Paul Gary Friendship v Cargo Carriers Limited and Across Enterprises (Private) Limited (In liquidation)

### Preamble
1
HH 291-12
HC 12471/12
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PAUL GARY FRIENDSHIP

versus

CARGO CARRIERS LIMITED

and

ACROSS ENTERPRISES (PRIVATE) LIMITED (In liquidation)

HIGH COURT OF ZIMBABWE

ZHOU J

HARARE, July 10, 2012 & 12 July 2012

Opposed Matter

K. Ncube, for the applicant

Ms R. Theron, for the first respondent

ZHOU J:  This judgment relates to two related applications which were argued together.  The parties are the same in both matters.  Case Number HC 12470/11 is an application for condonation of the failure to file an application for the setting aside of the default judgment granted in Case Number HC 9545/11 within the period provided for in r 63(1) of the Rules of this Court.  Case Number HC 12471/11 is the application for the rescission of the default judgment referred to above.

On 12 October 2011 this Court granted the following judgment against the applicant:

“IT IS ORDERED THAT:

The second respondent is liable to pay to the applicant:-

The sum of US$101 381.32 (one hundred and one thousand three hundred and eighty one United States Dollars and thirty two cents) being the judgment debt under HC 4980/09.

Costs of suit on a legal practitioner and client scale in case numbers:

HC 9419/10

HC 9420/10

HC316/11

Costs of suit on a legal practitioner and client scale.”

The judgments cited in the quoted order were given against the second respondent, Across Enterprises (Private) Limited.  The applicant is a director of that company.  His liability for the debts of the second respondent was founded upon the provisions of s 318(1) of the Companies Act [Cap 24:03], which provides as follows:

“If at any time it appears that any business of a company was being carried on –

Recklessly;  or

With gross negligence; or

With intent to defraud any person or for any fraudulent purpose;

the court may, on application of the Master, or liquidator or judicial manager or any creditor of or contributory to the company, if it thinks it proper to do so, declare that any of the past or present directors of the company or any other persons who were knowingly parties to the carrying on of the business in the manner or circumstances aforesaid shall be personally responsible without limitation of liability for all or any of the debts or other liabilities of the company as the court may direct.”

The two applications, HC 12470/11 and HC 12471 were filed on the same date, 15 December, 2011.  In para(s) 6 and 7 of his founding affidavit in the application for condonation the applicant states that condonation was being sought ex abundante cautela, as he “first became aware of the default judgment on 13 December 2011”.  The applicant’s assertion in that respect is incorrect.  A copy of the order in question was delivered to his erstwhile legal practitioners, Mujeyi & Manokore Attorneys, on 9 November 2011 under cover of a letter dated the same date.  The letter states the following:

“For your records, please find attached hereto a copy of the High Court Order granted on 12 October 2011 by the Honourable Justice MAKONI, duly signed by the Judge and received by us yesterday afternoon.”

Thus the applicant’s erstwhile legal practitioners became aware of the judgment on 9 November, 2011.  The knowledge of the legal practitioners is imputable to the applicant, as they were his agents.  The application for rescission of judgment was therefore filed out of time.  That application could not be properly before the Court in the absence of an order of this Court condoning its late filing.  See Forestry Commission v Moyo 1997 (1) ZLR 254(S) at 260D-E.  In the case of United Plant Hire (Pty) Ltd v Hills & Others 1976 (1) SA 717(A) at 720F-G, the Court set out the principles applicable in an application for condonation as follows:

“It is well established that, in considering applications for condonation, the Court has a discretion, to be exercised judicially upon a consideration of all of the facts; and that in essence it is a question of fairness to both sides.  In this enquiry, relevant considerations may include the degree of non-compliance with the Rules,  the explanation therefor,  the prospects of success …(on the merits), the importance of the case, the respondent’s interest in the finality of his judgment,  the convenience of the Court,  and the avoidance of unnecessary delay in the administration of justice.  The list is not exhaustive.

These factors are not individually decisive but are interrelated and must be weighed one against the other; thus a slight delay and a good explanation may help compensate for prospects of success which are not strong.”

