High Court Orders Bunching of Equity/Shah Cases

By Golden Sibanda
High Court Judge Justice Edith Mushore last week ordered consolidation of cases relating to the dispute between businessman Jayesh Shah’s Al Shams Global BVI Limited and local firm Equity Properties, saying the duplicitous nature of the contested issues warrants treating them as a single case.

The dispute between the feuding parties relates to title deeds to a property owned by Equity Properties, which Al Shams allegedly illegally obtained and has continued to hold despite the property firm having paid off the debts against which it had pledged the titled deeds as security.

Equity Properties has since sold more than 300 stands on the 163 000 hectare piece of land, Lot 3 of Bannockburn, popularly known as the Golden CT Suburb near Mount Pleasant to home and commercial land seekers.

According to correspondence of the directive by Justice Mushore issued through the Registrar of the High Court and seen by The Herald Finance and Business and Finance, the parties were ordered to submit pre-trial conference (PTC) minutes (signed) by October 9, 2019 , which the parties have done.

Justice Mushore also ordered the parties to submit other files on the same case before the High Court, including the recent urgent application by Al Shams seeking to stop Equity Properties from further developing and selling of stands at the Golden CT Suburb, for simultaneous determination.

The main reason for directing that the cases be consolidated was that the number of separate cases filed before the courts on the same dispute had gone up to 10, seven by Al Shams and three by Equity.

It was felt that victory in one case would not be victory in another as seen from determinations in two of the cases last week with none of the determinations by the court resolving the matter.

The dispute originated from a US$1,6 million that Equity Properties obtained from Interfin Bank, against which the property firm pledged title deeds to its land.

Al Shams, however, took custody of the title deeds without Equity Properties signing a Security Assignment Agreement for cession of the papers, which agreement only existed between Equity Properties and Interfin bank.

Equity argues that it fully repaid the loan from Interfin, with the total amount coming to US$3 million including interest, but when it demanded the title deeds Interfin was not able to give back the security and revealed a long while later that the title deeds had been taken by Al Shams.

The property company claims that by holding onto the tittle deeds, Jayesh Shah’s Al Shams is now demanding settlement of same debt twice. Al Shams is also alleged to have taken Bankers Acceptances that were not transferable without paying.

For two years, Equity claims it could not sue Al Shams to recover the tittle deeds, since the company is a foreign registered entity as enshrined in the peregrinus law, until it got a court order to serve summons to sue the company at the address of their lawyers.

However, after serving the summons and obtaining a default judgment, when Al Shams failed to respond to the law suit, Equity once again found itself on the losing end after Al Shams won a decision for rescission of a default judgment.

Equity claims at all material times it had believed that Interfin Bank was in possession of the title deeds when it entered a settlement agreement in December 2015 with the then under curatorship bank for full settlement of the debts.

The bank had been closed in 2012 after facing tight liquidity constraints.

The agreement also entailed that the title deeds would be returned within 10 days after it repaid the loan, but after several enquiries, it emerged that the deeds would not be returned as they had been taken by Al Shams.

It has also emerged that Al Shams was able to gain custody of the title deeds by virtue of a 36 percent shareholding in Interfin Bank’s parent firm, Interfin Financial Services.

The shareholding was issued out to Al Shams, reportedly, to secure a US$3 million loan the company had extended as a loan.

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