Locus Standi re: Derivative Action, Acting for an Organisation Amidst Leadership Wrangles and the Proper Plaintiff Rule

HH198-10 : BIRCH WILLIAMS vs MARIA KATSANDE and DELITTE PRODUCTS (PRIVATE) LIMITED
Ruled By: MAWADZE J

Reference was made to the case of Madzivire Ors v Zvarirwadzwa Ors 2005 (2) ZLR 148 (H) in support of counsel for the respondents argument.My view is that this case is irrelevant to the point in issue as it dealt primarily with the right of individual ...

Appealed
SC34-18 : MINISTER OF MINES and ZIMBABWE MINING DEVELOPMENT CORPORATION and MARANGE RESOURCES PL and ZIMBABWE CONSOLIDATED DIAMOND COMPANY vs GRANDWELL HOLDINGS PL and MBADA DIAMONDS and ANOR
Ruled By: PATEL JA, GUVAVA JA and UCHENA JA

This is an appeal against part of the judgment of the High Court granting a spoliation order and other consequential relief in an application at the instance of a shareholder on behalf of a company….,. The appellants raised several preliminary points including that the first respondent (Grandwell Holdings (Private) Limited), as a shareholder of Mbada Diamonds (Private) Limited, ...

The appellants raised several preliminary points including that the first respondent (Grandwell Holdings (Private) Limited), as a shareholder of Mbada Diamonds (Private) Limited, had no locus standi to institute an action on behalf of the company.

The appellants argued that Mbada Diamonds (Private) Limited should have made the application to enforce its rights.

The first respondent argued that it was entitled to institute proceedings on behalf of the company through derivative action. The appellants argued that derivative action was not available to the first respondent.

The court a quo dismissed the preliminary point raised by the appellants and held that derivative action was available to the first respondent. The court a quo held that it would have been futile for the first respondent to seek a resolution to sue the appellants given the stance Marange Resources (Private) Limited had already taken towards the intended merger. The court a quo found that since Marange Resources (Private) Limited was acting in concert with the other appellants, it would have been futile for the first respondent to have called for a meeting to resolve that Mbada Diamonds (Private) Limited should vindicate its rights. The court a quo held that the circumstances of the case justified the procedure adopted by the first respondent.

In any event, the court a quo also found that the first respondent (Grandwell Holdings (Private) Limited), as a shareholder of the second respondent (Mbada Diamonds (Private) Limited), had a direct interest in the second respondent and therefore had the necessary locus standi to institute the proceedings….,.

Whether or not derivative action was available to the First Respondent

Counsel for the first appellant challenged the first respondent's right to institute the application in the court a quo on behalf of the second respondent, a company which, in terms of the law, is entitled to enforce its own rights.

Counsel for the second, third, and fourth appellants agreed with counsel for the first appellant's submissions. It was argued, for the appellants, that the first respondent did not have the right to institute action on behalf of the second respondent without evidence that the second respondent was unable to institute the proceedings to protect its interests.

On the other hand, counsel for the first respondent argued that its right to institute the application arose from derivative action since the second respondent was not able to act on its own behalf.

The issue is, therefore, on when a shareholder of a company can institute proceedings on behalf of a company.

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

The rule in Foss v Harbottle [1843] 2 Hare 461, 67 ER 189 is that the proper plaintiff in an action in respect of a wrong alleged to be done against a company is prima facie the company itself. Thus, as a general rule, where the company is wronged, the proper plaintiff to institute an action to remedy the wrong is the company itself. No other person has the right to institute an action on behalf of the company if the company is able to vindicate its rights. However, the rule, as explained in Foss v Harbottle [1843] 2 Hare 461, 67 ER 189 is not inflexible and can be relaxed, where necessary, in the interest of justice. GIBSON, South African Mercantile and Company Law, 8^th ed…, states the following:

“But the rule in Foss v Harbottle is not universal. It is subject to exceptions. It does not apply where the interests of justice require the rule to be dispensed with (Russell v Wakefield Waterworks Co (1875) LR 20 Eq 474). So, where a wrong has been done to a company, a court will allow dissentient members to bring an action in their own names against those responsible where the latter hold and control the majority of the shares in the company and will not allow any action to be brought in the name of the company.“…,.

The rule in Foss v Harbottle [1843] 2 Hare 461, 67 ER 189 does not, in appropriate circumstances, prevent an individual member from suing through derivative action. Derivative action is an exception to the rule in Foss v Harbottle [1843] 2 Hare 461, 67 ER 189.

In Zimbabwe, derivative action has been recognised in many cases. See L Piras and Sons (Private) Limited v Piras 1993 (3) ZLR 245 (S) and Lameck Kufandada v Dairiboard Zimbabwe and Others HH564-15).

In L Piras and Sons (Private) Limited v Piras 1993 (3) ZLR 245 (S), GUBBAY CJ said the following:

“The derivative action is an exception to the rule in Foss v Harbottle (1843) 67 ER 189 and was expounded thus by LORD DENNING MR in Wallersteiner v Moir (No 2) [1975] 1 All ER 849 (CA) at 857 d-f:

'It is a fundamental principle of our law that a company is a legal person, with its own corporate identity, separate and distinct from the directors or shareholders, and with its own property rights and interests to which alone it is entitled. If it is defrauded by a wrongdoer, the company itself is the one person to sue for the damage. Such is the rule in Foss v Harbottle. The rule is easy enough to apply when the company is defrauded by outsiders. The company itself is the only person who can sue. Likewise, when it is defrauded by insiders of a minor kind, once again, the company is the only person who can sue.

But suppose it is defrauded by insiders who control its affairs - by directors who hold a majority of the shares - who then can sue for damages?

Those directors are themselves the wrongdoers. If a Board meeting is held, they will not authorise proceedings to be taken by the company against themselves. If a General Meeting is called, they will vote down any suggestion that the company should sue them themselves. Yet the company is the one person who is damnified. It is the one person who should sue. In one way or another some means must be found for the company to sue. Otherwise the law would fail in its purpose. Injustice would be done without redress.'

The nature, then, of a derivative action is that it is a device designed to enable the court to do justice to a company controlled by its wrongdoers and prevents a serious wrong from going unremedied. A shareholder is allowed to appear as the plaintiff. He acts, not as representative of the other shareholders, but as a representative of the company to enforce rights derived from the company. The action is brought by him in his own capacity to vindicate the company's rights.”…,.

It is important to note that derivative action is available when certain requirements are met;

(i) It must be clear that the company has been prevented from instituting proceedings by alleged wrongdoers in control of the company.

(ii) It must be alleged, and proved, that the wrongdoers (the majority shareholders or the other shareholder in the case of equal shareholders) have refused to institute the action and have prevented the company from instituting action using their majority or equal votes.

In order for the company to institute proceedings on its own behalf the shareholders must agree through a resolution. Thus, if the majority shareholder, using his majority vote, or the equal shareholder using his equal vote, blocks the attempt by the company to institute action to remedy the wrong, the minority or other equal shareholder is entitled to approach the court through derivative action.

In this case, counsel for the first appellant, submitted that derivative action was not available to the first respondent because there was no finding that the second respondent was prevented from instituting proceedings and that there are no findings that the second respondent refused, or failed, to act in its own interest. Counsel for the first appellant relied on the fact that the second respondent itself responded to the application filed by the first respondent. According to the first appellant, this shows that the second respondent was capable of instituting the proceedings to safeguard its interests.

In support of that, counsel for the second to fourth appellants submitted that in order for the court to find whether or not derivative action was available to the first respondent, the court ought to ask itself whether there was any wrongdoing against the company by the majority shareholders, or those in control of the company, before the party which seeks to rely on derivative action can succeed.

On the other hand, counsel for the first respondent submitted that derivative action was justified on the basis that the seeking of a resolution for the second respondent to institute proceedings would be a futile exercise since the third appellant, the other shareholder of the second respondent, would have made that impossible. Counsel for the first respondent further submitted that the futility of the meeting was known as the first respondent tried to call for the meeting with the other shareholder. Counsel for the first respondent submitted that an attempt was made to call for a shareholders' meeting but was declined by the other shareholder.

A perusal of the record reveals that there is no evidence that an attempt was made for the shareholders of Mbada Diamonds (Private) Limited to convene a meeting to decide whether or not Mbada Diamonds (Private) Limited should institute spoliation proceedings to protect its rights. There are only two shareholders of Mbada Diamonds (Private) Limited, the first respondent (Grandwell Holdings (Private) Limited) and the third appellant Marange Resources (Private) Limited. There is no evidence on record that the other shareholder actively prevented the company from instituting such proceedings. On record is a letter from the first and second respondents' South African legal practitioners threatening to institute proceedings on their behalf.

Whether or not the first respondent attempted to call for a meeting with the third appellant is a question of fact which must be proved by evidence. In this case, it was not proved that an attempt was made. As a result, it was not established that the second respondent was actively prevented by the third appellant from instituting the proceedings a quo in its own name.

According to GOWER L.C.M, Principles of Modern Company Law…, for derivative action to be justified:

“It must be shown that the alleged wrongdoers control the company. The clearest way of doing this will be to show that both the Directors and the General Meeting have been invited to institute proceedings in the name of the company and have refused to do so and that the refusal was because of the votes cast by the wrongdoers. However, the English cases recognise that there is no point in formally asking the directors to institute the proceedings if they are to be the defendants, and that it is not necessary to convene a General Meeting and to invite it to resolve upon proceedings in the company's name, provided that the court can be satisfied aliunde that the wrongdoers are in effective control.”…,.

It is therefore clear that derivative action can be relied on in two circumstances. In the first situation, it must be proved that a meeting was called for the shareholders to pass a resolution for the company to institute proceedings. In the event that the other shareholders refused or prevented the meeting from taking place, the other shareholders can rely on derivative action to institute action on behalf of the company.

However, this is not what happened in this case. No attempt was made by the shareholders of Mbada Diamonds (Private) Limited to convene a meeting to pass a resolution for the company to institute the proceedings.

The court a quo, conscious of there being no such evidence, at pages 12 to 13 of its judgment, said:

“In casu, the position of the American courts, as stated by GOWER above, seemed to have been Mr Hashiti's point. He submitted that in the absence of an invitation by Grandwell to Marange for a meeting to pass a resolution to sue in the name of Mbada; that in the absence of evidence that such an invitation had been turned down; that coupled with Werksmans' letter aforesaid, and Luciyano's affidavit, it could not be said Mbada had been unable to bring the urgent chamber application by itself and that therefore the derivative action was not available to Grandwell.

I recognise the force of the respondent's argument. But, in my view, the position of the English courts seems to accord more with notions of justice and the spirit of the derivative action. The law must not be rendered impotent.

In casu, the Minister moved with exceeding speed. For six or seven years' operations at Chiadzwa had gone on unhindered. But, on 22 February 2016, in one fell swoop, things were turned upside down. Mining was abruptly terminated; Mbada Diamonds (Private) Limited's personnel were forcibly expelled from site; inadequate security had exposed the precious diamonds, the expensive equipment, personal belongings, and more to destruction and theft. The situation was one of dire emergency. Werksmans letter of demand of 23 February 2016, sent by email, had been ignored. There had been no let-up in the looting, forcing Grandwell Holdings (Private) Limited, four days later, to run to the law.

Marange Resources (Private) Limited itself had already passed a resolution to adopt the Minister's plans for the consolidation of diamond mining companies, including Mbada Diamonds (Private) Limited, into one single entity, without agreement with Grandwell Holdings (Private) Limited - its co-shareholder. This was in spite of the outstanding details Grandwell Holdings (Private) Limited had requested on the proposed scheme. Further, the evidence showed that it was officials from Mbada Diamonds (Private) Limited, as the Minister's representatives, with the assistance of the police, who had executed the Minister's directives.

In my view, the spirit of the derivative action, being an exception to the rule in Foss v Harbottle [1843] 2 Hare 461, 67 ER 189, is that 'the claims of justice would be found superior to any difficulties arising out of technical rules respecting the mode in which corporations are required to sue.'”

These are the reasons which swayed the court a quo to allow derivative action by Grandwell Holdings (Private) Limited (the first respondent).

The second situation, which basically reflects the English position, is that if it is proved that calling a meeting was an exercise in futility, the other shareholder can institute proceedings on behalf of the company without seeking a resolution that the company institute the proceedings.

For the shareholder who seeks to rely on derivative action to rely on this option, the court must be satisfied that the majority shareholders or equal shareholders, who are the wrongdoers and would not want the company to institute proceedings, are in effective control. The second respondent (Mbada Diamonds (Private) Limited) is owned by the first respondent (Grandwell Holdings (Private) Limited) and the third appellant (Marange Resources (Private) Limited) in equal shares of 50 percent each. This means, if a meeting was to be called to pass a resolution for the company to sue and one shareholder votes against such a resolution, the company could not sue in its own name. It can also be established that the other shareholder was in effective negative control.

According to evidence on record, Marange Resources (Private) Limited was chaired by the Secretary of Mines who authored the letter of 22 February 2016. The same Secretary also chaired the second (Zimbabwe Mining Development Corporation) and fourth (Zimbabwe Consolidated Diamond Company) appellants. The Special Grants which enabled Mbada Diamonds (Private) Limited to mine belonged to Marange Resources (Private) Limited - which is wholly owned by the second appellant (Zimbabwe Mining Development Corporation). The Zimbabwe Consolidated Diamond Company, the fourth appellant, which was to replace Mbada Diamonds (Private) Limited and other diamond mining companies into mere 50 percent shareholders, is chaired by the Secretary of Mines. The Secretary's office was responsible for crafting Government policy. It was responsible for the granting of Special Grants. It also was entitled to make definitive orders on mining operations as it did on 22 February 2016.

In view of the above, there is no doubt that, in spite of formal equality as between the two shareholders, power and control were on Marange Resources (Private) Limited's side. The Secretary's word was administratively final.

It was also established, and proved, that the third appellant (Marange Resources (Private) Limited), as the other shareholder, opposed the application. That alone made it pointless to call for a meeting to resolve that the company institute application proceedings which the other equal shareholder was opposing. There was clearly no chance that such a resolution could be passed. Therefore, derivative action was justified because it would have been futile to call for a meeting to resolve that the company should sue in its own name. Marange Resources (Private) Limited would clearly not have agreed that Mbada Diamonds (Private) Limited should apply for an order against its own Chairman and the Minister's decisions and conduct.

In this case, the first respondent relied on an assumption that the third appellant would have made it impossible for the resolution to be passed. That assumption is supported by sufficient evidence that it would have been futile to call for a meeting to resolve that Mbada Diamonds (Private) Limited should make the application. The futility was clearly explained by the court a quo. It entitled the first respondent to rely on derivative action. There was proof that the third appellant was fully entangled to the will of its Chairman and the other appellant companies he chaired.

There was therefore evidence aliunde that it was impossible for the second respondent to institute spoliation proceedings in its own name.

It is clear that the right to institute proceedings using derivative action is meant to remedy wrongdoing against a company by its directors or majority or equal shareholders.

In this case, the court a quo correctly relied on the futility of expecting the first respondent to call for a meeting to resolve that the company should sue the appellants for spoliation as the other equal shareholder's position on the application was known. It was opposing the application. It clearly would not have supported a resolution for the company to make an application it was opposing.

The first respondent (Grandwell Holdings (Private) Limited) was therefore entitled to rely on derivative action to sue on behalf of the second respondent (Mbada Diamonds (Private) Limited).

GUVAVA JA: I fully concur with UCHENA JA's assessment of the facts leading up to the institution of the proceedings a quo and his conclusion on the first respondent's entitlement to sue by way of derivative action on behalf of the second respondent. Once it has been found that the first respondent had locus standi to bring the application then the second issue must be determined….,.

PATEL JA: As regards the first issue, the question of locus standi a quo, the authorities cited above relate primarily to the situation where an aggrieved minority in a company seeks to represent it in a derivative action against an oppressive majority.

In casu, the position is slightly different in that the situation to be addressed is that of one 50 percent shareholder taking up cudgels as against the other equal shareholder. Neither holds a majority shareholding in the company but either is capable of frustrating the legitimate claims of the other by declining to participate in matters concerning the good governance and best interests of the company. It is, in this sense, that either shareholder can be said to be in effective negative control of the company. As is aptly reasoned by UCHENA JA, this scenario fully justifies the entitlement of either shareholder to proceed against the other by way of a derivative action in order to protect or vindicate its rights.

View Appeal
HH193-16 : GRANDWELL HOLDINGS PL vs MINISTER OF MINES and ZIMBABWE MINING DEVELOPMENT CORPORATION and MARANGE RESOURCES PL and ZIMBABWE CONSOLIDATED DIAMOND COMPANY and MBADA DIAMONDS PL and ANOR
Ruled By: MAFUSIRE J

The third point in limine was whether the applicant had locus standi in judicio. The fourth was a variant of the third. It was whether the application was a derivative action as that expression is understood in company law….,. (iii) Whether the applicant had locus standi in judicio The respondents said it did not lie in the mouth of Grandwell ...

The third point in limine was whether the applicant had locus standi in judicio.

The fourth was a variant of the third. It was whether the application was a derivative action as that expression is understood in company law….,.

(iii) Whether the applicant had locus standi in judicio

The respondents said it did not lie in the mouth of Grandwell Holdings (Private) Limited to complain that it had been despoiled. The argument was that Mbada Diamonds (Private) Limited, and not Grandwell Holdings (Private) Limited, had been the one that had been in peaceful and undisturbed possession of the mine. Grandwell Holdings (Private) Limited was merely a shareholder in Mbada Diamonds (Private) Limited. At 50% equity, Mbada Diamonds (Private) Limited could not even be regarded as Grandwell Holdings (Private) Limited's subsidiary. So, the argument concluded, only Mbada Diamonds (Private) Limited, and not Grandwell Holdings (Private) Limited, was the one with the requisite locus standi in judicio to move for an order mandament van spolie.

Intrinsically linked to the question of locus standi was the question of the competency of Grandwell Holdings (Private) Limited to bring a derivative action. Although locus standi and the right to a derivative action are not necessarily cognates, in the circumstances of this case, I found them speaking to the same thing. Therefore, I deal with both at one go.

(iv) Whether it was competent for Grandwell Holdings (Private) Limited to bring a derivative action

In its founding affidavit, Grandwell Holdings (Private) Limited said its right to sue, as I understood it, and in my own words, stemmed from the desire to protect its investment in Mbada Diamonds (Private) Limited. Such investment had suddenly become under threat owing to the abrupt actions by Government. Grandwell Holdings (Private) Limited also said that Government's action threatened the very existence of Mbada Diamonds (Private) Limited as a joint venture project. To the extent that Mbada Diamonds (Private) Limited could not, of its own, seek relief by itself, it being a progeny of Grandwell Holdings (Private) Limited and the Government, it had been open to Grandwell Holdings (Private) Limited to bring the application in its name - but for the benefit of Mbada Diamonds (Private) Limited itself. Grandwell Holdings (Private) Limited argued that the Government was the sole cause and sole source of the grief. Mbada Diamonds (Private) Limited's Board was made up of an equal number of appointees from both shareholders. Under such circumstances, it would have been futile for Grandwell Holdings (Private) Limited to have sponsored or motivated a resolution to sue the Government. It was argued that a derivative action was available where not only those controlling the company and bringing harm to it were in the majority. Even negative control suffices.

Counsel for the applicant explained negative control as being where, even though not in the majority, as was the case in this matter, the directors could, by their negative vote, defeat a resolution.

The respondents countered that it was not correct to say that Mbada Diamonds (Private) Limited had been unable to bring or had been disabled from mounting the application in its own name and in its own right. They gave two illustrations. The one was a letter of demand, on 23 February 2016, from Werksmans, Mbada Diamonds (Private) Limited's South African based attorneys. The letter was reacting to the one from the Minister's Permanent Secretary the day before. After recapping the events of the previous day and referring to the agreements, and after demanding the restoration of the status quo ante, Werksmans' letter concluded:

“Should you fail to provide us with the written confirmation, as hereinbefore demanded, our clients will have no alternative but to take whatever legal steps/action as are available to them in order to protect their rights against the appropriate parties, which it shall do forthwith and without any further notice. Such remedies shall include, without limitation, an urgent court application to secure our clients' rights and/or a claim for damages suffered.”

To the respondents, the letter was sufficient evidence that Mbada Diamonds (Private) Limited had been conscious of the fact that only it alone could have brought the application that was now before me. The other illustration by the respondents was an affidavit by the Chief Executive Officer of Mbada Diamonds (Private) Limited, one Thomas Lusiyano [“Lusiyano”]. It was filed on the day of the hearing on the first day. In it, Thomas Lusiyano said Mbada Diamonds (Private) Limited supported the application and the relief sought. He said he had taken instructions from Mbada Diamonds (Private) Limited's Chairman to whom he reported. Whilst questioning Thomas Lusiyano's authority to file such an affidavit, the authenticity of that affidavit and the veracity of certain allegations in it, the respondents' major argument was that if Thomas Lusiyano could file papers supporting the application, purportedly on behalf of Mbada Diamonds (Private) Limited, then there was no reason why Mbada Diamonds (Private) Limited itself could not have brought the application. As such, the argument concluded, the right to a derivative action was not available to Grandwell Holdings (Private) Limited.

A derivative action is recognised in our law: see L Piras & Son [Pvt] Ltd v Piras 1993 [2] ZLR 245 [S].

It is one of the exceptions to the general rule of company law that says that only the company can sue for wrongs done to it. In such a situation, the company is the proper plaintiff. This principle is called the rule in Foss v Harbottle[1843] 2 Hare 461, 67 ER 189, after the nineteenth century English case in which it was espoused. The rule in Foss v Harbottle is of universal application.

But there are exceptions. One such is the derivative action.

In its classical form, this exception says that if a shareholder alleges that a wrong has been done to the company by persons in control of it, he may bring a derivative action against the wrongdoers, deriving his authority from his corporate right to sue on behalf of the company. The company is also cited as a co-defendant so that it is also brought before the court. The benefit from the suit flows directly to the company, not the disgruntled shareholder. He will be content with getting justice, and, to an extent, the appreciation or preservation of the value of the shares in the company - including his own. That there could be exceptions to the proper plaintiff rule was even recognised by the court in Foss v Harbottle [1843] 2 Hare 461, 67 ER 189 itself when one of the judges, WIGRAM VC…, talked of the unfairness that would ensue if shareholders, just because of their corporate status, would be deprived of their civil rights inter se:

“If a case should arise of injury to a corporation by some of its members, for which no adequate remedy remained, except that of a suit by individual corporators in their private characters, and asking, in such character, the protection of the rights to which in their corporate character they were entitled, I cannot but think that the principle so forcibly laid down by LORD COTTENHAM…, would apply, and the claims of justice would be found superior to any difficulties arising out of technical rules respecting the mode in which corporations are required to sue.”…,.

The exception was subsequently adopted and restated in various ways in various jurisdictions. In Wallersteiner v Moir [No.2][1975] 1 All ER 849 [CA], a case quoted with approval by our Supreme Court in L Piras & Son [Pvt] Ltd v Piras 1993 [2] ZLR 245 [S]…,.; LORD DENNING MR, with characteristic clarity of expression, said…,.:

“It is a fundamental principle of our law that a company is a legal person, with its own corporate identity, separate and distinct from the directors or shareholders, and with its own property rights and interests to which alone it is entitled. If it is defrauded by a wrongdoer, the company itself is the one person to sue for damage. Such is the rule in Foss v Harbottle. The rule is easy enough to apply when the company is defrauded by outsiders. The company itself is the only person who can sue. Likewise, when it is defrauded by insiders of a minor kind, once again the company is the only person who can sue. But suppose it is defrauded by insiders who control its affairs – by directors who hold a majority of the shares – who then can sue for damages? These directors are themselves the wrongdoers. If a Board meeting is held, they will not authorise proceedings to be taken by the company against themselves. If a General Meeting is called, they will vote down any suggestion that the company should sue them themselves – yet, the company is the one person who is damnified. It is the one person who should sue. In one way or another some means must be found for the company to sue otherwise the law would fail in its purpose. Injustice would be done without redress.”…,.

GOWER's Principles of Modern Company Law, 4^th ed…, says that English case law authority, unlike American, establishes that there is no point in the disgruntled shareholder formally asking the directors to institute the proceedings where they will end up being the defendants. Further, it is not necessary to convene a General Meeting and to invite it to resolve upon proceedings in the name of the company, provided that the court can be satisfied, aliunde, that the wrongdoers are in effective control. GOWER also notes that it is not necessary to prove control [of the company by the wrongdoers], but merely to allege facts which, if proved, would establish control. The author, however, further notes that the American courts are generally stricter in that they insist upon proof of an abortive demand having been made on the directors and, sometimes, a reference to the shareholders in a General Meeting.

In casu, the position of the American courts, as stated by GOWER above, seemed to have been counsel for the second to fourth respondents' point. He submitted that in the absence of an invitation by Grandwell Holdings (Private) Limited to Marange Resources (Private) Limited for a meeting to pass a resolution to sue in the name of Mbada Diamonds (Private) Limited; that in the absence of evidence that such an invitation had been turned down; that coupled with Werksmans' letter aforesaid, and Thomas Lusiyano's affidavit, it could not be said Mbada Diamonds (Private) Limited had been unable to bring the urgent chamber application by itself, and that, therefore, the derivative action was not available to Grandwell Holdings (Private) Limited.

