MANGOTA J: On 13 February, 2014 the
applicants filed an application with this court. The application was
filed under case number, HC1188/14.
On 14 February, 2014 the applicants
filed the present application with the court on an urgent basis. The
application was filed under case number, HC1248/14. I will for purposes
of clarity refer the application which falls under case number HC1188/14 as an
application in the main case or the main application. Whichever term is
employed is meant to be understood as such so that it remains distinguished
from the present urgent chamber application.
The applicants urged the court which
is dealing with this application to make an order which is to the effect that
the main application be heard on an urgent basis. They are, in a
paraphrased manner, praying the court to compel itself to hear the application
in the main case as a matter of urgency. The applicants advanced two reasons
for their prayer which they couched in the form of a final, as opposed to an
interim, order. Their first reason was, or is, that the first applicant's
application for rescission of judgment in the South African court has been set
down for hearing on 3 March, 2014. The judgement which is the subject of
the rescission application arose from the claim which the Minister, who in this
country administers the Reconstruction of State - Indebted Insolvent Companies
Act, [Cap 24:27] [The Act], through the third respondent, instituted
against the first applicant. They question the legal status of the third
respondent who instituted the claim which resulted in a default judgement being
entered against the first applicant. The applicants' second reason
for filing the present application centres on what they described as
harmful consequences which they say will visit the first applicant if the main
application is not heard on an urgent basis. They submitted that,
following the default judgment which the court in South Africa entered against
the first applicant on 11 October 2012, a warrant of execution was issued
against the property of the first applicant who may, as a result thereof, lose
property which is worthy R18 million. That, in their view, constitutes irreparable
harm of a very serious magnitude.
The respondents filed their opposing
papers and they argued that the application which the applicants placed before
the court was, or is, not urgent. They raised six preliminary matters in
their opposition of the application. The matters in question were or are
that:
(i)
the applicants' certificate of urgency was/is fatally defective,
(ii)
the application was/is not urgent,
(iii)
the applicants, the first applicant in particular, will not suffer irreparable
harm,
(iv)
the applicants do not have locus standi,
(v)
there is , in the application, the issues of non-joinder and misjoinder- and
(vi)
the applicants did not pay into court security for costs.
Two principles guide the courts in
their determination of applications of the present nature. The principles
in question do, more often than not, tend to gravitate along the following
matters:
(a)
whether, or not, the application which has been placed before the court
is urgent- and, if it is
(b)
whether, or not, the applicant(s) treated the application with the urgency
which it deserves.
It requires little, if any, emphasis
to observe and state that the application in the main case and the present
application are, in some way or other, interlinked to the first applicant's
rescission of judgement application which the court in South Africa set down
for hearing on 3 March, 2014. It goes without saying, therefore,
that in determining the urgency or otherwise of this application, the court
will not be oblivious to the first applicant's attitude to, as well as the
manner in which he handled, the case which was instituted against him in the
courts of South Africa. The court, in other words, cannot pay a blind eye
to the apparent conclusion which is that the determination of the main case in
favour of the first applicant does have in many respects a favourable trigger
effect to the determination by the court in South Africa of the first applicant's
application for rescission of judgement.
As is the generally accepted
practice in applications of this nature, the court will proceed to examine and
analyse the preliminary matters which the respondents raised and compare those
with the submissions of the applicants with a view to ascertaining if the
application remains holding. The court would examine those six in
limine matters, each in turn and, after a comparative analysis of the case
of the applicants and that of the respondents in respect of each matter, it
will arrive at a clear determination of the application which has been placed
before it. In so far as the first issue - that which relates to
certificate of urgency- is concerned, the respondents argued that the
certificate in question was totally defective for the reasons that one Benjamin
Chikowero who is a legal practitioner practising law under Gutu &
Chikowero legal practitioners:
(a)
drafted and signed the certificate of urgency when
(b)
he is the legal practitioner for the applicants in both the main case and
(c)
the present application.
