NYAMWEDA v GEORGIAS 1988 (2) ZLR 422 (SC)

Flynote

Practice and procedure — third parties — joinder of — third party having potential interest in case but parties to case not wishing it to be joined — approach trial court should take — approach of appeal court where matter arises on appeal.

Contract — illegality — par delictum rule — relaxation of.

Headnote

The respondent (plaintiff in the court a quo) has succeeded in an action in rem against the appellant, his former mistress, for an order directing her to transfer a house into his name. He had bought the house in her name because the building society he dealt with, having bonded one of his houses, would not lend him money for another. No misrepresentation was made to the building society when the bond was applied for by the appellant; it was simply not disclosed that she was acting an agent for an undisclosed principal. The respondent was party to the bond agreement in the capacity of surety and coprincipal debtor.

On appeal, it was argued on behalf of the appellant, firstly, that the contract, being in furtherance of the parties' immoral affair, was contrary to public policy and therefore void; and secondly, that since the transaction involved a conspiracy to defraud the building society, the maxim in pari delicto melior est conditio defendentis applied.

The Supreme Court raised the question of whether the interests of the third party, the building society, had been sufficiently considered and postponed the hearing to enable the society to determine its attitude in the question of joinder. The appeal was heard after the society indicated that it did not wish to be joined, but both parties sought guidance on the question of whether it was necessary to join the society as a party.

Held, that the transaction had nothing whatever to do with the parties' illicit relationship; it involved an investment on the respondent's part and he used the appellant in the capacity of agent for an undisclosed principal.

Held, further, that it was difficult to imagine how the building society's rights could have been prejudiced, since it accepted the respondent as surety and co-principal debtor; but even if there was some form of fraud on the building society, this was a case in which the par delictum rule should be relaxed.

Held, further, that where a third party may have a significant potential interest in the outcome of a legal dispute but the parties are reluctant to inform it of the dispute, it may be appropriate for the trial court of its own motion to consider advising the third party of the fact of the proceedings so that it can decide whether or not it wishes to be joined. Where real rights are involved, the question of joinder (or of advising the third party) may be more important. Where the Supreme Court is of the view that it is necessary or expedient in the interests of justice to ascertain the standpoint of a third party who is not party to an appeal, it will do so under the powers conferred by s 20(1)(b)(ix) of the Supreme Court of Zimbabwe Act 1981, preparatory to determining whether or not to act in terms of s 20(1)(b)(iv).