Basically, the plaintiff seeks an order that he be declared to be an owner of 50% shares in the first and second defendants.

The issues for determination, as agreed by the parties at the pre-trial conference, are in the following terms:

“1. Whether or not plaintiff is entitled 50% shares in 1^st and 2^nd defendants.

2. Whether or not when plaintiff purchased shares from 2^nd defendant, Stand Number 5157A Bulawayo was represented to be part of 2^nd defendant's asset.”

The applicant and the first respondent entered into an agreement of sale in respect of a 4.2% undivided share, being share number E8 and 90.15% undivided share being share number J4 of a certain piece of land situate in the District of Salisbury called the Remaining Extent of Stand 759A Greystone Township (“the property”).

This was sometime in July 2004.

A misunderstanding arose regarding payment of the purchase price which culminated in the applicant suing the first respondent for an order of specific performance in case number 11495/04. Judgment was entered in favour of the applicant on 4 April 2006. The order was to the effect that the applicant was to tender the purchase price and the first respondent would then transfer its rights, title, and interest in the property to the applicant.

The first respondent appealed against the judgment and later withdrew the appeal.

In the meantime, sometime in March 2006, the first respondent sold the same property to the second and third respondents. It effected transfer of the property to the second and third respondents on 13 April 2006. The second and third respondents subsequently sold and transferred the property to the fourth respondent on 18 September 2007.

Against this background, the applicant then brought the present application seeking an order in the following terms:

“It is declared that:

1. That the first respondent lost dominion in respect of a 4.2% undivided share, being share number E8 and a 0.15% undivided share, being share number J4, of a certain piece of land situated in the District of Salisbury called the Remaining Extent of Stand 759A Greystone Township with the closure of pleadings in case number HC11495/04.

2. The sale and transfer of the said property by the first respondent to the second and third respondents, and the subsequent sale and transfer of the same property by the second and third respondents to the fourth respondent is accordingly null and void.

Consequently, it is ordered that:

3. The sale and transfer of the said property, by the first respondent, to the second and third respondents, and the subsequent sale and transfer of the same property, by the second and third respondents, to the fourth respondent be and is hereby set aside.

4. The first respondent shall, within seven days of the service of this order upon its registered address by the Deputy Sheriff, tender transfer of the said property to the applicant and shall do all such things as are necessary to effect transfer thereof to the applicant.

5. In the event of the first respondent failing to comply with paragraph 4 above, the Deputy Sheriff be and is hereby authorized to do all such things and to sign all such documents as will be necessary to effect transfer of the said property to the applicant.

6. The first respondent shall pay the costs of the application at the legal practitioner and client scale.”

The applicant avers that he tendered payment in accordance with the judgment and same was rejected by the first respondent.

He contends that the sale of the property to the second and third respondents was void because the first respondent had lost dominion of the property with the closure of pleadings. He retained an absolute right to repossess the property from whoever had title at the time of judgment if such title was obtained subsequent to joinder of issues.

The first respondent opposes the matter on the basis that the property was sold to the second and third respondents before the judgment in case number 11495/04 had been delivered. He disputes that it lost dominion over the property.

In case number 10425/04 the applicant's application to interdict the first respondent from disposing of the property was dismissed. It does not accept that the second and third respondent's title to the property was defective in any way.

The fourth respondent opposes the application on the same grounds as advanced by the first respondent.

It was submitted, on behalf of the applicant, that, once the pleadings in HC11495/04 were closed, the matter became litis contestatio. The parties lost dominion over the property which became res litigiosa. As such, the property could not be disposed of before the termination of the proceedings. The proceedings in HC11495/04 were only terminated with the withdrawal of the first respondent's appeal.

It was further submitted, that, the sale of the property to the second and third respondents, and, subsequently, to the fourth respondent, was void because at the material time the first respondent had no dominion over same. The applicant is entitled to vindicate same.

It was submitted, on behalf of the first respondent, that, the mere operation of the doctrine of letigiosity does not result in dominion over property being lost. It is an accepted principle of law that res litigiosa can be alienated.

It was further submitted, that, at no time did the applicant become the owner of the property. He did not pay the purchase price. He cannot therefore seek to vindicate property which is now owned by the fourth respondent.

The fourth respondent associated itself with the argument by the first respondent. It was further submitted on its behalf that the agreement of sale between a litigating party and the third party is valid inter parties.

The present application was equated to a vindicatory action in ex parte Deputy Sheriff Salisbury in re Doyle v Salgo 1957 (3) SA 740 (SR).

One of the essential elements of an actio rei vindicatio is that a party seeking such relief must establish the right of ownership. The author, D CAREY MILLER, in The Acquisition and Protection of Ownership (1986)…, after making the above point, goes on to stress that:

“As VOET points out, the action is not available to those who have not yet obtained ownership, as, for example, a purchaser who has paid the price but not yet obtained delivery. Nor, indeed, is it enough for the plaintiff to gain ownership pendente lite because it cannot be competent for a party to institute a vindicatory action anticipating the acquisition of ownership.”

It is not in dispute that the applicant is not and has never been the owner of the property.

Further, what the applicant acquired through the judgment is a personal right. The doctrine of res litigiosa applies in an action in rem and not in a personal action.

In paragraph 1 of the draft order, the applicant seeks a declarator that the first respondent lost dominion in respect of the property with the closure of pleadings in case number HC11495/04.

The issue then is whether the operation of the doctrine of litigiosity results in dominion over property being lost.

No authority to that effect was quoted to the court by the applicant and I have been unable to find any.

Counsel for the applicant, in his reply, made a concession that dominion is not lost but that it is diminished. He did not however seek to amend paragraph 1 of the draft order.

The concession was properly made.

The defendant's real rights as dominius, in a res litigiosa, are diminished to that extent to which he cannot dispose of the thing to the prejudice of the plaintiff: see Exparte Deputy Sheriff Salisbury in re Doyle v Salgo 1957 (3) SA 740 (SR) and SIBERBERG and SCHOEMAN's The Law of Property 3rd ed…,.

Dominus is not lost as a result of litigiosity. Paragraph 1 of the draft order is therefore not the correct position in law.

In view of my finding above, the relief being sought by the applicant in paragraph 1 of the draft order cannot be granted.

In paragraph 2 of the draft order, the applicant seeks a declaratur to the effect that the sale to the first and second respondents and the subsequent sale and transfer of the same property to the fourth respondent is accordingly null and void.

From the wording of paragraph 2, in particular the use of the word “accordingly”, it would appear that the granting of paragraph 2 is linked to the granting of paragraph 1. Having made a finding that I cannot grant paragraph 1 it follows that paragraph 2 falls away.

Assuming I am wrong on this point, I will proceed to determine the next issue which is the validity of the sale of the property to the first and second respondents and the subsequent sale and transfer of the property to the fourth respondent.

It is now settled in our law that the fact that a thing is res litigiosa does not preclude or prevent it from being alienated or similarly dealt with, so long as the rights of the non-alienating litigant in the res are protected.

The above position comes out clearly in the recent case of Supa Plant Investments (Pvt) Ltd v Edgar Chidavaenzi HH92-09…, wherein MAKARAU JP analysed the authorities on the point.

The authors, SILBERBERG and SCHOEMAN, in the Law of Property 3rd ed…, made the point that the agreement of sale of the res litigiosa between the litigating party and a third party is valid inter partes. They go further to say that the purchaser is bound by the judgment in the action and the successful party can recover it from the new possessor by execution and without fresh proceedings.

The issue that confronts me in this matter is not of a third party who contracts with the litigating party but that of a party who purchases from the third party.

It was submitted, on behalf of the fourth respondent, that, recovery of the property would only apply if the property is in the hands of the second and third respondents and not against the fourth respondent. I was referred to the case of Menezes v McGaili 1971 (2) SA 12 (C).

In that case, a certain Van Schoor had been prohibited by an order of court from passing transfer of certain property to any person other than Mcgaili. In breach of the prohibition, Van Schoor passed transfer to one Eckard, who, in turn, sold the property to Menezes. Mcgaili argued, that, because of the existence of the prohibition, Menezes had not validly acquired ownership. It was held that the transfer from Van Schoor to Eckard had not been void even though it was done in violation of a court order. STEYN J…, made the following remarks:

“Provided, however, that the transaction between Van Schoor and Eckard complied with the requirements of a valid sale, in that, e.g., it was a genuine and not a simulated transaction negotiated with the object of defeating the court's order, the mere prohibition would not, in my opinion, render the transfer from Van Schoor to Eckard void. Probably such transfer is voidable, but, until it has been set aside, it stands, and if then Eckard transfers the property to a bona fide transferee, the latter transfer is valid.”

The learned judge went further and explained his reasoning which was the consideration that if a transfer effected in breach of an order of court were to be held void, a series of transfers might have to be set aside. This would constitute a serious inroad upon the unavailable title of a bona fide transferee and could lead to grave inconvenience and uncertainity.

I share the views as expressed by STEYN J in Menezes v McGaili 1971 (2) SA 12 (C).

The applicant has not alleged any mala fides on the part of the fourth respondent. The fourth respondent would therefore be a bona fide transferee.

In any event, the applicant only acquired a personal right, if any, through the court order and he cannot successfully claim the property from the fourth respondent as his rights are only enforceable against the first respondent.

The author, D CAREY MILLER, in The Acquisition and Protection of Ownership (1986) lends support to the point, that, the successful litigant can recover the res by execution from the third party only when, he states…,:

“In essence, the successful plaintiff could recover the thing from the one who had acquired from the defendant merely by recourse to execution – based upon the judgment against the defendant and without the need for vindication.”…,.

In the result, and on the basis of the foregoing, I make the following order:

1. The application is dismissed.

2. The applicant to pay costs of suit.

The three respondent companies are incorporated in Zimbabwe. BP Africa Limited..., and Shell Petroleum Company Limited..., are corporate entities based in the United Kingdom. They are equal shareholders in both the second and third respondents, while the latter companies are equal shareholders in the first respondent.  

Impending Sale

As appears from a letter emanating from BP Southern Africa (Pty) Ltd, which is dated 26 June 2010, BP Africa Limited and Shell Petroleum Company Limited intend to sell their business interests in Zimbabwe. An on-line data room has been opened for that purpose and there have been twenty offers or bids ranging from US$20 million to US$32 million. The data room was initially due to be closed by 25 June 2010 but the deadline was recently extended to 6 July 2010. The selection of the successful bidder is likely to take place on or soon after that date. However, it is not clear when the actual sale transaction will be negotiated and finally concluded.

The opening paragraph of the letter that I have alluded to reads as follows -

“BP Africa Limited and the Shell Petroleum Company Limited and their affiliates (collectively, 'the Sellers') have jointly elected, subject to mutually acceptable terms, to sell their downstream business in Zimbabwe through the sale of 100% of the issued and outstanding share capital in Shell (Zimbabwe) (Private) Ltd and BP Zimbabwe (Private) Ltd (the 'Business'). The Sellers intend to sell the entire Business in a single share sale transaction (the 'Proposed Transaction').”

On the third page of the letter, it is stated that the Sellers may, at their sole discretion, “manage the Proposed Transaction in any manner as they consider appropriate, whether in the form of private negotiations, tender process or otherwise, and, at any time, and without notice, may change or discontinue the Proposed Transaction (including modifying the scope of the Proposed Transaction) and/or the process contemplated in this letter.”

The applicant has also furnished a draft Share Purchase Agreement dated 10 July 2009, which, according to the applicant, substantially approximates the final agreement that will be adopted by the Sellers and the successful bidder. The cover page of this draft is entitled -

“SHARE PURCHASE AGREEMENT RELATING TO THE SALE AND PURCHASE OF 100% SHAREHOLDING IN SHELL ZIMBABWE (PRIVATE) LIMITED AND 100% SHAREHOLDING IN BP ZIMBABWE (PRIVATE) LIMITED.”

The Draft Agreement cites THE SHELL PETROLEUM COMPANY LIMITED and BP AFRICA LIMITED as the “Seller” and defines two key terms as follows –

·      “Shares” means the shares owned by Seller in the issued share capital of the Company.

·      “Company” means Shell Zimbabwe (Private) Limited and B.P. Zimbabwe (Private) Limited, certain particulars of which are set out in Part A & B of Schedule 1 [Part C of Schedule 1 sets out the particulars of the 1^st respondent, while Part D of the same Schedule lists certain joint venture companies].

The Arguments

The applicant avers that the intended sale by BP Africa Limited and Shell Petroleum Company Limited, either expressly or impliedly, encompasses the disposal of the assets of and/or shares in the second and third respondents as well as the first respondent. The applicant apprehends that this sale will take place without settlement of the first respondent's liabilities to the applicant. This fear is founded on the terms of the offer letter quoted above and the first respondent's Balance Sheet, as at 31 December 2009, which does not fully and clearly account for the applicant's claim, except as a contingent claim. It is further averred that the eventual purchaser of the first respondent, depending on the terms and conditions of sale, may not be legally accountable for the applicant's claim. This would occasion extreme prejudice to the applicant and the possibility of irreparable harm in the absence of any effective remedy as against BP Africa Limited and Shell Petroleum Company Limited as well as the purchaser. Therefore, the balance of convenience favours the stoppage of the intended sale pending the arbitration of the applicant's claim and the first respondent's counterclaim.

It is further submitted, for the respondents, that the relief sought is ill-founded in that the second and third respondents cannot be interdicted from selling shares in themselves. Only the holders of those shares, BP Africa Limited and Shell Petroleum Company Limited, can be so interdicted.

Disposition

The terms of the draft Share Purchase Agreement, as I perceive them, make it abundantly clear that the intended sale relates solely to the shares held by BP Africa Limited and Shell Petroleum Company Limited in the second and third respondents. This appears not only from the cover page of the Draft Agreement but also from the citation of the “Seller” (i.e. BP Africa Limited and Shell Petroleum Company Limited) and the definition of the “Shares” to be sold as those in the “Company” (i.e. the second and third respondents). The inclusion of the first respondent in Part C of Schedule 1 and the joint venture companies in Part D of that Schedule seems to have been designed to provide a comprehensive picture of the business interests of the “Group” in Zimbabwe.

Turning to the offer letter from BP Southern Africa (Pty) Ltd, this declares that what is to be sold by BP Africa Limited and Shell Petroleum Company Limited and their affiliates (i.e. “the Sellers”) is their downstream business in Zimbabwe, through the sale of 100% of the share capital in the second and third respondents (i.e. the “Business”), by way of a single share sale transaction (i.e. the “Proposed Transaction”). This appears to confirm that the intended sale is confined to the Shares in the second and third respondents and does not extend to the Shares in, or assets of, the first respondent.

The evidence led at this trial establishes that, apart from the second plaintiff, no other shareholder in Mabonde Enterprises (Pvt) Ltd authorized or granted Sibangilizwe Moyo a power of attorney to dispose of its two farms in question. It is trite that Sibangilizwe Moyo, being a mere agent of the second plaintiff, had no power to do what his principal could not do.

