Kettex Holdings (Pvt) Ltd v Kencor Management Services (Pvt) Ltd (Ref HC 3216 of 2013) [2015] ZWHHC 236 (10 March 2015)

1 HH 236-15 HC 7753/14 Ref HC 3216/13 KETTEX HOLDINGS (PVT) LTD versus KENCOR MANAGEMENT SERVICES (PVT) LTD HIGH COURT OF ZIMBABWE MATHONSI J HARARE, 5 March & 11 March 2015 Opposed Application T. Zhuwarara, for the applicant Ms S. Njerere, for the respondent MATHONSI J: In HC 3216/13 the respondent sued the applicant for payment of $33 856-15 as damages arising out of its breach of a contract allegedly entered into between the parties about September 2010 together with interest and costs of suit. In its declaration the respondent averred that: “1. 2. 3. Plaintiff is KENCOR MANAGEMENT SERVICES (PRIVATE) LIMITED a company incorporated with limited liability according to the laws of Zimbabwe, carrying on business under the style ‘NATIONAL TESTED SEEDS’ in the sale and supply of horticultural and crop seed of 750 Lorrain Drive, Bluff Hill Harare. Defendant is KETTEX HOLDINGS (PRIVATE) LIMITED, a company similarly incorporated, having its registered office at Arlington Estate, Harare Airport, Harare. In terms of an agreement entered into between the parties during or about September 2010, Plaintiff made available quantities of seed to Defendant on a consignment basis. 4. The material obligations of Defendant under such agreement were the following: 4.1 4.2 4.3 To maintain and store the seed at its centralised storage facility and all its distribution outlets in a safe, orderly and clean manner, and in such a way to prevent contamination inter alia by water, rodents and other pests; To undertake the sale and delivery of the seed in its branches and distributorship country wide to the best of its ability, at prices recommended by Plaintiff; To make available to plaintiff reconciliations for the consignment stock on a monthly basis; 4.4 To effect payment in respect of stock sold within seven days of reconciliations; HH 236-15 HC 7753/14 Ref HC 3216/13 4.5 To retain and preserve unsold stock at its premises; 4.6 To return unsold stock to Plaintiff in an orderly, clean, uncontaminated and undamaged state; 4.7 To pay for any missing or damaged stock on the basis that it was considered sold. 5. In breach of the said agreement, defendant failed to take proper and reasonable steps to ensure; 5.1 the safe, orderly and clean storage of the stock and to prevent its contamination; 5.2 the return of unsold stock in an undamaged state to plaintiff. 6. In consequence thereof, defendant became liable to pay plaintiff damages in the sum of $33 856-15 in respect of the damaged and/or unreturned stock. 7. Despite demand, defendant neglects or refuses to pay this amount”. The respondent then prayed for judgment aforesaid. The applicant must have entered appearance to defend (it is not attached to the papers) and promptly filed a plea which is not only legendary by its brevity for one responding to the above clear and incisive averments, it is also a bare denial of a sort. It pleaded: “Defendant pleads to plaintiff’s claim as follows: 1. AD PARA 1-7 No issues arise 2. AD PARA 8 The defendant denies entering into any form of agreement with the plaintiff. Plaintiff is thus put to strict proof thereof” That is all the applicant had to say in answer to the averments made by the respondent. Let me mention here that firstly there is no para 8 in the respondent’s declaration which the applicant was pleading to and therefore in para 2 of the plea it was denying nothing at all. Secondly, Mr Zhuwarara who appeared for the applicant did not hesitate to concede that para 1 of that plea was an admission and therefore the fact that the plea was a confessionary pleading is not in dispute. I shall return to that in a moment. It is common cause that when the matter was lined up for pre-trial conference, the applicant underwent some metamorphosis. It gave notice that at the pre-trial conference of the matter it would apply to amend its plea by a deletion of the entire plea and its substitution with the following: “1. AD PARA 1-3 HH 236-15 HC 7753/14 Ref HC 3216/13 Admitted 2. AD PARA 4 It is denied that defendant was obliged to store seed at a centralised place. The agreement between plaintiff and defendant was that all seed received by defendant from plaintiff was to be dispatched to the rural outlets in Mashonaland East and Mashonaland Central. It is further denied that the defendant agreed to pay for any missing or damaged stock. The agreement between the parties was that the defendant would take all reasonable measures to protect plaintiff’s stock at all material times. The agreement between the parties was a consignment agreement thus the stock was at all material times the property of the plaintiff. 