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PAPERHOLE INVESTMENTS (PRIVATE) LIMITED

versus
PIONEER HI-BRED ZIMBABWE (PRIVATE) LIMITED

HIGH COURT OF ZIMBABWE

ZHOU J
HARARE, 6, 7, 8, 9, 22 & 23 February 2018, 26 March 2018
and 8 August 2018

Civil Trial – Absolution from the instance

G. Nyengedza, for the plaintiff

A. B. C. Chinake, for the first defendant

ZHOU J: This is an application for absolution from the instance at the close of the
plaintiff’s case. The plaintiff’s claim against the defendant is for payment of a sum of US$201
335.63 in respect of inputs and funding given to the defendant for the growing of soya beans and
maize during the 2012/2013 agricultural season. The plaintiff also claims interest on the amount
stated above at the rate of 5% per month, together with costs of suit on the attorney-client scale.
The claim is contested by the first defendant. The claim against the second defendant was
withdrawn with the consent of all the parties.
The plaintiff’s case, as pleaded, is that on 20 November 2012 it entered into a Finance
Scheme Agreement with the first defendant in terms of which the plaintiff provided the
defendant with financial assistance in order to facilitate the out-grower contracts which the
defendant had with individual farmers of soya beans and maize during the 2012/2013 farming
season. Among other things, the defendant was to pay the agreed contracted amounts and,
further, cede to the plaintiff, as security, its rights under the out-grower contracts with the
individual farmers who were involved in the scheme. The agreement, as alleged by the plaintiff,
further provided that the first defendant was to pay the money due to the plaintiff on or before 31
July 2013 for the soya beans funding, and on or before 30 September of the same year for the
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maize funding. The plaintiff alleges that the defendant failed to repay the money which was
expended by the plaintiff in funding the farming activities in terms of the agreement. The first
defendant’s defence is that the agreement relied upon by the plaintiff was not authorized by the
defendant and/or was fraudulent. There is also a further point taken that the plaintiff’s claim has
prescribed. When the joint pretrial conference minute was prepared it included the claim against
the second defendant which has since been abandoned. The issue that remains between the
plaintiff and first defendant in respect of which the evidence led must be considered is therefore
whether a valid agreement was concluded between the parties. This is a matter that turns on
whether Daniel Myers, the former second defendant, was authorized to represent the first
defendant in concluding the agreement with the plaintiff.
The plaintiff led evidence from three witnesses and closed its case. These witnesses are
Daniel Myers who had been joined as the second defendant, Andrew Mashonga and Talent
Ndige. After the plaintiff had closed its case the first defendant applied to be absolved from the
instance. Both parties have filed written submissions in support of their respective positions.
The locus classicus on the principles relative to an application for absolution from the
instance is the case of Gascoyne v Paul & Hunter 1917 TPD 170, in which at p. 173 the Court
said:
“At the close of the plaintiff’s case, therefore, the question which arises for the
consideration of the court is, is there evidence upon which a reasonable man might find
for the plaintiff? And if the defendant does not call any evidence, but closes his case
immediately, the question for the court would be, ‘is there such evidence upon which the
court ought to give judgment in favour of the plaintiff.”

It has been held that an application for absolution from the instance at the close of the
plaintiff’s case is akin to and stands on much the same footing as an application for the discharge
of an accused at the close of the case for the prosecution, see Supreme Service Station (1969)
(Pvt) Ltd v Fox & Goodridge (Pvt) Ltd 1971 (1) RLR 1(A) at 4C-D; Walker v Industrial Equity
Ltd 1995 (1) ZLR 87(S) at 94F-G; Taunton Enterprises (Pvt) Ltd & Anor v Marais 1996 (2) ZLR
303(H) at 313C. In Supreme Service Station (1969) (Pvt) Ltd, supra, at 5D, BEADLE CJ
expressed the test as follows:
“The test, therefore, boils down to this: Is there sufficient evidence on which a court
might make a reasonable mistake and give judgment for the plaintiff? What is a
reasonable mistake in any case must always be a question of fact, and cannot be defined
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with any greater exactitude than by saying that it is the sort of mistake a reasonable court
might make – a definition which helps not at all.”

In the case of United Air Carriers (Pvt) Ltd v Jarman 1994 (2) ZLR 341(S) at 343B-C,
the court said:
“A plaintiff will successfully withstand such an application if, at the close of his case,
there is evidence upon which a court, directing its mind reasonably to such evidence,
could or might (not should or ought to) find for him.”

See also Walker v Industrial Equity Ltd, supra, at 94C-D.

