Golden Reef Mining (Pvt) Ltd & Anor v Mnjiya Consulting Engineers (Pvt) Ltd & Anor (Ref HC 11024 of 2014) [2015] ZWHHC 454 (19 May 2015)

1 HH 454-15 HC 1922/15 Ref HC 11024/14 GOLDEN REEF MINING (PRIVATE) LIMITED and FERBITT INVESTMENTS (PRIVATE) LIMITED versus MNJIYA CONSULTING ENGINEERS (PTY) LTD and THE DEPUTY SHERIFF HIGH COURT OF ZIMBABWE NDEWERE J HARARE, 20 March and 20 May, 2015 Urgent Chamber Application E. T. Matinenga, for the applicant L. Madhuku, for the respondent NDEWERE J: On 21 April 2015, I issued a provisional order for stay of execution in the matter HC 1922/15 and said reasons would be provided later. I hereby proceed to provide the reasons. The background of the matter is that the first respondent, Mnjiya Consulting Engineers, (Pvt) Ltd, obtained a default judgment against the applicants in case number HC 11024/14. A writ of execution was issued pursuant to that default judgment and the second respondent duly attended at first applicant’s mining site and attached some property. The applicants stated that they became aware of the default judgment when second respondent removed the attached equipment on 27 February, 2015. It was a Friday. The following Tuesday, on 3 March, 2015, the applicants filed an application for Rescission of Judgment. On the same day, 3 March, 2015, the applicants filed the current urgent application for stay of execution pending rescission of the Default judgment. The issues for determination are whether the application for stay of execution is urgent and whether the rescission application has prospects of success. The applicant argued that the application is urgent and if the court does not intervene and stay execution, the applicants will suffer irreparable harm. The respondent argued that HH 454-15 HC 1922/15 Ref HC 11024/14 the application is not urgent because it is dependent on another application being the application for rescission of judgment. After hearing arguments from both the applicants and respondents the court was persuaded to rule that the application is urgent. The applicants themselves treated the application with urgency. They said they became aware of the default judgment on 27 February, 2015. No evidence was provided by the respondents to dispute this assertion. All the respondents said was that they served process on the domicilium citandi. That service alone, while it enabled the respondent to obtain judgment, does not impute knowledge of the default judgment on applicant’s part where the applicant disputes such knowledge. The court will therefore accept the applicant’s submissions that they became aware of the default judgment on 27 February, 2015. This was on Friday. The following Tuesday, after the necessary delays caused by the weekend and having to engage a lawyer, giving instructions and preparing court documents for filing, the applicants filed both the application for rescission and the application for stay of execution. In my view, the applicants treated the matter urgently as envisaged by the dicta in Kuvarega v The Registrar General & Anor 1998 (1) ZLR 188. The need to act arose on 27 February, 2015 when the applicants became aware of the default judgment. As soon as the applicants became aware of the default judgment, they acted, they did not wait, thus satisfying another requirement for urgency, which is that: “..a matter is urgent if at the time the need to act arises, the matter cannot wait”. I am also convinced that irreparable harm to applicants will result through loss of business if stay is not granted, yet the respondent if successful, will still be able to execute and get all its $415 616-00 without any losses. So the balance of convenience favours the granting of stay. In Cohen v Cohen 1979(3) SA 420 SR referred to by the applicant and in Mupini v Makoni 1943(1) ZLR at 83B referred to by the first respondent, it was stated by Gubbay CJ, “Execution is a process of the court and the court has an inherent power to control its own process and procedures, subject to such rules as are in force. In the exercise of a wide discretion the court may therefore, set aside or suspend a writ of execution or for that matter, cancel the grant of provisional stay. It will act where real and substantial justice so demands”. The next issue for determination is whether the rescission application has prospects of success because if the rescission application has no prospects of success, they would be no point in granting a stay of execution pending that application. HH 454-15 HC 1922/15 Ref HC 11024/14 In terms of r 63(2) of the High Court of Zimbabwe Rules, 1971, a party seeking rescission of a judgment given in default must show that there is “good and sufficient cause”, to do so. The factors which a court will take into account in determining whether there is good and sufficient cause are “the reasonableness of the applicant’s explanation for the default, the bona fides of the application to rescind the judgment and the bona fides of the defence on the merits. These factors must be considered in conjunction with one another and with the application as a whole”. Rejoice Sibanda and Estate late C. Karpul HH 101/11. In the present case, the applicants have denied any knowledge of the matter until 27 February, 2015 when their goods were removed. Apart from its insistence that it served process on the domicilium citandi of the applicants as given in the joint venture agreement, the respondents did not point to anything else to confirm that the applicants knew about the suit in matter HC 11024/14. Given the applicants’ denial and the absence of other evidence to confirm that knowledge, even if service at the domicilium citandi of the Joint Venture agreement is technically proper, the applicants can still not be found to be in wilful default. Wilful default requires some other commission or omission which points to some careless failure to defend the action when evidence confirming full knowledge of the matter is available. That is not the case in the present matter. In any event, all facts are looked at conjunctively in an application for rescission. On the merits of the rescission, in my view, the applicants have prospects of success. The background information in the record point to some negotiations between the parties for the applicants to take over the 40% shareholding of the respondent in the second applicant by paying the respondent US$415 616-00 it had expended in acquiring the 40% shares following a supervening impossibility arising from certain pronouncements by the Government of Zimbabwe. This is clear from pages 38 and 39 of the record. Page 39 has the 20 May letter which has a “draft” repayment plan, proposed in good faith. The court has not been furnished with any other document to show that this draft proposal was finalised. From the documents in the record it appears the negotiations were not conclusive at the time of issuance of the summons. As a result the applicants are disputing that there was any cause of action in matter HC 11024/14. It is my view that the applicants are likely to succeed in convincing the court to rescind the default judgment and allow the parties to argue the matter on the merits. Consequently, the application for stay of execution is granted. HH 454-15 HC 1922/15 Ref HC 11024/14 Thompson Stevenson & Associates, applicant’s legal practitioners Mundia & Mudhara Legal Practitioners, 1st respondent’s legal practitioners