Francesco Marconati and Mark Andrew Hughes v DGL Investments Number Five (Pvt) Ltd and Hidden Spring Investments (Pvt) Ltd and Xing Ming Chang and Registrar of Companies

### Preamble
1
HB 146/25
HCBC 9/25
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FRANCESCO MARCONATI

And

MARK ANDREW HUGHES

Versus

DGL INVESTMENTS NUMBER FIVE (PVT) LTD

And

HIDDEN SPRING INVESTMENTS (PVT) LTD

And

XING MING CHANG

And

REGISTRAR OF COMPANIES NO

HIGH COURT OF ZIMBABWE

HON. M DUBE J

BULAWAYO, 30 MAY AND 18 AUGUST 2025

Opposed Application

B Mudhau, for the applicant

No appearances for 1st and 2nd respondents

S M Guwuriro, for the 3rd respondent

DUBE J:	The parties appeared before me on the 30th May 2025 on the roll of opposed Court applications. I granted the Applicants the relief they sought ex tempore. On the 19th June 2025 the 3rd Respondent filed his notice of appeal and sought my reasons for dismissing his opposition. I now provide such reasons herewith:

This is a court application in which the applicants sought declarations of rights and obligations and consequential relief in the following manner:

1. 	Applicants are members of 1st Respondent and are directors of the 1st Respondent duly appointed.

2. 	The removal and/or resignation of the Applicants could only be done in terms of the memorandum and articles of association and section 202 of the Companies and Other Business Entities Act [Chapter 24:31] and anything done to the contrary is null and void.

3.	 The removal and/or resignation of the Applicants, could not be done in the absence of the Applicants, who were not invited to the meeting by way of a notice stating the agenda of the meeting, and a voluntary resignation of the Applicants in terms of the Companies and Other Business Entities Act [Chapter 24:31] and anything done to the contrary is null and void

4. 	Consequently, Applicants be and are hereby reinstated to their positions as directors of 1st Respondent forthwith from the date this order is granted.

5. 	Costs of suit.

The application was opposed by the 3rd respondent only. The 1st and 2nd respondents, despite being served, did not file any opposing papers and were therefore presumed to want to abide by the outcome either way.

Factual Background

The salient facts of the matter are as follows. 1st Respondent is a juristic person which runs a mining plant in Matabeleland North on a cluster of mine claims under Queens Mine. Sometime in 2017, different individual entities came together and agreed to invest capital in 1st Respondent thus an investment agreement was concluded. The Applicants attached the purported investment agreement executed on the 11th April 2017, and marked it as Annexure A. In terms of the document, the partners listed acquired shares in 1st Respondent.

Accordingly, the following became shareholders of 1st Respondent; Eagle Italian Shoes (Pvt)Ltd, Gwampa Mining (Pvt) Ltd (formerly known as DGL Investments Number Twenty (Pvt) Ltd, Ming Chang Sino Africa Mining Investments (Pvt) Ltd and Fuel Africa (Pvt) Ltd.

Individual representatives of each shareholder company were then appointed directors of 1st Respondent. 1st Applicant claims to represent Eagle Italian Shoes (Pvt) Ltd while 2nd Applicant represents Gwampa Mining (Pvt) Ltd. From 2017 to date of filing these proceedings, the directors of 1st Respondent are said to have changed from time to time and the history said to be traceable from CR6 returns which are attached and marked as Annexures.

On the 22nd of February 2021, 2nd Applicant is said to have been appointed a director of 1st respondent and his appointment was in place of a former director a Mr John Neiss Muir who had passed on the same year.

On the 26th of January 2022, the 1st Applicant was also appointed as director of 1st respondent. He claims to be the person on the ground at the 1st Respondent’s mining plant and overseeing its day to day running in implementation of Annexure “A”, the Investment Agreement. He attached the CR6 returns and marked them Annexure B1-5. He avers that on or about 22 August 2024, he and 2nd Applicant discovered that a new CR6 return was filed with 4th Respondent indicating that he and 2nd Applicant had resigned as directors of 1st respondent. In response, and in the immediate, they attempted to interdict the 2nd and 3rd respondents from using the CR6 return through HCH3712/24.

