Fidelis Munyoro Chief Court Reporter
The late national hero Kumbirai Kangai’s land development company, Luna Estate, has lost a bid to remove a caveat placed on a farm it sought to dispose of.
A caveat is a notice, especially in a probate, that certain actions may not be taken without informing the person who gave the notice.
High Court judge Justice Esther Muremba ruled in the case in which Luna Estate wanted to have a caveat placed on the estate farm removed.
An investor, Divine Aid Trust Company, trading as Datco, had obtained an order placing a caveat on the farm in a bid to recover more than $3 million it invested in the property.
The judgment was granted in default after Luna Estate failed to oppose the registration of the caveat.
Luna Estate approached the High Court last month seeking a rescission of judgment, but the court threw out the case for lack of merit.
Datco lawyer Musindo Hungwe of Kadzere, Hungwe and Mandevere Legal Practitioners, opposed the application for rescission.
Mr Hungwe said his client applied to register a caveat on Luna Estate’s farm to protect its interests in view of the huge financial investments it made by entering into an agreement with the company.
He said the default judgment his client obtained could not be nullified, when Luna Estate made no attempt to oppose it.
The court agreed with Mr Hungwe’s submissions.
“It can neither be said that the first respondent erroneously sought the default judgment when the applicant had been served at its address of service, but did not file any opposing papers to the application,” said Justice Muremba.
“In view of the foregoing, the application is dismissed with costs.”
Datco obtained the caveat to stop the sale of the remainder of Paarl measuring 257 hectares.
The court heard that sometime in September 2012, Datco and Luna Estates entered into a memorandum of agreement in terms of which Datco was to subdivide the land in question and develop it into smaller stands for resale upon the completion of the land development.
In terms of the agreement, the parties would be entitled to sharing profits after the developed stands were sold.
Datco held 50 percent shareholding in Luna Estate, while the estate company had 30 percent, with the balance of 20 percent going to Fungai Kangai.
Issues then started arising in the estate, creating complications to enforce the contract.
Datco was faced with risks that had negative impact on its investment.
This prompted the firm to approach the High Court and successfully applied for the farm to be placed under the caveat.
Datco argued that it sunk $269 948,25 to have the land surveyed and in the process incurred costs for the field work that was conducted and for an environment assessment certification which was done by the Environment Management Agency.
After investing a substantial amount of cash in the project, the company said it had a substantial interest in the land and would be negatively affected if the property was to be sold without it having recovered its dues.