See also Mutizha v Ganda & Others 2009 (1) ZLR 241(S) at 245C-E;  Maheya v

Independent African Church 2007 (2) ZLR 319(S) at 323B-C; Forestry Commission v Moyo (supra) at 260E-G;  Bishi v Secretary for Education 1989 (2) ZLR 240(HC) at 242E-243C.

In the instant case the delay is just about six days.  The applicant blames his erstwhile legal practitioners for failing to file opposing papers in the application for summary judgment and for not informing him when the default judgment was given.  The Court does not readily penalise a litigant for the lack of diligence of his legal practitioners.  However, there is a limit beyond which a litigant cannot escape the consequences of his attorney’s lack of diligence or the insufficiency of the explanation tendered.  In the case of Beitbridge Rural District Council v Russell Construction Co 1998 (2) ZLR 190(S) at 193A, SANDURA JA stated:

“This court has, on a number of occasions, clearly stated that non-compliance with or wilful disdain of the rules of court by a party’s legal practitioner should be treated as non-compliance or wilful disdain by the party himself.”

In S v McNab 1986 (2) ZLR 280(S) at 284A-E, the principle is reiterated:

“In my view, clients should in such cases suffer for the negligence of their legal practitioners.  I share the view expressed by STEYN CJ in Saloojee & Another NNO v Minister of Community Development supra at 141C-E when he said:

‘There is a limit beyond which a litigant cannot escape the result of his attorney’s lack of diligence or the insufficiency of the explanation tendered.  To hold otherwise might have a disastrous effect upon the observance of the rules of this court.  Considerations ad misericordiam should not be allowed to become an invitation to laxity.  In fact, this court has lately been burdened with an undue and increasing number of applications for condonation in which the failure to comply with the rules of this Court was due to neglect on the party of the attorney.  The attorney, after all, is the representative whom the litigant has chosen for himself, and there is little reason why in regard to condonation of a failure to comply with a rule of court, the litigant should be absolved from the normal consequences of such a relationship, no matter what the circumstances of the failure are’.”

See also Ndebele v Ncube 1992 (1) ZLR 288(S) at 290C-E; Bishi v Secretary for Education, supra, at 224A-E.

The applicant did not attach any affidavit from his erstwhile legal practitioners to explain the default.  Apart from his mere allegation, there is nothing to demonstrate that the applicant sought an explanation for the default from his former legal practitioners.  In a case such as the present one where there is a history of consistent default on the part of a litigant and the legal practitioners are being blamed for that default, it is necessary for the litigant to avail proof, preferably in writing, that it has demanded for an explanation from the legal practitioners concerned.

On his part the applicant has not shown what steps he took to protect his interests.  Thus the applicant did nothing to extricate himself from that category of litigants referred to in the cases referred to above.

The fact that the delay was of just below a week does not, on its own, assist the applicant.   See Viking Woodwork (Pvt) Ltd v Blue Bells Enterprises (Pvt) Ltd 1998 (2) ZLR 249(S) at 253F-H.

The onus is on the applicant to show that he has a defence which has prospects of success.  The applicant seems to suggest that because the requirements of s 318 of the Companies Act have to be established for him to be personally liable then his has a defence which has prospects of success.  That is not so.  The applicant must set forth the facts upon  which the prospects of success of its defence may be assessed.  The documents in the record show that the applicant personally admitted to being liable to pay the second respondent’s debt owed to the first respondent.

In any event, it has been held that “in cases of flagrant breaches of the Rules, especially where there is no acceptable explanation therefor, the indulgence of condonation may be refused whatever the merits of the appeal are;  this applies even where the blame lies solely with the attorney”.  Viking Woodwork (Pvt) Ltd v Blue Bells Enterprises (Pvt) Ltd, supra, at 254D-E;  Tshivhase Royal Council & Another v Tshivhase & Another 1992 (4) SA 852(A) at 859E-F.

Once the application for condonation fails the application for rescission of judgment equally fails.

In the result, it is ordered that:

The application in Case Number HC 12470/11 is dismissed.

The application in Case Number HC 12471/11 is dismissed.

The applicant shall pay the costs of the two applications.

Gill, Godlonton & Gerrans, legal practitioners for the applicant

Scanlen & Holderness, legal practitioners for the first respondent