They submitted that Mr Chikowero's
involvement with the applicants in the above-mentioned three situations does
have the effect of clouding the legal practitioner's vision of looking at the
matters which he has brought before the court with an objective and
dispassionate mind. Mr Zvobgo who appeared for the respondents argued
in extenso and said the fact that Mr Chikowero
prepared the document which is entitled URGENT CHAMBER APPLICATION in addition
to the three documents which have already been made mention of makes his
ability to assess the urgency, or otherwise, of the application in a
dispassionate way very difficult. He, in support of his submission on
this matter, referred the court to the case of Chifanza v Edgars
Stores Limited and the Deputy Sheriff, Chinhoyi HB27/05, wherein CHEDA J
(as he then was) regarded such conduct as MrChikowore exhibited in the
main, and the current, applications as being improper. Advocate Matinenga
who appeared for the applicants made every effort to explain the distinction
which he said does exist between the Bulawayo court's approach to the matter
and the Harare court's attitude to the same. He stated that there was a
difference between the Harare and the Bulawayo practice on the law which
relates to preparation of certificates of urgency. He submitted that the
principles which the court in Harare adopted on the matter were more in
accordance with the generally accepted practice than the principles which the
court in Bulawayo adopted on the same. In arguing as he was doing,
Advocate Matinenga was no doubt distinguishing the Chifanza v Edgars
case which the court in Bulawayo decided from such cases as:
(i)
General Transport & Engineering P/L & Orsv Zimbank Corp P/L,
1998(1) ZLR 301, 303 - and
(ii)
Tripple C. Piggs & Anorv Commissioner- General, ZRA 2007 (1)
ZLR 27 wherein the court in Harare pronounced on the point which is under
consideration.
A common thread which runs through
the cases which Advocate Matinenga referred the court to is that a legal
practitioner who drafts and signs a certificate of urgency for his client must
retain to himself the attribute of being objective when he states in the
certificate that his client's case is an urgent one. GILLESPIE J
(as he then was) stated in the General Transport case that:
“The preferential treatment of
allowing a matter to be dealt with urgently is only extended if good cause is
shown for treating the litigant in question different from most
litigants. Where a party brings a chamber application for urgent relief,
it is a procedural requirement that the application be supported by a
certificate by a legal practitioner setting out with reasons the legal
practitioner's belief that the matter is urgent. The reason behind such
certificate is that the court is only prepared to act urgently in a matter
where a legal practitioner is involved, if the legal practitioner is prepared
to give his assurance that such treatment is required. Before putting his
name to such a certificate the legal practitioner must apply his mind and
judgement to the circumstances and reach a personal view that the matter is
urgent. He must support his judgement with reasons. It is an
abuse of a lawyer to put his name to such a certificate where he does not
genuinely hold the situation to be urgent. The genuineness of his belief
can be tested by the reasonableness of the purported view. Where a legal
practitioner could not reasonably entertain the belief that he professes he
runs the risk of a judge concluding that he acted wrongfully, of not
dishonestly, in giving his certificate of urgency”.
