Golden Million Engineering (Pvt) Ltd and Ephraim Gwatidzo and Admire Saweto v Old Mutual Property Investments Corporation (Pvt) Ltd and Messenger of Court N.O

### Preamble
1
HH 257-13
HC 6209/13
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GOLDEN MILLION ENGINERING (PVT) LTD

and

EPHRAIM GWATIDZO

and

ADMIRE SAWETO

versus

OLD MUTUAL PROPERTY INVESTMENTS

CORPORATION (PVT) LTD

and

MESSENGER OF COURT N.O

HIGH COURT OF ZIMBABWE

MANGOTA J

HARARE, 7 August 2013

Advocate P Kachidza, for the applicants

A. Mambosasa, for the 1st respondent

MANGOTA J: On 10 June, 2013 the first respondent obtained judgment in the magistrates’ court against the applicants. The judgment which the court a quo granted to the first respondent in the sum of $51 051-98 was for arrear rentals, operational costs, interests and collection commission.

The applicants were not satisfied with the court a quo’s decision in the abovementioned regard. They, on 26 June 2013, noted an appeal against the magistrate’s decision and that appeal is pending before this court.

The papers which are filed of record do not show which of the parties approached the magistrates’ court. What they do show, however, is that:-

either the first respondent applied to the court a quo to execute pending appeal to realise the judgment debt of $51 051-98 together with interest and costs;

or the applicants prayed the same court to stay the attachment and sale of any of their property under case number 12636/12.

However, when the court a quo was approached by one of the parties on this matter,

the court granted leave to the first respondent to execute its judgment pending appeal.

This latter decision of the court a quo prompted the applicants to file two applications with this court.

The applications in question comprise:

a review of the decision which the magistrate made on 23 July, 2013 under case number 12636/12 - and

the present application which the applicants filed on an urgent basis. It is this application which the court  is called upon to consider.

The applicants are seeking a stay of execution following the grant of leave to execute

pending appeal. They stated, in the application, that there would be irreparable economic harm to their business if execution was allowed to take place pending appeal. They stated, further, that the harm would be impossible to redress in the event that the appeal court finds in their favour after execution has already taken place. They, in short, prayed the court to order that the status quo should remain until the application for review which they filed with the court under case number HC 6202/13 has been determined.

The first respondent filed a notice of opposition to the application on 2 August 2013. Its property manager, one Trynos Ngara, the deponent of the first respondent’s opposing affidavit, raised three matters in limine. The matters in question were:

irregular founding papers

material disputes of facts – and

abuse of court process.

The first matter which Mr Ngara raised in limine should be read together with the

founding and supporting affidavits of one Ephraim Gwatidzo and one Admire Saweto respectively. These two are directors of the first applicant. They both claim that the first applicant clothed them with authority to depose to the founding and the supporting affidavits. None of them, however, produced a resolution of the Board of Directors of the first applicant showing that the first applicant had given to him, or them, the authority to depose to the affidavit for and on its behalf. The two concur on the point that the first applicant is a company which is duly registered as such in terms of the laws of this country. The first applicant, from their depositions, is a legal person with the capacity to sue, and be sued, in its own name. It also has the capacity to confer authority on its directors to speak, act, think, write, depose to affidavits and such like matters which natural persons are capable of doing for, and on, its behalf. The only evidence which can be tendered to show that the two directors were clothed with the necessary authority to depose to the founding and supporting affidavits by the first applicant is a board of directors’ written resolution which, in the instant case, was not produced. The first respondent’s first point in limine is, accordingly, not devoid of merit under the circumstances. The court is in agreement with the first respondent’s assertion which is to the effect that none of the two directors has locus standi and that their affidavits are not properly before the court.

The above observed fact show, in a clear and unambiguous manner, that there is no proper application before the court. The court’s views on this matter find support in the words of MAKARAU J who in Madzivire & Ors v Zvariwadza & Ors, 2005(2) ZLR 148(H)  stated that:-

“… outside a board meeting, individual directors of a company cannot speak for and in the name of the company even if they are of the same mind and are in the majority….”.

CHEDA JA took this matter further when this same point was appealed against and argued on appeal. The learned Judge of appeal said:-

‘..a company being a separate legal person from its directors cannot be represented in a legal suit by a person who has not been authorised to do so. This is a well-established legal principle which the courts cannot ignore. It does not depend on the pleadings by either party. The fact that the first appellant is the managing director of the fourth appellant does not clothes him with the authority to sue on behalf of the company in the absence of any resolution authorising him to do so….”.

