The cardinal principle of our Company Law is that a company enjoys separate legal personality, generally referred to as the legal persona principle. For that reason, its property and its liabilities should be maintained distinct and separate from those of its members.

However, the courts have always readily lifted the corporate veil where the company is used as a vehicle for fraud or to justify wrong....,.

As stated by CORBETT CJ in The Shipping Corp of India Ltd v Evdomon Corp and Anor 1994 (1) SA 550 (A)…, which was quoted with approval by SANDURA JA in Van Nickerk v Van Niekert & Ors 1999 (1) ZLR 421 (S)…,:

“It is of cardinal importance to keep distinct the property rights of a company and those of its shareholders - even where the latter is a single entity; and that the only permissible deviation from this rule known to our law occurs in those (in practice) rare cases where the circumstances justify 'piercing' or 'lifting' the corporate veil.

I do not find it necessary to consider, or attempt to define, the circumstances under which the court will pierce the corporate veil. Suffice it to say, that, they would generally have to include an element of fraud or other improper conduct in the establishment or use of the company or the conduct of its affairs.”

See also Mangwendeza v Mangwendeza 2007 (1) ZLR 216 (H)…, and Manyathela v Manyathela HB44-11.

A company, being a legal persona, owns its own property. Shareholders do not own company property….,.

In Shipping Corp of India Ltd v Evdomon Corp & Anor 1994 (1) SA 550 (A)…, quoted with approval by SANDURA JA in Van Niekerk v Van Niekerk & Ors 1999 (1) ZLR 421 (S)…, CORBETT CJ said:

“It seems to me that, generally, it is of cardinal importance to keep distinct the property rights of a company and those of its shareholders, even where the latter is a single entity, and that the only permissible deviation from this rule known to our law, occurs in those (in practice) rare cases where the circumstances justify 'piercing' or 'lifting' the corporate veil…,. I do not find it necessary to consider, or attempt to define, the circumstances under which the court will pierce the corporate veil. Suffice it to say that they would generally have to include an element of fraud or other improper conduct in the establishment or use of the company or the conduct of its affairs.”

The first issue is whether the first respondent, being a corporate entity, and legal persona, authorised the Agreement of Sale.

The first respondent contends that its' Managing Director, who is alleged to have seen the irrevocable offer letter, and to have proceeded to sign it, had no authority to negotiate the purchase price.

The first respondent does not deny that in terms of its Board of Directors resolution of 30 April 2007, it was resolved to dispose of Number 5 McNab Street, Redcliff, through Nandi Properties (Private) Limited.

There is no denial that Mr. Michael Hanyani, the Managing Director, instructed Nandi Properties (Private) Limited, on behalf of the first respondent.

It is trite law that the first respondent, being a legal persona, acts through its agents, in this case the Board of Directors.

In Walenn Holdings (Pvt) Ltd v Intergrated Contracting Engineers (Pvt) Ltd & Anor 1998 (1) ZLR 333 (H)..., SIBANDA J cited with approval the role of the Board of Directors as summed up in HAHLO, SA Company Law Through the Cases, 4^th ed...., where the author stated that –

“The fountain head of a managerial power in the company is the Board of Directors, which acts on its behalf. A transaction entered into, or approved by the Board, acting within its constitutional powers, is binding on the company. So is a transaction entered into, within the scope of his actual authority, by the Managing Director, if there is one, by a single Director, or by a Manager, or other officers of the company.”

In casu, the intention of the first respondent, to sell the property, was known through its resolution made by the Board of Directors.

Additionally, it is submitted for the respondents', the second and third respondents cannot be interdicted from selling the first respondent's assets, as distinct from their shares in it, as those assets are owned by the first respondent itself as a separate corporate entity.

...,. It is a firmly grounded principle of company law, dating back to the decision of the House of Lords in Salomon v Salomon & Company Limited [1897] AC 22 that a company is a corporate body that exists as a separate juristic entity distinct from its Members and Shareholders.  This principle was affirmed in Dadoo Ltd & Others v Krugersdorp Municipal Council 1920 AD 530. See also TETT & CHADWICK: Zimbabwe Company Law (2^nd ed. 1986)...,. Consequently, while the shares in a company may be owned and controlled by its shareholders, its assets vest exclusively in the company itself and are not subject to the ownership and control of its shareholders. Of course, one cannot discount the possibility of either or both of these principles being clouded or circumvented by well-orchestrated mercantile machination; although this might justify “piercing the corporate veil” in appropriate circumstances, viz. where there is evidence of fraud, it cannot dilute or detract from the fundamental legal distinction between the company, on the one hand, and its members or shareholders on the other.

