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Fidelis Munyoro Chief Court Reporter
Fairdrop (Pvt) Limited’s appeal against a High Court decision rejecting the company’s bid to have PTA Bank joined in the proceedings in which it was being sued by Capital Bank for more than $2 million, was this week struck of the roll.

Fairdrop lawyer Advocate Lewis Uriri, requested the Supreme Court to remove the appeal from the roll, saying the company was now under judicial management.

Fairdrop subsidiary Rockfoundation Medical Centre, was the beneficiary of the loan at the centre of the dispute.

The medical centre, was forced to cease operations early last year after Zimra garnished its accounts over a $3,3 million tax charge, which was later revised to $1,8 million after the business challenged the amount in court. The firm was placed under provisional judicial management and resumed operations last December.

“May the matter be removed from the roll as the appellant has since been placed under judicial management,” said Adv Uriri.

“The respondent (Capital Bank) has placed its claim before the judicial manager.”

Capital Bank, which was being represented by Mr Absolom Muchandiona, agreed with Fairdrop’s decision.

Deputy Chief Justice Luke Malaba sitting with Justices Elizabeth Gwaunza and Antonia Guvava, agreed and removed the matter from the roll with no order as to the costs of suit.

Capital Bank sued Fairdrop and 13 others on the basis of agreements entered into in July, September and December 2010 in terms of which the company was loaned sums of money the balance of which allegedly stood at $ 2 575 038,70 as at March 31, 2012. The other 13 companies were sued as sureties and co-principal debtors in that action. But High Court judge Justice Nicholas Mathonsi, dismissed the Fairdrop request saying in his view, the balance of convenience favoured “the refusal to grant the indulgence of joinder”.

He ruled that third party joinder was discretionary upon the court.

“I cannot exercise such discretion to cause inconvenience under circumstances where the applicant (in this Capital Bank) can still rely on the defence it has elected without the need of having the PTA Bank in court.”

Fairdrop and its co-defendants contested that suit and the company that was listed as the first defendant in that action, filed a plea for rectification.

It wanted that the action be stayed pending the determination of its counter-claim for the rectification of the contract upon which Capital Bank sued as well as the determination of another matter under HC 5427 /12 in which it had sued Capital Bank and others for certain damages.

Fairdrop then filed a counter-claim in that matter wherein it cited the PTA Bank as the 15th defendant.

It averred that itself and Capital Bank had executed the loan agreements, but that such agreements did not correctly record the agreement of the parties in that it records Capital Bank as the lender when in actual fact the lender was the PTA Bank, which granted Fairdrop a loan of $2,5 million.

It argued further that the PTA Bank could not register the loan in its books because Dr Munyaradzi Kereke, who was listed as the 13th defendant in that matter and was associated with Fairdrop, was on the European Union sanctions list.

The PTA Bank had then appointed Capital Bank’s predecessor, Renaissance Merchant Bank Limited as its disbursement agent as a sanctions bursting measure.

Fairdrop then sought an order rectifying the contracts by the substitution of the PTA Bank in the place of Renaissance Merchant Bank.