Agricultural Development Bank of Zimbabwe t/a Agribank v Pritchard Zhou and Perseverance Zhou

The applicant, Agricultural Development Bank of Zimbabwe t/a Agribank, advanced a loan of $52,827.00 to the first and second respondents on 27 October 2009 for use as working capital for farming operations on their farm at sub-division 4 of Lot 4 of Sherwood, Kwekwe. The loan was to be repaid by 30 June 2012, with prescribed interest payable in the event of failure to repay. The loan was secured by a Mortgage Bond over Stand No. 697 Ruwa Township held by respondents under Deed of Transfer No. 3198/96 dated 7 May 1996. The respondents breached the loan agreement by failing to repay the loan by the agreed date. The applicant issued summons on 29 April 2011, which the respondents defended on 17 May 2011. The applicant then brought an application for summary judgment.

• Whether the applicant was entitled to summary judgment against the respondents for breach of the loan agreement
• Whether the respondents had a bona fide defence to the claim
• Whether the Grain Marketing Board's (GMB) alleged failure to supply inputs timeously constituted a valid defence to non-payment of the loan
• Whether GMB's role was a condition precedent to the respondents' obligation to repay the loan

The court granted the following order: (a) Respondents to pay the sum of US$33,127.41 to applicant; (b) Pay interest on the said sum at the prescribed rate calculated from 1 July 2011 to the date of payment; (c) The piece of land Stand No. 697 Ruwa Township of Stand 659 Ruwa Township situate in the district of Goromonzi, held by the first respondent under Deed of Transfer No. 3198/96 dated 7 May 1996 be declared specially executable; (d) Respondents to pay costs of suit on an attorney-client scale plus collection commission.

Where a loan agreement does not specify a particular supplier from whom inputs must be purchased, the borrower cannot rely on a third party supplier's failure to provide inputs as a defence to non-repayment of the loan. The failure of a third party not mentioned in a contract and whose involvement is not a condition precedent to performance does not constitute a valid defence to breach of contract. For summary judgment to be granted, the plaintiff must prove its case is unanswerable and the defendant's defence must be shown to be not bona fide. A defendant cannot successfully resist summary judgment by raising defences that have no legal merit or sustainability.

The court noted that if GMB had been an integral party to the loan agreement, the respondents should have applied for GMB's joinder on the basis of either financial or proprietary interest, such as joint owners, joint contractors or partners, citing Morgan and another v Salisbury Municipality 1935 AD 167 at 171 and Amalgamated Engineering Union v Minister of Labour 1949 (3) SA 637 AD at 656-57. The court also observed that any variation, amendment or alteration of the loan agreement would have to be in accordance with the provisions of the agreement itself, which would set out the procedure to effect such changes. The court referenced several authorities on the purpose and stringent nature of summary judgment procedure, including Schoeman v New Mark 1919 CPD 55; Maharaj v Barclays National Bank Ltd 1976 (1) 418 (AD); and Breitenbach v Fiat SA (Edms) BPK 1976 (2) SA 226 (T).

This judgment clarifies the requirements for granting summary judgment in Zimbabwean law and reinforces the principle that a defendant must establish a bona fide defence to resist summary judgment. It demonstrates that parties to a contract cannot rely on the actions or failures of third parties not mentioned in the contract as a defence to non-performance, particularly where the contract does not make the third party's involvement a condition precedent. The case also illustrates the application of the principle that summary judgment is an extraordinary remedy available only where the plaintiff's case is unanswerable and the defendant's defence lacks legal merit.