Judgment no.

HB 58/99

Case No. HC 4340/98

EDWARD LIONEL VENABLES

and

MAVIS ROSE VENABLES

and

COLIN VENABLES

and

DECIM (PRIVATE) LIMITED

versus

THE LIQUIDATOR OF ZECO LIMITED (IN LIQUIDATION)

HIGH COURT OF ZIMBABWE

KAMOCHA J
BULAWAYO 22 JANUARY AND 2 SEPTEMBER 1999

Mr Nherere for applicants

Mr Carter for respondent

KAMOCHA J: The applicants in this application are some of the

defendants in the main action in which the respondent is the plaintiff.
Applicants prayed that the respondent be compelled to furnish further
particulars to his declaration. The draft of the order sought read as follows:
“IT IS ORDERED THAT:
(1)The plaintiff be and is hereby directed and ordered to furnish
better particulars and a proper and sufficient reply to the following paragraphs
of the defendants’ request for further particulars to the plaintiff’s
declaration in case number HC 2518/98.”
The applicants then listed 84 paragraphs. In the second paragraph of
the draft order the applicants sought to have the plaintiff ordered to furnish
further and better particulars to the plaintiff’s second set of further
particulars to his declaration in case number HC 2518/98. The applicant listed
not less than 33 particulars in respect of which they required further and
better particulars. The request in the second paragraph was, however, abandoned
when the matter was being argued in court. That then leaves the 84 paragraphs
contained in the first paragraph of the draft order.

HB-58/99
-2-

The principles applicable to the determination of the question as to

whether or not a litigant is entitled to further particulars to a pleading were
well established as far back as 1948. In the case of Curtis-Setchell, Lloyd
and Mathews vs Koeppen 1948(3) SA 1024 [WLD] at 027 to 1028 it was stated that
the function of particulars was to fulfill the following requirements;
(a) To limit the generality of allegations in the pleadings;
(b) To define with more precision the issues; and
(c) To prevent the party asking for particulars from being taken by
surprise at the trial.
It is plainly not the purpose of particulars to;
(1)Enable either party to find out on what evidence his opponent intends to rely
nor;
(2)To obtain information on which to build up an answer to the pleadings i.e
information, not about his opponent’s pleading, but on matters arising out of
the pleadings pertinent only to his defence and not to his opponent’s
allegations.
It is now standard procedure that the court will order particulars if
it considers that as a matter of fairness they should be given. That procedure,
however, was not designed to enable one party to carry out inquisitorial forays
upon his adversary, nor should it be regarded as a challenge to the subtle and
the over curious. See The Citizen (Pvt) Ltd vs The Art Printing Works Ltd
1957(2) R & N 500 at 505D-E per QUENET J, (as he then was).
In the case of Broute Hotel (Pvt) Ltd vs Low 1974(1) RLR 25 at 26B-C,
the court stated that no precise rule could be laid down as to the degree of
particularity required in any given case, but as much certainty and
particularity should be given as is reasonable having regard to the
circumstances and nature of the acts alleged. It is, however, also a long
established procedure that particulars will not be ordered of matter that forms
no part of the plaintiff’s cause of action or which relates to matters
extraneous to the facta probanda put forward by the plaintiff. See Irvine vs De
Villiers 1979 RLR 273 at 277D-E.
In the case of Timsecurity vs Castle Hotel 1972(1) RLR 155 at 160E-G
the court had this to say;
“A litigant is not to be put in a position either of pleading in the
dark or of preparing for trial in the dark. No hard and fast rule can be laid
down regarding the particularity required. Each case must be judged on its own
merits.
A litigant is entitled to know the case or defence he has to meet,
not only to know whether he should admit or deny the particular allegation.
He is entitled to decide whether to persist in his claim or defence. ...
A litigant must not be put in the embarrassing position of being
forced to resort to a mere denial by the lack of particularity; a denial
which, in the light of particulars supplied at a later stage, he might well be
obliged to withdraw, or qualify. He should be in the position honestly to
deal with the matter and either to admit or deny an allegation in the
light of the particulars furnished.”