In the second case, that of Tripple
C. Pigs, GOWORA J (as she then was) took the matter further and said:
“When
a court is considering whether, or not, a matter is urgent, each case is judged
according to the circumstances surrounding the matter. The test of urgency is,
however, not subjective”. She quoted, with approval, the remarks of MAKARAU JP
(as she then was) who in Document Support Centre (Pvt) Ltd v Mapuvire,
2006 (2) ZLR 240 said:
“the test of urgency is not subjective but objective”
The reasons which underlie the
practice of employing an objective, as opposed to a subjective, test in respect
of a legal practitioner who drafts and signs a certificate of urgency for his
client were made clear by JENNET JP who in S v Rolomane, 197 (4)
SA100 said:
“No doubt the courts require for
admissibility of affidavits tendered in evidence that they be attested by a
commissioner of oaths who is impartial, unbiased and independent in relation to
the subject matter of those affidavits”
The cited case authorities do, in a
large measure, demonstrate the undesirability of the practice of a legal
practitioner who represents a client drafting and signing a certificate of
urgency for his client. It is the court's considered view that, if the
practice was allowed to take root and flourish in the manner which Advocate Matinenga
was at pains to persuade the court to do, courts would be inundated with
applications which, in substance, are not urgent but which, because of the
tendency in human nature to jump the que-ue whenever an opportunity to do so
offers itself to anyone, will be described as such by legal practitioners who
desire their clients' cases to enjoy preferential treatment at court over the
cases of other litigants. That will, no doubt, destroy the meaning and
efficiency of the whole concept of what matter is, or is not, urgent. The
result which comes out of such a situation is not difficult to see. Chaos will
be the order of the day at court and that chaos will not contribute positively
towards the country's justice delivery system. It is for the
mentioned reason, if for no other, that the courts insist on the objective, as
opposed to the subjective, test when they go about their onerous task of
applying a value and reasoned judgement towards ascertaining whether, or not, a
matter which is placed before them on an urgent basis is so urgent that
everything else must wait whilst they attend to that matter. In
their assessment of the urgency, or otherwise, of a case, or cases, which is,
or are, placed before them on an urgent basis, courts invariably do rely on
certificates of urgency which legal practitioners prepare and sign certifying
that the matter is urgent. The legal practitioner who drafts and signs
such a certificate should not, in the court's view, allow himself to be clouded
with the dust of the matter. He should be a lawyer who allows himself to
maintain as well as retain the attributes of being independent of the matter,
impartial and unbiased towards the cause of the litigant whose case he has
objectively assessed and concluded that, in his honest and unbiased view, the
matter is both urgent and cannot, therefore, be allowed to wait. In the Chafanza
case, CHEDA J gave two reasons which he said do militate against the practice
of a legal practitioner who represents a client allowing a member of his law
firm to draft and sign a certificate of urgency for the client. He
said it was, in his view, improper for a legal practitioner who represents a
client to allow a member of his law practice to draft and sign a certificate of
urgency for the client as the legal practitioner in question does have an interest
in the matter. He continued and stated that the interest is grounded on
two factors which are that:
(a)
he has a pecuniary interest in the earning of fees from the said client- and
(b)
he is interested in promoting the good will of his company by bringing his
client's affairs to a successful conclusion.
It is CHEDA J's views, to which the
court subscribes, that certificates of urgency which relate to a legal
practitioner's client should not be drafted and signed by a member of the legal
practitioners' law firm, let alone by the legal practitioner himself but by
legal practitioners of law firms which are separate and distinct from the firm
of the legal practitioner. That arrangement assists in the assessment of the
genuineness and reasonableness of the drafted and signed certificate which a
court places great reliance upon in its effort to determine if a matter which
has been placed before it is urgent or not. Legal practitioners are
officers of the court whose first and foremost duty is, at all times, to remain
candid with the court on all matters which they bring before the court.
The present is classic case where a
legal practitioner who was driven by the interest of money which he earns from
working for his clients and the desire on his part to make a good name for his
law firm as well as for himself lost the objectivity which is required in the
drafting and signing of certificates of urgency. The amount of work which Mr Chikowore
did for his clients in both the main case and in the present application
cannot possibly be regarded as having left him with any any ability to
objectively assess the matter which he certified as having been an urgent one.
The court will demonstrate the view which it takes of the matter on this
preliminary point in some part of this judgment. He was simply not candid with
the court when he drafted and signed the certificate of urgency. The court, in
this regard, agrees with the respondents who, in their submissions, argued that
the certificate of urgency which Mr Chikowero drafted and signed was not
only totally, but was incurably, defective.
The respondents' second matter in limine was, or is, that the present
application is not urgent. The applicants, on their part, insisted that the
application was urgent. The urgency of the application, they said, arose from
two matters which were that:-
(a)
the first applicant received a warrant of execution – and
(b)
the attorneys of the respondents in the rescission of judgment application
which was set down for hearing on 3 March, 2014 confirmed to the applicants
that they intended to execute the warrant without any further delay.
