Omnia Fertilizer Zimbabwe (Pvt) Ltd v Mutsata (HC 6037 of 2013) [2015] ZWHHC 537 (16 June 2015)

1 HH 537-15 HC 6037/13 OMNIA FERTILIZER ZIMBABWE (PVT) LTD versus ELISHA MUTSATA HIGH COURT OF ZIMBABWE MUREMBA J HARARE, 4 June 2015 & 17 June 2015 Opposed application E. T Moyo, for the applicant T Zhuwarara, for the respondent MUREMBA J: This is an application for summary judgment against the respondent for the payment of the sum of US$78 113.25, interest at the rate of 18% per annum and costs of suit. The basis of the application is that from May 2012 to September 2012 the applicant sold and delivered fertilizer to the respondent at his specific instance and request and that on 18 May 2012 the respondent acknowledged his indebtedness by signing an acknowledgement of debt in the sum of US$79 077.87 and interest at the rate of 18% per annum. The background of the case is as follows. On 23 July 2013 the applicant issued summons against the respondent for the recovery of its money. It was now suing for the payment of US$78 773.25. The respondent entered an appearance to defend and then filed a plea. The filing of the plea prompted the applicant to make the present application for summary judgement stating that the plea does not provide any reasonable defence and that the defence is not bona fide. It was contended that the defence was entered into solely for the purpose of buying time. Further argument was made to the effect that this was an abuse of court process. In opposing the application the respondent stated in his opposing papers that the application should not be granted because although he signed the acknowledgement of debt the agreement which gave rise to this debt was entered into by and between the applicant and a company called Placeland Enterprises (Pvt) Ltd which is duly registered. He said that the agreement was not between him and the applicant. The respondent further stated that he is the director of Placeland Enterprises (Pvt) Ltd. He attached the agreement in question as HH 537-15 HC 6037/13 proof. The applicant did not dispute the agreement and that it sold the fertilizer to Placeland Enterprises (Pvt) Ltd. However, it insisted that the respondent is a liable because he executed an acknowledgement of debt in favour of the applicant in which he acknowledged himself to be truly and lawfully indebted to the applicant. In respect of the acknowledgement of debt the respondent stated in his opposing affidavit that he signed it under duress. He said that he was put under pressure to sign it. The respondent disputed that he is personally liable for the debt. His argument was that liability should be placed on Placeland Enterprises (Pvt) Ltd since it is the one which owes the debt. The respondent further averred that Placeland Enterprises (Pvt) Ltd should have been sued as the Principal debtor. He argued that he should not be held personally liable for the debts of a company which is a separate legal entity. He argued that Placeland Enterprises (Pvt) Ltd as a company has rights and liabilities of its own. In advancing this argument the respondent relied on the case of Salomon v Salomon and Company [1897] AC 22 (HL) which states that, “Once a company is legally incorporated it must be treated like any other independent person with its rights and liabilities appropriate to itself.” The respondent’s simple argument in his opposing affidavit was that the applicant is demanding its money from the wrong person. However, during the hearing Advocate Zhuwarara indicated that he was no longer going to pursue the argument that the respondent signed the acknowledgment of debt under duress. Surprisingly he came up with new defences to the plaintiff’s claim. The first one was that the plaintiff had given three different amounts in the acknowledgement of debt, summons and in the application for summary judgment. He argued that the variance in figures poses a difficulty and shows that the plaintiff’s claim is not clear and unanswerable. The second issue that he raised was that there was a dispute on the interest payable. The third issue that he raised was that the plaintiff did not make it clear in its summons what the basis of its claim was. He argued that it was not clear whether the claim was based on the unpaid account by Placeland Enterprises (Pvt) Ltd or whether it was based on the acknowledgment of debt. He argued that all these issues need to be dealt with at trial. In an application of this nature the applicant’s claim must be unanswerable and clear. See Van Winsen The Civil Practice of the Superior Courts in South Africa 3rd Edition at page 527. Pitchford Investments (Pvt) Ltd v Muzari 2005 (1) ZLR H. In casu it is not in dispute that this debt arose