Tel-One (Private) Limited v Capitol Insurance Brokers (Private) Limited

Tel-One floated a tender through the State Procurement Board for insurance brokers to provide insurance cover. Capitol Insurance Brokers won the tender on 14 November 2010 and was required to enter into a contract. Capitol sent a draft agreement to Tel-One containing an arbitration clause for dispute resolution. The parties did not sign the agreement but proceeded to perform their respective obligations. Capitol sourced an insurer (Zimnat, later Altfin) and Tel-One paid premiums. Altfin later withdrew the insurance cover, leaving Tel-One uninsured for employee deaths totaling $458,176.00. Tel-One sued Capitol for damages. Capitol raised an exception and special plea alleging: (i) the summons was defective and did not disclose a cause of action; and (ii) the court lacked jurisdiction because the parties had agreed to arbitration. Capitol also pleaded over to the merits. At trial, before any evidence was led, the court a quo stayed proceedings, referred parties to arbitration, and ordered Tel-One to pay costs. Tel-One appealed.

• Whether the exception and special plea were properly before the court a quo when Capitol had pleaded over to the merits and failed to set them down timeously
• Whether the court a quo erred in finding that an arbitration agreement existed in the absence of formally adduced evidence
• Whether a summons that incorporates requirements of Order 3 Rule 11(c) by reference to an attached declaration is excipiable
• Whether documents in parties' bundles can be relied upon as evidence without being properly tendered and admitted

The appeal was allowed with costs. The order of the court a quo was set aside. The matter was remitted to the court a quo: (i) for hearing of evidence on whether there was an agreement to resolve disputes by arbitration; and (ii) for hearing and determination of the plaintiff's claim on the merits if no arbitration agreement is found.

The binding legal principles established are: (1) A special plea raises factual issues that must be proven through evidence properly adduced under oath, by affidavit, or by consent - unlike an exception where the court is confined to the face of the pleadings. (2) Documents contained in parties' bundles of documents cannot be relied upon as evidence by a court unless they have been properly tendered and admitted as exhibits through identification by an appropriate witness, consent of the parties, or one of the other recognized exceptions to the general rule requiring formal proof of private documents. (3) A summons may satisfy the requirements of Order 3 Rule 11(c) of the High Court Rules by incorporating by reference the particulars contained in an attached declaration, which itself must comply with Rule 109. (4) While a party who pleads over to the merits may still pursue an exception or special plea at trial under rules 138(c) and 139(2), the act of pleading over tends to indicate that the excipient understood the plaintiff's claim and may weaken the exception.

The Court made obiter observations that: (1) The purpose of an exception alleging a summons is vague and embarrassing is to permit a defendant to show it does not know what claim it has to meet - therefore it is contradictory and surprising for a party to raise such an exception while simultaneously pleading over to the merits in the same document. (2) The Court was "not impressed with the standard of drafting of the declaration" but would not have found it fatally defective as all required elements were evident. (3) The court a quo misdirected itself when, without hearing evidence, it ruled that because there was no signed brokerage agreement "the Plaintiff's claim has no legal basis" - this issue should have been determined after hearing evidence at trial, especially since the parties had apparently acted in terms of the alleged unsigned agreement. (4) The Court noted that the failure to timeously set down an exception or special plea does not bar its determination at trial, though it may attract an adverse costs order.

This case is significant in Zimbabwean civil procedure for clarifying several important procedural principles: (1) It confirms that while a defendant may plead over to the merits and still pursue an exception or special plea at trial under rules 138(c) and 139(2), pleading over weakens the exception by suggesting the defendant understood the claim. (2) It establishes that a summons may satisfy the requirements of Order 3 Rule 11(c) by incorporation by reference to an attached declaration. (3) Most importantly, it reinforces the fundamental principle that special pleas, which raise factual defenses (unlike exceptions which are confined to the face of the pleadings), must be established through properly adduced evidence - either oral testimony under oath, affidavit evidence, or admission by consent. (4) It confirms that courts cannot rely on documents in parties' bundles as evidence unless they have been properly tendered and admitted as exhibits according to the rules of evidence. The judgment provides important guidance on the distinction between exceptions and special pleas, and the evidentiary requirements for each.