At the outset of the appeal, counsel for the appellants advised the court that he would confine
his submissions to the point raised in Ground 2 (of the three grounds of
appeal), which reads as follows.
“2. The court a quo erred and misdirected itself in
proceeding on the
assumption that the first appellant had taken control of the business
when, on the papers before the court a quo this was an issue in dispute and the
court was required to make a specific finding thereon.”
To his credit, counsel for the appellants was alive to the
fact that the grant of rescission of a judgment is an indulgence of the court
and that an appeal against a decision of the court in such a case would
necessarily involve an attack on the manner of exercise of the court's
discretion. See Barros & Anor v Chimphonda 1999 (1)
ZLR 58 (S)…,; Rule 63 High Court Rules, 1971. Counsel
were agreed that an exercise of judicial discretion could only be interfered
with on limited grounds.
BACKGROUND
The facts forming the background of the appeal can briefly
be stated as follows:
Pursuant to an agreement between the parties, the
respondent sold its furniture manufacturing business, as a going concern, to
the first appellant, represented by its Managing Director, the second
appellant, with effect from 1 June 2013. Included in the sale were, among other
things, furniture production assets, haulage trucks, compressors, and edging
machines. In addition, the entire workforce and liabilities associated with the
business were taken over by the first appellant.
The purchase price was US$110,000= which was to be paid by
way of a deposit of US$92,000= and the balance in stated installments
commencing 28 February 2014.
Because the premises from which the business was conducted
belonged to the respondent and did not form part of the Agreement of Sale, the
first appellant was to pay occupational rent for its continued occupation of
the premises up to 31 January 2014 when it was to move to its own premises. It was acknowledged in the agreement that
the premises had been leased to a prospective tenant and that any failure by
the appellants to vacate the premises timeously would cause substantial loss
and harm to the respondent.
The second appellant signed a Deed of Suretyship by which
he bound himself as surety and co-principal debtor 'unto and in favour of' the
respondent in respect of all the liabilities of the first appellant under the agreement.
The appellants moved onto the premises, and, save for the
deposit of $92,000= which was recorded in the Agreement as having been paid,
made no further payment to the respondent nor did they move out on 31 January
2014 as agreed. The respondent filed a court application for their eviction as
well as an order for the payment of $75,000= which was then outstanding for
occupational rent, as it was entitled to do in terms of the Agreement.
No opposition having been filed within the dies induciae, the respondent obtained a default
judgment as prayed.
Following a writ of execution served on the appellants by
the Deputy Sheriff, the application for rescission of judgment was filed and an
urgent application for stay of execution pending the court's decision on that
application, was made. By consent, the order was granted in the following terms:
“1. The execution of the judgment obtained in Case No. HC1317/14
be and is hereby stayed pending the finalization of the proceedings instituted
in Case No. HC3310/14.
2. In the event that the goods have already been removed
from the premises in execution the second respondent is hereby ordered to
restore possession of same to the first applicant who shall provide transport
to ferry the goods to the premises at corner Bell/Conald, Graniteside, Harare.
3. The costs
shall be costs in the cause.”
Before the court a quo,
the appellants argued that they were
not in willful default because they were misinformed by their security guard,
on whom the papers were served, as to the date on which the application was
served on him and that this caused them to miscalculate the dies induciae and file their opposing papers well out
of time. In addition, they had a bona fide
defence because the Agreement was not operative since it was subject to a
suspensive condition and they had, in consequence, not taken over the business
which was still being operated by the respondent.
The court a quo rejected
the appellants' explanation for the default and found that there was willful
default on the part of the appellants who, cognizant of the risks attendant on
so doing deliberately refrained from filing papers timeously. Regarding the prospects
of success, the court found that the appellants had no bona fide defence since the first appellant had
moved onto the premises and was operating the
business.
THE ISSUE ON APPEAL
The only issue to be determined is whether the appellants
were operating the business.
Clause 2 of the Order sought and obtained by the appellants
for stay of execution proves that the appellant was in control of the assets or
else why would they seek that
possession of the attached property be restored to the first appellant and not
the respondent? The record also shows
that as early as May 2013, the second appellant was holding meetings with the
staff and summoning employees for disciplinary hearings.
In the circumstances, it is quite understandable that counsel
for the appellants was unable to
present, with much force, his argument that the court wrongly proceeded on an
assumption that the appellants had taken over the business. It became obvious, on reading the papers on record
that the appellants were in control of the business.
We find no misdirection in the approach of the trial court.
Consequently, the appellants failed to establish any ground
upon which this Court could properly interfere with the judgment of the High Court….,.
It is for the above reasons that after hearing
submissions from counsel we dismissed the appeal with costs and indicated our
reasons would follow in due course. 