This is an application for condonation for non-compliance with the Rules of this Court and for an extension of time within which to file and serve a notice of appeal in terms of the same Rules.
The respondents oppose the application.
FACTUAL BACKGROUND
The first respondent is a medical aid society registered in terms of the Medical Services Act [Chapter 15:13]. The second respondent is said to be the investment vehicle of the first applicant.
Both respondents are managed by two separate boards of directors.
It is common cause that the applicant was, in terms of his contract of employment, the Chief Executive Officer of the first respondent.
In a judgment handed down by two judges of the Labour Court on 10 March 2017, two awards made in favour of the applicant were set aside and in their place the court substituted an order dismissing the applicant s claims before the arbitrator.
Dissatisfied, the applicant appealed to this Court against that judgment on 1 March 2019.
The notice of appeal reflected that it had been filed pursuant to Rule 29 of the now repealed Supreme Court Rules.
At the hearing of the appeal, the matter was, by consent, struck off the roll for the reason that the appeal should more properly have been noted in terms of the then Supreme Court (Miscellaneous Appeals and References) Rules.
This was on 14 March 2019.
Prior to the above developments, in a practice directive issued as 3/13 by the late former Chief Justice of Zimbabwe, on 29 November 2013, the following requirement was, inter alia, made applicable to all the superior courts of Zimbabwe:
“Where a matter has been struck off the roll for failure by a party to abide by the Rules of the Court, the party will have thirty (30) days within which to rectify the defect, failing which the matter will be deemed to have been abandoned. Provided that a Judge may, on application, and for good cause shown, reinstate the matter, on such terms as he deems fit.”
So far as I am aware, the practice directive, together with a number of others issued at about the same time, were not discussed amongst judges of this Court.
I mention this at this stage because paragraph 5 of the practice directive, which is captured above, has given rise to a major difficulty in the interpretation of that paragraph.
The conundrum faces not just the applicants whose matters are struck off the roll, but also the superior courts to this date.
The extent of the problem is aptly illustrated by the events that unfolded following the striking off of the matter from the roll.
The appeal, having been struck off the roll, on 14 March 2019, the applicant was required, in terms of the practice directive, to rectify the defect within the period of 30 days failing which the matter would be deemed abandoned.
Taking into account weekends and public holidays, the period of thirty (30) days was to lapse on 30 April.
The present application was only filed on 2 May 2019 - one business day late.
That development formed the genesis of the applicant's difficulties in trying to prosecute his appeal against the decision of the Labour Court.
In the application filed on 2 May 2019, the applicant prayed for condonation and extension of time in which to appeal the decision of the Labour Court.
In his founding affidavit, he explained the reasons for the delay.
As regards his prospects of success, he attached a copy of his heads of argument in the matter previously struck off the roll and requested that his prospects of success be determined on the basis of those heads.
In their opposing papers, the respondents took two points in limine.
One of the two points was abandoned at the hearing of the application before me.
The preliminary point that remained related to the propriety of the application for condonation and extension of the time within which to note an appeal.
The respondents averred, that, in terms of paragraph 5 of the Practice Directive, once the applicant failed to rectify, within 30 days, the defects that had led to the striking off of his appeal, his matter was deemed to have been abandoned. He could only apply for reinstatement.
The other submissions made by the respondents, on the length of the delay and the reasons thereof, as well as the prospects of success, are not relevant to the issues that arise for determination in this application.
In his answering affidavit, the applicant also took the preliminary point, that, the deponent to the opposing affidavit, who stated that he was the chairperson of the Board of Directors of the first respondent, was not authorised to represent both respondents as no resolution to that effect had been attached.
The applicant submitted, that, in the absence of such authorisation, the application was unopposed.
At the hearing of the application, I considered it appropriate that I hear the parties on the preliminary points that they had raised before delving into the merits of the matter.
The points in limine raised by the parties had the potential to dispose of the application in its entirety. Both parties filed written heads of argument in support of the preliminary points taken.
APPLICANT'S SUBMISSIONS
In argument, the applicant submitted that paragraph 5 of the Practice Directive is clearly an error because once a matter is struck off the roll, the purported appeal is regarded as having never existed.
More fundamentally, so the applicant argued, paragraph 5 of the Practice Directive is meaningless. This is because once it is accepted that there is no appeal before the court, there is therefore no defect to correct.
And, if there is no matter before the court, nothing therefore can be deemed to have been abandoned. For the same reason, there is no matter to reinstate.
