Danbro Holdings (Pvt) Ltd and Arlington Joint Venture v Innocent Manyange and Sakutukwa Partners and Registrar of Deeds

### Preamble
1
HH 376-13
HC 14578/12
DANBRO HOLDINGS (PVT) LTD.
and
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==============================

HH 376-13

HC 14578/12

DANBRO HOLDINGS (PVT) LTD.
and
ARLINGTON JOINT VENTURE
versus
INNOCENT MANYANGE
and
SAKUTUKWA PARTNERS
and
REGISTRAR OF DEEDS

IN THE HIGH COURT OF ZIMBABWE
TSANGA J.
HELD AT HARARE, 23 October 2013

S. Hashiti, applicants’ legal practitioners
L. Uriri, respondents’ legal practitioners

TSANGA J. This is an opposed application in which the applicants seek a rescission of judgement and an order in the following terms:

The first applicant Danbro is a company that owns a stand piece of land measuring 626 8895 hectares and described as the Remaining Extent of Arlington estate. The second applicant is Arlington a joint venture partnership between first applicant and a company called Drawcard Enterprises: In other words, Arlington consists of Danbro and Drawcard to make up Arlington.

Applicants seek a rescission of a default judgment made against them. The judgement emanated from the quest by the first respondent to have two stands which he says he purchased from the first applicant registered in his name. The purported sale, under two agreements, took place in 2005 where it is alleged by the first respondent that the first applicant was represented in the sale by one Jealousy Marimudza. The second respondent is a firm of lawyers who were the transacting attorneys in this sale. The applicants deny ever entering into the said agreement of sale at any time.

The court application which led to the default judgement says it was served on one Jealousy Marimudza at an unspecified address. The first applicant denies knowing the said Jealousy Marimudza and avers that he had no authority to represent the first application and he was never employed or related to the first applicant. It disputes further the manner of serving the court application which led to the default judgment was served. The first respondent stated the place of business 49 Greendale Avenue Msasa Harare an address applicant says it has never had. First applicant also declares that the manner of serving the application also did not comply with r 39(2) (d) of the High court Rules which deals specifically with how service of process on a body corporate is to be effected. This should be done either at the place of business of registered office or by delivery to a director or secretary or public officer of the body corporate. First applicant also challenges the service effected on second applicant pointing out that it never instructed Chikumbirike and Company at any time as their lawyers. In essence first and second applicants argue that their failure to file opposing papers was due to the fraud by the first respondent through false information to the court.

The nature of the judgement given was to the following effect.

- That agreement of sale was valid
- That first respondent was the rightful owner
- That second applicant was interdicted from selling the stand
- That first applicant was ordered to effect transfer.

The Applicants seek the following order:

1. Judgement entered in default against first and second applicants in Case Number HC 6876/07 be and is hereby set aside.
2. The first and second applicants shall file their opposing papers in Case Number HC 6876 within 10 days of the granting of this order.
3. The first and second respondents jointly and severally, the ne paying the other being absolved, pay costs of this applicant on the Legal Practitioner scale

It is this order that the applicants seek to rescind.

Counsel for first and second respondents object to the rescission and have raised two points in limine in relation to this application. The first point is that of that failure by the applicants to apply for condonation for late filing of rescission of judgment in accordance with r 63. Counsel for respondents argue that the application is on the face of it one which is being made in terms of the rules. Applicant’s counsel avers that it is being made not in accordance with r63 but with common law. They have cited the case of Chihwayi vs. Atish
 HC 14578/12

SC 191/06 in support of this averment and the nature of the gist of the complaint that they have brought before the courts. The basis of that application and this one are indeed ghostly similar. In that case SANDURA JA (as he then was) stated that the provisions apply to a rescission of default judgment given under these rules or and any other law. He categorically stated that a default judgement obtained fraudulently could not be described as a default judgment under these rules.

Whether in the final analysis the default judgment in this case was obtained by fraud is a question of merits. However, it does indeed appear to be the foundation upon which the applicants have brought their claim. Respondent’s argument that the application is couched in nature as if it were resting on r 63 cannot be sustained. I am of the view that the application is indeed being brought under common law though the issue of fraud is one that can only be determined on the merits. I therefore dismiss the first objection in limine.

The second objection by counsel for respondents Mr Uriri relates to the issue of authority the first applicant and whether he is properly before the court. Counsel has asserted that the matter is still born for want of authority and lack of a firm company resolution. He asserts that the application must fail on this basis alone. The authority is said to lack in respect of the company for which the deponent is a director (Danbro) in that such authority can only be by way of a company resolution. It is also said to lack with respect to the partnership between the first and second applicants. It is argued that there is no basis to act for the partnership has been set out.