They further contend that the development was illegal, and a misrepresentation for the following reasons:

1. 	They were never invited to a meeting, in terms of the law and the articles of association of 1st respondent.

2. 	They never resigned, neither in writing nor by conduct.

3.	 Resignation being a voluntary act, no one could have forced them to resign, and they contend that the articles of association do not support it.

4. 	1st respondent did not engage 2nd respondent, and any purported engagement is unlawful and non-existent because correct procedures were not followed.

5. 	There is no resolution appointing 2nd respondent who is not known to 1st and 2nd Applicants. 1st and 2nd Applicants have lodged disputes with this Honourable Court about the illegal mining operations of 3rd respondent who is being accused of extracting ore and processing it independent of 1st respondent.

6. 	The law in terms of s202 of the Companies & Other Business Entities Act [Chapter 24:31] is clear about the procedure that should be followed and that was not followed in the removal of directors, thus, any action done contrary to such law is null and void.

7. 	1st Applicant contends that he has been at the premises of 1st respondent for the past four years, he is responsible for the production and administration while also performing a supervisory role, as such, had there been any meeting of directors or shareholders, he would have known.

8.	 If 1st respondent was aware of the decision to remove 1st and 2nd rpplicants and if it was a decision of 1st respondent, the same information would have been recorded and made accessible to everyone.

9.	 Further that, their removal ought to be known by the shareholders that they represent, and none were made aware.

10. 	They reported the matter to the police, in terms of s67 of the Companies & Other Business Entities [Chapter 24:31] and the matter is pending investigation under IR5960/24 (presumably under Inyathi District). However, investigations cannot be finalized because 3rd Respondent ran away and has never shown up at the police station ever since the matter was reported, in other words, he is a fugitive.

11. 	The 1st Applicant avers that his appointment as a director was resolved and accordingly approved in terms of the resolution which he attached and marked Annexure “C”.

It is important to emphasise that the 1st and 2nd respondents did not file any notice of opposition. The 3rd respondents purports to speak on their behalf albeit without their authorisation. I must state that the notice of opposition filed by counsel for 3rd respondent is badly prepared. It is full of generalisations, complaints and what at most can be described as murmurs. He does not advert to the real substance of the application as contained in the founding and supporting affidavits of the applicants.

He however starts off by attacking the 2nd applicant’s supporting affidavit as having been improperly attested to. He contends that the said affidavit was sworn to before a legal practitioner who is a commissioner of oaths and not a notary public in the Republic of South Africa. I shall comment on such argument later as the parties argued both the merits and the preliminary points together.

He avers that the Applicants purport to derive their locus standi from an Investment agreement to which they were never a party to. He does not attach the specific document he is making reference to. It is not clear if he is making reference to Annexure “A” or whether there is another document that he is aware of. The court is unable to follow his argument as it does not have the benefit of perusing and interpreting the document he refers to. If he is making reference to Annexure “A” he could have done better by citing specific clauses.

The Applicants chronicled the history that led to them appearing on the CR6 Form and the resolutions that got them there. In particular 1st Applicant makes reference to Annexure “C” being a resolution appointing him as Director, which the 3rd Respondent does not comment on.

At paragraph 7 of his Opposing Affidavit 3rd Respondent alludes to the existence of a material dispute of facts without identifying the actual dispute. He argues that other persons should have been cited other than himself. He does not say whom and why. On the other hand, the Applicants demonstrates that the reason why they cited him in his personal capacity is the appearance of his signature as the person who effected changes on the CR6 Form dated 4th August 2024 removing them as directors. (See para 2.2.3 of 1st Applicant’s founding affidavit and para 5 of 2nd Applicant’s supporting affidavit.) 3rd Respondent does not dispute that it his signature appearing on the latest CR6 form as alleged. Neither does he explain, from whence he got such authority. The said amended CR6 form was presented for filing by 2nd Respondent, Hidden Springs (Pvt) Ltd. 3rd Respondent does not explain how that came to be. He does not point to any resolution taken authorising 2nd Respondent to present such CR6 form for filing by the 4th Respondent.