It is beyond question that the second defendant had no power to dispose of the shares belonging to his three brothers' deceased estates without authorization from their respective executors or the Master of the High Court according to law. It therefore appears to me that the general power of attorney granted by the second plaintiff to Sibangilizwe Moyo for the administration of his personal affairs and estates could not, and did not, extend to the three deceased brothers' estates. In the absence of express authorization it will be tantamount to dispossessing the dead who can no longer speak for themselves.

The respondent's case is, alternatively, that, in any event, section 183 of the Companies Act [Chapter 24:03]…, does not apply in this case.

The then applicant, Isabel Fumia, was married to the late Ettore Pietro Fumia. The first respondent, George Stephen Fumia, and the second respondent, Ellen Maria Fumia, are husband and wife. The first respondent, George Stephen Fumia, is the first son of the late Ettore Pietro Fumia having been born to the late Ettore Pietro Fumia and his first wife (not Isabel Fumia) one Fedora Fumia who passed away on 14 October 2007.

The third respondent, Falcon Hauliers (Private) Limited, is a limited liability company duly registered in accordance with the laws of Zimbabwe. Its address of service is given by the applicant as Number 1000 Manchester Street, Kwekwe and by the first and second respondents as Number 44 Cosham Avenue, Borrowdale, Harare - which also happens to be the residence of the first and second respondents.

The dispute between the parties is centred on the shareholding in the third respondent, which is a non-trading but a property-owning company, whose sole asset is an immovable property, Number 981 Kariba Township in Kariba. The third respondent was incorporated on 2 July 1990. It would appear that it is not in issue that at the incorporation of the third respondent two shares in the initial share capital of the third respondent were subscribed for and held by the first and second respondents who were also the initial founding Directors.

It appears not to be in issue that in 1992 the late Ettore Pietro Fumia purchased rights, title and interests in Stand Number 981 Kariba Township by way of cession from one S. Zhou for Zimbabwean $13 00-00 which was paid by way of a cheque on 26 June 1992. It is also common cause that notwithstanding that the late Ettore Pietro Fumia had purchased this immovable property, Stand Number 981 Kariba Township, he proceeded to register it in the name of the third respondent.

At the material time, the late Ettore Pietro Fumia was running a very successful construction company called FMB Construction (Pvt) Ltd which operated from Kwekwe. Isabel Fumia joined FMB Construction (Pvt) Ltd in May 1995 as a Secretary, and, at that time, the second respondent, Ellen Fumia, was the Administration Manager. During the same year, 1995, Isabel Fumia married the late Ettore Pietro Fumia who only had the first respondent, George Stephen Fumia, as his son. Later, another son, Luiguino Fumia, was born out of the marriage between the late Ettore Pietro Fumia and Isabel Fumia. When Isabel Fumia married the late Ettore Pietro Fumia, the second respondent, Ellen Fumia, resigned from FMB Construction (Pvt) Ltd and Isabel Fumia took over as the Administration Manager of FMB Construction (Pvt) Ltd, a position she holds to date. It is upon this background that Isabel Fumia alleges that in this capacity she virtually handled all financial transactions of FMB Construction (Pvt Ltd, the third respondent, and affairs of the late Ettore Pietro Fumia. Isabel Fumia claims to have access to all records and documents of the third respondent and FMB Construction (Pvt) Ltd. This also informs the background information she gave in much detail in her founding affidavit of how between 1993 and 1995 the late Ettore Pietro Fumia developed Stand Number 981 Kariba Township into a palacious - a double storey home with six bedrooms at a cost Isabel Fumia puts at Zimbabwe $288,269=85.

It is also common cause that at the material time the first respondent, George Stephen Fumia, was running his own company called Dora Transport (Pvt) Ltd which, according to Isabel Fumia, was set up with the financial help of the late Ettore Pietro Fumia. It is a transport company. The parties are also agreed that when Stand Number 981 Kariba Township was developed Dora Transport (Pvt) Ltd contributed to the construction of this property although there is a dispute as regards the monetary value of such contribution. What is not in issue is that Dora Transport (Pvt) Ltd ferried building materials for Stand Number 981 Kariba Township from Bulawayo, Kwekwe, and Harare to Kariba. At that time, the relations between the late Ettore Pietro Fumia and his son, George Stephen Fumia, were excellent. Dora Transport (Pvt) Ltd, which owned a number of haulage trucks, later faced serious financial problems. Isabel Fumia attributes this to financial mismanagement by George Stephen Fumia but the first and second respondents blame the hyperinflation which this country at some stage experienced. What is not disputed is that Dora Transport (Pvt) Ltd had borrowed heavily from financial institutions and the late Ettore Pietro Fumia had bound himself as surety and co-principal debtor. As a result, the late Ettore Pietro Fumia, together with FMB Construction (Pvt) Ltd, were exposed to the indebtedness of Dora Transport (Pvt) Ltd. What is material to state is that the borrowings by Dora Transport (Pvt) Ltd is also alleged by Isabel Fumia to have been secured by a mortgage bond registered by the third respondent which meant that Stand Number 981 Kariba Township, in essence, secured the debt. According to Isabel Fumia this prompted the late Ettore Pietro Fumia, who now risked losing FMB Construction (Pvt) Ltd and Stand Number 981 Kariba Township due to George Stephen Fumia's indebtedness through Dora Transport (Pvt) Ltd to pay off the first respondent, George Stephen Fumia's, liabilities. According to Isabel Fumia, Dora Transport (Pvt) Ltd was ruined and George Stephen Fumia was totally financially ruined and problems then started between the late Ettore Pietro Fumiaand George Stephen Fumia around 2000.

I now turn to the gist of the dispute between the parties.

On 15 November 1994, there was an allotment of shares in the third respondent in which the late Ettore Pietro Fumia got eight shares. On 8 June 1995, seven months after, George Stephen Fumia wrote a letter indicating that there should be no further allotment of shares to any of the Directors of the third respondent without a meeting being held involving all the Directors which were presumably George Stephen Fumia, his wife Ellen Fumia and the late Ettore Pietro Fumia. There is now a dispute as to the meaning of this letter. The applicant contends that by writing such a letter George Stephen Fumia had accepted the allotment of eight shares to the late Ettore Pietro Fumia in the third respondent and simply wanted assurance that no further allotment would happen. On the other hand, the respondents contend that the letter of 8 June 1995 shows that George Stephen Fumia did not approve of the allotment of eight shares in the third respondent to the late Ettore Pietro Fumia. There are various correspondences regarding the dispute between the parties in this regard, which dispute remains unresolved. On 30 June 2011, the first and second respondents proceeded to file a court application in case number HC6280/11 seeking a declaratur to the effect that the allotment of eight shares on 15 November 1994 in the third respondent to the late Ettore Pietro Fumia was unlawful.

This application was unopposed thus culminating in the default judgment which the applicant now seeks to be rescinded.

The other point raised by the applicant is whether, even if the third respondent was a Director, he could lawfully do what he did,  in view of the provisions of section 183(1)(b) of the Companies Act [Chapter 24:03]. Section 183(1)(b) of the Companies Act [Chapter 24:03] provides:

(1) Notwithstanding anything in the articles, the directors of a company shall not be empowered, without the approval of the company in general meeting –

(a) …,. 

(b) To dispose of the undertaking of the company or the whole or greater part of the assets of the company.”

There seems to be prospects of success on the merits in that the first applicant in casu did not sell the property in question. Only shares in the first applicant were transferred by previous shareholders to new shareholders. There is an arguable case on whether this constitutes the transfer of the immovable property thus granting the respondent the cause of action. Taking into account all the above I am persuaded that the applicants made a case for rescission.

The background information of this matter is that National Blankets Limited and David Whitehead Textiles Limited were at one time subsidiaries of Lonrho Africa which owned 88.06% of the shares in David Whitehead Textiles Limited through a company known as Textile Investments Company. David Whitehead Textiles Limited, in turn, owned 100% of the shares in National Blankets Limited.

According to Jeremy Musgrave, who deposed to an affidavit on behalf of the applicant, in 2001 Lonrho Africa made a decision to disinvest from Zimbabwe and decided to sell its interest in both National Blankets Limited and David Whitehead Textiles Limited. A National Blankets Limited consortium, headed by the deponent, was formed which made a bid for National Blankets Limited and had no interest in David Whitehead Textiles Limited. However, because Lonrho Africa was in a hurry to finalize its business it was agreed that the National Blankets Limited consortium would make a bid for both National Blankets Limited and David Whitehead Textiles Limited. It was further agreed with Lonrho Africa that National Blankets Limited would purchase the entire interest of Lonrho Africa in Textile Investment Company which held 88.06% of the shares in David Whitehead Textiles Limited thereby becoming its controlling shareholder.

The management of both National Blankets Limited and David Whitehead Textiles Limited, hereinafter referred to as “National Blankets” and “David Whitehead”, respectively, had formed consortiums to purchase Lonrho's shares in the respective entities. National Blankets formed a company known as Intaglio, which was the vehicle through which it put a bid for Lonrho's shares, while David Whitehead's vehicle, through which it put a bid for Lonrho's shares, was called Guscole Investments (Pvt) Limited.

It was alleged that after acquiring Lonrho's shares in Textile Investment Company, Intaglio entered into negotiations in terms of which Intaglio was to dispose of its interest in Textile Investment Company to Guscole Investments (Pvt) Limited. At the end of the negotiations, Ernst & Young Accountants were engaged to carry out the separation of the two companies. Part of the unbundling involved the transfer to National Blankets of a portion of land in Workington, Harare. The property in question was a portion of Stand 5453 A Salisbury Township. It was necessary to apply for sub-divisional authority from the City of Harare. The parties allegedly agreed that the unbundling would proceed and the transfer of the portion of land would be attended to in due course. In August 2002, applications were made to City of Harare and permission to subdivide Stand 5453A Salisbury Township was granted. The portion to be transferred to National Blankets was named as Stand 19100 Harare Township. It was alleged that survey diagrams were prepared and approved by the Surveyor General and David Whitehead allegedly instructed legal practitioners Gill, Godlonton & Gerrans to attend to the transfer to National Blankets of Stand 19100 Harare Township.

Jeremy Musgrave contended that the fact that National Blankets continued, and continues, to occupy the said premises rent-free and has, in fact, let a portion of the premises while David Whitehead paid all service charges levied by the utility providers for the property pointed to the fact that the transaction was entered into. That was so because the transfer to National Blankets had been delayed due to David Whitehead's dire financial status.

In 2006, and before transfer to the applicant could be effected, David Whitehead was placed under judicial management with Cecil Madondo of Tudor House Consultants (Pvt) Ltd as judicial manager.

In 2007, Triumphant Enterprises (Pvt) Ltd acquired controlling shares in National Blankets which for years, through correspondence, had sought to be advised of the progress that was being made about transferring Stand 19100 to it. It was, each time, being advised the transfer process was in progress and cited a number of reasons for the delay.

Due to what National Blankets, “applicant”, believed to be inordinate delays in transferring the property it then launched this application seeking specific performance by David Whitehead.

The application was vehemently opposed by David Whitehead, “respondent”….,.

Zivaishe Mangena…, made one valid point. He said he had gone through all the company records but was unable to see a company resolution to transfer the said piece of land and there was no record of any consideration having been paid for it. Whatever arrangement the applicant had with the former executives of the respondent was not shown in the company records and was not supported by any resolution and hence illegal.

I pause to observe that the applicant was unable to produce any company resolution. The respondent cited the provisions of section 183(1)(b) of the Companies Act [Chapter 24:03] which restrict the sale of undertaking by Directors which recites thus:-

“183 (1) Notwithstanding anything in the articles, the directors of a company shall not be empowered, without the approval of the company in a general meeting –

(a) …,.

(b) To dispose of the undertaking of the company or of the whole or the greater part of the assets of the company.”

See also Mason v Timore Trading Service (Pvt) Ltd and Ors 2004 (2) ZLR 347 where it was held that, “under section 183(1)(b) of the Companies Act [Chapter 20:03], the directors of a company are not empowered, without the approval of the company in a general meeting, to dispose of the company's undertakings or of the whole or greater part of the assets of the company.”

The applicant still contended that the letter by George Maulidi, of 22 October 2003, to Gill Godlonton & Gerrans, suggested that there was a resolution but failed to produce and file such a resolution.

This court finds no proof of any resolution.

If it had been there it would have been easily produced.  Such resolutions should be reflected in the minutes of the proceedings of the meeting at which the resolution was passed in terms of section 138 of the Companies Act [Chapter 24:03]. The applicant would have produced the minutes of such a meeting and a copy of such resolution. It admits of no doubt that there was no resolution of the Board of Directors of the respondent at the time of the alleged transaction approving the transaction and authorizing a party to negotiate and sign the required documents. Neither was there a special resolution of the shareholders of the company in terms of section 183(1)(b) of the Companies Act [Chapter 24:03]…,.

In response to the assertion that the use and occupation of the property, rent-free, by the applicant at all material times, pointed to the claim that the transaction had been entered into, the respondent stated that apart from the fact that the applicant did not have any written proof to support its claim what the applicant did was a fraud on the respondent. It was submitted that the fraud became apparent when paragraph 5(ix) of the applicant's heads of argument is considered. It was alleged that a close reading of that clause revealed that the applicant claimed that Stand 19100, Harare Township was part of the payment towards the purchase of 88.06% of the shareholding of the respondent by Guscole Investments (Pvt) Ltd which amounted to assistance by the respondent to Guscole Investments (Pvt) Ltd to purchase the respondent's shares in contravention of section 73 of the Companies Act [Chapter 24:03].

Finally, it follows from the above analysis, that upon the compulsory acquisition of land, the company lost its rights in the land. But the company continued to exist.

What was compulsorily acquired, through gazetting by the State, was the land, not the company.

What was sold were shares in the company, EC Miekle (Pvt) Ltd, no shares in the land acquired were sold, as held by the court a quo. The agreement on the sale of shares was a stand-alone transaction as the general rule is that shares are freely transferable in the manner provided for by the Companies Act [Chapter 24:03] and Articles of Association. The sale of shares agreement expressly state that the land was formerly owned by EC Meikle (Pvt) Ltd.

Counsel for the appellants sought to argue that when the respondent paid for the forty percent shares, it became a shareholder and hence asking for the US$400,000= back would amount to the respondent buying its own shares.

When the court asked for proof that the respondent owned the shares in the form of a share certificate, no such proof was produced. The respondent had paid money for no value. 

The applicant approached this court seeking interdictory relief against the respondent.

The applicant holds mining rights to a mining location called Elorado Mine. It was incorporated on 29 May 2009 and the respondent and his daughter, Chen Xiandong, were the initial Directors and subscribers who held sixty and forty ordinary shares respectively.

The applicant's position is that the respondent, at a later stage, took on board one Charles Fredrick Jones and one Kennedy Piti who were issued with 4,900 and 200 ordinary shares respectively.

In May 2012, the respondent and Charles Fredrick Jones sold their entire shareholding in the applicant with Charles Fredrick Jones transferring his shareholding to one Tafirenyika Kambarami and the respondent and his daughter transferring their shareholding to Haixi Zhou, the deponent to the founding affidavit. A new register of Directors was lodged with the Registrar of Companies wherein the respondent, his daughter and Charles Fredrick Jones resigned as Directors. The respondent surrendered the company documents to the new Directors. He also, without the approval of the applicant's Board of Directors, lodged a fraudulent CR14 in which he appointed himself as a Director; without authority from the applicant's Directors, withdrew a total of $32,800= from the applicant's bank account.

