Cases

TAYLOR v MINISTER OF HIGHER EDUCATION & ANOR

Supreme Court, Bulawayo

Gubbay CJ, Korsah JA & Ebrahim JA

Civil appeal

2 & 20 December 1996

Administrative law – review- grounds for – audi alteram partem – applicability to decision to transfer public servant to another town – legitimate expectation to be accorded fair hearing – whether lecturer has legitimate expectation that he will not be transferred without being heard from first

Public service – publice servant – transfer – servant’s entitlement to be heard before compulsory transfer to another town

Section 11(2) of the Public Service (General) Regulations 1992 (SI 125 of 1992) provides the head of a Ministry may transfer a person at any time without his consent from the post he presently occupies to any other post of the same grade. Acting in terms of this provision, the Ministry of Higher Education notified a senior lecturer in mechanical engineering at the Bulawayo Polytechnic College that in terms of the section he was to be laterally transferred from his post to a similar post at the Harare Polytechnic College. His salary conditions were to remain the same and he was to be reimbursed for reasonable relocation expenses. The lecturer unsuccessfully tried to obtain the reasons for this transfer.

The lecturer applied to have the decision to transfer him set aside by the High Court on review. One of the grounds for the application was that he had a legitimate expectation that he would not be transferred without first being given the opportunity to make representations about the transfer. The High Court judge decided that the phrase “without consent” in the relevant provision of the Regulations was a clear indication that it was the intention of the law-maker to deny the person being transferred any right to be heard before he was transferred. The lecturer appealed against this decision.

Held, that s 11(2) of the Regulations does not expressly or by necessary implication remove the right to be heard. The phrase “without his consent” does not mean “without a hearing”. The first simply means that under the contract of employment the employee does not have to consent to the transfer for it to be effective. The second is a matter of procedural justice.

Held, further, that the fact that in terms of the Regulations there was provision for a person to complain about a decision after it has been taken does not affect any common law right of the person to be heard before the decision is taken. The right to make representations after the decision has been made rarely cures the procedural defect of a prior fair hearing.

Held, further, that the maxim audi alteram partem expresses a flexible tenet of natural justice that has resounded through the ages. The audi principle applies both where a person’s existing rights are adversely affected and where he has a legitimate expectation that he will be heard from before a decision is taken that affects some substantive benefit, advantage or privilege that he expects to acquire or retain and which it would be unfair to deprive him of without first consulting with him. The application of the legitimate expectation doctrine is not confined to situations where the person affected can show that there is an established practice to grant a hearing or an express undertaking to grant a hearing; it applies in any circumstances where there is a legitimate expectation that the person will be consulted before the decision is taken.

Held, further, that even if the appellant has not demonstrated that his existing rights had been affected by the decision, the question remained as to whether he had a legitimate expectation that he would be consulted before a decision was taken to transfer him.

Held, further, that it is not be assumed that in every instance a person can only be transferred to a post of the same grade after he has been granted a hearing. It would be quite unworkable for a busy Ministry to have to grant a hearing to every single person it intends to transfer. This would lead to substantial delays and the extra work required would adversely affect efficiency of operations. The head of the Ministry should consider the position and circumstances of a person before deciding to transfer him. In some cases it will be necessary to hear the person in advance of the decision; in others it will not. In general, professional employees of long standing, holding senior posts, should not be transferred without account being taken of their personal situations and wishes. Where it is necessary to hear from the person first before transferring him, it would suffice to allow him to make written representations.

Held, further, that the circumstances in relation to the appellant were such that he had a legitimate expectation that he would be consulted before being transferred. Relevant factors were his age, seniority, the responsibilities in his job, the fact that he would not occupy the same prestigious position in Harare as he had in Bulawayo and the fact that he would suffer economic loss as a result of the transfer.

Held, therefore that the decision to transfer him must be set aside.


T.A.BLAKE & E.G.BURROUGHS vs TABS-AVON LIGHTING (PVT)LTD & ASMARA COMPANY (PVT) LTD & J.T.JERE & J.M.MOYO

High Court of Zimbabwe

Cheda J

Bulawayo 

24 & 29 January 2009

Judgement in foreign currency

CHEDA J: This is an application for a default judgement. The brief facts are that on or around the 28th of February 2005 plaintiffs sold to defendants their share in 1st defendants’ company and the agreement was reduced into writing. At the time first defendant asked for a loan from the plaintiffs in the sum of $300 million to enable it to capitalize itself and the loan was advanced and it was agreed that it would be paid within a year. 

