Cuthbert Elkanah Dube v Premier Service Medical Aid Society (2) Premier Service Medical Investments

### Preamble
Judgment No. SC 73/19
1
Chamber Application No. SC 256/19
---------


REPORTABLE	(67)

CUTHBERT     ELKANA     DUBE

v

PREMIER     SERVICE     MEDICAL     AID     SOCIETY     (2)     PREMIER     SERVICE     MEDICAL     INVESTMENTS

SUPREME COURT OF ZIMBABWE

GARWE JA

HARARE: 3 JULY & 19 SEPTEMBER, 2019

IN CHAMBERS

L. Madhuku, for the applicant

F. Mahere, for the respondents

GARWE JA:

[1]	This is an application for condonation for non-compliance with the Rules of this Court and for an extension of time within which to file and serve a notice of appeal in terms of the same Rules.  The respondents oppose the application.

FACTUAL BACKGROUND

[2]	The first respondent is a medical aid society registered in terms of the Medical Services Act, [Chapter 15:13]. The second respondent is said to be the investment vehicle of the first applicant.  Both respondents are managed by two separate boards of directors.  It is common cause that the applicant was, in terms of his contract of employment, the Chief Executive Officer of the first respondent. In a judgment handed down by two judges of the Labour Court on 10 March 2017, two awards made in favour of the applicant were set aside and in their place the court substituted an order dismissing the applicant’s claims before the arbitrator.  Dissatisfied, the applicant appealed to this Court against that judgment on 1 March 2018. The notice of appeal reflected that it had been filed pursuant to Rule 29 of the now repealed Supreme Court Rules, 1964.

[3]	At the hearing of the appeal, the matter was, by consent, struck off the roll for the reason that the appeal should more properly have been noted in terms of the then Supreme Court (Miscellaneous Appeals and References) Rules, 1975. This was on 14 March 2019.

[4]	Prior to the above developments, in a practice directive issued as 3/13 by the late former Chief Justice of Zimbabwe on 29 November 2013, the following requirement was, inter alia, made applicable to all the superior courts of Zimbabwe:

“5. Where a matter has been struck off the roll for failure by a party to abide by the Rules of the Court, the party will have thirty (30) days within which to rectify the defect, failing which the matter will be deemed to have been abandoned.

Provided that a Judge may on application and for good cause shown, reinstate the matter, on such terms as he deems fit.”

[5]	So far as I am aware, the practice directive together with a number of others issued at about the same time were not discussed amongst judges of this Court.  I mention this at this stage because paragraph 5 of the practice directive, which is captured above, has given rise to a major difficulty in the interpretation of that paragraph.  The conundrum faces not just the applicants whose matters are struck off the roll but also the superior courts to this date.  The extent of the problem is aptly illustrated by the events that unfolded following the striking off of the matter from the roll.

[6]	The appeal, having been struck off the roll on 14 March 2019, the applicant was required, in terms of the practice directive, to “rectify the defect” within the period of 30 days failing which the matter would be deemed abandoned.  Taking into account weekends and public holidays, the period of thirty (30) days was to lapse on 30 April 2019.  The present application was only filed on 2 May 2019, one business day late. That development formed the genesis of the applicant’s difficulties in trying to prosecute his appeal against the decision of the Labour Court.

[7]	In the application filed on 2 May 2019, the applicant prayed for condonation and extension of time in which to appeal the decision of the Labour Court. In his founding affidavit he explained the reasons for the delay. As regards his prospects of success he attached a copy of his heads of argument in the matter previously struck off the roll and requested that his prospects of success be determined on the basis of those heads.

[8]	In their opposing papers, the respondents took two points in limine.  One of the two points was abandoned at the hearing of the application before me. The preliminary point that remained related to the propriety of the application for condonation and extension of the time within which to note an appeal.  The respondents averred that, in terms of paragraph 5 of the Practice Directive, once the applicant failed to rectify, within 30 days, the defects that had led to the striking off of his appeal, his matter was deemed to have been abandoned.  He could only apply for reinstatement.  The other submissions made by the respondents on the length of the delay and the reasons thereof as well as the prospects of success are not relevant to the issues that arise for determination in this application.

[9]	In his answering affidavit, the applicant also took the preliminary point that the deponent to the opposing affidavit, who stated that he was the chairperson of the board of directors of the first respondent, was not authorised to represent both respondents as no resolution to that effect had been attached.  The applicant submitted that, in the absence of such authorisation, the application was unopposed.

[10]	At the hearing of the application, I considered it appropriate that I hear the parties on the preliminary points that they had raised before delving into the merits of the matter. The points in limine raised by the parties had the potential to dispose of the application in its entirety.  Both parties filed written heads of argument in support of the preliminary points taken.

