MUTEMACHANI v PAN REEF MINING (PVT)LTD and OTHERS (230 of 2025) [2025] ZWHHC 230 (31 March 2025)

1 HH 230-25 HCHC 15/24 GODFREY MUTEMACHANI Versus PAN REEF MINING (PVT)LTD AND REEF MINING AND EXPLORATION (PVT)LTD AND BAYHAM MINING (PVT) LTD AND ARCEM RESOURCES LIMITED AND GARY TULLIS AND PAUL MAIN AND MING CHANG SINO AFRICA MINING INVESTMENTS HIGH COURT OF ZIMBABWE COMMERCIAL DIVISION CHILIMBE J HARARE 30 January and 31 March 2025 Exception T. L. Mapuranga for plaintiff /respondent T. Zhuwarara for first, second and third defendants/excipients No appearance for fourth to seventh defendants CHILIMBE J INTRODUCTION [1] The plaintiff`s claim for arrear director fees in the sum of US$503,750 was accompanied by allegations of a grand heist in the region of US$18 million. It was plaintiff`s case that he rendered the services of director to first respondent under an agreement whose remuneration obligations first respondent breached. HH 230-25 HCHC 15/24 [2] It was his further contention that second, third and fourth defendants disposed of their shareholding in first respondent to seventh respondent for US$19 million. The transaction invested seventh respondent with 100% shareholding in first respondent and was superintended by fifth and sixth respondents. [3] These latter two defendants being peregrines, allegedly spirited all of the sale proceeds but US$1, 000,000 externally in violation of the country`s revenue laws. The balance of US$1,000,000 was according to the declaration, held in trust by seventh defendant. The seventh defendant who had apparently undertaken to retain the funds pending resolution of this dispute. In that respect, plaintiff demanded, under his suit, the amount due to him from first to seventh defendants. THE EXCEPTION [4] The claim was resisted by first, second, third and seventh defendants. The fourth, fifth and sixth defendants are not before the court. Seventh defendant filed a plea on the merits. It dismissed the material averments made against it and dissociated itself from the dispute. Seventh defendant`s argument was that it was not privy to the arrangements founding the claim neither did it admit holding an amount of US$1, 000,000 in trust. [5] The first, second and third defendants (“the excipients”) raised an exception against plaintiff`s summons and declaration. Their complaints are clustered under 4 heads which I paraphrase below; - First; defective citation of first defendant [6] That the correct name and citation of first defendant is Pan Reef Mining Company (Private) Limited. Plaintiff cited it incorrectly as Pan Reef Mining Private Limited. Failure to include the word “Company” rendered the summons fatally defective at law. Second; prolixity [ 7] That the summons fell afoul of r 8 of the High Court (Commercial Division) Rules SI 123/2020 (“the Commercial Court Rules”), as read with r 12 (5) (d) of the High Court Rules SI 202/2021 (“the High Court Rules”). Both rules oblige a plaintiff to set out his claim with HH 230-25 HCHC 15/24 clarity and concision. The claim was allegedly set out in a jumble of paragraphs containing irrelevant matters to the embarrassment of the excipients. Third; defective declaration or claim [8] That the declaration violated r 13 (1) (e) of the High Court Rules as read with r 4 (2) of the Commercial Court Rules which require a declaration to set out the nature, extent and grounds of the cause of action in that; - i. It did not state whether the agreement to pay plaintiff the gross fee of US$6,250 per month was oral or written, thus prejudicing the excipients in their defence. ii. It did not particularise the composition of the plaintiff`s claim for US$503,750. iii. It mixed up claims for “gross fees” and “board fees”, leaving the excipients unclear as to the claim they were expected to answer. iv. The declaration did not advert to thew nature off duties allegedly performed by plaintiff in the capacity of director, thus further embarrassing the excipients in their defence. v. No explanation was tendered in the declaration to justify a claim exclusively in United States Dollars (USD) “…given the conversion of United States Dollar obligations by operation of the law since 2019”. Such fact ought to have been pleaded. vi. Paragraph 12 to 17 contained extraneous and superfluous matters which created the needless burden for the excipients to respond to such matters. vii. The formula for calculating the amount claimed in paragraph 3 of the declaration was incomprehensible. It rendered the relief claimed in that paragraph incompetent. viii. Paragraphs 4 and 5 of the declaration fused the incompetent relief of collection commission and legal fees. PLAINTIFF`S RESPONSE TO THE EXCEPTION [9] Plaintiff denied, in a terse replication whose brevity intersected with paucity, that he had incorrectly cited the first defendant. He demanded proof that indeed first defendant`s name HH 230-25 HCHC 15/24 was Pan Reef Mining Company (Private) Limited rather than Pan Reef Mining Private Limited. It is noteworthy that before set down of this matter for