High Court stops businessman Sivan from removing company partners
The High Court has stopped controversial businessman Ofer Sivan from using a default judgment obtained under “mysterious” circumstances to oust his business partners Gilad Shabtai and Munyaradzi Gonyora.
Sivan had sued his business partners Shabtai and Gonyora seeking a declaratur that the two had misappropriated a sum of US$1 300 000 from their company Adlecraft Investments through acts of fraud between January 2021 and August 2021.
He sought an order compelling the two to reimburse the money in United States currency or its equivalent in Zimbabwean dollars and an order removing Shabtai and Gonyora from their positions as directors of the company.
This comes after the High Court recently chastised him from claiming to be the only shareholder in the company and also dismissing his application to prevent Shabtai from transacting and representing the company.
This is also contrary to some online media reports that the High Court had removed Shabtai and Gonyora from the firm leaving Sivan with full ownership and directorship.
In hearing the latest matter Justice Pisirai Kwenda noted some irregularities that Shabtai and Gonyora would not find the record of proceedings each time they sought to act on the matter but it would only be availed to Sivan.
“The applicants’ legal practitioners tried to set down the ‘special plea and exception’ as unopposed on three occasions but were unsuccessful because the court record was unavailable.
“There is no official explanation on record for the unavailability of the court record.
“While the applicants were failing to locate the court record, the first and second respondents (Sivan/Adlecraft) were lucky, because the record was availed to them and they were able to set the matter down for default judgement in default of plea.”
Sivan then obtained a default judgment and before he could execute it, Shabtai and Gonyora got to know of it and filed an application for its rescission on the grounds that it was sought and entered in error.
They approached the High Court seeking a stay of execution before the application for the rescission of judgment is heard.
Their argument is that the default judgement entered on Wednesday 21 September 2022 was neither brought to their attention nor served on them by Sivan and Adlecraft.
Justice Kwenda, having heard both parties, stayed the execution of the default judgment agreeing that Shabtai and Gonyora through their lawyers raised valid arguments.
“I accept the applicants’ submission that they only became aware of the default judgment order on Friday 23 September 2022 because it is common cause among the parties that the judgment was entered in their absence, that they were unaware of the set down and the respondents have not served the judgment on them as is required at law,” Justice Kwenda ruled.
The judge said Sivan’s lawyers shot themselves in the foot by not serving Shabtai and Gonyora the judgment.
“The decision by respondents’ lawyers not to serve the applicants with the default judgment was ill conceived. The default judgment affected the status of the applicants and ought therefore to have been served personally before being carried into execution,” the judge ruled.
The judge also spoke on the said repayment of the alleged US$1.3 million adding that Sivan’s desire to execute the default judgment calls for the court’s intervention.
“The other part of the order relates to payment of a sum of money and may only be executed by way of a writ of execution and a party must be called upon to fulfill a judgment sounding in money through service before his or her goods are attached in execution.
“The fact that the respondents are taking steps to execute the default judgment without notifying the applicants is therefore in itself a circumstance which calls for the urgent intervention of this court on an urgent basis.
“The applicants became aware of the judgment fortuitously and have adequately explained each day that passed. I rule that the matter is urgent,” Justice Kwenda said.
The judge was further critical of Sivan’s lawyers actions which he said were all erroneous.
“On the face of it the decision by the legal practitioners acting for the first and second respondents (Sivan and Adlecraft) to obtain default judgement in the face of a special plea which remained extant may have been erroneous.
“The legal practitioners were content with snatching default judgement and surreptitiously executing the same. Their decision to manufacture a non-existent form which they named Notice to Plea and Intention to bar was also an error,” the court said.
“I am satisfied that the applicants (Shabtai and Gonyora) have made a case for the exercise of this court’s discretion in their favour of stay of execution,” the court added.
Meanwhile, Shabtai and Gonyora will be in the country for the fraud trial of Sivan contrary to reports that they are fugitives from justice as they do not have a pending criminal case against them.