It is common cause that there was an Agreement entered into between the defendants and the plaintiff for the drilling of a borehole at the latter's farm in Mvuma.

It is abundantly clear and requires no detailed analysis of the evidence led that although the first and second defendants took part in the actual negotiations which led to the subsequent agreement with the plaintiff, these defendants were only acting in a representative capacity for the third defendant which is the company that actually entered into an Agreement with the plaintiff.

It is a time-honoured and firm legal position that a company stands as a separate legal entity from its Directors and in this regard it was improper for the first two defendants to be cited in their personal capacity. In fact, it was incompetent to do that in the absence of any allegation of fraud on the part of the first and the second defendants.

In any case, the pieces of 'correspondence' relied on by the applicant are proof of 'correspondence' between the second respondent and the applicant. I am mindful of the fact that the second respondent was only the Managing Director of the first respondent. However, for the purposes of establishing a binding agreement between the applicant and the first respondent, the need for a Board resolution would, in my view, arise. It cannot, in the absence of evidence, just be assumed that the second respondent had authority to enter into certain binding arrangements with the applicant on behalf of the first respondent. The alleged contract was meant to be between the applicant and the first respondent. In paragraph 8 of the founding affidavit the applicant presents her case as follows:-

“8. I approach this honourable court for an order directing and authorising a debatement of the foreign currency accounts of Travel Connections (Private) Limited, for the appointment of an intervener or referee, and for payment of all foreign currency due to me from Travel Connections on account of the profit sharing consultancy agreement which I had with Travel Connections (Private) Limited prior to the unlawful termination of my employment.”

Regarding the claim to the rest of the items placed under attachment, counsel for the first and second claimants submitted that the property in question belongs to the second claimant which is a duly incorporated company and is therefore not Harare Kawasaki - a mere brand name. As Harare Kawasaki does not exist as a separate entity the attachment of property belonging to the second claimant was wrong. He, however, conceded that it is the second claimant which trades as Harare Kawasaki.  It also employed the judgment creditor.

Counsel for the first and second claimants submitted that while Order 2A Rule 8C allows for a person carrying on business in a name or style to be sued in that name or style, that Rule either does not apply to incorporations or it has been overtaken by time.

Order 2A Rule 8C provides:

“Subject to this Order, a person carrying on business in a name or style other than his own name may sue or be sued in that name or style as if it were the name of an association, and rules 8A and 8B shall apply, mutatis mutandis, to any such proceedings.”

The entire Order 2A relates, as the heading suggests, to “proceedings by or against Associations, etc.” To my mind that heading has a telling effect on the extent of its application especially when read with the word “person” in Rule 8C.

Counsel for the first and second claimants relied on the authority of Inyanga Downs Orchards v Buwu HH108-10 in which MUSAKWA J stated…,:

“Regarding the identity of the applicant, Mr Mpofu submitted that a party may sue or be sued by its trade name.  Mr Mpofu cited Order 2A Rule 8. However, this provision relates to associates being able to sue or be sued in the name of the association. He must have had in mind Order 2A Rule 8C…,. As submitted by Mr Chikumbirike, in the papers before this court the applicant is not described as an association. Reverting to Rule 8C, Mr Mpofu sought to argue that the applicant is sufficiently described in para 3 of the founding affidavit where it is stated that:

'The applicant, as a person at law, was first incorporated in terms of the law as far back as 1968.'

Now, the effect of incorporation is that a company assumes the name by which it is registered. In this respect see s22(2) of the Companies Act [Cap 24:03].  Although Mr Mpofu drew the court's attention to para 3 of the founding affidavit, it is clear that the applicant is not sufficiently described by its trade name. Therefore, Mr Chikumbirike was quite correct that the respondent does not know who Inyanga Downs Orchard is. The applicant should have instituted proceedings in the name by which it was incorporated.”

