TETRAD INVESTMENT BANK LTD v LARGEDATA ENTERPRISES (PVT) LTD
HIGH COURT, HARARE
[Opposed Application-Special Case HH 730-15]
July 10 and 16 and September 17, 2015
CHIGUMBA J
Court - High Court - Jurisdiction - Constitutional matters - Court's jurisdiction not dependent on finding that matter raised neither frivolous nor vexatious.
Debtor and Creditor - Provisional sentence - Constitutionality of.
Section 171(1)(c) of the Constitution confers jurisdiction on the High Court in constitutional matters except those that only the Constitutional Court may decide. In a constitutional matter not reserved for the Constitutional Court, the High Court has jurisdiction to determine the constitutional issue and is not obliged to refer the matter to the Constitutional Court. Further, the exercise of this jurisdiction is not dependent on whether the raising of the Constitutional matter is frivolous or vexatious.
The provisional sentence procedure in the High Court serves a useful purpose in the justice delivery system as it affords a creditor armed with sufficient documentary proof, a quick remedy for the recovery of its money without resorting to the expensive, cumbersome and often dilatory machinery of an illiquid action. The procedure is constitutional as there can be no merit whatsoever in the proposition that it is a violation of ss 56(1) and 69(2) of the Constitution of Zimbabwe.
Cases cited:
Caltex Africa Ltd v Trade Fair Motors and Another 1963 (1) SA 36 (SR), referred to
Chief Constable, Pietermaritzburg v Ishim (1908) 29 NLR 338, referred to
Chikadaya v Chikadaya & Anor 2000 (1) ZLR 343 (H), referred to
Hicks v Dobriskey 1976 (2) SA 792 (R), referred to
Hundah v Murauro 1993 (2) ZLR 401 (S), referred to
Nel v Waterberg Landbouwers Ko-operatiewe Vereeniging 1946 AD 597, referred to
Mukahlera v Clerk of Parliament and Others HH 107-05 (unreported), referred to
O'Reilly v Mackman [1983] UKHL 1; [1983] 2 AC 237; [1982] 3 All ER 1124; [1982] 3 WLR 1096, referred to
Rich and Others v Lagerwey 1974 (4) SA 748 (A), applied
Zuva Petroleum One (Pvt) Ltd v Ruzive HB 32-14 (unreported), referred to
Legislation considered:
Constitution of Zimbabwe Amendment (No 20) Act, 2013, ss 3(f), 56(1), 69(2), 86(3)(e), 167(2)(a)-(d) and (3), 171(1)(c), 175(4)
High Court Act [Chapter 7:06]
High Court Rules, 1971 (RGN 1047 of 1971), O 4 rr 21, 22, 25(1), 28, O 13 r 87, O 29 r 199
Book cited:
Cilliers AC, Loots C and Nel HC Herbstein and Van Winsen, The Civil Practice of the High Courts and the Supreme Court of Appeal of South Africa, (5th edn, Juta & Co Ltd, Cape Town, 2009) vol 2 at p 1313
T Mpofu, for applicant
L Uriri, for respondent
CHIGUMBA J:
The parties to this dispute consented to it being disposed of by way of a special case as provided for by O 29 r 199 of the High Court Rules, 1971. Although this is an opposed application, the parties agreed that their dispute be determined by the court on the basis of the papers filed of record. It is common cause that the dispute between the parties is one of law. The issue for determination is whether the provisional sentence procedure is unconstitutional. The High Court has its own constitutional jurisdiction which it exercises subject to confirmation of any declaration of constitutional invalidity of an act of Parliament by the Constitutional Court. Litigants must be cognizant of the fact that this Court has its own jurisdiction to declare a statutory provision to be ultra vires the new Constitution. It is not every case of alleged constitutional invalidity of a statute which must be referred to the Constitutional Court for determination. The new Constitution sets out clearly those issues that only the Constitutional Court has exclusive jurisdiction over. In my view, it is not necessary that the High Court considers whether the constitutional question that will have arisen before it is frivolous or vexatious before dealing with the question on its merits. It is my view that it is only in contemplation of referral of the constitutional matter to the Constitutional Court that it becomes mandatory that there be a consideration, by the court in which the question will have arisen, of the frivolity or vexatiousness of the question.
{mprestriction ids="1,2,3,4,5"}
The background to this matter is that, on 27 November 2014, the applicant issued summons for provisional sentence in the sum of US$ 2 023 221.44 against the respondent, under case number HC 10530-14, together with interest thereon at the rate of 23 per cent per annum calculated from 27 November 2013 to the date of payment in full, as well as legal costs and collection commission. The applicant's claim was based on an acknowledgment of debt executed by the respondent on 14 January 2014. The applicant averred that the amount in question had become due and payable because the respondent had failed to make any monthly installments as agreed in terms of clause 9 of the acknowledgment of debt, with the result that the full amount due had become immediately due and payable. Summons for provisional sentence was served on a security guard at respondent's place of business, on 12 December 2014, the set down date being the 14 January 2015.