From the welter of authorities relevant to absolution from the instance, it is established
that in case of doubt the court should always lean in favour of allowing the case to proceed to the
defendant’s case rather than granting absolution from the instance at this stage of the
proceedings, see Standard Chartered Finance Zimbabwe Ltd v Georgias & Anor 1998 (2) ZLR
547(H) at 554A-B; Bailey NO v Trinity Engineering (Pvt) Ltd & Ors 2002 (2) ZLR 484(H);
Supreme Service Station (1969) (Pvt) Ltd, supra, at 6. A further principle which reflects the
preponderance of judicial thinking on the preferred approach is that courts are “very loath to
decide upon questions of fact without hearing all the evidence on both sides”, per JUTA J in
Theron v Behr 1918 CPD 443 at 451, which is cited in Supreme Service Station (1969) (Pvt) Ltd,
supra, at 6; and Standard Chartered Finance Zimbabwe Ltd, supra, at 553B-C.
The first witness for the plaintiff, Daniel Myers, who is the second defendant was joined
as such pursuant to an order of this court given during the pre-trial conference. However, at the
commencement of the trial both the plaintiff and the first defendant indicated that they had no
claim against the second defendant and the plaintiff accordingly withdrew the claim against him
which had been made through the amended summons. Daniel Myers was the Managing Director
of the defendant at the material time. He was also Regional Production Director for Africa at the
same time. His evidence was that he rose to that position through the ranks from the position of
Seed Inspector. The defendant is a subsidiary of an American registered company although it is
registered in accordance with the laws of Zimbabwe. Following the imposition of economic
sanctions by the Government of the United States of America, the defendant experienced
economic challenges. Funding which had previously come from the majority shareholder,
Dupont, ceased. He stated that the defendant entered into the contract upon which the instant
claim is founded with the plaintiff. He and Kamambiri, the Finance Manager, represented the
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defendant and signed the agreement on behalf of the defendant. Apart from this particular
contract he signed many other contracts on behalf of the first defendant which have not been
disputed by the first defendant. He stated that he had the authority to enter into the agreement on
behalf of the first defendant. His evidence was that the first defendant did pay some money to
the plaintiff pursuant to the agreement, leaving the balance which is the subject of this matter.
According to him the plaintiff performed its obligations in terms of the contract and the amounts
being claimed are due to the plaintiff.
The evidence of the other witnesses who testified on behalf of the plaintiff, Andrew
Mashonga and Talent Ndige was essentially to show that the plaintiff and defendant did conclude
the agreement on which the claim is based and that both parties did perform in terms of that
agreement, save that the defendant still owes the amount that is being claimed.
In casu absolution from the instance is being sought on the single ground that there is an
arbitration clause in the written agreement upon which the application is founded and that,
therefore, this court has no jurisdiction to determine the dispute. An objection that the court has
no jurisdiction whether on the basis of an arbitration clause or on any other ground must be
raised by way of special plea. It cannot be raised through the written submissions filed in
support of an application for absolution from the instance. The reason for that is that this is a
court in which issues for trial are presented through pleadings. Written submissions such as
those in which the matter is raised are not a pleading. The issue of whether this court has
jurisdiction is not one of those referred to trial, hence there was no need for evidence to be led on
it and, consequently, it is not one on the basis of which it can be said that on the evidence led the
court might not make a reasonable mistake and find for the plaintiff. The application for
absolution from the instance is therefore misconceived on that account alone.
The need to raise an objection based on an arbitration clause by way of special plea is
further justified by the fact that an arbitration clause does not have the effect of ousting the
jurisdiction of the court, but merely to delay its interposition, see Dipenta Africa Construction
(Pty) Ltd v Cape Provincial Administration 1973 (1) SA 666(C); Rhodesia Railways Limited v
Mackintosh 1932 AD 359. In the case of University of Stelenbosch v J A Louw (Edms) Bpk 1983
(4) SA 321(A) at 333G, the Appellate Division held: “It has always been recognized that an
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arbitration agreement does not necessarily oust the jurisdiction of the courts.” In Parekh v Shah
Jehan Cinemas (Pty) Ltd 1980 (1) SA 305E-H, DIDCOTT J said:
“An arbitration agreement does not deprive the Court of its ordinary jurisdiction over the disputes
which it encompasses. All it does is to oblige the parties to refer such disputes in the first
instance to arbitration, and to make it a prerequisite to an approach to the Court for a final
judgment that this should have happened. . . .”

Put in other words, an arbitration agreement is not an automatic bar to legal proceedings
in respect of disputes which fall within the purview of the agreement. Because of that, it would
be undesirable for a party to seek stay of proceedings which have commenced, in which the
plaintiff has led all its evidence and closed its case, on the basis that the dispute should have been
dealt with by way of arbitration. The submission that this court has no jurisdiction, which is the
only basis upon which the application for absolution from the instance is predicated, is therefore
not sustainable. The application is founded upon a legally unsound ground.
In any event, I doubt that the clause which the defendant seeks to rely upon in the
application for absolution from the instance is an arbitration clause, given that it does not make
arbitration compulsory as such. Rather, the clause requires the parties to hold a meeting first.
Even where that meeting fails to resolve the dispute the plaintiff is still given the “absolute right
to approach a competent court for relief” should it so decide, or to refer the matter for
determination by an expert. Clearly, this is not a clause in which there is a requirement to refer
the dispute to arbitration before the plaintiff can seek recourse through the court.
The plaintiff has asked for costs to be awarded on the attorney-client scale. That is a
special order of costs which is reserved for special situations such as where the litigant against
whom it is sought is guilty of some reprehensible conduct. In the instant case the application for
absolution from the instance is vexatious. The special order of costs is therefore justified by the
vexatiousness of the application.
In all the circumstances, the application without merit.
In the result, the application for absolution from the instance is dismissed with costs on
the attorney-client scale.
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Scanlen & Holderness, plaintiff’s legal practitioners

Kantor & Immerman, defendant’s legal practitioners