Globe Trot (Private) Limited v Probadek Investments (Private) Limited and Others

In October 2020, the parties concluded a joint venture agreement for a proposed mining project at Redwing Mine. As part of its capital contribution, the applicant advanced USD$50,000 to the first respondent company, whose directors were the second and third respondents. On 28 October 2020, the second and third respondents signed an acknowledgment of debt in their personal capacity, undertaking that the amount would be considered as capital if the joint venture materialized, and that they would repay the amount by 30 December 2020 if the venture failed. The venture did not materialize. The applicant wrote letters on 20 November 2020 and 7 January 2021 demanding repayment, but received no response. Summons were issued on 5 March 2021, and after the respondents filed their plea, the applicant applied for summary judgment.

• Whether summary judgment should be granted in circumstances where the respondents claimed to have a triable defence
• Whether the applicant's claim was illegal for being denominated in foreign currency (USD) in light of Zimbabwe's monetary regime
• Whether the second and third respondents had personal liability or were merely acting in a representative capacity for the first respondent company
• Whether the acknowledgment of debt was enforceable on its face
• Whether the defences raised (that the money was a 'commitment fee' and that the applicant acted deceitfully) constituted bona fide defences

Summary judgment was entered against all three respondents, jointly and severally, one paying the other to be absolved, for payment of USD$50,000 or the ZWL$ equivalent calculated at the prevailing interbank rate on the date of payment. The respondents were ordered to pay the costs of suit.

The binding legal principles established are: (1) In summary judgment applications, a respondent must place positive and sufficient facts before the court to support a claimed defence - mere mention of a defence is insufficient. (2) Post SI 33/19, courts may grant judgment denominated in foreign currency where appropriate to adequately compensate the plaintiff, with payment to be made in local currency at the prevailing interbank rate. (3) When determining whether signatories to an acknowledgment of debt or other liquid document are personally liable, the court must decide according to the tenor of the document itself, not according to other documents or allegations. (4) Where directors sign an acknowledgment of debt using personal pronouns ('we') and making personal undertakings without clear words indicating representative capacity, they are personally liable jointly and severally with the company. (5) A defence that contradicts the clear terms of an acknowledgment of debt signed by the defendants themselves is not a bona fide defence and will not defeat summary judgment.

The court observed that where a point of law raised is frivolous and groundless and made for the purpose of delaying the day of reckoning, particularly where the position of law is so trite that no reasonable litigant would expect relief at trial, the court should not allow abuse of process and should assess the point's viability in the summary judgment application rather than waiting for trial. The court also noted that the transaction appeared to involve the second and third respondents using the corporate personality of the first respondent as a sham, transacting personally under the cloak of a corporate transaction, though it was unnecessary to formally pierce the corporate veil given the clear personal undertakings in the acknowledgment of debt.

This case clarifies important principles in Zimbabwean law regarding: (1) summary judgment applications and the requirement that defendants must disclose not merely a defence but sufficient facts supporting a bona fide defence; (2) the ability of courts to grant judgment denominated in foreign currency post the monetary reforms of 2019, with payment to be made in local currency at the interbank rate; (3) personal liability of company directors who sign acknowledgments of debt without clearly indicating they are acting in a representative capacity; and (4) the interpretation of liquid documents such as acknowledgments of debt based on their face value without reference to external explanations. The case reinforces that summary judgment is an effective remedy against unmeritorious defences raised to delay payment.