In Burnstein v Yale, 1958(1) SA 768 it was held, as a general rule, that directors of a company can only act validly when they are assembled at a board meeting.

It follows, from the foregoing, that a company is a legal person which enjoys full recognition by both the courts and statute. Section 9 of the Companies Act [Cap 24:3] is relevant on this point. It reads:-

“A company shall have the capacity and powers of natural person of full capacity in so far as a body corporate is capable of exercising such powers:.

According to our law, therefore, for acts done in the name of the company, a resolution duly passed by the board of directors of the company should be produced to show that the fictional persona has authorised the act, It goes without saying that the directors’ depositions of affidavits for, and on behalf of, the first applicant in the absence of the latter conferring authority to them to do so on its behalf is fatal to the application.

The second matter which was raised in limine was that the applicants raised issues which could not be dealt with exhaustively on the papers. It was contended that the applicants had adopted a wrong procedure. The matters which the applicants introduced in their directors’ affidavits are those which relate to:-

their erstwhile practitioners – Nyika & Company – accepting liability on behalf of the applicants without the latter’s authority to them to do so – and

the first respondent’s alleged act of removing goods from the applicants’ premises and selling those goods at Hammer & Tongues and/or Tongue & Grove Auctioneers. Given the applicants’ assertion which is that their liability to the first respondent is either less than what the latter obtained in its judgment against them or nothing at all, any court which is dealing with their stated position would not unnaturally have wanted to have clarifications on:-

the amount of money which their former legal practitioners accepted on their behalf, allegedly without their authority, as having been owed by them to the first respondent.

whether, or not, the legal practitioners in question did not have the applicants’ authority to accept liability.

In so far as the alleged removed and sale of the applicants’ goods by the auctioneers

was, or  is, concerned, the court would have sought clarifications on:-

what goods were removed

who removed them

why were the goods removed.

when were they sold

how much was realised from the sale of the goods –

and

who received the proceeds of the sale.

Answers to the abovementioned questions would have been furnished to the court by

the applicant’s’ former legal practitioners and the auctioneers respectively. As matters stand currently, the court remains in the dark on this aspect of the application. Strictly speaking, the applicants should not have belaboured the court’s mind as they did in para(s) 8 and 9 of their affidavits. The contents of those paragraphs are more for the attention of a court which is reviewing their case or is sitting as an appeal court than it is for a court which is dealing with applications of the present nature. There is, accordingly, merit in the first respondent’s assertion which was to the effect that the procedure which the applicants adopted was, or is, a wrong one. The court cannot decide this matter on the papers in the face of issues which the applicants raised. Those issues are irrelevant to the present application. They are relevant to a review or an appeal of the case.

The third matter which the first respondent raised in limine was that the applicants were abusing court process. It claimed that they were making every effort to frustrate execution of competent court orders. The alleged abuse of court process was said to be mainly in the following actions of the applicants:-

that they went to court with the first respondent and that, when their case failed to stand, they filed an appeal with this court;

that when leave to execute pending appeal was granted to the first respondent, they filed two applications with this court which are:

one for review of the decision which granted leave to the first respondent to execute pending appeal – and

the other for a stay of execution pending finalisation of the review of the decision which granted leave to the first respondent to execute its judgment pending appeal.

The court remains of the view that this third point in limine is not a valid one. The

applicants have every right to pursue all legal channels in an effort to protect their interest. The unfortunate thing for them is that, in doing that which the law allows them to do, they failed to make a clear distinction between matters which relate to one procedure and those which relate to the other as they did in the second point which the first respondent raised in limine. That yielded some undesirable consequences which no court, with the best of intentions in the world, could ever condone.

The court has considered all the matters which the first respondent raised in limine. It remained satisfied of the fact that two, of the three, points which were raised in limine were thoroughly fatal to the case of the applicants. The court cannot, in view of that fact, proceed to consider the merits. The applicants’ case falls on all fours on the basis of their failure to comply with the requisite procedural aspects of their application.

The application is, in the result, dismissed with costs.

Bherebende Law Chambers, applicant’s legal practitioners

Mambosasa Legal Practitioners, 1st respondent’s legal practitioners