The
applicants attached to their founding affidavit Annexures A and B which
annexures would, in their view,
assist the court in determining the urgency, or otherwise, of the
application. At the time of the hearing of the matter, the warrant of execution
which the applicants made reference to was not in the record of proceedings.
The applicants were kind enough to submit that warrant. They did so at the
instance of the court which drew their attention to the absence of the warrant
from the record and its request that it be made part of the record because of
its importance in the determination of the case. The applicants submitted the
warrant on 20 February 2014. Attached to the warrant is a document which is
entitled NOTICE OF ATTACHMENT, I.T.O. RULES 45(12). I will, for purposes of
clarity refer to the warrant as Annexure C and the notice of attachment as
Annexure D. Both those annexures support the claim of the applicants which is
to the effect that their matter is urgent.
The applicants argued that the execution of the warrant will result in the
first applicant's property which they said was in excess of R 18 million value
- wise being transferred from South Africa to Zimbabwe. There is, according to
them, a real risk that once the property has been transferred to Zimbabwe, the
applicants will not be able to recover the same in the event of success in a
rescission application which is before the court in South Africa or any
subsequent appeals. They argued, further, that irreparable harm may be suffered
by them if the main application is not dealt with on an urgent basis.
The court mentions in passing that the present applications are preceded by a
default judgment which the court in South Africa entered against the first
applicant. The date on which the first applicant became aware of the judgment
which had been entered against him remains unknown. What is known, however, is
that the judgment in question was entered, or granted, on 11 October, 2012.
What is also known is that the first applicant applied for rescission of
judgment on 12 August, 2013. It can safely be assumed that as of the mentioned
date, the first applicant was pretty much alive to the existence of the
judgment which, to all intents and purposes, was going to operate against his
interests. The Notice of Attachment, Annexure D, which the applicants submitted
is dated 9 December, 2013. That notice read together with Annexure B which the
plaintiff, or the applicant's legal practitioners in the South African court
case, addressed to the first applicant's legal practitioners on 10 December,
2013 supports the court's observation which is to the effect that the first
applicant became aware of the existence of Annexures C and D from as far back
in time as 10 December, 2013 or even earlier than the mentioned date. He was,
as at that date, also aware that judicial attachment of his property had either
taken place, or was seriously being contemplated. Paragraph 4 of Annexure B is
pertinent to the matter. It, in part, reads:-
“…. Senior counsel acting for our
client made it clear when the rescission application was last in court
that our client does not provide any undertaking to stay the execution pending
the hearing of the rescission application during February, 2014”.
(emphasis is mine).
Annexure B is dated 10 December, 2013. The quoted paragraph makes reference to
a rescission application which the first applicant made as well as to a hearing
which the court in South Africa had scheduled to take place in February, and
not 3 March, 2014. The first applicant cannot, under the circumstances, be
heard to be claiming that he was, as at 10 December 2013, not aware of the
existence of the warrant of execution and/or the other party's avowed intention
to execute. His knowledge of those matters notwithstanding, the first applicant
did nothing about the matter which related to the protection by him of his
property which was under the threat of being attached and sold in execution. He
remained indifferent to the described set of circumstances from about 10
December, 2013 to 30 January, 2014 when he said he started to act in an effort
to protect his property. He said his action was prompted by the statement which
the Minister made on 30 January, 2014. The applicants spoke with some degree of
eloquence in their endeavour to show the court the steps which they said they
took in reaction to the Minister's statement. The steps in question do no doubt
lead up to the present application. Their counsel Advocate Matinenga implored
the court to look at his clients' case in the context of its circumstances. He,
in this regard, referred the court to the remarks of BERE J who, in Dodhill
(Pvt) Ltdv Minister of Lands and Rural Resettlement & Anor,
2009(1) ZLR 182, 187 said:
“there is no standard formula which
determines urgency. Every case number be looked at within its context”.