3. AD PARA 5-7 This is denied. The defendant took insurance to cover plaintiff’s stock. Defendant took all necessary precautions and did everything humanly possible to prevent and protect plaintiff’s stock from contamination. The defendant made sure that all the store owners were trained to protect plaintiff’s stock by using Delport Fumigation Services’ programme of weevil and pest control. The plaintiff also supplemented the programme by using other fumigants and pesticides. The defendant’s duty in terms of agreement was to take all reasonable steps to protect plaintiff’s stock, and defendant dutifully performed its obligations in terms of the agreement. The plaintiff has also not substantiated its supposed claim for damages. The plaintiff is put to strict proof thereof. Wherefore plaintiff’s claim should dismissed with costs”. From where I am standing this was not only a drastic transformation from what the applicant earlier stood for but quite a mouthful as well. The case itself has got some unpleasant history arising out of the existence of 2 companies apparently run by the same director and bearing a similar name “Kettex” they being Kettex Trading and Kettex Holdings, one of which was placed under liquidation a few months after incorporation. The respondent says this was done in order to confound creditors. It delayed the commencement of proceedings while the respondent battled to ascertain the true identity of its debtor. Whatever the case, when the applicant could not secure the consent of the respondent to its proposed amendment of its plea on the eve of the pre-trial conference, it was forced to make this application for the amendment to be granted by the court. In the founding affidavit of Adam Selby, its managing director, the applicant stated that the proposed amendment was occasioned by the fact that when it pleaded originally it had sold its division known as Feya Feya to one Mark Selby who was required to register another company known as Kettex Trading (Pvt) Ltd which should have taken over all the obligations of Feya Feya. For that reason, the applicant had denied the existence of an agreement between it and the respondent. It was only after being advised that an obligation cannot be transferred or ceded that it saw HH 236-15 HC 7753/14 Ref HC 3216/13 the light and decided to accept the existence of the agreement but deny liability as appears in the proposed amendment. The applicant asserted that the amendment will assist the court to properly ventilate the real issues between the parties. The amendment will not prejudice the respondent in any way. The respondent opposed the application on essentially 2 grounds namely that the proposed amendment has come rather late in the day in order to delay the resolution of the matter and that it is intended to withdraw an admission already made to the detriment of the respondent. Ms Njerere for the respondent took a point in limine that the deponent of the founding affidavit had not shown that he has the authority of the applicant to represent it in this particular application, a point made in the opposing affidavit to which the applicant had responded by attaching a resolution of a meeting of directors authorising Selby to represent the company “in all its legal affairs”. Ms Njerere submitted that the resolution in question was not enough as it did not specifically authorise Selby to represent the company in this particular application. I have stated before that litigants are now taking the requirement of a resolution to be produced by a representative of a company too far: African Banking Corporation of Zimbabwe Ltd t/a BancABC v PWC Motors (Pvt) Ltd & Ors HH 123/13 Where the deponent of a founding affidavit has stated that he has authority of the company to represent it, the court has no reason to disbelieve him and would generally accept that claim. Where the respondent challenges the deponent to exhibit that authority, it should be enough to then produce the resolution giving such authority. The requirement that a company representative should produce a resolution is to satisfy the court that it is the company that it litigating and not some other unauthorised person. Unless the respondent who is challenging the existence of that authority can point to some tangible reason pointing to the fact that it is not the applicant company that is litigating but someone else, it should be enough for the deponent to state that he has authority and the failure to attach a resolution cannot possibly defeat the application. In casu, when his authority was challenged, Selby produced a resolution authorising him to represent the applicant in all its legal affairs. To then say that such resolution should have specifically authorised Selby to make this particular application when the making of it HH 236-15 HC 7753/14 Ref HC 3216/13 falls squarely under the company’s legal affairs, is to stretch that requirement to ridiculous levels. There is no merit in the point in limine which is accordingly dismissed. On the merits of the application Mr Zhuwarara for the applicant, while accepting that the proposed amendment had the