The applicant, a company registered in the British Virgin Islands with a principal place of business in Dubai, was the holder of Bankers Acceptances avalised by the second respondent (Interfin Bank Limited) to the value of US$8,920,611.77. The applicant sought summary judgment against the first respondent (Zimbabwe Alloys Private Limited), a Zimbabwean company, for US$7,420,611.77, being the amount of Bankers Acceptances that had matured and been presented for payment but dishonoured. The Bankers Acceptances were originally issued by Interfin Bank under a credit facility dated 26 August 2011 and were payable to bearer. Interfin had sold/ceded these Bankers Acceptances to the applicant. The second respondent did not enter appearance to defend and was therefore barred. The first respondent opposed the application on procedural and substantive grounds.
Summary judgment was granted in favour of the applicant against the first respondent for the amount of US$7,420,611.77 representing the matured and dishonoured Bankers Acceptances, in terms of the draft order.
The binding legal principles established are: (1) A foreign litigant's failure to raise and insist upon security for costs before a hearing proceeds constitutes a waiver of the right to object on this ground. (2) Where Bankers Acceptances are made payable to bearer or "to the Order of ourselves," they are negotiable instruments that can be transferred without the drawer's consent, in accordance with section 6 of the Bills of Exchange Act Chapter 14:12. (3) Under section 54(1) of the Bills of Exchange Act, a drawer engages that upon due presentation the bill shall be accepted and paid according to its tenor, and if dishonoured, must compensate the holder. (4) For summary judgment to be refused, a respondent must establish facts which, if proven, would provide a plausible and bona fide defence; mere denial or technical objections designed to obstruct proceedings are insufficient. (5) A deponent's authority to represent a company will not be invalidated solely due to failure to attach a Board resolution where the deponent avers he is a duly authorized director and the opposing party fails to seriously dispute that authority.
The court made several obiter observations: (1) It is "neater" and generally good practice for a deponent representing a company to attach a Board resolution authorizing such representation, though the absence thereof is not necessarily fatal. (2) Where a litigant genuinely believes security for costs is required, the proper course is to raise this with the Registrar or court before the matter proceeds to hearing, citing Prionsias Michafu Gorman v Forestry Commission HH 107/06. (3) The court noted that preliminary objections that lack substance may be characterized as "smokescreens" or points "rooted in air." (4) The court commented that the first respondent was "not being candid with the court" regarding its denial that demand for payment had been made, given the clear evidence in Interfin's letter of 7 March 2012. (5) The court observed that answering affidavits in summary judgment applications must comply with Order 10 r 67(c) and cannot be improperly "smuggled" into proceedings.
This case illustrates the Zimbabwean High Court's approach to summary judgment applications in commercial disputes involving negotiable instruments, particularly Bankers Acceptances. It clarifies that: (1) foreign litigants who fail to raise security for costs issues before hearing may be deemed to have waived this objection; (2) technical objections regarding corporate authority will not succeed where the deponent's authority is not seriously disputed; (3) bearer instruments under the Bills of Exchange Act can be traded without the drawer's consent; (4) the statutory liability of drawers under section 54(1) of the Bills of Exchange Act is engaged upon dishonour. The case reinforces that summary judgment will be granted where the respondent fails to establish a bona fide defence and appears to be using procedural objections to delay adjudication.