It is for the above reasons that the applicant seeks the interdictory relief.

The respondent's position is that he is a shareholder and a director of the applicant. He owns 24.5% of the applicant just as the deponent to the founding affidavit who owns 24.5%. He disputes that he at one point issued shares to Charles Fredrick Jones. He puts in issue the signature that appears on the allotment return. He did not sell his shares to Haixi Zhou neither did he resign as a Director of the applicant. He also avers that he is the sole signatory to the applicant's bank account.

At the hearing of the matter, counsel for the respondent took two points in limine:

(i) That this court has no jurisdiction to hear the matter as the respondent is a peregrinus.

(ii) That there are material disputes of fact which cannot be resolved on the papers.

I will deal with the points in limine in seriatum.

The applicant was allotted 500 shares and issued with a share certificate on 14 January 2014…,. The applicant was therefore a shareholder and a contributory to the first respondent company.

It is a fact that cannot be wished away…,.

For the applicant to lose her shareholding something had to happen to her 500 shares. She had to alienate them in one way or the other.

This is an action instituted by the plaintiff claiming the following relief which is set out in the summons:

“1. An order declaring that:

(a) The purported sale between first and second defendants for the sale of 100% shareholding in second plaintiff on or about 12^th February 2009 and all actions flowing therefrom, including but not limited to;

(i) The removal of directors and appointment of new directors; and

(ii) The sale and transfer of Stand 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant, commonly known as 3 Justice McNally Close, Mount Pleasant, Harare to 5^th defendant represented by 4^th defendant, are null and void;

(b) The minor children, Panashe Ralph Rushesha and Tivonge Sacha Rushesha remain the sole shareholders in 2^nd plaintiff; and

(c) The directors of 2^nd plaintiff, as at 12 February 2009, remain directors unless lawfully removed or through resignation (sic).

2. An order that:

(a) 4^th defendant, or failing it the Deputy Sheriff, takes all necessary steps to transfer Stand 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant, commonly known as 3 Justice McNally Close, Mount Pleasant, Harare, back into the name of the 2^nd plaintiff;

(b) 4^th defendant and all those claiming occupation through it vacate 3 Justice McNally Close, Mount Pleasant, Harare within fourteen (14) days from the date of judgment; and

(c) 2^nd to 5^th defendants jointly and severally, the one paying the others to be absolved:

(i) Pay for an assessment and report within fourteen (14) days of such report, by an independent property expert appointed by the High Court, of 3 Justice McNally Close, Mount Pleasant, Harare of any structural changes or damage other than fair wear and tear caused to 3 Justice McNally Close, Mount Pleasant, Harare since 12^th February 2009 and the costs of repairs or reconstruction; and

(ii) Pay 2^nd plaintiff the amount recommended within thirty days of such assessment.

3. An order barring 6^th defendant from transferring the property referred to in 6 (sic) above to any third party until transfer to 2^nd plaintiff is concluded.

4. In any event, costs of suit on an attorney and client scale to be paid by 1^st to 5^th defendants, the one paying the others to be absolved.”…,.

The issues which were referred to trial are set out in the joint pre-trial conference minute as follows:

1. Whether or not a valid agreement of sale of shares, allegedly belonging to the minor children (herein represented by the first plaintiff), was entered into between the first and second and third defendants.

2. Whether or not the changes relating to the second plaintiff?s directors and shareholders effected as a result of any such agreement is valid. If not, whether or not such directors and shareholders should revert back (sic) to the period before the 12^th February 2009.

3. Whether or not the second plaintiff validly entered into an agreement for the sale of the immovable property, being Stand Number 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant, with the fourth and fifth defendants. If not, whether the registration of title into the fourth defendant (sic) must be set aside and the original Deed reinstated.

4. Whether or not the plaintiffs have any claim for damages against the second to fifth defendants arising out of the structural alterations to the immovable property. If they have a claim, what the quantum of damages recoverable is.

5. Whether or not if the plaintiffs succeed, the fourth defendant should remain in possession of the immovable property on the basis of a lien and until any such claim as it may have (has) been realized.

This is an application for a joinder. The draft order attached to the application reads as follows:-

“1. The 6^th Respondent be and is hereby joined as the 6^th Respondent in Case No. HC1393/08.

2. The 6^th Respondent shall, if he wishes to defend the 1^st and 2^nd Applicants' claim, file a Notice of Opposition within (10) ten days of service of the pleadings in Case No. HC1393/08 on him.

3. The rest of the pleadings shall be dealt with in accordance with the rules of the Court.

4. There shall be no order as to costs.”

I give, here-below, a brief background to the relief sought.

On 7 March 2008 the applicants filed an application under case number HC1393/08 (the main matter) for the following relief:-

“IT IS ORDERED THAT:

1. The 1^st Respondent [the plaintiff herein] is hereby interdicted from transferring the property known as No. 98 Churchill Avenue, Harare, also known as a certain piece of land situate in District of Salisbury Township Lands measuring 3,066 square metres under Deed of Transfer 39/76 to anyone except the 1^st and 2^nd Applicants.

2. The property in paragraph 1 above be transferred to Asswell Africa Gurupira and Jean Jane Gurupira and the 2^nd Respondent [Sandra Muir] is directed to sign all the necessary documents to finalise the transfer within 10 days of the Order.

3. Should the 2^nd Respondent fail or refuse to sign the necessary documents to effect transfer, the 4^th or 5^th Respondent [Sheriff and Deputy Sheriff respectively] are hereby directed to sign all the necessary documents to effect the transfer by the 3^rd Respondent [Registrar of Deeds] to 1^st and 2^nd Applicants.

4. The 1^st and 2^nd Respondents shall bear all the costs of this application on attorney-client scale jointly and severally one paying the other to be absolved.”

On 21 May 2008, I granted the above order in default.

On 22 August 2008, the sixth respondent, in his capacity as the Managing Director of the first respondent, filed an application, under case number HC4211/08, for the rescission of the default judgment granted in favour of the applicant on 21 May 2008. I must mention that when the rescission application was filed, the default order had already been executed/enforced.

In paragraph 14 of the founding affidavit in the rescission application filed on 22 August 2008 in HC4211/08, the sixth respondent averred as follows:-

“14. I humbly submit that the Applicant has got a prima facie right and a bona fide defence to the 1^st and 2^nd Respondents claim. Applicant bought all the shares from the 3^rd Respondent, through its Managing Director, and took transfer of the shares well before the 16^th of June 2008 when the 1^st and 2^nd Respondents took transfer of the immovable property. In fact, the Order granted by this Honourable Court, see Annexure “I”, was granted in error. The alleged Agreement of Sale between 1^st, 2^nd and 3^rd Respondents was not for the sale of the immovable property but for the sale of shares. In fact, it is quite doubtful that the same could have been granted if the 1^st and 2^nd Respondents' Legal Practitioners had been candid with this Honourable Court and included Annexure “H” which is the Notice of Opposition to the Court Application. As it is, 1^st and 2^nd Respondents Legal Practitioners saw it fit to cherry pick the information and omitted to mention or attach the Opposing Affidavit to Case No. HC6660/07. In a nutshell, the transfer of the immovable property to the 1^st and 2^nd Respondents is null and void as the company shares in the Applicant were bought and transferred to JOHN LEGGETT, who, in his capacity as the sole shareholder, became the owner of all assets owned by the Applicant well before it purported to take transfer of the immovable property on the 16^th of June, 2008.”…,.

The first and the second respondents referred to in the above passage are the first and the second applicants herein. The third respondent is the second respondent in this matter. John Leggett, referred to in the above passage, is the sixth respondent that the applicant herein seeks to join in the main matter (HC1393/08).

The contents of the above passage are further reinforced in the answering affidavit filed by the sixth respondent on 25 September 2008 in HC4211/08 on behalf of the applicant therein. In paragraphs 6 and 7 of the answering affidavit, the sixth respondent states as follows:

“6. Annexures “B1” and “B2” clearly show that 3^rd Respondent transferred her shareholding to John Leggett. I also attach hereto, as Annexure “A” a Share Certificate which clearly shows that John Leggett is the owner of 100 fully paid ordinary shares in the Applicant. It is true that the Applicant was the owner of all its assets, including the immovable property in dispute, and the same (Applicant) was owned by the 3^rd Respondent hence her power to sell and transfer the shares to John Leggett who became the owner of the Applicant. Simple logic testifies that the purpose of purchasing shares is to own and control that company and how 'the deponent did not become the owner of the Applicant's property by acquiring shares in it' is confusing (for want of a better word).

Is it being suggested that Applicant's shareholder (John Leggett) elected to buy the name of the company and did not want to become owner of Applicant's property by acquiring shares in it?

The averments in this paragraph by the 1^st and 2^nd Respondents is, with respect, confusing. Initially, it is alleged that “3^rd Respondent did not transfer any shares to the Applicant. Then a few lines down it is alleged that 'the deponent did not become owner of the Applicant's Property by acquiring shares in it.'

The issue is not who entered into an Agreement with 3^rd Respondent first. The issue is simply, who took transfer of the shares first.

As at 28^th May 2008, John Leggett was the new shareholder and owner of the Applicant.

Annexure “A”, attached hereto, clearly shows that the Share Certificate was issued to John Leggett on the 5^th of June 2008 and 1^st and 2^nd Respondents took transfer improperly of the immovable property on the 16^th of June 2008. The 1^st and 2^nd Respondents either deliberately or through a genuine error on their party overlooked the fact that the Applicant has a new shareholder who took transfer of the Shares from 3^rd Respondent, and, as such, has got a vested interest in the matter. The Applicant is the owner of the immovable property and other movable property and if it cannot be the Applicant who deposes to the Founding Affidavit who should then be?

7. The Applicant had new Shareholders who should have been cited by the respondents. The law is quite clear.”…,.

As per his own averments, the sixth respondent was actually the new sole shareholder of the first respondent in casu. The foregoing brings to the fore the sixth respondent's vested interest in the main matter. Clearly, the relief sought in paragraph 2 of the draft order in the main matter (HC1393/08) would adversely impact on the vested interest of the sixth respondent. That position requires no argument and would indeed form the legal basis upon which a joinder is being sought.

When the rescission application was placed before PATEL J…, he directed that, because of the disputes of fact in the matter, it should go to trial.

The matter eventually went to trial before MAFUSIRE J who granted the rescission on 19 March 2014. The rescission meant that the main matter, (HC1393/08), should now be heard in terms of the rules of this court. However, before the hearing of the matter, the applicants correctly deemed it necessary to join the sixth respondent who was not cited in the main matter.

Curiously, the application for joinder is opposed by the sixth respondent. This is despite the fact that, according to him, he is now the Managing Director and sole shareholder of the first respondent. Ownership of the property, which is really at the center of the dispute between the parties, is said to vest in the first respondent, whose total shares the sixth respondent now claims to own.

In his founding affidavit, in casu, the first applicant explains, in part, as follows:

“8. On the 7^th of March 2008, I together with 2^nd Applicant filed a Court Application before this Honourable Court, seeking an order for specific performance against the 1^st and 2^nd Respondents, among other things. The order was granted in default and has since been rescinded by this Honourable Court. Parties are back to the previous status quo.

I beg leave to refer to the pleadings in 1393/08 as if specifically traversed herein. At the time of the issuing of the said application the 2^nd Respondent had in her possession on the Share Certificates reflecting her as the sole shareholder of the 1^st Respondent, the Company owning Stand 12896 Salisbury Township measuring 3,066 square metres also known as No.98 Churchill Avenue, Gunhill, Harare. I together with 2^nd Applicant, entered into an agreement to buy the said shares to facilitate ownership and control of Stand 12896 Salisbury Township measuring 3,066 square metres also known as No.98 Churchill Avenue, Gunhill, Harare.

However, it subsequently came out that the 2^nd Respondent had later purported to issue and sell the same shares in the 1^st Respondent to the 6^th Respondent, John Legett, without our knowledge. Therefore, the said John Legett clearly has an interest in the outcome of the Case No. HC1398/08 which seeks to have us declared the true shareholder of the 1^st Respondent and subsequently, the process of Stand 12896 Salisbury Township measuring 3,066 square metres also known as No.98 Churchill Avenue, Gunhill, Harare at 6^th Respondent's expense.

9. The 2^nd Applicant and I insist that we are the rightful shareholders in 1^st Respondent and believe that the purported transfer to John Legett was improper and a legal nullity.

We would want the court to rule that purported sale of the shares to John Legett be deemed null and void and it is only proper that the 6^th Defendant/Respondent be given an opportunity to give his side of the story.

10. Therefore, it is necessary that the 6^th Respondent, John Legett, be joined in this case to enable us to enforce the order we are seeking before this Honourable Court. In fact, the Court can properly determine the issue of the purported sale of shares to the 6^th Respondent by the 1^st and 2^nd Respondents as all the interested parties would be before it.”

Indeed, the relief sought in the main matter is the one reproduced in full at page 2 of this judgment. In the main, the applicants pray for the transfer of the property in dispute to themselves.

In the main matter, (HC1393/08), the opposing affidavit sworn to by the sixth respondent states, in part, as follows:-

“(a)…,.

(b) The 2^nd Respondent's interest in this matter ceased on the 28^th of May 2008 when 2^nd Respondent sold and transferred to me her two shares in the 1^st Respondent. I must mention that by this date I already held 98 shares in the 1^st Respondent.

(c) As from 11 December 2007 I had been the majority shareholder in the 1^st Respondent as I had ninety eight shares. Following the agreement of 28 May 2008 I had then assumed 100% shares of the 1^st Respondent.

(d)…,.”

The above is consistent with other averments made in the rescission application (HC4211/08) and already quoted in this judgment.

Notwithstanding the sixth respondent's clear interest in the main matter, (HC1393/08), he remains opposed to the joinder.

In his opposing affidavit in the main matter the sixth respondent states as follows:-

“4. The First Applicant has deliberately misrepresented the relevant facts of this matter which facts are well known to him. Undoubtedly, he has chosen to adopt a course based on incorrect and incomplete facts in order to justify this extremely belated application for joinder.

5. It is correct that on 7 March 2008 the Applicants instituted a Court Application in Case No. HC1393/2008. I was not cited as a party in that application. In that matter, the Applicants sought an order, without any factual or legal basis, for the transfer of the property in Churchill Avenue from the name of the First Respondent into their personal names. There had not been any proper service of the papers in the matter on the First Respondent, but, notwithstanding, a judgment in default was granted.

6. As soon as I learnt to the default judgment, I caused an application for rescission of that default judgment to be made on behalf the First Respondent, which was Case No. HC4211/2008. It was an application brought, in the main, by the First Respondent, for the rescission of the judgment obtained without notice or proper service and without any basis for the transfer to the Applicants of the property belonging to the First Respondent.