He persists in paragraph 7 of his opposing affidavit to state that;

“The agreement is very clear as to what transpires should there be a dispute…”

He however does not say which agreement he is referring to and at what paragraph. He protests that Applicant do not mention other companies that invested in 1st Respondent, such as Eagle Italian Shoes (Pvt) Ltd yet at para 4.1 to 4.4 the 1st Applicant states that he represents Eagle Italian Shoes (Pvt) Ltd while 2nd Applicant represents Gwampa Mining (Pvt) Ltd. Other companies are listed as Ming Chang Sino Africa Mining Investments (Pvt) Ltd and Fuel Africa (Pvt) Ltd. All these companies are said to be shareholders of 1st respondent while their representatives were appointed as directors. One is mindful that if indeed 3rd Respondent is referring to Annexure “A” the Investment agreement, the representatives of each shareholding company could not be expected to remain the same. If 1st and 2nd Applicants were not directors at inception of the agreement in 2017, it does not preclude them from representing their respective companies now. What would have happened within their individual companies is not subject of this application.

At para 8 of its opposing affidavit the 3rd Respondent seems to object towards its joinder as a party to these proceedings but does not say why.

At para 11 he merely states that “A lot has happened such that it is not legally proper and prudent for the Applicants to want to have this matter resolved on paper, when in actual fact there a lot of facts that need to be cured and proved by oral evidence”

What ‘lot’ happened remains only known to the 3rd Respondent. What dispute ought to be cured in evidence is equally left as his sole domain.

In short, the 3rd Respondent does not take the court into his confidence to concisely state those facts that may disclose the existence of a material dispute of facts.

As a result of 3rd Respondent’s failure to specifically deny the averments placed on record by the Applicants, I agree that the following remain undisputed:

It is not disputed that Applicants were directors

2. 	It is not disputed that Applicants were removed unlawfully from the directorship of 1st respondent. If anything, it is not challenged that 3rd Respondent was instrumental in the removal of the Applicants.

3. 	3rd Respondent does not dispute that it is his signature on the CR6 return being challenged.

4. 	3rd Respondent does not deny his participation and that there was no meeting and resolution of the 1st Respondent.

I shall now comment on the objection made regarding the affidavit of the 2nd Applicant. The point was raised as part of the merits of the matter not as a preliminary point. I shall treat it as such. It is correct that the said affidavit was commissioned by a legal practitioner in the Republic of South Africa who identified himself as a practicing attorney and commissioner of oaths. He certainly does not identify himself as a notary public. He is therefore not a “commissioner of the High Court” as envisaged by Rule 85(5) of the High Court Rules, 2021. A commissioner of the High Court is defined as;

“a commissioner of the High Court appointed by the High Court to take affidavits or examine witnesses in any place outside Zimbabwe”

Clearly the legal practitioner whom 2nd Applicant conducted the solemnities of the oath was not appointed by the High Court of Zimbabwe. I find therefore that Counsel for the Applicants misread Rule 85 and its interpretation in the Madokero Service Station matter he sought to rely on. (See Madokero Service Station v Muromba (88 of 2023) ZWHHC 88 (7 February 2023)

It follows therefore that the affidavit of the 2nd Applicant is improperly before the court and it is hereby expunged. So is his answering affidavit as it derives its origin from the supporting affidavit. I however find that such exclusion does not change the merits of the matter. It remains an uncontroverted fact that both Applicants were appointed directors of the 1st Respondent per evidence attached by 1st applicant. It also remains uncontroverted that the CR6 Form presented on the 4th of August 2024 by the 2nd Respondent and signed by the 3rd Respondent was not done per Article 58(a-h) of the Articles of Association applicable to 1st Respondent. That document was prepared in violation of section 202 of the Companies and Other Business Entities Act. That remains unchallenged. That document bears the names of both the 1st and the 2nd Applicants marked as “Resigned”. If it is declared a nullity it applies with equal force to the 1st and 2nd applicant.

Where a decision is made or an action is taken without following the mandatory legal procedure, that decision or action is not merely irregular; it is void ab initio, it is a nullity from the moment it was conceived and has no legal force or effect. If the purported removal of the Applicants was conducted without a valid meeting, proper notice, or a formal resolution, it would be a legal non-event. The consequence is that the Applicants’ status as directors of the 1st Respondent remains unaltered, and any documentation filed with the Registrar to the contrary would be a legal nullity.