In my view, the foregoing passage in the judgment of MUSAKWA J does not support the contention that the provisions of Rule 8C have been overtaken by time; it would be absurd to have a provision in the Rules which has no application. Neither does it support the assertion that Rule 8C does not apply to incorporations. All the learned judge said was that Rule 8C applies to associations. He did not say that it does apply to incorporations. That Rule provides that “a person” can be sued in a name or style other than his own name and in the name or style in which it carries on business.

It is a celebrated principle of company law that a company, once incorporated, becomes a fictious person. That is the whole essence of the legal persona principle of our law. To that extent, therefore, the use of the word “person” in Rule 8C should, of necessity, include an incorporation. In my view, an incorporation which carries on business in a name or style can be sued in that name or style.

Once one examines that provision from that perspective, the definition of an association as a trust, and a partnership, a syndicate, a club or any other association of persons which is not a body corporate in Rule 7 pales. Rule 8C does not refer to an association as defined in Rule 7 but to “a person.”…,.

I conclude, therefore, that the judgment creditor was entitled to sue the second claimant in its trading name or style; what counsel for the first and second claimants chose to call “a brand.” Clearly, the second claimant presented itself to the transacting public as Harare Kawasaki. In fact, the passage in the contract of the parties, which I cited above, even refers to Harare Kawasaki as “a company incorporated in Zimbabwe.” While admitting that it employed the judgment creditor, the second claimant wants to dissociate itself from the judgment taken against it in its trading name, a trading name it elected to use in the Consultancy Agreement - a real case of hiding behind the proverbial finger. 

It cannot succeed.

To me, it is dishonesty in the extreme for the second claimant to attempt to evade liability in terms of the judgment taken against it in the name or style in which it related to the public. What belongs to Harare Kawasaki clearly belongs to the second claimant. It would appear that the second claimant uses the two names interchangeably in order to confound creditors. Therefore, the claim made by the second claimant has no merit.

In the result, I make the following order, that –

1. …,.

2. …,.

3. The second claimants' claim to the goods placed under attachment in execution of the judgment in HC437/13 is hereby dismissed.

4. The goods set out in the notice of seizure and attachment dated 29 May 2013 issued by the applicant, except for the goods set out in para 1 above, are hereby declared executable.

In terms of Order 2A Rule 8C of the High Court of Zimbabwe Rules, 1971;

''Subject to this order, a person carrying on business in a name or style other than his own name may sue or be sued in that name or style as if it were the name of an association, and rules 8A and 8B shall apply mutatis mutandis, to any such proceedings.''

In casu, the respondent entered into a written contract for security services with the applicant in the name of ''Superbake Bakery.'' It traded in that name throughout. It can therefore not argue at this stage that the entity in question does not exist. The applicant is therefore entitled to sue the respondent in the name of its business.

In one of her affidavits, Donna Ray Campbell says Haddon & Sly is a trade name of a company known as Catsbury Trading (Pvt) Ltd. In his submissions on behalf of the claimant Mr Nkomo said:

“Catsbury, which trades as Haddon & Sly, is in occupation of the property which accumulated the rates.”

The judgment creditor says it has never dealt with Catsbury but with Haddon & Sly. It is not disputed that Haddon & Sly has always been the one paying the rates to the Bulawayo City Council over a long time. If, as it seems, a new company called Haddon & Sly Properties was formed this was never arranged with the judgment creditor to change the responsibility for the rates and levies. In any case, the claimant is not Haddon & Sly which was cited in the papers. If it is admitted that Haddon & Sly is a trade name for Catsbury then they are one and the same. The attempt by Donna-Ray Campbell to deny any knowledge of Haddon & Sly is simply dishonest. The facts point to the fact that Haddon & Sly and Haddon & Sly Properties are one and the same.

The papers also show that at one stage Haddon & Sly attempted to settle the debt but did not make full payment. This is reflected by the receipt referred to earlier.

At the hearing of the summary judgment application, one Chipanguza, who said he was Director of Haddon & Sly Properties, was assisted by Lazarus & Sariff Attorneys. It was after the attempt to settle that the sum of $2,500= was paid on behalf of Haddon & Sly. Donna Ray Campbell signed documents for Haddon & Sly and also for Catsbury. A stamp of Haddon & Sly was actually used in one of the documents from the claimant. The above shows a clear abuse of the court process and should properly be reflected by an order for costs on attorney and client scale as prayed.

