Saturday, December 3, 2022

Choppies pushes back against Mphokos

Regional Grocer Choppies is questioning the decision by former Zimbabwean Vice President Phelekezela Mphoko and his son Siqokoqela to demand fresh payment for their shares in the company despite the fact that they received payment when they initially divested from the company. This is revealed in an appeal that the Choppies has launched before Zimbabwe’s Supreme Court challenging Bulawayo High Court Justice Martin Makonese’s decision to throw out it exception plea.

The Mphokos took Choppies Zimbabwe (trading as Nanavac Investments Pty Ltd) demanding payment for the 51% shares that they argued were they held when they divested from the company. Initially the parties entered into an agreement which resulted in a deed of settlement being recorded. The Mphokos received $2.9 million during the settlement in question. Later on they approached the High Court sought an order declaring the deed of settlement null and void, adding that they were entitled to payment of their 51% shareholding. Choppies then countered by raising an exceptional plea.

But this was dismissed by Makonese. In legal terms, an exception is pleading in which a party raises an objection to the summons or plea on the basis that the pleading is vague and embarrassing or lacks the necessary averments to disclose a cause of action or defense. In its papers notifying their Supreme Court of its intention to plead, Choppies indicated that it will “appeal against the whole judgment of the High Court handed down by Justice Makonese on the 28th of July 2022.” The papers further stated that: “The appellants hereby offer such security for the respondents' costs of appeal as may be agreed between the parties or determined by the registrar.”

Choppies also stated that it undertakes to pay the costs for the preparation of the record in full as soon as such costs have been determined by the registrar. Some of Choppies’ grounds of appeal are that the High Court erred at law in failing to uphold the exception that once the Mphokos pleaded the setting aside of the purchase price and consequently the sale agreement, no cause of action was further pleaded for a new sale at the purchase price of US$22.5 million and in the absence of such cause of action.

Therefore Choppies argued, the court could not be requested to set a new purchase price of US$22.5 million thereby making a contract on behalf of the parties. The retail store also argued that the High Court erred at law in failing to uphold the exception that once the Mphokos pleaded the setting aside of the purchase price and consequently the sale agreement, they were supposed to tender, in their declaration, the return of the amount $2.9 million) they received under the sale agreement they sought to be set aside.

Some of the reliefs that Choppies is seeking include among others that its appeal against the High Court Judgement succeeds with costs. Choppies wants the order of the High Court be set aside and substituted with the following: “It is hereby ordered that: “The exceptions are upheld.” Choppies further indicated that it wants the summons and declaration by the Mphokos be struck off the roll and that the plaintiffs shall pay the defendants cost of suit. Choppies also informed the higher Court that leave to appeal is not necessary as the judgment by Justice Makonese is final.

Court papers show that the dispute arose in 2018 between the Mphokos and Choppies Enterprises, and it spilled to the courts. They also show that in January 2019 the Mphokos and defendants agreed that plaintiffs would divest themselves of their shareholding in Nanavac Investments. The parties entered into an agreement, which resulted in a deed of settlement being recorded. The deed of settlement is the one that is at the centre of the legal dispute.

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