APPLICANT’S SUBMISSIONS

[11]	In argument, the applicant submitted that paragraph 5 of the Practice Directive is clearly an error because once a matter is struck off the roll, the purported appeal is regarded as having never existed.  More fundamentally, so the applicant argued, paragraph 5 of the Practice Directive is meaningless.  This is because once it is accepted that there is no appeal before the court, there is therefore no defect to correct.  And if there is no matter before the court, nothing therefore can be deemed to have been abandoned.  For the same reason, there is no matter to reinstate.  Further the applicant submitted that the 30-day period is reckoned from a “non-event” since the nullity arises merely by operation of law and the court merely advises the parties of the fact of the nullity.  Once a matter is struck off the roll, there is no time limit within which to make an application for condonation and extension under Rule 43 of the Supreme Court Rules, 2018.  A litigant can, in terms of the Rule, apply at any time, the length of the delay being one of the factors that must be considered.  The applicant submitted that paragraph 5 of the Practice Directive must be expunged from the Practice Directive.

[12]	On the point taken that the opposing affidavit is not properly before the court, he submitted as follows. Legal entities such as the respondents have separate legal personae from its members or officials.  There is therefore need for a person who purports to act on behalf of such a legal entity to produce proof of authorisation. Otherwise former directors challenging their dismissal may continue to purport to represent the company.

RESPONDENTS’ SUBMISSIONS

[13]	In argument, the respondents submit that, it being common cause that the applicant did not comply with the thirty (30) day requirement in terms of the Practice Directive, his matter was deemed to have been abandoned.  In the circumstances, he should have applied for reinstatement of the abandoned appeal and not condonation and extension of time in which to appeal.  They further submitted that it is not open to a litigant to adopt the attitude that an extant Practice Directive is erroneous.

[14]	On the preliminary point raised by the applicant that the deponent to the respondents’ opposing affidavit had no authority to represent those two entities, the respondents submitted that there is no requirement in terms of the law that a resolution by the board of directors be produced in every case. The deponent had filed papers on behalf of the respondents in the court a quo and his authority had, at no time, been challenged. In this case, the deponent had specifically stated in his affidavit that he was duly authorised to depose to the affidavit on behalf of the respondents. No evidence having been provided by the applicant to show that the deponent was not so authorised, the objection to the authority of the deponent to represent the respondents is not sustainable.

ISSUES FOR DETERMINATION

[15]	On the basis of the submissions made by the parties, the first issue that falls for determination is whether the application for condonation and extension is properly before the court, regard being had to paragraph 5 of the Practice Directive.  If the application is not properly before this Court, then that would be the end of the matter and the application would stand to be struck off the roll. In the event, however, that the application for condonation and extension of time in which to appeal is found to be properly before the court, the issue that would arise is whether, in the absence of a board resolution by the respondents authorising the deponent to act on its behalf, the opposing affidavit filed by the deponent is properly before this Court. If not, then the matter would be regarded as unopposed.  If it is found that it is properly before the court, then the merits of the application would then require determination.

PARAGRAPH 5 OF THE PRACTICE DIRECTIVE

[16]	There can be no doubt that paragraph 5 of the Practice Directive cuts across legal principle established by this Court in a long line of cases over the years.  It also effectively overrides Rule 43 of the Supreme Court Rules, 2018.  Rule 43 has made provision for the procedure to be followed in applications for leave to appeal and for condonation of non-compliance with the Rules and for extension of time in which to appeal.

[17]	In Jensen v Acavalos 1993 (1) ZLR 216(S) KORSAH JA made the following pertinent remarks:-

“A notice of appeal which does not comply with the Rules is fatally defective and invalid.  That is to say it is a nullity.  It is not only bad but incurably bad, and unless the court is prepared to grant an application for condonation of the defect and to allow a proper notice of appeal to be filed, it must be struck off the roll with costs ….

In Hattingh v Piennar 1977 (2) SA 182(O) at 183, KLOPPER JP held that a fatally defective compliance with the rules regarding the filing of appeals cannot be condoned or amended. “What should actually be applied for is an extension of time within which to comply with the relevant rule. With this view I most respectfully agree; for if the notice of appeal is incurably bad …” 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.”

[18]	That the above sentiments correctly reflect the current state of the law in this country is without doubt.  In Matanhire v BP and Shell Marketing Services (Pvt) Ltd 2004(2) ZLR 147(S) 149 E-H, MALABA JA (as he then was), writing for the court, cited with approval the remarks made in Jensen v Acavalos as well as the decision of this Court in Business Equipment Corp v Baines Imaging Group 2002 (2) ZLR 354 (S).

