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Published On: Mon, Dec 8th, 2014

Harare Court Orders Woman to pay $700k to bank

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The High Court has ordered a Harare woman who used her property as surety in a loan deal to reimburse more than US$680 000 to FBC Bank after a relative defaulted on a debt repayment. Ms Eva Muzuva guaranteed and surrendered her immovable property in Mount Pleasant as security for a loan obtained by her relative Duncan Mukondiwa for family business, DunlethEnterprises (Private) Limited.

There are two other guarantors who will cough up some more money to settle the debt.

FBC sued Dunleth Enterprise, (Duncan) Mukondiwa, Sinikiwe Mukondiwa, Marian Smelwani Mapanda and Muzuva for payment of US$685 442, 42 plus interest at the High Court after the company failed to service the loan.

Muzuva denied the claim arguing that her liability was limited to US$150 000, which amount according to her, was already paid by the principal debtor.

But Justice Happias Zhou ruled in favour of FBC and ordered Muzuva to pay costs of suit.

“In the result, it is ordered that judgment be and is hereby given in favour of the plaintiff against the 5th defendant for payment of a sum of US$685 442, 46 together with interest thereon at the rate of 6,6 percent per month plus a penalty rate of 5 percent per month,” ruled Justice Zhou.

According to the court order, the payment is with effect from June 1, 2011 to the date of full payment.

In his ruling, Justice Zhou observed that Muzuva failed to explain why she did not fill in the sum of US$150 000 if she genuinely believed the figure to represent the full extent of her liability in terms of the deed of suretyship.

“She should, therefore, be taken to be bound by the terms of the guarantee form which she signed,” said Justice Zhou.

“That, in my view, is the approach which is consistent with the dictates of modern commercial convenience.” The FBC claim arose from certain banking facilities extended to Dunleth Enterprise by the financial institution.

Duncan Mukondiwa, Sinikiwe Mukondiwa, Mapanda and Muzuva were cited in the claim on grounds that they executed guarantees in favour of FBC for Dunleth’s obligations to the bank arising from the facilities.

They all did not oppose the claim that was granted on February 28 2012.

Only Muzuva defended the claim and filed a plea denying that her liability in terms of the guarantee which she executed was unlimited.

Mr Patrick Nyeperai of Costa and Madzonga appeared for FBC while Ms Beatrice Mtetwa acted for Muzuva.

 

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