argument, plaintiff filed a notice to amend its summons to cite first defendant as Pan Reef Mining Company (Private) Limited. [10] Plaintiff also contended that his summons were neither prolix nor unclear. He concluded his response by accusing the excipients of burdening the court with inconsequential folderal meant to delay resolution of the dispute. THE MATTER BEFORE THE COURT. [11] Before turning to the arguments presented before the court, I must of necessity make a few comments regarding this exception. The resolution of a commercial dispute (as defined in r 3 (1) of the Commercial Court Rules) translates, according to a senior advocate, into a judicial inquiry over the question; - “where is the money?”1 [12] This point-blank articulation invites another equally forthright adage; - “time is money”. Does the progression of this exception reflect an earnest quest by the parties and their respective legal practitioners to zero in on the money? In answering this question I refer to the guidance in r 4 (3) of the Commercial Court Rules which provides thus; - 4 (3) The court shall in administering these rules, have due regard to the set of values set out in the Second Schedule to these rules and the need to achieve substantial justice inter parties in any particular case without derogating from the principles of natural justice or established law and resolving the dispute timeously. [13] The Second Schedule is a short instalment of the good behaviours expected of litigants and their legal practitioners. I set it out hereunder in full. Restating that it is not at all lengthy but incontestably lucid in its guidance; - 1 See Rosenfeldt v The Brackenhills Trust & Ors HH 348-23 at [60], HH 230-25 HCHC 15/24 VALUES (R 2) The adjudication of disputes and operation of the Commercial Division of the High Court of Zimbabwe (hereafter referred to as “the Commercial Court”) shall be guided by the set of values listed below which however, are not part of the Rules of Court. (1) The establishment of the Commercial Court in Zimbabwe is designed to improve the ease of doing business in line with the criteria set by the World Bank and contribute towards the national effort in attracting local and foreign direct investment. (2) The core function of the Commercial Court is the expeditious resolution of commercial disputes according to international best practices to enhance efficient justice delivery. (3) The core attributes of the Commercial Court are: (a) reduction and simplification of processes; (b) curtailment and minimisation of costs and time; (c) full integration of electronic case management systems; (d) complete digitalisation of records; (e) across the board training; (f) enhanced professionalism and increased efficiency; (g) new rules of procedure; (h) adaptability. [14] The jurisprudence issuing from this court has consistently communicated the need to heed the guidance in r 4 (3) and the Second Schedule2. Returning to the matter at hand, my view was that this dispute fell under r 3 (1) (k) of the Commercial Court Rules which say that; - (k) any dispute relating to the management of a business or commercial organisation, including a dispute relating to the management of business executive directors of a company and its shareholders or executive directors and the company; [15] Which means that the contractual dispute issues from the realm of corporate law, an area closely regulated by the Companies and Other Business Entities Act [ Chapter 24:31] 2 See Matthew Rosenfeldt v The Brackenhills Trust & 4 Ors HH 348-23, Blakey Investments (Pty) Ltd v Delta Beverages (Pvt) Ltd & 2 Ors HH 388-23; Centenary Tobacco (Pvt) Ltd v CMED HH 591-24, Hashiti &Anor v Seedco HH 615-24, Streamspace Incorporated (Pvt) Ltd v Hayes Construction (Pvt) Ltd HH 53-25 and Blakey Investments (Pty) Ltd v Delta Beverages (Pvt) Ltd & 2 Ors HH 230-25 HCHC 15/24 (“COBA”). On that basis then, how does the court end up burdened by a quarrel over the correct citation of an entity? [16] Surely in this day and age of the strictest of regulatory requirements over KYC or know your customer/client/counter-party, why should arguments over the citations of parties in legal proceedings -especially corporate entities still arise? Over and above the requirements of COBA, first defendant was regulated by the Mines and Minerals Act [Chapter 21:05], a statute which places an equally strict raft of administrative requirements commencing with an accurate record of the first defendant`s name. [17] It thus stands as a matter of grave concern to have the director of a company accused of incorrectly citing -not just any adversary-but the very company he is leading. Even more aggravating is the fact that when such issue arose in contention, it was not swiftly resolved by reference to the records, if not in the filing cabinet, then in the various regulatory repositories. [18] This tragic charade continued. The plaintiff filed a rather truculent response to the excipient. He insisted, without giving further details, that the correct citation of first