On 13 January 2015, the respondent filed an opposing affidavit to the summons for provisional sentence and its consequential relief. The respondent prayed for the referral of the summons provisional sentence procedure to the Constitutional Court. The question sought to be referred was whether the common law procedure of provisional sentence was constitutional regard being had to the provisions of s 69(2) of the Constitution of Zimbabwe Amendment (No 20) Act, 2013 ("the Constitution"). It was averred that O 4 r 28 of the High Court Rules, 1971 infringed upon the respondent's right to a fair hearing and equality before the law as enshrined in s 69(2), as read with s 3(f) of the Constitution. It was averred further, that O 4 of the rules of this Court violates the provisions of s 86(3)(e) of the Constitution. The relief sought was a declaratur that the provisional sentence procedure was unconstitutional.
The respondent averred further, that the particulars of claim were defective because of the failure to state the particulars of interest unpaid and accumulated to the account as required by O 4 r 22. The respondent submitted that the interest portion of the applicant's claim was not authentic, and that it was inaccurate. The matter was referred to the opposed roll. On 24 March 2015, the applicant filed heads of argument in support of its claim, in which the thrust of its argument was that this is a proper case for provisional sentence because it holds a liquid document, to which the respondent has not denied signing, or denied the validity of the claim. The applicant denied that the provisional sentence procedure is unconstitutional, and that it infringes upon the respondent's right to a fair hearing. The applicant denied that the common law procedure for provisional sentence and O 4 r 28 of the rules of this Court infringe on the respondent's constitutional right to equality before the law which is guaranteed by s 56 of the Constitution.
It was contended on behalf of the applicant, in its supplementary heads of argument filed of record on 13 July 2015, that it was incompetent and an indication of the dilatory nature of the respondent's opposition that the relief sought includes a request that this matter be referred to the Constitutional Court. I find merit in the contention that this Court has its own constitutional jurisdiction, conferred on it by s 171(1)(c) of the Constitution, which provides that this Court may decide constitutional matters except those that only the Constitutional Court may decide. Those matters that only the Constitutional Court may decide are; to advise on the constitutionality of any proposed legislation where such legislation is referred to it in terms of the Constitution; hear and determine disputes relating to election to the office of President; hear and determine disputes relating to whether or not a person is qualified to hold the office of Vice-President; or determine whether Parliament or the President has failed to fulfill a constitutional obligation. (See s 167(2)(a)-(d) of the Constitution).
Clearly this Court's own constitutional jurisdiction is not ousted in a matter such as this one, which does not fall under those matters that the Constitutional Court has exclusive jurisdiction over. The request by the respondents that this matter be referred to the Constitutional Court is therefore incompetent. The rules of this Court are enacted pursuant to the provisions of the High Court Act [Chapter 7:06]. A declaration by this Court that O 4 of its rules, which provides the provisional sentence procedure is unconstitutional would be subject to approval by the Constitutional Court before the offending rule could be of no further force or effect. See s 167(3) of the Constitution which provides that:
"The Constitutional Court makes the final decision whether an Act of Parliament or conduct of the President or Parliament is constitutional, and must confirm any order of constitutional invalidity made by another court before that order has any force".
Having established that this Court has the requisite jurisdiction to grant the relief sought by the respondent, a declaration of the Constitutional invalidity of O 4 of the rules of this Court, I now turn to the contention made on behalf of the applicants that it would be improper and incompetent for this Court to strike down the relevant provisions of the High Court Act which provide for its rules, as well as O 4 of its rules in circumstances where the "owner" of the legislation has not been cited as a party to the proceedings. I accept this as a valid proposition of law, and am fortified in this view by the following cases: Hundah v Murauro 1993 (2) ZLR 401 (S); Mukahlera v Clerk of Parliament and Others HH 107-05 (unreported); O'Reilly v Mackman [1983] 2 AC 237 and Chief Constable, Pietermaritzburg v Ishim (1908) 29 NLR 338. However, it is my considered view that non joinder of a party to proceedings is not necessarily fatal to the proceedings, as the court can, of its own volition, order the joinder of that party to the proceedings, at any stage of the proceedings, if it is of the view that it would be in the interests of justice to do so. (See O 13 r 87 of the rules of this Court).