HB-58/99
-3-

VAN WINSEN J (as he then was) in Van Tonder vs Western Credit Ltd
1966(1) SA 189 at 195C-F had this to say,
“The function of particulars never was, and is still not, to enable
the pleader’s opponent to interrogate the former on matters which,
though arising out of the pleading, nevertheless served merely to inform
the opponent of a possible reply to the pleadings. A pleader cannot,
under cover of an application for further particulars, be compelled to
incorporate into his pleading averments which he does not consider to be
essential to his cause of action or defence, as the case may be. If his
opponent considers that the pleadings, in respect of which particulars are
requested, will, in the absence of a reply to the request, lack averments which
are necessary to sustain the pleader’s action or defence, as the case may be,
the opponent should, if so advised, except to the pleadings.”
ROMSBSOTTOM J (as he then was) pointed out that particulars are not
required in regard to aspects which form no part of the plaintiff’s case in
Samuels & Anor vs William Dunn and Company South Africa (Pvt.) Ltd 1949(1) SA
1149(T), he concluded at page 1160 that,
“Particulars to a declaration, when supplied, form part of the
declaration itself. To order the plaintiff to supply this information
would be to order it to embody in its declaration a number of statements
of fact which are irrelevant to its cause of action; that the court will not
do.”
In Curtis-Setchell, Lloyd & Mathews vs Koeppen supra at page 1028 the
court had this to say,
“For instance in various cases it is said that a person who applies
for particulars must show some circumstances entitling him thereto, such
as, that without the particulars which he seeks, he would be embarrassed in
pleading, or, that he is unable to understand fully and in detail the
case sought to be made against him. The request must be reasonable, and
the particulars must be necessary for the purpose of pleading.”
I now turn to deal with some of the requests. The first two were
these:
Who made the representation on behalf of ZECO?
Precisely when “on or about 9 May 1991” was the representation made.
As far as the first one is concerned paragraph 13 of the plaintiff’s
declaration specifically identified the first defendant as the individual who
acted on behalf of ZECO when it conducted its business in the manner alleged.
There was therefore no need to ask who represented ZECO eleven times. The
applicants appear to be asking for the time when the representation was made on
the 9th May 1991. Quite clearly these two requests are not needed to enable the
applicants to plead.
Paragraph 14 of the plaintiff’s declaration was to the effect that on
or about 9 May 1991 and at Bulawayo ZECO represented to the eighth defendant,
represented by one Dos Santos, that it had sold import licences to the value of
$10,4 million to third parties named SLP (Private) Limited and one Palmeiri.

HB-58/99
-4-

The plaintiff elleged that the aforesaid representation was false in that the
import licences in question were in fact sold to the ninth defendant and its
associates.
ZECO’s financial statements for the year ending February 1991 did not
disclose the aforesaid transaction between ZECO and the ninth defendant which
transaction accounted for a profit amounting to $5,2 million. As a consequence
of the misrepresentation the eighth defendant certified ZECO’s aforesaid
financial statements as having been properly prepared despite the non-disclosure
of the said transaction.
In reaction to the above allegations the applicants requested, in
paragraph 2.6 of their request for further particulars, for full and precise
details of the respects in which the allegations contained in paragraph 14.1 to
14.3 resulted in the business of ZECO being carried on:
(a) for fraudulent purpose and, precisely who was defrauded;
(b) recklessly;
(c) with gross negligence.
In answer to that the respondent explained that the profit of $5.2
million from that transaction was brought into account in the financial
statement of ZECO as a whole, which statement recorded the total net profit of
only $3.8 million, in other words, had it not been for the transaction in
question, ZECO would have reported a net loss for the year.
The respondent alleged that by fraudulently representing that the
transaction in question had been concluded with third parties, ZECO concealed
the fact that the only reason why it could report a profit for the year was a
transaction with a related company, namely, the ninth defendant, and which
transaction did not involve ZECO’s core business, but related to the sale of
licences.
Further, ZECO’s business was fraudulently conducted by concealing
from its members and creditors and others who read its financial statements the
fact that, but for the transaction with the ninth defendant involving non-core
business, ZECO had traded at a loss for that year.
This request was repeated in respect of paragraphs 15, 17, 19, 20,
21.2, 22, 23, 25 and 26 of the plaintiff’s declaration. The respondent
furnished the following replies in respect of each request. In reply to request
6.4 which relates to paragraph 15 of plaintiff’s declaration the respondent
alleged that ZECO fraudulently concealed the fact that its core business with
related parties was conducted at a loss by fraudulently representing that the
transaction involving licences with its parent company had infact been concluded
with an unrelated party.
The replies relating to requests for further particulars in respect
of paragraphs 17, 19 and 20 are identical. Therein, the respondent stated that
by fraudulently including fictitious transactions and thus fictitious turnover
and profit in its reported results, ZECO falsely inflated its results so as to
represent that it had traded at a profit, whereas in fact it had traded at a
loss.

