This is an appeal against that judgment.
THE BACKGROUND
On 17 December 2010, the appellant (plaintiff in the court
a quo) issued summons against the respondents (defendants in the court a quo)
in the High Court, Bulawayo under case No. HC2734/10. It sought:
(a) A declaratory order that the Plaintiff has a right of
refusal upon the disposal of the immovable property known as Stand 1396,
Bulawayo and registered in the name of the second respondent regardless of
whether the disposal is by way of sale
of shares in the second respondent;
(b) A declaratory order that the Agreement of Sale of
shares of second respondent entered into by the first respondent and the third
respondent, on 15 and 21 April 2010, is in breach of the Plaintiffs right of
first refusal and therefore invalid;
(c) An order directing the second respondent to enforce the
right of first refusal by selling the property to the plaintiff.
The appellant alleged, inter alia;
(i) That there was a lease agreement between the second respondent
and the appellant in terms of which the second respondent let to the appellant
the premises known as Kings Auction Centre (the property);
(ii) That sometime in or about 30 June 2006, the second
respondent, then represented by one of its Directors and shareholder, one
Graham Leonard Elston (now late), concluded a verbal agreement with the
appellant, represented by one of its Directors, Irene King, in terms of which
the second respondent granted to the appellant, as a sitting tenant, a right of
first refusal in respect of the property should it be put up for sale;
(iii) That as a consideration for the right of first
refusal, the parties agreed that the appellant would, at its own cost,
undertake all necessary repairs and maintenance of the property and pay
instalments towards the eventual purchase of the property;
(iv) That following the conclusion of the Right of First Refusal
Agreement, the parties negotiated and agreed upon a purchase price of $5 billon
for the property, but, before the sale could be finalized, the late Mr Elston
and his wife Elana, both Directors and holders together of all the issued share
capital of the second respondent, died and the appellant remained in occupation
of the property;
(v) That on or about 15 and 21 April 2010, the first
respondent, in his capacity as executor of the estate of the Elstons, concluded
a written agreement for the sale of shares of the second respondent to the
third respondent;
(vi) That the sale of shares agreement had the effect of
disposing of the property to the third respondent in breach of the right of
first refusal granted by the second respondent to the appellant and was
therefore invalid and of no force and effect;
(vii) That the property was the sole asset of the second
respondent and the sale of shares agreement had the effect of disposing of the
shares of the second respondent without compliance with section 183 of the
Companies Act [Chapter 24:03] and for this additional reason was invalid and of
no force and effect.
Thereafter, the following is the sequence of events:
(i) On 1 February 2011, the second and third respondents
entered appearance to defend.
(ii) On 21 February, 2011,
Messrs Coghlan Welsh and Guest, who signed themselves as Defendant's Legal
Practitioners, entered appearance to defend the action on behalf of a defendant
only described as the Defendant. On the
same date, a request for further particulars was filed in the name of the first
Defendant by the same legal practitioners
FIRST
RESPONDENT'S EXCEPTION
Before the requested particulars were filed, the first
respondent, on 29 March 2011, filed an exception to the declaration on the
grounds that it disclosed no valid grounds for the relief sought in that:
(i) No averment was made that the first respondent had, in
fact, sold Stand 1396 Bulawayo Township;
(ii) First respondent had not sold the Stand which remains
registered in the name of second respondent;
(iii) The appellant acknowledged the above facts in paras
13-14 of its declaration; (in these paragraphs it is alleged that the sale of
shares in the second respondent to the third respondent had the effect of
disposing of the property to the third respondent);
(iv) It was not alleged that
the Stand belonged to the Elstons and formed part of their estates; and
(v) That the declaration was vague and embarrassing and the
appellant had failed to rectify its defects.
The first respondent therefore prayed that the exception be
allowed and that the appellant's claim be dismissed with costs.
Rule 119 of the High Court Rules (the Rules) governs the
filing of exceptions. It provides:
“119. Time for filing plea, exception
or special plea
The defendant shall file his plea, exception or special
plea within ten days of the service of the plaintiff's declaration provided
that where the plaintiff has served his declaration with the summons as
provided for in Rule 113 there shall be added to the period of ten days above
referred to the time allowed a defendant to enter appearance as calculated in
terms of Rule 17.”