7. However, that application was referred to trial by the Honourable Mr Justice Patel on 24 September 2009 and the parties were directed to file pleadings. Among the pleadings filed was one termed “1^st and 2^nd Defendants' Counterclaim', filed on behalf of the present Applicants on 2 November 2009. In the so-called Counter-claim I was cited as the Second Defendant, and the relief sought in that Counterclaim was, in essence, precisely the same relief as is now being sought through the application for joinder. I attach a copy of that so-called Counter claim as Annexure “A” for the benefit of this Honourable Court.

Objection was taken to the attempt to join me as a party as none of the original papers had been served on me, and the legal practitioners representing the present Applicants thereafter withdrew the so-called Counterclaim. When the trial took place earlier this year before the Honourable Mr Justice Mafusire there was no claim made by the present Applicants against me in my personal capacity.

8. The result of that trial, handed down on 19 March 2014, was that the judgment given in default was set aside. Subsequent thereto, on 2 April 2014, I caused to be filed on behalf of the First Respondent the necessary opposing papers to the application brought in Case No. HC1393/2008, together with a counter-application for the eviction of the Applicants from the property belonging to the First Respondent.

The response thereto, on behalf of the Applicants, was to file, on 8 May 2014, the Applicants filed an opposing affidavit to the counter-application. The delay in filing that opposing affidavit had been the subject of correspondence between Gill, Godlonton & Gerrans and Sawyer & Mkushi. As agreement had been reached to allow the late filing of the Opposing Affidavit I make nothing of that delay.

10. On 30 May 2014, Heads of Argument for the Applicants were filed in Case No. HC1393/2008. I am advised that these Heads of Argument were filed out of time and that issue will be raised at the hearing of the application. Some five business day later the present application for joinder was filed and served.

12. The papers in Case No HC1393/2008 are now closed and the matter ready for hearing, rendering it inappropriate to reopen all those papers simply because the Applicants have eventually decided to bring an application for joinder. Most certainly, the Applicants have had since 19 March 2014 to make any such application, but have delayed, I would suggest, deliberately, until 6 June 2014 to bring that application in order to extend their unlawful occupation of the house in Churchill Avenue. It is also intended to interfere with the administration of justice and the proper determination of the issues raised in Case No. HC1393/2008.

11.3 Furthermore, more than three years have elapsed since the Applicants knew that I had entered into two agreements relating to the shares of the First Respondent. Those details had been set out in the founding papers which I caused to be filed on behalf the First Respondent in Case No. HC1393/2008 as long ago as 22 August 2008. I am therefore advised that the claim purported to be brought by way of the joinder application is prescribed and cannot be pursued.”

I take note of the withdrawal of the counter-claim wherein the sixth respondent had been cited.

In addition to the above objections, which I have, for the purpose of clarity, quoted at length, during the hearing of this application the sixth respondent raised another issue. It was an issue of law and the submission was:-

“19. The Form 29 used to institute this present application for joinder specifically states that the application is made in terms of Order 13 Rule 85 of the High Court Rules 1971. This reads:

'85. Subject to Rule 86 two or more persons may be joined together in one action as plaintiffs or defendants whether in convention or in reconvention where -

(a) If separate actions were brought by or against each of them, as the case may be, some common question of law or fact would arise in all the actions; and

(b) All rights to relief claimed in the action, whether they are joint, several or alternative, are in respect of or arise out of the same transaction or series of transactions.

The Rule clearly applies solely to actions and not to applications. It is submitted that there has been no extension of this Rule in the procedure relating to applications. Therefore, the attempt to make an application in terms of Rule 85 in the present circumstances was ill-founded.

21. This is not to say that in application procedures and Order 32 the Court cannot order the joinder of an interested party. But it does mean that any such joinder cannot be to permit substantive relief different to that sought in the founding application to be claimed.”

I find myself in a situation where the party to be joined is clearly an interested party, and, to me, that is the major issue in this case.

The sixth respondent has indeed loudly pronounced his interest in the matter. However, for the detailed reasons given above, the interested party (i.e. the sixth respondent) does not want to be joined. To the extent that my finding, based on his own statements, is that he is indeed an interested party, it becomes difficult to accept the issue of delay as militating against the joinder. The main matter is yet to be set down and heard.

I also believe that the issue of prescription is a matter to be determined during the hearing of the main matter. The same applies to whether or not, because of disputes of fact, the matter should have been by way of action. That, in my view, is an issue to be determined by the judge who will deal with the main matter. It will be his/her prerogative to either dismiss the matter or give directions as happened in the first respondent's application for rescission (i.e. HC4211/08).

It is also important to understand the full import of the rescission order granted by MAFUSIRE J. The full order read as follows:-

“IT IS ORDERED THAT:

In the circumstances, this matter is disposed of as follows:

1. The default judgment granted by this court on 21 May 2008 in HC1393/08 is hereby set aside.

2. The Registrar of Deeds is hereby ordered and directed to cancel Deed of Transfer No.4778/08 over certain piece of land situate in the district of Salisbury called Stand 12896 Salisbury Township Lands measuring 3,066 square metres ^, dated 16 June 2008, in the name of Asswell Africa Gurupira and Jean Jane Rudo Gurupira and to restore the prior Deed of Transfer No.39/76.

3. The following residual issues shall be determined in the main application in HC1393/08:

3.1. Whether or not the agreement of sale between the first and second defendant, namely, Asswell Africa Gurupira, of the one part, and the third defendant, namely, Sandra Maureen Muir, of the other part, was duly performed.

3.2. Whether or not the transfer of shares in the plaintiff company, namely, Earthmoving & Construction Company (Private) Limited, by the third defendant to one John Legget, should be set aside.

3.3. Whether or not the first and second defendant should vacate the premises situate on the property more fully described in paragraph 2 above and which is also known as 98 Churchill Avenue, Gunhill, Harare.

4. The plaintiff shall file its notice of opposition or other such papers in HC1393/08 within ten (10) days of the date of this order and thereafter the filing of any further documents shall be in accordance with the Rules.

5. The costs of the application and of the trial in HC4211/08, and the costs of the application in HC6660/07 shall all be borne by the first and second defendant jointly and severally, the one paying the other to be absolved.”…,.

As can be seen under the Judge's directions, given under paragraph 3.2. of the order, the sixth respondent is brought into the main matter. Given the import of paragraph 3.2. of the court order, I do not see how the residual matters referred to in that order can be determined without the participation of the sixth respondent. My view is that the order indirectly called for the joinder of the sixth respondent.

With regards to the legal issue, I acknowledge the fact that both Rules 85 and 87 appear to confine themselves to actions. However, I take the view that a rigid construction of those Rules will result in a miscarriage of justice. I therefore believe that reference to “any cause” in Rule 87 should enjoy a wider and encompassing meaning. In that case, an interested party can join or be joined as long as the matter is yet to be determined i.e. at any stage. It would therefore, in the circumstances, be appropriate to invoke Rule 4C of the High Court Rules 1971 which provides as follows:-

“4C. Departures from Rules and directions as to procedure

The court or a judge may, in relation to any particular case before it or him, as the case may be –

(a) Direct, authorize or condone a departure from any provision of these Rules, including an extension of any period specified therein, where it or he, as the case may be, is satisfied that the departure is required in the interests of justice;

(b) Give such directions as to procedure in respect of any matter not expressly provided for in these Rules as appear to it or him, as the case may be, to be just and expedient.”

In view of the foregoing and given the fact that this court can manage its own Rules in order to render justice to litigants, I am unable to accept that an application for joinder cannot be made in a matter/cause brought by way of application. That, in my view, would be an unfair law.

It was correctly argued that pleadings had closed and the matter was ready for hearing. That may be the case, but this court has, in the interests of justice, a discretion which it can, without prejudice to the sixth respondent, use to accommodate the situation that the sixth respondent is uncomfortable with. That extends to the possibility of supplementary affidavits being filed subject to leave being granted by the court. I cannot, therefore, at this stage, pronounce on how the main matter will be handled upon the sixth respondent being joined. I can, however, boldly declare that the sixth respondent has a vested interest in the main matter and should therefore be joined as a party to the main matter. That move will enable the court to properly interrogate the issues to be addressed in the main matter.

The application must succeed.

IT IS ORDERED THAT:

1. John Leggett be and is hereby joined as the 6^th Respondent in Case No. HC1393/08.

2. The 6^th Respondent shall, if he wishes to defend the 1^st and 2^nd Applicants' claim, file a Notice of Opposition within (10) ten days of service of the pleadings in Case No. HC1393/08 on him.

3. The rest of the pleadings shall be dealt with in accordance with the Rules of the Court.

4. There shall be no order as to costs.”

A company is a person. It is a juristic person, or, in legal parlance, a legal persona, but all the same a person. It has an identity separate from that of its members. It can own property independently of, and separately from, its members. Thus, a company's assets are not the members' assets.

These cardinal principles seem to have been purposefully ignored or inadvertently overlooked in this matter. The result has been prolonged litigation for over five (5) years.

The facts were largely common cause.

The plaintiff was a duly registered private company. At all relevant times, prior to 16 June 2008, its major asset was an immovable property situate Stand 12896 Salisbury Township, measuring 3,066 square metres, held under Deed of Transfer No.39/76 and otherwise known as 98 Churchill Avenue, Gunhill, Harare (hereafter referred to as “the property”). Its principal officer, in the sense of being the majority shareholder and director, was the third defendant (hereafter referred to as “Sandra Muir”).

On 21 May 2008, this court, MTSHIYA J, granted a default judgment in HC1393/08. This followed an application by the first and second defendants herein who therein were the first and second applicants respectively. Hereafter, I shall refer to the first and second defendants as “Mr and Mrs Gurupira” or “the Gurupiras”. The default judgment effectively directed the plaintiff herein, the first respondent therein, to transfer the property to the Gurupiras. Sandra Muir, the second respondent therein, was ordered to sign the necessary papers within 10 days of the order failing which the Sheriff, who is the fourth defendant herein, or the Deputy Sheriff, who is the fifth defendant herein and was also the fifth respondent therein, would sign the transfer papers in place of Sandra Muir. The order by MTSHIYA J read as follows:

“IT IS ORDERED THAT;

1. The 1^st Respondent [the plaintiff herein] is hereby interdicted from transferring the property known as No.98 Churchill Avenue, Harare, also known as a certain piece of land situate in District of Salisbury Township Lands measuring 3,066 square metres under Deed of Transfer 39/76 to anyone except the 1^st and 2^nd Applicants.

2. The property in paragraph 1 above be transferred to Asswell Africa Gurupira and Jean Jane Gurupira and the 2^nd Respondent [Sandra Muir] is directed to sign all the necessary documents to finalise the transfer within 10 days of the Order.

3. Should the 2^nd Respondent fail or refuse to sign the necessary documents to effect transfer the 4^th or 5^th Respondent [Sheriff and Deputy Sheriff respectively] are hereby directed to sign all the necessary documents to effect the transfer by the 3^rd Respondent [Registrar of Deeds] to 1^st and 2^nd Applicants.

4. The 1^st and 2^nd Respondents shall bear all the costs of this application on attorney-client scale jointly and severally one paying the other to be absolved.”

The order was granted in default of appearance by the plaintiff and Sandra Muir.

Through their erstwhile lawyers, Manase and Manase, the Gurupiras said they had served their application in HC1393/08 in a letter-box at the property.

Following that default judgment, the property was transferred to the Gurupiras on 16 June 2008 under Deed of Transfer No. 4778/2008. The then Deputy Sheriff for Harare had signed the transfer papers. Manase and Manase had been the conveyancers. After that, Manase and Manase had applied for, and had obtained, ex parte, an order of eviction from the Magistrate's Court.

Meanwhile, the plaintiff had changed hands.

One John Legget had become the majority shareholder. This had followed a series of agreements with Sandra Muir. She, on her part, had by then emigrated to Israel. One Diniwe Chinyani (“Diniwe”) had been staying at the property. She had been Sandra Muir's employee of 10 years and more. With the change of ownership of the plaintiff, Diniwe's continued stay on the property, as an employee of the plaintiff, had been through an arrangement with John Legget. As the Messenger of Court was executing the ex parte order of eviction from the Magistrate's Court Diniwe Chinyani raised alarm. It did not help. She and her family were evicted. After that, the Gurupiras took occupation and moved in.

The plaintiff, through John Legget, filed an urgent chamber application for rescission of judgment. However, the matter was adjudged to be not urgent. The plaintiff then filed an ordinary court application for rescission of judgment. It also sought the reversal of the transfer of the property from the Gurupiras back to the plaintiff. Finally, it also sought the eviction of the Gurupiras. The application was filed under the reference no HC4211/08. The application was said to have been brought in terms of both Order 9 Rule 63 and Order 49 Rule 449.

The Gurupiras, through Manase and Manase, opposed the application.

The matter came before PATEL J…, The learned judge felt that there were serious and irreconcilable disputes of facts. On 24 September 2009 he referred the matter to trial. The application would stand as a summons. The parties would file further pleadings in accordance with the rules of court. That was done.

The trial came before me on 10 February 2014....,.

The plaintiff called seven (7) witnesses. The first was one Paradzayi Matambanadzo, a technician from Net One Cellular, a cellular network provider. His evidence was that without a special device, which Net One Cellular did not have, it was not possible for it to decrypt a short message service (sms) transmitted through its platform by one user to the other. This evidence was led to deal with one of the issues in the matter. That issue was whether or not Sandra Muir had transmitted to the Gurupiras an sms advising them of the Zimbabwean dollar balance due by them to her in respect of the sale of shares. It was in issue whether the purchase price would be paid in Zimbabwean dollars or in foreign currency. These transactions had been entered into before the advent of the multi-currency system adopted by this country in February 2009.

The second witness called by the plaintiff was one Leonard Nhari, a forensic scientist. One of the issues was whether or not Sandra Muir had acknowledged receipt of certain payments made by the Gurupiras. Mr Nhari's evidence was that after he had examined Sandra Muir's purported signatures on the questioned documents it was his conclusion that the signatures were not hers but forgeries or imitations.

The third witness called by the plaintiff was John Legget himself. His evidence was that at the time the Gurupiras had taken transfer of the property, through a court order that they had obtained in default, he had already become the owner of the plaintiff through an initial allotment of 98 of the un-issued shares and a subsequent buy out of the remaining two (2) shares still held by Sandra Muir.

John Legget said that neither he nor the plaintiff had been aware of the court application by the Gurupiras. Until the time of eviction he had never heard of the Gurupiras, let alone of their interest in the property. If their application had been served through the letter box at the property then Diniwe Chinyani ought to have seen it. She stayed permanently on the property. She would bring him all mail that concerned Sandra Muir or the plaintiff. John Legget questioned why Manase and Manase had chosen to serve the court application meant for the plaintiff and Sandra Muir through a letter box when they were, at all relevant times, duly represented by legal practitioners, Thompson Stevenson & Associates. At that time there was already litigation pending between the Gurupiras and Sandra Muir under HC6660/07. That was an application by the Gurupiras to compel Sandra Muir to furnish them with her local Bank account details allegedly to enable them to deposit the balance of the purchase price.

