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Business Reporter
A HIGH Court judge has ordered the cancellation of the replacement copy of title deed of an upmarket suburb and suspended all activities done in pursuant of such replacement copy, in a case in which businessman Jayesh Shah’s Al Shams Global and a local property company, Equity Properties, are seeking determination on who rightfully should hold the title deed to the land property.

Equity Properties, claims Shah’s Al Shams Global took the title deed from Interfin Bank, after Al Shams used its shareholding in Interfin Bank to take the title deed which Equity had given as security for a bank loan.

Also in a previous letter dated November 17, 2017, attached to court papers, Equity said that initially the curator of Interfin Bank had refused to release the title deed to Al Shams.

This was because Equity had not consented to it as legally required, but later on the curator agreed to do so after Al Shams wrote and requested the Reserve Bank of Zimbabwe (RBZ) to prevail on the curatorin 2012, but Equity was never given a chance to be heard before such decision was taken by either RBZ at that time or by the curator.

The ruling by Justice Owen Tagu pertained to a replacement copy of title deed only and not the original copy for Lot 3 Bannockbum, popularly known as the Golden CT Suburb in Harare, that is being developed by Equity Properties. Also the ruling by Justice Tagu does not, however, affect the more than 300 clients who bought commercial and residential stands from Equity on Lot No. 3 Bannockbum, prior to the replacement title deed issued to cover for the original one held by Al Shams since 2012.

In a ruling delivered last week, Justice Tagu last ordered cancellation of a replacement title deed obtained by Equity Properties pursuant to a default judgment in a dispute over Al Shams Global’s alleged illegal possession of the title deed to the former’s Lot No. 3 Bannockbum property.

Justice Tagu upheld Al Shams Global claims that the default judgment was erroneous because Equity’s lawyers had served papers to businessman Jayesh Shah’s previous company lawyers thereby denying it the opportunity to defend its position regarding its holding of the title deed.

Previously Equity had difficulty suing and serving court papers on Al Shams regarding its alleged unlawful possession of the title deed, as Al Shams claimed to be a foreign company with no local address and which cannot be sued without the permission of the courts of law.

In terms of the peregrinus law, a local company cannot sue a foreign company without permission of the court but a foreign company can sue a local company without seeking similar permission of the court.

Equity claimed such law was out of line with Zimbabwe’s Constitution which guarantees equality of all people before the law regardless of one’s background and equal access to the court.

Equity then applied to court for permission and Justice Chigumba in a separate judgment then authorised Equity to sue Al Shams and serve court papers on the previous lawyers of Al Shams.

After serving the papers Al Shams changed lawyers and this affected the period within which it was supposed to respond to lawsuit, and as a result a default judgment was granted by Justice Munangatire, enabling Equity to get a replacement copy of title deed.

Later on Al Shams applied for the rescission of the default judgment on the basis the court papers were served to a wrong address despite the fact that there was a court order by Justice Chigumba authoring the use of that address.

However, Justice Tagu last week avoided ruling on the rights of the parties to the possession or ownership of the original title deed stating that the issue was not a matter before him, but before Justice Edith Mushore under consolidated/combined cases.
The issue of rights of parties to the original title is the major dispute. More than 10 cases have been filed as the parties sued and counter sued each other on different aspects of the dispute while the ruling on main dispute is still pending.

The consolidation will allow for most of the cases including the major dispute to be heard in totality since they relate to the same dispute.

Among the consolidated cases, are two notable cases. One of the consolidated cases relates to whether Equity is liable to Al Shams from 2012 to the tune of US$2,67 million plus interest for Bankers Acceptances (BAs) obtained by Al Shams from Interfin, which were purportedly secured by the title deed, and Al Shams argues the BAs and title deed were ceded to it by the bank.

This forms the basis for its taking the title deed. Equity disputes the claim and argues that it owed Interfin only and not Al Shams, and that it repaid fully its debt to Interfin. Further Equity argues that the BAs and the title deed were not ceded to Al Shams by Interfin in terms of the law.

Notably, the BAs were not endorsed and the mortgage bond on the title deed was cancelled by the court. Equity says that no evidence of the cession of the title deed has been produced so far.

The other consolidated case relates to whether Al Shams is liable to pay Equity US$ 10 million plus interest in damages for taking and holding its title deed unlawfully, thereby causing damages to its business.

The High Court did not deal with such consolidated cases. The judge only dealt with the replacement copy of title deed and not original copy of the title deed as well as rights to the holding or ownership.

Justice Tagu did also not set aside the sales of stands by Equity or any of the actions of Equity Properties, as requested by Al Shams in their court application, but instead suspended only the actions which were done pursuant to the replacement title deed including sales and subdivisions of the residential land, near Mt Pleasant in Harare.

Court papers also show that Justice Tagu did not stop Equity from selling its stands or from carrying out any other activities, which are not linked to the replacement copy of the title deed or were done before the replacement copy of title deed was issued by the Registrar of Deeds.

“All actions by the first respondent made pursuant to the replacement title deed . . . in lieu of the original title deed issued on 18 July 2018 referenced 2370/2018 be and are hereby suspended, including but not limited to the sub-division of Lot 3 Bannockbum; any transfers of stands in Lot No. 3 Bannockbum,” Justice Tagu said.

Recently Justice Musakwa dismissed a court application by Al Shams to stop Equity from selling or developing its stands and such court order dismissing the application is still in force.

In the latest case, Al Shams had sued Equity Properties under an urgent chamber application, which also saw Equity Properties counter suing the businessman’s firm, over the legality of its holding of the title deed to the piece of land for the upmarket residential property.

The background to the dispute stems from the fact that Equity obtained a loan of US$1,6 million from Interfin Bank and such loan 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 as it had released without Equity’s consent, the title deed and BAs to Al Shamswhich had loaned the bank before it collapsed in 2012.

Equity claims Al Shams, which was a significant shareholder in the banking institution; allegedly knew the bank was aboutto fail and thus took unlawfully possession of the title deed that secured a loan between the bank and Equity Properties, without the property firms’ consent.

Justice Tagu has previously ruled on an aspect of the dispute between Al Shams and Interfin where he ordered that the parties should adhere to the original terms of the Security Assignment Agreement and Security Trust Deed between, which stated that the parties needed the consent of Equity Properties before the release of the title deed by Interfin to Al Shams.
However, Justice Tagu in his recent judgement did not refer to his previous judgement as he left that to be done under the consolidated case.