CBZ Bank Limited v Graver Nhamburo Nyamuyaruka

CBZ Bank Limited (applicant) issued summons against the respondent in case HC 8036/14 for payment of $112,303.70 in respect of a loan advanced to Lomagundi Poles (Pvt) Ltd. The respondent had bound himself as guarantor, co-principal debtor and surety of Lomagundi Poles on 3 July 2009. The loan arose from an overdraft facility granted to Lomagundi Poles not exceeding $65,000 in January 2010, which expired on 31 December 2011. The respondent entered appearance to defend and filed a plea. The applicant also had a pending case (HC 4058/12) against Lomagundi Poles (Pvt) Ltd for loans advanced in 2009 ($50,000 on 2 June 2009 and $40,000 on 10 November 2009), secured by the same notarial covering bond (Deed 1236/09). Both matters had the same due date of 31 December 2011 and the same security. The respondent opposed summary judgment on grounds including lis pendens, usurious interest rates, and that the applicant should proceed against the principal debtor first.

• Whether the defence of lis alibi pendens was available to the respondent where the applicant had sued the principal debtor in a separate action (HC 4058/12) while simultaneously suing the guarantor in the current matter (HC 8036/14)
• Whether the two cases related to the same cause of action or different causes of action
• Whether summary judgment should be granted where there was uncertainty about whether the claims in the two cases were identical or separate
• Whether the applicant's failure to consolidate the matters or inform the court of joint and several liability defeated the summary judgment application

The application for summary judgment was dismissed with costs.

The binding legal principles established are: (1) The defence of lis alibi pendens is available in Zimbabwean law where there is pending litigation between the same parties (or their privies) based on the same cause of action and in respect of the same subject matter; (2) A surety or guarantor can raise the defence of lis pendens where the creditor has instituted separate proceedings against the principal debtor and the surety for what may be the same debt; (3) Summary judgment will not be granted where there are material disputes of fact or confusion as to whether multiple claims relate to the same or different causes of action; (4) For summary judgment to succeed, the outcome must be obvious and the court must be satisfied that considering all evidence, no court could disagree with the applicant; (5) Courts should discourage multiplicity of actions involving the same parties and causes of action in order to conserve judicial resources and prevent congestion of court rolls; (6) It is procedurally improper for a creditor to sue a principal debtor in one action and the surety in a separate action without either consolidating the matters or informing the court of the joint and several liability.

The court made several obiter observations: (1) It would be "smarter" for a party to sue a principal debtor and guarantor or surety jointly and severally to avoid duplication of suits and ensure court rolls are not congested; (2) The respondent also raised defences regarding usurious interest rates and the principle that a creditor should proceed against the principal debtor before the surety, but the court did not need to decide these issues; (3) The respondent's challenge to collection commission as "double dipping" was noted but not decided; (4) The court noted with approval the South African position in Socratous v Crindstone Investment that courts under severe pressure due to congested rolls must allow lis alibi pendens to operate to stem unwarranted proliferation of litigation, and stated "the same is true of Zimbabwean courts at the moment"; (5) The court observed that the principle behind lis alibi pendens and res judicata, like estoppel, are founded on public policy to avoid multiplicity of actions to conserve resources of courts and litigants.

This case is significant for establishing the application of the lis alibi pendens defence in Zimbabwean banking litigation involving sureties and guarantors. It emphasizes the importance of judicial economy and the prevention of multiplicity of actions, particularly in the context of congested court rolls. The judgment provides guidance on when summary judgment applications will fail due to material disputes of fact and procedural irregularities. It reinforces the principle that creditors should sue principal debtors and sureties jointly and severally rather than in separate actions, and that courts will not grant summary judgment where there is confusion about whether multiple claims relate to the same or different causes of action. The case also demonstrates the court's willingness to apply South African jurisprudence on lis pendens and summary judgment procedures.