The fourth witness called by the plaintiff was Thompson David Stevenson. He had, at all relevant times, been Sandra Muir's attorney. No application had been served on him. He found it strange that Manase and Manase had not directed that the court application in HC4211/08 be served on him. He was at that time still seized of Sandra Muir's mandate in HC6660/07 in which she was vigorously contesting the Gurupiras' claims. Mr Stevenson also said that nobody had approached him for the original title deed for the property. It was strange that Manase and Manase had resorted to applying for a replacement copy in order to register the transfer of the property to the Gurupiras.

The fifth witness called by the plaintiff was Washington Meda. His firm, Admew Management Services, had provided secretarial services to the plaintiff. It had, among other things, registered the transfer of shares in favour of John Legget and had drawn up the share certificates for him.

The sixth witness for the plaintiff was Diniwe Chinyani. She explained that she checked the mail box everyday. She had seen no application. Although at the particular time the application is alleged to have been served Sandra Muir was now in Mozambique on her way to Israel, her home country, she would remit all her mail or that of the plaintiff to John Legget.

The seventh and last witness for the plaintiff was one Anthony Neil Purkis (“Mr Purkis”). He was a chartered secretary in real estate. His evidence was that it was him that had fixed the sale of shares agreement between Sandra Muir and John Legget. Initially, a Mr Stephen Lennox Attwell had offered to buy Sandra Muir's shareholding in the plaintiff. The agreed price had been around US$220,000. However, Mr Attwell had only paid a deposit of $30,000 and had defaulted afterwards. The sale had been cancelled. Mr Purkis had subsequently closed another deal with John Legget. That agreement had been consummated. Out of the proceeds from John Legget, $30,000 would be kept in trust for Mr Attwell. Mr Purkis said he had not heard of the Gurupiras prior to the agreement with John Legget. It was only much later that he had heard of them from Sandra Muir. He had heard that other than a trifle US$17,000, the Gurupiras had failed to pay the sum required on the plaintiff's shares.

For the defence, only Mr Gurupira gave evidence.

Basically, his evidence was that following an advert in one of the local newspapers they had learnt that the property was on sale. The property was owned by the plaintiff. They had been advised that in order to get the property they had to buy Sandra Muir's shares in the plaintiff. Although they were not really interested in the plaintiff they had signed an agreement for the purchase of those shares. This was the only way to get the property. The agreed purchase price had been ZW$7 billion payable over 6 months in local currency. They had fully paid the purchase price; partly in foreign currency, partly in local currency, and partly in kind.

Towards the end, when the balance owing was ZW$6 billion, Sandra Muir had started to prevaricate and it was becoming difficult to remit payments to her. In November 2008, which was the deadline for payment in terms of the agreement, they had had to apply to court for an order to compel her to disclose details of her local Bank account to enable them to make the last payment. This had been the application under HC6660/07. However, that application had not been proceed with. Sandra Muir had agreed to accept cash. She had received and had signed for it on 13 November 2008. The date on the acknowledgement of receipt had incorrectly been entered as 14 November. He had altered it in long hand to read 13 November.

Mr Gurupira denied that they had breached the agreement of sale. He confirmed that Manase and Manase had applied on their behalf to compel the plaintiff and Sandra Muir to transfer the property to him and Mrs Gurupira. The actual registration of transfer had been in terms of the court order.

The defence closed its case after the evidence of Mr Gurupira.

Having heard all the evidence and having read the voluminous record I was left in no doubt that Manase and Manase had snatched a judgment for the Gurupiras who, through their new attorneys, Sawyer and Mkushi, were improperly clinging onto it. The words of McNALLY JA in Zimbabwe Banking Corporation Ltd v Masendeke 1995 (2) ZLR 400 (S) (the Zimbank case) have kept playing in my mind. At p402E the learned judge of appeal made the following terse remarks (KORSAH JA and MUCHECHETERE JA agreeing):

“Here there was a mistake. It was clearly a mistake. Zimbank had no possible reason to allow the claim against it…, to go by default. No-one, and in that term I include My Moyo of Chikumbirike and Associates, who acted for Masendeke, could have reasonably have thought otherwise.”

The facts of Zimbabwe Banking Corporation Ltd v Masendeke 1995 (2) ZLR 400 (S) (the Zimbank case) were far removed from those of the instant case.

In Zimbabwe Banking Corporation Ltd v Masendeke 1995 (2) ZLR 400 (S) the respondent's suit had been preceded by a letter of demand. The letter had been acknowledged and had been said to have been under consideration. In the present case, apart from HC6660/07 which Sandra Muir was defending to the hilt, there was no prior demand for the transfer of the property prior to the application under HC421/08 being filed.

In Zimbabwe Banking Corporation Ltd v Masendeke 1995 (2) ZLR 400 (S) the summons had been served and had been acknowledged on behalf of the applicant. It had been served on the accountant of one of the branches of the applicant. The accountant had referred it to the applicant's Head Office where it had reached the office of the General Manager. In the present matter, the summons had been served in a letter box, notwithstanding that Sandra Muir was, at that time, duly represented by Mr Stevenson. The court application in HC4211/07 had actually cited the earlier application under HC6660/07 as a reference matter.

In one of Mr Gurupiras affidavit in opposition to the application for rescission of judgment it was claimed that it was not competent to have served the application on the legal practitioners in the absence of evidence that they had the mandate to represent Sandra Muir in that particular application.

Without doubt, this was a self-serving subterfuge. If no confirmation had been sought how could it be given?

In Zimbabwe Banking Corporation Ltd v Masendeke 1995 (2) ZLR 400 (S) the summons had been inexplicably filed away. The General Manager had not seen it. Default judgment had been sought without any further communication when no appearance to defend had been entered. The judgment was easily rescinded. The respondent's lawyers, who had unreasonably opposed the application for rescission of judgment, just as in this case, narrowly escaped an order of costs de bonis propriis.

In this matter, it is unbelievable that given the surreptitious manner in which Manase and Manase obtained the default judgment and the order of eviction from the Magistrates Court, ex parte, they had the audacity, not only to seek costs, and not only to seek such costs on the higher scale of attorney and client against the plaintiff and John Legget for having applied for rescission of judgment, but also they sought costs de bonis propriis against the plaintiff's attorneys, then, Matimba and Muchengeti.

In this mater, to allow the default judgment to stand would make justice turn on its head. See Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S)…,.; and Pamire & Ors v Dumbutshena NO & Anor 2001 (1) ZLR 123 (H)…,.

What Manase and Manase were doing offends against all notions of justice even though the return of service by the Deputy Sheriff, on the application to compel transfer, stated that the application had been served through the letter box,

I am sceptical that such a huge bundle of documents, which, from its index, was 56 pages long, could be shoved into a standard letter box and fit. The return did not even say that this had been done after a diligent search for someone responsible to receive the papers. Diniwe Chinyani and her children stayed at the property. None of them saw the papers. This lends credence to John Legget's rejection that any such documents had been placed in the letter box. Manase and Manase deliberately avoided service on Sandra Muir's attorneys. It obviously meant that the application was intended not to be served on the plaintiff or on Sandra Muir.

Furthermore, it was manifestly reprehensible for Manase and Manase to rush an ex parte application for eviction through the Magistrate's Court. It was clearly an abuse of the court process. The main matter was playing out in the High Court. It is doubtful that the Magistrate's Court had jurisdiction over such a matter. The High Court was avoided deliberately because evidently no judge of this court would have countenanced an application for such profound and life-changing relief as eviction to be determined ex parte.

The application for an order to compel transfer was itself replete with patent falsehoods. It was claimed that Sandra Muir was the Managing Director of the plaintiff; that she owned 32,000 shares allegedly being the entire share capital of the plaintiff and that Sandra Muir was the sole beneficial owner of the property.

That was false.

Sandra Muir did not own 32,000 of the plaintiff's shares. To the knowledge of the Gurupiras and their lawyers, Manase and Manase, because this was manifest in the agreement of sale, Sandra Muir owned only 2 shares. That was all that had been issued at that time. 32,000 shares was the authorised share capital. Sandra Muir was not the beneficial owner of the property. She may have enjoyed a right of occupation but ownership of the property was vested in the plaintiff.

It was further alleged in Mr Gurupira's affidavit that on 25^th day of some undisclosed month, but in the year 2007, Sandra Muir had sold to him and Mrs Gurupira her entire shareholding in the plaintiff and that those shares had entitled the holders thereof to an exclusive right of ownership, occupation and use of the property. The reference to Sandra Muir's “entire shareholding” could only have been to the 32,000 shares that Sandra Muir was alleged to own. This was calculated to mislead. Sandra Muir had sold to the Gurupiras' only 2 shares. Whilst this was her “entire shareholding” the reference in the preceding paragraph to her owning 32,000 was evidently calculated to give the impression that Sandra Muir had sold Mr and Mrs Gurupira the entire 32,000 shares.

Furthermore, it was false to claim that the shares in the plaintiff gave the holder an exclusive right of ownership of the property. The order by MTSHIYA J directed that the property be transferred to the Gurupiras. Clearly, that relief was sought erroneously. Clearly, it was granted erroneously. Clearly, it was granted in the absence of the plaintiff. There had been no proper service of the papers. Therefore, under Rule 449, the order was liable to be set aside.

I am also satisfied that under Rule 63 the plaintiff has established good and sufficient cause why the order should be set aside. In order to show good and sufficient cause under Rule 63 the applicant has to give a reasonable explanation for the default, the bona fides of the application for rescission of judgment, and the prospects of success on the merits: see Roland & Anor v McDonnell 1986 (2) ZLR 216 (S); Songore v Olivine Industries (Pvt) Ltd 1988 (2) ZLR 210 (S); Stockill v Griffiths 1992 (1) ZLR 172 (S); and Enock Govha v Ashanti Goldfields Zimbabwe Limited & Anor HH48-12.

These aspects are considered cumulatively and not individually: Stockill v Griffiths 1992 (1) ZLR 172 (S)…,.

I have already considered that the plaintiff was not in wilful default. Regarding the bona fides of the application for rescission; it is quite clear that the plaintiff, without due process, was deprived of its only major asset. Section 183(1)(b) of the Company's Act [Chapter 24:03] prohibits the disposal of the whole or the greater part of the assets of a company without the approval of the company in a general meeting.

This was not done in this case.

The property was just about the only asset of significance owned by the plaintiff. The evidence placed before me showed that the Gurupiras never took transfer of the shares of the plaintiff. All that they were ever interested in was the property even though their agreement was for the purchase of the shares in the company, not the purchase of its assets. The evidence also showed that by the time that the Gurupiras took transfer John Legget had already become the majority shareholder and the Managing Director of the plaintiff. Thus, transfer of the property to the Gurupiras was a nullity. The plaintiff did not sanction it. Regarding the prospects of success, I have decided to leave this aspect for determination at the hearing of the main matter under HC1393/08.

Procedurally, once I set aside the order by MTSHIYA J, as I must, the application under HC1393/08 becomes alive again even though I have already heard viva voce evidence on it. In the end, this court shall have to pronounce the fate of the plaintiff and the fate of the assets owned by it. In my view, and without in any way being prescriptive or pre-emptive, some of the issues to be determined in the main application includes the question of whether or not there had been a double sale in the true sense; whether or not the Gurupiras breached the agreement of sale with Sandra Muir by failing to pay the purchase price either timeously or in full; and whether or not that agreement had automatically lapsed.

There is one final aspect of this matter.

When the application was referred to trial and the parties were directed to file further pleadings with the application taking the place of the summons, the Gurupiras, through Manase and Manase, had purported to join John Legget to the matter and had gone on to claim a substantive relief against both him and the plaintiff. It was pleaded that the sale and transfer of the shares in the plaintiff by Sandra Muir to John Legget had been a nullity. The counter-claim was for the reversal of that transfer of the shares.

At the trial, however, counsel for the Gurupiras, wisely, abandoned the counter-claim. John Legget had not been a party to the action. He had not been joined properly. His name had just been inserted in the citation as second defendant. Such crass conduct and wanton disregard of the rules by Manase and Manase properly ought to have attracted a penal order of costs at the very least. However, no such order was asked for. But, it was a correct decision by counsel for the Gurupiras to have abandoned the counter claim.

DISPOSITION

In the circumstances, this matter is disposed of as follows:

1. The default judgment granted by this court on 21 May 2008 in HC1393/08 is hereby set aside.

2. The Registrar of Deeds is hereby ordered and directed to cancel Deed of Transfer No. 4778/08 over certain piece of land situate in the district of Salisbury, called Stand 12896 Salisbury Township of Salisbury Township Lands, measuring 3,066 square metres, dated 16 June 2008 in the name of Asswell Africa Gurupira and Jean Jane Rudo Gurupira and to restore the prior Deed of Transfer No. 39/76.

3. The following residual issues shall be determined in the main application in HC1393/08:

3.1 Whether or not the agreement of sale between the first and second defendants, namely, Asswell Africa Gurupira, of the one part, and the third defendant, namely, Sandra Maureen Muir, of the other part, was duly performed.

3.2 Whether or not the transfer of shares in the plaintiff company, namely, Earthmoving & Construction Company (Private) Limited, by the third defendant to one John Legget, should be set aside.

3.3 Whether or not the first and second defendants should vacate the premises situate on the property more fully described in paragraph 2 above and which is also known as 98 Churchill Avenue, Gunhill, Harare.

4. The plaintiff shall file its notice of opposition or other such papers in HC1393/08 within ten (10) days of the date of this order and thereafter the filing of any further documents shall be in accordance with the Rules.

5. The costs of the application and of the trial in HC4211/08, and the costs of the application in HC6660/07 shall all be borne by the first and second defendants jointly and severally, the one paying the other to be absolved.

The present application was filed on 7 March 2008 and has raged on with various twists and turns, culminating in the hearing before me.

The background facts are that, on 25 May 2007, the applicants (the Gurupiras) and the second respondent (Muir) entered into an agreement whereby Muir sold to the Gurupiras two (2) issued shares in the first respondent (the company). The company is the registered owner of a certain piece of land situate in the District of Salisbury Town measuring 3,066 square metres commonly known as 98 Churchill Ave, Gunhill, Harare held under Deed of Transfer Number 39/76 (the property). The shares entitled the holder to an exclusive right of occupation and use of the property.

The applicants aver that they paid the purchase price in instalments. They then encountered problems when they intended to make the final payment as Muir became evasive. The Gurupiras then filed a court application, in HC6660/07, seeking to compel Muir to furnish them with her banking details to enable them to make payment of the balance of the purchase price. They finally paid the balance on 13 February 2008 by cheque.

On 11 December 2007 Muir and the sixth respondent (Leggatte) signed a Shareholders Agreement in terms of which 98 shares in the company were issued and allotted to Leggatte. The Gurupiras got wind of the agreement and they instituted the present proceedings on 7 March 2008 against the company and Muir seeking the following relief;

“Whereupon, after reading documents filed of record and hearing counsel it is hereby ordered that:-

IT IS ORDERED THAT:-

1. The 3^rd respondent is hereby interdicted from transferring the property known as No. 98 Churchill Avenue, Gunhill, Harare also known as a certain piece of land situate in District of Salisbury Town Lands measuring 3,066 square metres under Deed of Transfer dated 7 January 1976 (Registration Number 39/76).

