development Company (Pvt) Ltd (“Bernwin”), whose principal shareholder was Bernard Mahara Mutanga (“Mutanga”), owned immovable property in Harare (“the property”) which it wished to develop. It approached Beverley for the required finance.

In 1999 Beverley and Bernwin concluded two agreements, in terms of which Beverley advanced to Bernwin two loans on certain terms and conditions. As security for the said loans Bernwin registered two mortgage bonds over the property in favour of Beverley.

Subsequently, Beverley discovered that some of the funds advanced to Bernwin had been used for purposes other than the development of the property. In order to be sure that the funds would only be used for the agreed purpose, Beverley devised a very strict procedure for disbursing the funds which required proof of the progress completed on the ground as verified by Beverley’s valuers.

Thereafter, Mutanga, apparently annoyed by the new procedure for disbursing the funds, approached the Criminal Investigation Department of the Zimbabwe Republic Police and alleged that Beverley had failed to disburse all the money lent to Bernwin because some of the money had been fraudulently disbursed to third parties by Moyo, who was then Beverley’s deputy general manager, and David Chinhara (“Chinhara”), who was then Beverley’s mortgage operations manager.

The allegation was investigated by Detective Inspector Charles Murehwa (“Murehwa”) and his colleagues. In the course of that investigation, Murehwa and his team informed Beverley that they required from it all the documents relating to the two loans advanced by Beverley to Bernwin, and the documents were given to them.

However, a few days later Murehwa and his team arrested Moyo and Chinhara on a Friday, detained them over the weekend and took them to the magistrate’s court on Monday. The allegation was that they had committed fraud. The presiding magistrate subsequently refused to place them on remand on the ground that there was no reasonable suspicion that they had committed an offence.

As a consequence of their unlawful arrest and detention, Moyo and Chinhara subsequently instituted a civil action for damages in the High Court against Murehwa and two other persons. Thereafter, on 14 January 2002 the High Court granted an order by consent directing the three defendants to pay to each plaintiff damages in the sum of $100 000.00, together with interest and costs of suit, jointly and severally, the one paying the others to be absolved.

About two-and-a-half months later, on 28 March 2002, Godfrey filed an urgent ex parte application in the High Court against Beverley in terms of s 51(2) of the Act, seeking the order already referred to at the beginning of this judgment. The order was granted on 3 April 2002.

Aggrieved by that decision, Beverley appealed to this Court.

Section 51(2) of the Act reads as follows:

“Where a person has been convicted of, or is reasonably suspected of having committed, a serious offence and a police officer has reasonable grounds for suspecting that any person has possession or control of any property-tracking document in relation to that offence, he may apply to a judge for an order directing the person, subject to subsection (5), to produce to a police officer any document described in the order which is in that person’s possession or control.”

The issue which arose for consideration was whether Godfrey had any basis for filing the ex parte application. I do not think that he had.

I say so because in April 2000 Moyo and Chinhara were arrested and detained by Murehwa and his team on the same allegations subsequently made against them by Godfrey in the ex parte application filed in the High Court on 28 March 2002. In the course of their investigation Murehwa and his team required Beverley to produce, and Beverley did produce, all the documents which related to the two loans advanced by Beverley to Bernwin.

Thereafter, when Murehwa and his team took Moyo and Chinhara to the magistrate’s court for remand the presiding magistrate refused to place them on remand on the ground that they had no case to answer.

In addition, when Murehwa and the two other persons were sued by Moyo and Chinhara for damages for unlawful arrest and detention, they consented to an order directing them to pay damages in the sum of $100 000.00 to each plaintiff. If there had been any evidence which justified the arrest and detention, they would not have consented to the granting of the order.

In my view, Godfrey must have been aware of all this background information when he filed the ex parte application in the High Court. I say so because both he and Murehwa were members of the Serious Offences Fraud Squad in the Criminal Investigation Department and were based in Harare. The unlawful arrest and detention of Moyo and Chinhara by Murehwa and his team, as well as the order for the payment of damages, which was granted by consent, would not have escaped Godfrey’s notice.

As the application was ex parte, Godfrey should have made a full disclosure of all the relevant information which was within his knowledge and which might have affected the granting of the order sought.

