Premier Service Medical Investments (Pvt) Ltd & Anor v Cuthbert Elkanah Dube

### Preamble
1
HH 354 -21
HC 6407/19
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PREMIER SERVICE MEDICAL INVESTMENTS (PVT) LTD

and

PREMIER SERVICE MEDICAL AID SOCIETY

versus

CUTHBERT ELKANA DUBE

HIGH COURT OF ZIMBABWE

MUZOFA J

HARARE, 21 May & 7 July 2021

Opposed Application

F Mahere, for the 1st   & 2nd applicants

L Madhuku, for the respondent

MUZOFA J: This is an application for dismissal for want of prosecution in terms of r 236 (3) (b) of the High Court Rules, 1971.

The first and second applicants are companies registered in accordance with the laws of Zimbabwe. The second applicant owns the entire shareholding in the first applicant.

The applicants and the respondent are embroiled in a shareholding dispute of the first applicant. The background to this matter is largely undisputed. The respondent filed an application for a declaratory order in March 2018 against the applicants under HC 2821/18 9 the main matter). Notices of opposition were filed in April 2018. The respondent did not file any further process thereafter. On 4 December 2018 having noticed the inaction by the respondent, the applicants filed a chamber application under HC 1129/18 for the dismissal of the main matter for want of prosecution. On 18 December 2018 the respondent filed the notice of opposition. After filing of all pleadings the matter was set down for hearing in March 2019. The applicants withdrew the matter on the understanding that the respondent would file the outstanding pleadings in the main matter within a fortnight. When the respondent failed to comply with his undertaking the applicants filed this application about 4 months after the withdrawal of the first matter. By then it was 15 months after the opposing papers were filed. On that basis the applicants seek an order in terms of the draft.

In opposing the application, a preliminary point was taken for the respondent challenging the authority of the deponent to the applicants’ founding affidavit. A number of issues were raised by Mr Madhuku for the respondent, that one natural person cannot represent two separate artificial persons, that the resolutions attached are invalid for lack of the certifying officers’ names, that in terms of corporate law a board of directors cannot authorise a shareholder to represent the company and that in previous matters no board resolutions were produced to confirm the authority, these resolutions are a recent invention.

On the merits the respondent does not deny the historical background. However the relief sought is resisted on the basis that the respondent was ill and could not instruct his legal practitioners for the purposes of the answering affidavit. Other issues raised are that the requisite pleadings have already been filed and the main matter is ready for set down subject to the applicants herein filing their heads of argument. He also bemoans the undesirability of disposing the matter on a technicality because the main matter related to property rights, the matter should be disposed on the merits. He also avers that the applicants should have set the matter down for it to be heard on the merits.

A company is a fictional person created by the law. It can only speak through the collective voice of its board of directors. This voice is the board resolution. This issue of authorisation to represent a company has been decisively stated that a company ,being a legal persona separate from its directors ,cannot be represented in a legal suit by a person who has not been authorised to do so.Where the authority of the deponent is challenged the onus is on the deponent to tender the authorisation. The rationale behind the authorisation is to confirm that it is indeed the company that is litigating and not some disgruntled individual on a frolic of his own. Therefore, the position of a person in a company does not per se entitle the individual to represent a company. Even where two entities litigate, there must be two resolutions authorising the individual to represent the companies. It is trite that an affidavit must be deposed to by a person who has knowledge of the issues or who can positively swear to such issues.

Taking into account who should depose to an affidavit from the intrinsic knowledge of the case perspective and how that person should be clothed with the authority to represent a company. I find the preliminary point unsustainable.

Indeed, one person Jeremiah Bvirindi swore to an affidavit on behalf of both applicants. Bvirindi is the chairperson of second applicant’s board of directors. Although disputed and forming the subject matter in the main matter, the second applicant owns the entire shareholding in the first applicant. It was submitted for the applicants that it was both convenient and logical for the deponent to represent the applicants as he had intricate knowledge in the shareholding structure of the first applicant. The first and second applicants have separate and district board of directors who passed resolutions authorising Bvirindi to represent the applicants. Two board resolutions were attached to the application from each applicant’s board of directors authorising Bvirindi to represent the applicants in litigation between the applicants and the respondent. I find this resonating with the law. A company is at liberty to authorise anyone it deems fit and proper to represent it in litigation. It is not for the courts to appoint or discredit a person properly appointed by a company to represent it. The courts do not run companies. If the applicants were of the view that the chairperson of the board of directors is best suited to explain the issues, then nothing should stand in their way. A board resolution can only be challenged where it was not properly made. In casu the making or the process leading to the board resolution was not challenged. There is no legal ground for the court to interfere with the board resolutions. For the avoidance of doubt, it is competent for one person to represent two companies where the person is properly authorised by both companies to represent them in litigation.