I recognise the force of the respondents' argument.

But, in my view, the position of the English courts seems to accord more with notions of justice and the spirit of the derivative action. The law must not be rendered impotent.

In casu, the Minister moved with exceeding speed. For six or seven years operations at Chiadzwa had gone on unhindered. But, on 22 February 2016, in one fell swoop, things were turned upside down. Mining was abruptly terminated; Mbada Diamonds (Private) Limited's personnel were forcibly expelled from site; inadequate security had exposed the precious diamonds, the expensive equipment, personal belongings, and more, to destruction and theft. The situation was one of dire emergency. Werksmans letter of demand, on 23 February 2016, sent by e-mail, had been ignored. There had been no let-up in the looting, forcing Grandwell Holdings (Private) Limited, four days later, to run to the law.

Marange Resources (Private) Limited itself had already passed a resolution to adopt the Minister's plans for the consolidation of diamond mining companies, including Mbada Diamonds (Private) Limited, into one single entity without agreement with Grandwell Holdings (Private) Limited - its co-shareholder. This was in spite of the outstanding details Grandwell Holdings (Private) Limited had requested on the proposed scheme. Furthermore, the evidence showed that it was officials from Mbada Diamonds (Private) Limited, as the Minister's representatives, with the assistance of the police, who had executed the Minister's directive.

In my view, the spirit of the derivative action, being an exception to the rule in Foss v Harbottle[1843] 2 Hare 461, 67 ER 189 is that;

“…, the claims of justice would be found superior to any difficulties arising out of technical rules respecting the mode in which corporations are required to sue.”…,.

In L Piras & Son [Pvt] Ltd v Piras 1993 [2] ZLR 245 [S], there were only two shareholders. They were also the sole directors. They had equal control of the company. The one shareholder started doing sinister things behind the other's back: like suing the company for a debt that he knew the company did not owe; like serving the summons on his own wife, at his own residence - albeit also the company's registered office; and like not only refraining from entering an appearance to defend on behalf of the company, but also proceeding to enter judgment against it. When the other director eventually got to know about it, he applied to be joined to the suit against the company. The Supreme Court allowed the application under the derivative action.

I agree with counsel for the applicant; the derivative action is available, not in situations of fraud to the company only, but also in all situations in which the company is harmed by those in control. The term 'fraud' covers more than just the ordinary common law fraud. It also covers situations of intentional or un-intentional, fraudulent or negligent wrongdoing: see Daniels v Daniels [1978] Ch 406.

Control need not be control by the majority shareholders. Negative control, that is, where a resolution to sue in the name of the company is defeated by a negative vote cast, should suffice: see East Pant Du Lead Mining Co v Meryweather(1864) 2H & M254.

In casu, it would have been futile for Grandwell Holdings (Private) Limited to have sponsored a resolution to sue the respondents given the stance Marange Resources (Private) Limited had already taken. At any rate, I was satisfied with events aliunde that Marange Resources (Private) Limited would not have tagged along with Grandwell Holdings (Private) Limited. Among other things, it energetically opposed the application. Not only that, but Mr Mark Mabhudhu consciously and openly defied the Monday Order. The reference to Werksmans' letter and Thomas Lusiyano's affidavit was a red herring. In spite of them, it would still have been futile for Grandwell Holdings (Private) Limited to successfully sponsor a resolution to sue the respondents.

Therefore, the respondents' point in limine that the right to a derivative action was not available to Grandwell Holdings (Private) Limited is hereby dismissed. That should put paid to the objection on locus standi.

HH564-15 : LAMECK KUFANDADA vs DAIRIBOARD ZIMBABWE LIMITED and JANAWAYS (PRIVATE) LIMITED and MICHAEL MUSAMIRAPAMWE
Ruled By: MTSHIYA J

In this application, the applicant prays for the following relief: “IT IS ORDERED THAT: 1. The application be and is hereby granted. 2. The purported termination of the Franchise Agreement be and is hereby declared null and void and is accordingly set aside. 3. First Respondent be and is hereby prohibited from offering the franchise to another person and shall forthwith ...

In this application, the applicant prays for the following relief:

“IT IS ORDERED THAT:

1. The application be and is hereby granted.

2. The purported termination of the Franchise Agreement be and is hereby declared null and void and is accordingly set aside.

3. First Respondent be and is hereby prohibited from offering the franchise to another person and shall forthwith reinstate the franchise in Second Respondent's name.

4. Respondents shall pay applicant's costs of suit.”

According to the applicant, the background to the relief sought is that on 1 December 2001 the first respondent and the second respondent entered into a Franchise Agreement. The purpose of the Franchise Agreement was for the sale and distribution of the first respondent's specified products in designated districts….,.

The applicant and the third respondent, as Directors, represented the second respondent. The Agreement relied on seems to indicate that, apart from the franchise being given to the second respondent (the Company), it was also given to the applicant and the third respondent in their individual capacities. It is, however, not clear whether the agreement signed on 8 December 2012 is the one that the applicant is relying on. To me, the agreement attached to the papers appears to be a draft. It was not dated by the first respondent. Nevertheless, it is clear that there was indeed an agreement between the first respondent and the second respondent because, on 27 November 2013, the first respondent addressed the following letter to the second respondent:

“The Directors

Janaways Services (Pvt) Ltd

Stand No.335 Lion Drive

CHIREDZI

Dear Sir

R: DAIRIBOARD ZIMBABWE (PVT) LTD

We address to you at the instance of our above-mentioned client.

We are instructed that in terms of clause 6.1.3 of your franchise agreement with our client as read with clause 6.1.2(b), you agreed and undertook to achieve sales levels in accordance with sales budgets as agreed upon from time to time.

We are further instructed that during the months between January 2013 to September 2013 you failed to meet the agreed sales level as compared with the sales budgets for the same period. In fact, your sales levels for this period as compared to the same period in 2012 actually show a 59% decline.

In August and October 2013, our client held meeting with you after noting that your sales levels were declining as a result of the fact that you were failing to maintain an adequate supply of stocks of the products, among other reasons. However, despite demand by our client, that you maintain an adequate supply of stocks of the products, which in turn would have translated to high sales levels, you still have failed to do so and to achieve at least 95% of the agreed budgets for the period between January 2013 to September 2013. You therefore are in breach of the agreement as stipulated in clause 10.2.5.

As a consequence, we have been instructed to advise, as we hereby do, that our client hereby cancels the franchise agreement with you. As a result of the cancellation the amount outstanding on your credit account is now due and payable to our client together with interest thereon. Accordingly we demand that you immediately pay to our client the sum of US$49,150=30 being the balance due on your account as at 27 November 2013.

In addition, you are, in terms of clause 11 of the franchise agreement, required to immediately cease carrying on the business, immediately vacate from our client's premises and hand over the same to our client together with all their equipment and the remaining stock-in-trade accompanied with a full inventory thereof.

Unless you comply with the above four (4) days of the date hereof, we shall be left with no options but to institute legal proceedings against you and your sureties without further reference to you.

We trust this shall not be necessary and look forward to hearing from you by return. By copy of this letter Messrs Warara & Associates who had requested to met with our client in respect of this matter are hereby so advised.

Yours Faithfully,

Costa & Madzonga

cc Client

cc Messrs Warara & Associates Legal Practitioners, Harare (CW)

cc Mr Kufandada, Janaways Services, Stand No.335 Lion Drive, Chiredzi

cc Mr Musamirapamwe, Janaways Services, Stand No.335 Lion Drive, Chiredzi”

The above letter confirms the existence of an agreement between the first and second respondents. It is the decision contained in the above letter that the applicant wants set aside.

In this application, the applicant wants the franchise reinstated in the name of the second respondent. That, in my view, further confirms that the agreement was indeed between the first and second respondents and not between the first respondent and the applicant and third respondent in their individual capacities.

The first respondent, in its opposing papers, has raised the following points in limine:

(a) That there was still a pending matter (HC636/14) because the applicant had attempted to withdraw same without tendering costs; and

(b) That the applicant has no locus standi.

To that end, the first respondent made the following averments:

“4.1 A similar application brought by Applicant against 1^st and 2^nd Respondents for the same relief is still pending before this Honourable Court under case No. HC636/14. Applicant can therefore not institute fresh proceedings against the same Respondents for the same relief before the initial application has been determined. I beg leave to incorporate herein by reference, the process filed with this Honourable Court.

4.2 On 16 April 2014, Applicant withdrew the application filed under case No. 637/2014 by filing a Notice of Withdrawal attached hereto marked as Annexure “M”.

4.3 I aver that the said Notice of Withdrawal is incurably defective as is therefore a nullity. It is trite that a party cannot withdraw a matter after filing a Notice of Opposition has been filed without tendering the wasted costs. For this reason, the Notice of Withdrawal which Applicant purported to file on 16 April 2014 is null and void and therefore of no legal consequence.

4.4 The present application has therefore been improperly filed and is improper before this Honourable Court. Even if Applicant was to subsequently file a valid Notice of Withdrawal, the present application would remain improper before this Honourable Court for having been filed at a time when similar application was still pending before this Honourable Court.

4.5 Applicant, in filing these improper multiple proceedings, has done so with the benefit of professional legal advice, and, as such, ought to have been properly advised and known better. I therefore urge this Honourable Court to dismiss this improper application with costs on a legal practitioner and client scale.

4.6 Secondly, there is no privity of contract between Applicant and 1^st Respondent in respect of the Franchise Agreement in question. The initial Franchise Agreement was concluded in 2001 between 1^st Respondent, as the Franchiser and 2^nd Respondent as the Franchisee. A copy of the 2001 Franchise Agreement is attached hereto as Annexure “N”.

4.7 Since then, the initial Franchise Agreement was renewed over time and the last of which was concluded in September 2012 - still between 1^st Respondent, as the Franchiser and 2^nd Respondent as the Franchisee. A copy of the 2012 agreement is attached to the Application as Annexure “A” thereto.

4.8 Applicant and 3^rd Respondent signed the 2012 agreement in a representative capacity, as directors of 2^nd Respondent. They erroneously inscribed their names in the face of the 2012 agreement in clause A3 instead of the line above.

4.9 At all times, it was the intention and the understanding of the parties that the franchise agreement was entered between 1^st Respondent and 2^nd Respondent who was represented by its directors. Applicant and 3^rd Respondent and the parties conducted themselves through on this basis. In this regard, I beg leave to refer to all correspondence attached by Applicant filed in this matter and the one filed under HC637/14.

4.10 In this regard, I submit that Applicant has no locus standi to sue Applicant for the relief sought in this application based on a contract in which he was never a party thereto. I therefore urge this Honourable Court to dismiss this application with costs on a Legal Practitioner and client scale without further ado.”

The above points in limine gain support from the opposing affidavit filed by the third respondent wherein he also states:

“2. This matter is pending before the High Court under case number HC637/14 and I am advised that it was not withdrawn but the Applicant has seen his mistake in taking the matter to court without my consent and has now made himself as the Applicant citing me as the Third Respondent and a company he co-directs as the Second Respondent. I humbly submit that I have been improperly cited in this matter. The reading of the applicant's affidavit shows that Applicant has a grievance against First Respondent, albeit the latter's right to cancel the franchise if its terms were not followed. I did not cancel the franchise; I applied for a franchise when I saw an advertisement in the media and I did so in my personal capacity and won the tender not because I bought my way in but because I met the conditions. So when the Applicant wants the franchise to be cancelled I am at loss as to which one, the first franchise or the second one and what would be the reasons for cancellation.

…,.

4. I deny ever acting in convenience with the First Respondent to the detriment of the Applicant, this could have been in breach of my position to act in good faith as a Director of Second Respondent and surely the Applicant should have reprimanded me for that. He did not. I truly believe that he is not being truthful on that aspect. I have already explained the history behind securitization and how Applicant productively provided his house as collateral. I thank him for that and Janaways (Second Respondent) oiled to clear all the payments and restored the house to the Applicant. I equally reciprocated but the Applicant then folded his arms and become a spectator in a business where he expects to derive profit. The franchise is a demanding business and does not need people who do not see beyond signing an agreement.

It is true the collapse of the franchise granted to Janaways is attributable to the Applicant and no one else. The applicant filed the current application as a self actor and not as a company (Second Respondent) now blames First Respondent in granting me the franchise. Why? Why would the applicant seek an order on behalf of the second respondent whom he cites as an opponent in the proceedings. Why did he cite Second Respondent in the first place and proceed to seek an order to be granted in its favour? Ultimately, the Applicant, Second Respondent and myself will be forced into the franchise and go back to square one where Applicant becomes indigent and uncooperative. The Applicant must be reminded to abide by his contractual obligations than to apportion blame to other people.”

Given the above points in limine, it is essential to first of all establish whether or not the applicant in casu has locus standi. A determination on that issue in the negative will dispose of this matter.

The applicant, in his answering affidavit, admits that the agreement was indeed between the first and second respondents, and that, upon withdrawal of HC637/14, on 16 April 2014, he did not tender costs as generally required in law. The applicant avers, in part, as follows:

“2.1 Ad Paragraph 4.1

I aver that the contents of this paragraph are true save to state that the Respondents in case No. HC637/14 are not the same in that the second respondent was not a Respondent in that initial application.

2.2 Ad Paragraph 4.2 – 4.5

2.2.1 It is true that I filed a Notice of Withdrawal with the Registrar. I acknowledge that the initial proceedings were withdrawn without a tender of costs. I am advised, which advice I accept as the correct legal position, that it is trite that in a legal system in which the procedures are driven by the parties to the suit, as opposed to a system where the process is managed by the court, the general rule appears to be that any party to the suit is entitled to withdraw any of its pleadings provided this does not cause any injustice to the other party.

2.2.6 In light of the above averments, I candidly state that I am willing to tender First Respondent's wasted costs in accordance with the correct legal position.

2.3 Ad Paragraph 4.6 – 4.10

2.3.1 It is noted that the franchise agreement was made and entered into by and between First Respondent and Second Respondent. However, I candidly state that this is a matter in which the corporate veil must be lifted, and, accordingly, I have locus stadii to sue Respondents herein for the relief sought in this application in my personal capacity as a director and shareholder of Second Respondent.

2.3.2 I am advised, which advice I accept as the correct position, that courts have held that when the notion of a legal entity is used to defeat public convenience, justify wrong, protect fraud, defend crime or other improper conduct the law will regard corporation as an association.

2.3.3 I aver that the separate legal personality of Second Respondent is being used to justify wrong and improper conduct in that it is common cause that the directors of Second Respondent are at loggerheads, thus there is no way whatsoever I would obtain a Board resolution to represent Second Respondent in my capacity as an agent without consent of Third respondent, the other director of Second Respondent.

2.3.4 It is on that basis that I aver that I have locus standii to issue for the relief sought in the application. Moreover, I have direct and substantial interest in this matter in that I have an interest in the right which is the subject matter of the litigation and my rights will be in jeopardy should the courts uphold this technical objection because I am a shareholder of Second Respondent.”…,.

I have serious problems with the issue of locus standi.

The applicant admits he has none, but, because of his interests as a shareholder, he believes lifting of the corporate veil will clothe him with locus standi. This, he says, is more so because the relationship between him and the third respondent has collapsed. That means the two shareholders (Directors) cannot come up with a resolution on behalf of the second respondent. A quorum cannot be formed.

The first respondent is, in law, correct in asserting that there must be a distinction between the company and its shareholders/directors.

A similar situation was dealt with in the case of L. Piras & Son (Pvt) Ltd & Another Intervening v Piras 1993 (2) ZLR 245 (SC). In that case, one of the directors sued the company and obtained a default judgment. A Dr Madekunye, one of the two directors, attempted, in his personal capacity, to have the judgment against the company set aside. He failed because he had no locus standi. On appeal, the decision of the lower court was confirmed by the Supreme Court. Dr Madekunye then applied for leave to intervene on behalf of the company. The application was granted. On that basis, he was then allowed to proceed with the rescission application.

The then Chief Justice, GUBBAY CJ, in L. Piras & Son (Pvt) Ltd & Another Intervening v Piras 1993 (2) ZLR 245 (SC), spoke of the need of a derivative action where a director or shareholder, such as the applicant, would intervene to save the interests of a company such as the second respondent in casu. He said:

“Taking account of the law, as I perceive it to be, it is clear to my mind that Dr Madekunye was not empowered to resolve that the appellant institute the application for rescission. In my view, the learned judge was correct in concluding that it was not the appellant that was litigating but the unauthorised Dr Madekunye on its behalf.

It remains to consider whether the appeal should be allowed on the ground that Dr Madekunye, as an intervening party, is entitled to pursue the derivative action as a shareholder in his own name on behalf of the appellant in order to protect the interests of the latter.”

The then Chief Justice went on:-

“The derivative action is an exception to the rule in Foss v Harbottle 1843 67 ER 189 and was expounded thus by LORD DENNING MR in Wallersteiner v Moir (No. 2) [1975] 1 All ER 849 (CA) at 875 d-f:

'It is a fundamental principle of our law that a company is a legal person, with its own corporate identity, separate and distinct from the directors or shareholders, and with its own property rights and interests to which alone it is entitled. If it is defrauded by a wrongdoer; the company itself is the one person to sue for damage. Such is the rule in Foss v Harbottle. The rule is easy enough to apply when the company is defrauded by outsiders. The company itself is the only person who can sue. Likewise, when it is defrauded by insiders of a minor kind, once again, the company is the only person who can sue.

But, suppose it is defrauded by insiders who control its affairs – by directors who hold a majority of the shares – who then can sue for damages? Those directors are themselves the wrongdoers.

If a Board meeting is held, they will not authorise proceedings to be taken by the company against themselves. If a General Meeting is called, they will vote down any suggestion that the company should sue them themselves – yet, the company is the one person who is damnified. It is the one who should sue. In one way or another some means must be found for the company to sue otherwise the law would fail in its purpose. Injustice would be done without redress.'

The nature, then, of a derivative action is that it is a device designed to enable the court to do justice to a company controlled by its wrongdoers and prevents a serious wrong from going un-remedied. A shareholder is allowed to appear as the plaintiff. He acts, not as representative of the other shareholders, but as a representative of the company to enforce rights derived from the company. The action is brought by him in his own capacity to vindicate the company's rights.

I see no reason to deny Dr Mudekunye the right to pursue a derivative action in his name, and in his capacity as the remaining shareholder, on behalf of the appellant. A wrong of a fraudulent nature was done to the appellant, the details of which I have already outlined. By virtue of the lack of a quorum, for which the respondent was responsible, the appellant has been unable to bring proceedings itself to redress that wrong.”

It is admitted the applicant could not get co-operation of the third respondent. However, the above case tells us that the situation was not hopeless. The applicant, instead of filing this application in his own right should have sought leave of court to intervene on behalf of the second respondent. He cannot approach the court directly, as second respondent, just because the other director has refused to cooperate. He can, in law, seek legal authority to do so. Without such legal authority, he cannot purport to be the second respondent.

Clearly, therefore, the applicant can only represent the second respondent upon being granted leave by a court of law. The existence of his interests in the second respondent is not denied, but, unfortunately, he cannot sue on its behalf without authority. He accepted this position in the withdrawn matter (i.e. HC637/14). I am therefore at a loss to understand his current attitude. The applicant, therefore, as matters stand, has no locus standi.

Having upheld the issue of locus standi, it would be irregular to proceed to the merits of the matter because there is no application before the court….,.

The application is dismissed with costs.

HH223-13 : HWANGE COLLIERY CO. LTD and HWANGE COAL GASIFICATION CO. PL vs HWANGE COAL GASIFICATION CO. PL and TENDAI SAVANHU and KINGDOM BANK LTD and STANBIC BANK LTD and GUO FENG and ORS
Ruled By: MAFUSIRE J

At the hearing there was this remarkable situation that two sets of legal representatives purported to represent the same company.

HH229-15 : IZAYI PARK HOUSING SCHEME (represented by ELINAS GUMBO) vs SHADRECK GWENA and OTHERS
Ruled By: TAGU J

The applicant seeks a spoliation order against all the 18 respondents on the following terms:“A. TERMS OF THE FINAL ORDER SOUGHTIt is ordered that:(1) The Respondents are interdicted from interfering with the Applicant's project and business in whatever manner.(2) The Respondents' behaviour and conduct is hereby declared wrongful and unlawful.(3) ...

The applicant seeks a spoliation order against all the 18 respondents on the following terms:

“A. TERMS OF THE FINAL ORDER SOUGHT

It is ordered that:

(1) The Respondents are interdicted from interfering with the Applicant's project and business in whatever manner.

(2) The Respondents' behaviour and conduct is hereby declared wrongful and unlawful.

(3) The Respondents are ordered to pay costs of suit on a client–attorney scale.

B. PROVISIONAL ORDER GRANTED

Pending the confirmation of the provisional order;

It is ordered that;

(1) The Respondents be and are hereby ordered to release and return all documents, and office keys to the Applicant forthwith or at least not later than 48 hours from the date of this order.

(2) The Respondents are ordered to vacate the Applicant's offices at No.6 Kataza Road, Zvishavane and allow the Applicant to take occupation of its offices forthwith.

(3) The Respondents are barred from interfering with the Applicant's affairs, business or/and project in whatsoever manner unless with the Applicant's consent.

(4) The Respondents are barred from going to Izayi Park project site unless with the consent of the Applicant.

(5) The Respondents are interdicted from harassing and threatening the Applicant's executive members or the Applicant's general members in whatever manner.

C. SERVICE OF THIS ORDER

Service of this order shall be effected by the Applicant's legal practitioners.”

The respondents raised three points in limine....,.

(iii) Thirdly, the respondents took issue with Elinas Gumbo's locus standi in judicio to represent Izayi Park Housing Scheme before any court of law.

Their argument being that there was a General Meeting on 3 January 2015 where elections were held and a new executive committee was ushered in and Elinas Gumbo lost the right to occupy office or any positions within Izayi Park Housing Scheme Organisation.

The applicant challenged this point in limine on the ground that there is a resolution which authorised him to depose an affidavit on behalf of the applicant. He argued that the respondents are raising the issue of the purported new executive which is the basis of this present application. He therefore denied that he was trying to challenge the election of the new executive through the back door.

The resolution which Elinas Gumbo referred to says;

“RESOLUTION OF IZAYI PARK HOUSING SCHEME EXECUTIVE COMMITTEE MADE AT A MEETING WHICH WAS HELD ON THE 11TH DAY OF FEBRUARY 2012

The executive committee of Izayi Park Housing Scheme unanimously passed a resolution that ELINAS GUMBO shall represent the cooperative in all legal proceedings instituted by the co-operative or against the co-operative.

Dated at 11th February 2012

M. Mubaiwa
……………………………
MAXWELL MUBAIWA
SECRETARY”

In casu, up to about 7th February 2015 there was a legitimate committee in charge of Izayi Park Housing Scheme headed by Elinas Gumbo.

Currently, there is a new executive committee in charge of the same Izayi Park Housing Scheme purportedly headed by one Stephen Chipembere, comprising the rest of the respondents.

It is the alleged conduct of the respondents towards Elinas Gumbo and his committee members that is the subject of this application.

In my view, any aggrieved party has a right to take the offending party to court for redress.

In this situation, any committee member has locus standi in judicio to sue any committee member. It is apparent that there is a split among the members and each group is claiming to be the legitimate one. Under such a scenario the courts could be approached by either side to make a determination. The party deciding to approach a court for arbitration cannot be said to lack locus standi in judicio.

In the case of Elinas Gumbo, he has locus standi to sue any member of the committee. Equally still, unless it has been decided otherwise, he has full locus standi to sue on behalf of Izayi Park Housing Scheme in terms of the resolution of the 11th of February 2012.

In the result, I dismiss the last point in limine.

Appealed
SC56-20 : MOVEMENT FOR DEMOCRATIC CHANGE and NELSON CHAMISA and MORGAN KOMICHI vs ELIAS MASHAVIRA and ELIAS MUDZURI and THOKOZANI KHUPE and DOUGLAS MWONZORA
Ruled By: GARWE JA, PATEL JA and GUVAVA JA

This is an appeal against the entire judgment of the High Court, sitting at Harare, handed down on 8 May 2019, in which the following order was granted:

1. The appointment of the 2nd and 3rd respondents as Deputy Presidents of the Movement for Democratic Change party were unconstitutional therefore null and void.

2. The appointments of the 2nd respondent, as Acting President and President of the Movement for Democratic Change party, were unconstitutional and therefore null and void.

3. All appointments and/or re-assignments and actions of the 2nd respondent, in his purported capacities as Deputy/Acting or incumbent President, were unconstitutional and therefore null and void.

4. The 1st respondent be and is hereby ordered to hold an Extra-Ordinary Congress after the lapse of at least one month after the date of this Order.

5. The respondents are ordered to pay the applicant's costs of suit, jointly and severally, the one paying the others to be absolved.

The Background

The first appellant is the Movement for Democratic Change, a political party which has capacity to sue and be sued in its own name (“the Party”).

The remaining protagonists are members of the Party who were cited as follows in the court a quo;

The second appellant is the President of the Party, while the third appellant is its National Chairman.

The first respondent, who was the applicant a quo, is the Organising Secretary for the Gokwe Sesame District. The second respondent is the Deputy President, the third respondent is the Acting President and the fourth respondent is the Secretary General of the Party.