[19]	Paragraph 5 of the Practice Directive has effectively set aside the various decisions of this Court based on Jensen v Acavalos (supra) and instead introduced a completely different regime on what a litigant should do in the event that he finds himself in breach of the Rules of this Court and, in particular, where the matter, purporting to be an appeal, is struck off the roll for non-compliance with the rules.

[20]	I am inclined to agree with Mr Madhuku, for the applicant, that paragraph 5 of the Practice Directive, as presently worded, contradicts the Supreme Court Rules, 2018 (and also the 1964 Rules before their repeal and substitution by the 2018 Rules) and that the paragraph, in reality, is meaningless.  As he correctly points out, once it is accepted that there is no valid appeal before the court, there is no defect to correct.  There is no matter pending before the court and consequently there is nothing that can be deemed abandoned.  Further, as there is nothing before the court, there is no matter to reinstate.  The thirty (30) day requirement is reckoned from the date the matter is struck off the roll by the court.  In the absence of condonation and extension of time, there is no obligation on an aspiring appellant to do anything further to regularise the non-compliance with the rules.

[21]	In Bindura University v Paison Chikeya Mugogo SC 32/15, following the striking off of the appeal, the applicant, within the requisite period of 30 days provided for in paragraph 5 of the Practice Directive, filed an application seeking reinstatement of the appeal.  Noting that paragraph 5 of the Practice Directive had been introduced “in order to manage cases which would have been struck off the roll so that the registry would not be cluttered with “dead files”, GUVAVA JA determined that one could not simply apply for reinstatement of the appeal as such an appeal is a nullity.  Instead, the learned judge held that the applicant in that case should have applied for condonation and extension of time within which to appeal.

[22]	The difficulty, as correctly pointed out by Ms Mahere, is that Practice Directive 3/13 and more specifically paragraph 5 thereof is still extant and bids compliance by litigants whose matters are, for one reason or another, struck off the roll.  Notwithstanding its obvious defectiveness, should I as a Judge of this Court, continue to demand compliance therewith despite the fact that it is meaningless and is not capable of implementation?

STATUS OF A PRACTICE DIRECTIVE

[23]	A practice directive (or direction) is a supplementary protocol to rules of civil or criminal procedure in the courts – English Legal System, Nineteenth Edition, 2018. Practice Directives are official announcements by the court laying down rules on how it will function.  They are not the same as rules of court but express the view of the court on matters of practice and procedure. Litigants and practitioners are expected to comply with them or show good cause for doing otherwise.

[24]	The introduction to the Gauteng Division practice Manual states:

“The provisions set out in the practice manual are not rules of court.  It does not displace or amend rules of court.  It merely tells practitioners how things are done in this court.”

[25]	It is clear from the foregoing that a practice directive is binding and has legal force and effect.  In this regard see also the remarks of BHUNU JA in Ahmed v Docking Station Safaris (Private) Ltd t/a CC Sales SC 70/18.

[26]	Litigants appearing before the courts are therefore obligated to comply with, not just the rules of court but also its practice directives. The law, however, recognizes that rules of court are not always an end in themselves and that, in appropriate circumstances, they may be departed from in the interest of achieving justice. Rule 4 of the Supreme Court Rules, 2018 provides that a court or a judge may direct a departure from the rules in any way where this is required in the interests of justice and, additionally or alternatively, may give such directions in matters of practice or procedure as may appear to him to be just and expedient.  The rule emphasises the precept that rules are designed to ensure a fair hearing and the achievement of justice.

[27]	That rules and practice directives are made for the court and not the court for the rules is a principle accepted in this jurisdiction. Various decisions of the courts in this country and in South Africa have stressed this position.  Therefore, where strict adherence to a rule and, I would add, a practice directive issued by a court results in substantial injustice, a court will grant relief in order to prevent such an injustice – Eke v Parsons 2016 (3) SA 37; HPP Studios (Pvt) Ltd v Associated Newspapers of Zimbabwe (Pvt) Ltd 2000 (1) ZLR 318 (H); Mogale City v Fidelity Security Services (Pvt) Ltd & Ors 2015 (5) SA 590.  The Rules of Court are not laws of the Medes and Persians and in suitable cases the Court will not suffer sensible arrangements between the parties to be sacrificed on the altar of slavish obedience to the letter of the Rules - Scottish Rhodesian Finance Ltd v Honiball 1973 (3) SA 747, 748 G-H.

