Angela Dandadzi v Pioneer Transport (Pvt) Limited (Represented by Dr Wesley Sibanda the Judicial Manager) and The Master of High Court

### Preamble
1
HH 771-18
HC 9049/17
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ANGELA DANDADZI

versus

PIONEER TRANSPORT (PVT) LTD

(REPRESENTED BY DR WESLEY SIBANDA THE

JUDICIAL MANAGER)

and

THE MASTER OF HIGH COURT

HIGH COURT OF ZIMBABWE

MUZENDA J

HARRE, 8 November 2018 & 21 November 2018

Opposed Application For Leave To Sue

L Ziro, for the applicant

R.C Muchenje, for the 1st respondent

No appearance, for the 2nd respondent

T J Mafongoya, for the 3rd respondent

MUZENDA J: Angela Dandadzi (applicant) is applying for leave from this court where she is seeking the following relief:

IT IS ORDERED THAT

“A	Leave be and is hereby granted to the applicant to:

Sue and/or continue with her application for damages in the Labour Court.

Join in 3rd  respondent as second respondent in case LC/H/APP/803/16 pending in the Labour Court.

Issue writs of execution against 1st and 3rd respondent’s property and attach same in sale in execution in the event that any order has been granted for applicant’s damages against 1st and 3rd respondent.

The 1st and 3rd respondent shall pay costs of this application jointly and severally, the one paying the other to be absolved on an attorney client scale.

B.	OR ALTERNATIVELY

IT IS ORDERED THAT

Leave be and is hereby granted to the applicant to:

Sue and continue with her application for quantification of damages in the Labour Court.

Issue writs of execution against 1st respondent’s property and attach same in sale in execution in the event that any order has been granted for applicant’s damages against 1st respondent.

The costs of this application shall be borne by the 1st respondent on an attorney-client scale.”

Background and facts

On 24 December 2013 (a day before Christmas) the applicant was dismissed by the first respondent before it was placed under judicial management following a disciplinary process and the effective date of dismissal was 17th December 2013.

On 29 September 2014 Mr B. Matongera, the Arbitrator gave an award in favour of the applicant to the effect that the applicant was unfairly dismissed and ordered a reinstatement from the date of dismissal without any loss of salary or benefits. In the event that reinstatement was no longer tenable, the applicant was to be paid damages in lieu of reinstatement.

The first respondent did not reinstate the applicant.

On 14 January 2015 the Arbitrator quantified the damages to the tune of $26 940-16. The first respondent did not pay.

On 8 April 2016 Murasi J dealing with an appeal filed by the first respondent herein allowed the appeal, went on to set aside the decision of the Arbitrator and ordered trial de novo before a different arbitrator whose costs were going to be met by the first respondent and that the fresh trial was to be held within sixty (60) days, from the date of his order, failing which the respondent/applicant now) would be deemed to have been reinstated from the date of dismissal without loss of salary and benefits.

On 7 July 2016 the applicant’s legal practitioners wrote a letter to the first respondent for the latter to reinstate the applicant in compliance with Murasi J’s order but the first respondent did not oblige.

On 10 August 2016 the applicant filed another application for the quantification of damages which was duly served on the first respondent. In response the first respondent’s then legal practitioners indicated that the first respondent was placed under judicial management.

On 3 July 2018 Kwenda J granted an order for joinder of the third respondent to these proceedings presumably on the basis that the first respondent is now shifting liability to the third respondent. The first respondent is saying it had an agreement with third respondent wherein the latter agreed to pay the applicant’s damages when quantified and that because of that so called agreement the first respondent should have cited third respondent.

Applicant’s application is being opposed by both first and third respondent. The first respondent raises a preliminary point arguing that the applicant is suing a wrong party in these proceedings. To the first respondent, applicant must sue Unifreight Africa Limited, third respondent. It goes on to say that during the time that the applicant was employed by Pioneer Transport, first respondent was wholly owned by third respondent and first respondent was then sold to the employees of same entity. The first respondent further contends that in terms of share sale and purchase agreement it was agreed that the applicant was one of the employees who should be dealt with by third respondent in respect of labour claims, that arose during the period first respondent was owned by third respondent. As a result the first respondent argues that it has no obligation to resolve the matter with the applicant, applicant must sue the third respondent.

From the papers it is not in dispute that the first respondent is that the first respondent is the party that charged and tried applicant for disciplinary purposes. It subsequently dismissed her. The first respondent was the employer during arbitration and the order for reinstatement was granted against the first respondent. First respondent then appealed to the labour court and the appeal directed the respondent and applicant to appoint a fresh arbitrator and deal with the matter within 60 days. The list goes on. During these processes the first respondent never mentioned that it was the third respondent who was liable to deal with the applicant. There was no contractual relationship between the applicant and the third respondent and all labour related matters at the instance of the applicant cited the first respondent. It is the first respondent who is clearly the employer of the applicant, and it is the first respondent who should have reinstated the applicant or pay damages and not third respondent. The point in limine is dismissed.

On the merits the applicant submitted that the first respondent is now comparably in a better financial position and can now compensate her. This aspect is not incidentally controverted by the first respondent.

According to the applicant the first respondent has not shown that if execution is allowed to take place first respondent will go into liquidation or will fail to financially recover. No evidence has been produced and no computation presented to present figures to prove that. The first respondent just makes an unsubstantiated statement that it takes time to make a company stable. First respondent does not deny that its representation made a statement in the media to the effect that the first respondent is remarkably performing well financially. The applicant added that the alleged share purchase agreement between the first and third respondent was clearly designed and planned by both in an effort to frustrate the applicant and she urges to disregard the agreement.

