Moosa v Stanziani (HC 631 of 2014) [2015] ZWHHC 485 (27 May 2015)

1 HH 485-15 HC 631/14 MAHBUB MOOSA versus OMAR STANZIANI HIGH COURT OF ZIMBABWE DUBE J HARARE, 26 March 2015 & 28 May 2015 TRIAL D . M Foroma, for the plaintiff A. A Debwe, for the defendant DUBE J: On the 27 the January 2014, the plaintiff issued summons against the defendant claiming a total of $166 800, 00 being an investment loan advanced to the defendant and outstanding salaries in the sum of $16 000, 00. The plaintiff’s claim is based on an acknowledgement of debt signed by the defendant. The plaintiff claims that the sum owed became due and payable on the 8th of October 2012 in terms of the defendant’s verbal undertaking on 26 August 2012 to settle the full debt in six weeks from the date of signing the acknowledgment of debt. That the defendant has refused and neglected to repay the money advanced. The defendant resists the claim. The defendant’s pleadings reveal the following. He disputes that he is indebted to the plaintiff in the amount claimed or at all. The defendant denies that the plaintiff ever loaned him some money. He asserts that the plaintiff invested money into in the defendant’s company in cash and equipment into his company. He contends that the parties entered into an investment agreement whose material terms are as follows. The plaintiff was to invest the said money into the defendant’s company Symphony of Tobacco Leaves Company which manufactures cigarettes. The plaintiff invested $75 000.00 in cash and a Mercedes Benz valued at $25 000, 00 to be used as a company car. The defendant was to repay the capital and 30% of the profit made in the first year. The defendant further denies that the plaintiff ever worked for the defendant. The defendant alleges that when his business failed, the plaintiff began to change goal posts and demanded a refund of his investment. He signed the acknowledgment of debt. He asserts that the said HH 485-15 HC 631/14 acknowledgement of debt was signed under duress. That the plaintiff’s brother Ismael Moosa threatened to kill him and coerced him into signing an acknowledgment of debt in August 2012. The following issues were referred to trial. 1. Whether defendant was induced by duress to sign the acknowledgement of debt attached to the summons 2. Whether the defendant is indebted to the plaintiff in the sum of $166 800, 00. The plaintiff testified in his own case. His testimony is as follows. The defendant was in the business of manufacturing cigarettes. The defendant approached him for a loan. He sold his house and gave him $100 000, 00 payable in one year. A memorandum of agreement was signed on 18 January 2011 much later than when the contract was entered into. The defendant suggested that it be back dated. The witness did not have any problem with the backdating because he had nothing in writing to show that he was owed money. After some time the plaintiff asked the defendant to pay back his money. The defendant failed to do so. The parties continued to wrangle over the money. Their church priest called them for a meeting to try and resolve the dispute. The defendant indicated at the meeting that he wanted to pay back the money. The plaintiff drafted an acknowledgment of debt. It was at this meeting that the document was signed. The defendant signed the acknowledgement of debt admitting owing the monies in issue. The acknowledgement was signed in the presence of the priest who is now late and the priest signed as a witness. His brother Ismail was not present when the document was signed. No pressure was brought to bear on the defendant to sign the document. The plaintiff is claiming in addition to the $100 000, 00, 8 months in salaries at $2000, 00 per month. The defendant had offered him an allowance of $2000, 00 a month which he said would credited to him at the end of the year. He accompanied him on business trips to South Africa when he was marketing the cigarettes. He drove the defendant because he had no licence to drive. The witness maintained under intense cross examination that the acknowledgement of debt was signed by the defendant freely and voluntarily and that no pressure was brought to bear on the defendant. The plaintiff denied that either he, his brother or the late priest exerted any pressure on the defendant to sign the acknowledgement of debt. The witness also maintained that the defendant borrowed the money from him so that the defendant would HH 485-15 HC 631/14 invest it in his business. He refuted that the $100 000, 00 he gave to the defendant was his own investment. The witness gave a straightforward version of his story. He was an impressive witness. I believed his story. The plaintiff’s other witness is his brother, Ismael Moosa. He testified as follows. Sometime in mid 2013 his brother, the plaintiff, got into a depression. His family was concerned and requested him to speak to the defendant and assist him. He enquired as to the cause of the depression and learnt that the depression was due to financial problems caused by this present dispute between the defendant and the plaintiff. His brother showed him the acknowledgment of debt signed by the defendant on 26 August 2012. He engaged the defendant over the outstanding money and asked him to propose a payment plan and he did so in writing. The defendant prepared a document dated 27 August 2013 and signed it at the witness’ house. The defendant made an undertaking to commence payment as from 25 November 2013 at a minimum rate of $5000, 00 a month. The document does not state the total debt to be paid. The defendant indicated that he was prepared to pay $100 000, 00 being the plaintiff’s investment into his business but the amount is not stated in the document. The witness was not present when the acknowledgment was signed and could not therefore have threatened the defendant to sign it. The witness denied ever threatening the defendant with physical violence to make him pay back the money. He contended that there was no need to threaten the defendant because he had already offered a payment plan and already signed a document to that effect. Under cross-examination he insisted that he was not present when the acknowledgment of debt was signed. The witness gave a clear and convincing version of his involvement in this matter. He was not shaken under cross-examination. I believed his testimony. The defendant testified in his own case. He testified as follows. He became friends with the plaintiff after he met him at a mosque. He told the plaintiff that he was in the cigarette manufacturing business. The plaintiff asked to invest in his business as his own business was not doing well. An investment agreement was conducted. The plaintiff invested $75 000,00 in cash and provided his Mercedes Benz E200 valued at $25 000, 00 as an investment into the business. The plaintiff was to invest a total of $100 