[28]	In Sigugu v Minister of Lands & Anor 2013 (1) ZLR 48 (H), the High Court accepted that administrative practices that evolve through directives, circulars and the like, though without specific statutory authority, are permissible as long as they do not conflict with the empowering legislation under which an authority acts or infringe legally protected rights and interests.  In Greenberg v Khumalo & Anor (2012) JOL 29170 (GS) the court stated that a practice directive which is inconsistent with the rules is procedurally incompetent.  Further in In re: Several Matters on the Urgent Roll (2012) ZAGPLHC 165; (2012) 4 All SA 570, the court held that if a practice directive is compatible with or complements the rules, then it cannot be objected to. In Absa Bank Limited v Lekuku (32700/2013) (2014) ZAGPJHC 274 (14 October 2014) the court expressed the view that where a practice directive is a product of a collective discussion of the judges in a particular division, a court should not tamper with the provisions of the Practice Manual and that the matter was better left in the hands of the Judge President who, after consulting the judges of that division, can advise the Chief Justice to amend the relevant portions of the Practice Directive.

[29]	In the case of Practice Directive 3/13, it is a fact that it was not the product of discussions amongst the judges of this Court.  It was issued by the then Chief Justice without any input from judges in order to manage the figures of inactive matters that gave the impression that there was backlog in uncompleted cases.  Notwithstanding the fact that this was a practice directive issued by the then Chief Justice, I consider that I have the jurisdiction, in the interests of justice, to direct that paragraph 5 of that Practice Directive does not abrogate an applicant’s right to apply for condonation and extension of time in terms of Rule 43 of the Supreme Court Rules, 2018.

[30]	Moreover, in terms of s 176 of the Constitution, this Court, together with the Constitutional and High Courts, has the inherent power to protect and regulate its own process and to develop the common law, taking into account the interests of justice and the provisions of the Constitution.  The court will exercise inherent jurisdiction whenever justice requires that it should do so, or where justice cannot properly be done unless relief is granted to the applicant – Moulded Components and Rotomoulding South Africa (Pty) Ltd v Cou courakis & Anor 1979(2) SA 457 (W).  In the exercise of its inherent jurisdiction the court may regulate its own procedure independently of the Rules of Court – Mukaddam v Pioneer Foods (Pty) Ltd & Ors 2013 (5) SA 89 (CC); 2013(1) BCLR 1135(CC) (27 June 2013).

[31]	A practice directive should complement or enhance existing rules of court and not render such rules nugatory.  Everything considered therefore, and in order to do justice to litigants who fall foul of the requirements of the Rules of court, paragraph 5 of Practice Directive 3/13 must be regarded as subservient to r 43 of the Rules of this Court.  Were that not the position, litigants such as the applicant would find their right to access the court stultified.  The preliminary objection raised by the respondents in this regard must therefore fail.

[32]	It is unconscionable that paragraph 5 of the Practice Directive, with its obvious shortcomings, is allowed to remain operative.  The difficulty however is that the practice directive emanated from the office of the Chief Justice.  I do not believe that, as a single judge in chambers, I have the legal authority to set aside that practice directive.  The best course would be for a copy of this judgment to be forwarded to him so that he may take appropriate action in order to regularise the situation.

WHETHER A BOARD RESOLUTION WAS REQUIRED AUTHORISING DEPONENT TO ACT ON BEHALF OF THE RESPONDENTS

[33]	This is the question that now arises.  The respondents say it is not necessary that a resolution of the board of directors be produced in all cases involving legal entities, particularly in a case, such as the present, where the deponent has previously represented the respondents and his authority to do so has not been challenged. Ms Mahere cited a number of High Court decisions that suggest that a resolution is not always necessary in such cases.

[34]	The cases of Air Zimbabwe Corporation & Ors v ZIMRA 2003 (2) ZLR 11, 16 and Direct Response Marketing (Pvt) Ltd v Shepherd 1993 (2) ZLR 218 (H) cited by Ms Mahere were decided before the decision of this Court in Madzivire & Ors v Zvarivadza & Ors 2006(1) ZLR 514 (S).  The case of Zimbank v Trust Finance Ltd 2006 (2) ZLR 404 (H) which she also cited did not deal with the question that is before me.  Rather the question before the court in that case was whether the failure by a legal practitioner who had acted for the applicant in the litigation giving rise to the application to state in his founding affidavit that he had been authorised to act for his client was not fatal.