The facts relating to this matter are as follows;

On 15 July 2016, the second appellant and the second respondent were appointed Deputy Presidents of the Party by the founding President, the late Dr Morgan Richard Tsvangirai. At the time these appointments were made, the post of Deputy President was occupied by the third respondent, having been elected as such at the Party's Congress held in October 2014.

Following the death of Dr Tsvangirai, on 14 February 2018, a special National Council meeting was convened, on 15 February 2018, whereat the second appellant was confirmed as the Acting President of the Party.

On 24 September 2018, the first respondent launched an application in the High Court challenging the validity of the President's appointment of the second appellant and second respondent as Deputy Presidents of the Party. He averred that such appointments were made ultra vires the Party's constitution as they were not done via an election by Congress. The first respondent argued that the meeting of 15 February 2018 was a non-event as the National Council did not have powers to ordain an Acting President or a President of the Party. He further emphasised that Article 9.21.1 of the Party's constitution was clear that, upon the death of the President, the Deputy President assumed the role of Acting President. As such, he argued that the third respondent, as the duly elected Deputy President of the Party, became Acting President upon the death of Dr Tsvangirai, and was obliged to call for an Extraordinary Congress within a year.

The third appellant opposed the application and deposed to an affidavit on behalf of the first and second appellants as well as the second and fourth respondents. He took four preliminary objections to the application;

(i) Firstly, he contended that the first respondent did not have locus standi to represent the first appellant as he had not produced a solemn declaration reflecting proof of acceptance of his membership of the Party.

(ii) Secondly, he stated that the first respondent's delay in raising his complaints was inordinate and would cause prejudice as many developments had occurred since the appointments under challenge. Further, he claimed that the first respondent had waived his rights to challenge the appointments.

(iii) Thirdly, he argued that the first respondent ought to have exhausted internal remedies provided in the Party's constitution by noting an appeal to its Appeal's Tribunal.

(iv) Lastly, the third appellant contended that the order directing the first appellant to hold an Extra-Ordinary Congress was incompetent relief in an application for a declaratur.

Regarding the merits of the application, the third appellant disputed the validity of the Constitution relied on by the first respondent. He submitted that the “true Constitution” was attached to the late President's opposing affidavit in the case of Patson Murimoga & Anor v Morgan Richard Tsvangirai & Ors HC7453/16.

The third appellant also argued that the appointments by the late President were made in terms of Article 9 of the Constitution which gave the President power to appoint deputies to “officers of Congress” on the instructions of the National Executive and the National Council. It was submitted that the appointments were made on the instructions of the National Council and ratified by the same in terms of Article 18 of the Party's constitution.

The third appellant further submitted that the subsequent occupation, by the second appellant, of the office of Acting President, was valid as it was the result of unanimous assent and was based on the second appellant's valid election as Deputy President.

In his replying affidavit, the first respondent challenged the validity of the third appellant's opposing affidavit. He stated that, in the absence of a mandate from the other parties, the third appellant could not depose to solemn facts on their behalf.

Further, he contended that the third appellant had not shown that he was authorised to represent the Party.

Lastly, the first respondent took the position that the first appellant, together with the second, third, and fourth respondents, were barred for having failed to file their opposition to the application.

Determination of the Court A Quo

On the preliminary objections raised by the parties, the court a quo made the following rulings;

It held that the first appellant was barred for having failed to file an opposing affidavit, as the third appellant, who purported to act on its behalf had failed to show proof of his authority. The court also held that the second and fourth respondents were barred for having failed to file their own opposing papers, while the third respondent was barred for having failed to oppose the application.

In relation to the first respondent's locus standi to institute the proceedings, the court held that his membership card was sufficient proof of his membership of the Party.

Regarding the issue of exhaustion of internal remedies, the court a quo reflected that the relief sought by the first respondent would not be competently granted by the Party's appeals tribunal. The court reasoned that it was more probable that the appeal would not be heard in an impartial manner due to the composition of the Appeals Tribunal.

On the issue of waiver of the first respondent's right to challenge the appointments, the court found that the first respondent had timeously approached the court after he became aware of his rights through a legal opinion furnished to the Party.

On the merits of the application, the court held that the appointments of the second appellant and second respondent, as Deputy Presidents of the Party, having by-passed the electoral process, were ultra vires the Party's constitution.

The court reasoned that the Constitution clearly provided that a Deputy President could only hold office by virtue of an election by Congress. This position was fortified by the court's interpretation of several provisions of the Party's constitution. The court considered the provisions of Article 6.4.4, which relate to the composition of the National Standing Committee. In particular, Article 6.4.4.1 was clear that a member could only occupy the office of Deputy President pursuant to an election at Congress. The late President had acted contrary to this provision by “picking” the second appellant and the second respondent as Deputy Presidents. The court also had regard to Article 9 of the Constitution which provides for the functions of various office bearers, including Deputy Presidents. In particular, Article 9.14 stipulates that all office bearers hold office by virtue of winning an election in Congress in terms of Article 6.4.4. The court highlighted that the President's powers of appointment, in terms of Article 9.1.4, had to be exercised “where such is provided for in the Constitution.” Thus, the President could only appoint the Secretary for Elections in terms of Article 6.4.4(k). The court further indicated that Article 9 listed office bearers and the Deputy President in the singular. In light of this, the court reasoned that the mention of Deputy Presidents in the plural was a typographical error.

The court further considered the powers of the National Council, in terms of Article 18 of the Constitution, to cure an oversight or omission in the appointment of office bearers. The court held that the contention that the National Council had delegated to the late President the power to make the contested appointments was not supported by the evidence. The oversight or omission sought to be cured was not identified in the papers pertaining to the deliberations of the National Council in 2016. Accordingly, Article 18 could not aid the appellants' case. Neither the President nor the National Council could bypass the requirement of holding an election at a Congress to fill those offices that were already provided for under the Constitution.

Additionally, the court took the view that the Party was founded on constitutionalism and social democracy, as per Article 3.1. Thus, the imposition of Deputy Presidents, by the late President, and the imposition of the second appellant as Acting President, acting in concert with the National Council, at its meeting on 15 February 2018, was contrary to those founding values.

In light of these considerations, the court a quo held that the contested appointments were unconstitutional and granted the order aforementioned.

Consequently, the court applied the provisions of Article 9.2.1(b) of the Constitution, in terms of which the Deputy President becomes the Acting President, where the President is unable, for any reason, to perform his or her powers, functions, or administrative duties. The court accordingly concluded that at the time of the late Dr Tsvangirai's death, the third respondent was the Deputy President and ought to have assumed presidential duties, pending the holding of an Extra Ordinary Congress to elect a new President, in terms of Article 9.21.1 of the Constitution.

Grounds of Appeal

There are numerous grounds of appeal herein, some of which are repetitive or should have been conjoined. They are reproduced verbatim as follows:

1. The court a quo erred in coming to the conclusion that first appellant was barred for failing to file an opposing affidavit and so erred in treating a valid affidavit deposed to by the third appellant as pro non scripto, and, in proceeding to determine the matter without hearing the first appellant.

2. A fortiori, the court a quo erred in proceeding in a manner which is in violation of the first appellant's constitutionally-protected right to be heard before an independent and impartial court as envisaged by section 69(2) of the Constitution of Zimbabwe, 2013.

3. Having found that the Constitution relied upon by the appellants at least contemplated the appointment of Deputy Presidents, the court a quo misdirected itself in concluding, without hearing evidence on this material issue, that the reference to Deputy Presidents in that Constitution was a typographical error.

4. A fortiori, the court a quo erred in writing a Constitution for the first appellant and in irregularly bringing it under the authority of such a document.

5. The court a quo erred in not concluding that the appointment of Deputy Presidents in the first appellant was in accordance with the Constitution of that party, had been mandated by congress and the highest decision making organ outside congress, and was, for all purposes, valid as a unanimous decision of a voluntary association.

6. Having been addressed on the law governing voluntary organisations and its effect on the subject before it, the court a quo misdirected itself in not pronouncing itself on that issue and in not deciding a question which was material to the decision required of it.

7. The question of the proper Constitution for the first appellant having been previously resolved in terms of an extant judgment in a matter which involved the same parties and/or at least their privies, the court a quo erred in allowing that issue to be re-opened and in founding its judgment on a Constitution which is foreign to the first appellant.

8. The court a quo erred in treating, without a valid legal or factual basis, the domestic remedies set out under the first appellant's Constitution as ineffectual and in not requiring, in accordance with superior court authority, the exhaustion of those remedies ante the bringing of the matter to court.

9. The court a quo misdirected itself, such misdirection amounting to an error in law, in not finding that the first respondent's participation in the activities of the first appellant, under the leadership of the second appellant, and duration of same, estopped him from contending against the validity of his appointment to the prejudice of the first appellant.

10. The ordinary congress for the first appellant having become due, the court a quo erred in finagling upon that party an extra ordinary congress and so erred in creating a totally untenable position which is at variance with the first appellant's Constitution and is totally unworkable either in fact and/or in law.

11. The court a quo erred in intervening, without a valid legal or factual basis, in the workings of a voluntary association and in subordinating its statutes and unanimous assent to the whims of a dishonestly disgruntled individual....,.

Issues for Determination

Before commencing his submissions, Mr Mpofu indicated that he was abandoning the tenth ground of appeal which avers that the court a quo had “finagled” upon the Party an Extra-Ordinary Congress which was at variance with the Party's constitution.

In my view, he should also have been forthright in abandoning the related seventh ground of appeal which impugns the court a quo for having founded its judgment on a Constitution which was “foreign” to the first appellant. Clearly, this latter ground simply cannot be sustained given the position eventually accepted, and confirmed, by his co-counsel that the document availed by the Court, which was identical to that contained in the appeal record as well as that attached to Dr Tsvangirai's opposing affidavit in Case No. HC7453/16, is the only true and authentic Constitution of the Party for present purposes.

It is that very document which was also relied upon by the court a quo in formulating its judgment.

It follows that the seventh ground of appeal must also be jettisoned. It is accordingly ordered that both the seventh and the tenth grounds of appeal be struck out.

I now turn to the remaining nine grounds of appeal.

As I have already intimated, some of the grounds of appeal ought to be combined so as to rationalise their disposition. On that basis, I consider the following to be the salient issues for determination in casu:

(a) Whether the first appellant was correctly barred a quo, and, consequently, denied the right to be heard.

(b) Whether the first respondent should have exhausted the domestic remedies afforded by the Party constitution before instituting the application a quo.

(c) Whether the first respondent was estopped from challenging the validity of the second respondent's appointment as the leader of the Party.

(d) Whether the reference to Deputy Presidents (in the plural) in the Party constitution was a mere typographical error.

(e) Whether the appointment of the second appellant and the second respondent, as Deputy Presidents of the Party, and the subsequent appointment of the second appellant as its Acting President, were valid as being in accordance with the Party constitution.

(f) Whether there was any valid legal or factual basis for the court a quo to intervene in the workings of the Party as a voluntary organisation.

Status of First Appellant A Quo

In his opposing affidavit a quo the third appellant (Mr Komichi) declares that he is “the National Chairman of the [first appellant] by whom I am duly authorised to depose to this affidavit in my capacity as National Chairman.”

The court a quo found that the first appellant was barred for having failed to file its own opposing affidavit and that the third appellant, who purported to act on its behalf, had failed to demonstrate his authority to do so.

Mr Mpofu submits that Mr Komichi's affidavit clearly speaks to the status and locus standi of the Party and that there was no need for him to have been authorised for that purpose. The judgment a quo materially affected the rights and interests of the Party to its prejudice and it should therefore have been afforded the right to be heard. In any event, the first respondent could not drag the Party to court and then claim that it had no locus standi. Furthermore, even if the Party were to be held to be in default a quo, it is entitled to appeal against the judgment a quo given that it was final and definitive in its effect vis a vis the Party.

Mr Mutungura counters that no person claiming to act on behalf of another can do so without authority. A body corporate, being an artificial person, cannot act by itself and any person claiming to act on its behalf must be clothed with authority to do so. In the instant case, Article 6.6.1(j) of the Party constitution allows its National Executive Committee to institute and defend legal proceedings against the Party. It was therefore necessary for that Committee to appoint Mr Komichi to act on behalf of the Party.

Mr Madhuku supports this position and further submits that the holding of executive office did not entitle Mr Komichi to depose on behalf of the Party. In any event, the Party was fully heard a quo through the third appellant's (Mr Komichi) averments and submissions.

I note, first and foremost, that the cases relied upon by counsel for the respondents, i.e. Crown & Anor v Energy Resources Africa Construction SC03-17 and Madzivire & Ors v Zvirivadza & Anor 2006 (1) ZLR 514 (S), were both concerned with corporate bodies as opposed to voluntary organizations.

In the latter instance, particularly where a political party bedevilled by a leadership wrangle is involved, it may be necessary to adopt a less rigid approach to questions of locus standi and authority to depose. The principal mischief that is to be guarded against is to avoid the situation where the organisation in question is litigated for by an un-authorised person without its specific sanction.

As is reasoned by HERBSTEIN and Van WINSEN: The Civil Practice of the Superior Courts in South Africa (3rd ed.)…,:

“Any person who can swear positively to the facts will be sufficient and no special authority to him or her by the Plaintiff is necessary for the affidavit to be effective.”

The difficulty in casu, however, is that Mr Komichi's opposing affidavit is somewhat laconic and lacking in particularity as to the specific mechanism by which he was authorised by the Party to depose to his affidavit.

It is not evident whether this was by resolution of the National Executive Committee or by some other committee or functionary within the Party. Nor does Mr Komichi affirm that he can swear positively to the facts deposed to in his affidavit. Be that as it may, I do not think that it is necessary, for present purposes, to determine this particular aspect of the appeal. As is conceded by Mr Mpofu, the second and third appellants were represented and heard through the same counsel that represented the first appellant. Given this context, his belated prayer that the matter be remitted to the court a quo to hear the first appellant would entail nothing less than an exercise in judicial futility.

I agree with Mr Madhuku that the first appellant was adequately represented in the proceedings a quo, and, despite having been non-suited, was afforded the right to be heard.

Insofar as concerns the present appeal, there can be no doubt that the first appellant has had more than ample opportunity to be very ably represented and fully heard in the proceedings before us. All in all, I take the view that the first ground of appeal is entirely otiose and need not detain this Court any further.

HH04-10 : MYDALE INTERNATIONAL MARKETING (PVT) LTD vs DR ROB KELLY and HAMMER AND TONGUES (PVT) LTD
Ruled By: GOWORA J

The first respondent herein had, under Case No. HC1049/09, instituted proceedings against the applicant and second respondent herein. On 30 March 2009, OMERJEE J issued an order as follows:“IT IS ORDERED THAT:1. Mydale International Marketing (Pvt) Ltd is entitled to receive from the second respondent and have in its custody ...

The first respondent herein had, under Case No. HC1049/09, instituted proceedings against the applicant and second respondent herein. On 30 March 2009, OMERJEE J issued an order as follows:

“IT IS ORDERED THAT:

1. Mydale International Marketing (Pvt) Ltd is entitled to receive from the second respondent and have in its custody and under its control vehicles registration number no. AAU 8190, ABC 3354 and AAP 1952.

2. Mydale International (Pvt) Ltd shall record the mileage on each vehicle from the time of receipt from the second respondent.

3. Mydale International (Pvt) Ltd shall be entitled to ordinary use of the motor vehicles and shall not sell or otherwise alienate the said motor vehicles without an order of court.

4. Messrs Byron Venturas & Partners shall within 24 hours of the order surrender to the Registrar of the High Court, Harare the US$28,500 the proceeds for the sale of the six motor vehicles owned by Mydale International (Pvt) Ltd for retention by the Registrar pending the determination of any dispute over ownership of Mydale International Marketing (Pvt) Ltd.”

On 4 April 2009, the first respondent noted an appeal against the order, and, as a result, he did not surrender the money to the Registrar as had been ordered.

On 21 April 2009, the applicant launched these proceedings under a certificate of urgency for the grant of a Provisional Order. The respondent, having filed a notice of opposition and opposing affidavits, the matter was not heard on an urgent basis.

Instead, the learned judge before whom the matter was placed gave directions to the parties to file pleadings and thus the matter was converted into an opposed court application.

The second respondent has not filed any papers in this matter, and I will, as a result, refer to the first respondent as the respondent.

The matter was not heard on an urgent basis and the interim relief being sought was not granted.

The applicant has not however filed an amended draft order, and, from the submissions by counsel, it is clear that what is sought is an order in terms of the final relief on the provisional order. That part of the order depended on the court having granted interim relief.

A word of caution should be sent to legal practitioners to ensure that a draft order must be filed where an urgent application has been ruled not to be urgent and the matter proceeds on the basis of the provisional order initially filed with the application. A party must ensure that it moves for the order that it wishes for.

Where a provisional order is left without interim relief having been granted it should not be left to the judge to decide what order should be granted to the prejudice to parties in the dispute....,.

The terms of the interim relief being sought were the following:

“INTERIM RELIEF GRANTED:

(a) Pending appeal, within 24 hours of the service of this order on him, the first respondent and his lawyers Messrs Venturas & Samukange shall comply with para 4 of the judgment by OMERJEE J in case HC1049/09 dated 3 April 2009.

(b) Failing compliance, the first respondent, and the said lawyers, shall, within a further 24 hours, appear before this honourable court to show cause why he/they should not be committed to prison for contempt of court.”

In the final relief, it is sought that the Registrar of the High Court pay to the applicant the sum of US$28,500 upon satisfactory proof that it owned the vehicles sold by Hammer & Tongues....,.

I turn next to deal with the terms of the final relief which is what I assume the applicant really sought not only from the founding affidavit, but from submissions by counsel both written and oral.

What the applicant seeks in final terms is as follows:

“FINAL RELIEF GRANTED

(a) That the Registrar of the High Court shall pay to the applicant US$28,500 subject to satisfactory proof by the applicant that it owned the motor vehicles sold by the second respondent to raise the said amount of US$28,500.

(b) The first respondent shall pay the costs of the application.”

A perusal of paragraph 4 of the order issued by OMERJEE J shows that the money that was to be surrendered to the Registrar was to be retained by him pending the determination of the dispute of the ownership of the shareholding in the applicant.

That dispute, as far as I am aware, has not yet been determined.

The applicant has come to court for relief which would have the effect of nullifying that order in that the Registrar would hand over to the applicant the monies in dispute without the resolution of the ownership of the shareholding in the company.

A company is owned by its members and the benefit accruing to a company is that of its members, and, there is a dispute as to who the members of the applicant are. This was a dispute that was simmering when OMERJEE J heard the matter. It is important that it be resolved. It has not.

The representative of the applicant, in these proceedings, seems to be oblivious to the effect of the order given and seeks that this court nullifies an order that has been granted by the same court.

In my view, this court cannot order that the money mentioned in paragraph 4 of the order dated 30 March 2009 be paid to the applicant. It is relief that is not available on the papers before me. The effect of that order would go beyond what OMERJEE J ordered, and would, in effect, have the effect of confirming that Mr Peter Valentine did own shares in the applicant without a proper resolution of the dispute as to who owns shares in the applicant.

The question as to who owns shares in the company is, I believe, directly linked to the point in limine raised by the respondent as to the locus standi of Mr Valentine in instituting these proceedings.

The respondent has filed, as part of his papers, an affidavit from one Obaid Salem who claims not only beneficial interests in the company assets but also the vehicles which were the subject matter of the dispute before OMERJEE J. The Notice of Appeal filed by the respondent challenges the order by the learned judge that the vehicles in question be retained by the applicant as it is contended, by the respondent, that the vehicles do not belong to the applicant, but to Obaid Salem. As the proceeds of the cash being sought to be paid over to the applicant are from the sale of the vehicles, it is mischievous for the applicant to seek to have the order by OMERJEE J reversed by having the money handed over to itself taking into account all the factual disputes that are apparent on the pleadings.

In my view, the applicant's representative has not satisfied me that he has locus standi to institute proceedings on behalf of the applicant.

For all the reasons stated above, the application is ill-conceived and it therefore must fail. In the result, the application is dismissed and the applicant is ordered to pay the costs of the application.

HH19-11 : JAMESON RUSHWAYA and ANNIE RUSHWAYA vs PATTERSON TIMBA and SWIMMING POOL & UNDER WATER REPAIRS PL and TOLROSE INVESTMENTS PL and MESSENGER OF COURT, KADOMA
Ruled By: MAVANGIRA J

This is an urgent chamber application in which the applicants seek a Provisional Order in the following terms:“TERMS OF FINAL ORDER SOUGHTThat you show cause to this Honourable Court why a final order should not be made in the following terms:-1. That first, second, and fourth respondents and/or their agents ...

This is an urgent chamber application in which the applicants seek a Provisional Order in the following terms:

“TERMS OF FINAL ORDER SOUGHT

That you show cause to this Honourable Court why a final order should not be made in the following terms:-

1. That first, second, and fourth respondents and/or their agents shall not interfere in any manner whatsoever with applicants' possession of Glencairn Mine or the assets thereat.

INTERIM RELIEF GRANTED

Pending the determination of this matter, the applicants are granted the following relief:-

2. That first, second, and fourth respondents be and are hereby ordered to remove all the locks on the 3 gold concentrators, carbon room, 4 fuel pumps, workshop, and gates leading to the mining areas at Glencairn Mine.

3. That the first, second, and fourth respondents restore possession of the Nissan NP 300 (registration no. ABP 0456) and Nissan Hardbody 2.5 (registration no. ABG 4956) to the applicants.”

At the onset of proceedings, counsel for the first, second, and third respondents raised four preliminary points for determination by the court before the matter could be heard on the merits:

(i)...,.

(ii)...,.

(iii) The third point raised is that the applicants herein have no locus standi in judicio to institute these proceedings. Counsel for the first, second, and third respondents submitted that the mine and assets are owned by the third respondent. The applicants are shareholders, the first applicant being also a director of the third respondent. The company has not mandated them to bring these proceedings which they have brought in their personal capacities....,.

It appears to me that the preliminary point that must first be determined is whether or not the applicants have the locus standi in judicio to bring this application before the Court.

The essence of the applicants' claim is that they were despoiled of their possession and control of Glencairn Mine, and the assets thereat.

In his founding affidavit, the first applicant has stated that the second applicant and he, in their capacities “as the legal directors and shareholders of the third respondent, have been in peaceful and undisturbed possession of the mine…, and all the assets thereat.”

Clearly, the applicants' said possession was not exercised or enjoyed in their personal capacities.

It is common cause that the third respondent owns and runs the mine. Any disturbance of peaceful and undisturbed possession, therefore, could only be complained of by the third respondent.

Had the third respondent passed a resolution authorising the institution of these proceedings, they would have been instituted in the name of the third respondent and the applicants, as authorized agents, would have been on solid ground.

The applicants have rather opted to cite the third respondent as a respondent to their claim. The third respondent cannot be a respondent in the applicant's claim. If any spoliation has occurred, the third respondent herein would be the applicant. Its Board of Directors would then pass a resolution authorising the institution of the necessary proceedings and indicating the person or persons who would do the necessary acts on its behalf.

It is not the applicants' stance that they were acting independently of the third respondent. Rather, in paragraph 6 of the first applicant's founding affidavit, he states that he only cited the third respondent as a respondent because in proceedings instituted by the first respondent against the applicants, which application resulted in the granting of the order that has prompted these proceedings, the third respondent herein was joined as third applicant.

It appears to me that the applicants' stance and explanation is self-contradictory.

The institution of proceedings against them, by the third respondent, under whose auspices they were engaged in all the pertinent activities, negates their very locus standi in this matter having regard to the nature of their claim.

For the above reasons, the said point in limine is upheld.

It appears to me that it is not necessary, in view of my finding on the discussed point in limine, to deal with the rest of them. The nature of the point in limine that has been upheld is such as to make it unnecessary to do so. No purpose would be served thereby.

In the result, it is found that the applicants have no locus standi in judicio to institute this urgent chamber application.

HB189-18 : CLAUDIUS MANAMELA and BRIGHTON NANGA and SIBONGILE MANAMELA vs ROSEWELL ZULU and APOSTOLIC FAITH MISSION OF AFRICA INTL and CLEMENT NYATHI and APOSTOLIC FAITH MISSION OF AFRICA
Ruled By: MABHIKWA J

On 30 January 2018, the applicants caused to issue legal proceedings, an application, out of this Honourable Court –

“In the High Court of Zimbabwe, held in Bulawayo. The applicant sought an order that it be declared that:

(1) That the President of the Apostolic Faith Mission of Africa International is Reverend Zulu.

(2) That the President of the Apostolic Faith Mission of Africa is Reverend Clement Nyathi.”

On the day of the hearing, on 10 July 2018, the first applicant quickly made what he termed an application for the matter to be removed from the roll.

That application, which must have taken everyone by surprise, was vigorously opposed by the first, second and fourth respondents.

The court may mention, at this stage, that, for all intents and purposes, it became clear, as the matter progressed, that this was an application (i.e. the main application and the “mini” application for removal from) were being orchestrated by the first applicant.

The second applicant, despite being present in court, and allegedly appearing in an individual capacity, said virtually nothing apart from bending over for a second to say he was associating himself with the first applicant's submissions - and this only when asked by the court.