The second basis for challenging the authorities is that the signatures of the company secretaries are nameless. The signatures were identified in the answering affidavit. It might have been desirable for the persons who affixed the signatures to confirm his or her signature but I do not find the lack of such going to the root of the board resolution. It is not disputed that the meeting was held. It is not disputed that Bvirindi was authorized. There is no indication that the signatures do not belong to the company secretaries identified in the answering affidavit. In my view that should dispose of the issue. The authority for the first applicant is stamped with the company stamp. In my view it is clear that the company is litigating and has authorized Bvirindi. The same applies to the second applicant, the authorisation is on its letterhead and the signature by the company secretary was verified in the answering affidavit. I am satisfied that the authorities are for both applicants.

The third issue taken is that management cannot delegate its duties to a shareholder.  The submissions were that Bvirindi sits in the first applicant’s board of directors representing the interests of the shareholders. The duties and roles of the shareholders and the management are different. One of the duties of management is to represent the company in litigation. I was referred to two cases for the proposition that the respondent relied on.The two cases do not advance the point taken. An undertaking was made to file further authority in support of the proposition. Nothing was filed and the court could not wait forever. The proposition therefore remained unsupported at law. It was not shown that it is the sole duty of management to represent the company in litigation. As already stated it is the company’s sole prerogative to authorise a person to represent it in litigation. I have not been referred to any limitation as to who can be appointed by a company to represent it. In the absence of a legal limitation it is my view that a company is at liberty to appoint anyone who in its view can best represent its interest in a matter. This includes the right to appoint even a shareholder. The point taken is of no moment.

I was not persuaded that one person cannot represent two artificial persons. As long as the requirements to represent such artificial persons are met viz a board resolution. The representation is unassailable. Similarly the point that the board resolutions are a recent invention is irrelevant. What is in issue is whether Bvirindi was properly authorised to represent the applicants in this litigation. My finding is that he was properly authorised. The court may not allude to the authorisation in other matters to discredit the authorisations in this matter.

I find no merit in the point taken in limine. It is dismissed.

I address the merits.

Rule 236(3) provides a mechanism to dispose of a matter where the applicant has failed to prosecute the matter in terms of the rules. The court in Scotfin v Mtetwa  succinctly summarised the purpose of the rule as follows,

‘I think however the overall consideration for the judge is to exercise his or her discretion in such a manner as would give effect to the intention of the law maker. The primary intention of the law maker is to ensure that matters brought to the court are dealt with due expedition. But considering the application the judge can only make an order other dismissal if the respondent has opposed the application and shows good cause why the application should not be dismissed’

The dicta is instructive in the decision I make herein. The applicant is dominus litis in any application. It is expected that the applicant prosecutes the matter with a view to have it finalised in the shortest period possible. Rule 236(3) empowers a respondent to take the matter forward where the applicant derogates from his or her role. Where the applicant fails to do so, the respondent has an option either set the matter down or to file a chamber application for the dismissal of the matter. In such an application, the applicant has to establish that it has filed the notice of opposition and the opposing affidavit and one month has lapsed and the respondent has not done nothing to take the matter to finality.

The onus shifts to the respondents to show that a reasonable explanation exists for the failure to prosecute the matter in terms of the rules.

The judge has to exercise a discretion either to grant the application or make such order as appropriate in the circumstances.

