A
company is a person. It is a juristic person, or, in legal parlance,
a legal persona, but all the same a person. It has an identity
separate from that of its members. It can own property independently
of, and separately from, its members. Thus, a company's assets are
not the members' assets.
These
cardinal principles seem ...
A
company is a person. It is a juristic person, or, in legal parlance,
a legal persona, but all the same a person. It has an identity
separate from that of its members. It can own property independently
of, and separately from, its members. Thus, a company's assets are
not the members' assets.
These
cardinal principles seem to have been purposefully ignored or
inadvertently overlooked in this matter. The result has been
prolonged litigation for over five (5) years.
The
facts were largely common cause.
The
plaintiff was a duly registered private company. At all relevant
times, prior to 16 June 2008, its major asset was an immovable
property situate Stand 12896 Salisbury Township, measuring 3,066
square metres, held under Deed of Transfer No.39/76
and otherwise known as 98 Churchill Avenue, Gunhill, Harare
(hereafter referred to as “the property”). Its principal officer,
in the sense of being the majority shareholder and director, was the
third defendant (hereafter referred to as “Sandra Muir”).
On
21 May 2008, this court, MTSHIYA J, granted a default judgment in
HC1393/08. This followed an application by the first and second
defendants herein who therein were the first and second applicants
respectively. Hereafter, I shall refer to the first and second
defendants as “Mr and Mrs Gurupira” or “the Gurupiras”. The
default judgment effectively directed the plaintiff herein, the first
respondent therein, to transfer the property to the Gurupiras. Sandra
Muir, the second respondent therein, was ordered to sign the
necessary papers within 10 days of the order failing which the
Sheriff, who is the fourth defendant herein, or the Deputy Sheriff,
who is the fifth defendant herein and was also the fifth respondent
therein, would sign the transfer papers in place of Sandra Muir. The
order by MTSHIYA J read as follows:
“IT
IS ORDERED THAT;
1.
The 1st
Respondent [the plaintiff herein] is hereby interdicted from
transferring the property known as No.98 Churchill Avenue, Harare,
also known as a certain piece of land situate in District of
Salisbury Township Lands measuring 3,066 square metres under Deed of
Transfer 39/76 to anyone except the 1st
and 2nd
Applicants.
2.
The property in paragraph 1 above be transferred to Asswell Africa
Gurupira and Jean Jane Gurupira and the 2nd
Respondent [Sandra Muir] is directed to sign all the necessary
documents to finalise the transfer within 10 days of the Order.
3.
Should the 2nd
Respondent fail or refuse to sign the necessary documents to effect
transfer the 4th
or 5th
Respondent [Sheriff and Deputy Sheriff respectively] are hereby
directed to sign all the necessary documents to effect the transfer
by the 3rd
Respondent [Registrar of Deeds] to 1st
and 2nd
Applicants.
4.
The 1st
and 2nd
Respondents shall bear all the costs of this application on
attorney-client scale jointly and severally one paying the other to
be absolved.”
The
order was granted in default of appearance by the plaintiff and
Sandra Muir.
Through
their erstwhile lawyers, Manase and Manase, the Gurupiras said they
had served their application in HC1393/08 in a letter-box at the
property.
Following
that default judgment, the property was transferred to the Gurupiras
on 16 June 2008 under Deed of Transfer No. 4778/2008. The then Deputy
Sheriff for Harare had signed the transfer papers. Manase and Manase
had been the conveyancers. After that, Manase and Manase had applied
for, and had obtained, ex parte, an order of eviction from the
Magistrate's Court.
Meanwhile,
the plaintiff had changed hands.
One
John Legget had become the majority shareholder. This had followed a
series of agreements with Sandra Muir. She, on her part, had by then
emigrated to Israel. One Diniwe Chinyani (“Diniwe”) had been
staying at the property. She had been Sandra Muir's employee of 10
years and more. With the change of ownership of the plaintiff,
Diniwe's continued stay on the property, as an employee of the
plaintiff, had been through an arrangement with John Legget. As the
Messenger of Court was executing the ex parte order of eviction from
the Magistrate's Court Diniwe Chinyani raised alarm. It did not
help. She and her family were evicted. After that, the Gurupiras took
occupation and moved in.
