eBusiness Weekly
Golden Sibanda
EQUITY Properties, a local private property development firm, has filed a law suit at the High Court for a damages claim of US$10 million against businessman Jayesh Shah’s Al Shams Global BVI Limited, as the parties’ long-standing wrangle over title deeds rages on.
The Zimbabwean property development firm is demanding US$10 million for lost business after failing to develop and sell some of its residential stands on a piece of land near Mount Pleasant in Harare because it did not have original title deeds to the land question.
Equity Properties alleged Al Shams took possession of the papers without its consent using its influence as a shareholder as well as creditor in collapsed Interfin Bank.
Further, Equity is also seeking payment of interest by Al Shams Global in the order of 20 percent per annum, US$50 000 for patrimonial loss and cost of suit on attorney client scale.
In its submissions to the High Court, under case number HC 3588/18, the property firm alleges that Al Shams Global illegally took possession of title deeds to the piece of land, Lot 3 of Bannockburn.
The title deeds had been pledged against a loan equity obtained from Interfin Bank to develop the land.
Equity said it had surrendered the title deeds to Interfin Bank for a US$1,6 million loan it accessed in 2012, and later settled in full after paying US$3,8 million, including interest in February 2016.
The property development firm had also registered mortgage bond over its property valued at US$2,5 million, being Lot 3 of Bannockburn in order to obtain the US$1,6 million loan.
Upon settling the debt, Equity demanded return of its title deeds, Deed of Transfer 9068/2008, but Interfin failed to comply and only revealed later that Al Shams had taken them.
“The plaintiff at all material times understood that the title deeds were in the possession of Interfin Bank,” Equity submitted.
Equity also pointed out that Al Shams took possession of the title deeds after using the Reserve Bank of Zimbabwe and prevailing over then curator, Peter Bailey, following Interfin Bank’s closure in 2012, due to liquidity constraints.
“In terms of the credit facility agreement, Interfin Bank had no basis of retaining possession of the original title deeds after plaintiff finished paying its debts. Plaintiff requested its title deeds on June 8, 2016, Interfin Bank informed plaintiff that the defendant was in possession of the title deeds,” Equity said.
Al Shams, Equity Properties said, acquired the title deeds unlawfully as there was no direct or indirect relationship between Shah’s company and the property development firm.
“Plaintiff extinguished the debt sometime in February 2016 and thereafter Interfin Bank had no legal basis to retain possession of the title deeds.
“Resultantly, defendant by extension has no legal basis to hold on to the title deeds because Interfin Bank could transfer more rights than it actually had at the material time,” Equity said.
The firm said it had lost US$50 000 in legal costs attempting to repossess its title deeds and mitigate the damage to its business, which was caused by Al Shams refusal to return the title deeds.
“Further, plaintiff has lost business of ten million United States dollars because of unavailability of the title deeds. The plaintiff had planned a housing project wherein it was to build at least 100 houses on some subdivisions of the property held under the title deed defendant’s possession.
Equity Properties has been developing and selling housing stands on Lot 3 of Bannockburn, popularly known as the Golden CT Suburb near Mount Pleasant in Harare since 2008.
Al Shams Global recently attempted to stop Equity Properties from selling stands from Lot 3 of Bannockburn through an agent chamber application, until the title deeds dispute is resolved, but the application was deemed not urgent by High Court judge, Justice Musakwa.
Equity says it is demanding damages amounting to US$10 million and other costs for the missed business opportunities it has lost as a result of the absence of original title deeds to the land on which the development has to take place.
“Plaintiff expected a profit of at least US$100 000 per housing unit. Plaintiff cannot proceed with the project because it cannot use its title deed to raise money for the project or transfer subdivisions of the property including houses thereon without the original deeds,” the property firm says.
Equity has since 2016 struggled to pin down Al Shams to surrender the title deeds given that the British Virgin Islands registered company enjoyed legal protection under the peregrinus law.
However, when Equity eventually obtained a court order to use Al Shams’, a foreign domiciled entity, lawyers address it also obtained a default judgment after the defendant failed to respond to summons filed at the High Court.
The judgment was, however, later overturned after the High Court ruled that the order was issued in default because Al Shams had already changed lawyers by the time summons were presented to its previous legal representatives.
