Manase & Manase Legal Practitioners v First Merchant Bank of Zimbabwe

The plaintiff is a law firm seeking payment of professional fees and Deputy Sheriff's costs totaling $637,076.80 (later reduced to $360,201.81 after abandoning collection commission). On 16 February 2002, Bruno Fungai Takawira and Garikai Rakabopa (the defendant bank's Account Relationship Manager) visited plaintiff's offices. Rakabopa gave instructions via a written letter (Annexure 'A') asking plaintiff to recover money owed by RMS (Pvt) Ltd for spares sold to it by Bruno Fungai Takawira (Pvt) Ltd, which had been financed by the defendant bank. RMS had provided letters of undertaking to pay directly to the bank. Plaintiff issued summons citing the defendant bank as plaintiff and obtained judgment against RMS (Pvt) Ltd. When goods were attached, the bank's Managing Director, Francis Dzanya, disputed the instruction and claimed Rakabopa had no authority to give such instructions. A meeting was held on 28 August 2000 where parties disputed what was agreed regarding payment of fees. Rakabopa initially denied knowledge of the instruction letter, then admitted writing it but denied delivering it or intending to instruct suit in the bank's name.

• Whether plaintiff was given instructions to sue on behalf of the defendant bank or on behalf of Bruno Fungai Takawira (Pvt) Ltd
• Whether Rakabopa had actual or ostensible authority to instruct legal practitioners on behalf of the defendant bank
• Whether the plaintiff was entitled to collection commission and costs in the sum claimed
• Whether the defendant was entitled to its counterclaim of $82,000.00 for costs of urgent chamber application

Judgment granted for the plaintiff in the sum of $360,201.81 together with costs. Interest at the prescribed rate on the sum of $360,201.81 from 27 September 2000 to date of payment in full. Defendant's counterclaim dismissed with costs.

Where a bank official gives written instructions to legal practitioners to institute proceedings, and the bank has a sufficient legal interest in the matter (having advanced funds and obtained letters of undertaking for direct payment), the bank may be properly cited as plaintiff and will be liable for the legal practitioners' fees and disbursements, notwithstanding subsequent disputes about the official's authority. A sufficient causa exists for a bank to sue in its own name where: (1) it has advanced money to a client; (2) those funds were used in a transaction with a third party; and (3) the third party has given undertakings to pay amounts owed directly to the bank. The failure of bank management to take immediate steps to rectify court process citing the bank as plaintiff, once they became aware of it, supports a finding that the instruction was properly given.

The court observed that Rakabopa appeared to know more than he was prepared to disclose to his superiors and to the court. The court noted that it was arguable that a close analysis of the instruction letter could reveal that the principal debtor was Bruno Fungai Takawira (Pvt) Ltd rather than the bank, but ultimately this did not affect the outcome given the bank's sufficient interest in the matter. The court also noted that the meeting of 28 August 2000 appeared to be "frank and cordial" according to the plaintiff's evidence, though the parties disputed what was agreed at that meeting.

This case is significant in Zimbabwean (and by extension Southern African) jurisprudence for establishing principles regarding: (1) the authority of bank officials to bind their institutions in instructing legal practitioners; (2) the assessment of credibility where witnesses retract or modify initial denials; (3) the interpretation of instruction letters and whether a bank may be properly cited as plaintiff where it has financed transactions and obtained undertakings for direct payment; and (4) the entitlement of legal practitioners to fees where instructions are given by an employee who may lack express authority but where the principal has sufficient interest in the litigation to be properly cited.