The
plaintiff, through John Legget, filed an urgent chamber application
for rescission of judgment. However, the matter was adjudged to be
not urgent. The plaintiff then filed an ordinary court application
for rescission of judgment. It also sought the reversal of the
transfer of the property from the Gurupiras back to the plaintiff.
Finally, it also sought the eviction of the Gurupiras. The
application was filed under the reference no HC4211/08. The
application was said to have been brought in terms of both Order 9
Rule 63 and Order 49 Rule 449.
The
Gurupiras, through Manase and Manase, opposed the application.
The
matter came before PATEL J…, The learned judge felt that there were
serious and irreconcilable disputes of facts. On 24 September 2009 he
referred the matter to trial. The application would stand as a
summons. The parties would file further pleadings in accordance with
the rules of court. That was done.
The
trial came before me on 10 February 2014.
At
the commencement of the trial counsel for Mr and Mrs Gurupira took an
objection in limine. He submitted that the trial should not proceed.
He said it was a novel procedure to seek rescission by way of a trial
action. By law and by practice, rescission of judgment was always via
the application procedure. It had been a mistake by the court for it
to have referred the matter to trial.
It
seemed both the parties, and the court, had overlooked that point.
The
order by PATEL J, referring the matter to trial, was a nullity. The
trial was hanging on nothing. You cannot put something on nothing and
expect it to stay there. It will collapse. Inevitably, reference was
made to the oft quoted case of McFoy v United Africa Co Ltd [1963] 3
All ER 1169 (PC)…,.
It
being a legal point Mr and Mrs Gurupira could raise it at any stage
of the proceedings. In this regard, reference was made to the case of
Muchakata v Netherburn Mine 1996 (1) ZLR 153 (S).
In
terms of Rule 449, the court could correct its own mistake and
dismiss the claim for rescission without going into the trial.
Counsel
for the Gurupiras further submitted that the moment the court had
decided that rescission would be determined by way of a trial action,
itself an unusual procedure, the Gurupiras had been placed at a
disadvantage. They stood to lose all the benefits that the order of
MTSHIYA J had bestowed on them.
Although
counsel for the Gurupiras arguments did not come out with that much
clarity, I think I have summarised them as accurately as possible.
Counsel
for the plaintiff opposed the application.
He
submitted that there was nothing novel or contrary to law or to
practice for an application for rescission to be referred to trial if
a dispute of fact emerges that is incapable of resolution on the
papers. Until the rescission was granted the Gurupiras did not lose
the benefits accruing to them in terms of the order of MTSHIYA J. It
was, in fact, wrong for a litigant to persist on clinging onto a
judgment that had been snatched in circumstances where the other
party had clearly intended to defend. Reference was made to the cases
of Zimbabwe Banking Corporation Ltd v Masendeke 1995 (2) ZLR 400 (S)
(“the Zimbank case”) and Mufundisi v Rusere 2008 (2) ZLR 264 (H).
After
a brief adjournment to consider the objection I came back to dismiss
it.
Rule
63 reads as follows:
“63.
Court may set aside judgment given in default
(1)
A party against whom judgment has been given in default, whether
under these rules or under any other law, may make a court
application, not later than one month after he has had knowledge of
the judgment, for the judgment to be set aside.
(2)
If the court is satisfied, on an application in terms of subrule (1),
that there is good and sufficient cause to do so, the court may set
aside the judgment concerned and give leave to the defendant to
defend or to the plaintiff to prosecute his action, on such terms as
to costs and otherwise as the court considers just.”
Rule
449 reads:
“449.