According to the Notice of Appearance to Defend, the
summons was served on the first respondent on 14 February 2011. The declaration
appears, going by the date thereon, to have been served with the summons in
which event the exception ought, in terms of the above Rule, to have been filed
20 days later, at the latest by 14 March 2011.
The exception was out of time by 15 days.
Nothing further took place until 31 August 2011 - some five
(5) months after the exception was filed. On that date, the first respondent
filed its plea to the merits. By then, the provisions
of Rule 138 of the High Court Rules had come into effect and the exception
could not, in terms of that Rule, be set down for hearing before the trial.
Rule 138 provides:
“138. Procedure on filing special plea,
exception or application to strike out
When a special plea, exception or application to strike out
has been filed -
(a) The parties may consent, within ten days of the filing
to such special plea, exception or application
being set down for hearing in accordance with sub rule (2) of rule 223;
(b) Failing consent, either party may, within a further
period of four days set the matter down for hearing in accordance with sub rule (2) of rule 223;
(c) Failing such
consent and such application, the party pleading specially, excepting or
applying, shall within a further period of four days plead over to the merits
if he has not already done so and the
special plea, exception or application shall not be set down for hearing before
the trial.”
On 27 September 2011, the first respondent joined issue
with the appellant on the pleadings.
THE SECOND
RESPONDENT'S EXCEPTION AND SPECIAL PLEA
On 13 September 2011, the second respondent apparently woke
up to the fact that an exception had been filed by the first respondent on 29
March 2011. It filed 'SECOND DEFENDANT'S EXCEPTION' in which it aligned itself to the first respondent's exception filed of
record on 29 March 2011 and alleged that the appellant's summons and
declaration were vague, bad in law, contradictory and disclosing no cause of
action.
By then, the exception was hopelessly out of time by reason
of its non-compliance with Rule 119.
In addition, on the same date, the second respondent filed
a 'SPECIAL PLEA' in which it alleged that the matter was lis alibi pendens in that the same suit was pending
before the High Court in a court application under case number HC2104/10
referred to trial by NDOU J on 20 June 2011 - some six (6) months after the
issue of summons in this matter. And then, to further complicate matters, the second
respondent, on the same day, filed its plea to the merits as well as a claim in
reconvention in which it sought the eviction of the appellant from the property.
As already noted above, by virtue of the provisions of Rule
138, once the plea had been filed, the matter could not be heard before the trial.
The third respondent's plea was filed on the same day.
The matter proceeded to finality with the plea to the claim
in reconvention being filed and discovery being made by the parties.
Thereafter, it appears that at a pre-trial conference held in the matter under
HC2104/10 (the court application), the two matters were consolidated and referred
to trial. According to the appellant, it was agreed, in principle to
consolidate the issues in both matters and to formalize the fact that only one
issue was to be decided at the trial.
Following the pre-trial conference referred to above, the
parties prepared for trial. On 20 February 2013, the second and third
respondents filed a document stating that to 'avoid unnecessary duplication',
they would rely on the synopsis of evidence and Discovery affidavit filed by
the appellant in case No. HC2104/2010.
On the same date, the first respondent filed a document
entitled 'FIRST DEFENDANT'S ISSUES FOR TRIAL'. In this document, the first respondent set out six (6) issues
for determination arising from the merits of the claims.
A similar document was filed by the second and third
respondents also setting out the issues for determination at the trial.
As a point in limine, they raised the issue that the
summons and declaration were vague and embarrassing, bad in law, contradictory,
and disclosed no cause of action.
Thereafter, on 13 March 2013, the first respondent filed
its discovery affidavit in case number HC2734/10 (the very case in which the
exceptions were taken). The appellant's synopsis of evidence and issues for
trial were adopted by the respondents and the trial was set down, by consent of
the parties, for hearing on 21 and 22 March
2013.
On the first day of the trial, the respondents moved their
exceptions and special plea. The court a quo
heard the exceptions and special plea as a point in limine. Thereafter,
rejecting a plea by the appellant for the grant of leave to amend its
pleadings, it proceeded, without hearing evidence, to dismiss the appellant's
claim with costs on the basis that the pleadings were incurably bad.