1. I therefore hold that Haddon & Sly and Haddon & Sly Properties are one and the same.

2. The application by the inter pleader succeeds and the claimant's claim is dismissed.

3. The claimant is to pay costs on attorney and client scale.

Did the appellant occupy gazetted land?

Even if it were assumed in favour of the State, that the requirement for mens rea was expressly or impliedly excluded by the legislature, it is trite that liability in strict liability offences is dependent on proof of the actus reus constituting the offence - in this case, occupation of the land. BURCHELL and HUNT put the matter thus:

“It must be stressed that even where the requirement of mens rea is expressly or impliedly excluded by the legislature, liability is dependent upon proof by the prosecution of the actus reus. It would have to be proved that the accused's act was both a voluntary one and that it was unlawful. It follows that although a defence which excludes mens rea would be irrelevant, a defence which excludes the unlawfulness of the actus (e.g. necessity, impossibility, authority) would remain open to the accused. Liability is therefore 'strict' rather than 'absolute'.”

The undisputed evidence by the appellant was that the appellant was not in occupation of Coldstream Estate, as alleged in the State Outline, but that he resides at 'Mountain Home, Penhalonga'. The Gazetted Lands (Consequential Provisions) Act [Chapter 20:28] does not define 'occupation'. Black's Law Dictionary, 5^th ed (West Publishing Co) defines occupation as:

“Possession; control; tenure; use. The act or process by which real property is possessed and enjoyed. Where a person exercises physical control over land.”

The appellant does not possess or enjoy Coldstream Estate, nor does he exercise physical control over it. A company, Allied Timbers (Saligna) (Pvt) Ltd, in which he is a minority shareholder, enjoys control of the same. Clearly, the magistrate fell into error when he held that because the appellant is a minority shareholder of this company, he therefore, was in occupation of the land in question. As noted by CILLIERS and BANADE, an important consequence of the separateness of a company from its shareholders is that;

“[T]he assets of the company are its exclusive property and the members have no proportionate proprietary rights therein. Only on liquidation of the company are the members entitled to share in a division of the assets of the company. Consequently, it is not necessary to transfer a company's assets when there is a change of membership…,.”

CILLIERS and BANADE, Company Law, 4^th ed (Butterworths) 1982…,.

This is an appeal from a judgment of the High Court in which it granted an application for an eviction order against the appellant on the basis that the respondent was the owner of the property known as Stand number 3182 of Subdivision A of 159 of Prospect, Harare. The appellant was found not to have a right of occupation.

The appellant had challenged the vindicatory action instituted by the respondent on the basis that she had a right of occupation derived from an agreement of sale of the property entered into between her and a company called Champion Constructors (Pvt) Ltd, duly represented by one of its directors and a shareholder, Ms Elizabeth Chidavaenzi.

After hearing argument from counsel for both parties, the appeal was dismissed. It was indicated then that reasons for the decision would follow in due course.

It was not in dispute that the respondent was the registered owner of Stand number 3182 of subdivision A of 159 of Prospect, Harare. The issue before the court a quo was whether there was a binding agreement of sale which gave the appellant the right of occupation.

The court a quo found against the appellant.

The question before this Court is whether the decision of the court a quo is correct on the evidence placed before it by the parties.

The facts of this case are as follows.

The respondent issued summons for the ejectment of the appellant from Stand number 3182 of Subdivision A of Stand 159 Prospect in Harare on 9 June 2008. In her plea, the appellant sought the dismissal of the claim on the basis that she was a legitimate possessor and occupier of the property. The contention was that the right, title and interest in the property was lawfully transferred to her by a declaratory order issued by the High Court in case No. HC7594A/06.

The appellant contended that she was in occupation of the property pursuant to an agreement of sale entered into between herself and a company called Champion Constructors (Pvt) Ltd. The appellant contended that, alternatively, the respondent was estopped from denying that Champion Constructors (Pvt) Ltd was the holder of rights, title and interest in the property and was entitled to dispose of the property as it did.

The respondent, through its managing director, Mrs Elizabeth Chidavaenzi, tendered various documentary exhibits in support of its position. She denied that Champion Constructors (Pvt) Ltd had ever been authorised to dispose of the property in the manner alleged or at all.

The appellant relied on her own testimony and on the evidence of two former workers of Fingold Real Estate, which had allegedly been mandated by Champion Constructors (Pvt) Ltd to dispose of the property to her.