It
is on the basis of the abovementioned remarks, therefore, that Advocate
Matinenga urged the court not to lose sight of
the context which pertains to this urgent chamber application. The Learned
Judge's remarks would have applied to the case of the applicants pretty well if
that case had remained confined to the time that the applicants reacted to the
statement of the Minister right up the stage that they filed this application
with the court. It has, however, been observed that the first applicant became
aware of the warrant of execution, Annexure C, and the Notice of Attachment
Annexure D, on or about 10 December, 2013. He was also aware, at about the same
date, of the existence of the letter which threatened execution of the property
his application for rescission notwithstanding. The applicants marked that
letter Annexure B. He, despite his knowledge in the above mentioned regard,
remained inattentive to the threat which the law was likely to visit upon him
from about 10 December, 2013 to 30 January, 2014 when he, for the first time,
started to put the wheels of justice into motion with a view to protecting his
interests. Simple mathematical calculation shows that he was inactive in regard
to the threat for a period of some fifty (50) days running. He proferred no
reasons for his inaction. Certainly this is not the context in which the
Learned Judge wanted his remarks to have been understood to mean. The conduct
of the first applicant in allowing the matter to remain unattended to for a
period of fifty (50) days without any reason on his part for not acting upon it
can, at best, be described in the words of CHATIKOBO J (as he then was) who, in
Kuvarega v Registrar General & Anor, 1998(1) ZLR, 189, 193
said:-
“What constitutes urgency is not
only the imminent day of reckoning; a matter is urgent, if at the time the need
to act arises, the matter cannot wait. Urgency which stems from a deliberate or
careless abstention from acting until the deadline draws near is not the type
of urgency contemplated by the rules”.
The learned judge's remarks are on all fours with the conduct of the first
applicant who did nothing for some fifty days running when his goods were under
a real threat of being put under the hammer. He allowed that matter to wait and
only did have it commenced, in the court's view, in preparation of the
rescission application which the court in South Africa set down for hearing on
3 March, 2014. This, in a nutshell, is what is termed self-created urgency
which cannot properly be placed under the realms of what are, in the strict
sense of the word, termed urgent chamber applications.
The court observes and mentions in passing that the application in the main
case was prepared on 12 or 13 February, 2014 and the applicants' affidavit
which related to that case was signed and sworn to on 11 February, 2014. The
court noted, further, that the applicants' urgent chamber application was
prepared on 10 February, 2014 and that the affidavit which related to that case
was signed and sworn to on 11 February, 2014. It is evident that the urgent
chamber application came into existence prior to the existence of the main
application. That evident fact notwithstanding, the application in the main
case was filed with the Registrar of this court on 13 February, 2014 and the
present application was filed with the same office on the following day i.e 14
February, 2014. The observed confused state of affairs did arise, in the
court's view, from an effort by the applicants to convey to the court the
impression that the application in the main case preceded the present
application when, on an effortless analysis of the two applications, the
reverse of the matter was the case. The applicants' scheme was, unfortunately
for them, not a well thought out one. It betrayed their unrewarding effort in a
manner which is difficult to countenance. Their case on this preliminary matter
cannot, and does no, hold.
The respondents' third matter in
limine was that the applicants will not suffer irreparable harm. The
applicants, on the other hand, insisted that irreparable harm would visit them
if the main application is not heard on an urgent basis. They stated that,
where the main and the rescission, applications succeed when execution has been
made against the first applicant's property, the first applicant would be without
a remedy. The respondents' position was that, in the circumstances which the
applicants have made mention of, the latter may sue for damages in respect of
the first applicant's property which would have been executed against.
The applicants' counter-argument was that they would be remediless for
the reasons that the second applicant under reconstruction would, at law, be a
different legal person from the second applicant as a reconstructed company.