Another issue referred to this Court for consideration was whether if the court formulated the view that the application for a declaration of constitutional invalidity was vexatious, it ought to hear the matter at all in light of the provisions of s 175(4) of the Constitution which provides that:
"If a constitutional matter arises in any proceedings before a court, the person presiding over that court may and, if so requested by any party to the proceedings, must refer the matter to the Constitutional Court unless he or she considers the request is merely frivolous or vexatious".
My reading of the provisions of s 175(4) of the Constitution is that the constitutional matter which arises in any proceedings must be such a matter that only the Constitutional Court has exclusive jurisdiction over, in order for this Court to decline jurisdiction and refer the matter to the Constitutional Court, after consideration of whether the question that is intended to be referred is frivolous or vexatious. This Court has a duty to interpret the provisions of the new Constitution, and not to confuse these provisions with those of the old Constitution, where the jurisdiction of the High Court to itself determine the constitutionality of acts of Parliament was not as clear cut as it is now, in the new Constitution. It is my considered view that, the jurisdiction that was conferred on the High Court to determine the constitutional validity of statutes does not include a rider that it can only be exercised where the matter that arises is not frivolous or vexatious. That rider applies to proposed referrals to the Constitutional Court, and its purpose is to stop the floodgates and to protect the apex court in the land from being inundated with "trivialities". I am unable to agree with the submissions made by counsel for the applicant Mr Mpofu that this Court must not exercise its constitutional jurisdiction if it is of the view that the constitutional matter that will have arisen during the course of its proceedings is frivolous or vexatious. There is no such provision in the new Constitution in relation to the exercise of constitutional jurisdiction by the High Court. It is only in contemplation of referral of the Constitutional matter to the Constitutional Court that it becomes mandatory that there be a consideration of the frivolity or vexatiousness of the question that will have arisen. I therefore find nothing that precludes me or constrains me in the exercise of this Court's constitutional jurisdiction to determine the matter that has arisen in the course of provisional sentence proceedings.
Turning to the merits of the matter, it was submitted on behalf of the applicant, quite correctly in my view, that provisional sentence is a special procedure which is designed to give a plaintiff with a liquid document and prima facie proof of its claim, a speedy judgment without the expense and delay that an ordinary trial action entails. The essence of the procedure is that it provides a creditor who is armed with sufficient documentary proof with a quick remedy for the recovery of money due to him without resorting to the expensive, cumbersome and often dilatory machinery of an illiquid action. See AC Cilliers, C Loots and HC Nel Herbstein and Van Winsen, The Civil Practice of the High Courts and the Supreme Court of Appeal of South Africa (5th edn, Juta & Co Ltd, Cape Town, 2009) vol 2 at p 1313. A liquid document was defined in the case of Rich and Others v Lagerwey 1974 (4) SA 748 (A) at 754H as follows:
"If the document in question, upon a proper construction thereof, evidences by its terms, and without resort to evidence extrinsic thereto, is an unconditional acknowledgment of indebtedness in an ascertained amount of money, the payment of which is due to the creditor, it is one upon which provisional sentence may properly be granted."
It is common cause that the agreement entered into by the parties on 14 January 2014, is a liquid document. It is a clear acknowledgement of debt signed by a duly authorized agent of the respondent. The debt which is acknowledged therein is for a fixed and determinate sum of money which is endorsed on the face of it. It is also common cause that the respondent has not denied the validity of the claim, or denied the signature on the document. It has been held that where the acknowledgement of debt is sufficiently clear and certain and no evidence to the contrary has been given by the defendant, provisional sentence will be granted. See Caltex Africa Ltd v Trade Fair Motors and Another 1963 (1) SA 36 (SR), and Zuva Petroleum One (Pvt) Ltd v Ruzive HB 32-14 (unreported).
Section 69(2) of the Constitution provides that:
"In the determination of civil rights and obligations, every person has the right to a fair, speedy and public hearing within a reasonable time before an independent and impartial court, tribunal or other forum established by law".
It is correct that the key elements of this constitutional provision are that one must be afforded a hearing, which is fair, and quick. Order 4 r 21 provides that a debtor be allowed to appear on the set down date in order to acknowledge or deny the signature to the liquid document or the validity of the claim. Order 4 r 25(1) provides that a defendant may file a notice of opposition together with supporting affidavits, prior to the date of the hearing. It was submitted on behalf of the applicant that there can be no question of infringement of the right to a fair hearing, in light of these provisions of the rules of this Court, which regulate and provide for the provisional sentence procedure. On the date of the hearing, plaintiff bears the onus which must be discharged on a balance of probabilities, to prove that an authentic liquid document exists. The defendant bears the onus of convincing the court that the balance of probabilities does not support the plaintiff's claim. The applicant contends that this is the very cornerstone of the constitutionally guaranteed right to a fair hearing, with emphasis being on fairness, which implies a strict adherence to the audi alteram partem rule, the right to be heard. It was submitted further on behalf of the applicant, correctly in my view, that the defendant has two opportunities to be heard in terms of the provisional sentence procedure, on the date of the hearing of the application for provisional sentence where it may appear in person to confirm or deny its signature on the liquid document, and, may enter appearance to defend within one month after any attachment pursuant to a writ issued as a result of provisional sentence, or, where there is no attachment, within one month of having satisfied the judgment. See O 4 r 28 of the rules of this Court.