To this argument counsel for applicants Mr Hashiti has argued that it will be taking formality too far to say that in each and every instance a company acts there has to be a resolution. They cite the case of Direct Response v Sherperd 1993 (2) ZLR 216 at p 222 in support of this averment.

This issue of company authority is indeed one that has come time and again before our courts. While indeed there have been cases where the courts have taken an accommodative interpretation of what is required, especially where parties are known to each other, there are equally cases that point to a stricter interpretation of this need.

For example in the case of Air Zimbabwe & Others v Zimbabwe Revenue Authority 2003 (2) ZLR 11 (H) CHINHENGO had this to say on p 16 of the judgement:
 “It is often that litigants take objection to the other party’s locus standi to institute proceedings. I do not think that it is proper for any litigant to do so especially where from prior dealings he should be aware that the challenge to his adversary’s; locus standi will not succeed.” (My emphasis)

In terms of accommodative approach the South African case of Mall (Cape) Pvt Ltd v Merino Ko-Operasie BPK 1957 (2) SA 347 (C) is often cited in this regard where WATERMEYER J STATED as follows:

“The best evidence that the proceedings have been properly authorised would be provided by an affidavit made by an official of the company annexing a copy of the resolution but I do not consider that form of proof is necessary in every case. Each case must be considered on its own merits and the court must decide whether enough has been placed before it is warrant the conclusion that it is applicant that is litigating and not some unauthorised person in its behalf.”

In that case WATERMEYER J had considered the issue of locus standi stemming from an affidavit where director of a society had averred his authority in an affidavit thus:

“I am duly authorised to make this affidavit”

Judge WATERMEYER was in agreement that the above phrase showed that authority had been conferred upon him. The word “duly” was also said to show that authority conferred had been properly conferred and that all necessary formalities prescribed by the applicant’s society had been complied with. The affidavit in question was in reality that of the applicant society.

In casu should the affidavit of Jeremy Joseph Brooke be similar construed to clothe him with the necessary authority? The applicant’s founding affidavit as follows:

“I am the director of the 1st applicant and as such duly authorised to depose to this affidavit”.

Now looking at the cases that have required a stricter approach:

The need for authorisation is indeed clearly articulated in the case of Chemist Siziba & Hawkhope Investments v Ryik Pearcy Danckwerts and Others HH 108-2008 cited by counsel for Respondents. At page 5 of the cyclostyled judgement GOWORA J makes the following observations about the need for authorisation in representing a company.

“…… It is trite that since a company or an artificial person can only act through agents, where legal proceedings are instituted in its name, there must be some proof placed before the courts that the litigation has been authorised by the company through a company resolution to that effect…….”
 Counsel for Respondent also cite the case of *Madzivirire v Zvariwadzwa and Others* 2005 ZLR (2) 148 where MAKARAU J also held that outside a board meeting individual directors of a company cannot speak for and in the name of the company. In the appeal decision to (that case *Madzivirire v Zvariwadzwa and Others* SC 93/05) which the applicants cite albeit with many vital omissions as to what was actually stated, CHEDA JA “as he then was), in a case had to similarly address the *locus standi* of the appellant which had been successfully challenged in the High Court. He was guided in addressing the issue by s 9 of the Companies Act which reads as follows:

“A company shall have the capacity and powers of a natural person of full capacity in so far as a body corporate is capable of exercising such powers”

He then stated as follows:

“It is clear from the above that a company being a separate legal person from its directors, cannot be represented in a legal suit by a person who has not been authorised to do so. This is a well-established legal principle which the courts cannot ignore. It does not depend on the pleadings of the other party. The fact that the 1st applicant is the managing Director of the 4th appellant does not clothe him with the authority to sue on behalf of the company in the absence of any resolution authorising him to do so”. (I emphasise this in light of the fact that counsel for applicants argued that this aspect was not part of the judgement).

In my view it is necessary for the applicant to seek this company resolution if it is to legitimately pursue this matter on the merits. In fact the nature of the dispute is such that it is absolutely essential for such authority to be unequivocally stated. I find that at present the company is indeed not properly before the courts and I uphold the respondents second objection in *limine*...

In the result the application is dismissed with costs.

*Messrs Mhishi Legal Practice, applicants’ legal practitioners*

*J. Mambara & Partners, 1st respondent’s legal practitioners*

*Messrs Sakutukwa & Partners, 3rd respondent’s legal practitioners*
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