Further, the applicant submitted that the 30-day period is reckoned from a non-event since the nullity arises merely by operation of law and the court merely advises the parties of the fact of the nullity.
Once a matter is struck off the roll, there is no time limit within which to make an application for condonation and extension under Rule 43 of the Supreme Court Rules. A litigant can, in terms of the Rule, apply at any time, the length of the delay being one of the factors that must be considered.
The applicant submitted, that, paragraph 5 of the Practice Directive must be expunged from the Practice Directive.
On the point taken, that, the opposing affidavit is not properly before the court, he submitted as follows:
Legal entities, such as the respondents, have separate legal personae from its members or officials. There is therefore need for a person who purports to act on behalf of such a legal entity to produce proof of authorization. Otherwise, former directors challenging their dismissal may continue to purport to represent the company.
RESPONDENTS SUBMISSIONS
In argument, the respondents submit, that, it being common cause that the applicant did not comply with the thirty (30) day requirement in terms of the Practice Directive, his matter was deemed to have been abandoned.
In the circumstances, he should have applied for reinstatement of the abandoned appeal and not condonation and extension of time in which to appeal.
They further submitted, that, it is not open to a litigant to adopt the attitude that an extant Practice Directive is erroneous.
On the preliminary point raised by the applicant, that the deponent to the respondents opposing affidavit had no authority to represent those two entities, the respondents submitted, that, there is no requirement in terms of the law that a resolution by the Board of Directors be produced in every case.
The deponent had filed papers on behalf of the respondents in the court a quo and his authority had, at no time, been challenged.
In this case, the deponent had specifically stated in his affidavit, that, he was duly authorised to depose to the affidavit on behalf of the respondents.
No evidence having been provided by the applicant to show that the deponent was not so authorized, the objection to the authority of the deponent to represent the respondents is not sustainable.
ISSUES FOR DETERMINATION
On the basis of the submissions made by the parties, the first issue that falls for determination is whether the application for condonation and extension is properly before the court, regard being had to paragraph 5 of the Practice Directive.
If the application is not properly before this Court, then, that would be the end of the matter and the application would stand to be struck off the roll.
In the event, however, that the application for condonation and extension of time in which to appeal is found to be properly before the court, the issue that would arise is whether, in the absence of a Board resolution by the respondents, authorising the deponent to act on its behalf, the opposing affidavit filed by the deponent is properly before this Court.
If not, then, the matter would be regarded as unopposed. If it is found that it is properly before the court, then, the merits of the application would then require determination....,.
WHETHER A BOARD RESOLUTION WAS REQUIRED AUTHORISING DEPONENT TO ACT ON BEHALF OF THE RESPONDENTS
This is the question that now arises.
The respondents say it is not necessary that a resolution of the Board of Directors be produced in all cases involving legal entities, particularly in a case, such as the present, where the deponent has previously represented the respondents and his authority to do so has not been challenged.
Counsel for the respondents cited a number of High Court decisions that suggest that a resolution is not always necessary in such cases:
The cases of Air Zimbabwe Corporation & Ors v ZIMRA 2003 (2) ZLR…, and Direct Response Marketing (Pvt) Ltd v Shepherd 1993 (2) ZLR 218 (H), cited by counsel for the respondents, were decided before the decision of this Court in Madzivire & Ors v Zvarivadza & Ors 2006 (1) ZLR 514 (S).
The case of Zimbank v Trust Finance Ltd 2006 (2) ZLR 404 (H), which she also cited, did not deal with the question that is before me. Rather, the question before the court in that case was whether the failure by a legal practitioner who had acted for the applicant in the litigation giving rise to the application to state, in his founding affidavit, that he had been authorised to act for his client was not fatal.
The reality is that there have been conflicting decisions in the High Court on the question whether a deponent who purports to represent a legal entity is required, in all cases, to prove that he is duly authorised to represent the legal entity.
On the one hand, a number of cases have relied on the judgment of this Court in Madzivire & Ors v Zvarivadza & Ors 2006 (1) ZLR 514 (S) in determining that proof of such authority is necessary in all cases: see, for example, Deputy Sheriff, Chinhoyi v Appointed Enterprises & Ors HH450-13; First Mutual Investment (Private) Limited v Roussaland Enterprises (Private) Limited t/a Third World Bazaars HH301-17.
On the other hand, a number of cases from the same court have held, that, proof of such authority was not necessary in all cases.