The third applicant was not even present, although, upon inquiry by the court, the three (3) applicants were said, by the first applicant, to be appearing purely in their individual capacity.

The first applicant then told the court that for some reason, the third applicant had failed to attend court.

It was however clear that the first applicant, as he went on over-drive in submissions, was really speaking on behalf of all three (3) applicants - and moreso supposedly on behalf of a “church”.

This court had to discover later on…, that the third applicant is his wife, as shown by various other matters brought before the courts.

As the first applicant insisted, the court decided not to shut him out, as an unrepresented litigant, but to give him a long ear so to speak.

HH49-09 : DYNAMOS FOOTBALL CLUB (PRIVATE) LIMITED and DYNAMOS FOOTBALL CLUB vs RICHARD CHIMINYA and OTHERS
Ruled By: CHATUKUTA J

This is an opposed application in which the applicant sought the following relief, that:

“1. The affairs of the Second Applicant shall be run by the Board of Directors of the First Applicant.

2. The Ninth Respondent (the Premier Soccer League) shall forthwith recognize any person appointed by the First Applicant and the two representative (sic) of the Second Applicant.

3. The First (Richard Chiminya), Second (Sunday Chidzambwa), Third (Charles Gwatidzo), Fourth (Jairos Banda), Fifth (George Shaya), Sixth (Simon Sachidi), Seventh (Brian Kashangura) and Eighth (Eric Mvududu) Respondents shall cease to run the affairs of Dynamos otherwise than through the structures set by the First Applicant.

4. First to Eighth Respondent (sic) shall pay the costs of this application.”

The second applicant is a football club (herein referred to as the Club). It is an un-incorporated voluntary organization. It was established in 1963 under the Constitution of the Dynamos Football Club of Salisbury Rhodesia (the Constitution). A Board of Trustees was established in terms of clause 5 of the Constitution. The Board of Trustees was constituted of the founder members and former players who joined the Club within the first year of its existence.

The Board of Trustees was mandated to be the policy organ of the Club (Clause 5.1.3). It was further empowered to appoint the executive committee, managers, head coach, and other committees of the club. The executive committee was mandated to administer and manage the affairs of the Club.

Clause 16 of the Constitution provided for the registration of a company, Dynamos Football Club (Pvt) Ltd (the Company). Upon registration of the Company, the Board of Trustees was to constitute the Board of Directors of the Company.

The first applicant is the company that was formed pursuant to clause 16 of the Constitution.

The applicants averred that the first respondent, in connivance with the second to the eighth respondents, formed an association which they termed the “Board of Trustees”. They proceeded to appoint an executive committee which is now illegally running the affairs of the Company.

It was contended that the Board of Trustees and the executive committee are illegally running the affairs of the club as it has usurped the powers of the Board of Directors of the Company.

The application was opposed by the first to the eighth respondents whom I shall refer to as “the respondents”.

The respondents raised two points in limine:

(i) The first point is that Morris Longstaff Sifelani (Sifelani), who deposed to the founding affidavit, did not have the authority to represent both applicants. It was contended that Sifelani purported to act for two separate entities and was required to satisfy the court, in the founding affidavit, that he had the authority to represent the applicants.

The applicants filed minutes of a meeting of Board of Directors of the company, held on 22 May 2007, which purported to authorise Morris Longstaff Sifelani to institute the proceedings in the Answering Affidavit.

I say “purported” because the legality of the Board of Directors is challenged by the respondents.

The respondents contended that the proof of authority only arose in the Answering Affidavit instead of the Founding Affidavit. This amounted to introducing new evidence. The applicants should therefore have applied for leave of the court to introduce the new evidence. It was contended that an application must stand or fall by its founding affidavit.

The applicants contended that the minutes were adequate to cure the irregularity raised by the respondents. It was further contended that section 12 of the Companies Act [Chapter 24:03] raises a presumption that the acts of the company are regular. Outsiders should therefore not inquire if the rules of the company have been complied with.

(ii) The second point in limine is that there is a material dispute of fact that cannot be resolved on the papers.

It was contended that Morris Longstaff Sifelani does not have the authority to represent the applicants. It was further contended that Sifelani was not a Director of the first applicant. He was not a member of the Board of Trustees of the second applicant at the time the first applicant was incorporated. He therefore could not have been a director of the first applicant.

It was further contended that the first respondent has disputed Morris Longstaff Sifelani's authority and membership of the second applicant in other cases. The applicants therefore ought to have known that a material dispute of fact would arise and should therefore have not proceeded by way of motion.

The applicants contended that the court should adopt a robust approach and resolve the dispute on the papers.

It was contended that the production of Form CR14, on the appointment of directors, was adequate proof that Morris Longstaff Sifelani is a Director of the company. It was submitted that the Form was prima facie proof of Sifelani's directorship.

It is my view that the two issues are entwined and the first issue is subsumed by the second issue; whether or not there is a material dispute of fact.

I shall therefore deal with first issue in that context.

It is clear that the court has a discretion as to whether or not to dismiss an application where there are material disputes of fact which cannot be resolved on the papers. In exercising its discretion, the Court must take into account when the applicants became aware that there were disputes of fact in the matter: see Masukusa v National Foods Ltd & Anor 1983 (1) ZLR 232.

I will deal first with the applicant's contention that the decision that Morris Longstaff Sifelani represents the first applicant in these proceedings is covered by section 12 of the Companies Act.

It appears to me that the presumption of regularity of the acts of a company does not apply in this case and the applicants' reliance on the rule is misplaced.

As stated by MALABA JA in Ngatibataneyi (Private) Limited v Tobias Venganayi Moyo and Anor SC13-07, section 12 of the Companies Act embodies the common law principles of estoppel enunciated in the case of Royal British Bank v Turquand (1856) 119 E.R. 886 (generally known as the Turquand Rule).

The Turquand Rule is intended to protect the rights of third parties dealing with companies. It is therefore a rule that a third party would rely on when a company or office bearer of a company seeks to avoid liability.

It is my view that section 12 of the Companies Act was a red herring.

The question of Morris Longstaff Sifelani's locus standi or authority to institute legal proceedings on behalf of the applicants is not new to this Court.

The present application is a sequel to other applications brought on behalf of the applicants.

On 2 August 2005, the Club filed an Urgent Chamber Application in case no. HC3803/05 against the first and ninth respondents in the present matter and another. The applicants were challenging the dissolution of the then incumbent executive committee on 25 July 2005 by the first respondent. It appears from the Consolidated Index to the application that Morris Longstaff Sifelani deposed to a supporting affidavit. However, the affidavit is not in the record. The application was opposed. The first respondent, in paragraph 12(ii) of the Opposing Affidavit, listed the original members of the Board of Trustees. The list does not include Morris Longstaff Sifelani. The application was dismissed on the basis that it was not urgent and that the deponent to the Founding Affidavit, one Phillip Mugadza, did not have the authority to represent the Club.

On 12 September 2005, the present applicants, Morris Longstaff Sifelani and three others filed an Urgent Chamber Application in case no. HC4530/05, against the first respondent in the present matter. Sifelani deposed to the applicants' founding affidavit on behalf of all the applicants. The applicants were again challenging the 25 July 2005 dissolution of the Club's executive committee by the first respondent. Sifelani averred that he was the executive director and executive chairman of the company. He further averred that he was a founder member and a trustee of the Club. The application was almost a replica of HC3803/05. It appears that the respondents had not filed any opposing papers. Letters filed of record indicate that the respondents were going to oppose the application. The application was withdrawn and the applicants, except for the Company and the Club, were ordered to pay costs on a legal practitioner and client scale.

On 23 February 2006, the same applicants as in case no. HC4530/05, filed yet another court application against the first respondent in case no. HC1065/05. The cause of action was the same as in the other two applications. Morris Longstaff Sifelani deposed to the founding affidavit, again averring that he was a founding member and trustee of the Club and that he was the chairman and chief executive officer of the company. The application was again opposed. Sifelani's status was again put into issue in paragraph 8 of the opposing affidavit.

On 29 May 2007, the applicants filed the present application. At the core of the application is again the question as to who should run the Club. The application was again opposed and Morris Longstaff Sifelani's directorship and trusteeship put into issue. In issue is also his status as the chairman and chief executive officer of the company.

It is clear that when the applicants brought the application it must have been in their contemplation, from the previous applications, that a dispute of fact would arise.

The Form CR14 produced by the applicants does not seem to resolve the issue.

The Form is merely prima facie proof of the directorship of Morris Longstaff Sifelani. The proof has been put into issue with the production of what the respondents purport to be the first trustees of the Club who subscribed to the formation of the Company. It is these Trustees who were mandated, under the Club's Constitution, to form the Company and constitute the Board of Directors. The document therefore questions Sifelani's assertion that he is one of the founding members and a trustee of the Club when his name does not appear on its face. It further raises the question how Sifelani became a director of the applicant as at 10 October 2002 as appears on the Form CR14.

The minutes of the Board of Directors that purportedly authorized Morris Longstaff Sifelani to institute these proceedings were challenged by the respondents.

The first respondent challenges the holding of the meeting and the passing of the resolution.

It is not in issue that the first respondent is a director of the company. It appears from the minutes of the meeting that he did not attend the meeting. There is no indication from the applicants whether or not notice of the meeting was given as is required under the Companies Act.

Despite previous challenges of Morris Longstaff Sifelani's authority to represent the company, the minutes were only annexed to the answering affidavit.

It is my view that these disputes of fact cannot be resolved on the basis of the affidavits filed of record.

As already alluded to, these are disputes of fact that the applicants should have anticipated and adopted the proper procedure for their resolution.

What is left, I believe, is for me to decide whether or not, in view of the apparent material dispute of fact, I should dismiss the application as prayed for by the respondents.

As stated in Adbro Investments Co. Ltd v Minister of Interior 1956 (3) SA 345 AD;

“Where the facts are in dispute, the court has a discretion as to the future course of the proceedings. It may dismiss the application with costs or order the parties to go to trial or order oral evidence…,.

The first course may be adopted when the applicant should have realised, when landing his application, that a serious dispute of fact was bound to develop.”

Ordinarily, because of the apparent material dispute of fact, this is a case where the respondents would have been entitled to their prayer. However, I consider this case not an ordinary one.

It appears that there is a tug of war between individuals who purport to be representing the applicants, particularly the Club. In almost all the applications, there are two people who are featuring prominently, challenging each other's status within the Club, that is, Morris Longstaff Sifelani and the first respondent. When the elephants fight, the grass suffers. In this case, it is the Company and the Club which appear to be suffering. This, in my view, is not healthy for the two applicants.

It should be noted that the dispute as to who should control the Club has spilt into the Supreme Court following an appeal against a decision of this court.

The issue before the Supreme Court, in Dynamos Football Club (Private) Ltd and Anor v Zimbabwe Football Association and Ors SC93-06, was the independence of the Club to run its own affairs following a dissolution of the executive committee by the Zimbabwe Football Association (ZIFA). The second issue was whether or not a 1994 amendment of the Club's constitution was valid. The court ruled that the Club was to manage its own affairs without any interference from the respondents. It was also declared that the ownership and management of the club was in terms of the 1963 Constitution until such time as it was lawfully amended or repealed.

Although the case did not deal with Morris Longstaff Sifelani's locus standi, it brings to the fore the unending fight for the control of the Club. The multiplicity of court applications has not resolved the issue. It is my view that the fight should be brought to an end in the interest of the applicants.

This is one of the cases where it is therefore necessary to adopt a robust approach and refer the matter to trial so that all the issues are properly ventilated.

On the question of costs, the court can order costs against the applicant even where it has not dismissed the application as a sign of its displeasure: see HERBSTEIN and Van WINSEN..,. However, in Van Answegen and Another v Drotkskie and Anor 1964 (2) SA 391…, SMUT AJ stated -

“It does of cause not follow that because a dispute of fact is reasonably foreseeable that an application on notice of motion will always be dismissed with costs. There may still be circumstances present which will persuade a court not to dismiss an application but to order the parties to go to trial together with an order that the costs of the application be costs in the cause or else that the costs stand over for determination at the trial.”

This is a case where authorization of the institution of the proceedings is in issue.

I do not believe that an order for costs at this stage would be in the interest of justice where the decision to institute the proceedings may later be found not to have been authorized by the two applicants.

In the result, it appears only just that the question of costs be deferred for determination at trial.

In the result, it is ordered that:

1. The matter be and is hereby referred to trial with the court application standing as the summons.

2. The applicants be and are hereby ordered to file a declaration within 10 days of the date of this order.

3. The respondents' notice of opposition shall stand as the appearance to defend.

4. All further pleadings shall be in accordance with the rules of this Court.

5. The costs of this application shall stand over for determination at the trial.

HH424-13 : HONEY AND BLANCKENBERG vs LOURENCE ERASMUS VERMAAK and OTHERS
Ruled By: TSANGA J

The BackgroundThe applicant, Honey and Blanckenberg, instituted interpleader, in terms of Rule 30 of the High Court Rules, for the court to declare to whom it should pay an amount of $70,000 currently held in trust as rentals for certain companies.According to the applicant's affidavit, the companies in question are ...

The Background

The applicant, Honey and Blanckenberg, instituted interpleader, in terms of Rule 30 of the High Court Rules, for the court to declare to whom it should pay an amount of $70,000 currently held in trust as rentals for certain companies.

According to the applicant's affidavit, the companies in question are being laid claim to by nine different respondents (Lourence Erasmus Vermaak, Terence Cobden Rhodes, Gideon Hwemende, Valentine Mushore, Alfred Chademana, Joel Tandera, Oliver Chibage, Farai Mutizwa and Calisto Vengesai).

The tenth respondent (the Registrar of Companies) was cited to throw light on the question of ownership by virtue of certain statutory returns that have been filed with it.

Despite the assistance that the court would indeed have obtained from the tenth respondent's comments, none were availed as the tenth respondent (the Registrar of Companies) did not participate at all in these proceedings.

The companies in question, namely, Beverly East Properties and Karoi Properties (the companies) were established by the late Brian James Rhodes who died on 29 July 2006.

At least this much is not in dispute.

The companies own commercial premises described as 184 Mutare Rd; 186 Mutare Rd; 188 Mutare Rd; 194 Mutare Road, all in Msasa.

These premises are leased.

Until October 2011, the rentals were being collected by an estate agent, namely, Robert Root and Company. They discontinued agency and accounted to the applicants for rentals held by them.

Certain tenants have continued paying rentals to the applicants.

The applicant averred, in its affidavit, that, it is currently holding $70,000 in trust by way of accumulated rentals from these tenants.

In its affidavit, the applicant lays out the conflicting claims that it has been saddled with as emanating from triple sources:

(i) The first set of claimants for the rentals is a Trust called Phoenix Trust which the deceased is said to have established in 1998. The first and second respondents (Lourence Erasmus Vermaak and Terence Cobden Rhodes) are identified by the applicants as Trustees asserting that the Trust is the lawful owner of the entire share capital in the companies and to whom the applicants should account for the rentals held as representatives of the companies.

(ii) The second claimant, also laying claim to the rentals is said to be Gideon Hwemende, the third respondent (a former employee of the deceased) whom the applicant indicates in its affidavit as having made diverse claims to shareholdings in the companies ranging from 40%, to 60%, as well as to the entire ownership of the companies.

(iii) The third set of claimants are the fourth to ninth respondents (Valentine Mushore, Alfred Chademana, Joel Tandera, Oliver Chibage, Farai Mutizwa and Calisto Vengesai), who, in their capacity as Directors appointed by the third respondent (Gideon Hwemende), lay claim to interests in the companies.

The affidavits and various annexures filed by the different claimants bear the hallmarks of a dramatic 'corporate soap opera' characterised by intrigue; alleged chicanery; resultant grievance.

It is necessary to set out the facts somewhat fully from the papers filed of record as they have a bearing in determining in whose favour the balance emerges in terms of this interpleader application.

The Facts

Mr Lourence Vermaak, the first respondent, initially submitted an opposing affidavit on 12 March 2013 which was later withdrawn and expunged from the record by court order obtained as a result of a default judgement.

From the correspondence on file, the reason for the seeking that this initial opposing affidavit be withdrawn was because it had been obtained through coercion.

However, by the time of its withdrawal, the third to ninth respondents had filed their own opposing affidavits in which they drew heavily, in asserting their claims, on this initial affidavit. Even after the first and second respondents had filed their new affidavits, the third to the ninth respondents appear to have ignored the fact that this document was obliterated by an order of this court.

Whilst bearing in mind that the document was wiped out, it is necessary to set out, briefly, its contents in order to give some context to the election by the third to ninth respondents to hang on its every word despite the court order stating that it is expunged from the record.

In the expunged affidavit, the first respondent averred that he had resigned as Trustee of Phoenix Trust and Director of Beverley East Properties - which is not in dispute.

He denied having laid claim to owning or representing the companies.

He asserted that he had appointed himself as Director when he saw that the companies were lying idle. He also swore that the second respondent, Terence Cobden Rhodes, had been appointed fraudulently by him (with one Kenny Regan) without his knowledge and that the second respondent was not even aware that he is a director or was a director.

In a dramatic twist to the applicant claim of a dispute, the first respondent refuted that the shareholdings in the companies were in dispute in any way. He also stated that the third (Gideon Hwemende) and the ninth (Calisto Vengesai) respondents are current directors and shareholders of Beverly East Properties and that he had no problems with this nor did he have any interest in the matter.

Attached as annexures were letters of withdrawal as Director of Beverly East Properties.

The eighth respondent, Farai Mutizwa, in his purported capacity as Director of Beverly East Properties, deposed to an affidavit in which he essentially embraced the first respondent's affidavit as embodying the correct position. He confirmed that the first and second respondents had resigned and had not laid any interest in the companies as they had resigned as both directors and company secretaries. He also stated that ownership and control are in the hands of the remaining respondents and that there are no contradictory or competing interests.

He also said that the third respondent (Gideon Hwemende) is a director in the company.

He referred to the only dispute as that pertaining to Directorship of Karoi Properties, a case which he said they were making frantic efforts to resolve.

In that case, which I will allude to later, JUSTICE ZHOU ordered tenants of Karoi Properties to deposit rentals into the account of the Registrar until the matter of ownership is resolved.

The fourth, fifth, sixth, seventh, and ninth respondents submitted affidavits in support of the eighth respondent's averments.

The third respondent (Gideon Hwemende), who was separately represented, initially deposed to his own affidavit on 18 March 2013. He withdrew, through a letter from his legal practitioners to the Registrar of the High Court, two days after its submission on 20 March.

In its place, he submitted an affidavit stating that he too was embracing the affidavit deposed to by the eight respondent.

It is necessary to state, briefly, the contents of this affidavit as its contents have a bearing on why it was withdrawn.

In addition, its contents also have some bearing on the first respondent's later affidavit.

In his initial affidavit, he gave a totally different picture of the share ownership pertaining to the company compared to that deposed to by the first respondent. He did not assert full ownership, but, instead, claimed that he had acquired 60% of the shareholding, with the remaining 40% belonging to the estate of the late Brian James Rhodes. He sought to shed light on how he came to own what he asserted as 60% of the company.

In essence, his claim was that he had been employed as clerk by Brian James Rhodes in 1990 who was the sole shareholder of the companies. He was elevated to controlling all the accounts for the companies in 1992 which included mining companies. He said that when Brian James Rhodes became old, he proposed that he buy shares in Beverly East Properties in 1999 so that he could become the majority shareholder. His claim was that the deceased said he would work out a plan since the third respondent did not have money.

He asserted, that, in 2002, the said Brian Rhodes indicated that he was handing him 60% of the company and drew up shareholding agreements. He also gave him the title deeds of three properties Lorely, Beverly East, and Karoi Properties.

He further averred, that, by 2006, had paid up for the 60% shareholding in each of the two companies, and that, at the time of his death, Brian Rhodes owned 40% of the company. He further submitted that he himself had fallen ill, and, for seven years, and could not control the two companies.

It was during this time, he said, that the companies had been left with no Directors and that the first and second respondents had illegally appointed themselves.

He alleged that there is no record of how Phoenix Trust came to own 80% or 100% of the shareholding in the two companies.

He had submitted documents to support his claim in the form of receipts from a petty cash book to show purchase. He also attached annexures of the Share Agreements in Beverly East and Karoi Properties.

Also among the annexures was a copy of a letter, purportedly by Brain James Rhodes, offering the third respondent the properties in 2002.

Also included was a company resolution, also from 2002, appointing the estate agents as managers of the property.

Turning back to the first respondent, he withdrew his initial opposing affidavit on 27 May 2013.

Having the court's blessing to breathe freely again and file new papers on the basis of a court order granted by JUSTICE MATHONSI, under case No. HC3889/13, he filed a new opposing affidavit on 12 July 2013.

Equally unfettered by the first respondent's initial affidavit, the second respondent (Terence Cobden Rhodes) also filed his own opposing affidavit.

In his new opposing affidavit, the first respondent disputed the third respondent's (Gideon Hwemende) claim to shareholding on a number of grounds:

He asserted, that, from the evidence produced by the third respondent, he could not be owner as he had failed to produce proof of actually paying for the shares, neither had he shown any proof of paying any capital gains tax on the shares as required by the Capital Gains Tax Act [Cap 23:01]. He also stated that no such share transfers were ever processed by the first respondent's company that was at the time managing the two companies as company secretaries.

In addition, he attached a number of annexures which included a document examiners report disputing the signatures to the Share Agreements that had been produced by the third respondent.

The examiner opined that the signatures could have been forged but that he required to see the originals.

What clearly does not help the third respondent's claims is that also included were a proven forged letter in which he had claimed 100% ownership, from 40%, through indigenisation.

The first respondent also questioned why the company needed to be indigenised, if, as claimed by the third respondent in the affidavit he had initially filed, he already owned 60% which would mean the company was already compliant with indigenisation.

The second respondent, Terence Cobden Rhodes, submitted an affidavit as Trustee of Phoenix Trust.

He asserted that he has never resigned as Trustee of Phoenix Trust or Director of Beverly East Properties (Pvt) Ltd and Karoi Properties (Pvt) Ltd. He insisted, in his affidavit, that the entire shareholding of the two companies is with Phoenix Trust.

He refuted the claim by the third respondent, Gideon Hwemende, that he owns 60% of shareholding of either company.

The Issues

Having brought the application as an interpleader, the applicant made it clear that it is a disinterested party in the proceeding and will abide by the decision of this court.

Counsel for the first and second respondents (Lourence Erasmus Vermaak and Terence Cobden Rhodes) argued, in limine, that, the fourth-ninth respondents (Valentine Mushore, Alfred Chademana, Joel Tandera, Oliver Chibage, Farai Mutizwa and Calisto Vengesai) have no locus standi as the Directors in their personal capacity.

Owing to the distinct legal persona of a company which is separate and distinct from its members and shareholders, he argued that they cannot arrogate to themselves to sue what can only be legally suffered by Beverly East Properties and Karoi Properties.

Where wrong is done to a company the proper complainant is the company itself.

The following cases were cited in support of these averments: Salomon v Salomon & Co Ltd [1897] AC 22; Dadoo Ltd & Others v Krugersdorp Municipal Council 1920 AD 530; Foss v Harbottle (1893) 67 ER 169; Wallersteiner v Moir (No.2) [1975] 1 All ER (CA) 849.

He also argued, that, the claim for the fourth-ninth respondents must fail on the basis that they do have a direct and substantial interest in the matters as they are not even shareholders.

He further submitted that their appointment as Directors rests on a person whose ownership is disputed and that one cannot appoint directors to a company to which one has been unable to prove ownership.

He argued, that, the third respondent had failed to show ownership of the property and had merely managed to put forward a series of inconsistent claims.

The third respondent did not file any heads of argument neither did he appear in court on the appointed day. He was therefore in default and was barred.

Counsel for the fourth to ninth respondents argued that there was no dispute of fact as regards ownership on the basis of the first respondent's initial affidavit - despite the fact that this had been legally withdrawn and substituted.

She insisted that both the first and second respondents had resigned from the company.

She argued that the Directors were properly before the court as it is their duty to manage the company as agents of the company.

Turning to these arguments.

The rule is indeed well established that a company is a separate legal persona capable of suing and being sued in its own name. As such, shareholders have passive role especially where a company can use its corporate character to obtain redress for the alleged wrong.

Where the wrong doers are the directors themselves, there are obvious challenges in that they cannot bring a claim against themselves. Thus, under the exception to the rule in Foss v Harbottle (1893) 67 ER 169, a shareholder can bring a derivative action as a corporate shareholder to address a wrong done to the corporation.

It seems to me, that, a practical approach to addressing the issue of the Directors locus standi in this case, is an analysis of the relationship between shareholders and directors and the roles attendant upon each.

A person who has acquired shares in a company, and can produce irrefutable proof of such ownership, has a right to play a central role in the governance of such company. Among such roles that a shareholder is entitled to play include the appointment and removal of directors and addressing issues of their remuneration.

The appointment and removal of auditors, as well as issues to do with their remuneration, is another such role.

Dealing with issues of management and business of the company and also any issues to do with the company's constitution is yet another.

Directors so appointed by a legitimate shareholder have the right to commence litigation in the company's name; to buy and sell property; to employ people; and to conduct the business of the company, among some of their rights.

