The Mining Industry Pension Fund v United Refineries Limited and Others

In October 2006, the applicant (Mining Industry Pension Fund) purchased Stand 13981 Khami Road Extension, Kelvin West Bulawayo Township from the first respondent (United Refineries Limited) in terms of an agreement of sale. The purchase price was duly paid. The parties also entered into a lease-back arrangement whereby the property was leased to the first respondent. A legal partnership (third respondent) was nominated as conveyancer to transfer the property. The first respondent failed to effect transfer and experienced financial difficulties, specifically in meeting capital gains tax obligations to ZIMRA. On 25 January 2011, the first respondent purported to cancel the agreement of sale. The applicant brought this application for specific performance to compel transfer of the property. The first respondent defended the application and attempted to file a supplementary affidavit without leave, which was ruled inadmissible by both the High Court and Supreme Court on appeal.

• Whether the deponent to the applicant's founding affidavit had locus standi and proper authority to bring the application on behalf of the Pension Fund
• Whether the dispute should be referred to arbitration in terms of the arbitration clause in the lease agreement
• Whether the agreement of sale was valid and binding on the parties
• Whether the first respondent could be compelled to perform its obligations under the agreement of sale
• Whether the first respondent could raise the issue of legality of the contracts at the hearing stage without having pleaded it

1. First respondent ordered to sign all documents and do all things necessary to effect transfer of Stand 13981 Khami Road Extension, Kelvin West Bulawayo within 14 days, failing which the Sheriff of the High Court is authorised to sign such documents on behalf of the first respondent. 2. First respondent ordered within 7 days to obtain a Capital Gains Clearance certificate at its sole expense and furnish same to third respondent within 7 days of obtaining it, failing which it shall irrevocably indemnify the applicant for costs of obtaining such documents. 3. First respondent to bear costs of the application on the scale of legal practitioner and own client.

1. For locus standi challenges: A deponent bringing proceedings on behalf of a corporate entity need only allege authority in the founding affidavit. When challenged, only 'minimum evidence' is required to show the applicant is litigating - evidence of prior dealings between the parties on the same subject matter can constitute such minimum evidence. 2. For arbitration referral: Under Article 8 of the Model Law to the Arbitration Act, a court may only stay proceedings and refer a matter to arbitration where there is a dispute between the parties apparent ex facie the pleadings when the party submits its first statement on the substance of the dispute. 3. On formal admissions: Formal admissions made in pleadings are binding and conclusive on the parties and the court unless withdrawn. They prevent the leading of further evidence to prove or disprove admitted facts. 4. On specific performance: Where a valid contract of sale exists, all essential elements are met, and the applicant has performed its obligations, specific performance will be granted. Self-created difficulties of the defaulting party in performing (such as failure to pay taxes timeously) are of no consequence and attract no sympathy from the court.

The court made strong obiter observations about the mala fides of the first respondent's defence, noting it was 'trifling with the court' by first seeking to file a supplementary affidavit to respond to the founding affidavit, appealing the refusal to the Supreme Court, and then turning around to challenge the same founding affidavit for lack of authority. The court stated this 'speaks to the mala fides of the first respondent's defence.' The court also observed that 'it is increasingly becoming trendy for litigants to challenge the authority of deponents who depose to founding affidavits on behalf of companies' and clarified there is no legal requirement to attach board resolutions at the commencement of proceedings. The court expressed strong displeasure at the respondent's conduct, stating it had 'just spit into the face of the court' by attempting to introduce issues previously ruled out, and that it had employed 'tardy tactics' with no real defence, unnecessarily putting the applicant out of pocket. These observations justified the punitive costs order on attorney-client scale.

This case is significant for several principles of Zimbabwean civil procedure and contract law: (1) It clarifies the requirements for locus standi when a deponent brings proceedings on behalf of a corporate entity - establishing that while authority is required, only 'minimum evidence' of such authority is necessary when challenged, and prior dealings between parties can satisfy this requirement; (2) It reinforces the strict requirements for referral to arbitration under Article 8 of the Model Law - that a dispute must be apparent ex facie the pleadings when the first statement on substance is submitted; (3) It confirms that formal admissions made in pleadings are binding and conclusive unless withdrawn, preventing parties from later resiling from admitted positions; (4) It demonstrates the courts' willingness to grant specific performance of contracts and their unsympathetic approach to parties who breach valid contracts and then seek to avoid performance; (5) It establishes limits on raising new points of law at later stages where this would cause prejudice or effectively allow parties to reintroduce matters previously ruled inadmissible.