This Court finds that the right to a fair trial is supported by O 4 of its rules which provides the respondent debtor with the right to file opposing papers, the right to appear in court even without having filed papers, the right to file heads of argument and the right to argue the matter. The respondent's right to a fair trial within a reasonable time is not abrogated by the summary nature of provisional sentence because there is a right to enter appearance to defend and to have the matter determined on the merits. The reasonableness of the time is related to the nature of the issues to be determined. If a litigant owes and has no defence it would contravene the rights of the plaintiff to go through a protracted trial process which may be concluded after a lengthy period.
Provisional sentence is only granted in those instances where the defendant fails to discharge the onus on it to satisfy the court, on a prima facie basis, that the plaintiff's probability of succeeding in the main matter is not high. It has been held that in an application for provisional sentence, it is necessary to decide whether or not there is a balance of probability in favor of the defendant which would justify the refusal of an order for provisional sentence. See Hicks v Dobriskey 1976 (2) SA 792 (R). It is common cause that the provisional summons procedure affords defendant two bites of the cherry to defend itself, and allows such a defendant the right to insist that the plaintiff give security de restituendo, against payment by the defendant. This acts as a check and balance and ensures that the plaintiff will be able to repay the defendant if he mounts a successful defence in the main action.
The contention by the respondent that the provisional sentence procedure violates s 56(1) of the Constitution, the right to equal protection of the law, is in my view, entirely devoid of merit, for some of the reasons already stated above in relation to the right to a fair trial. The law protects both debtors and creditors, as it should, because that is the essence of equality before the law. There is nothing objectionable in a procedure that affords a debtor two bites of the cherry and checks and balances via the requirement that the creditor furnish security de restituendo to hedge against the likelihood of the defendant debtor mounting a successful defence in the main matter.
The applicant contended that the defendant's opposition is an abuse of court process, and urged the court to express its displeasure and punish it by an award of costs on a higher scale. The court was referred to the dicta in the following cases, as authority for the proposition that, where a defendant opposes the granting of provisional sentence when he had no explanation for his failure to honor his obligation in terms of the acknowledgement of debt, that would be a proper case for a punitive order as to costs. See Caltex (Africa) Ltd v Trade Fair Motors (supra); Nel v Waterberg Landbouwers Ko-operatiewe Vereeniging 1946 AD 597 at 607 and Chikadaya v Chikadaya & Anor 2000 (1) ZLR 343 (H) at 345 where the following appears:
"In the Mahleza case supra at p 426 B-C, Bartlett J said:
'people are not allowed to come to court seeking the court's assistance if they are guilty of a lack of probity or honesty in respect of the circumstances which cause them to seek relief from the court. It is called, in time-honoured legal parlance, the need to have clean hands. It is a basic principle that litigants should come to court without dirty hands. If a litigant with unclean hands is allowed to seek a court's assistance, then the court risks compromising its integrity and becoming a part to underhand transactions. As stated by DAVIDSON J in Underhay v Underhay 1977 (4) SA 23 (W) at 24E-F:
"It is fundamental to court procedures in this country and in all civilized countries that standards of truthfulness and honesty be observed by parties who seek relief."
If this court were not to enforce that standard, it would be washing its hands of its responsibility'."
Costs being always at the discretion of the court, which must protect its integrity and guard against abuse of its process, I am persuaded that in this case, a punitive order as to costs would be an appropriate expression of this Court displeasure at the palpable lack of merit of the submissions made on behalf of the respondent.
Accordingly, it be and is hereby ordered that provisional sentence be entered as against the defendant and in favor of the plaintiff in case number HC 10530/14. It is ordered that:
1. Defendant shall pay the plaintiff the sum of US$ 2 023 221.44.
2. Defendant shall pay interest on the sum of US$ 2 023 221.44 at the rate of 23 per cent per annum calculated from 27 November 2013 to the date of payment in full.
3. Defendant shall pay costs of suit on a legal practitioner client scale.
4. Defendant shall pay collection commission in terms of the Law Society By-laws.
Mawere & Sibanda, plaintiff's legal practitioners
Makiya & Partners, defendant's legal practitioners
{/mprestriction}