Correction, variation and rescission of judgments and orders
(1)
The court or a judge may, in addition to any power it or he may have,
mero metu or upon application of any party affected, correct, rescind
or vary any judgment or order –
(a)
That was erroneously sought or erroneously granted in the absence of
any party affected thereby; or
(b)
In which there is an ambiguity or a patent error or omission, but
only to the extent of such ambiguity, error or omission; or
(c)
That was granted as the result of a mistake common to the parties.
(2)
The court or a judge shall not make any order correcting, rescinding
or varying a judgment or order unless satisfied that all parties
whose interests may be affected have had notice of the order
proposed.”
Even
though in terms of Rule 63 and Rule 449 rescission of judgment is by
way of an application, and the plaintiff had in fact done just that,
these Rules
do not, in my view, take away the court's unfettered discretion to
refer such an application to trial where it is faced with serious
disputes of facts which it is not capable of resolving on the papers.
It may well be desirable to err on the side of caution that where
such an application gets bogged down on such disputes of fact as to
render the court incapable of determining whether or not the
applicant has shown “good and sufficient cause” as Rule 63
requires, rescission should be granted so as to enable the matter to
be canvassed more fully at the trial of the main matter. However,
that does not, in my view, detract from the discretion that the court
always have to refer that particular application to trial for the
determination of “good and sufficient cause” through viva voce
evidence. At any rate, under Rule 449, “good and sufficient cause”
is not a requirement: see Grantully (Pvt) Ltd & Anor v UDC (Pvt)
Limited 2000 (1) ZLR 361…,.
Furthermore,
and in my view, the “court application” that is referred to in
Rule 63 is the same “court application” as defined in Order 1
Rule 3. In Rule 3 it is defined as follows:
“'Court
application' means an application to the court in terms of
paragraph (a) of subrule (1) of Rule 266;”
Paragraph
(a) of subrule (1) of Rule 266 reads:
“226.
Nature of applications
(1)
Subject to this rule, all applications made for whatever purpose in
terms of these rules or any other law, other than applications made
orally during the course of a hearing, shall be made –
(a)
As a court application, that is to say, in writing to the court on
notice to all interested parties;”
Thus,
given the clear wording of Rule 226(1)(a) there can be no doubt that
an application for rescission of judgment, whether made under Rule 63
or under Rule 449 is an application “…, made for whatever purpose
in terms of these rules…,.”
It
is in the nature of an application under Rule 226(1)(a) that where a
dispute of fact arises which is incapable of resolution on the papers
the court can proceed in one of four ways:
1.
The court can take a robust view of the facts and resolve the dispute
on the papers; see Masukusa v National Foods Ltd & Anor 1983 (1)
ZLR 232 (H); Zimbabwe Bonded Fibreglass (Pvt) Ltd v Peech 1987 (2)
ZLR 338 (SC); Van Niekerk v Van Niekerk & Ors 1999 (1) ZLR 421
(SC); and Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949 (3) SA 1155 (T)…,.; or
2.
The court can permit or require any person to give oral evidence in
terms of Rule 229B if it is in the interests of justice to hear such
evidence; or
3.
The court can refer the matter to trial with the application standing
as the summons or the papers already filed of record standing as
pleadings; see Masukusa v National Foods Ltd & Anor 1983 (1) ZLR
232 (H); or
4.
The court can dismiss the application altogether if the applicant
should have realized the dispute when launching the application; see
Masukusa v National Foods Ltd & Anor 1983 (1) ZLR 232 (H); also
Savanhu v Marere NO & Ors 2009 (1) ZLR 320 (S); Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A).
Therefore,
in my view, a court application in terms of Rule 63 is no different
from the court application whose procedure is outlined in Rule 226.
In the exercise of its discretion, the court can refer such an
application to trial.
With
regards to prejudice, I failed to appreciate counsel for the
Gurupiras point. Until rescission was granted I did not understand
how the Gurupiras could be said to have lost the benefits of the
order by MTSHIYA J.
After
the disposal of the point in limine, the trial began in earnest.