HB-58/99
-5-

In the reply in respect of paragraph 21.2 of the declaration the

respondent said by fraudulently representing to the Import Controller that it
required foreign currency in order to manufacture the goods ZECO obtained
foreign currency. In response to the request relating to paragraph 22 the
respondent alleged that by fraudulently including fictitious items of turn over
and profit in its financial reports ZECO concealed the fact that it was
operating at a loss by representing that it had achieved a profit.
As far as paragraph 23 of the declaration was concerned the
respondent still alleged that by fraudulently representing that it was entitled
to accrue the sum of $1 million, ZECO firstly inflated its turnover and net
profit thus concealing the fact that it was operating at a loss. Despite all
these explanations the applicants still made the same request in respect of
paragraph 23, 25, 26, 27 and 28 of the declaration.
Furthermore the applicants were quite aware from the onset that the
plaintiff’s cause of action was founded on section 318(1) of the Company’s Act
[Chapter 24:03] “the Act” which is couched in the following terms;
“If at any time it appears that any business of a company was being
carried on -
(a) recklessly; or
(b) with gross negligence; or
(c) with intent to defraud any other person or for any
fraudulent purpose;
the court may, on the application of the Master, or Liquidator or
Judicial Manager or any Creditor of or contributory to the company, if it
thinks proper so to do, declare that any of the past or present
directors of the company or any other persons who were knowingly parties
to the carrying on of the business in the manner or circumstances aforesaid
shall be personally responsible, without limitation of liability, for all or
any of the debts or other liabilities of the company as the court may direct”
It seems to me that the above section does not require a plaintiff to
plead the elements of criminal fraud, in particular, a plaintiff is not required
to allege prejudice on the part of any misrepresentee. I am therefore not
persuaded to agree that the applicants require particulars in respect of those
particular paragraphs of their request for further particulars.
For the same reason I hold the view that the applicants do no need
the particulars in respect of the following paragraphs 2.7, 6.5, 12.1, 15.3,
16.8, 20.2, 22.5, 2.10, 22.11, 23.4, 23.5, 24.3, 25.3, 26., 27.2. The plaintiff
alleged, in paragraph 14 of his declaration, that ZECO represented to the 8th
defendant it had sold import licences to named third parties when the
representation was false in that the import licences in question were in fact
sold to the 9th defendant and its associates and yet the applicants still
requested, in paragraph 3.2(b) of their request for further particulars that in
respect of each import licence dealt separately when each import licence was
sold. I do not believe that the applicants need the information they are asking
for in order to plead. The same applies in respect of paragraph 4.2(d).

HB-58/99
-6-

In paragraph 15 of his declaration the plaintiff alleged that during

or about April 1992 at Bulawayo, ZECO represented to the 8th defendant,
represented by one Cooper, that it had sold all imports available on its import
licences to the said Palmeiri for the sum of $16.935 million and that it had
achieved a profit of $10.161 million on this transaction. The said
representation was false, in that ZECO had sold all imports available on its
import licences to the 9th defendant and its associates.
ZECO’s financial statements for the year ending February 1993 did not
disclose the aforesaid transactions between ZECO and the 9th defendant. As a
consequence of that misrepresentation, the 8th defendant certified those
financial statements as having been properly prepared despite the said non-
disclosure.
The plaintiff amplified the above allegations when supplying his
further particulars by stating that by fraudulently including fictitious
transactions and thus fictitious turnover and profit in its results ZECO falsely
inflated its results so as to represent that it had traded at a profit, whereas,
in fact, it had traded at a loss. The applicants were still not satisfied with
the above explanation and requested for further and better particulars in
paragraph 7.5. The request was that in respect of each sale, dealt with
separately:
(a) when was such sale on each occasion?
(b) precisely who was the purchaser on each occasion?
I am not convinced at all that the applicants need the information
they are seeking in this particular request in order to plead.
In paragraph 26 and 27 of the declaration the allegations were that
during or about April 1992 ZECO represented to the 8th defendant, represented by
one Cooper, that it had sold five palm oil wagons to Zerbeck for $1 million,
realizing a profit of $266 305,00 during the 1992 financial year.
The aforesaid representation was false in that the wagons were only
manufactured during the 1993 financial year, were not exported and still in
stock as at 28 February 1993. The turnover and net income reported in ZECO’s
financial statements for the 1992 financial year included the amounts involved
in that transaction and were accordingly overstated in the amounts of $1 million
and $266 205,00 respectively.
During or about April 1993 ZECO represented to the 8th defendant,
represented by Cooper, that it was entitled to accrue, in the 1993 financial
year, the sum of $2million being the price of ten palm oil wagons allegedly sold
to Zerbeck in terms of an order dated 17 March 1992.
That representation was, however, false in that the order in question
was not executed, the wagons were not manufactured or delivered and the price
was not paid during the 1993 financial year or at all. In reply to the request
for further particulars the plaintiff informed the applicants that the details
they sought were to be found in the 8th defendant’s related party transactions
report for February 1995, a copy of which was annexure “PFP-K” to plaintiff’s
first set of particulars.

HB-58/99
 -7-

The plaintiff further referred the applicants to annexures “PFP-C to

PFP-J” attached to the first set of further particulars as well as a copy of the
minutes of the Board of Directors of ZECO Limited of 5 May 1994, annexed to 8th
defendant’s memorandum dated 9 November 1994.
The applicants were, however, not satisfied with the particulars
supplied and still requested for further and better particulars in paragraphs
22.6, 22.7, 22.8, 22.9, 23.7, 23.8 and 23.9 of their request for further and
better particulars. Their request gives the impression that they did not refer
to the above mentioned annexures. I am, therefore, unable to conclude that the
request is reasonable and that the particulars are necessary for the purpose of
pleading.
I do not propose to recount all the paragraphs in respect of which
further and better particulars were requested. Suffice it to say the
information requested by the applicants in the remaining paragraphs is also,
inmy view, not necessary to enable them to plead. It is, therefore, not
surprising why the applicants did not state in their affidavits the reason why
the particulars were required by them and why they did not explain their
embarrassment in the absence of such particulars.
The respondent asked for a special order of costs in this matter. I
am, however, not satisfied that this is a proper case to make such an award.
In the result I would dismiss the application with costs on the
ordinary scale.

Webb, Low & Barry, applicants’ legal practitioners

Ben Baron & Partners, respondent’s legal practitioners