effect of withdrawing an admission, submitted that the amendment should be granted firstly because r 132 of the High Court of Zimbabwe Rules, 1971 allows a party to amend a pleading anytime before judgment is delivered and secondly because a reasonable explanation has been given by the applicant for seeking the amendment. It is because the applicant had made an error in its original plea as it thought that it had no agreement with the respondent. Upon being disabused of that erroneous view, it sought the amendment. He relied on the authority of Whittaker v Roos & Anor 1911 TPD 1092 at 1102- 13 where the court stated that the business of pleading is not a game where if a mistake is made, the forfeit is taken. The real dispute between the parties is the main concern of the court and it must allow an amendment which helps ventilate that. What the court has regards to in deciding whether to allow an amendment or not was set out by Chinhengo J in UDC v Shamva Flora (Pvt) Ltd 2000 (2) ZLR 210 (H) 217 C-F namely that: 1. The court has a discretion whether to grant or refuse an amendment. 2. An amendment cannot be granted for the mere asking but some explanation must be offered therefor. 3. The applicant must show that prima facie the amendment has something deserving of consideration, a triable issue. 4. The modern tendency is that the court will generally grant an amendment if it facilitates the proper ventilation of the dispute between the parties. 5. The party seeking the amendment must not be mala fide. 6. The amendment must not cause an injustice to the other party which cannot be compensated by costs. 7. The amendment should not be refused simply as punishment to the applicant for neglect. 8. A mere loss of time is no reason in itself to refuse the application. 9. If the amendment is not sought timeously some reason should be given. See also Commercial Union Assurance Co Ltd v Waymark N. O 1995 (2) SA 73 at 77 F-I; Kingdom Merchant Bank Ltd v Shah & Anor HH 159/13. HH 236-15 HC 7753/14 Ref HC 3216/13 Ms Njerere for the respondent submitted that the application is not bona fide as it is part of a strategy to delay proceedings. In my view the question of delay cannot, on its own, disentitle a party to an amendment. It matters not that the amendment was sought more than a year after the original plea was filed. This is because an amendment can be granted at any stage of the proceedings (r 132) and the loss of time on its own is not a reason for refusing an application. However, I agree with Ms Njerere that the application is mala fide for the simple reason that it cannot be said that what is sought to be ventilated by the amendment is something which the applicant has just discovered. It would appear that the amendment sought is dishonest. The applicant admitted the averments contained in the declaration and as stated by Uchena J in Mauro (nee Nyambo) v Mauro HH 365/13 it is presumed that when it did so, it knew what it was doing. There can be no room for an error except an error in how to evade an otherwise genuine and indisputable claim. In that regard, I am mindful of the provisions of s 36 of the Civil Evidence Act [Chapter 8:01] that: “(1) An admission as to any fact in issue in civil proceedings made by or on behalf of a party to the proceedings shall be admissible in evidence as proof of that fact, whether the admission was made orally or in writing or otherwise. (2) ……………… (3) It shall not be necessary for any party to civil proceedings to disprove any fact admitted on the record of proceedings; Provided that this subsection shall not prevent any such admission being withdrawn with leave of the court, ……”. If the original plea were to remain as it is it would be a confessionary pleading and therefore taken for granted. It would be unnecessary to prove those facts that have been admitted: Adler v Elliot 1988 (2) ZLR 283 (S) 288 C; Copper Trading Co (Pvt) Ltd v City of Bulawayo 1992 (1) ZLR 134 (S) 144G; Wamambo v Municipality of Chegutu 2012 (1) ZLR 452 (H) 458E-F, DD Transport (Pvt) Ltd v Abbot 1988 (2) ZLR 92 (S) 98 F, 99A-B, Therein lies the real reason behind the proposed amendment. The applicant having realised that the plea will not pass the test at the pre-trial conference, decided to withdraw an admission in order to elongate the dispute, a dispute that does not exist at all. The whole exercise is mala fide and should not be tolerated. This matter is one of many, where HH 236-15 HC 7753/14 Ref HC 3216/13 defendants defend claims and submit pleas which have no chance of success at the trial as shelter for the time being until the trial and then capitulate. I conclude therefore that no case has been made for the amendment sought, which is clearly mala fide. In the result the application is hereby dismissed with costs. Coghlan, Welsh and Guest, Incorporating Stumbles and Rowe, applicant’s legal practitioners Honey and Blackenberg, respondent’s legal practitioners