2. The sale of the property to any unknown third party be and is hereby set aside.

3. The property in paragraph 1 above be transferred to Asswell Africa Gurupira and Jean Jane Gurupira and the 2^nd respondent is directed to sign all the necessary documents to transfer.

4. Should the 2^nd respondent fail or refuse to sign the necessary documents to effect transfer the 4^th of 5^th respondent is hereby directed to sign all the necessary documents to effect the transfer by 3^rd respondent to 1^st and 2^nd applicants.

5. The 1^st and 2^nd respondents shall bear all the costs of this application on an attorney client scale.”

The application was served by the Deputy Sheriff on both respondents by placing in a letter box. None of the respondents responded, and, on 21 May 2008, the Gurupiras obtained default judgement. On 16 June 2008, the Gurupiras took transfer of the property into their names. On 23 July 2008, they made an ex parte application, in the Magistrates' Court, for the eviction of the company and Muir and it was granted. On 24 July 2008 the company and Muir and all those claiming occupation through her were evicted.

That is when the company, as represented by Leggatte, became aware of the default judgment, and, on 22 August 2008, it applied for rescission of the default judgement in Case No. 4211/08. The matter was referred to trial after material disputes of fact became apparent. The trial was held before MAFUSIRE J, and, on 19 March, judgment was handed down. The court made the following order;

“DISPOSITION

In the circumstances, this matter is disposed of as follows:

1. The default judgment granted by this court on 21 May 2008, in HC1393/08, is hereby set aside.

2. The Registrar of Deeds is hereby ordered and directed to cancel Deed of Transfer No. 4778/08 over certain piece of land situate in the district of Salisbury, called Stand 12896 Salisbury Township of Salisbury Township Lands, measuring 3,066 square metres, dated 16 June 2008 in the name of Asswell Africa Gurupira and Jean Jane Rudo Gurupira and to restore the prior Deed of Transfer No. 39/76.

3. The following residual issues shall be determined in the main application in HC1393/08:

3.1 Whether or not the agreement of sale between the first and second defendants, namely, Asswell Africa Gurupira, of the one part, and the third defendant, namely, Sandra Maureen Muir, of the other part, was duly performed.

3.2. Whether or not the first and second defendants should vacate the premises situate on the property more fully described in paragraph 2 above and which is also known as 98 Churchill Avenue, Gunhill, Harare.

3.3 Whether or not the transfer of shares in the plaintiff company, namely, Earthmoving & Construction Company (Private) Limited, by the third defendant to one John Leggatte, should be set aside.

4. The plaintiff shall file its notice of opposition or other such papers in HC1393/08 within ten (10) days of the date of this order, and, thereafter, the filing of any further documents shall be in accordance with the Rules.

5. The costs of the application and of the trial in HC4211/08, and the costs of the application in HC6660/07 shall all be borne by the first and second defendants jointly and severally, the one paying the other to be absolved.”

The company, in terms of paragraph 4 above, then filed its opposing papers to the present proceedings on 2 April 2014. It took the point in limine, that, the order sought by the Gurupiras was incompetent in that they sought transfer of the property and yet they only bought shares in the company. On the same date, the company filed a counter application for the eviction of the Gurupiras. Again, on the same date, Mr Stevenson filed a Notice of Opposition for Muir. The parties filed further papers up to Heads of Argument.

On 22 January 2015, the Gurupiras filed an application for joinder of Leggatte which he opposed. On 25 February 2016 an order granting joinder of Leggatte was granted. Further pleadings were filed pursuant to the order of joinder. Leggatte also adopted the point as raised by the company. The Gurupiras filed a supplementary affidavit wherein, inter alia, they sought an amendment to the draft order.

The matter was set down for hearing on 21 May 2015. A day before the hearing Mr Stevenson filed a document titled “Take notice that the 2^nd respondent hereby files of record a mandate given to her legal practitioners of record.”

A supporting affidavit by Mr Moyo, Leggatte's legal practitioner, is attached. To the affidavit, Mr Moyo attached a letter allegedly written by Muir and delivered to him by Leggatte who had allegedly received it from Muir's son.

On the day of hearing, Mr Mpofu moved for the amendment of the Draft Order. Both Mr De Bourbon and Mr Stevenson did not oppose the amendment. It was therefore granted. The amended Draft Order seeks the following relief;

“WHEREUPON, after reading the documents filed of record and hearing counsel:

IT IS ORDERED THAT:

1. An order declaring the 1^st and 2^nd applicant to be the lawful shareholders of the entire shares in the 1^st respondent (the company) and that any purported transfer or appointment of directors by the 1^st respondent to the 6^th respondent be deemed null and void.

2. An order declaring the 1^st and 2^nd applicants to be the lawful owners of the 1^st respondent (the company's) sole immovable property being Stand 12896 Salisbury Township situate in the district of Salisbury measuring 3,066 square metres known as No.98 Churchill Avenue, Gunhill, Harare and that the above property be transferred in favour of 1^st and 2^nd applicants.

3. An order that the 2^nd respondent be directed to sign all necessary documents to effect transfer of both the shares and the property.

4. Should the 2^nd respondent fail to sign the necessary documents to effect transfer of the shares and the property, the 4^th respondent is hereby directed to sign all necessary documents for 3^rd respondent to effect the transfer to 1^st and 2^nd applicants.

5. The 1^st, 2^nd and 6^th respondents shall bear all the costs of this application on an attorney and client scale jointly and severally each causing another to be absolved.”

The granting of the application to amend the Draft Order disposed of the point taken by the company and Leggatte regarding the competency of the order sought by the Gurupiras.

Mr Mpofu took the point, in limine, that the second respondent was not properly before the court. He submitted that the default judgment was taken against all respondents. The company applied for rescission of the judgment. In the order by MAFUSIRE J, only the company was given leave to defend the matter. Muir was in default and never applied for condonation.

He further submitted that Mr Stevenson deposed to the affidavit opposing the matter. He avers that after the granting of the default judgement he renounced agency after being instructed to hand over Muir's files to another legal practitioner. He was then prevailed upon by interested parties to act on behalf of Muir. Since the company was directed to file its opposing papers within 10 days of the order, he felt compelled to do the same for Muir.

Mr Mpofu further contended that Mr Stevenson did not have instructions to deal with this matter.

He tells some falsehoods on page 136 paragraph 12 when he said Muir's husband signed the agreement with Legatte on 27 May 2008 and yet, by then, Mr Muir had transferred his one share to his wife and had passed on.

The supplementary affidavit by Mr Moyo, in paragraph 2, is at variance with what appears in Mr Stevenson's affidavit in paragraphs 4 and 5. The position put forward by Mr Moyo is a false position.

In response, Mr De Bourbon submitted that the entire judgment was set aside for both the second and sixth respondents. The judgment dealt with the issue of service of the application on Muir and the company. All the issues that the court opined might be determined in the matter, in paragraph 3.2 of the order also involve Muir. She was therefore properly before the court.

Mr Stevenson submitted that at the time default judgment was taken the issue was transfer of the property and not of shares. He contended that in an emergency one acts to protect his or her neighbour. If the Gurupiras had been successful, it would reflect on his client as she is the one who sold the shares. He submitted that a legal practitioner is allowed to give evidence. He had sought authority from his client's relative and the letters had just been found by Mr Moyo. The fact that he had handed over file HC66660/08 to another legal practitioner did not prevent him to act in an emergency on behalf of his client. He was the one best placed to know the position.

In reply, Mr Mpofu submitted that the fact MAFUSIRE J opined that the issue of service might need determination does not make Muir a party. In any event, service was effected on the domicilium citandi in terms of the agreement. If Muir is not happy then she is the one who must attack it. A Notice of Opposition is filed by the respondent. The legal practitioner can file a supporting affidavit as witness. Mr Stevenson purports to act as an agent when he has no authority. When notice is given that the issue will be taken up, an attempt is made to validate the authority. Mr Stevenson does not do the affidavit himself. Instead, Mr Moyo, the sixth respondent's legal practitioners, deposes to the affidavit. Mr Stevenson filed an affidavit in his own name without purporting to represent Muir.

The issue for determination is whether the second respondent, Muir, is properly before me. I will examine the issue from two angles;

(i) Firstly, whether the judgment by MAFUSIRE J gave Muir leave to defend the matter.

(ii) Secondly, whether the affidavit by Mr Stevenson is properly before me. In other words, is there a Notice of Opposition on behalf of Muir?

In dealing with the first point, it is important to determine whether Muir was served with the court application. There is a Return of Service which was rendered by the Deputy Sheriff which reflects that the court application was served at No. 98 Churchill Avenue, Gunhill, Harare. It was served by placing in a letter-box. The service was on behalf of the first respondent, the company and the second respondent - Muir. In terms of clause 9 of the agreement between Muir and the Gurupiras, Muir chose that address as her domicilium citandi.

It is trite that the return of service of an officer of the court, whether he be the Sheriff, the Deputy Sheriff or the Messenger, has to be accepted as prima facie proof of what was stated therein, capable of being rebutted by clear and satisfactory evidence. See Gundani v Kanyemba 1988 (10) ZLR 226 (SC).

In casu, Muir has not placed any facts before this court, either in the application for rescission on in the present matter, that she was not served with the application. None of the witnesses, in the application for rescission, could testify on her behalf on that aspect. All that Mr Stevenson could say was that he wondered why the application was not served on his law firm. The answer is to be found in clause 9 of the agreement. Service of the process other than as stipulated in the agreement would have fallen foul of that clause.

Having been served, and after the expiry of 10 days, Muir was therefore barred. This is provided for in Rule 233(2) of the High Court Rules, 1971. She did not approach the court to seek upliftment of the bar.

The fact that the company successfully sought rescission of the judgment does not assist her.

MAFUSIRE J was clear in his order. He gave the company leave to file its opposing papers. He did not relate to the position of Muir as she had not made an application for the order to be set aside. She cannot therefore cling to the judgment made in favour of the company and allege that it paved the way for her to file her papers in opposition. MAFUSIRE J could not grant what had not been prayed for.

Coming to the second angle, Muir did not file an affidavit neither has one been filed by a party authorised by her.

In terms of Rule 227(2)(b), every written Notice of Opposition shall be signed by the respondent or by his legal practitioner. In terms of Rule 227(4)(a) an affidavit shall be made by the respondent or by a person who can swear to the facts or averments set out therein.

It is trite that where the Notice of Opposition or affidavit is to be signed by a person other than the respondent, that person must show that he is authorised to do so. The authors HERBSTEIN & Van WINSEN - The Civil Practice of the High Courts of South Africa, 5^th Ed…, put it this way;

“Where an application is made by an agent on behalf of a principal, an averment of the agent's authority is essential, unless it appears from the affidavits filed in the application that the principal is aware of and ratified the proceedings. A statement that the applicant is acting in the capacity of agent for the principal in question is a sufficient allegation of authority to make the application.”

In casu, Mr Stevenson filed an affidavit. It is not clear whether it is an opposing or supporting affidavit. In it he avers that he renounced agency after being asked by Muir to hand over her files to some other legal practitioners. In paragraph 7 he asserts;

“I have been prevailed upon by interested parties to the instant matter to act on behalf of the second respondent in the absence…,.”

It is a telling assertion. He filed the “affidavit” without a mandate from Muir but did so due to some pressure from interested parties.

After the matter had been postponed, Mr Moyo, for Leggatte, filed a supplementary affidavit whereby he asserted that he had discovered a letter from Muirs's son authorising Mr Stevenson to act for Muir.

It is clear that this is an attempt to validate the actions of Mr Stevenson.

Mr Stevenson does not depose to the supplementary affidavit to explain why he was quite categoric in his affidavit that “he had been prevailed upon”. This does not explain why he filed the affidavit in his name without an averment that he had been authorised by Muir to defend the proceedings and to depose to the opposing affidavit.

If the interested parties thought that his evidence would assist them, then he should have deposed to an affidavit which they would attach to their own papers.

In any event, Mr Stevenson does not have personal knowledge about some of the critical matters in this case. He has no independent knowledge of whether the Gurupiras discharged their obligations or not in terms of the agreement. He does not know whether Muir cancelled the agreement, and, if so, how.

Mr Stevenson is either mistaken on the facts or he did not tell the truth in his affidavit. In paragraph 12 of his affidavit he states;

“The agreement signed by the second respondent and her husband, Ramon Charles Muir, on 27 May 2008 with John Leggatte, who signed on 28 May 2008…,.”

It is common cause that the agreement with Leggatte was entered into by Sandra Muir only. By the time of that agreement, her husband was late. She owned the two issued shares in the company with her husband's share having been transferred to her in 2006. Whatever information that he placed before the court is hearsay and it is inadmissible - and such information does not constitute Muir's opposition.

In view of the above there is no opposition filed by Muir and the matter will be related to on that basis.

This leaves the court with the Gurupira's position and that of Leggatte in the main and the counter-application.

Mr De Bourboun contented that, at best, the Gurupiras own two shares of the 100 issued shares in the company. That right is in dispute as they failed to pay the purchase price and the agreement terminated in terms of clause 13. Leggatte owns the remaining 98 issued shares. The Gurupiras have no proof in the form of certificates that they own the two shares. There is no entry in the share register.

The other issues that he addressed, relating to the transfer of the company property to the Gurupiras, were taken care of by the amendment to the draft order.

It was further submitted that you cannot give any relief which impacts on Muir in her absence.

In respect of the counter-application, Mr De Borboun contended that the Gurupiras are in unlawful occupation of the property that belongs to the company in which Leggatte was the majority shareholder. There is no arrangement, contractual or otherwise, in terms of which the Gurupiras can claim a right to reside in or occupy the property.

The Gurupira's position is that they discharged their obligation in terms of the agreement. The agreement still subsists. It makes the agreement with Leggatte a double sale.

It was further submitted that once Muir had sold the two shares, she lost rights to deal with those two shares. She could not do the allotment of the other shares as that is done by directors and not shareholders. She would need a quorum of two (2) directors as provided for in terms of section 169(v) of the Companies Act [Chapter 24:03].

The Gurupira's position can only be responded to by Muir who is not before the court. The position of law is settled on this point. In Fawcett Security Operations (Pvt) Ltd v Director of Customs & Excise & Ors 1993 (2) ZLR 121 (SC) it has stated:

“The simple rule of the law is that what is not denied in affidavits must be taken to be admitted.”

In casu, no evidence has been placed before the court to controvert the Gurupira's assertion that they complied with their obligations. There is also no evidence that the agreement was cancelled. As it is, nothing stands in the way of the grant of the order as sought by the Gurupiras.

In my view, the applicants have not established a legal basis for the property to be transferred into their names. The property is the sole asset of the company. The applicants will be the shareholders of the company. They will have to deal with the property in terms of the Companies Act. Any reference to transfer of the property in the draft order will therefore be deleted.

In view of the findings I made above, Leggatte's counter application cannot succeed.