In this case the applicant opted to file a chamber application for the dismissal of the main matter. I must state that, the applicant has no obligation to justify its option as insinuated for the respondent. In as much as it was within the applicant’s capacity to set down the matter, it was not obliged to do so. The notion that the applicant should have set the matter down instead of making this application is ill advised. The respondent’s main point in opposing the application is that he was ill and he could not instruct counsel. I find the explanation bare and unsubstantiated. The opposing affidavit is evidence of the casual approach in respondent’s manner of dealing with his case. No further information was provided on the indisposition in the affidavit. The respondent did not take the court into his confidence to at least attach some doctor’s affidavit or anyone who could confirm the position. There was no information when he became ill and when he recovered. There was no evidence that such illness or incapacity was communicated to the applicants. In fact Mr Madhuku made a startling submission that the court should accept the averment of the illness because it was made under oath. I do not believe that was enough. Since the indisposition is not admitted by the applicants, it was for the respondent to show by way of evidence the veracity of the averment. Failure to do so is prejudicial to the respondent’s case. The incapacity alleged must have been supported. In the absence of such supporting evidence I cannot find a reasonable explanation.

It is a fact that by December 2018 the respondent had failed to file the required papers within the one month and an application for dismissal was filed. When the matter was set down for hearing the parties agreed to withdraw the matter in favour of disposal of the matter on the merits. An olive branch was extended to the respondent but he did not fully embrace it. Neither the applicants nor the respondent refer to the withdrawal as occasioned by illness it was attributed to the parties’ desire to dispose the main matter on the merits. Despite the withdrawal, the respondent did not file the required pleadings. It is only when this application was filed that the respondent was jerked into action. This chamber application was filed on 2 August 2019 and served on the respondent the same day. It is only then that the respondent filed the answering affidavit and the heads of argument on 19 August 2019 about 5 months after the withdrawal of the first application for dismissal and 16 months later from the date the applicants filed the opposing papers.

The extent of the delay is evidence of a non-committal to finalise the matter. There was no explanation when the respondent recovered to be able to give instructions. What is evident from the facts is that, it was upon service of the application that the respondent decided to act. It is farfetched to even insinuate that the respondent recovered when this application was filed.

The respondent alleged that the applicants intend to snatch at a judgment. I do not believe so. An indulgence was once extended to the respondent for the matter to be determined on the merits, this could not be achieved due to the respondent’s inaction. The respondent wants a second bite of the cherry to the applicant’s prejudice. It is trite that a litigant who leaves his affairs to chance and is not diligent has himself to blame because the law assists the diligent and not the sluggard. See Ndebele v Ncube  where the court stated;

‘It is the policy of the law that there should be finality to litigation…the time has come to remind the legal profession of the old adage vintilantibus non dormlentibus jura subveniurit, roughly translated, the law will help the vigilant and not the sluggard.’

If this matter was indeed important to the respondent, his conduct in dealing with matter must have confirmed so, unfortunately his conduct did not confirm the submissions made. One wonders if the respondent would have filed the outstanding pleadings had the applicants not filed this application. It seems the filing was a direct response to this application.

It was also argued that the main matter is now ready for set down since the requisite pleadings were filed. The point is not whether the main matter is ready, otherwise we may lose focus. The issue is whether the respondent complied with the rules in the prosecution of the matter. If he has failed to do so, has the respondent given an excusable explanation for the inaction?

I find no excusable explanation. The fact of the illness was not confirmed by independent evidence. The respondent chose not to give the court adequate information. If indeed he was ill disposed there was no communication with the other party he just let the matter lie dormant. So it was within the applicant’s rights to file this application.

In principle indeed it is best that the real dispute between the parties be resolved. However, where a party drags the matter unnecessarily, the  court rules  have allowed the disposal of a matter on a technicality. In this case, the respondent is his own worst enemy, he has literally stood in the way of the disposal of the matter on the merits.

The fact of the filing by the respondent of the heads of argument and the answering affidavit was clearly done to defeat this application. In my view in such an application, the court must consider the pleadings up to the date of filing of the application for dismissal. Any pleadings filed thereafter are unnecessary in the determination of the application for dismissal.

As already stated, I find no plausible explanation for the inaction. The application must be granted. The law protects the diligent and not the sluggard.

Accordingly, the application is granted.

The matter under HC 2821/18 is dismissed for want of prosecution.

The costs of this application and costs in HC 2821/18 shall be paid by the respondent.

Muzangaza Mandaza & Tomana, 1st & 2nd applicants’ legal practitioners

Lovemore Madhuku Lawyers, respondent’s legal practitioners