The latter cases made no mention of the decision of this Court in Madzivire & Ors v Zvarivadza & Ors 2006 (1) ZLR 514 (S) and appear to have been oblivious to its existence as authority on this topic: see, for example, African Banking Corporation of Zimbabwe Limited t/a Banc ABC v PWC Motors (Pvt) Ltd & 3 Ors HH123-13; Tianze Tobacco Co. (Pvt) Ltd v Muntuyadzwa HH626-15; Mukomba v Unibox Investments t/a Arundel Village Spar HH539-15; Trustees of The Makono E Chimanimani v Minister of Lands & Anor 2016 (2) ZLR 324 (H).
The conflict in the High Court on this aspect was completely unnecessary.
In Madzivire & Ors v Zvarivadza HH74-06 MAKARAU J…, stated as follows:
“The fictional legal persona that is a company still enjoys full recognition by the courts. Thus, for any acts done in the name of a company, a resolution, duly passed by the Board of Directors of the company, has to be produced to show that the fictional persona has authorised the act.
In my view, so trite is this proposition or so settled is this position at law that no authority need be cited.
The applicants are well aware of this position at law, for, in paragraph 17 of the first paragraph, issue is taken that no resolutions were passed by the company authorising the first respondents and others to do certain acts complained of in that paragraph. Due to lack of such authority stemming from the Board of Directors, the applicants argue that the purported act by the first respondent are null and void.
Such may be the case, but, the irony of it all is that the applicants themselves are guilty of the oversight forming the basis of their complaint to this court.
No resolution was produced before me to show that the first to third applicants are authorised to bring this action on behalf of the fourth respondent.
In seeking to lay a foundation for purporting to act on behalf of the fourth applicant, the first applicant had this to say in paragraph 2 of his founding affidavit:
'I am making this affidavit on my own behalf and on behalf of the fourth applicant who is a legal persona wherein I am the Managing Director and shareholder respectively, and, in that capacity, I am authorised to make the following statements on behalf of the fourth applicant.'
Needless to say, this is woefully inadequate to clothe the deponent with authority to make any statement on behalf of the fourth applicant.
The paragraph does not even attempt to lay a basis for holding that the bringing of the proceedings in the name of the fourth applicant is authorised.
The first to third applicants have expressly averred, in their respective affidavits, that they also bring this application on their own behalves as directors and shareholders of the fourth respondent.”
The High Court decision was appealed to this Court.
In a decision reported as Madzivire & Ors v Zvarivadza & Ors 2006 (1) ZLR 514 (S)…, this Court (per CHEDA JA) remarked as follows:
“A company, being a separate legal person from its directors, cannot be represented in a legal suit by a person who has not been authorised to do so. This is a well established legal principle, which the courts cannot be ignored.
It does not depend on the pleadings by either party.
The fact that the person is the managing director of the company does not clothe him with the authority to sue on behalf of the company in the absence of any resolution authorising him to do so. The general rule is that directors of a company can only act validly when assembled at a Board meeting. As exception to this rule is where a company has only one director who can perform all judicial acts without holding a full meeting.”
The above remarks are clear and unequivocal.
A person who represents a legal entity, when challenged, must show that he is duly authorised to represent the entity. His mere claim, that, by virtue of the position he holds in such an entity, he is duly authorized to represent the entity, is not sufficient. He must produce a resolution of the Board of that entity which confirms that the Board is indeed aware of the proceedings and that it has given such a person the authority to act in the stead of the entity.
I stress, that, the need to produce such proof is necessary only in those cases where the authority of the deponent is put in issue. This represents the current state of the law in this country.
In this case, the deponent to the opposing affidavit produced no such resolution.
Going by the papers before me, the two respondents operate through two distinct Boards of Directors.
Whilst the deponent may be the chairperson of the Board of Directors of the first respondent, that position does not, on its own, clothe him with the necessary authority to represent the first respondent's Board of Directors. Nor is there any proof that the Board of the second respondent has also authorized him to represent the second respondent in this application.
The point in limine taken by the applicant must therefore succeed....,.
It is clear that it is the law in this country, that, when challenged, a person who purports to represent a legal entity must produce proof of his authority to represent such entity. In the absence of proof of such authority, the affidavit deposed to on behalf of the entity is irregular and must be ignored....,.
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3. The preliminary objection raised by the applicant, on the lack of authority of the deponent to the opposing affidavit, is upheld with costs.