The difficulty on the case before me is that the Directors have been appointed by a person whose very claim to ownership is strongly challenged.

The Directors, in the persons of the fourth to the ninth respondents (Valentine Mushore, Alfred Chademana, Joel Tandera, Oliver Chibage, Farai Mutizwa and Calisto Vengesai), do not deny that they were appointed by the third respondent in his capacity as shareholder.

As conceded by counsel for the fourth to ninth respondents, none of them are shareholders.

The annexures that were included in this application, by the first respondent, indeed reveal that the third respondent's claim to share ownership rests on quick sand.

As stated by the first respondent, there is no evidence of the requisite tax having been paid for the shares as required by the law; neither is there actual proof of payment for those shares.

Whilst admittedly not conclusive, the forensic report suggests that the signatures to the Share Agreements may have been forged.

What clearly does not help the third respondent's claim to share ownership is the annexure of a court case involving him which details proven submission of a forged document in claim of 100% ownership to one of the properties in this case.

In the matter of South Mark Trading (there were 12 other companies cited in that matter) v Karoi Properties & Lorna Kruger & Retired Major Chademana & Gedion Hwemende & National Indigenisation Board HH52-13, which this court takes cognisance of, the tenants of Karoi Properties sought the guidance of the court as to whom to pay their rentals.

Mr Hwemende (the third respondent in the current matter) claimed rentals on the basis of 100% share ownership of the Karoi company. He based his claim on a letter from the National Indigenisation & Economic Empowerment Board (NIEEB) dated 30 September 2011.

That letter, which turned out to be forged, stated that Mr Hwemende, who previously owned 40%, now owned 100% shares in the company.

The National Indigenisation & Economic Empowerment Board (NIEEB) had written, on January 20, 2012 denying Mr Hwemende's claims and emphasising that the indigenisation process in the above-mentioned properties is yet to be finalised.

JUSTICE ZHOU made the following remarks regarding the forged letter and the very tenor underlying the claim:

“The biblical aphorism: 'Whatever a man sows he will also reap' has lost its meaning in our society. This matter presents a sordid picture of a culture of wanting to reap where persons did not sow….,.

The fourth respondent was aware that he could not just wake up to find himself as the holder of all the shares in a company for free. He would know, too, that, the indigenisation legislation does not operate in the manner that he sought to portray to justify his claim to a 100% shareholding in the first respondent.”

In this particular matter, the third respondent initially claimed 60% before throwing his lot with the 100% claim.

The third respondent has undeniably made claims that have ranged from 40% to 60% to 100%.

What is before the court is evidence of claims to ownership which swing like a yoyo.

It is evident, that, from the papers filed of record, that, the assertions of ownership lack veracity and consistency and merely lend credence to the proverb that liars should have good memories.

As this claim has been lodged in interpleader proceedings, what the claimant must allege is succinctly stated in the case of Bruce NO v Josiah Parkes and Sons (Rhodesia) (Pvt) Ltd and Another 1972 (1) SA 68 (R) where GOLDIN J…, stated as follows:

“In my view, in proceedings of this nature, the claimant must set out such facts and allegations which constitute proof of ownership so that the question whether or not to refer the matter to trial would arise only in the event of there being a conflict of fact which cannot be decided without hearing oral evidence.”…,.

The test whether a claimant has discharged the onus of proving his ownership is whether the probabilities are balanced in his favour.

The case of Corlett Drive Estates v Boland Bank BPK and Another 1979 (1) SA 863…, elucidates the purpose of setting out particulars of claim as follows:

“The purpose, inter alia, of the setting out of the claimant's particulars of claim is to acquaint his opponent of the tenor of his case, so that the latter can be put in the position of deciding whether to oppose his claim or not.”

I do not see any real dispute of fact, on the basis of this inter-pleader, that ought to be referred to trial as, in my view, the third respondent (Gideon Hwemende) has not shown this court that he has any real basis for his assertion of ownership.

The third respondent (Gideon Hwemende) did not file heads or make an appearance.

Notably, the third respondent did not challenge the first respondent's application to withdraw his opposing affidavit which he said had been obtained by coercion.

In inter pleader proceedings, where a claimant does not deliver any details of his claim nor appear in support of a possible claim, the court can exercise discretion and order the claim lapsed: see Free State Consolidated Gold Mines Operations BPK v Sam Flanges 1997 (4) SA 644 (O)…,..

If the third respondent had full confidence in his claim, he would have made every effort to defend it to its logical conclusion.

Instead, he withdrew his affidavit in which he had purported to shed light on how he came to acquire the shares. In addition to the withdrawal, he chose to assert his claim on the foundation of the first respondent's affidavit which has been withdrawn and allowed to be substituted by the court. Thereafter, the third respondent could not thereafter be bothered to file his heads of argument or appear in court to file for upliftment of a bar.

Given these realities, the court is entitled to draw the adverse inference, that, in the third respondent's own view, his claim had collapsed, or, for that matter, that a guilty conscience needs no accuser.

Taking all the above into account, I do not think the evidence before this court shows that the third respondent has a valid claim as a share owner.

Accordingly the claim by the fourth to the ninth respondents cannot stand as the third respondent, who appointed them, has failed to prove that he is indeed a share-owner.

I therefore uphold the point in limine raised by counsel for the first and second respondents regarding the lack of locus standi by the fourth to ninth respondents and their claim is accordingly dismissed.

View Appeal
SC61-22 : BDO ZIMBABWE CHARTERED ACCOUNTANTS vs ROBIN VELA and THE AUDITOR GENERAL OF ZIMBABWE
Ruled By: BHUNU JA, MATHONSI JA and CHIWESHE JA

INTRODUCTIONThis judgment involves two consolidated appeals from the High Court (the court a quo) being case numbers SC258/20 and SC285/20. The court issued a consolidation order dated 29 March 2021 by consent of the parties. Both appeals are based on the same record of proceedings and issues in the court ...

INTRODUCTION

This judgment involves two consolidated appeals from the High Court (the court a quo) being case numbers SC258/20 and SC285/20. The court issued a consolidation order dated 29 March 2021 by consent of the parties. Both appeals are based on the same record of proceedings and issues in the court a quo under Case No. HC6503/19.

It was therefore convenient to consolidate the two appeals because the matter was determined by the same judge a quo on the same facts and issues.

The two appeals arise from the same judgement. Each appellant lodged its own appeal against the same judgment in which they were contesting parties.

Both appeals bring into question the judgment of the court a quo which determined that the forensic audit conducted by the appellant, at the behest of the second respondent, was an administrative action subject to review by the court a quo.

In consequence thereof, the court a quo reviewed and set aside the forensic audit for irregularity coupled with costs at the higher scale....,.

POINTS IN LIMINE

At the commencement of the hearing, counsel for the first respondent raised two preliminary points for determination. After hearing arguments from counsel, the court ruled that the two preliminary points be determined in tandem with the main appeal:

(i) The first point of objection in limine is that there is no appellant before the court in this case....,.

WHETHER THERE IS A PROPER APPELLANT BEFORE THIS COURT

Counsel for the first respondent's first contention is that BDO Zimbabwe Chartered Accountants (BDO), being a partnership, cannot sue or be sued in its own name because it has no legal personality. It therefore has no locus standi in any court of law.

For that proposition of law, he placed reliance on the case of Gariya Safaris (Private) Limited v Van Wyk 1996 (2) ZLR 246 (H) in which MALABA J…, observed that:

“A summons has legal force and effect when it is issued by the plaintiff against an existing legal or natural person. If there is no legal or natural person answering to the names written on the summons as being those of the defendant, the summons is null and void ab initio.”

On that score, he submitted that BDO Zimbabwe Chartered Accountants (BDO) was improperly before the court because it was a non-existent legal entity lacking the requisite legal capacity to sue and be sued in its own name.

Counsel for BDO Zimbabwe Chartered Accountants (BDO), on the other hand, countered that a partnership, being an association, can sue or be sued in its own name in terms of Order 2A of the High Court Rules, 1971.

I now proceed to resolve the two conflicting propositions of law submitted by opposing counsel respectively.

The facts in Gariya Safaris (Private) Limited v Van Wyk 1996 (2) ZLR 246 (H) are diametrically different from the facts of this case.

In that case, the applicant had sued and obtained judgment against a non-existent fictitious entity called Con and Son (Private) Limited in the mistaken belief that it was a registered company. When it turned out that it was in fact a fictitious unregistered company, the applicant applied for its substitution with a natural person, one Van Wyk, for purposes of execution alleging that he had acted fraudulently as Managing Director of the fictitious company.

The court found no evidence of fraud and held, as appears from the headnote, that:

“…, in the present case, the proceedings and judgment following the issuing of summons were null and void because the proceedings had been brought before a non-existing defendant. Therefore, there could be no question of the substitution of a new judgment debtor.”

The main distinguishing feature in this case is that BDO Zimbabwe Chartered Accountants (BDO) is not a non-existent party lacking the capacity to sue or be sued in its own name.

While, at common law, in the distant past, partnerships, unregistered associations, and clubs had no locus standi to sue or be sued in their own names except through the names of their individual membership, the law has since changed.

The development and change of the archaic common law in this respect was a progressive endeavour to facilitate easier citation of the parties in a partnership without being bogged down in unnecessary cumbersome citation technicalities.

The applicable law is to be found under Order 2A of the High Court Rules, 1971 which rules were in force when the litigation commenced. They have since been repealed and substituted by S.I.202 of 2021 (SI202/21).

Order 2A is now Rule 11 of the Supreme Court Rules, 2018.

It regulated the citation of partnerships, trusts, syndicates, clubs or any other association which is not a body corporate.

BDO Zimbabwe Chartered Accountants (BDO) reliance on that Rule was therefore apposite.

The capacitation of partnerships, associations, and clubs to sue and be sued in their own names without the cumbersome need to cite each and every member of the unincorporated entities in court proceedings has been a welcome development both at home and in South Africa which has similar jurisprudence as ours.

At home, Rule 7 of the High Court Rules 1971 provided the definition of an association as follows:

“In this Order, 'associate', in relation to —

(a) A trust, means a trustee;

(b) An association other than a trust, means a member of the association;

'association' includes —

(a) A trust; and

(b) A partnership, a syndicate, a club, or any other association of persons which is not a body corporate.”

Undoubtedly, Rule 7 defines an association as including a partnership, a syndicate, a club or any other association of persons which is not a body corporate.

Rule 8 goes on to clothe members of such entities with locus standi to sue or be sued in the name of the association as defined in the Rules. It provides as follows:

“8. Proceedings by or against associations

Subject to this Order, associates may sue and be sued in the name of their association.”

Having conferred members of unregistered associations with locus standi, the law maker was careful to render members of an association accountable for their rights and obligations without hiding behind the association's name.

To that end, Rule 8A of the High Court Rules obliges an association engaged in legal proceedings to provide the other party, upon written request, within five (5) days, with the names and addresses of its associates at the material time when the cause of action arose.

The Rule shields the other party against any prejudice that may arise from the association's lack of legal or corporate status.

Thereafter, it proceeds to provide an elaborate procedure for obtaining the relevant information. It provides as follows:

“8A. Naming of Associates

(1) In any proceedings to which an association is a party, any other party may, by written notice to the association, require a statement of the names and places of residence of the persons who were the association's associates at the time the cause of action accrued.

(2) A person who receives a notice in terms of subrule (1) shall, within five days after receiving it —

(a) Furnish the party concerned with a written statement containing the required information; and

(b) File a copy of the written statement with the Registrar; and the proceedings shall continue in the same manner, and the same consequences shall follow, as if the associates had been named in the summons or notice commencing the proceedings: Provided that the proceedings shall continue in the name of the association except where a writ of civil imprisonment is sought against an associate, in which event the associate shall be specifically named in the civil imprisonment proceedings.”

In interpreting the South African Rule 14, which is similar to our Rule 2A, the learned authors HERBSTEIN & Van WINSEN,,The Civil Practice of the High Courts and the Supreme Court of Appeal of South Africa, 5th ed, Vol 1…, articulate the mischief behind the change as follows:

“Rule 14 facilitates the citation of partnerships, firms, and associations as defendants, as well as allowing those entities to sue in their own names. It has been held by the Supreme Court of Appeal, that, this Rule enables members of an association to assert rights which they hold, by virtue of their membership, in the name of the association.”

From the foregoing, it is plain that the primary distinguishing feature between Gariya Safaris (Private) Limited v Van Wyk 1996 (2) ZLR 246 (H) and this case is that a partnership is covered by Order 2A of the High Court Rules whereas an unregistered company is not.

Since the legislature has not altered the common law in respect of the citation of unregistered companies the position remains the same.

Gariya Safaris (Private) Limited v Van Wyk 1996 (2) ZLR 246 (H) was therefore correctly decided because it dealt with the citation of a non-existent, fictitious, and unregistered company which is not the case here. The decision in that case is therefore irrelevant to the determination of the issues at hand in this case.

Having said that, I find it ironic that it is the first respondent who sued the appellant in case number HC60503/19 citing it in the manner it now objects to.

I therefore find no merit in the first point in limine. It is accordingly dismissed without any further consideration.

HH272-22 : SLASHWOOD MINING (PVT) LTD and ZENIT GROUP LIMITED vs ONTAGE RESOURCES (PVT) LTD
Ruled By: ZHOU J

This is an application for the revival of an order by consent that was granted in Case Number HC13123/12 and for costs of suit.The order in question was granted on 5 December 2012.The application is opposed by the respondent.The background facts to this application are as follows:On 5 December 2012, ...

SC67-21 : COSSAM CHIANGWA and OTHERS vs APOSTOLIC FAITH MISSION IN ZIMBABWE and OTHERS
Ruled By: MAVANGIRA JA, MAKONI JA and KUDYA AJA

This is an appeal against the entire judgment of the High Court, dated 4 September 2019, in which the court a quo granted a declaratur and consequential relief sought by the respondents against the appellants and dismissed the application for a declaratur sought by the appellants against the respondents.

The order of the court a quo erroneously confirmed the terms of a provisional order of the initial urgent chamber application that had, by consent of the parties, been removed from the roll of urgent chamber matters, on 8 October 2018, and enlisted on the opposed roll. The provisional order was substituted by an “amended draft order” filed together with the respondents answering affidavits and heads of argument on 2 November 2018.

The erroneous order was, with the consent of the parties, corrected by this Court in terms of section 22(1)(a) of the Supreme Court Act [Chapter 7:13] in Civil Appeal No. SC527/2019, which was specially lodged by the respondents for that purpose and heard just before the present appeal.

The corrected order of the court a quo, therefore forms the basis of the present appeal.

THE FACTS

The appeal concerns a church dispute between two formations for the control and leadership of the Apostolic Faith Mission in Zimbabwe (the AFM or the church).

The appealed judgment is a consolidation of two applications that were filed separately by the parties.

The first application, HC9149/18, was filed by the first five respondents (Apostolic Faith Mission in Zimbabwe, Aspher Madziyire, Amon Madawo, Munyaradzi Shumba and Tawanda Nyambirai) against the seven hominal appellants (Cossam Chiangwa, Amon Chinyemba, Nathan Nhira, Shepherd Sebata, Donard Mdoni, Arthur Nhamburo and M. Mashumba) on 4 October 2018; while the second application, HC179/19, was filed by the first five appellants (Cossam Chiangwa, Amon Chinyemba, Nathan Nhira, Shepherd Sebata and Apostolic Faith Mission in Zimbabwe) against the second (Aspher Madziyire), third (Amon Madawo), sixth (Clever Mupakaidzwa), seventh (Briton Tembo) and eighth (Christopher Chembere) respondents on 10 January 2019.

In the first application, the respondents sought the nullification of a meeting held by the appellants on 22 September 2018, and all subsequent acts flowing from it while in the second application the appellants sought recognition as the duly elected office bearers of the church and consequential relief.

The High Court granted the first application and dismissed the second, with costs.

The church is a universitas with a written Constitution and consequent regulations, which inscribe its foundational values, confession of faith, mission and governance structures and reposes the power to sue and be sued in its national office bearers in clauses 1.2, 1.3, 1.4 1.4. 6(f) and 12.4.1, respectively.

The dominant protagonists in the two applications were the second respondent (Aspher Madziyire) and the first appellant (Cossam Chiangwa), respectively, who were elected President and Deputy President of the church at the triennial elections in April 2015. The third (Amon Madawo) and fourth (Munyaradzi Shumba) respondents were elected, at the same elections, as General Secretary and National Administrator.

Between August 2015 and 15 September 2018, the Church, led by the Apostolic Council and Workers Council, conducted a Constitutional Review Process (CRP) through a Constitutional Review Committee (CRC) chaired by the fifth respondent (Tawanda Nyambirai), a co-opted member of the Apostolic Council.

The Constitutional Review Process (CRP) was designed to address acute electoral, financial, and governance shortcomings through the amendment of the Constitution and geared to deliver free, fair and credible church elections; strengthen accountability and transparency; and engender parity and equity in the conditions of service of the clergy and development programs of the church in both rural and urban areas.

The Constitutional Review Process (CRP) culminated in the Extraordinary General Meeting (EGM) of the Workers Council of 10 February 2018, which resolved to hold the triennial Provincial and Workers Council elections, due on 28 April 2018, after “the Workers Council considers, and, if deemed fit, passes, with or without amendment, the proposed amendments to the Constitution of the Apostolic Faith Mission in Zimbabwe in terms of the attached draft” at its scheduled meeting of 28 April 2018.

The meeting of 28 April 2018 was terminated unceremoniously without resolving the proposed resolution.

Tonderai Mathende took the Church, the first (Apostolic Faith Mission in Zimbabwe), second (Aspher Madziyire) and fifth (Tawanda Nyambirai) respondents and the first appellant (Cossam Chiangwa) to court under HC4756/18 and obtained an order compelling the 2015 office bearers to reconvene and conclude the aborted Workers Council meeting of 28 April 2018.

By a letter dated 31 July 2018, the second respondent (Aspher Madziyire) called for a Workers Council Meeting to be held on 15 September 2018 in compliance with the court order issued under HC4756/18.

On 15 September 2018, the Workers Council met and considered the proposed Constitutional amendments and “accepted” them subject to the suspension of all the provisions, except for the provisions relating to the conduct of elections, in order to give other church members an opportunity to propose further amendments to the amendments.

The resolution was carried by 2,021 votes, inclusive of the appellants votes, against 35, with no abstentions.

The optimum number of councillors supplied by the respondents was 3,475 councilors against 2,056 provided by the appellants.

On 21 September 2018, the Apostolic Council met to consider the dates and rules for the impending triennial elections.

The provincial elections were to be held on 29 September and 3 October 2018, while the national elections would be on 3 November 2018.

The first appellant (Cossam Chiangwa) told the meeting that “he would go his own way because he did not accept the resolution that was passed by the Workers Council on 15 September 2015.”

Whereupon, he served written notice, dated 20 September 2018, and co-signed by all the appellants (Cossam Chiangwa, Amon Chinyemba, Nathan Nhira, Apostolic Faith Mission in Zimbabwe, Donard Mdoni, Arthur Nhamburo and M. Mashumba), except the fourth (Shepherd Sebata), on his fellow national office bearers of the meeting of 22 September 2018.

Paragraph 2 of the notice implored the targeted audience to:

“Please note that this is a National Workers Council of all those councilors who strongly feel the adoption of the DRAFT resulted in the formation of a totally different church and is in itself a departure from the church that they have always cherished and loved. It is, therefore, a National Workers Council of those councilors who would like to remain in the AFM in Zimbabwe Church which is governed by the old Constitution which the 15th September National Workers Council attempted to repeal.”…,.

The meeting of 22 September 2018, was purportedly attended by 2,056 councillors, comprised of 1,562 delegates and 567 pastors from 513 assemblies with apologies from 137 assemblies.

The attendees ignored the cease and desist call from the second respondent (Aspher Madziyire).

The meeting, inter alia, reviewed and nullified the resolution of 15 September 2018, and, by a total 1,557 affirmative votes, dismissed the serving national bearers, other than the first appellant (Cossam Chiangwa), arrogated to themselves the power to conduct triennial elections on 6, 13 and 20 October 2018 and incited the members to revolt against the defrocked office bearers.

On 25 September 2018, the Apostolic Council abandoned the saved electoral amendments because they were in complete dissonance with the preserved governance structures of the amended Constitution.

On 26 September 2018, the appellants (Cossam Chiangwa, Amon Chinyemba, Nathan Nhira, Shepherd Sebata, Apostolic Faith Mission in Zimbabwe, Donard Mdoni, Arthur Nhamburo and M. Mashumba) spurned the cease and desist order and call to return to the mainstream fold issued by the third respondent (Amon Madawo).

They appointed their own 26 provincial overseers and the fourth appellant (Shepherd Sebata) as the National Administrator to whom church funds were to be remitted.

They also urged all church members to ignore the triennial dates set by the Apostolic Council.

On 27 September 2018, the appellants were suspended without pay and benefits and subsequently charged with participating in an illegal meeting and formenting rebellion, disharmony, confusion, destabilization, disorder, and disturbances against the church; forming a splinter group and usurping the powers of the Apostolic Council and the other office bearers in violation of clauses 1.4.2 and 1.4.6 of the Constitution.

They snubbed the charges and notices of hearing, and were dismissed from their official positions on 15 October 2018 with effect from their respective dates of suspension.

They refused to vacate church premises and surrender church assets in their possession or under their control.

They were permanently replaced as office bearers at the national elections held by the respondents (Apostolic Faith Mission in Zimbabwe, Aspher Madziyire, Amon Madawo, Munyaradzi Shumba, Tawanda Nyambirai, Clever Mupakaidzwa, Briton Tema and Christopher Chembere) on 3 November 2018.

The appellants conducted parallel provincial elections on 3, 6, 7, 13 and 14 October 2018 and Worker's Council elections on 20 October 2018, where the first four appellants (Cossam Chiangwa, Amon Chinyemba, Nathan Nhira and Shepherd Sebata) were elected as President, Deputy President, General Secretary and National Administrator.

It was in their collective capacity, as purported office bearers, that they lodged the second application.

THE ARGUMENTS PRESENTED IN THE COURT A QUO

The First Application

In the first application, the respondents submitted, that, they were the duly elected office bearers of the church, who had legal standing to sue on its behalf for the vindication and protection of its assets through a declaratur and an interdict.

They contended that they had satisfied the requirements for a declaratur prescribed in section 14 of the High Court Act [Chapter 7:06] and the common law requirements for a final interdict and were thus entitled to such relief.

They argued that the meeting of 22 September 2018 was ultra vires the Constitution in that it violated the notice and quorum requirements stipulated in clause 12.7.1 as read with 12.3, clause 13.3.1 of the Regulations and clauses 12.6 and 12.9 and the financial probity arrangements enshrined in clause 12.5 and 12.6 of the Constitution.

They also argued that the vote of no confidence was not only alien to the Constitution but also violated the audi alteram rule.

Lastly, they contended that the appointment, instead of election, of office holders in the church, was anathema to the Constitution.

The appellants took five preliminary points. These were;

(i) That the application was not urgent;

(ii) The respondents did not have locus standi to represent the church as their tenure of office, as national office bearers, had expired on 28 April 2018 and had not been renewed;

(iii) The matter was lis pendens in Mujokeri v Madziyire HC4583/18, in which judgment had been reserved;

(iv) The application was a disguised review of the outcomes of the meeting of 22 September 2018 which could not be sought urgently, on review, or through a declarator; and

(v) Lastly, that there were material disputes of fact, pertaining to the quorum of the meeting of 22 September 2018, which could not be resolved on the papers.

On the merits, the appellants implicitly conceded that their meeting was not convened in terms of the Constitution by ascribing the call to “a big constituency of the church which was clearly not happy with the way the church was going about the Constitutional changes.”

They, however argued, that, this amorphous grouping had the power to dis-appoint just as it had the power to appoint the respondents.

They strongly contended that the resolution of 15 September 2018 was in breach of the mandatory procedural requirements of the two-thirds quorum prescribed in clause 12.6 of the Constitution.

The Second Application

In the second application, the appellants, who baptized themselves as 'the Originals' submitted, that, as the office bearers elected by the church at the triennial elections of 20 October 2018, they had the power to vindicate and protect the assets of the church from the respondents, whom they christened 'the Reform Side' whose tenure of office expired by the effluxion of time on 28 April 2018.

They further submitted, that, the respondents, by violating the amendment clause, clause 12.6 to the Constitution, had, by public acclamation, forfeited their claims to the leadership of the church to the appellants.

The respondents took two preliminary points:

(i) They contended, that, the appellants had no locus standi to represent the church as their election to the national offices was tainted by the illegality of the meeting of 22 September 2018 from which they traced their authority.

(ii) The second was that there were material disputes of fact on the procedure, substance, and effect of the meeting of 22 September 2018 which could not be resolved on the papers.

On the merits, the appellants contended, for the first time in argument, that, the respondents had seceded from the church on 22 September 2018 and therefore did not have locus standi to represent the church.

They argued, that, the respondents sought to overhaul the Constitution and reframe the church in their own image by abandoning the confession of faith and the fundamental doctrines of the church.

THE DETERMINATION OF THE COURT A QUO

The court a quo criticized both parties for raising preliminary points “in such a contentious matter.” It prefaced its decision on the preliminary objections by remarking that:

“Both Madziyire and Chiangwa should have realized that preliminary matters, though permissible in terms of the rules of court, served no purpose in such a contentious matter as the present one.

