Court orders Tongaat, Rukatya to pay commercial farmer $US1,4m

HIGH Court judge Justice Webster Chinamora has ordered sugar producers Tongaat Hullet and businessman Isaac Rukatya, to pay US$1,4 million plus legal costs to a Chiredzi commercial farmer, Tony Renato Sarpo, for diverting money realised from his sugarcane sales.

The matter was heard at the High Court on July 22.

This was after Sarpo, approached the court accusing Triangle Ltd of assisting Rukatya to divert US$1 499 353,96 sugarcane proceeds from his grower number 591 paid into a CBZ Bank account.

His lawyers Antonio & Dzvetero Legal Practitioners argued that the creation of grower number 346 in the name of TIV Rukatya Estate by Triangle Ltd resulted in the unlawful diversion of revenue meant for grower number 591.

Sarpo is the major shareholder and director of Hothfield Enterprises (Pvt) Ltd, which used grower number 591, while Rukatya is a minority shareholder.

He grew sugarcane on Lot 1 of Chiredzi Ranch North, and the remainder of Chiredzi Ranch South.

Under the joint venture, Sarpo and Rukatya opened grower number 591 through which all revenue realised from sugarcane sales grown from the said pieces of land would be paid.

However, Rukatya, who was represented by Dube-Banda, Nzarayapenga & Partners Legal Practitioners, is said to have connived with Triangle Ltd and side-lined Sarpo by opening grower number 346.

Triangle Ltd employee Ushe Chinhuru emailed Tawanda Vharetah and Luis Mashaira on August 4, 2014, did not copy Sarpo.

The email read: "Please note the new grower code for TIV Rukatya (former Hothfield). Please ensure the account details are appropriately changed, including the banking details per letter I submitted last week".

The directive was issued despite that Triangle Ltd had demanded a resolution signed by the directors of Hothfield Enterprises confirming that they had stopped farming sugarcane, and accordingly authorise and approve the cancellation of their sugarcane purchase agreement with Triangle Ltd.

Under cross-examination, Chinhuru accepted that from August 4, 2014, Triangle Ltd did not furnish Sarpo with sugarcane delivery notes, and that he was not aware of the purchase agreement signed between Triangle and Rukatya.

He also conceded that the resolution required by Triangle Ltd, which was being represented by Scanlen and Holderness Legal Practitioners, was not provided, and that Sarpo should have known of the change of grower number.

Sarpo, who had a loan facility with CBZ Bank which was serviced by proceeds of the sugarcane, was not aware that a new grower number (346) had been created until he got a letter from CBZ Bank on June 2, 2015, advising that his loan account was heavily in arrears.

The defendants argued that the plaintiffs' claim had been extinguished by operation of prescription, and prayed for its dismissal with costs.

In his judgment, Justice Chinamora said it was unnecessary for him to deal with Sarpo's argument that there was judicial interruption of prescription.

"I am, therefore, not inclined to grant the defendant's special plea of prescription. If a debtor wilfully prevents his creditor from becoming aware of the existence of a debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt," Justice Chinamhora ruled.

"In the result, it be and is hereby ordered that the special plea of prescription raised by the defendants is dismissed. Defendants are to pay costs jointly and severally, the one paying for the others to be absolved."