In this regard, the learned authors of Herbstein & Van Winsen: The Civil Practice of the Supreme Court of South Africa 4 ed state at follows at p 367:

“Although, generally, an applicant is entitled to embody in his supporting affidavits only allegations relevant to the establishment of his right, when he is bringing an ex parte application in which relief is claimed against another party he must make full disclosure of all the material facts that might affect the granting or otherwise of an order ex parte. The utmost good faith must be observed by litigants making ex parte applications in placing material facts before the court, so much so that if an order has been made upon an ex parte application and it appears that material facts have been kept back, whether wilfully and mala fide or negligently, which might have influenced the decision of the court whether to make an order or not, the court has a discretion to set the order aside with costs on the ground of non-disclosure.”

In my view, it is clear from a perusal of Godfrey’s founding affidavit that the most important part of the background facts already set out in this judgment was deliberately withheld from the court. Had Godfrey stated in his affidavit that the fraud allegations against Moyo and Chinhara had previously been investigated by Murehwa and his team, and that the magistrate before whom the two men had been brought for remand had refused to place them on remand on the ground that they had no case to answer, it is unlikely that the learned judge in the court a quo would have granted the order which she granted.

In the circumstances, we were satisfied that the ex parte application filed by Godfrey was an abuse of the process of the High Court, and that the order granted by the learned judge in the court a quo should be set aside with costs on the legal practitioner and client scale.

Finally, I would like to comment on the late filing of the respondent’s heads of argument.

The appellant’s heads of argument were filed with this Court on 25 November 2004 and thereafter served on the respondent, but the respondent’s heads of argument were not filed until Thursday 3 February 2005, in breach of the Rules of this Court (“the Rules).

Rule 43(3) of the Rules, which governs the filing of heads of argument by the respondent, in relevant part reads as follows:

“Where the respondent will be represented by a legal practitioner at the hearing of the appeal, that legal practitioner shall, within ten days after receiving the appellant’s heads of argument in terms of subrule (2), file with a registrar a document setting out the main heads of his argument together with a list of authorities cited in support of each head, and immediately thereafter shall deliver a copy to the appellant …”.

In view of the fact that the appeal was due to be heard on Monday 7 February 2005, the filing of the respondent’s heads of argument on Thursday 3 February 2005 was obviously not in compliance with the Rules, as no condonation of the late filing of the heads of argument had been granted.

Consequently, Mr Andersen, who appeared for the appellant, submitted, quite correctly in my view, that counsel for the respondent was not properly before this Court. That submission prompted Ms Chimbaru, who appeared for the respondent, to make an application for condonation of the late filing of her heads of argument.

Her explanation for the delay in filing the heads of argument was as follows. There had been some confusion in the Attorney-General’s Office with regard to which Division of that Office was to handle the appeal. As a result, the relevant file had initially been sent to the Civil Division instead of the Criminal Division, to which it was eventually sent on 27 January 2005. It was only after that date that the file was allocated to her and she was directed to prepare the respondent’s heads of argument. By that time, the period within which the heads of argument ought to have been filed had already expired.

Whilst that explanation was not entirely satisfactory, we decided to give Ms Chimbaru the benefit of the doubt, and accordingly condoned the late filing of her heads of argument.

However, legal practitioners should be aware that this Court will not always consider applications for condonation indulgently. The relief sought will only be granted when sufficient and satisfactory grounds have been advanced.

In appropriate cases, applications for the condonation of the late filing of heads of argument may be refused. As DUMBUTSHENA  CJ stated in Le Mans Motors (Pvt) Ltd v Collins 1986 (2) ZLR 253 (S) at 253 F-G:

“Time and time again, we have warned legal practitioners of the need to file heads of argument in compliance with rule 43(2) of the Supreme Court Rules as amended. Insufficient heed has been paid to our warnings. The time has come to indicate this Court’s disapproval by dismissing this appeal. In doing so we wish to stress that we would not have resorted to this somewhat drastic action but for the fact that it is our unanimous view that there is no reasonable prospect of this appeal succeeding.”

It is, therefore, in the interests of the administration of justice that legal practitioners observe the Rules of this Court, and that whenever they realise that they have not complied with the Rules, they should, without delay, apply for condonation.

ZIYAMBI JA: I agree.

GWAUNZA JA: I agree.

Gill, Godlonton & Gerrans, appellant's legal practitioners

Office of the Attorney-General, respondent's legal practitioners