defendant was Pan Reef Mining Private Limited. This response, in my view devolved to a failure by plaintiff to answer the excipients` complaint over the name. I would have ended the inquiry on this conclusion but for other factors as discussed hereunder. [19] Mr Zhuwarara, for the excipients, launched a formidable onslaught predicated on the principle that the plaintiff`s summons were fatally flawed for citation of a non-existent first defendant. He referred to a raft of authorities to that effect including Gariya Safaris v Van Vyk 1996 (2) ZLR 246 (H), Fadzayi John v Delta Beverages Limited SC 40-17, Amos Makono v Freda Rebecca Mine HH 400-18 and CMED v Samson Bande & 29 Ors HH 80-19. [20] I will return to these authorities shortly. But assuming counsel was correct, the result is that each and every spear that he hurled at his adversary boomeranged to strike the very heart of his own argument. This is because first defendant`s resolution authorising defence of these proceedings was issued under Pan Reef Mining Private Limited very same appellation it strenuously attacked as incorrect. [21] The question arising is not so much that the resolution was not at the heart of the exception hearing, it relates to probity as viewed from the guidance in r 4(3) and the Second Schedule. Again, it brings up the very concern I raised earlier of inattentiveness on mundane HH 230-25 HCHC 15/24 matters in commercial disputes. Are these parties and their legal practitioners about the money? [22] Finally, the plaintiff appeared to capitulate and filed a notice to amend its summons to reflect the correct name of first defendant as Pan Reef Mining Company . (Private) Limited This proposal to amend, on the face of it, ought to have cured the complaint founding the present exception. I would again have ended matters here had it not been for the excipients` persistence that the proceedings were anchored on an incurable fallacy and thus could not be redeemed by the proposed amendment. [23] I return to the authorities cited from both sides, I believe the position herein is summed up by the below extract from Herbstein and Van Winsen3 at page 145: “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”. [24] A survey of the authorities discloses that the court resolved the question on the basis of fact. In Gariya Safaris v Van Vyk (supra) for example, the determining issue was expressed as follows at page 249; - “The applicant ‘s legal practitioner, for the first time in the action, conducted a search in the register of companies for-Con and Son (Pvt) Ltd. There was indeed no company registered in that name. It became clear to all concerned, that the judgment was a brutum fulmen as the judgment debtor was non-existent.” [25] A somewhat different approach was taken in Amos Makono v Freda Rebecca Mine (supra) due to the facts (which are closer to the present) of that matter. CHATUKUTA J (as she then was) observed as follows at page 4; - “In Marange Resources (Private) Limited v Core Mining & Minerals (Private) Limited (in liquidation) & Ors (supra), which again is similar to the present matter, the appellant had wrongly cited the first respondent as “Core Mining and Minerals 3 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) 5th edition at p 145 HH 230-25 HCHC 15/24 (Pvt) Ltd” instead of “Core Mining and Mineral Resources (Pty) Ltd”. The omission of the word “Resources” and the use of “Pvt” as opposed to “Pty” was found to have altered the legal personality of the respondent. The simple question is therefore whether there is a legal or natural person answering to the name Freda Rebecca Mine. There is no such legal person. There is however a legal person called “Freda Rebecca Mine Limited”. The omission of the word “Limited” altered the legal identity of the proper respondent. The applicants therefore cited a non-existent respondent. By virtue of the stare decisis doctrine, this court is bound by the plethora of Supreme Court cases on the issue including Fadzai John v Delta Beverages. The present application therefore suffers the same fate as in those cases. In the result, the preliminary point is upheld.” [26] This view should dispose of the matter. The authorities have spoken and demand compliance. The summons herein were thus issued against a non-existent entity and cannot be cured. The exception succeeds on that basis and the matter will be struck off the roll with costs. This disposes of the dispute and I will issue no further comment other than state though, that the second and third grounds of the exception reflect an attempt to sidestep r 12 (3) of the Commercial Court Rules which provides that; - 12 (3) There shall be no request or application for further particulars to any pleading filed of record. DISPOSITION 1. The exception is upheld and plaintiff`s claim be and is hereby struck off with costs. Whatman and Stewart- excipients/ first, second and third defendants` legal practitioners Gill, Godlonton and Gerrans-respondent/plaintiff`s legal practitioners [CHILIMBE___31/03/25] HH 230-25 HCHC 15/24