The court a quo accepted that the respondent was the registered owner of the property in question on the basis of irrefutable evidence - the title deeds to the property. The court also accepted that Mrs Elizabeth Chidavaenzi was the managing director and controlling shareholder of the respondent. The evidence placed before the court a quo pertaining to the relationship between the respondent and Champion Constructors (Pvt) Ltd was that the respondent company had contracted Champion Constructors (Pvt) Ltd to service the land and develop residential houses on the subdivisions. The agreement between the parties was that Champion Constructors (Pvt) Ltd would be paid in kind for its services or in the form of completed houses which it would, in turn, sell to prospective home-owners in order to recoup its expenses.

Mrs Elizabeth Chidavaenzi told the court a quo that, in the past, the respondent had mandated Fingold Real Estate to sell two of its properties but it did not sanction the sale of the property in issue. She testified, further, that this is the reason why the agreement of sale was not signed by the seller. Her testimony was to the effect that the appellant was involved in a fraudulent sale which had been masterminded by John Chagaresango of Finhold Real Estate, a close relative of the appellant.

Ms Chidavaenzi said that the first time she became aware of the purported agreement of sale of 26 September 2006, between the appellant and Champion Constructors (Pvt) Ltd, was in November 2006 when lawyers for the appellant began pestering her with demands that she sign the document. She also told the court a quo that on the two occasions that she had mandated Fingold Real Estate to sell properties on the respondent's behalf, she had given them instructions in writing, which she denied doing in this case.

The appellant admitted before the court a quo that John Chagaresango of Fingold Real Estate was a close relation of hers, her elder sister's son. She testified that she signed the agreement of sale before John Chagaresango, Mr Phiri and Faith Muzungu on 26 September 2006. Thereafter, she paid Z$32,500,000= on 28 September 2006, 9 October 2006 and 3 November 2006. The appellant's evidence before the court a quo was that the terms of the agreement of sale were not fully explained to her. She admitted that Ms Chidavaenzi had never authorised her to make improvements to the property.

The court a quo found that, despite being a major shareholder in both the respondent and Champion Constructors (Pvt) Ltd, Ms Chidavaenzi was a “focused, confident and convincing” witness whose “evidence proclaimed loudly and boldly that there was no contract to talk about between Champion Constructors and the appellant.”

The court found, further, that, Fingold Real Estate could not possibly have been mandated to sell the property in question to the appellant by Champion Constructors (Pvt) Ltd or anyone else. The estate agent failed to produce proof of its mandate to sell that particular property.

On the effect of the High Court order relied upon by the appellant as bestowing or confirming that the appellant had acquired the rights, title and interest in the property, the court a quo found that the order was made in default and was against Champion Constructors (Pvt) Ltd and Elizabeth Chidavaenzi. The court's view was that the order was not binding on Drawing Services (Pvt) Ltd or enforceable against it, because, despite being the registered owner of the property, it had also not been cited as a party to the proceedings.

According to the appellant's testimony before the court a quo, John Chagaresango, who worked for Fingold Real Estate, advised her that the property in question was for sale. Accompanied by John Chagaresango, she went to view the property. The property was in the care of Champion Constructors (Pvt) Ltd, which, together with Drawing Services (Pvt) Ltd, the respondent, were under the directorship and shareholding of Elizabeth Chidavaenzi and Keroni Tevera (according to form CR14 produced before the court a quo).

Elizabeth Chidavaenzi testified that Keroni Tevera was a passive participant in the management of the affairs of Champion Constructors (Pvt) Ltd. According to the evidence before the court a quo, after the visit to the Stand, John Chagaresango contacted Elizabeth Chidavaenzi and advised her that the appellant wished to purchase the Stand. It would appear that, upon instruction, Fingold Real Estate drew up a draft agreement, in terms of which the seller, Champion Constructors (Pvt) Ltd, held itself out as being the holder of the rights, title and interest in the property, and as agreeing to sell to the purchaser, the appellant, its right, title and interest on some of the following conditions:

1. The purchase price of the property of Z$32,000,000= (thirty two million Zimbabwe dollars) plus 15% value added tax be paid.

2. A deposit of Z$21,000,000= (twenty one million Zimbabwe dollars) to be paid in full within 48 hours of signing the agreement of sale, failing which the seller shall be entitled to cancel the agreement without further notice.