The venerable dicta of Lord Denning in MacFoy v United Africa Co Ltd [1961] 3 All ER 1169, as cited in Ngani v Mbanje & Anor; Ngani v Mbanje & Anor 1987 (2) ZLR 111 (HC), is most apposite:

“If an act is a nullity, it is not only bad, but incurably bad… And every proceeding which is founded on it is also bad and incurably bad. You cannot put something on nothing and expect it to stay there. It will collapse.”

Whether or not the requirements for a declaratory order were met.

The jurisdiction of this Court to grant declaratory orders is an inherent power enshrined in Section 14 of the High Court Act [Chapter 7:06]. The provision states that:

“The High Court may, in its discretion, at the instance of any interested person, enquire into and determine any existing, future or contingent right or obligation, notwithstanding that such person cannot claim any relief consequential upon such determination”.

For a court to exercise its discretion under Section 14, an applicant must satisfy a two-part test that has been developed through Zimbabwean jurisprudence.

The applicant must demonstrate that they have a direct and substantial interest in the subject matter of the application.

And that the interest must relate to an existing, future, or contingent legal right or obligation. A declaratur cannot be granted to resolve a purely academic or hypothetical question.

In the case of Johnsen v AFC 1995 (1) ZLR 65, GUBBAY CJ (as he then was) had the occasion to consider when a declaratur can be granted. He stated at page 72E-F as follows:

“The condition precedent to the grant of a declaratory order under section 14 of the High Court Act 1981 is that the applicant must be an “interested” person in the sense of having a direct and substantial interest in the subject matter of the suit which could be prejudicially affected by the judgment of the court. The interest must concern an existing future or contingent right. The court will not decide abstract, academic or hypothetical questions unrelated thereto.”

Even upon satisfying the two requirements, the grant of a declaratory order is not a right but remains within the discretion of the Court. The Court must be convinced that the matter is a proper one for the exercise of this discretion, considering all the circumstances of the case. The Applicants’ claim, seeking to rectify an alleged unlawful act that infringes upon their rights as directors and undermines the integrity of public company records, is undoubtedly a proper case for this Court's intervention.

Effect of non-compliance with section 202 of the Companies and Other Business Entities Act.

Section 202 of the Companies and other Business Entities Act [Chapter 24:31] is couched as follows:

202 Removal and resignation of directors

(1) 	One or more directors may be removed, with or without a stated reason or cause, at a general meeting by a majority of the votes of shares then entitled to vote at an election of directors, except that no director may be removed unless the notice of the meeting states that a purpose of the meeting was to vote on the removal of such director at the meeting.

(2) 	The removal of a director shall not in itself prejudice any right to compensation upon removal which the director may have under a contract with the company. However, the election or status of a person as a director shall not, in itself, create any such rights.

(3) 	A director may resign at any time by giving written notice, as far in advance as is practicable, to the board of directors or its chairperson. A resignation is effective when the notice is given unless the notice specifies a future date. The pending vacancy may be filled before the effective date of the resignation, but the successor shall not take office until the effective date.

The removal of a director from office is not an arbitrary act. It must adhere to both the company’s internal regulations (its articles of association) and the fundamental principles of corporate governance and natural justice. These include:

Due process and the right to be heard and to be given a fair opportunity to make representations in their defense.

There should be a proper notice of a meeting where a decision to remove a director will be made. All directors and/or shareholders must be given adequate notice of the meeting, and the agenda must clearly state that a resolution for the removal of a director will be considered.

A resignation is, by definition, a voluntary act. It must be communicated formally to the company, typically in writing.

The applicants’ allegations, represent a complete breakdown of corporate governance and a blatant disregard for the law. The filing of a CR6 return indicating the resignation of directors without their consent and without a valid resolution from the company is a serious matter. The Applicants’ application satisfies the prerequisites for a declaratur. Their positions as directors and members of the 1st Respondent constitute a direct and substantial interest in the matter. The right they seek to have declared is their right to be directors until such time as they are lawfully removed or resign, which is an existing legal right, not an abstract one. This establishes their locus standi to bring this application.

It is for these reasons that I found in favour of the applicant.

Madzima and Co Law Chambers- applicants’ legal practitioners

Guwuriro and Associates Legal Practitioners- 3rd respondent’s legal practitioners