There is, in the court's view, merit in the argument which the applicants
advanced on this matter. The second applicant under reconstruction would, in
the stated case, be represented by the third respondent whereas the second
applicant as a reconstructed company would be a stand-alone legal entity which
is capable of suing and being sued in its own right.
Locus standi of the second, third and fourth applicants constituted the
respondents' fourth preliminary matter. The respondents argued that, since the
second, third and fourth applicants (i.e the three applicants) are associates
of the second applicant which was placed under reconstruction in terms of the
Reconstruction of State-Indented Insolvent Companies Act (“the Act”) on 6
September, 2004 and since that reconstruction has not been cancelled in terms
of s 35 of the Act, the three applicants are also under reconstruction in terms
of the interpretation section of the Act. The three applicants, it was argued,
could not and cannot, at law, commence any proceedings without the leave of the
third respondent whom the Minister of Justice Legal and Parliamentary Affairs
(the Minister) appointed to the position of administrator of the company, or
companies, which is, or are, under reconstruction. The respondents submitted
that the appointment of the third respondent by the Minister conferred upon him
the authority to assume control and management of the three applicants as well
as to recover and take possession of all their assets. The applicants, on the
other hand, insisted on the point that they all did have locus standi in
the mater. They stated that their application in the main case is aimed at
showing the world at large that the second applicant is a reconstructed company
as opposed to it being a company which is under reconstruction. A cursory examination
of their application in the main case does, indeed, work towards having the
third respondent declared to have been divested of the authority which the Act,
through the Minister, conferred upon him on 6 September, 2004. Section 35 of
the Act is relevant towards the determination of this preliminary matter. The
section deals with cancellation of a reconstruction order.
It, in part, reads:-
“If at any time the administrator
notifies the Minister in writing that the purpose of a reconstruction order has
been fulfilled or that for any reason it is undesirable that the order should
remain in force, the Minister may, by notice published in the Gazette, cancel
the order and thereupon the administrator shall be divested of his or her
functions”.
The applicants did not ever claim that s 35 of the Act was complied with. Nor
did they challenge the respondents' assertion which is to the effect that the
reconstruction order of 6 September, 2004 is still in existence. Their main
application does, in fact, seek to have the authority which the third
respondent was clothed with as of 6 September 2006 removed from him through the
court and not through administrative procedures which the Act provides.
Accepting, as it must be accepted, that the reconstruction order of 6
September, 2004 still subsists it cannot be doubted that the three applicants'
conduct of bringing this law suit to court without leave of the third
respondent is bad at law. None of those applicants do have locus standi
to act in the manner which they did. The fact that they filed an application
with the court in the main case cannot clothe them with the requisite authority
to institute legal proceedings against the respondents, let alone the third
respondent. The court is satisfied, the applicants' attachments MDM 11
notwithstanding, that the third respondent's authority still subsists until he
has been divested of it in terms of the Act.
The respondents' fifth preliminary matter centred on the issue of non – joinder
and mis-joinder. It was, and is, the respondents' contention that the Act upon
which the current application is based was assigned to the Minister of Justice,
Legal and Parliamentary Affairs and not to the first respondent. They,
therefore, argued that the main, and the present, applications should have been
brought against the Minister under whose mandate the Act falls and not against
the first respondent. They submitted that the second applicant exists as a
company which is under reconstruction and not as a reconstructed company. The
applicants insisted on the point that the second applicant was a company the
reconstructing exercise of which had already been completed and was, therefore,
a stand alone company which did not fall under the Act any longer. They stated
that the second applicant fell under the administration of the first respondent
who, in their view, was properly cited in both main, and the current,
applications.
The court observes that the applicants are not being candid with the court.