They should have remained alive to the fact, that, the same required the court to consider the merits of the case as opposed to having the same resolved on the basis of technical issues.

Any technical issue which is not capable of resolving the dispute of the parties is not worth the paper on which it is written. It becomes a time-wasting exercise which does not enhance the work of the court. It should, therefore, be avoided as it constitutes an exercise in futility which is of no benefit to anyone. It does not benefit the party which raises it, let alone the party against which it is raised.

Apart from the issue of lis pendens, which Chiangwa raised, I shall, therefore, deal with all the parties preliminary issues in the body of this judgment. They all relate to the reasons which prompted Madziyire and Chiangwa to file their respective applications.”

In regards to the preliminary objections moved by the appellants in the first application, the court a quo ruled, that, the question of urgency was no longer a live issue; lis pendens could not be sustained as the pending judgment in Mujokeri v Madziyire HC4583/18 had been handed down on 25 March 2019, prior to the hearing before it; there were no material disputes of fact on the quorum of 15 September 2018; and the use of a declarator rather than a review, in the circumstances of the application, was proper, as a nullity could not be reviewed; and, lastly, that, as the respondents were the only office bearers of the church at the time the proceedings were instituted, they had the requisite locus standi to do so.

On the merits, the court a quo, found, that, on a proper application of the operative Constitution of the church, the respondents had established their case on a balance of probabilities and granted them the relief set out in the amended draft order filed on 2 November 2018, as corrected by this Court.

It specifically found, that, they were the office bearers of the church vested with the power to call for, hold, and preside over the Workers Council meetings.

It also held, that, although the triennial anniversary date had passed, on 28 April 2018, clause 13.3.1 of the Constitution as read with clause 13.1.1 of the Regulations, preserved their term of office until the holding of triennial elections in the calendar year in which the triennial year fell; and, in the alternative, that, the common law extended their appointment beyond the triennial anniversary date to the date of the investiture of their elected successors.

It thus found, that, the respondents had proved that the conduct of the appellants, on 22 September 2018, had been motivated by selfish ambition to “illegally snatch power within the church through a coup” and “split the church in their quest for power” and not over any constitutional reform dispute - which reforms they voted in favour of.

It further determined that the meeting of 22 September 2018 suffered from fatal and incurable extrinsic and intrinsic irregularities that were in violation of the Constitution, which rendered the meeting void ab initio.

Lastly, it held that any outcomes that flowed from that meeting were also void and of no force or effect.

On the preliminary issues raised by the respondents in the second application, the court a quo ruled that there were no material disputes of fact which could not be resolved on the averments on quorum on the papers of the appellants in respect of the meeting of 22 September 2018; it upheld the respondents objection on locus standi; it found that the meeting violated the Constitution of the church; further, that, as the Workers Council elections held by the appellants on 20 October 2018 were premised on the meeting of 22 September 2018 they were tainted by these violations; it found both the meeting and the elections invalid and of no force or effect.

On the merits, it held that the appellants bore the onus of establishing, on a balance of probabilities, that the respondents had seceded from the mainstream church and formed a new church by abandoning the church Constitution and adopting the proposed amendments to that Constitution.

It found that the appellants had not placed any evidence capable of discharging the onus.

They had not filed the proposed amendments nor particularized the clauses in the accepted but suspended Constitution that violated the operative Constitution.

Rather, they had produced and relied on the same Constitution as the respondents.

The court dismissed the appellants contention, that, at the time the meeting of 15 September 2018 was held, the respondents tenure of office had expired on two grounds:

(i) The first was that clause 13.3.1 of the Constitution as read with clause 13.3 of the Regulations allowed the office bearers to continue in office beyond the triennial anniversary of their election to any date within the calendar year of such anniversary.

(ii) The second was that the common law abhorred a vacuum and thus allowed office bearers of a universitas to continue in office until elections were held to replace them.

It was on the basis of these findings that the court a quo granted the first application and dismissed the second application with costs.

THE GROUNDS OF APPEAL

The five grounds of appeal raised by the appellants were framed as follows:

“1. The High Court erred in failing to find that the adoption of a new Constitution by the second to eighth respondents and their followers, on 15 September 2018, was unprocedural and not in accordance with the provisions of the Constitution of the fifth appellant.

2. The High Court consequently erred in failing to find that the second to eighth respondents and their followers seceded from the church of the fifth appellant as from 15 September 2018 and therefore had not locus standi to challenge the proceedings of the fifth appellant's church subsequent to that date.

3. The High Court further erred in finding that the appellants had no locus standi to institute the proceedings in case number HC179/19, and, having so found, in going ahead to determine the merits of that application.

4. The High Court further grossly erred in finding that the new Constitution, adopted by the second to eighth respondents, was not a renunciation of the fifth appellant's Constitution when the said Constitution was not placed before the court by the respondents who had the onus to place it before the court.

5. The High Court further erred in finding that the appellants could not seek consequential relief upon the grant of a declarator unless it was combined with an interdict or a claim for a vindicatory relief.”

ISSUES FOR DETERMINATION ON APPEAL

The cumulative import of the first four grounds of appeal was that the court a quo grossly misdirected itself in finding that the respondents, and not the appellants, were the proper office bearers of the church imbued with the requisite legal standing to act on its behalf.

The last ground of appeal interrogates the correctness of the observation of the court a quo that the declarator sought by the appellants was fatally defective for want of vindicatory consequential relief.

The two issues for determination on appeal that arise from all the grounds are:

1. Whether the court a quo was correct in finding that the respondents, and not the appellants, were the recognized office bearers of the church who had locus standi to act on its behalf.

2. Whether the declarator sought by the appellants was not conjoined with consequential relief and therefore fatally defective.

SUBMISSIONS IN THIS COURT

In this Court, counsel for the appellants submitted that the respondents did not have locus standi to institute or defend legal proceedings on behalf of the church because they seceded from the church on 15 September 2018.

He contended that the adoption of the constitutional amendments by the Workers Council, on 15 September 2018, constituted the act of secession in two respects:

The main one was that the adoption was in breach of the peremptory notice and quorum requirements prescribed in clause 12.6 of the Constitution: and, the alternative was that the very adoption of the amendments, whose content was materially at variance with the content of the amended Constitution constituted a renunciation of the original Constitution, and was therefore an act of secession.

He also contended, that, the duty to place the constitutional amendments before the court a quo, which would have established secession, lay on the respondents.

He argued, that, the effect of the act of secession was that the respondents ceased to be office bearers of the church and concomitantly lost the right to represent the church in any legal proceedings lodged after that date.

He further contended, that, it was remiss of the court a quo to further determine the second application on the merits once it had decided the issue of locus standi against the appellants.

Lastly, he contended that the finding of the court a quo, that the relief sought in the second application was fatally defective for failing to con-join the declarator with an interdict cum vindication was incorrect.

Counsel for the respondents submitted, that, the secession argument could not be properly raised in the court a quo or in this Court because it had not been pleaded by the appellants in their opposing affidavits in the first application and founding affidavits in the second application.

He contended, that, the appellants case, in both claims, was based on the purported illegal stay in office subsequent to 28 April 2018.

In the alternative, he argued that the resolution accepting and immediately suspending the constitutional amendments, other than those relating to elections, did not constitute secession.

He contended, that, the respondents remained the only office bearers of the church imbued with the power to represent it in all legal proceedings launched by or against the church.

In reply, counsel for the appellants argued, that, the oblique reference to the negation of the “foundational and fundamental doctrines of the AFM in Zimbabwe and of the AFM International” in the appellants memorandum of 24 September 2018, and the averments in paragraph 46 to 49 of the appellants founding affidavits sufficed to found secession as a cause of action.

THE LAW

The law concerning universitas, and the power of the courts to interfere in their affairs, is reproduced in BAMFORD's The Law of Partnerships and Voluntary Associations in South Africa, 3rd ed…, and restated in various cases such as Dynamos Football Club (Pvt) Ltd & Anor v ZIFA & Ors 2006 (1) ZLR 346 (S)…,; Independent African Church v Maheya 1998 (1) ZLR 552 (H)…, and Independent African Church v Maheya 2000 (1) ZLR 39 (H).

It is that courts generally construe the Articles of Association or Constitution of voluntary associations strictly. Thus, any conduct which falls outside the strict requirements of the Constitution of a universitas would generally be adjudged to be invalid.

This is because the Articles constitute the primary documents in which the nature, manner, and scope of voluntary associations are reposed. It is also from these Articles that voluntary associations derive universal recognition by the courts.

Another established principle of our law is that an applicant's cause stands or falls on his founding affidavit and not in an answering affidavit, while the defence of a respondent stands or falls on his opposing affidavit: see Steinberg v Cosmopolitan National Bank of Chicago 1973 (4) SA 564 (RA)…,; Austerlands (Pvt) Ltd v Trade and Investment Bank Ltd & Ors SC 2006 (1) ZLR 372 (S)…,; Moyo v Zvoma SC28-10; Bonnyview Estates (Pvt) Ltd v Zimbabwe Platinum Mines (Pvt) Ltd SC15-18; and Pountas Trustee v Lahamas 1924 WLD 67…,.

The principles on which secession is based are well settled in this country. They are crystallized in the case of The Church of the Province of Central Africa v Diocesan Trustees, Harare Diocese 2012 (2) ZLR 392 (S).

In that case…, and in Sibanda & Ors v The Apostolic Mission of Port Oregon (Southern African Headquarters) SC49-18…, secession was equated to schism and unilateral declaration of independence and was authoritatively defined as “the separation of a Church into two Churches or the secession of a group owing to doctrinal, disciplinary differences.”

Again, the common law principle governing the expiration of fixed tenure of office bearers was settled in the cases of Padayiche v Pavadai NO & Anor 1994 (1) SA 662 (W)…, and Exparte United Party Club 1930 WLD 277…,.

It is that the tenure of office of elected office bearers is not terminated by the effluxion of time but by subsequent elections that are held for new office bearers.

APPLICATION OF THE LAW TO THE FACTS

Whether the court a quo was correct in finding that the respondents, and not the appellants, were the recognized office bearers of the church who had locus standi to act on its behalf

The appellants nailed their colours on the secession argument.

In so doing, the appellants lost the opportunity to attack the bases upon which the court a quo held that the respondents, and not the appellants, were the proper office bearers of the church who had the legal standing to represent it in legal proceedings.

The case pleaded by the appellants, in the second application, was predicated on the expiration of the triennial tenure of the respondents on 28 April 2018. This was expressly stated in paragraphs 17 to 19 of the appellants main founding affidavit deposed to by the first appellant.

That was why the court a quo relied on clause 13.3.1 of the Constitution as read with clause 13.3 of the Regulations and the common law principle stated in Padayiche v Pavadai NO & Anor 1994 (1) SA 662 (W) and Ex parte United Party Club 1930 WLD 277 for its decision.

The secession argument was raised by the appellants for the first time in their supplementary heads of argument filed a quo some two months after the respondents had filed their own heads.

The supplementary heads were not based on the pleadings before the court a quo.

The failure to plead secession hamstrung the appellant's case in that they failed to particularize the changes rendered to the Constitution, which overhauled rather than amended the Constitution, was the basis for the finding a quo that the appellants had failed to discharge the onus on them to establish secession.

It is for these reasons that I agree with the submission made by counsel for the respondents, in this Court, that, the appellants could not properly premise their grounds of appeal on a cause of action which they did not plead a quo.

The correctness of the submission is borne out by the well-established principle of our law that a case stands or falls on its founding affidavit. It does not stand on the answering affidavit or in correspondence exchanged between the parties before the institution of litigation.

Thus, the contention by counsel for the appellants, that, the oblique reference to the breach of “foundational and fundamental doctrines of the AFM in Zimbabwe and of the AFM International” in the appellants memorandum of 24 September 2018, coupled with the averments made in paragraphs 46 to 49 of the appellants founding affidavit, sufficed to found secession as a cause of action, is incorrect.

The letter addressed to the respondents, on 24 September 2018, is not a pleading. The contents of that letter were not pleaded in the appellants founding affidavits and they do not, standing on their own, constitute pleadings.

Paragraphs 46 to 49 of the appellants founding affidavit merely summarized the schism that existed in the church in the aftermath of the unconstitutional meeting held by the appellants on 22 September 2018, and constituted the concluding remarks of the cause of action raised in paragraphs 17 to 19 of the same affidavit.

These paragraphs do not plead secession to be a derivative of the meeting of 15 September 2018.

The submissions made by counsel for the respondents, in this respect, have merit and must be upheld.

The import of this finding is that the appeal should really be dismissed at this stage.

I, however, proceed to deal with the appeal in the further respects that were argued for the sake of completeness.

Counsel for the appellants contended that the failure to strictly abide by the requirements of clause 12.6 of the Constitution invalidated the meeting of 15 September 2018 and the outcomes that flowed from it.

Per contra, counsel for the respondents argued, that, that meeting, together with its outcomes, was valid.

In terms of clause 12.9.1 of the Constitution, the quorum required for a valid meeting for the dispatch of a constitutional amendment is a simple majority of the full complement of the Workers Council.

Whether reliance is placed on the 3,475 total membership figure provided by the respondents or 2,056 figure supplied by the appellants, the quorum was achieved by the recorded total number of 2,056 councillors in attendance on 15 September 2018.

Clause 12.6 of the Constitution provides that:

“To amend this Constitution, written notice shall be given to the General Secretary by Provincial Workers Council, the Apostolic Council, at least six months before the next Workers Council meeting. In the said notice, details must be given of the proposed amendment. Such notice shall then be forwarded to all Provincial Workers Councils in preparation for the next Workers Council Meeting. A two-thirds majority of the Workers Council shall decide whether the Constitution should be amended or not.”

The cumulative and conjunctive requirements to pass a valid Constitutional amendment are that:

1. Six months written notice from either the Provincial Workers Council or the Apostolic Council, or both, be given to the General Secretary before the Workers Council meeting at which the amendments are to be considered;

2. The details of the proposed amendments must accompany the notice;

3. The notice, and the detailed amendments, must be sent to all Provincial Workers Councils before that Council meeting;

4. The quorum for passing the amendment is a two-thirds majority of the optimum membership of the Workers Council.

Counsel for the appellants correctly contended, that, clause 12.4.1 and 12.3.1 of the Constitution enjoins the Workers Council and the Apostolic Council and the office bearers, acting of their own accord, to strictly abide by the letter and spirit of the Constitution. He also correctly contended that the courts are enjoined, by case law, such as Dynamos Football Club (Pvt) Ltd & Anor v ZIFA & Ors 2006 (1) ZLR 346 (S) to generally construe the constitutions of universitas, like the church, strictly.

The meeting of 15 September 2015 was, however, convened on a month's and not six months notice.

The notice emanated from the President and General Secretary and not the Workers Council or Apostolic Council. However, the notice, together with the proposed amendments, were dispatched to the Provincial Councils for the next Workers Council meeting, by the General Secretary.

The parties were at variance on whether the resolution of that day was passed by the two-thirds quorum prescribed in clause 12.6.

The second (Aspher Madziyire) and third (Amon Madawo) respondents did not convene that meeting of their own accord. They did so in obedience to a judicial command emanating from the unopposed Mathende application.

They were commanded to convene the Workers Council meeting on 30 days notice to the members of the Workers Council. The 30 days were to be calculated to commence within 7 days of the service of the order on the last of the respondents cited in that order.

The onus to establish, on a balance of probabilities, the date on which the last of the respondents in HC4756/18 was served with the court order was on the appellants.

They did not adduce any evidence to that effect in their papers.

In the absence of that evidence, the argument by counsel for the appellants, that 15 September 2018, fell outside the outer limits of the court order is unsustainable.

It seems to me, that, the failure of the respondents to abide by the constitutional time frame would not affect the constitutional validity of the meeting for the reason that the time limits for convening the meeting of 15 September 2018 were prescribed by a duly constituted court of law.

It is trite that extant court orders must be obeyed.

This principle was affirmed by this Court in Econet Wireless (Pvt) Ltd v Minister of the Public Service, Labour and Social Welfare & Ors SC31-16…, where BHUNU JA aptly remarked that:

“The doctrine of obedience of the law until its lawful invalidation was graphically put across by LORD RADCLIFFE in Smith v East Elloe Rural District Council [1956] AC 736 at 769 when he observed that:

'An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of illegality on its forehead. Unless the necessary procedures are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders.'

If it were not so, and every litigant challenging the validity of any law was excused from obeying the law pending determination of its validity, there would be absolute chaos and confusion rendering the application of the rule of law virtually impossible. This is because anyone could challenge the validity of any law just to throw spanners into the works to defeat or evade compliance with the law.”

To the same effect is Hodkinson v Hodkinson (1952) 2 ALL ER 567 (CA) at 569C:

“It is the plain and unqualified obligation of every person against, or in respect of whom, an order is made by a court of competent jurisdiction to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it even extends to cases where the person affected believes it to be irregular or even void.”

That order was extant on the date of the meeting.

It, therefore, conferred the imprimatur of validity to the meeting, notwithstanding that it was not in accordance with the constitutionally stipulated six month notice period and that the notice did not come from the constitutionally mandated source.

It is clear to me, that, the first three requirements prescribed by clause 12.6 were met.

The only issue that has exercised my mind was whether the two-thirds threshold of the optimum membership of the Workers Council was met.

If the full membership was the tally sheet figure of 3,475 supplied by the respondents, then the 2,021 councillors who passed the proposed amendments would have been short by 296 of the 2,317 members required to pass the resolution.

My burden was removed by the finding of the court a quo on this aspect.

It accepted the figure of 2,056 councilors, furnished by the appellants, as the established optimum number of the Workers Council.

That finding was not appealed.

The effect of this finding is that the proposed amendments were passed by 98 per cent of the total Workers Council membership - which figure exceeded the minimum 67 per cent constitutional threshold.

Consequently, the resolution of 15 September 2018 met all the procedural requirements prescribed in Clause 12.6.

The alternative contention, on secession, submitted by counsel for the appellants is unsustainable.

The import of the submission is to deny the Church the constitutional power to reframe itself in tandem with evolving contemporary religious developments and thought, which would impact on its shared fundamental religious doctrines and principles.

The Constitution of any organisation is a living document, which must evolve and be amenable to necessary periodic reviews to remain relevant to its vision, mission, and core values.

The church is no exception. It cannot remain trapped in a time warp of a bygone era.

In casu, there were no entrenched or pillar clauses in the church Constitution which precluded the Workers Council from amending the Constitution.

Rather, the Constitution contemplated its own amendment - including the clauses relating to the church's confession of faith, ecclesiastical doctrines, governance, worship, and discipline.

All that was required of the Workers Council was to follow the requirements of Clause 12.6 and the prescribed consultative processes.

It did so subject to the intervening order of court that had to be obeyed in accordance with the doctrine of obedience to the law; an aspect the rule of law.

In any event, a reading of The Church of the Province of Central Africa v Diocesan Trustees, Harare Diocese 2012 (2) ZLR 392 (S)…, suggests that the passing of an invalid resolution does not constitute a renunciation of the fundamental doctrines of the church but merely makes the resolution void ab initio.

I am unable to find, that, by passing an invalid resolution, the Workers Council evinced an intention to secede from the Church.

A void ab initio resolution would be of no force or effect. It would have preserved the subsisting status quo ante, thus guaranteeing the continued validity of the subsisting Constitution and tenure of the elected office bearers.

The alternative submission, predicating secession on the content of the constitutional amendments, would, therefore, be dismissed for lack of merit.

There is a further basis for dismissing the secession argument.

It is, that, the appellants were aware, before their meeting of 22 September 2018, that, the resolution had suffered a still birth at inception and would not be applied to the impending triennial elections.

The awareness is shown by the following factors:

(i) Firstly, the appellants characterized the resolution in the notice of meeting of 20 September 2018 as an “attempt to repeal” the Constitution.

(ii) Secondly, they boasted, in their memorandum of 26 September 2018, that, their unsanctioned meeting had prompted the Apostolic Council to abandon the electoral amendments.

(iii) Lastly, they declined to return to the mainstream fold when entreated to do so on 26 September 2018.

There was therefore no secession by the respondents emanating from the adoption of the resolution at the time the appellants held the meeting of 22 September 2018, conducted their own triennial elections in September and October 2018 and lodged the second application in January 2019.

The further contention by counsel for the appellants, that the appellants were prevented from particularizing the decimation of the subsisting Constitution by the respondents failure to attach the constitutional amendments to their pleadings a quo is clearly disingenuous.

This contention, which relates to the fourth ground of appeal, seeks to place the onus of placing the amendments on the respondents.

In so doing, the appellants overlooked the trite principle of our law, that, he who alleges must prove.

This point was emphatically restated by this Court in Zimbabwe United Passenger Company Limited v Packhorse Services (Pvt) Ltd SC13-17…, as follows:

“The cardinal rule on onus is that a person who claims something from another in a Court of law has to satisfy the Court that he is entitled to it: see Pillay v Krishna 1946 AD 946 at 952–953. It is also settled that he who alleges must prove: see MB Investments (Pvt) Ltd v Oliver & Partners 1974 (3) SA 269 (RA).”

See also Goliath v Member of the Executive Council for the Eastern Cape [2014] ZASCA 182…,.

It is trite that the existence of secession is a question of fact.

The appellants bore the onus to establish secession by producing the proposed constitutional amendments.

They disingenuously claimed that the amendments were hidden from them by the respondents when it was common cause that both hard and soft copies of the documents had been dispatched to all structures on 18 February 2018 and 31 July 2018.

It is clear that the appellants did not attach the proposed amendments to their own pleadings because they were not necessary to establish the case they pleaded in the second application.

This last point on secession is also unmeritorious.

The appellants failed to establish the jurisdictional facts upon which they sought to predicate the secessionist argument.

Accordingly, the first four grounds of appeal must fail.

In the premises, the respondents wielded the power to institute legal proceedings for and on behalf of the church and were entitled to the declaratory order and consequential relief sought, which were designed to protect the assets of the church from the interlopers in the parallel formation.

They properly exercised that power and obtained judgment in their favour in the court a quo, which judgment correctly declared the appellants meeting of 22 September 2018, and all its subsequent outcomes, invalid.

It is trite that all outcomes flowing from an invalid act are also invalid: see Osman v Jhavary & Ors 1939 AD…, and Muchakata v Netherburn Mine 1996 (1) ZLR 153 (S)…,.

The meeting of 22 September 2018 was the genesis of the appellants secession from the mainstream church which had matured by the time they held their own parallel elections in October 2018 and filed the second application in January 2019.

The finding a quo, that it was the appellants who seceded, is therefore unassailable.

I uphold the finding a quo, that, election year referred in clause 12.9.1 of the Constitution as read with 13.3.1 of the Regulations, correlated to the 2018 calendar year in which the triennial cycle fell.

Again, Padayiche v Pavadai NO & Anor 1994 (1) SA 662 (W) and Ex parte United Party Club 1930 WLD 277 are authority for the proposition that office bearers continue to hold office even beyond their prescribed time until replaced by election.

The finding of the court a quo, to the same effect, is unassailable.

The finding that the meeting of 22 September 2018 was a nullity undermines the basis upon which the second application was conceived.

It was premised upon the legitimacy of the 20 October 2018 elections, which, in turn, derived efficacy from the invalid meeting of 22 September 2018. The appellants brought this application as office bearers of the Church, which they were not. They therefore lacked the legal capacity to do so.

The court a quo correctly held, that, they did not have the locus standi to institute proceedings on behalf of the Church.

It is correct that the court a quo then proceeded to deal with other ancillary issues.

The issue of locus standi had been raised by both parties as a preliminary issue in their respective applications.

The finding that the respondents had locus standi, while the appellants did not, adequately resolved the dispute between the parties. It was not necessary for the court a quo to delve into the other issues.

HH02-21 : ERNEST MHAMBARE vs ALFRED MWAZHA and OTHERS
Ruled By: MUREMBA J

Following a leadership dispute in the African Apostolic Church (VaApostora VeAfrica) which is the tenth respondent in this matter, the applicant approached this court, by way of a court application in case number HC2402/20 for a relief.He petitioned the court, in his capacity as an interested party, reverend, and church ...

SC144-21 : FARAI MATSIKA and FAIRGOLD INVESTMENTS (PRIVATE) LIMITED vs MOSES CHINGWENA and 38 OTHERS
Ruled By: BHUNU JA

This is an opposed application for condonation of late noting of an appeal and extension of time within which to file a notice of appeal. The applicant brings the application in terms of Rule 43 of the Rules of Court 2018.THE PARTIESThe first applicant is a former employee of the ...

THE PARTIES

The first applicant is a former employee of the third respondent (the company). He was employed as its Chief Executive Officer. He was dismissed from employment sometime in 2015 following disciplinary proceedings.

The first applicant claimed to own 30% shares in the third respondent through the agency of the second applicant, a duly incorporated company, and, to that extent, a juristic person.

His claim to the directorship of the company is in dispute. He claims to be duly authorised to represent the second applicant, a factor which is also disputed by the respondents.

The first and second respondents are natural persons bearing the same surname of 'Chingwena'.

The third to ninth respondents are duly incorporated companies.

