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High Court orders attachment of VFEX listed WestPro's land

by Staff reporter
15 May 2023 at 18:59hrs | Views
A High Court judge has ordered the attachment of land belonging to Victoria Falls Stock Exchange (VFEX) listed West Property Holdings (WestPro) to offset a longstanding debt with a contractor.

Justice Nyaradzo Munanganti-Munongwa ordered that WestPro's land in Harare's Pomona area worth US$105 million should be sold to recover money owed to Fairclot.

The ruling followed a case by Fairclot, which was challenging a move Augur Investments, which gave birth to WestPro, to pay for the payment of a US$4.8 million debt for the construction of the Harare Airport Road in local currency using a 1:1 rate to the US dollar after the introduction of Statutory Instrument 33 of 2019.

WestPro is an offshoot of Augur Investments after taking over assets of Sharpe's company, including land earned from the Harare City Council for the Harare Airport Road project.

Fairclot also successfully challenged the upliftment of the attachment on the property by the sheriff of the High Court on the pretext that the debt had been cleared after the payment of $4.8 million in the Real Time Gross Settlement (RTGS) currency.

At least 300 people are said to have bought housing stands in the affected area.

 "The upliftment of the judicial attachment on Stand 654 Pomona Township be declared void," part of Justice Munangati-Munongwa read.

"Stand No. 654 Pomona Township be and is hereby placed under judicial attachment.

"Any and all transfers of title effected between the date of upliftment of judicial attachment by the second respondent to the date of this order are hereby cancelled."

Fairclot was the applicant, while Augur Investments and the sheriff of the High Court were the first and second respondents.

The order added. "The registrar of deeds be and is hereby directed to cancel the transfer of title effected on Stand No. 654 Pomona Township held under Deed of Grant No. 2884/10 after 10 days of the granting of this order.

"The second respondent is hereby directed to advertise for the sale of Stand 654 Pomona Township, held under Deed of Grant No.2884/10 within 10 days of this order."

However, WestPro, through Chinawa Law Chambers, has noted a Supreme Court appeal against the High Court ruling that was delivered on May 9.

Part of the grounds of appeal said: "the court a quo erred in failing to hold that the arbitral award dated 19 March 2015, granted in favour of the first respondent, constituted a liability affected by the provisions of s 4 (1) (d) of Statutory Instrument 33 of 2019 [ subsequently s 22 of the Finance Act No. 2 of 20191.

"Concomitantly, the court a quo also erred in determining that the arbitral award issued on the 19th of March 2015 only became effectual upon its registration on the 26th of June 2019.

"At law an arbitral award constitutes a binding obligation as at the date of its grant and not its registration.

"With respect, the court a quo also grossly misdirected itself in holding that the

1st appellant RTGS payments did not fully discharge its indebtedness to the first respondent in respect of the registered arbitral award dated the 19th March 2015.

"Such payments fully discharged what was lawfully due."

It added: "the court a quo also erred in determining that the second respondent had acted unlawfully in uplifting the judicial attachment on Stand 654 Pomona Township held under Deed of Grant 2884/10.

"The voiding of such upliftment was anomalous at law given that the first appellant's had discharged its indebtedness thereby obviating the continuation of execution.

"Additionally, the court a quo erred in cancelling 'any and all' transfers effected on Stand 654 Pomona Township in circumstances where the second appellant had received title by operation of an extant Deed of Settlement and Court Order handed down by the court a quo under HC 4528/19.

"The court a quo also erred in ordering the advertisement and sale in execution of Stand 654 Pomona Township held under Deed of Grant No 2884 / 10 after the cancellation of all subsequent transfers.

"Such determination is anomalous in 4/16 that after the aforesaid cancellation of subsequent transfers the land reverts to being state land incapable of being sold in execution."

WestPro was set up by businessman Ken Sharp whose company Augur Investments entered into a contract agreement with Fairclot Investments trading as Truck and Construction Private Limited (T&C Construction) for the construction of the Airport Road and was offered part of Stand Number 654 Pomona Township as collateral.

After constructing 2.7 km of the road, a dispute over payment arose and Fairclot abandoned the project.

Augur offered Fairclot stand 654 as collateral and title deeds were held in escrow by Couglan, Welsh and Guest.  

The dispute was sent for arbitration and Fairclot won the case.

But following the promulgation of the controversial Statutory Instrument 33 of 2019 which declared that debts owed in US dollars could be settled in local RTGS at a rate of 1:1, Augur Investments transferred $$4.8 million and $1 078 040.21 to Fairclot Investments in local currency.

The sheriff of the High Court then lifted the attachment of the stand, which was then transferred to Doorex, a shelf company owned by Augur, despite protest by Fairclot's lawyers.

The title deed for the property remained under the custody of Coughlan, Welsh and Guest.

WestPro listed on the VFEX on May 5 amid protests from Fairclot and other contractors argued that the company had not disclosed some outstanding litigation against it, which could affect the value of its shares.

Source - the standard