The loan agreed to, was $300 million and not in United States dollars.In applying for default judgement plaintiffs are now asking for the Zimbabwe dollars to be converted to United States dollars on the basis that the judgement in foreign currency would mostl truly express their loss and more fully compensate them for that loss.

Mr.P.Ncube for plaintiff filed Heads of Arguments in support of this application. Mr.Ncube referred me to the case of Watergate (Pvt) Ltd vs Commercial Bank of Zimbank SC78/05 were it was held that a party is entitiled to payment in foreign currency if we can show that a judgement in that currency would most likely express its loss, and thereby being fully compensated for the said loss.

He also referrd me to the use of Makwindi Oil Procurement (Pvt) Ltd v National Oil Company of Zimbabwe 1988 (2)ZLR 482(SC) and Watergate (Pvt) Ltd v Commercial Bank of Zimbabwe SC 78/05. In these cases the claim was for foreign currency arising from contracts whereas in casu the parties did not agree on the foreign currency element.

While the ruling in that case is no doubt correct, I am of the opinion that the present case is distinguishable because in casu the parties’ agreement was for the purchase of shares in Zimbabwe dollars and no other currency was agreed to. A contract where payment was to be paid in foreign currency in Zimbabwe would have been unawful and the parties were aware of this. 

In the present case plaintiff is seeking to enforce an illegal claim through the backdoor. The court  can not lend its assistance to the enforcement of an illegal transaction, that is, the conversion of a deb sounding in local currency to foreign currency where there has been no prior agreement to do so. What plaintiff is asking the court to do is to enforce an illegality on the basis of financial sympathy. This is a wrong device to use. I should point out that defendants have not raised the issue of illegality and it was not pleaded or relied upon in this court. However, the court has a duty in the interest of justice to take the point metro motu at any time during the hearing, see Stanford v City Bioscope 1917 CPD 591 at 593 and Cape Dairy and General Livestock Auctioneers v Sim 1924 AD 167.

This court cannot lend its aid in the enforcement of a claim now couched in foreign currency when the debt was in local currency.

The following order is accordingly made:

  1. Judgement is entered in the sum of $300 million dollars together with interest at the prime overdraft interest rate of Barclays Bank per month calculated from the 31st March 2005 to the date of last payment.
  2. Cost of suit.

Messrs. Coghlan and Welsh Partners, plaintiff’s legal practitioners

Messrs. Marondedze, Mukuku, Ndove and Partners, defendants’ legal practitioners.


ZIMBABWE INTERNATIONAL TRADE FAIR COMPANY v  VIKING PLASTICS (PVT) LTD & BONGANI NDLOVU N.O 

High Court of Zimbabwe

Mutema J

Bulawayo 

4 & 25 April 2013

N. Mangena for the applicant

No appearance for the respondents

Court application for the discharge of provisional judicial management order

MUTEMA J:  Economic challenges, liquidity crunch, viability problems, competition- the list is not exhaustive for theses and other phenomena which have conspired to hamstring a lot of business entities in this country with the consequent result of threatening their very existence. Too ghastly to contemplate are the possible consequences. But is the flagrant abuse of court process the panacea to theses ills? it is my considered view that it certainly is not. it only provides temporary refuge.

On 12 April, 2012 under case number HC 3387/11 applicant obtained summary judgement in an opposed application in an amount in excess of $16 599-00. This judgement was closely followed by a writ of execution issued on 17 April, 2012. The Deputy Sheriff proceeded to attach 1st respondent’s movables on 7 May 2012. On 14 May 2012 1st respondent in HC 1528/12 filed an urgent chamber application seeking an order for provisional judicial management which was granted on 22 May, 2012. That provisional judicial management order contained the following notable features:

  1. the 2nd respondent volunteered to be appointed provisional judicial manager;
  2. 26 July, 2012 was set as the return date for the confirmation of the provisional order;
  3. all actions, summons and writs were stayed pending the return date.
The applicant has lodged the current application in terms of section 301 (2) of the Companies Act, [Chapter 24:03]. That section provides:
“301(2) The court or a judge may at anytime and in any manner, on the application of creditor, a member, the provisional judicial manager, the Master or any person who would have been entitled to apply for the provisional judicial management order concerned, vary the terms of a provisional judicial management order, including the date of the return day, or discharge it.”