In the result, I will make the following order;

IT IS ORDERED THAT:

1. An order declaring the first and second applicants to be the lawful shareholders of the entire shares in the first respondent (the company) and that any purported transfer or appointment of directors by the sixth respondent to the first respondent be deemed null and void.

2. An order that the second respondent be directed to sign all necessary documents to effect transfer of the abovementioned shares.

3. Should the second respondent fail to sign the necessary documents to effect transfer of the shares, the fourth respondent is hereby directed to sign all necessary documents to effect transfer of the shares to the first and second applicants.

4. The first and sixth respondents shall bear all the costs of this application on an attorney and client scale jointly and severally each causing another to be absolved.

This is an appeal against a judgment of the High Court handed down on 18 May 2016.

BACKGROUND FACTS

The facts which gave rise to this appeal are somewhat convoluted. Earthmoving & Construction Company (Private) Limited, the second appellant (hereinafter referred to as “the Company”), is a private limited company duly registered as such under the laws of Zimbabwe.

The Company had, at the time of incorporation, an authorized share capital of $32, divided into 32,000 ordinary shares with a nominal value of $0.001 each. Of those shares, only two had been issued. and were, at the time that these events evolved, owned by one Sandra Maureen Muir (“Mrs Muir”). This, in effect, gave 100 percent ownership of the issued shares to Mrs Muir.

In turn, the Company is the registered owner of an immovable piece of land, situate in Harare, identified as a certain piece of land situate in the district of SALISBURY TOWN LANDS measuring 3,066 square metres (also known as 98 Churchill Avenue, Gunhill, Harare). This property is the sole asset of the company.

On 27 May 2007, Mrs Muir concluded a written agreement of sale with Mr and Mrs Gurupira, in terms of which Mrs Muir sold to them the two shares in the Company. In terms of the agreement between the parties, the shares purchased by the Gurupiras' would entitle them to the “exclusive right of use and occupation” of the immovable property owned by the company. The purchase price for the shares was recorded as ZW$7,000,000,000= (seven billion dollars), payable as to a deposit of ZW$3,300,000= which was acknowledged as having been paid at the time of signing of the agreement. The balance of ZW$3,370,000,000= was to be paid within six (6) months from the date of the agreement. The rate at which the outstanding balance was to be paid as well as the frequency thereof were left to the discretion of the parties.

Although the purchase price was quoted in the local currency, it is common cause that the Gurupiras made sporadic payments sometimes in fuel, sometimes in US Dollars, and sometimes in Zimbabwe Dollars.

Up until the end of June 2007, the Gurupiras had made payment on eight occasions, with payment being made as described above. The total amount paid to Mrs Muir under this arrangement is in dispute between the parties.

On 4 August 2007, the Gurupiras addressed a letter to Mrs Muir indicating that they were encountering challenges raising the balance of the purchase price and sought an extension of the time to make payment but did not specify an exact date of expected payment. The last date for payment under the agreement was 25 November 2007.

A dispute ensued on the manner of payment, the currency of payment, and the place at which payment should be effected.

The Gurupiras alleged that at some point Mrs Muir started refusing payment in the local currency and demanded that the balance be paid in foreign currency. Mr Gurupira advised Mrs Muir that he could only pay foreign currency if he was able to access it and that he was not always in a position to obtain it. On 12 November 2007, Mr Gurupira instructed his legal practitioners to write to Mrs Muir to provide an account into which payment of the outstanding balance of the purchase price could be deposited. There was no response.

On 23 November 2007, the Gurupiras filed an application in the High Court seeking an order for Mrs Muir to provide a Bank account into which payment of the outstanding balance of the purchase price could be paid. In addition, they sought an order for specific performance by Mrs Muir for the transfer of shares in the company to themselves against a tender of payment of the balance of the purchase price.

This application never saw the light of day having been withdrawn before it could be set down.

The record shows that on 6 September 2007, the Gurupiras made a payment through wire transfer directly to Israel where Mrs Muir was now residing. Also on record is a cheque payment, in February 2008, into a Standard Chartered Bank account bearing Mrs Muir's name.

It is common cause that during the period following the filing of the above mentioned application Mrs Muir concluded a series of agreements with the first appellant, (“Leggett”).

On 11 December 2007, Mrs Muir and Leggett concluded an agreement in terms of which the latter would subscribe to 98 ordinary shares in the company. Subsequently, on 27 May 2008, Leggett concluded an agreement with Mrs Muir in terms of which the former purchased the entire shareholding in the company from Mrs Muir. Just as in the case of the Gurupiras, the purchase entitled him to “exclusive use and occupation” of the immovable property which is the subject matter of this appeal.

Subsequent to the conclusion of the first agreement, the Gurupiras became aware that Mrs Muir had placed advertisements for the sale of the immovable property. As a consequence, on 7 March 2008, under Case No. HC1393/08, the Gurupiras filed an application with the High Court in which they sought, variously, as against the company, interlocutory relief prohibiting the transfer of the immovable property, and, as against Mrs Muir, an order for specific performance in respect of the immovable property. The Registrar of Deeds, the Sheriff for Zimbabwe and his Deputy were also cited as third, fourth and fifth respondents respectively.

On 21 May 2018, the High Court granted an order in favour of the Gurupiras, in default of appearance from Mrs Muir and the company, as claimed in the draft order.

On 16 June 2008 the property was transferred to the Gurupiras under Deed of Transfer No. 4778/08. They proceeded to evict the occupant, one Diniwe Chinyani. She informed Leggett.

An urgent application for rescission of the default judgment was filed on behalf of the company. It was adjudged not urgent and was finally set down for hearing as an opposed matter. However, the matter was referred to trial on the premise that there existed material disputes of fact.

Pending the determination of the application for rescission, the company filed a counter application in which it sought an order for the eviction of the Gurupiras on the premise that it was the owner of the property in question.

On 19 March 2014, after a full trial, the High Court gave an order in terms of which the default judgment was set aside with leave being granted for “the respondent” in the main application to file opposing papers.

The main application was heard by the High Court on 21 May and 18 June 2015. By this time, pursuant to an application by the Gurupiras, Leggett had been joined as sixth respondent by order of the court. An issue arose as to whether Mrs Muir was before the court. The Gurupiras argued that she had not applied for the rescission of the default judgment in the sense that only the company had sought such rescission. It also transpired that Mr Stevenson, who purported to represent her on the day of the hearing, had not filed papers on her behalf nor did he appear to have the mandate to represent her.

On 18 May 2016 the High Court handed down its judgment and issued an order:

1. Declaring that the Gurupiras to be the lawful shareholders of the entire shareholding in the first respondent (the company) and that any purported transfer or appointment of directors by the sixth respondent (Leggett) be deemed to be null and void. (sic)

2. Directing the second respondent to sign all necessary documents to effect transfer of the above-mentioned shares. (sic)

3. That should the second respondent fail to sign the necessary documents to effect transfer of the shares, the Sheriff of the High Court be directed to sign all necessary documents to effect transfer of the shares to the Gurupiras.

4. The first and sixth respondents shall bear the costs of this application on an attorney and client scale jointly and severally each causing the other to be absolved. (sic)

5. Dismissing the sixth respondent's counter-application.

It is this decision that Leggett has brought on appeal and Mrs Muir is cited as third respondent to the appeal. The appeal is premised on the following grounds:

1. The learned Judge erred in finding that the judgment given in default as Mrs Muir had not been set aside and rescinded in case no. HC4211/08.

2. The learned Judge erred in holding that the matter fell to be determined on the basis that Mrs Muir had been properly served with the papers in the matter, and that, as a consequence of her failure to oppose the matter (which finding is disputed), the disputes fell to be resolved on the basis of the version put forward by the Gurupiras.

3. The learned Judge erred in finding that the Gurupiras had established an entitlement to the transfer into their names of any shares in the second appellant, and that the transfer of shares into the name of Leggett had no legal effect.

4. The learned Judge erred in failing to apply section 120 of the Companies Act [Chapter 24:03], and in failing to take account of the fact that no application was made to rectify the share register of the company.

5. The learned Judge erred in failing to hold that Leggett, as the sole registered shareholder of the company, was entitled to assert both his own rights as a shareholder and the rights of the second appellant as the registered owner of the immovable property in question.

6. The learned Judge erred in failing to grant an order of eviction from the property in question of the Gurupiras in favour of the company.

7. In the alternative, and in any event, the learned Judge ought to have found that there were disputes of fact which could not be resolved on the papers, and, accordingly, referred the matter to trial….,.

Counsel for the respondents also took a point in limine on the appeal by the second appellant. He submitted that legally a company could only be represented by a director and not a shareholder, which the first appellant described himself as. Accordingly, he argued that there there was no proper appeal by the second appellant before the court.

I do not intend to let this argument detain me.

The first and second respondents have been litigating with the second appellant from the onset. In documents filed by the first appellant in defence of the second appellant, the former has always referred to himself as a shareholder and director of the second appellant. The point in limine is groundless and is dismissed.

ISSUES FOR DETERMINATION ON APPEAL

Although the Gurupiras obtained an order for specific performance against Mrs Muir, which is the main issue in contention in this appeal, the starting point revolves around the issue of rescission of the default judgment of 21 May 2018.

1. In this appeal, the court has to determine the effect of the order for rescission given by MAFUSIRE J.

2. Consequent thereto is the issue as to whether Mrs Muir, following upon the rescission of the default judgment, was before the court a quo for the determination of the main application.

3. Additionally, there should be a determination as to whether the court a quo was correct in finding that the Gurupiras were entitled to specific performance. For the proper determination of this aspect on the merits, it stands to reason that Leggett and the company could only appeal if Mrs Muir was a party to the proceedings. Her absence militates against their contentions in that regard.

4. Lastly, the court had to decide whether Leggett was entitled to relief in respect of the shareholding transferred to him by Mrs Muir.

Given the issues raised in the rather extensive grounds, I have decided to deal with each ground of appeal separately ad seriatim.

AD GROUNDS 1 and 2 - WHETHER THE COURT A QUO ERRED IN FINDING THAT MUIR HAD BEEN PROPERLY SERVED, THAT, AS A CONSEQUENCE, MUIR WAS NOT BEFORE THE COURT AND HAD FAILED TO OPPOSE THE APPLICATION FOR SPECIFIC PERFORMANCE

These two grounds are interlinked as they are concerned with the same issue.

The application for the rescission of the default judgment was the sine qua non for any party seeking to oppose relief being claimed by the Gurupiras to have the leave of court to appear in opposition to such application.

As regards this issue, it was contended that the High Court had said that the issue was whether or not Mrs Muir was before the court. It was contended that due to the findings of fact made by MAFUSIRE J the court had to find that the judgment had been rescinded, thus affording her a right to oppose the relief sought by the Gurupiras.

Per contra, counsel for the respondents submitted that Mrs Muir had not appealed against the finding that she was not before the High Court. As a consequence, there was no opposition filed by her to the order sought by the Gurupiras.

The court a quo made the following critical findings;

It found that Mrs Muir had been properly served with the application. Further to that, it found that due to her failure to have the judgment granted in default rescinded as against her, she was not before the court.

The application for rescission was, on the order of the High Court, converted to a trial given the seeming myriad material disputes of fact on the papers. The witnesses called included Leggett, one Diniwe Chinyanga, L. T Nhari, a forensic documents examiner, and Thomas David Stevenson.

The last witness was appearing in his capacity as the legal practitioner of record for Mrs Muir.

Mrs Muir, however, did not launch an application for the rescission of the order made against her nor was she one of the witnesses who gave evidence before the High Court in support of the application for rescission of the default judgment.

Counsel for the appellants, Leggett and the company, submitted that the court a quo should have had regard to the evidence given to the court during the trial wherein the rescission of the default judgment was being considered.

It is pertinent to note that when the matter was heard by MAFUSIRE J, on 10 and 11 February 2014, there was only one party referred to as the plaintiff - and that was the company. Mrs Muir was cited as the third respondent in that matter. This is because the company had made the application for rescission. It cited Mrs Muir as a respondent. She did not file any papers. The judgment reflects that there was no appearance by Mrs Muir. The learned judge found that there had been no proper service of the application to compel specific performance as against Mrs Muir. He found, as a consequence, that there had not been proper service on Mrs Muir.

The critical question that begs an answer is what was before his Lordship. In other words, was Mrs Muir before his Lordship in an application for the setting aside of a judgment granted in default?

Such an application is governed by Rule 63 of the Rules of the High Court, 1971. Rule 63 is couched as follows:

“(1) A party against whom judgment has been given in default, whether under these rules or under any other law, may make a court application, not later than one month after he has had knowledge of the judgment, for the judgment to be set aside.

(2) If the court is satisfied, on an application in terms of sub-rule (1), that there is good and sufficient cause to do so, the court may set aside the judgment concerned and give leave to the defendant to defend or to the plaintiff to prosecute his action on such terms as to costs and otherwise as the court considers just.

(3) Unless an applicant for the setting aside of a judgment in terms of this Rule proves to the contrary, he shall be presumed to have had knowledge of the judgment within two days after the date thereof.”

In my view, it was incumbent upon Mrs Muir, in the pursuit of the protection of her rights under the agreement with the Gurupiras, to apply, in terms of Rule 63, to have the judgment against her rescinded or set aside.

Even the order issued by MAFUSIRE J is of no assistance to her cause. It orders that “the plaintiff shall file its notice of opposition within ten days of the date of the order” - and it is common cause that the plaintiff in those proceedings was the company.

Notwithstanding his remarks on service, there is no order granting leave to Mrs Muir to file opposing papers. This is due to her absence from the proceedings from the beginning.

The court a quo found that, despite the presence of Mr Stevenson, who purported to act on her behalf, Mrs Muir was not before it. The court said:

“It is trite that where the Notice of Opposition or affidavit is to be signed by a person other than the respondent, that person must show that he is authorised to do so. The authors Herbestein & Van Winsen - The Civil Practice of the High Courts of South Africa, 5th Ed, p437 put it this way;

'Where an application is made by an agent on behalf of a principal, an averment of the agent's authority is essential, unless it appears from the affidavits filed in the application that the principal is aware of and ratified the proceedings. A statement that the applicant is acting in the capacity of agent for the principal in question is a sufficient allegation of authority to make the application.'”

In casu, Mr Stevenson filed an affidavit. It is not clear whether it is an opposing or supporting affidavit. In it he avers that he renounced agency after being asked by Mrs Muir to hand over her files to some other legal practitioners. In paragraph 7 he asserts;

“I have been prevailed upon by interested parties to the instant matter to act on behalf of the second respondent in the absence…,.

It is a telling assertion.

He filed the 'affidavit' without a mandate from Mrs Muir but did so due to some pressure from 'interested parties.'”

In the light of these facts, as emanating from the record, the finding that Mrs Muir was not before the court a quo is beyond impeachment.

Counsel for the appellants proceeded to argue that the finding by MAFUSIRE J, that there had in fact not been proper service of the application, was pertinent in this regard.

He contended that it could not be argued that the company and Mrs Muir could be said to have been in default, and, therefore, no order could be made against either of them.

