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Cheda senior partners ordered to pay back $335,000
06 Jun 2015 at 18:56hrs | Views
BULAWAYO High Court Judge, Justice Maxwell Takuva, yesterday ordered senior partners at the now defunct Cheda and Partners Legal Practitioners, Sindiso Shephered Mazibisa, Mlamuli Ncube and Nqobizitha Ndlovu, to reimburse a South Africa-based businessman more than $335,000.
The trio conned Titus Ncube of the $335,536,55, being money for deposit for mining company shares. Ncube had made the payment on behalf of a company in which he is a director, Southwest Gold (Pvt) Ltd
The company shares were being sold by Gugulethu Dube, a client of the respondents. In the court papers, Southwest Gold (Pvt) Ltd is cited as the applicant while Mazibisa, Ncube and Ndlovu are the respondents.
Justice Takuva yesterday ruled in favour of Southwest Gold (Pvt) Ltd and directed Mazibisa, Mlamuli Ncube and Ndlovu to pay the applicant the sum of $335,536,55.
He also ordered the respondents to pay the cost of the application on the attorney-client scale.
Job Sibanda of Job Sibanda and Associates represented Southwest Gold (Pvt) Ltd
Justice Takuva said the trio under their law firm, Cheda and Partners Legal Practitioners, were asked by Southwest Gold (Pvt) Ltd and one Gugulethu Henrieta Dube, to draw up an agreement of sale of certain company shares that were being sold by Dube. Dube is a client of the respondents.
An agreement was then crafted on February 8,2013. On March 19,2013, Southwest Gold (Pvt) Ltd through Titus Ncube who represented its directors, deposited in terms of the agreement $335,536,55 to the Trust Account of Mazibisa, Mlamuli Ncube and Ndlovu.
However, Dube failed to deliver the shares resulting in the cancellation of the agreement between applicant and Dube.
Southwest then demanded a refund of the money they had paid to the respondents which they failed to pay.
However, respondents through Mazibisa thereafter made several written undertaking to refund the amount
Notwithstanding these promises, respondents failed to do so prompting Southwest Gold (Pvt) Ltd to institute legal proceedings. The applicant was claiming payment of the part deposit in the sum of $335,536,55 paid into the trust account of respondents pursuant to the written agreement of sale.
In his ruling, Justice Takuva attacked Mazibisa for ignoring "acknowledgements of debt" that he authored on behalf of the respondents.
Mazibisa had, in his opposing papers, argued "Gugulethu Henrietta Dube has made adequate plans and arrangements assisted by myself to clear off the purchase price outside the four corners of the agreement sale.
Justice Takuva said "This is not a defence at all, let alone a bona fide one I say so for the simple reason that Mazibisa surprisingly does not say anything about the acknowledgements of debt that he authored on behalf of the respondents. Clearly there is no triable issue here and not surprisingly first respondent (Mazibisa) has not said what issue it is he wants tried Apart from waffling in his opposing affidavit, Mazibisa has totally foiled to allege facts which disclose a plausible defence*!
Mlamuli and Ndlovu had argued in their opposition papers that appointment of Titus Ncube to appear on behalf of Southwest Gold (Pvt) Ltd was defective.
They also argued that Titus Ncube had not averred that he could swear positively to the facts.
Mlamuli and Ndlovu said they paid the money to Dube who was the owner of the money.
"The payment of the purchase price was made directly to the seller through her agents (that is, themselves). There is therefore no way the applicant alleges that the purchase price paid was trust money to be held in trust by the agents. The purchase price was money belonging to the seller and the money was legally released to the seller who was the owner of the funds," they argued Justice Takuva expressed shock from the twos defence.
"Such a defence from registered practitioners is mala fide and shocking in that they pretend that the seller had no duty to deliver. Not only that, they are the ones who drafted the agreement of sale wherein the seller's "undertakings" and "warranties" are listed The following are some of the seller's warranties under the agreement: The seller undertakes that against payments by the purchaser of the purchase price in full, it will on effective date deliver to the purchaser the following documents; The share certificates relating to the shares, together with appropriate share transfer forms relating to the transfer, all duly completed by the seller. And that the seller shall provide a complete and amended CRM and all other company statutory documentation including but not limited to Certificate of Incorporation, Memorandum of Association and Articles of Association, the Tax Clearance Certificate, CR2, Share Register, Share Certificates".
Justice Takuva said the respondents were aware of all the obligations but deliberately and craftily chose to rely on some obscure clause they inserted in the agreement relating to the payment of the purchase price.
"Respondents simply paid themselves as partners "agents commission" before the shares were transferred to the buyer. Further, if the money was paid to the seller because respondents believed that it was Ms Dube's, why then did respondents promise on numerous occasions to pay it back to applicant? It is apparent that the respondents were aware that as legal practitioners registered with the Law Society of Zimbabwe, they were obliged to hold the money in trust pending delivery of shares. Until delivery was effected, the money remained the buyer's.
"Accordingly, it is hereby ordered that (a) An order for summary judgment is granted in favour of the applicant directing respondents to pay to the applicant, jointly and severally, the one paying to absolve the others, the stun of $335,536,55. The respondents pay the costs of this application on the attorney-client scale," he said.
Cheda and Partners ceased operating on May 15. The law firm has been under curatorship since February 5 after the Law Society of Zimbabwe (LSZ), the legal profession regulator, detected alleged abuse of trust funds running into hundreds of thousands of dollars.
The law firms demise was triggered when Ncube and Mazibisa surrendered their practising certificates.