They, in the third matter in limine for instance, advanced the argument
that if the first applicant's goods are attached and sold in satisfaction of
the judgement which had been entered against him by the court in South Africa,
the first applicant would be without any remedy. They stated on that point that
he would be remediless for the reason that the second applicant under
reconstruction was, at law, separate and different from the second applicant as
a reconstructed company. Their abovementioned statement clearly shows the
uncontroverted point which was, or is, to the effect that the legal status of
the second applicant was capable of changing from one form to the other
following the court's hearing and determination of their main application. On
the preliminary matter which is under consideration, however, they stated as a
fact, which they know it is not such, that the second applicant's legal status
has already changed and that the second applicant as constituted now is a
reconstructed company. If such was the case as they would have the court
believe, their main application would have no basis at all in law or in logic.
It is their intention in that application to have the court issue a declaratory
order which is to the effect that the second applicant is a reconstructed
company which no longer falls under the administration of the third respondent.
The court has already made a finding which is to the effect that the second
applicant is a company which is still under reconstruction. The only way
through which the third respondent can be properly divested of his functions in
respect of the second applicant occurs when s 35 of the Act has been complied
with, in the court's view. The provisions of the mentioned section have not
been commenced, let alone completed. The court, has therefore, little if any
difficulty to assert as it is doing that the second applicant's status remains
as it was established by the Minister through the Government Gazette of 6
September, 2004. It, accordingly, goes without saying that there was, in these
applications, a mis-joinder on the part of the first respondent and a
non-joinder on the part of the Minister under whose purview the Act falls.
The sixth and last preliminary matter which the respondents raised related to
the issue of security for costs. They prayed the court to stay these
proceedings until the applicants whom they described as foreign based entities
have deposited with the registrar of this court security for the costs which
the respondents would incur in their effort to defend themselves in this
application. They stated that the three applicants were foreign companies which
according to the papers filed of record did not authorise, or approve,
institution of these proceedings. They insisted that the applicants should, in
terms of the law and the rules of this court, deposit an appropriate sum of
money with the registrar as security for any award of costs which may be
ordered against them. The respondents' apprehension on this matter was premised
on the point that the applicants did not furnish the court or anyone with
information of their financial status and that they, to the respondents'
knowledge, do not have any assets in this country. The applicants' response was
that the first applicant who is a business person in both Zimbabwe and South
Africa was a Zimbabwean who, if an order of costs were to be made against the
applicants, may be ordered to pay the costs for his co-applicants and himself
on a joint and several basis. They stated, further, that the second applicant
was, or is, the holder of 7 980 ordinary shares and has, therefore, assets in
what they termed the reconstructed company which is located in Zimbabwe. They
insisted that the three applicants have in the past appeared before the highest
court in the land without the court in question raising any issue of security
for costs.
The first applicant deposed to the affidavit which forms the basis of the
present application. He stated that he was the director of his co-applicants
and that he had the authority of those three to institute these proceedings.
His co-applicants are described in the papers as legal entities which are
capable of suing and being sued in their own respective rights. Resolutions
from, or of, their respective boards of directors clothing the first applicant
with the authority to Act for, and on behalf of, all three of them would
have sufficed as evidence of authorisation to him to sue the respondents. The
first applicant produced no such authority save to state as he did. This
observed set of circumstances confirms the apprehension of the respondents.
When the issue of costs comes to the fore in the absence of the existence of
clear and unambiguous evidence which shows that the first applicant did have the
authority to act, the three applicants may well turn their back against the
respondents whom they would leave in the cold on the basis that the respondents
cannot produce any document which shows that the three authorised the first
applicant to act for them. The fact that the three applicants' operations are
based outside this country makes the apprehension of the respondents more real
than they are fanciful.
There are, in the court's view, a variety of reasons which account for the
non-production of the resolutions by the three applicants. One reason which
easily comes to mind is that the first applicant did not bother himself to have
those prepared, produced and availed to the court as well as to the
respondents. The second and more probable reason is what the respondents are
asserting. They stated that the second applicant is a company which is under
reconstruction and so are the three applicants which are its associates. It
requires no emphasis to state that a company which is under reconstruction does
not have a board of directors as such a company's affairs are wholly placed
under the administration of the administrator whom the Minister appoints in
terms of the Act. Without the board of directors, therefore, that company
cannot pass any resolution such as the one which is being contemplated in this
application. Going by way of the above stated matter, therefore, it is not
difficult to see that the three applicants could not, and cannot, have passed
any resolution which authorised the first applicant to act for them.