The first respondent submitted that it is how under final judicial management, a development which has evolved from the date when the present application for leave to sue was filed. The leave if granted will be contrary to the objective of judicial management, the first respondent must be returned to a financial health with the supervision of the courts if the applicant is allowed to apply for an order to quantify damages with the labour court, first respondent will be saddled to pay a debt when it does not have the capacity to pay at the moment. It will also lead to attachment of first respondent’s assets. It prays for the court to give it a chance for it to recover from its debts.

First respondent however admits its own documents shows a statement of income showing that it is now making profits. It also admits that the judicial manager Mr Sibanda has found an investor and is in the process of paying the investor and the day to day expenses to keep the operations running. The granting of the application for leave to sue would amount to allowing the applicant to proceed with litigation over other creditors. First respondent thus prays for the dismissal of the application on a higher scale.

The third respondent heavily relies on the legal position of a private company and vehemently submitted that first and third respondents are two distinct entities and the first respondent must meet its obligations towards the applicant. Third respondent also reiterates that it was not part of any proceedings that gave rise to the application before the court. It insists that first respondent was correctly cited and should pay. In principle one would not be mistaken to conclude that third respondent’s submissions are totally in sync with those of the applicant. It would appear on the face of it  that the third respondent is applicant’s ally in this matter. Third respondent denies ever employing the applicant at any time. To third respondent applicant is still an employee of first respondent.

It is not third respondent who turned away the applicant when she reported for work at the first respondent’s premises. The first respondent, according to the third respondent, had the easiest of all tasks to comply and follow the order given to it by the Labour Court, but decided not to and it is an irresponsibility of the first respondent to impute that problem to the third respondent after first respondent’s failure to act. Any liability after April 2015 accrued to the first respondent, the liability, whether to conduct a hearing afresh, reinstate or pay the applicant all accrue to the first respondent not the third respondent.

The question for determination by this court is whether or not the court should grant an application for leave to sue.  The order to stay all legal proceedings, including execution of writs without the leave of the court during the time that the company is under judicial management is one that is within the discretion of the court as illustrated by the use of the word “may” in s 301 (1) of the Companies Act [Chapter 24:03]. The court is not employed to grant directions that while the company is under judicial management, all legal processes against it be stayed and not proceeded with without the leave of the court. However as correctly pointed out by first respondent in its heads, in para 28, the Companies Act does not provide for the circumstances in which the court may point legal process to be proceeded with or  extended against the company notwithstanding the evidence of the judicial management order. Common law applies in determining whether or not leave to sue must be granted. The court must take into account whether or not such leave to sue will destroy the company and prejudice all other creditors, but the court must equally be sensitive to the reality that the interest of the applicants are also relevant and must be safeguarded.

(See Bindura University of Science and Education v Tetrad Investments and Another HH 319/17 and HO 1139/15)

Western Bank Ltd v Laure Tassati Construction (Pvt) Ltd 1974 (4) SA 607 at 611)

It is not, in dispute that the first respondent’s behavior virtually borders on continuous contempt of courts. The order by Murasi J is crisply clear but has gone unheeded and it appears the first respondent would only react at each stage the applicant would want to get relief and block her. She is not employed, not getting income, at law she is still employed by the first respondent but in reality, from her papers she is going through a frustrating experience. The first respondent is worried about the flourishing of the company and protection of the creditors and livelihood of first respondent but does not consider the plight of the applicant yet it unreservedly admits in its papers that first respondent is now a viable entity, the very ground relied upon by the applicant, to bring this application before me. The first respondent also admitted that the first respondent’s financial status is now healthy and is now making profits. The first respondent must be commended for this candidness but it was as not compassionate towards the applicant nevertheless. It does not propose how it is going to resolve the impasse between it and applicant but prays for more time which is not specified to make more money for the company and creditors and not time to pay what is due to the applicant. I am satisfied that the applicant has outlined the parameters for the application for leave and she ought to succeed.

I wish to register this court’s displeasure on the behavior of Messrs Matsikidze and Mucheche in this matter. The legal firm once represented first respondent before the Labour Court. No doubt it is the one which presumably advised first respondent not to abide by court orders or judgments. Now the same law firm is representing third respondent and has by mere cursory look at the affidavit and heads embarked at tearing first respondent’s position into shreds blaming it left, right and centre. I agree with both applicant and first respondent’s counsel that the law firm is really at sixes and sevens in this matter. It cannot be doubted that it was exposed to a lot of confidential information when it was dealing with first respondent and now uses the same communication against its former clients. I hereby direct the Registrar of this court to place this judgment, before the Secretary of the Law Society to reprimand the legal firm for this kind of behavior. It is not in my view recommended and highly prejudices litigants and frustrate, the resolution of cases at a minimum cost.

On the question of costs, my view is that the first respondent dragged in third respondent unnecessarily. It also unwittingly chose to oppose this application thereby putting applicant into unnecessary legal expense. The first respondent failed to abide by a simple Labour Court order and abruptly jumped to blame third respondent as one being liable to pay the applicant. The first respondent should meet all the costs of both first and third respondents on a higher scale. Accordingly I will dismiss the main order and grant the alternative which is that:

1.	Leave be and is hereby granted to the applicant to

(a)   	Sue and continue with her application for quantification of damages in the labour court

(b)	Issue writs of execution against first respondent’s property and attach same for sale in execution in the event that any order has been granted for applicant’s damages against first respondent.

(c)	Costs of this application shall be borne by the 1st respondent on attorney-client scale

Hungwe and Partners, applicant’s legal practitioners

Mbidzo Muchadehama and Makoni, 1st respondent’s legal practitioners

Matsikidze & Mucheche, 3rd respondents’ legal practitioners