Shepherd Zihlangu v Evergrowing Farm

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/346/14
HELD AT HARARE 5TH MAY 2014
CASE NO
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IN THE LABOUR COURT OF ZIMBABWE	         JUDGMENT NO LC/H/346/14

HELD AT HARARE 5TH MAY 2014			CASE NO LC/H/208/11

& 20TH JUNE 2014

In the matter between:-

SHEPHERD ZIHLANGU			Appellant

And

EVERGROWING FARM				Respondent

Before The Honourable P Muzofa, Judge

For Appellant		C.K. Mutevhe (Legal Practitioner)

For Respondent		Z Makorie (Legal Practitioner)

MUZOFA, J:

This is an appeal from a decision of an arbitrator who dismissed appellant’s claim on the basis that it had prescribed.

The background to this case is somewhat disputed.  The appellant was employed by the respondent as a farm manager until the contract of employment was terminated by respondent in 2007.  The appellant filed a complaint with the Ministry of Labour at Karoi for unfair labour practice.  No certificate was issued since parties agreed to give the employment relationship another chance.  According to appellant the employment relationship continued to be acrimonious and he sought to resuscitate the 2007 matter before the same conciliator in 2008.  According to respondent in 2007 the conciliation was finalised by parties agreeing to reinstate appellant.  However the working relationship did not work out and in the same year the appellant resigned.  Appellant was paid his terminal benefits.  The respondent’s version is that in 2008 appellant lodged a fresh complaint for non-payment of terminal benefits.  Both parties concede that this process was not finalised.  The record of proceedings could not be located to determine how the 2008 complaint was dealt with.  In 2010 appellant filed another complaint for non-payment of terminal benefits.  According to appellant this was just a continuation of the 2007 case.  Respondent’s version was that the 2010 complaint was a fresh matter.  A certificate of no settlement was issued and the matter was referred to an arbitrator.  The arbitrator dismissed the appellant’s claim in that it had prescribed.

The appellant then approached this court on appeal.  The sole ground of appeal from the twelve grounds of appeal attached to the notice of appeal seems to be that the arbitrator erred in finding that the matter had prescribed.  The respondent raised two issues in opposing the appeal.  Firstly that indeed the matter had prescribed as it arose in 2007.  Secondly that the respondent was improperly cited as the conciliation and arbitration proceedings cited Hank Terblanche the respondent’s Managing Director.   On appeal the appellant then cited Evergrowing Farm.

I propose to deal with the issue of citation first.  It is not in dispute that the conciliation proceedings were between S Zihlangu and Mr H Terblanche which is evident from the certificate of No Settlement page 19 of the record of proceedings.  The parties referred for arbitration were S Zihlangu and H Terblanche as evidenced on page 7 and 8 of the record of proceedings.  During the two preliminary hearings the respondent was H Terblanche. However when the appellant noted an appeal to this court he noted an appeal against Evergrowing Farm (Pvt) Ltd.  It was not disputed that Evergrowing Farm is a duly incorporated company in terms of the law of Zimbabwe, it therefore being a juristic person.  Generally a company has a separate legal persona from its owners.  As such it can sue and be sued in its capacity.  It is an established principle of law that the courts will not go behind the separate personality of a company to the members, See Dadoo Ltd and Others v Krugersdorp Municipal Council 1920 AD 530 at 550-551.  The courts will only go beyond the personality of a company in exceptional cases.

Counsel for the appellant urged the court to look to the substance of who is the owner of Evergrowing Farm.  It was submitted that the law is clear that ill citation is not fatal as long as it was clear to the parties who exactly was claiming from the other.  Despite the submission that the law was clear on this aspect counsel for the appellant failed to refer the court to any authority to support the said proposition.  The appellant also relied on the findings of the court in an application for rescission.  The court in that application made a finding that the issue of citation was not fatal to the proceedings.  I do not believe the findings are binding to this court they are of persuasive value only.  In any event the court therein dealt with the application for rescission.  This court is now ceased with the appeal on the merits.  In the instant case the arbitration was between Zihlangu and H Terblanche.  If an award was to be made it was invariably going to be executed against him in his personal capacity.  The employer Evergrowing Farm was not part of those proceedings.  Evergrowing Farm technically was unaware of the conciliation and arbitration process.  With respect, to adopt an approach that H.P. Terblanche is the owner of Evergrowing Farm therefore the citation is proper means the corporate veil has been pierced.  As stated above the courts are reluctant to pierce the corporate veil unless there are exceptional circumstances.  One such exception is where fraudulent use is made of the corporate principle.  This is an entrenched principle of company law succinctly stated  by Professor Gower  in Modern Company 4th  ed at p124.

“when, however they have been asked to that the company as an agent of C its individual controlling shareholder and to make the shareholder liable on that basis they have not been willing to do so except where that is necessary to frustrate some grave improperly, and in such circumstances they have coupled the description of the company as an agent with more pejorative descriptions such as ‘sham’, cloak’, ‘device’, ‘stratagem’, puppet’, creature’, etc.

There was no fraudulent conduct by the employer to justify piercing of the corporate veil.  The appellant as the prosecutor was very much in charge of who to cite in his matter.  He was aware who his employer was.  The courts cannot allow litigants to switch from one party to another.  The proper parties should always be cited in the absence of an application to correct that it is difficult for this court to proceed against Evergrowing Farm as the respondent.  It was not party to the conciliation and arbitration hearings.  Technically the appeal is improperly before this court against Evergrowing Farm.  There is no need to make a determination on the second ground of appeal since the issue of citation deposes of the matter.

Respondent asked this court to dismiss the appeal on that basis.  I do not believe disposing of this matter on a technicality will meet the justices of the case.  Appellant should be given an opportunity to put his papers in order.

Accordingly the following order is made

The matter be and is hereby struck off.

No order as to costs.

Muvingi & Mugadza & Associates, appellant’s legal practitioners

Coglan Welsh & Guest, respondent’s legal practitioners