 The following pertinent issues are material to the outcome of this application:

  1. the return date for the provisional judicial management order was pegged at 26 July, 2012. On that date, the order was further extended to 15 November, 2012. Thereafter there was no further extension made which means that the provisional order is lying dormant.
  2. on 26 July, 2012 applicant’s current legal practitioners wrote to 2nd respondent lodging applicant’s claim as per the judgement in HC 3387/11. The letter fell on deaf ears prompting another follow up correspondence dated 8 August, 2012. On 24 September, 2012 2nd respondent replied advising that he was aware of applicant’s claims but the provisional order had been extended to 15 November, 2012 to allow for time to advertise and file a statement of affairs. He undertook to keep applicant informed of new developments. it should be noted that on 9 July, 2012 applicant’s legal practitioners of record had also written to 1st respondent’s erstwhile legal practitioners  requesting for an update of the judicial management and any reports filed with the Master’s office. nothing was provided.
  3. the provisional judicial management has not to date been issued with a certificate of appointment by the Master. he also has not lodge a bond of security with the Master.
  4. the provisional judicial management order has not yet been advertised
  5. no meeting of creditors has been convened by 2nd respondent.
The bottom line here is the process of provisional judicial management has clearly failed to take off not because of the applicant’s fault but that of the respondents.
Over and above the foregoing, it is pertinently laughable (excuse the pun) that in founding affidavit by Zenzo Moyo, the 1st respondent’s managing director, in the urgent chamber application for provisional  judicial management order, in annexure “H”, he gave a list of applicant’s creditors and what it owed each as follows:
1.  Zesa Pension Fund – Rentals $92,920.71  (which, as at May, 2012 stood at $126,952.60 
2. Applicant – Rentals  $16,591.00   
3. Zesa  $5,900.00   
4. Bulawayo City Council   $1,301.67  
5. Legal costs  $1,200.00   
  Total  $117,913.38   
 It is settled law that the object of  a judicial management order is not an experiment of jiggling around to see whether any judicial manager might be able to turn around a distressed company’s fortunes at his/her leisure. It is to avoid the drastic remedy of winding up when a company is in financial difficulties due to mismanagement or some other cause, and there is a reasonable probability that under the carefully controlled management it will surmount its difficulties. Section 300 (a)(ii) of the Companies Act, [Chapter 24:03] expressly requires such a reasonable probability to be established in an application for provisional judicial management order under Section 299(i)(a), a lack of  opposition does not entitle the court to dispense with this requirements: R H Christie, Business law in Zimbabwe, Juta & Company Ltd 1998 at page 422.
This is so even in casu where there is lack of opposition on account of failure to file notices of opposition and heads by respondents. In spite of that, it goes without quarrel that in view of foregoing circumstances surrounding the 1st respondent’s precarious financial position, coupled with failure to put even the judicial management machinery into motion, there is nothing to suggest that a reasonable probability exists that the company can at all be enabled to pay its debts and become a successful concern or that it is just and equitable to let it continue wallowing in its current dormant state of provisional judicial management.
The conduct by the respondents in this matter points to only one thing, viz that the provisional  judicial management order was not applied for in good faith. It was simply designed to frustrate the applicant who was on the verge of recovering what is  duly owed to it thereby delaying execution. I find such conduct to amount to abuse of court process. In this regard, the words of MACDONALD ACJ in Beresford Land Plan (Pvt) Ltd v Urquhart 1975(1) RLR 260 AT 265 D-F bear useful repetition for driving the point home. The learned acting CHIEF JUSTICE said:
‘There are numerous ways in which the legal process in civil cases may be abused by  unscrupulous litigants, and of these, by far the most common, persistent and deleterious in its adverse effect on the administration of justice is the use of such process to delay the enforcement of just claims. It is this aspect of the administration of the civil law which more than any other has tended to bring it to dispute and there can scarcely be a more important duty imposed upon the courts than to suppress firmly and without delay any manifestation of this all too common abuse. The greater the law’s delay, the greater the temptation for unscrupulous litigants to defend claims solely to gain time and, in the result the evil, unless it is eliminated at its first appearance, tends to escalate.”

 I found similar abuse of court process along similar lines in Ellingbarn Trading (Pvt) Ltd v Assistant Master and Another, HB 82/13, a matter I also heard on the same day. I do not know how many more such cases have found their way into the system but such conduct has to be nipped whenever it rears its pernicious head for the sake of smooth and credible administration of justice. A warning must be sounded to both the legal practitioners who institute such litigation as well as those who rush to certify the litigation as being urgent that in future they may find themselves being visited with costs on attorney-client scale de bonis propriis.

In the result I make the following order:

  1. the provisional judicial management order granted in favour of the 1st respondent on 22 May, 2012 be and is thereby discharged in its entirety;
  2. the 1st respondent shall pay the applicant;s cost of suit on the scale of legal practitioner and client.
 
  

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