The 10th, 11th, 15th-22nd, 29th, 33rd respondents are also duly incorporated companies clothed with juristic personality.

The remaining parties, though cited, did not appear to oppose the appeal.

The 4th to 38th respondents are companies in which the first appellant alleges the company has investments liable to his 30% claim of the shares allegedly held by the third respondent therein.

THE LAW

The law relating to applications of this nature is well known such that it cannot be the subject of any controversy. The requirements for the application to succeed were spelt out in Kombayi v Berckout 1988 (1) ZLR 53 (S). These are:

(a) The extent of the delay;

(b) The reasonableness of the delay; and

(c) The prospects of success on appeal....,.

BRIEF SUMMARY OF THE CASE

The first applicant approached the court a quo in terms of section 196(1) as read with section 198 of the Companies Act [Chapter 24:03] complaining that the affairs of the company, Croco Holdings (Private) Limited are being, or have been, conducted in a manner that is oppressive or unfairly prejudicial to the interests of some part of the members including himself. The section provides as follows:

“196 Order on Application of Member

A member of a company may apply to the court for an order in terms of section one hundred and ninety-eight on the ground, that, the company's affairs are being, or have been, conducted in a manner which is oppressive or unfairly prejudicial to the interests of some part of the members, including himself, or that any actual or proposed act or omission of the company, including an act or omission on its behalf, is or would be so oppressive or prejudicial.”

The first applicant deposed to the founding affidavit wherein he averred, that, he owns 30% shares in the company whereas the first respondent owns the remaining 70%.

His complaint is that the first respondent has been, and is, abusing his position as the majority shareholder.

He alleged that the first respondent was conducting the company's affairs in an oppressive and prejudicial manner to its members including him.

He averred, that, the first respondent and he were the promoters and founding directors of the company. The first respondent had, however, fraudulently removed his name from the company's register of directors.

He proffered some documentary evidence tending to show that he was an initial subscriber of shares and Director of the company. To that end, he submitted, that, all the essential company records showed that he owned 30% of the shares in the company. He contended that he subscribed for the shares in terms of a shareholding agreement he signed on 27 May 2006.

The first applicant cast aspersions on the first respondent alleging that since 2014 he had conducted himself contrary to the Shareholders Agreement. He further accused the first respondent of making decisions outside the forum of the Board of Directors.

It was his averment, that, in frustration, he offered to sell his shares to the first respondent but he was evasive and non-committal. Eventually, the first respondent turned the tables against him and began to dispute his shareholding in the company. They, however, subsequently met and agreed that the shares be evaluated before disposal. Despite having ordered that evaluation of the shares be carried out, the first respondent, again, made an about turn and denied ever having entered into such an agreement with him.

Having failed to resolve their differences amicably, the first applicant alleged that the first respondent proceeded to suspend him from work leading to his dismissal from employment. He has since challenged his dismissal in the courts.

On that score, he complained, that, the first respondent had violated his rights as a shareholder which rights are protected by the Companies Act. Consequently, he implored the court a quo to provide him with the following relief:

“WHEREUPON after reading documents filed of record and hearing counsel;

IT BE AND IS HEREBY ORDERED THAT:

1. A forensic audit and valuation of the 3rd respondent and its investments in the 4th to 38th respondent be and is hereby ordered to be conducted by an accounting firm registered in terms of the Public Accounts and Auditors Act [Chapter 27:12] to be appointed by the 39th respondent within 5 days of granting this order, all fees and costs of the evaluation being paid by the 3rd respondent.

2. 3rd respondent be and is hereby ordered to pay the applicants the full value of thirty percent (30%) of its total issued ordinary shares and 30% of its investments in the 4th to the 38th respondents within 5 days of completion of the forensic audit and valuation; such value having been established in terms of paragraph 1 above.

3. 3rd respondent be and is hereby directed to reduce 3rd respondent's share capital once the full amount of its thirty percent (30%) issued ordinary shares have been paid by 3rd respondent.

4. The Sheriff of the High Court and/or his lawful deputies be and are hereby ordered to execute terms of paragraph 2 above.

5. The 1st respondent pays the costs of suit on a legal practitioner and client scale.”

The respondents opposed the application, arguing that the first applicant was never a shareholder of the company.

They accused him of relying on forged fraudulent documents and challenged him to prove how he had acquired the alleged company shares.

Riding on that challenge, they raised a point in limine disputing his locus standi.

They submitted, that, only a member of a company, in the form of a shareholder, can bring an application in terms section 196 as read with section 198 of the Companies Act. The first applicant, not being a shareholder of the company, was not a member of the company, and, therefore, not qualified to bring the application before the court a quo.

As a second point in limine, the respondents challenged the first applicant's authority to represent the second applicant.

FACTUAL FINDINGS OF THE COURT A QUO

The court a quo found, that, the application was founded on material falsehoods based on fraudulent documents. Both the Shareholders Agreement and the share transfer documents were adjudged to be fraudulent documents. It also found, that, in relation to the point in limine, the applicant was unable to explain two conflicting CR2 documents.

Thus, the court a quo upheld both points in limine.

Ultimately, the learned judge a quo upheld the two preliminary points, and, in the process, found, that, the application was bad at law in that it did not meet the requirements of section 95 as read with section 196 of the Companies Act.

In the result, he dismissed the application with costs....,.

For the sake of completeness, I however feel constrained to briefly deal with his other complaint, that, after finding that the first applicant had no locus standi, the court a quo ought to have struck the matter off the roll instead of dismissing it.

There is absolutely no merit in this submission for the simple reason, that, the court was clothed with an unfettered discretion.

It is trite, that, Appellate Courts are always loathe to interfere with the exercise of judicial discretion save where the exercise of such discretion is injudicious or contrary to public policy.

The learned judge a quo was alive to the fact that he had discretion whether or not to dismiss the application.

Having carefully examined the facts and the law he exercised his discretion with admirable efficacy. In dismissing the application, he placed reliance on the case of Masukusa v National Foods Ltd & Anor 1983 (1) ZLR 232 (HC) where McNALLY J…, had this to say:

“Where the facts are in dispute, the court has discretion as to whether to dismiss the application or allow the matter to go to evidence. The first course is appropriate where an applicant should, when launching his application, have realised that a serious dispute of fact was inevitable.”

The learned judge a quo took the view, that, the applicant took a conscious risk by taking the application route in the face of glaring facts pointing to a serious dispute of facts.

For that reason, he had to bear the consequences of the ineptitude of his lawyers who chose the wrong procedure.

The course of action taken by the learned judge a quo finds support in the dictum of MULLER JA in Tamarillo (Pty) Ltd v BN Aitken (Pty) Ltd 1982 (1) SA 398 (AD)…, quoted with approval in Masukusa v National Foods Ltd & Anor 1983 (1) ZLR 232 (HC) where he observed that:

“A litigant is entitled to seek relief by way of notice of motion. If he has reason to believe that the facts essential to the success of his claim would probably be disputed, he chooses that procedure at his peril; for the court, in the exercise of its discretion, might decide neither to refer the matter for trial nor to direct that oral evidence on the disputed facts be placed before it, but, to dismiss the application.”

The first applicant had previously engaged the first respondent and they had failed to reach an amicable settlement.

He therefore knew, as a matter of fact, that, the respondents were disputing his claim that he was the owner of any shares in the company. By extension, he knew, or ought to have known, that, they were also disputing his documentary evidence tending to prove that he had a 30% shareholding in the company otherwise they would not have disputed his claim.

The first applicant's conduct, in providing fraudulent evidence, as demonstrated elsewhere in this judgment, could only aggravate matters to his detriment.

This is, therefore, a proper case where the naivety of the applicants lawyers was properly visited on their clients as the applicants were not entirely free from blame.

In the final analysis, no fault or misdirection can be laid at the learned judge a quo's door in his treatment of the substantive issues and verdict.

HH28-16 : FARPIN INVESTMENTS [PVT] LTD vs NETONE CELLULAR [PVT] LTD and JUSTICE L.G. SMITH [RETD] - ARBITRATOR
Ruled By: MAFUSIRE J

This was an application for the setting aside of an arbitration award.

The arbitrator, the second responded herein, was a retired Judge of this court.

The basis of the application was that the arbitrator had misconstrued the factual basis of the applicant's claim before him. It was also said, that, the arbitrator's second and final award had contradicted the findings in his first award. This misdirection was said to have led the arbitrator to make an award that was so palpably iniquitous as to be in conflict with the public policy of Zimbabwe, as envisaged by Article 34(2)(b)(ii) of the Model Law, which is incorporated in the Arbitration Act [Chapter 7:15].

The applicant also challenged the arbitrator's order of costs against it on the punitive scale of attorney and client and said, or implied, that, it was irrational, especially in circumstances where not only the arbitrator had given no justification or explanation for it, but also where the first respondent had not asked for such a scale.

Finally, the applicant also challenged the arbitrator's order that his costs be met by the applicant alone. The award of costs in such a manner was cited as another example of the lack of logic in, and the iniquitous nature of the award.

The first respondent opposed the application.

It supported the arbitrator's award and submitted that the applicant had misconstrued the arbitrator's findings in his initial award, which, it was argued, were no more than a re-statement or formulation of the issues for arbitration.

The papers were moderately voluminous. From the onset, I endorse the applicant's self-criticism in its heads of argument, that:

“…,. (T)he arguments in the submissions by the parties are somewhat convoluted, and, in some instances, intended to confuse the real issues.”

Not only that, but, the applicant's affidavits were prolix, repetitive, and argumentative. But, shorn of that, I believe the facts and the issues were simple and straightforward.

They were these:

(a) The Facts

The first respondent was a public cellular telephone operator. It was a private company. The applicant was also a private company. The genesis to the dispute between the two was the relationship that they entered into on 23 February 2009. As at that date, the first respondent was a 60% shareholder in another company called Zellco Cellular [Private] Limited [“Zellco”]. This shareholding had come about following a debt-equity swap.

The arrangement had been induced by Zellco Cellular's failure to remit what had been due by it to the first respondent.

Zellco Cellular's indebtedness to the first respondent had arisen out of a relationship that had existed between it and the first respondent since the year 2001. That relationship had been created in terms of a certain written agreement titled 'Service Provider Agreement' [hereafter referred to as “the SPA”].

In terms of the Service Provider Agreement, Zellco Cellular had been appointed to supply and distribute, inter alia, the first respondent's radio-linked telephone services to Zellco Cellular's own customers whom it would bill, and collect payments from, in connection with those services. In return, Zellco Cellular would be paid a commission by the first respondent. This would be deducted up-front and the net remitted to the first respondent.

The life-span of the Service Provider Agreement had been five years, but had been subject to renewal.

As at 23 February 2009, when the first respondent entered into the aforesaid relationship with the applicant, the Service Provider Agreement (SPA) had been renewed for another five years, from 21 November 2006 to some date in 2011.

Thus, when the applicant and the first respondent started their relationship, on 23 February 2009, the Service Provider Agreement (SPA) had still about two more years to run.

The relationship that the applicant and the first respondent created, on 23 February 2009, as aforesaid, was a straightforward sale of shares agreement. They executed a written document titled “Agreement of Sale of Shares”] [hereafter referred to as “the ASS”].

In substance, the first respondent sold to the applicant its entire shareholding in Zellco, i.e. the aforesaid 60% equity, for a certain sum of money.

It seemed common cause, that, the applicant had paid the purchase price in accordance with the agreement.

The fall-out between the parties was in respect of clause 13 of the Agreement of Sale of Shares.

The dispute was multi-faceted.

As I understood it, and in my own words, the applicant's position was that the first respondent had breached clause 13, and that, as a result, the first respondent had become liable to it in damages.

The first respondent disputed that it had breached the Agreement of Sale of Shares or that the applicant had been entitled to damages. It accused the applicant of purporting to step into the shoes of Zellco, and suing as if it were Zellco, allegedly in violation of basic tenets of Company Law.

The applicant's rejoinder was that it had not purported to step into Zellco's shoes; that, but for it to claim from the respondent, it had necessarily had to compute what Zellco had been owed by the first respondent by way of commissions in terms of the Service Provider Agreement, both as accrued in the past, and as projected in the future; that, the net amount, after deductions for expenses and contingencies, had constituted the value of its investment in Zellco, and that that was what it had lost as a result of the first respondent's breach.

Initially, the quantum of the applicant's claim was $13, 912,700=61. Subsequently, this was revised upwards to $14,962,121=82.

Zellco was not part of the dispute....,.

Clause 13 of the Agreement of Sale of Shares was undoubtedly the only link between the Service Provider Agreement (SPA) and the Agreement of Sale of Shares. As such, it was what connected the applicant to the SPA - an agreement to which it was otherwise not a party....,.

Clause 13 of the Agreement of Sale of Shares, particularly sub-clause 2 thereof, read as follows:

“13 Duration of Agreement and Life of Service Provider Agreement

13.1….,.

13.2 NetOne undertakes to renew the Service Provider Agreement between Zellco Cellular and themselves in order for Farpin to have the opportunity to realise full value on the shares procured by a further five [5] years from the date of expiry of the current agreement between NetOne and Zellco.”

[b] Arbitration

The dispute between the parties, or rather facets of it, was arbitrated upon, twice, by the second respondent.

In the first arbitration, the applicant challenged the jurisdiction of the arbitrator saying that the dispute was not one to be resolved by arbitration.

The arbitrator ruled against it.

In the course of his award, he made reference to the cancellation of the Service Provider Agreement (SPA) by the first respondent as not constituting a breach of the Agreement of Sale of Shares, but, that the effect of the cancellation had given rise to such breach since the respondent could then not comply with the Agreement of Sale of Shares.

From there, the arbitrator directed the parties to file their statements of claim for the second arbitration on the two issues that he had identified.

The first respondent was ordered to meet the costs of that initial award.

The arbitrator conducted a second hearing at which, among other things, the applicant's witness, an accountant, gave viva voce evidence on how the applicant's damages had been computed.

The proceedings did not go to the “defence” case.

The first respondent applied for the discharge of the applicant's claim.

The application was granted with costs on an attorney and client scale.

The arbitrator's findings and conclusions were as follows:

“Having given careful consideration to the submissions made by the legal representatives of the parties, I consider that there is no privity of contract between the parties.

Clause 13.2 of the SPA does not provide a nexus which would entitle the Claimant to claim damages for the loss of commission and profits suffered by Zellco because of the cancellation of the SPA.

The Claimant cannot step into the shoes of Zellco and claim the alleged damages suffered by Zellco.

In clause 7 of its Statement of Claim, as amended, the Claimant submitted, that, as a consequence of the cancellation of the SPA it suffered damages in the sum of $14,962,121=82 which is made up of three elements:

(i) The first being commission amount due to it (not to Zellco) up to April 2011;
(ii) The second being loss of income [from] April to May 2014; and
(iii) The third being projected loss of income [from] June 2014 to November 2016 and then claim that that was the amount of the damages it suffered.

If income in the sum of $6,688,988=96 was lost by Zellco, that does not mean that Zellco did not make a profit of $6,688,988=96 which it would have passed on to its shareholders. It would have incurred expenses which would have had to be paid from the income received.”

After that, the applicant applied to this court for the setting aside of the arbitrator's decision.

[c] Issues

In order for me to arrive at the conclusion whether or not the arbitration award was impeachable by reason of a violation of the public policy of Zimbabwe, as envisaged by Article 34[2][b][ii] of the Model Law, which is incorporated in the Arbitration Act [Chapter 7:15], the issues, as I see them, were these:

[i] What is the approach of the court where an arbitration award is sought to be impeached?

[ii] Did the arbitrator contradict himself in his two awards?

[iii] Did the first respondent breach the Agreement of Sale of Shares; was the applicant entitled to damages?

[iv] Did the arbitrator misdirect himself by awarding the first respondent costs on a higher scale and ordering the applicant to meet the costs of the arbitrator on its own?

I now proceed to consider the law on the point and to determine the issues as I have identified them above.

[i] Approach of the court vis-a-vis impeachment of Arbitral Award

In terms of Article 34 of the Model Law in the Arbitration Act, this court may set aside an arbitral award only on the grounds specified therein. One of those grounds, which the applicant has expressly relied on in these proceedings, was that the arbitration award was in conflict with the public policy of Zimbabwe as envisaged by sub-article [2][b][ii] of Article 34.

Sub-article [5] of Article 34 states:

“(5) For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this article, it is declared, that, an award is in conflict with the public policy of Zimbabwe if —

(a) The making of the award was induced or effected by fraud or corruption; or

(b) A breach of the rules of natural justice occurred in connection with the making of the award.”

Other than paragraph [b] above, none of the other grounds listed by Article 34, on which this court may set aside an arbitral award, applied to the applicant's situation herein.

The definition of “public policy” in sub-article [5] does not limit the generality of that term as used in sub-article [2][b][ii].

The applicant alleged, that, the arbitrator misconstrued the premise upon which his claim had been presented before him, and that, as a result, he had seriously misdirected himself. It was argued, that, such misdirection had led him to come to a wrong conclusion. This was said to constitute a palpable and intolerable inequity that would hurt the conception of justice in fair-minded persons.

The onus lies on the party that seeks to set aside an arbitral award under Article 34 of the Arbitration Act.

In my view, it is an extremely heavy onus.

I believe, that, in the same way as in they exercise their review powers, superior courts restrain themselves from unnecessarily interfering with the exercise of judicial discretion by the inferior courts or tribunals. Unless the exercise of discretion by the inferior court or tribunal was injudicious or so grossly wrong as to amount to a miscarriage of justice, the superior court will let the decision pass even though it might itself have come to a different decision.

Dealing with the old Arbitration Act, before it was repealed and replaced by the current one, where the ground for setting aside an arbitral award was misconduct of the proceedings by the arbitrator, or the improper procurement of the arbitrator, or of the award, GUBBAY CJ, in Zimbabwe Electricity Supply Authority v Maposa 1999 [2] ZLR 452 [SC] said, at p462E–H:

“…,. [A] party seeking to set aside an arbitral award could succeed only if able to establish either misconduct on the part of the arbitrator or the fact that the award was improperly procured. The word 'misconduct' was to be understood in the sense of some wrongful, dishonest, or improper conduct; a bona fide mistake, whether of law or of fact, on the part of the arbitrator could not be relied upon as a ground for setting aside the award.”…,.

At p466E, the learned Chief Justice, dealing with the current Arbitration Act, said:

“An arbitral award will not be contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in fact or in law. In such a situation, the court would not be justified in setting the award aside. Under Article 34 or 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognise and enforce an award by having regard to what it considers should have been the correct decision.”…,.

In casu, both parties relied on Zimbabwe Electricity Supply Authority v Maposa 1999 [2] ZLR 452 [SC] above.

In particular, the applicant quoted the passage at 466 above, and evidently found support in what the learned Chief Justice went on further to say at p466F–G:

“Where, however, the reasoning or conclusion in an award goes beyond mere faultiness or correctness and constitutes a palpable inequity that is so far reaching and outrageous in its defiance of logic or acceptable moral standards that a sensible and fair minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award, then, it would be contrary to public policy to uphold it.

The same applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue, and the resultant injustice reaches the point mentioned above.”

I now turn to examine the alleged palpable, far reaching, illogical and outrageous inequity by the arbitrator which fair-minded persons would consider would hurt the conception of justice in Zimbabwe if allowed to stand.

This leads me to consider the rest of the issues as I have identified them above.

[ii] Did the arbitrator contradict himself?

One of applicant's refrain was, that, in his first award, the arbitrator had made a positive finding that the first respondent had breached clause 13.2 of the Agreement of Sale of Shares by having cancelled the Service Provider Agreement and that the effect of that cancellation had given rise to a breach of the Agreement of Sale of Shares.

Having made that finding, it was argued, all that had remained, as indeed the arbitrator himself had gone on to direct, was the filing of the parties statements of claim.

I understood the applicant's argument on this to be that the liability of the first respondent for breach of clause 13.2 of the Agreement of Sale of Shares had already been settled by the first award and that the purpose of the second arbitration had merely been to settle quantum.

On the other hand, the first respondent accused the applicant of having misconstrued the arbitrator's statement in the first award. It disputed that the arbitrator had made a finding that there had been a breach and said that he had merely identified that aspect as being one of the issues for arbitration, otherwise he would not have called on the parties to file their statements of claim.

I find against the applicant on this point.

Regarding the generic statement in question, the applicant was guilty of, firstly, selective quoting; secondly, quoting the statement out of context; and, thirdly, misconstruing it altogether.

The applicant repeatedly quoted [i.e. in the founding affidavit, answering affidavit, and heads of arguments] the arbitrator's statement in the first award as follows:

“In my opinion…, the effect of the cancellation did give rise to a breach of the Agreement because Claimant [sic] did not comply with the provisions of Clause 13.2.”

But, that was not all that the arbitrator had said on the point.

The arbitrator's full statement, relevant to that point, was this [with the words removed by the applicant restored and highlighted, and those directly contradicting it highlighted and underlined]:

“It is clear that the cancellation by Respondent, on May 2011, of the Service Provider Agreement it had entered into with Zellco did not constitute a breach of the Sale Agreement Respondent had entered into with Claimant….,.

In my opinion, although the actual cancellation by Respondent of the Service Provider Agreement did not constitute a breach of the Sale Agreement, and, therefore, could not be subject to arbitration in terms of clause 14, the effect of the cancellation did give rise to a breach of the Agreement because Claimant [sic - obviously Respondent] did not comply with the provisions of Clause 13.2.

Had Respondent renewed the Service Provider Agreement in November 2011 and cancelled it a few months later there would have been no breach of the agreement.

I consider that there are two issues giving rise to a dispute between the Parties.

[a] Under 14.1.3 the respective rights and obligations of the parties under the agreement once clause 13.2 became incapable of performance; and

[b] Under 14.1.4, because Respondent breached the agreement by failing to comply with its undertaking in terms of clause 13.2 to renew the Service Provider Agreement for a further 5 years from November 2011.

The first respondent was right.

In his first award, the arbitrator did not, as it were, settle the question of the first respondent's liability for the alleged breach of clause 13.2 of the Agreement of Sale of Shares. He had merely identified that aspect as being one of two issues to be settled in the second arbitration. As paragraph [a] of his formulation of the issues put it, the second arbitration would determine “…, the respective rights and obligations of the parties under the agreement….,.”

The applicant forgets, that, at that stage, the issue before the arbitrator was whether or not the dispute was one to be settled by arbitration.

The arbitrator said it was. He then went on to identify what the issues were.

The applicant's selective quoting of the arbitrator's statement in this regard, and quoting it out of context for that matter, was a self-serving stratagem which was intended to mislead. Therefore, it is my finding, that, the arbitrator did not contradict himself in his two awards in question.

[iii] Did the first respondent breach the Agreement of Sale of Shares; was the applicant entitled to damages?

Without doubt, there was no privity of contract between the applicant and the first respondent in terms of the Service Provider Agreement.

The Service Provider Agreement was between the first respondent and Zellco. That agreement started and ended with these two parties only.

It seems there had been some stray or loose argument to the effect that both Zellco and the applicant had a common shareholding in some respects.

Certainly, at the relevant time, Zellco's chief executive officer also happened to be the chairman of the applicant. But, this set up could not have had any consequence by itself.

Zellco and the applicant were separate legal personae. A wrong done to one was not necessarily a wrong done to the other.

Before me, the applicant accused the arbitrator of misconstruing the premise of his claim before him when he made a finding, that, by suing the first respondent directly for damages, the applicant was attempting to step into the shoes of Zellco.

The applicant said it never stepped, or ever wanted to step, into Zellco's shoes. It said it was not suing the first respondent on the basis of the Service Provider Agreement, to which it was not a party. It was suing the first respondent only on the basis of its breach of the Agreement of Sale of Shares, to which it was a party.

It is important that I capture, accurately, the gravamen of the applicant's argument on this point. It was the jugular vein.

The applicant put its argument this way…,.:

“Contrary to Respondent's allegations and the basis of the ruling by the Arbitrator on the issue, Applicant did not claim everything Zellco would have earned as its profits….,. Zellco's commission was calculated in terms of the SPA, as a percentage of the total income generated from its clients based on the usage of the Respondent's network.

It therefore is no rocket science that in order to determine the commission Zellco would have earned, Applicant needed to calculate or estimate the said total income. Having determined the commission, Applicant went on…, to deduct from the commission all the operating and administrative expenses Zellco would have incurred in earning such commission.

The result is what Zellco would have earned from the operations as its profit and it is this profit that accrues to the shareholders of Zellco and distributed to them as dividends or retained earnings or some other form.

It is this profit, calculated as such, that Applicant is clearly claiming in its statement of claim and particulars of damages.

To the extent that the arbitrator's ruling failed to appreciate this simple fact, it cannot be based on sound legal principles at all and allowing any finding or ruling based on grossly unsound appreciation of fact and such fundamental legal principles to stand would be such an aberration of justice that would no doubt be contrary to the public policy of Zimbabwe which requires that sound legal principles and justice be upheld in such matters.”

Earlier…, the applicant had put forward the same argument as follows:

“The only way the Claimant could have stepped into the shoes of Zellco and sued Respondent for damages suffered by Zellco as a result of the cancellation of the SPA is by suing Respondent in terms of breach of a specific clause of the SPA. Zellco had no shoes in the SSA (no privity of contract) and by suing Respondent for breach of Clause 13.2 of the SSA, the Claimant could not have been doing so in the shoes of Zellco but its own as it clearly has privity of contract.”

