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Fidelis Munyoro
Chief Court Reporter
The Supreme Court has confirmed cancellation of the replacement title deed obtained by Equity Properties to a large stand in northern Harare and has strongly criticised the company for abusing the appeal process to hold on to the deed for as long as possible.
In a judgment handed down last week, a three-judge panel upheld the High Court decision that ordered the cancellation of a replacement title deed to Lot 3 of Bannockbum, also known as Golden CT Suburb, in Harare that is being developed by Equity.
The property firm is embroiled in a dispute with businessman Jayesh Shah’s firm Al Shams Global, which is holding the original title deed to the land.
The row over the duplicate deed stretches back more than a decade. Equity was the original holder and used the title deed as security when it borrowed money from Interfin Bank, which it says it paid back in full with interest, although agrees that the payment was late. But while that was going on Al Shams lent money to Interfin, with the bank using the title deed as security, and when the bank went insolvent Al Shams held the original deed.
Court cases are still in progress over whether Equity owes Al Shams the money borrowed by Interfin.
Writing the judgment for the court Justice Samuel Kudya criticised Equity’s conduct of abusing the appeal process to prolong the holding of the replacement deed and expressed the court’s disquiet by cuffing the firm with high costs of suit, in which they have to pay the fees charged by the lawyers acting for Al Shams Global, and not just the court fees.
“It is clear to us that the appeal was launched for the perverse purpose of prolonging the appellant’s stranglehold on the replacement deed in order to render the security held by the first respondent redundant. This is a proper case for expressing our displeasure at the conduct of the appellant by mulcting it with costs on the scale of legal practitioner and client.”
The complex dispute over control of the land, as opposed to ownership, is still pending in courts, with the two suits now a consolidated matter. Among other things, Al Shams Global seeks the discharge of dishonoured bankers’ acceptances drawn by Equity and secured by the title deed, and there is a claim of vindication lodged by the property firm.
The case was awaiting determination in accordance with the law. Two years ago the Supreme Court on October 7 2019 effectively disgorged Equity of the duplicate deed and nullified its efficacy. So last week, Justice Kudya in his ruling, found that Equity’s refusal to surrender the duplicate deed was inimical to the real rights of Al Shams Global in the matters still to be determined.
The provisional order granted in the lower level court could not and did not determine the issues pending in the main matter.
To this end, the Supreme Court ruled that it was a remiss of Equity to seek to impugn the legality of by Al Shams Global’s possession of the original deed while studiously ignoring the legality of its own stranglehold on the duplicate deed.
Justice Kudya dismissed Equity’s contention that the lower court erred in granting a final interdict on an interim basis. The judge said the order granted in the lower court was a provisional order, which restored the status quo to what it was before the legal disputes, pending the conclusion of the consolidated main matter.
Before the replacement deed was issued, Equity could neither subdivide, sell nor transfer any stands on the land, a position that that was safeguarded by the provisional order granted to Al Shams Global.
Justices Chinembiri Bhunu and Tendai Uchena concurred with Justice Kudya.
High Court Judge Justice Owen Tagu in November 2019 ordered the cancellation of a replacement title deed obtained by Equity from the High Court in a default judgment.
Equity and Al Shams have been engaged in a long bout of litigation, with Interfin Banking Corporation Ltd, now in liquidatio, involved at times. The legal disputes have been addressed in both the High and Supreme Courts. Some of the cases have been concluded while others are still pending.
The cases relate to whether Equity is liable to Al Shams for US$2,67 million in bankers acceptances obtained by Al Shams from Interfin, which were secured by the title deed.
Al Shams had sued Equity under an urgent chamber application, which also saw Equity counter suing, over the right to hold the title deed to the land for the upmarket residential property.
The dispute stemmed from Equity obtaining a loan of US$1,6 million from Interfin Bank and while it initially defaulted, it eventually fully repaid the loan, which was secured by the titled deed now at the centre of the court battles.
Equity argues that it fully repaid the loan after paying a total of US$3,2 million including interest, but Interfin was not able to return the title deed after ceding the documents to Al Shams, which had loaned money to the bank, which in turn collapsed in 2012.
Equity claims Al Shams, which was a significant shareholder in the banking institution, allegedly knew the bank was going to fail and thus took possession of the title deed that secured a loan between the bank and Equity, without the property firms’ consent.
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