The applicants' second contention was that the second applicant which is
locally based held 7980 ordinary shares. That contention falls away on the
basis that the second applicant could not and cannot dispose of those shares
without the leave, or approval, of the third respondent. Section 6 (a) (c) and
(d) of the Act is relevant on this point. In any event the third respondent who
is a party to this application would, in all probability, not authorise the
second applicant to dispose of those shares with a view to raising money with
which it would meet the legal costs of the third respondent and his
co-respondents. Any such authorisation by the third respondent, would be
likened to the situation of an administrator who, with full knowledge of his
functions, makes a conscious effort to shoot himself in the foot, if the
compensation may be favoured. No person who is in full control of his cognitive
faculties would allow that to happen to himself or herself.
The applicants' assertion which was to the effect that the first applicant is a
Zimbabwean who conducts business operations in South Africa is neither here nor
there. That assertion would have somehow held if the first applicant's
financial position had been made known to the court and to the respondents.
Both the court and the respondents are in the dark on that matter. He may, or
may not, have the requisite means to meet those costs where an order of costs
is made against the applicants.
It is not disputed that the applicants appeared before the highest court on the
land in constitutional case number 151/07 SC 2/11. The applicants submitted
that when the three applicants so appeared, the issue of security for costs did
not ever arise. It is the court's considered view that the matter might not
have arisen at the mentioned stage because no party had put it into issue then.
In casu the respondents have raised it and it is properly before the
court which is enjoined to consider the merits, or otherwise, of the same.
The respondents stated that, in terms of the laws and the rules of this court,
such non-resident entities as the three applicants are, at the application of
the other party, required to deposit an appropriate sum of money with the
registrar as security for any award of costs which may be awarded against them.
The respondents did not refer the court to any law or rule of this court which
supports their claim in the mentioned regard.
The court was, accordingly, at pains to identify any law, or rule, which was in
sinc with the respondents' claim in the abovementioned regard. It found
none.
The nearest which the court found on this matter were some South African case
authorities. Amongst them were the following: Baker & Company v Granger,
1937 AD 223; Witham vVenebles,1829 (1) Menz E 291; Alexander v
Jow & Anor,1948 (3) SA. The principle which the cases bring to the
fore is that, in proceedings which are initiated by a peregrinus the
court should exercise its mind in a judicious manner with a view to protecting
an incola to the fullest extent which is possible under any given
circumstance. The cited case authorities are not binding on this court. They,
however, offer some clear and straight forward guidelines which the court
cannot afford to ignore.
In casu the provisions which the applicants raised in response to the
respondents' apprehension all fell by the way side. The court cannot, and
should not, lose sight of the fact that the respondents who have been dragged
before the court will incur expenses in their effort to defend themselves.
Where the court rules in their favour and awards them costs for this
application and the applicants remain unreachable, the result will be
thoroughly unpalatable to the respondents. Under the mentioned circumstances,
no one will lay any blame on the respondents if they assert, as they are likely
to do, that the court exercised its discretion injudiciously.
It is the court's view that the interests of the parties to this application
will best be served if the applicants are made to pay into court security for
costs as an assurance to the respondents that where an award of costs is made
in their favour their costs for the suit are guaranteed irrespective of the
fact that the applicants are within, or outside, their reach.
The respondents have argued five, of
the six, matters which they raised in limine successfully. For the
reasons which appear in the body of this judgement, the applicants failed to
prove their case on a balance of probabilities. They could not show that the
application which they brought to court was, or is, urgent. They, on their
part, or at least one of them, did not treat the application with the urgency
it deserved.
The application is, accordingly,
dismissed with costs.
Gutu &
Chikowero, applicants' legal practitioners
Dube Manikai & Hwacha, respondents' legal practitioners