out of an agreement of sale which was entered into between the applicant and Placeland Enterprises (Pvt) Ltd in which the HH 537-15 HC 6037/13 respondent is a director. In terms of that agreement the applicant sold fertilizer to Placeland Enterprises (Pvt) Ltd on credit. So the cause of action is very clear. Even the claim itself is also very clear. The amount that is owing and the rate of interest were never disputed in the respondent’s plea and in his opposing affidavit. It was only during the hearing that Advocate Zhuwarara sought to dispute the capital amount and the interest. The respondent must show that he has a bona fide defence to the plaintiff’s action. In Hales v Doverick Investments (Pvt) Ltd 1998 (2) ZLR 235 (H) it was said, “Where a plaintiff applies for summary judgment against the defendant and the defendant raises a defence, the onus is on the defendant to satisfy the court that he has a good prima facie defence. He must allege facts which if proved at the trial would entitle him to succeed in his defence at the trial. He does not have to set out the facts exhaustively but he must set out the material facts upon which he bases his defence with sufficient clarity and in sufficient detail to allow the court to decide whether, if these facts are proved at the trial, this will constitute a valid defence to the plaintiff's claim. It is not sufficient for the defendant to make vague generalisations or to provide bald and sketchy facts. ” In Jena v Nechipote 1986 (1) ZLR 29 at 30 GUBBAY JA (as he then was) said, “ All that a defendant has to establish in order to succeed in having an application for summary judgment dismissed is that "there is a mere possibility of his success"; "he has a plausible case"; "there is a triable issue"; or, "there is a reasonable possibility that an injustice may be done if summary judgment is granted". These tests have been laid down in many cases, typical of which in this country are Davis v Terry 1957 (4) SA 98 (SR); Rex v E Rhodian Investments Trust (Pvt) Ltd 1957 (4) SA 631 (SR); Kassim Brothers (Pvt) Ltd v Kassim & Anor 1964 (1) SA 651 (SR); Shingadia v Shingadia 1966 (3) SA 24 (SR); Webb v Shell Zimbabwe (Pvt) Ltd 1982 (1) ZLR 102.” In casu the respondent has not succeeded in showing that he has a bona fide defence to the plaintiff’s claim. To begin with, in the main matter, in his plea he admitted acknowledging the debt in his personal capacity although he went on to state that the credit facility was extended to the company. However, he never disputed liability on the basis that the applicant had sued the wrong person. He never disputed liability on the basis that he signed the acknowledgement of debt under duress as he later sought to say in his opposing affidavit to the application. Instead he admitted that he had already made some payments since the signing of the acknowledgement of debt. He even indicated that he had intended to pay off the debt through a farming project but his tobacco crop had been a disaster. He further indicated that he intended to pay off what he owed in the 2014-2015 tobacco season. He said that there was absolutely no reason why he should try to run away from the debt. He ended up by pleading that he be given payment terms starting with the 2014-2015 tobacco season to pay off the debt. HH 537-15 HC 6037/13 With the admission that the respondent made in his plea he cannot now seek to raise all sorts of defences which defences he never raised before. If he intended to dispute the debt on the basis that he was not the debtor then this is what he ought to have raised in his plea to the applicant’s claim in the main matter. If he intended to dispute the interest he should have raised it from the onset in his plea. If he wanted to know the basis of the plaintiff’s claim then he should have not admitted liability in his plea. The raising of defences after the application for summary judgment had been made shows that the respondent has no bona fide defence to the claim. In any case the fact that the fertilizer was sold to the company cannot make the respondent escape liability. He cannot escape liability because he signed an acknowledgement of debt in his personal capacity stating that he was liable for the debt and by so doing he assumed the debt from the company. The applicant managed to show that it has an unanswerable claim. It clearly explained the variance in figures by saying that the initial amount had been reduced by the respondent who continued to make payments towards extinguishing the debt. In the result, the application for summary judgment is granted with costs. Scanlen & Holderness, plaintiff’s legal practitioners Coghlan, Welsh & Guest, respondent’s legal practitioners