These comments are made against the finding by the court a quo that Mrs Muir did not file an application for rescission, which finding has not been appealed against. The court stated:

“In casu, Muir has not placed any facts before this Court, either in the application for rescission or in the present matter, that she was not served with the application. None of the witnesses, in the application for rescission, could testify on her behalf on that aspect.”

According to the learned authors, HERBSTEIN and Van WINSEN, The Civil Practice of the High Courts of South Africa, 5ed…, Rule 31(2)(b) of the Uniform Rules of the High Courts of South Africa provides that a defendant may, within twenty days after gaining knowledge of a default judgment granted against him, apply to court upon notice to the plaintiff to set aside the judgment.

I must say that I much prefer the wording in that rule to the one in our Rule 63.

The former is clear and admits of no doubt as to who should make the application. It is the defendant.

On p715, the learned authors state the following:

“An applicant for the rescission of a default judgment must show good cause and prove that at no time did he renounce his defence, and has a serious intention of proceeding with the case. In order to show good cause, an applicant must give a reasonable explanation for the default, the application must be made bona fide and must show that a bona fide defence to the plaintiff's claim (exists).”

The contentions by counsel for the appellants, that Mrs Muir was not in default and was so found by MAFUSIRE J must, therefore, be considered in the light of the provisions of Rule 63 above.

The judgment of the learned judge in the court a quo is clear. As a consequence, when MAFUSIRE J found that the plaintiff had not been in wilful default such finding could only have related to the company. Mrs Muir never made an application for the rescission of the default judgment entered against her, and, as a consequence of such failure, the judgment, as it related to an order aimed at her personally, was not set aside. As a consequence, the setting aside of the order did not mean that she had purged her default. She had not sought an order permitting her to oppose the application filed against her.

According to the agreement of sale, the domicilium citandi et executandi was 98 Churchill Avenue. The return of service by the Deputy Sheriff stated that service had been effected at the domicilium citandi et executandi. The court a quo found that service had been effected because that is the address for service chosen by Mrs Muir in the agreement. The court stated:

“It is trite that the return of service of an officer of the court, whether he be the Sheriff, the Deputy Sheriff or the Messenger, has to be accepted as prima facie proof of what was stated therein, capable of being rebutted by clear and satisfactory evidence. See Gundani v Kanyemba 1988 (1) ZLR 226 (SC).”

It is on record that she left Zimbabwe in September 2008. The documents were served in March 2008. She needed to explain why the return of service was not correct and why she had not seen the documents. There was no explanation from her. The return must therefore be accepted as correct.

In the absence of an application for rescission challenging such manner of service, a court hearing an application for rescission of a default judgment does not have the jurisdictional base to proceed and make conclusions touching on that process. It can only do so once good and sufficient cause has been established for the setting aside of the judgment. In this case there was none as related to Mrs Muir.

In the final analysis, the finding by the court a quo that the judgment against Mrs Muir was not set aside is unassailable. Grounds 1 and 2 of the appeal accordingly are without merit and must be dismissed.

AD GROUND 3 - WHETHER THE COURT A QUO ERRED IN FINDING THAT THE GURUPIRAS HAD ESTABLISHED AN ENTITLEMENT TO THE TRANSFER OF SHARES

Counsel for the appellants contended that the Gurupiras had not established an entitlement to the transfer of shares in their names.

In my view, this submission could only be made on behalf of Mrs Muir and not the two appellants.

Although Mrs Muir was adjudged not to be before the court a quo, a critical examination of the submissions, both in the High Court and this Court, will tend to show that almost all the points being raised related to Mrs Muir and her relationship with the Gurupiras. I can only say that this is an unfortunate development in the sense that, whatever the relationship between Leggett and Mrs Muir was, it was clear on the papers that counsel for the appellants appeared on behalf of the two appellants, Leggget and the company - and not Mrs Muir.

Leggett was not, and could not claim to be privy to the transaction between Mrs Muir and the Gurupiras. He concedes as much in all the affidavits deposed to by him. On that score, he is not in a position, nor would I find that he was, authorized to speak to it.

When the High Court granted the application for rescission of the default judgment, it set aside the interdict and the order for the transfer of the property to the Gurupiras. The learned judge however also ordered that the following pertinent issues be determined in the main application:

“3. The following residual issues shall be determined in the main application in HC1393/08:

3.1 Whether or not the agreement of sale between the first and second defendants, namely, Asswell Africa Gurupira, of the one part, and the third defendant, namely, Sandra Maureen Muir, of the other part was duly performed;

3.2 Whether or not the transfer of shares in the plaintiff company (Private) Limited, by the third defendant to one John Leggett, should be set aside;

3.3 Whether or not the first and second defendants should vacate the premises situate on the property more fully described in paragraph 2 above and which is also known as 98 Churchill Avenue, Gunhill, Harare;

4 The plaintiff shall file its notice of opposition or other such papers in HC1393/08 within ten (10) days of the date of this order and thereafter the filing of any further documents shall be in accordance with the Rules.”

Pursuant to this, on 2 November 2009, the Gurupiras filed a counterclaim in which they sought an order for the setting aside of the transfer of shares in the company from Mrs Muir to Leggett. Concomitant with that prayer was a prayer for the transfer of those shares to the Gurupiras.

I note that at the commencement of the hearing in the court a quo counsel for the respondents moved an application for the amendment of the draft order on behalf of the Gurupiras.

The court a quo recorded that the application was granted with the consent of both counsel for the appellants and Stevenson. This is what the court said:

“On the day of hearing, Mr Mpofu moved for the amendment of the Draft Order. Both Mr de Bourbon and Mr Stevenson did not oppose the amendment. It was therefore granted.”

The granting of the application to amend the draft order disposed of the point taken by the company and Leggett regarding the competency of the order sought by the Gurupiras.

The coming into the picture of Leggett did not, in my view, change the substance of the agreement between Mrs Muir and the Gurupiras. The latter purchased the two issued shares that Mrs Muir had in the company. The purchase of those shares bestowed rights upon them. According to the agreement, they were entitled to certain rights in the immovable property owned by the company. The pertinent paragraphs of the agreement are set out hereunder and read:

“C. The authorized share capital of the Company is divided into 32,000 (thirty-two thousand) ordinary shares of $1.00 each, of which authorized share capital 2 (two) ordinary shares (the shares) have been issued as follows:

SANDRA MAUREEN MUIR 2 CERTIFICATE No 1 & 3. She being the sole beneficial owner thereof;

D. The said shares confer on the holders thereof an exclusive right of occupation and use of the property;

E. The parties warrant that at the date of execution hereof and at the date of payment in terms of clause 2 of this agreement they are and they will be residents of Zimbabwe;

F. The purchaser warrants that he is using Zimbabwe dollars;

G. The seller is desirous of selling the shares, which shares confer on the holder hereof the exclusive right of use and occupation of the property and the improvements thereupon;”

From a perusal of these pertinent clauses in the agreement, the purchase by the Gurupiras of the two issued shares at the time of the sale entitled them to the exclusive use and occupation of the immovable property owned by the company. There was no novation of the agreement. There was no evidence that the agreement was ever cancelled. If it was, Mrs Muir did not choose to establish such fact before the court a quo. This she was obliged to do in order to oppose the claim for specific performance brought against her by the Gurupiras.

As matters stand, that application was unopposed.

In disposing of this issue, the court a quo stated that no evidence had been placed before it to controvert the assertion by the Gurupiras that they had complied with their obligations in terms of the agreement. Also, the learned judge in the court a quo found, as a fact, that no evidence had been placed before the court that the agreement had been cancelled.

I have to agree.

It is also pertinent to note that there was no appeal against these findings of fact which are themselves critical as to the determination of the respective rights of Mrs Muir and the Gurupiras in the claim for specific performance. Instead, the appellants placed reliance on findings of fact made during the application for rescission of judgment. Those findings of fact, which did not include evidence from Mrs Muir, cannot be binding in this instance.

In the initial application filed under Case No. HC1393/08, the Gurupiras sought an order for the transfer of the immovable property to themselves. An order for the transfer of the immovable property to the Gurupiras affected the rights of the company in the immovable property and the company was within its right in approaching the court for the reversal of that order. Leggett called witnesses to testify and they could only testify on behalf of the company - but not on Mrs Muir's behalf. In everything he did, Leggett purported to act for the company. The substantive relief, premised on the sale of shares, contained in the draft order, was against Mrs Muir, the Registrar of Deeds and the Sheriff. Clearly, in the circumstances, they had no business testifying on matters not within their personal knowledge.

This ground has no merit and is accordingly dismissed.

AD GROUND 5 - WHETHER THE COURT A QUO SHOULD HAVE FOUND THAT THE FIRST APPELLANT WAS THE SOLE REGISTERED OWNER OF THE SECOND APPELLANT

The contention made in respect of this ground was to the effect that Leggett did not transfer his shareholding. The allotment to him of the ninety-eight shares was done in December 2007 and this fact had never been challenged. He had also purchased the two shares that had been sold to the Gurupiras. It was contended, further, that the Gurupiras had never claimed to have purchased more than two shares.

On the other hand, it was contended on behalf of the Gurupiras that the agreement between Mrs Muir and the Gurupiras was never cancelled. It was argued that the agreement had come to life and that a term in an agreement that provides that it has automatically lapsed is not in sync with the law. It was contended, further, that Mrs Muir had accepted payment after the period wherein she claimed that the agreement had lapsed. To that end, she was bound by the agreement.

The agreement with the Gurupiras was executed on 25 May 2007. In the preamble thereto, in particular in paragraph C, Mrs Muir is described as the sole shareholder of the two issued shares. The certificate numbers are described.

Thereafter, two agreements were concluded with Leggett. In the first of the agreements, dated 11 December 2007, Mrs Muir is described as owning two shares, and, as a consequence, her position as the sole shareholder is confirmed. This agreement is concerned with the proposed allotment of ninety-eight shares to Leggett.

According to the affidavit filed by Leggett on 22 August 2008, on behalf of the company, the return of allotment was filed with the Registrar on 30 May 2008. Surprisingly, on 27 May 2008, an agreement of sale is executed between Ramon Charles Muir, Sandra Maureen Muir and Leggett. In terms of the said agreement, the first two sell the entire shareholding in the company to Leggett. This development is in direct contradiction to the averments made in an affidavit filed on behalf of Mrs Muir in which she states:

“I left Zimbabwe in September 2008 to settle in Israel. The company always had an authorized share capital of 32,000 ordinary shares. Up to November 2007 only two of those shares had been issued. Originally, one share each was issued to myself and one to my late husband, Ramon Charles Muir. However, on the 8th of November 2006, the share in the name of my husband was transferred into my name.”

In my view, this statement by Mrs Muir suggests that as of 25 May 2007, when she concluded an agreement with the Gurupiras, she was the sole shareholder of the two issued shares in the company. This position is also confirmed in the memorandum with Leggett in which the allotment of the ninety-eight shares was concluded. She however made averments in another affidavit, deposed to on 6 December 2007, which contradict the averments in the aforementioned affidavit and the agreement executed on 11 December 2007 on the allotment of shares.

In this affidavit, deposed to on oath on 6 December 2007, Mrs Muir states:

“My husband has indicated to me that he will not pass transfer of his share on the basis of the applicant's claim. This is understandable as it is inconceivable that any seller would give a purchaser six months in which to pay a purchase price fixed in Zimbabwe dollars in the presence of the hyperinflation and the rapid loss in the value of local currency already being experienced at the time of the true and fictional agreements.”

The allotment was effected on 11 December 2007.

The agreement in which Mrs Muir and one Ramon Charles Muir dispose of one hundred shares in the company to Leggett is executed on 28 May 2008. Mystery surrounds the participation of Ramon Charles Muir in this debacle. In December 2007, Mrs Muir indicated, on oath, that her husband had refused to transfer his share to the Gurupiras; and yet, this is the same share that she says was transferred to her in 2006. The circumstances of the transfer are shrouded in mystery.

Could it be possible, as contended by counsel for the respondents, that at the time of transfer in 2006, he was already deceased?

However, there is no record that the company authorized the issuance of an additional ninety-eight shares. The allocation to Leggett appears to hinge on a process that has not been specified. There is no resolution from the directors of the company authorizing their issuance. In the absence of such a resolution, where did they come from? It then begs the question as to whether or not the agreement with Leggett was in fact ever concluded or whether it was a mere sham.

I turn now to the contention that the court a quo ought to have found that Leggett was entitled to assert his rights as the sole shareholder of the company.

On 25 February 2015, the High Court ordered that Leggett be joined as a party to the proceedings under appeal. The order enjoined him to file a notice of opposition if he so wished. On 2 March 2015, he duly filed his notice of opposition. He also referred to the averments made by him in the application for rescission of judgment as well as the counter application. I have noted, however, that at no point during the protracted proceedings did Leggett file a draft order seeking specific relief against the Gurupiras. All the orders filed of record relate to the Gurupiras or the company. The declaration filed subsequent to the referral of the matter to trial for purposes of rescission only reflects one plaintiff - the company. There was never any attempt to amend the pleadings even after his joinder.

In addition, there was no relief claimed by Leggett against the Gurupiras.

When the court granted rescission at the instance of the company, the issues referred for determination on the merits were as follows;

(a) Whether the Gurupiras and Mrs Muir had performed their obligations in terms of the agreement;

(b) Whether or not the transfer of shares to Leggett should be set aside; and, lastly

(c) Whether the Gurupiras should be ordered to vacate the immovable property.

Apart from the transfer of shares, no other issues relating to any rights attaching to Leggett were recorded. Consequently, absent a prayer by a party claiming specific relief from the court, a court cannot be criticized for not having given an order in favour of such party.

AD GROUND 6 - WHETHER THE COURT A QUO SHOULD HAVE ORDERED THE EVICTION OF THE GURUPIRAS FROM THE PROPERTY

The absence of Mrs Muir from the proceedings left Leggett in a quagmire. The agreement of sale gave the purchasers the exclusive use and occupation of the immovable property. The agreement was not cancelled. The Gurupiras produced documents showing payments. Mrs Muir acknowledged having received some of the payments. However, she did not herself participate in the proceedings and the parties called to court were not there as her witnesses but for the company.

In the absence of a challenge to the contention by the Gurupiras that they complied with their obligations under the agreement, the court a quo had no option but to grant specific relief as prayed. As against this, an order for their eviction would have been unsustainable.

In any event, the order for the eviction of the occupants of 98 Churchill Avenue was issued by the Magistrates Court and was still extant. It has not been set aside.

Once the court a quo found that the Gurupiras were entitled to specific relief, the company could not counter-apply. It was not privy to the agreement between Mrs Muir and the Gurupiras. Even though it owned the immovable property - rights for its use and occupation had been conveyed through the purchase of shares in the company. The property itself was not the subject of the agreement of sale.

The last ground, ground number 7, speaks to disputes of fact.

Only Mrs Muir could make this argument. Neither the company nor Leggett, not having been privy to the agreement between the parties, could claim that there were disputes of fact. Once it was found that Mrs Muir was not properly before it, the court a quo could not be enjoined to find that any material disputes of fact existed.

DISPOSITION

In the premises, none of the grounds have merit. The appeal is accordingly dismissed with an order that Leggett, the first appellant, pays the costs of suit.