I saw no difference. To me, it was all a question of semantics. The applicant was approbating and reprobating.

Plainly, it purported to step into Zellco's shoes and to sue, under the guise of damages, the respondent for money that allegedly would have been due to Zellco.

I find no fault in the arbitrator's findings. But, I explain the situation in my own way.

In terms of the Service Provider Agreement (SPA), Zellco supplied the first respondent's products to members of the public. The profit belonged to the respondent. All Zellco was due was a commission. The applicant had no stake in that.

As a shareholder in Zellco, it would have had to wait for the declaration of a dividend.

If Zellco was pilfering the first respondent's money, then, that was a breach of the Service Provider Agreement (SPA). Indeed, the first respondent complained that Zellco was pilfering its money.

As a result, it instituted proceeding in HC3507/11 saying it had commissioned a firm of auditors who had discovered that Zellco had diverted an amount in excess of $14 million to its other project which had nothing to do with the first respondent. It said it had obtained summary judgment from this court in respect of that money.

All that the applicant said on this point was that the judgment had not been summary judgement, but merely a default judgment against which an application for rescission had been filed.

But, to me, that was neither here nor there. At the time of arbitration, Zellco had an unfulfilled judgment of over $14 million in respect of the first respondent's money. What was worse, Zellco had filed for bankruptcy.

On these facts, clearly, the first respondent had been entitled to cancel the Service Provider Agreement. It had done so. But, apparently, it had botched the cancellation procedure. For that, it had been ordered, by this court, to reverse the cancellation.

It had also been found guilty of contempt of court and fined for having failed, neglected, or refused to reverse the cancellation as had been ordered.

But, that was not the dispute that the arbitrator had been seized with. This was merely an aspect of, or the background to it.

At any rate, the first respondent contended, that, there had been yet another cancellation subsequent to the one in respect of which the applicant had obtained a provisional order and which the applicant had never challenged.

Of course, the applicant disputed that.

But, in my view, the goings-on between Zellco and the first respondent, which were playing out in this court, could not preclude the arbitrator from holding that there had been no privity of contract between the applicant and the first respondent in terms of the Agreement of Sale of Shares.

I find no fault with that decision, let alone one that could be classified as a palpable iniquity that was so outrageous in its defiance of logic or acceptable moral standards and would therefore be in conflict with the public policy of Zimbabwe.

The applicant fixed its sails to the mast of clause 13.2 of the Agreement of Sale of Shares. That clause obligated the first respondent to renew the Service Provider Agreement for a further five years.

The purpose for the renewal was so that the applicant could have the opportunity to realize full value on the shares that it had acquired from the respondent in terms of the Agreement of Sale of Shares.

Clause 13.2 was the only place in the whole Agreement of Sale of Shares that made reference to the Service Provider Agreement.

The clause did not say what would happen if the respondent did not renew as envisaged.

Notwithstanding that, the applicant claimed it knew what would happen.

In paragraph 8.7 of its founding affidavit, it said logic and equity demanded, that, any claim for damages in such circumstances would be a claim based on the applicant recovering that same value from the Service Provider Agreement that it would have derived had that agreement not been cancelled by the first respondent, which cancellation had resulted in the failure by the first respondent to renew the Service Provider Agreement.

But, there was a problem in the applicant's formulation of its alleged cause of action for damages against the first respondent.

In my view, clause 13.2 of the Agreement of Sale of Shares did not override the entirety of the Service Provider Agreement. It only revised the rights and obligations of the parties under the Service Provider Agreement regarding renewal, and not cancellation.

Those parties were Zellco and the first respondent.

The Service Provider Agreement had provisions relating to the rights and duties of the parties under it regarding cancellation. If Zellco frittered away the first respondent's money and the first respondent moved to cancel the Service Provider Agreement, the applicant could not invoke clause 13.2 of the Agreement of Sale of Shares and seek to block the first respondent from cancelling.

Clause 13.2 of the Agreement of Sale of Shares did not have that effect.

That, in my view, was why the arbitrator, in his first award, had surmised, that, had the first respondent renewed the Service Provider Agreement in November 2011, and cancelled it a few months later, there would have been no breach of the Service Provider Agreement.

There was yet another problem with the applicant's formulation of its damages claim.

Any rights arising out of any breach of the Service Provider Agreement, by the first respondent, would accrue to Zellco - not the applicant.

The applicant may have been the majority shareholder in Zellco, and clause 13.2 of the Agreement of Sale of Shares may have been inserted for its benefit; but, to argue that the value accruing to Zellco was the measure of the applicant's damages under the Agreement of Sale of Shares - never mind Zellco's own breach of the Service Provider Agreement, would, in my view, run counter to basic tenets of Company Law.

The applicant was no more than a shareholder in Zellco.

Zellco's money or assets were not the applicant's money or assets. Zellco's debtors were not the applicant's debtors.

The applicant could only rely on such rights as were conferred by its shares in Zellco.

What is a share? What rights does it confer to the holder?

In Borland's Trustees v Steel Brothers & Co Ltd [1901] 1 Ch 279 the plaintiff suggested, that, a share was a sum of money which would be dealt with in a particular manner by what were called, for the purpose of argument, executory limitations. The suggestion was emphatically rejected by the judge, FARWELL J…,.:

“To my mind, it is nothing of the sort. A share is the interest of a shareholder in the company, measured by a sum of money, for the purpose of liability in the first place, and interest in the second, but, also consisting of a series of mutual covenants entered into by all the shareholders inter se…,. A share is not a sum of money settled in the way suggested, but is an interest measured by a sum of money and made up of various rights contained in the contract [i.e. the articles of association], including the right to a sum of money of a more or less amount…,.”

CILLIERS and BENADE on Company Law, Durban Butterworths…, say:

“The term 'share' as such denotes that the holder thereof has a claim on part of the share capital of the company – and does not refer to a right of ownership in any part of the net assets of the company. A share in a company is not a corporeal object but represents a complex of rights and duties.”…,.

Some of the rights accruing to a shareholder via his shareholding in the company, and depending on the type of shares, are the right to dividends when they are declared, and the right to participate in a distribution on liquidation. There is also the right to vote at meetings, and so on.

For the applicant to have sued the first respondent directly to recover what would have accrued to Zellco, simply by virtue of an alleged breach of clause 13.2 of the Agreement of Sale of Shares, which, in any case, did not provide for such a right, amounted to the applicant assuming some derivative right of action but which it has not explained, let alone link to any tenet of Company Law.

The applicant's claim before the arbitrator was evidently based on numerous assumptions, not least, that Zellco had not been in breach of the Service Provider Agreement – despite the judgment of this court; that Zellco was trading profitably and would have made money, not only for the first respondent, but also for itself via the commissions – despite Zellco filing for voluntary liquidation; that Zellco would have declared dividends in all the succeeding years up to November 2016 when the Service Provider Agreement would expire, if it had been renewed, and so on.

I am satisfied, that, when the arbitrator refused to recognise such a formulation for a damages claim, there was nothing palpably iniquitous in his decision that could be said to be far reaching and outrageous in its defiance of logic that sensible and fair minded persons would consider that the conception of justice would be intolerably hurt.

Therefore, on this ground, again, I find against the applicant.

[iv] Did the arbitrator misdirect himself by awarding the first respondent costs on the higher scale and ordering the applicant to meet the costs of the arbitrator alone?

The applicant's claim before the arbitrator was dismissed with costs on the higher scale of attorney and client. Further, the applicant was ordered to meet the costs of the arbitrator on its own.

It has not been clear to me the basis upon which such scale of costs was ordered, or why the applicant was made to meet the costs of the arbitrator all by itself.

The first respondent did not ask for such a scale.

The arbitration clause in the Agreement of Sale of Shares made no provision for the costs of the arbitration. The only provision relating to costs was clause 15. But, this confined itself to the costs of, or incidental to, the negotiation, preparation and execution of the Agreement of Sale of Shares.

In his award, the arbitrator did not explain why he granted such a scale of costs, or why he ordered that his costs be paid by the applicant alone.

In casu, the applicant has made a frontal challenge on the arbitral award on this point. The first respondent's response has been rather muted or equivocal.

The award of costs is wholly a matter in the discretion of the judicial officer: see Graham v Odendaal 1971 [2] SA 611 [AD]; Kruger Brothers & Wassermen v Ruskin 1918 AD 63 and Rautenbach v Symington 1995 SA 583 [O].

Unless a party is guilty of some misconduct, costs are normally awarded on the ordinary scale. That is my understanding of the general principle in the civil courts. But, I see no reason why, in the absence of an agreement to the contrary, or of some other factors affecting it, the principle should not be extended to other fora or bodies exercising judicial or quasi-judicial functions.

In my view, the arbitrator misdirected himself when he awarded costs on the higher scale.

The applicant's claim may have been misconceived, but, the misconception was not so out of the ordinary as to warrant the applicant being mulcted in costs.

Although, even in these proceedings, the applicant may still be kicking against the legal pricks [see Corderoy v Union Government [Minister of Finance] 1918 AD 512…,.], in my view, it has not so gone out of bounds as to attract an adverse order of costs beyond the ordinary scale.

Regarding the order that the costs of the arbitrator should be borne by the applicant alone; again, I have found no explanation anywhere for this.

In my experience, the costs of the arbitrator are generally met by the parties in equal shares.

In the absence of an explanation for a departure from this practice, the arbitrator's costs have to be shared by the parties equally.

In the circumstances, the order of costs by the arbitrator, against the applicant, is set aside and substituted with one of costs on the ordinary scale, with the costs of the arbitrator being shared equally between the parties.

In casu, the applicant has only been partially successful, i.e. on the question of costs. But, to me, such success has been so infinitesimal as to warrant interference with the general principle that the costs should follow the result. Therefore, I make no special order as to costs.

DISPOSITION

1. The application is hereby dismissed with costs.

2. Paragraph 2 of the arbitration award by the Honourable Justice L. G. Smith [Retired], on 2 December 2014, relating to costs, is hereby set aside and substituted by the following:

2.1 The Claimant shall pay the Respondent's costs.

2.2 The costs of the arbitrator shall be borne by the parties in equal shares.

View Appeal
HH264-21 : MUSA KIKA vs MINISTER OF JUSTICE LEGAL & PARLIAMENTARY AFFAIRS and THE CHIEF JUSTICE HONOURABLE LUKE MALABA N.O. and OTHERS
Ruled By: ZHOU J, CHAREWA J and MUSHORE J

It is not in every case that the court would insist on a resolution to authorize or defend proceedings.Where a juristic entity has brought itself before the court, particularly where it is represented by a legal practitioner, it is up to the person alleging want of authority to produce evidence ...

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Law Portal
Zimbabwe

Locus Standi re: Derivative Action, Acting for an Organisation Amidst Leadership Wrangles and the Proper Plaintiff Rule

HH198-10 : BIRCH WILLIAMS vs MARIA KATSANDE and DELITTE PRODUCTS (PRIVATE) LIMITED
Ruled By: MAWADZE J

Appealed
SC34-18 : MINISTER OF MINES and ZIMBABWE MINING DEVELOPMENT CORPORATION and MARANGE RESOURCES PL and ZIMBABWE CONSOLIDATED DIAMOND COMPANY vs GRANDWELL HOLDINGS PL and MBADA DIAMONDS and ANOR
Ruled By: PATEL JA, GUVAVA JA and UCHENA JA

View Appeal
HH193-16 : GRANDWELL HOLDINGS PL vs MINISTER OF MINES and ZIMBABWE MINING DEVELOPMENT CORPORATION and MARANGE RESOURCES PL and ZIMBABWE CONSOLIDATED DIAMOND COMPANY and MBADA DIAMONDS PL and ANOR
Ruled By: MAFUSIRE J

HH564-15 : LAMECK KUFANDADA vs DAIRIBOARD ZIMBABWE LIMITED and JANAWAYS (PRIVATE) LIMITED and MICHAEL MUSAMIRAPAMWE
Ruled By: MTSHIYA J

HH223-13 : HWANGE COLLIERY CO. LTD and HWANGE COAL GASIFICATION CO. PL vs HWANGE COAL GASIFICATION CO. PL and TENDAI SAVANHU and KINGDOM BANK LTD and STANBIC BANK LTD and GUO FENG and ORS
Ruled By: MAFUSIRE J

HH229-15 : IZAYI PARK HOUSING SCHEME (represented by ELINAS GUMBO) vs SHADRECK GWENA and OTHERS
Ruled By: TAGU J

Appealed
SC56-20 : MOVEMENT FOR DEMOCRATIC CHANGE and NELSON CHAMISA and MORGAN KOMICHI vs ELIAS MASHAVIRA and ELIAS MUDZURI and THOKOZANI KHUPE and DOUGLAS MWONZORA
Ruled By: GARWE JA, PATEL JA and GUVAVA JA

HH04-10 : MYDALE INTERNATIONAL MARKETING (PVT) LTD vs DR ROB KELLY and HAMMER AND TONGUES (PVT) LTD
Ruled By: GOWORA J

HH19-11 : JAMESON RUSHWAYA and ANNIE RUSHWAYA vs PATTERSON TIMBA and SWIMMING POOL & UNDER WATER REPAIRS PL and TOLROSE INVESTMENTS PL and MESSENGER OF COURT, KADOMA
Ruled By: MAVANGIRA J

HB189-18 : CLAUDIUS MANAMELA and BRIGHTON NANGA and SIBONGILE MANAMELA vs ROSEWELL ZULU and APOSTOLIC FAITH MISSION OF AFRICA INTL and CLEMENT NYATHI and APOSTOLIC FAITH MISSION OF AFRICA
Ruled By: MABHIKWA J

HH49-09 : DYNAMOS FOOTBALL CLUB (PRIVATE) LIMITED and DYNAMOS FOOTBALL CLUB vs RICHARD CHIMINYA and OTHERS
Ruled By: CHATUKUTA J

HH424-13 : HONEY AND BLANCKENBERG vs LOURENCE ERASMUS VERMAAK and OTHERS
Ruled By: TSANGA J

View Appeal
SC61-22 : BDO ZIMBABWE CHARTERED ACCOUNTANTS vs ROBIN VELA and THE AUDITOR GENERAL OF ZIMBABWE
Ruled By: BHUNU JA, MATHONSI JA and CHIWESHE JA

HH272-22 : SLASHWOOD MINING (PVT) LTD and ZENIT GROUP LIMITED vs ONTAGE RESOURCES (PVT) LTD
Ruled By: ZHOU J

SC67-21 : COSSAM CHIANGWA and OTHERS vs APOSTOLIC FAITH MISSION IN ZIMBABWE and OTHERS
Ruled By: MAVANGIRA JA, MAKONI JA and KUDYA AJA

HH02-21 : ERNEST MHAMBARE vs ALFRED MWAZHA and OTHERS
Ruled By: MUREMBA J

SC144-21 : FARAI MATSIKA and FAIRGOLD INVESTMENTS (PRIVATE) LIMITED vs MOSES CHINGWENA and 38 OTHERS
Ruled By: BHUNU JA

HH28-16 : FARPIN INVESTMENTS [PVT] LTD vs NETONE CELLULAR [PVT] LTD and JUSTICE L.G. SMITH [RETD] - ARBITRATOR
Ruled By: MAFUSIRE J

View Appeal
HH264-21 : MUSA KIKA vs MINISTER OF JUSTICE LEGAL & PARLIAMENTARY AFFAIRS and THE CHIEF JUSTICE HONOURABLE LUKE MALABA N.O. and OTHERS
Ruled By: ZHOU J, CHAREWA J and MUSHORE J

Categories

Law Portal Zimbabwe

Locus Standi re: Derivative Action, Acting for an Organisation Amidst Leadership Wrangles and the Proper Plaintiff Rule

HH198-10 : BIRCH WILLIAMS vs MARIA KATSANDE and DELITTE PRODUCTS (PRIVATE) LIMITED Ruled By: MAWADZE J

Appealed SC34-18 : MINISTER OF MINES and ZIMBABWE MINING DEVELOPMENT CORPORATION and MARANGE RESOURCES PL and ZIMBABWE CONSOLIDATED DIAMOND COMPANY vs GRANDWELL HOLDINGS PL and MBADA DIAMONDS and ANOR Ruled By: PATEL JA, GUVAVA JA and UCHENA JA

View Appeal HH193-16 : GRANDWELL HOLDINGS PL vs MINISTER OF MINES and ZIMBABWE MINING DEVELOPMENT CORPORATION and MARANGE RESOURCES PL and ZIMBABWE CONSOLIDATED DIAMOND COMPANY and MBADA DIAMONDS PL and ANOR Ruled By: MAFUSIRE J

HH564-15 : LAMECK KUFANDADA vs DAIRIBOARD ZIMBABWE LIMITED and JANAWAYS (PRIVATE) LIMITED and MICHAEL MUSAMIRAPAMWE Ruled By: MTSHIYA J

HH223-13 : HWANGE COLLIERY CO. LTD and HWANGE COAL GASIFICATION CO. PL vs HWANGE COAL GASIFICATION CO. PL and TENDAI SAVANHU and KINGDOM BANK LTD and STANBIC BANK LTD and GUO FENG and ORS Ruled By: MAFUSIRE J

HH229-15 : IZAYI PARK HOUSING SCHEME (represented by ELINAS GUMBO) vs SHADRECK GWENA and OTHERS Ruled By: TAGU J

Appealed SC56-20 : MOVEMENT FOR DEMOCRATIC CHANGE and NELSON CHAMISA and MORGAN KOMICHI vs ELIAS MASHAVIRA and ELIAS MUDZURI and THOKOZANI KHUPE and DOUGLAS MWONZORA Ruled By: GARWE JA, PATEL JA and GUVAVA JA

HH04-10 : MYDALE INTERNATIONAL MARKETING (PVT) LTD vs DR ROB KELLY and HAMMER AND TONGUES (PVT) LTD Ruled By: GOWORA J

HH19-11 : JAMESON RUSHWAYA and ANNIE RUSHWAYA vs PATTERSON TIMBA and SWIMMING POOL & UNDER WATER REPAIRS PL and TOLROSE INVESTMENTS PL and MESSENGER OF COURT, KADOMA Ruled By: MAVANGIRA J

HB189-18 : CLAUDIUS MANAMELA and BRIGHTON NANGA and SIBONGILE MANAMELA vs ROSEWELL ZULU and APOSTOLIC FAITH MISSION OF AFRICA INTL and CLEMENT NYATHI and APOSTOLIC FAITH MISSION OF AFRICA Ruled By: MABHIKWA J

HH49-09 : DYNAMOS FOOTBALL CLUB (PRIVATE) LIMITED and DYNAMOS FOOTBALL CLUB vs RICHARD CHIMINYA and OTHERS Ruled By: CHATUKUTA J

HH424-13 : HONEY AND BLANCKENBERG vs LOURENCE ERASMUS VERMAAK and OTHERS Ruled By: TSANGA J

View Appeal SC61-22 : BDO ZIMBABWE CHARTERED ACCOUNTANTS vs ROBIN VELA and THE AUDITOR GENERAL OF ZIMBABWE Ruled By: BHUNU JA, MATHONSI JA and CHIWESHE JA

HH272-22 : SLASHWOOD MINING (PVT) LTD and ZENIT GROUP LIMITED vs ONTAGE RESOURCES (PVT) LTD Ruled By: ZHOU J

SC67-21 : COSSAM CHIANGWA and OTHERS vs APOSTOLIC FAITH MISSION IN ZIMBABWE and OTHERS Ruled By: MAVANGIRA JA, MAKONI JA and KUDYA AJA

HH02-21 : ERNEST MHAMBARE vs ALFRED MWAZHA and OTHERS Ruled By: MUREMBA J

SC144-21 : FARAI MATSIKA and FAIRGOLD INVESTMENTS (PRIVATE) LIMITED vs MOSES CHINGWENA and 38 OTHERS Ruled By: BHUNU JA

HH28-16 : FARPIN INVESTMENTS [PVT] LTD vs NETONE CELLULAR [PVT] LTD and JUSTICE L.G. SMITH [RETD] - ARBITRATOR Ruled By: MAFUSIRE J

View Appeal HH264-21 : MUSA KIKA vs MINISTER OF JUSTICE LEGAL & PARLIAMENTARY AFFAIRS and THE CHIEF JUSTICE HONOURABLE LUKE MALABA N.O. and OTHERS Ruled By: ZHOU J, CHAREWA J and MUSHORE J

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Law Portal
Zimbabwe

HH198-10 : BIRCH WILLIAMS vs MARIA KATSANDE and DELITTE PRODUCTS (PRIVATE) LIMITED
Ruled By: MAWADZE J

Appealed
SC34-18 : MINISTER OF MINES and ZIMBABWE MINING DEVELOPMENT CORPORATION and MARANGE RESOURCES PL and ZIMBABWE CONSOLIDATED DIAMOND COMPANY vs GRANDWELL HOLDINGS PL and MBADA DIAMONDS and ANOR
Ruled By: PATEL JA, GUVAVA JA and UCHENA JA

View Appeal
HH193-16 : GRANDWELL HOLDINGS PL vs MINISTER OF MINES and ZIMBABWE MINING DEVELOPMENT CORPORATION and MARANGE RESOURCES PL and ZIMBABWE CONSOLIDATED DIAMOND COMPANY and MBADA DIAMONDS PL and ANOR
Ruled By: MAFUSIRE J

HH564-15 : LAMECK KUFANDADA vs DAIRIBOARD ZIMBABWE LIMITED and JANAWAYS (PRIVATE) LIMITED and MICHAEL MUSAMIRAPAMWE
Ruled By: MTSHIYA J

HH223-13 : HWANGE COLLIERY CO. LTD and HWANGE COAL GASIFICATION CO. PL vs HWANGE COAL GASIFICATION CO. PL and TENDAI SAVANHU and KINGDOM BANK LTD and STANBIC BANK LTD and GUO FENG and ORS
Ruled By: MAFUSIRE J

HH229-15 : IZAYI PARK HOUSING SCHEME (represented by ELINAS GUMBO) vs SHADRECK GWENA and OTHERS
Ruled By: TAGU J

Appealed
SC56-20 : MOVEMENT FOR DEMOCRATIC CHANGE and NELSON CHAMISA and MORGAN KOMICHI vs ELIAS MASHAVIRA and ELIAS MUDZURI and THOKOZANI KHUPE and DOUGLAS MWONZORA
Ruled By: GARWE JA, PATEL JA and GUVAVA JA

HH04-10 : MYDALE INTERNATIONAL MARKETING (PVT) LTD vs DR ROB KELLY and HAMMER AND TONGUES (PVT) LTD
Ruled By: GOWORA J

HH19-11 : JAMESON RUSHWAYA and ANNIE RUSHWAYA vs PATTERSON TIMBA and SWIMMING POOL & UNDER WATER REPAIRS PL and TOLROSE INVESTMENTS PL and MESSENGER OF COURT, KADOMA
Ruled By: MAVANGIRA J

HB189-18 : CLAUDIUS MANAMELA and BRIGHTON NANGA and SIBONGILE MANAMELA vs ROSEWELL ZULU and APOSTOLIC FAITH MISSION OF AFRICA INTL and CLEMENT NYATHI and APOSTOLIC FAITH MISSION OF AFRICA
Ruled By: MABHIKWA J

HH49-09 : DYNAMOS FOOTBALL CLUB (PRIVATE) LIMITED and DYNAMOS FOOTBALL CLUB vs RICHARD CHIMINYA and OTHERS
Ruled By: CHATUKUTA J

HH424-13 : HONEY AND BLANCKENBERG vs LOURENCE ERASMUS VERMAAK and OTHERS
Ruled By: TSANGA J

View Appeal
SC61-22 : BDO ZIMBABWE CHARTERED ACCOUNTANTS vs ROBIN VELA and THE AUDITOR GENERAL OF ZIMBABWE
Ruled By: BHUNU JA, MATHONSI JA and CHIWESHE JA

HH272-22 : SLASHWOOD MINING (PVT) LTD and ZENIT GROUP LIMITED vs ONTAGE RESOURCES (PVT) LTD
Ruled By: ZHOU J

SC67-21 : COSSAM CHIANGWA and OTHERS vs APOSTOLIC FAITH MISSION IN ZIMBABWE and OTHERS
Ruled By: MAVANGIRA JA, MAKONI JA and KUDYA AJA

HH02-21 : ERNEST MHAMBARE vs ALFRED MWAZHA and OTHERS
Ruled By: MUREMBA J

SC144-21 : FARAI MATSIKA and FAIRGOLD INVESTMENTS (PRIVATE) LIMITED vs MOSES CHINGWENA and 38 OTHERS
Ruled By: BHUNU JA

HH28-16 : FARPIN INVESTMENTS [PVT] LTD vs NETONE CELLULAR [PVT] LTD and JUSTICE L.G. SMITH [RETD] - ARBITRATOR
Ruled By: MAFUSIRE J

View Appeal
HH264-21 : MUSA KIKA vs MINISTER OF JUSTICE LEGAL & PARLIAMENTARY AFFAIRS and THE CHIEF JUSTICE HONOURABLE LUKE MALABA N.O. and OTHERS
Ruled By: ZHOU J, CHAREWA J and MUSHORE J