Zimbabwe Phosphate Industries Limited v Windmill (Pvt) Limited

In October 2011, the parties entered into a written credit agreement whereby the applicant would supply the respondent with phosphate products on credit. The repayment period varied from 60 to 120 days depending on the season, with interest at 15% per annum on overdue invoices. The respondent breached the contract by failing to make payments when due. On 24 December 2012, the respondent signed an acknowledgement of debt for US$9,530,919.40 acknowledging interest rates of 15% and 45% per annum. The applicant issued summons on 15 April 2013 claiming US$4,912,267.00. The respondent entered appearance to defend and requested further particulars. On 31 January 2014, the respondent acknowledged owing US$1,130,702.65 in correspondence. After the respondent made some payments reducing the debt, the applicant applied for summary judgment on 27 March 2014 claiming US$1,172,492.86. The respondent opposed, denying liability and challenging the legality of the 15% interest rate as excessive and contrary to public policy under the Contractual Penalties Act.

• Whether the applicant was entitled to file a supplementary affidavit under Rule 67(c) of the High Court Rules dealing with matters raised by the respondent that could not reasonably have been anticipated
• Whether the respondent had raised a bona fide defence to resist summary judgment
• Whether the respondent's challenge to the legality of the 15% interest rate as excessive under the Contractual Penalties Act [Chapter 8:04] constituted a good prima facie defence
• Whether the applicant had established an unanswerable claim entitling it to summary judgment

The application for summary judgment was granted with costs. The court also granted the applicant's application for leave to file a supplementary affidavit.

A supplementary affidavit may be filed in summary judgment proceedings under Rule 67(c) when it deals with matters raised by the defendant which the plaintiff could not reasonably have been expected to deal with in the first affidavit, particularly where the defendant surprisingly denies liability or raises defences inconsistent with prior admissions. A defence to summary judgment must be bona fide; where a defendant has repeatedly and consistently acknowledged a debt including specific interest rates through acknowledgements of debt and correspondence, and has made payments without protest, a belated challenge to the legality of the interest rate raised only in opposition to summary judgment is not a bona fide defence. While the legality of contractual interest rates under the Contractual Penalties Act can constitute a prima facie defence at law, it must be raised in good faith and timeously, not as an afterthought when other attempts to negotiate have failed.

The court observed that a party seeking summary judgment must have an unanswerable claim as pleaded in the summons and declaration and verified in the affidavit. If the plaintiff's claim requires amendment, summary judgment cannot be granted. The court noted that there is an obligation on an applicant for summary judgment to adduce evidence in the initial affidavit dealing with all relevant matters within the applicant's knowledge, and failure to do so makes it difficult to obtain leave to introduce a supplementary affidavit. The court also noted that the slight difference between the applicant's and respondent's calculation of the balance (US$1,818.86) could be attributed to different calculation dates and showed that both parties were using the same 15% interest rate in their calculations.

This case is significant for establishing the circumstances under which a supplementary affidavit may be filed in summary judgment proceedings under Rule 67(c) of the High Court Rules. It clarifies that such affidavits may be admitted when dealing with defences raised by the defendant that could not reasonably have been anticipated. The case also reinforces the principle that while a question of law (such as the legality of contractual interest rates under the Contractual Penalties Act) can constitute a prima facie defence to summary judgment, such a defence must be raised bona fide and timeously. A party cannot be permitted to blow hot and cold by repeatedly acknowledging a debt with specific interest terms and then belatedly challenging the legality of those terms only when faced with summary judgment.