000, 00 into the defendant’s cigarette manufacturing company. The business failed to yield good results. The parties travelled to South Africa together on a number of occasions and took with them cigarette samples. They travelled for 6 months trying to sell the cigarettes but failed to HH 485-15 HC 631/14 successfully market them. The witness admitted that he offered the plaintiff an allowance of $2000, 00 a month. The money came from that given to him by the plaintiff. He disagrees that he owes the plaintiff $166 800, 00. After the business failed, the plaintiff began to demand a refund of his investment. He signed the acknowledgment at a car park in the Mosque. The plaintiff prepared the acknowledgement of debt. The witness testified that he signed the acknowledgment in front of a priest who had asked him to sign so that the plaintiff would not hurt himself. The plaintiff had a history of trying to take his life and he feared that if he refused to sign, he may harm himself. . When the witness saw it, he threw away but when the plaintiff threatened to kill himself, the priest pleaded with him to sign it and he did. The second document is a document signed by himself on 27 August 2013. He signed it at the plaintiff’s brother’s house. He prepared the document and signed it because he felt that he had a duty to pay the money the plaintiff put into his business. The document gives a payment plan wherein he undertakes to pat $ 5000,00 per month. Under cross-examination the witness insisted that he signed the acknowledgement of debt against his will because the priest had asked him to sign. The parties were supposed to open a company together. The witness accepted that this is contrary to what he stated in his summary of evidence which is to the effect that the company already existed when the alleged investment agreement was entered into. Further, that he was running a profitable company. The witness accepted that he has no registered company and gave out that he was going to register one with the defendant. The witness insisted that the money was not a loan but an investment. The witness testified that although he stated in further particulars there was duress was in the form of physical threats, he does not remember telling his legal practitioner that. He also did not understand why his legal practitioner included in his papers that the plaintiff’s brother had threatened him to sign the acknowledgement of debt. He testified that he was not forced to sign the acknowledgment of debt by the plaintiff’s brother. He testified that the plaintiff’s brother only threatened him over the over the phone and he threatened to sort him out if he did not pay the money. There were no threats of physical violence. The plaintiff’s brother was not involved in the signing of the acknowledgement of debt. Later the witness appeared to have given up and asserted that it is his moral obligation to pay what the plaintiff put into the business. He is prepared to pay $100 000, 00. The witness did not maintain his version of events as given in his pleadings. He appeared to be making up his story as his testimony progressed. Whenever there was an HH 485-15 HC 631/14 inconsistency he would blame it on his legal practitioners. The witness did not impress me as a good witness. The plaintiff’s claim is based on an acknowledgement of debt where the defendant signed an acknowledgement of debt which he now challenges on the basis that he signed it under duress. The onus of showing that acknowledgment of debt was signed through duress rests on the party making the allegation. The onus shifts on the defendant to show on a balance of probabilities that the acknowledgement of debt was not signed freely and voluntarily. In such cases, the defendant has the duty to begin and is expected to lead evidence first. In this case however for expediency, the parties agreed that the plaintiff call its witnesses first because one of the plaintiff’s witnesses was going away. He had to testify and be excused and other witnesses would testify later. The onus of proving that the acknowledgment of debt was signed under duress still rests on the defendant. The following facts are common cause. The plaintiff sold his own house and advanced $100 000, 00 to the defendant for use in his business. A dispute ensued over whether this was a loan or an investment for both parties. The defendant failed or refused to reimbursethe money to the plaintiff. At acknowledgement of debt was signed by the defendant admitting legal liability for the money claimed. In his summary of evidence the defendant alleged that Ismael, the plaintiff’s brother threatened to kill him and coerced him into signing the acknowledgment of debt in August 2012. This was the backbone of the defendant’s defence. In his evidence however, the defendant made an about turn and distanced himself from that statement, attributing it to his legal practitioner. He claimed in his testimony that Ismael was not there when the document was signed and he did not put pressure on him to sign the document. The blame for influencing the signing of the acknowledgment has been placed on the shoulders of the late priest. This about turn has given a different colour to his defence. In effect he has abandoned his defence. The suggestion that the defendant was induced to sign the acknowledgement of debt by duress is a fabrication. The defendant was developing his case as it progressed. The defence that was pleaded has fallen away as the defendant has failed to show that he was forced by Ismael to sign the acknowledgement of debt. Where a litigant raises a defence in his pleadings which he subsequently disowns, that is the end of the matter. He cannot raise a fresh defence during the trial and hope that such defence will avail him. The defendant has hopelessly tried to avoid paying the debt by raising suggestions of duress. The HH 485-15 HC 631/14 assertion that the acknowledgement of debt was signed freely and voluntarily without any undue influence being brought to bear upon the defendant is supported by the fact that he subsequently offered a payment plan to liquidate the debt. The evidence discloses that the acknowledgement of debt was not signed under duress. By signing the acknowledgment of debt, the defendant admitted liability. The acknowledgment binds the defendant to liquidate the indebtedness. The defendant’s version of events is rejected. Consequently, the plaintiff is entitled to the claim in terms of the acknowledgment of debt. I am satisfied that the plaintiff has proved his case on a balance of probabilities. He is entitled to the order sought. In the result it is ordered as follows: Judgment in the sum of $166 800, 00 is hereby entered for the plaintiff. The defendant shall pay the plaintiff’s costs. Sawyer and Mkushi, plaintiff’s legal practitioners Kantor &Immerman, defendant’s legal practitioners