They were later suspended by the LSZ pending fraud investigations, one of which was the alleged theft of $335,000 by Mazibisa which was held in trust
Ndlovu was later suspended by LSZ for interfering with the curator's duties.
Cheda and Partners was a top law firm in Zimbabwe with its head office in Bulawayo and branches in Gwanda and Victoria Falls.
The firm was established in 1992 by its founding partner, the former senior Bulawayo High Court Judge, Justice Maphios Cheda.
The trio conned Titus Ncube of the $335,536,55, being money for deposit for mining company shares. Ncube had made the payment on behalf of a company in which he is a director, Southwest Gold (Pvt) Ltd
The company shares were being sold by Gugulethu Dube, a client of the respondents. In the court papers, Southwest Gold (Pvt) Ltd is cited as the applicant while Mazibisa, Ncube and Ndlovu are the respondents.
Justice Takuva yesterday ruled in favour of Southwest Gold (Pvt) Ltd and directed Mazibisa, Mlamuli Ncube and Ndlovu to pay the applicant the sum of $335,536,55.
He also ordered the respondents to pay the cost of the application on the attorney-client scale.
Job Sibanda of Job Sibanda and Associates represented Southwest Gold (Pvt) Ltd
Justice Takuva said the trio under their law firm, Cheda and Partners Legal Practitioners, were asked by Southwest Gold (Pvt) Ltd and one Gugulethu Henrieta Dube, to draw up an agreement of sale of certain company shares that were being sold by Dube. Dube is a client of the respondents.
An agreement was then crafted on February 8,2013. On March 19,2013, Southwest Gold (Pvt) Ltd through Titus Ncube who represented its directors, deposited in terms of the agreement $335,536,55 to the Trust Account of Mazibisa, Mlamuli Ncube and Ndlovu.
However, Dube failed to deliver the shares resulting in the cancellation of the agreement between applicant and Dube.
Southwest then demanded a refund of the money they had paid to the respondents which they failed to pay.
However, respondents through Mazibisa thereafter made several written undertaking to refund the amount
Notwithstanding these promises, respondents failed to do so prompting Southwest Gold (Pvt) Ltd to institute legal proceedings. The applicant was claiming payment of the part deposit in the sum of $335,536,55 paid into the trust account of respondents pursuant to the written agreement of sale.
In his ruling, Justice Takuva attacked Mazibisa for ignoring "acknowledgements of debt" that he authored on behalf of the respondents.
Mazibisa had, in his opposing papers, argued "Gugulethu Henrietta Dube has made adequate plans and arrangements assisted by myself to clear off the purchase price outside the four corners of the agreement sale.
Mlamuli and Ndlovu had argued in their opposition papers that appointment of Titus Ncube to appear on behalf of Southwest Gold (Pvt) Ltd was defective.
They also argued that Titus Ncube had not averred that he could swear positively to the facts.
Mlamuli and Ndlovu said they paid the money to Dube who was the owner of the money.
"The payment of the purchase price was made directly to the seller through her agents (that is, themselves). There is therefore no way the applicant alleges that the purchase price paid was trust money to be held in trust by the agents. The purchase price was money belonging to the seller and the money was legally released to the seller who was the owner of the funds," they argued Justice Takuva expressed shock from the twos defence.
"Such a defence from registered practitioners is mala fide and shocking in that they pretend that the seller had no duty to deliver. Not only that, they are the ones who drafted the agreement of sale wherein the seller's "undertakings" and "warranties" are listed The following are some of the seller's warranties under the agreement: The seller undertakes that against payments by the purchaser of the purchase price in full, it will on effective date deliver to the purchaser the following documents; The share certificates relating to the shares, together with appropriate share transfer forms relating to the transfer, all duly completed by the seller. And that the seller shall provide a complete and amended CRM and all other company statutory documentation including but not limited to Certificate of Incorporation, Memorandum of Association and Articles of Association, the Tax Clearance Certificate, CR2, Share Register, Share Certificates".
Justice Takuva said the respondents were aware of all the obligations but deliberately and craftily chose to rely on some obscure clause they inserted in the agreement relating to the payment of the purchase price.
"Respondents simply paid themselves as partners "agents commission" before the shares were transferred to the buyer. Further, if the money was paid to the seller because respondents believed that it was Ms Dube's, why then did respondents promise on numerous occasions to pay it back to applicant? It is apparent that the respondents were aware that as legal practitioners registered with the Law Society of Zimbabwe, they were obliged to hold the money in trust pending delivery of shares. Until delivery was effected, the money remained the buyer's.
"Accordingly, it is hereby ordered that (a) An order for summary judgment is granted in favour of the applicant directing respondents to pay to the applicant, jointly and severally, the one paying to absolve the others, the stun of $335,536,55. The respondents pay the costs of this application on the attorney-client scale," he said.
Cheda and Partners ceased operating on May 15. The law firm has been under curatorship since February 5 after the Law Society of Zimbabwe (LSZ), the legal profession regulator, detected alleged abuse of trust funds running into hundreds of thousands of dollars.
The law firms demise was triggered when Ncube and Mazibisa surrendered their practising certificates.
They were later suspended by the LSZ pending fraud investigations, one of which was the alleged theft of $335,000 by Mazibisa which was held in trust
Ndlovu was later suspended by LSZ for interfering with the curator's duties.
Cheda and Partners was a top law firm in Zimbabwe with its head office in Bulawayo and branches in Gwanda and Victoria Falls.
The firm was established in 1992 by its founding partner, the former senior Bulawayo High Court Judge, Justice Maphios Cheda.
Source - chronicle
