Kingdom Bank Africa Limited v Notraught Trading (Private) Limited and Others

The plaintiff bank, registered in Botswana, advanced loans to the first defendant totaling US$500,000 (US$425,000 on 14 September 2009 and US$75,000 bridging finance on 30 November 2009) to finance chrome production for export to China. The second defendant bound itself as surety and co-principal debtor, hypothecating its property (Stand 17 Winchedon Township). The third and fourth defendants executed deeds of guarantee as guarantors and co-principal debtors. On 31 January 2010, a rollover facility was granted extending repayment to 31 January 2011. The first defendant failed to perform, and the plaintiff claimed US$777,380.05 being capital and interest. The first defendant was placed under judicial management on 12 September 2012. The defendants alleged supervening impossibility due to a government ban on chrome exports imposed in April 2011, claiming they were only liable for capital.

• Whether the defendants were jointly and severally indebted to the plaintiff and the extent of such indebtedness
• Whether supervening impossibility (the government ban on chrome exports) relieved the defendants of liability
• Whether the plaintiff was entitled to interest, collection commission, and attorney-client costs
• Whether costs on a punitive scale were warranted given the conduct of the defendants

Judgment granted for the plaintiff against the second, third and fourth defendants jointly and severally (the first defendant being under judicial management) for: (1) US$498,648.78 being capital; (2) US$278,731.27 being interest on capital; (3) Interest on US$498,648.78 at 30% per annum from 12 March 2011 to date of payment in full; (4) Declaration that Stand 17 Winchedon Township of Lot D of Borrowdale Estate held under Deed of Transfer No. 6628/2000 is executable; (5) Costs of suit on a legal practitioner and client scale.

1. A supervening impossibility will only excuse performance where it occurs before the obligation to perform falls due and is not caused by the debtor's own fault or negligence. 2. Sureties and guarantors are liable for all obligations of the principal debtor, including interest and charges, unless specifically limited by the terms of the guarantee. 3. Collection commission cannot be claimed once summons has been issued, as recovery then results from court judgment rather than collection efforts by the attorney. 4. Parties are bound by their pleadings and cannot raise defences at trial that were not properly pleaded.

The court expressed strong disapproval of the defendants' conduct in defending the case all the way to trial despite having no viable defence, characterizing it as a serious abuse of process. Mathonsi J noted that the plaintiff's attorney appeared to abandon the claim for attorney-client costs in favor of collection commission without properly consulting the client, which the judge found concerning. The court also observed that the main reason for non-performance appeared to be delays in constructing processing plants rather than the government ban, suggesting the ban defence was "an after thought."

This case is significant in Zimbabwean commercial law for clarifying the principles of supervening impossibility in loan agreements and the liability of sureties and guarantors. It reinforces that impossibility must actually supervene (occur after the obligation arises) and that debtors cannot rely on events occurring after their obligations have already fallen due. The case also provides guidance on the distinction between collection commission and legal costs, confirming that collection commission cannot be claimed once litigation has been instituted. The judgment demonstrates the court's willingness to impose punitive costs where litigation is pursued without merit, constituting an abuse of process.