3. A cash deposit was to be paid by Bank cash transfer to Champion Constructors (Pvt) Ltd.

Clause 8 of the document of sale provided that there would be no variation of the conditions of the agreement unless the variation was in writing and signed by the parties.

In Clause 14, the parties acknowledged that the written agreement between them would be the only agreement and that no other conditions, stipulations, warranties or guarantees would be valid unless included in the agreement.

The appellant signed the proposed agreement on 26 September 2006 before two witnesses. The respondent did not sign. Champion Constructors (Pvt) Ltd did not sign. Elizabeth Chidavaenzi alleges that the estate agents drafted the document without her knowledge and consent. The appellant paid the deposit before the respondent signed the agreement of sale.

Her first instalment was paid on 28 September 2006. It took her up to 3 November to pay the deposit in full, contrary to the provisions of clause 1 of the alleged agreement of sale which stipulated that the deposit must be paid in full within 48 hours of the date of the signature of the agreement. If the appellant signed the alleged agreement on 26 September, and assumed that the seller had done the same, the deposit ought to have been fully paid by 28 September 2006.

It is not in dispute that the appellant subsequently paid the purchase price in full to Champion Constructors (Pvt) Ltd. When she sought to take occupation she was prevented from doing so by the respondent. The appellant applied to the High Court seeking an order declaring that the document she signed on 26 September 2006 constituted a valid and binding agreement of sale between herself and Champion Constructors (Pvt) Ltd. On 19 September 2007, the High Court issued an order on the following terms:

1. The provisional order in case number HC7594A/06 be and is hereby confirmed on the following terms:

(a) That the agreement of sale between the applicant and the first respondent, signed on 26 September 2006, in respect of Stand 3182 of Subdivision A of 159 Prospect be and is hereby declared to be legally binding and enforceable against the first respondent.

Armed with the order, the appellant took occupation of the property against protestation by Elizabeth Chidavaenzi. On 9 June 2008 the respondent issued summons out of the High Court claiming, by vindicatory action, ejectment of the appellant from Stand 3182 of Subdivision A of Stand 159 of Prospect Harare. It alleged that it was the owner of the property in terms of Deed of Transfer DT5668/72.

The respondent alleged that the appellant had no right to occupy the property as she had not entered into an agreement of sale with the registered owner of the property. The respondent alleged that there was no privity of contract between the appellant and the respondent.

In resisting the action, the appellant raised three points:

1. She denied that the respondent was the owner of the property and argued that the right, title, and interest in the property had been lawfully transferred to her by virtue of the declaratory order issued in her favour by the High Court order of 19 September 2007.

2. The appellant alleged that she had a right of occupation to the property by virtue of the agreement of sale with Champion Constructors (Pvt) Ltd.

3. The appellant denied that there was no privity of contract between the respondent and Champion Constructors (Pvt) Ltd as they were both under the directorship of Ms Chidavaenzi, who, according to the appellant, knew about the agreement of sale.

After hearing the evidence of the parties relating to the issues, the court a quo found that the appellant was not a credible witness. The court was not assisted by the evidence of the witnesses called by the appellant to bolster her case. It found Evis Monica Mutodi to have given “a hopelessly confusing piece of evidence”, which, under cross examination, was not consistent with that of the appellant even on the purchase price.

The court found that the appellant said that the purchase price was pegged at $32,000,000= while Evis Monica Mutodi said the purchase price was $32,000,500=. While Evis Monica Mutodi told the court that she had discussed the clauses of the alleged agreement of sale with her, the alleged appellant denied this and testified that she only discussed the agreement of sale with John Chagaresango.

On the veracity of the evidence of John Chagaresango, the court found that he testified to being given a mandate by Elizabeth Chidavaenzi to sell certain of her properties, including what he constantly referred to as Stand 1382, which, in reality, was Stand 3182. The court found his evidence at variance with that of Evis Monica Mutodi when he said that Ms Chidavaenzi had visited the site prior to the appellant doing so. The court also found that when directed to clauses that the appellant had not complied with, all John Chagaresango could say was that the agreement was not based on what the appellant and the witnesses had signed, but other verbal assurances by Ms Chidavaenzi.

In contrast, the court found the evidence of Ms Chidavaenzi to be precise and to the point. It found that the evidence was consistent with her plea and summary of evidence; and, in her evidence-in-chief, and under cross-examination, she maintained the denial that she gave Fingold Real Estate, or anyone, a mandate to dispose of the property.