GROUNDS OF APPEAL
The main issues raised in the grounds of appeal are:
(i) Whether the court a quo properly entertained the exception and special plea as a point in
limine at the hearing;
(ii) Whether the court misdirected itself in determining
the exceptions on facts and evidence not found within the pleadings excepted to;
(iii) Whether or
not the court erred in dismissing the appellant's claim without affording it an
opportunity to amend the offending pleadings.
These issues are considered in turn.
Whether the court a quo properly entertained the exceptions and
special plea as a point in limine at
the hearing.
The first consideration is that the exception filed by the
first respondent, and the exception and Special Plea filed by the second
respondent, were filed outside the timeframe stipulated in the Rules. The
learned Judge dealt with the breach of Rule 119 in the following terms:
“The Plaintiff
sought to argue that second Defendant filed the exception to the Plaintiff's summons and declaration outside the time limits stipulated
in the rules in that the papers were filed five and a half months after the
Plaintiff's further particulars were served on the second defendant…,. It is beyond argument that the rules do
not provide for an automatic bar against a defendant who files an exception
outside the prescribed time limits.”
He went on to say:
“I am satisfied
that the first and
second defendants' exception and special plea are properly before the court and that
there is no prejudice to be suffered by the Plaintiff because the basis of the
exception and special plea have always been known to them.”
It is true, as the learned
Judge remarked, that there is no sanction for the late filing of an exception
or special plea. However, the provision in the Rules is mandatory and the
documents filed in contravention thereof cannot, in the absence of condonation
of the non-compliance with the Rules, have any legal validity. The sanction
must, in my view be, that the pleading is invalid by virtue of its
non-compliance with the Rules.
The first respondent's exception was filed fifteen (15)
days out of time. The second respondent's special plea and exception were filed
six (6) and a half months out of time. Both applications were in violation of
the Rules, without explanation, without condonation sought or granted. There
was, therefore, no legal basis on which they were entertained by the court a quo.
The second consideration under this head is whether the
court a quo acted properly when it
heard the exception and special plea as a point in limine at the trial.
It was submitted, on
behalf of the appellant, that the two matters, having been consolidated, were
set down for trial in order that the merits of the dispute might be determined.
Indeed, so it was submitted, the two parties were agreed that the central issue
to be decided was whether the appellant had been granted a right of first
refusal in respect of the property. The agreement to set the matter down for
hearing for determination of the central issue meant that the exceptions and special
plea fell away. Had it been the respondents' intention to pursue the exceptions
and special plea, they ought to have proceeded in terms of Rule 138. The appellant, having been
led to believe that the exceptions and special plea had fallen away was now
confronted with them at the trial to its prejudice. It was submitted that the
court a quo erred in allowing the
exceptions and special plea to be argued at the trial without hearing evidence.
Further, and this brings me to the third consideration under
this head; it was submitted that the court a quo erred in holding that there was no prejudice to the appellant in
entertaining the exceptions and special plea at that stage. Had the proper
procedure, as outlined in Rule 138 been followed, the appellant would have had
the opportunity to challenge the exceptions and special plea, and, among other
things, raise any or all of the defences
available to it, including the defence that the exceptions and special plea
were not properly before the court.
It was further submitted that the special plea and
exceptions were abandoned when the matter was, by consent, referred to trial
for the determination of the sole issue agreed upon by the parties.
It appears to me that the matter, having proceeded to
trial, the court a quo ought to have
conducted a hearing to determine the merits thereof. Thereafter, an order of
absolution from the instance or dismissal of the claim on the merits could
properly follow if the court, after hearing all the evidence, was so minded. Having
regard to the purpose of the exception, which is to remove contradictions and
bring clarity to the declaration and summons in order to enable the respondents
to plead thereto, it would seem to me to follow that the fact that the
respondents had pleaded over on the merits and proceeded to set the matter down
for hearing, by consent, and on defined issues, was an indication that they no
longer considered a ruling on the exceptions to be necessary. In the premises,
there is substance in the appellant's submission that the procedure adopted by
the court a quo, in dealing with the exceptions as a point in limine, was prejudicial to the appellant. I
therefore agree with counsel for the appellant that the court a quo erred when it failed to conduct a full
trial and determine the matter on the evidence
adduced.
The determination of this issue in favour of the
appellant is, in my view, dispositive of this appeal. I proceed, however, to
consider the remaining issues. 