Having dismissed the defence by the appellant, the court granted the eviction order. It is against the order that the appeal was instituted on the following grounds:

1. The court misdirected itself in concluding that Elizabeth Chidavaenzi was a credible witness, yet her demeanour and the inconsistencies and improbabilities in her evidence justified a finding that she lacked credibility.

2. The Judge misdirected himself by relying on what he considered as not having been put to the plaintiff's witness in cross-examination, yet, those matters related to areas where the evidence of the witnesses was mutually destructive.

3. The court misdirected itself by failing to determine that Elizabeth Chidavaenzi represented both the plaintiff and Champion Constructors (Pvt) Ltd when she sold the property in dispute to the defendant.

4. The Judge misdirected himself in his conclusion that Evis Monica Mutodi's evidence was “hopelessly confusing.”

5. The court misdirected itself in accepting, without criticism, the evidence of Elizabeth Chidavaenzi to the effect that she did not mandate Fingold Real Estate to sell the property in dispute.

6. The court misdirected itself by coming to a contrary conclusion in respect of a fact which was issue estoppel.

7. The court misdirected itself by relying on principles applicable to a lessee to conclude that the defendant, a bona fide possessor, had no right of retention pending compensation for improvements.

8. The Judge misdirected himself by failing to consider that the right of retention arises by operation of law upon the defendant showing that she is a bona fide possessor, and not upon the defendant instituting proceedings to enforce the agreement of sale.

The question whether the respondent, Drawing Services (Private) Limited, was a party to the proposed agreement of sale with the appellant must be answered in the negative. This means that there was simply no privity of contract between the appellant and the respondent. The appellant purported to contract with Champion Constructors (Pvt) Limited - a separate legal entity from the respondent.

It is trite and a matter of elementary law that a company is a fictitious juristic legal entity with a separate and distinct legal existence apart from its shareholders. It is capable of owning property in its own right separate from that of its shareholders.

It is an established principle of our law that a company's property is not the property of its members, shareholders or directors.

The principle was laid down in Salomon v Salomon and Co Ltd [1897] AC 22 HL per LORD HALSBURY LC (30) when he said:

“It seems to me impossible to dispute that once a company is legally incorporated it must be treated like any other independent person with its rights and liabilities appropriate to itself, and that the motives of those who took part in the promotion of the company are absolutely irrelevant in discussing what those rights and liabilities are.”

From the above exposition of the law, it follows that the first appellant, TBIC Investments (Pvt) Ltd, is a separate legal entity from its owners, shareholders and directors.

It is a trite principle of company law that a company should itself enforce its rights when it is wronged. This was considered as the rule in Foss v Harbottle [1843] 2 Hare 461, 67 ER 189.

In order for the company to institute proceedings on its own behalf the shareholders must agree through a resolution.

Thus, if the majority shareholder, using his majority vote, or the equal shareholder using his equal vote, blocks the attempt by the company to institute action to remedy the wrong, the minority or other equal shareholder is entitled to approach the court through derivative action….,.

Derivative action is an exception to the rule in Foss v Harbottle [1843] 2 Hare 461, 67 ER 189.

External power cannot alter the internal governance of a corporate body.

The first issue that needs to be determined is: Whether or not Foldaway Investments (Pvt) Ltd is a separate entity from Zim Halaal Meats

Although the defendant insisted that Foldaway Investments (Pvt) Ltd and Zim Halaal Meats were two separate entities he was at pains to explain the nature of Zim Halaal Meats. He could not clearly explain what kind of entity it was.

On the other hand, the plaintiff maintained that Zim Halaal Meats was the trade name of Foldaway Investments (Pvt) Ltd and that this was just one entity.

The plaintiff cannot be faulted for believing so.

To begin with, the defendant admitted that he is the one who completed the credit application form on behalf of Foldaway Investments (Pvt) Ltd on 20 October 2010. On the portion written 'Purchaser (Trading Name)' he wrote 'Foldaway Investments t/a Zim Halaal Meats'. Therefore, it is him who represented to the plaintiff that Zim Halaal Meats was the trade name of Foldaway Investments (Pvt) Ltd. In 2011, after Foldaway Investments (Pvt) Ltd