[35]	The reality is that there have been conflicting decisions in the High Court on the question whether a deponent who purports to represent a legal entity is required, in all cases, to prove that he is duly authorised to represent the legal entity.  On the one hand a number of cases have relied on the judgment of this Court in Madzivire (supra) in determining that proof of such authority is necessary in all cases – see for example Deputy Sheriff, Chinhoyi v Appointed Enterprises & Ors HH 450/13; First Mutual Investment (Private) Limited v Roussaland Enterprises (Private) Limited T/A Third World Bazaars HH 301/17.  On the other hand, a number of cases from the same court have held that proof of such authority was not necessary in all cases.  The latter cases made no mention of the decision of this Court in Madzivire and appear to have been oblivious to its existence as authority on this topic – see for example African Banking Corporation of Zimbabwe Limited t/a Banc ABC v PWC Motors (Pvt) Ltd & 3 Ors HH 123/13; Tianze Tobacco Co (Pvt) Ltd v Muntuyadzwa HH 626/15; Mukomba v Unibox Investments t/a Arundel Village Spar HH 539/15; Trustees of The Makono E Chimanimani v Minister of Lands & Anor 2016 (2) ZLR 324 (H).

[36]	The conflict in the High Court on this aspect was completely unnecessary.  In Madzivire & Ors v Zvarivadza HH 74/2006 MAKARAU J (as she then was) stated as follows:

“The fictional legal persona that is a company still enjoys full recognition by the courts.  Thus, for any acts done in the name of a company, a resolution, duly passed by the board of directors of the company, has to be produced to show that the fictional persona has authorised the act.  In my view, so trite is this proposition or so settled is this position at law that no authority need be cited. The applicants are well aware of this position at law for in paragraph 17 of the first paragraph, issue is taken that no resolutions were passed by the company authorising the first respondents and others to do certain acts complained of in that paragraph. Due to lack of such authority stemming from the Board of Directors, the applicants argue that the purported act by the first respondent are null and void.  Such may be the case, but the irony of it all is that the applicants themselves are guilty of the oversight forming the basis of their complaint to this court.  No resolution was produced before me to show that the first to third applicants are authorised to bring this action on behalf of the fourth respondent.

In seeking to lay a foundation for purporting to act on behalf of the fourth applicant, the first applicant had this to say in paragraph 2 of his founding affidavit:

“I am making this Affidavit on my own behalf and on behalf of the Fourth Applicant who is a Legal persona wherein I am the Managing Director and shareholder respectively and in that capacity, I am authorised to make the following statements on behalf of the Fourth Applicant.”

Needless to say, this is woefully inadequate to clothe the deponent with authority to make any statement on behalf of the fourth applicant.  The paragraph does not even attempt to lay a basis for holding that the bringing of the proceedings in the name of the fourth applicant is authorised …

The first to third applicants have expressly averred in their respective affidavits that they also bring this application on their own behalves as directors and shareholders of the fourth respondent.”

[37]	The High Court decision was appealed to this Court.  In a decision reported as Madzivire & Ors v Zvarivadza & Ors (supra), at 515, this Court (per Cheda JA) remarked as follows:-

“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 be ignored.  It does not depend on the pleadings by either party.  The fact that the person is the managing director of the company 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.  The general rule is that directors of a company can only act validly when assembled at a board meeting.  As exception to this rule is where a company has only one director who can perform all judicial acts without holding a full meeting.”

[38]	The above remarks are clear and unequivocal. A person who represents a legal entity, when challenged, must show that he is duly authorised to represent the entity.  His mere claim that by virtue of the position he holds in such an entity he is duly authorised to represent the entity is not sufficient.  He must produce a resolution of the board of that entity which confirms that the board is indeed aware of the proceedings and that it has given such a person the authority to act in the stead of the entity.  I stress that the need to produce such proof is necessary only in those cases where the authority of the deponent is put in issue.  This represents the current state of the law in this country.

[39]	In this case the deponent to the opposing affidavit produced no such resolution. Going by the papers before me, the two respondents operate through two distinct boards of directors.  Whilst the deponent may be the chairperson of the Board of Directors of the first respondent, that position does not, on its own, clothe him with the necessary authority to represent the first respondent’s Board of Directors.  Nor is there any proof that the board of the second respondent has also authorised him to represent the second respondent in this application. The point in limine taken by the applicant must therefore succeed.

DISPOSITION

[40]	I am satisfied that paragraph 5 of Practice Directive 3/13 purports to override Rule 43 of the Supreme Court Rules, 2018.  This it cannot do.  A practice directive should complement Rules of Court, particularly in areas where there may be a lacuna in the Rules.  It is not in the interests of justice that a practice directive should take away rights given by the Rules and effectively leave a litigant without a remedy.

[41]	Further it is clear that it is the law in this country that, when challenged, a person who purports to represent a legal entity must produce proof of his authority to represent such entity. In the absence of proof of such authority, the affidavit deposed to on behalf of the entity is irregular and must be ignored.

[42]	In the result, I make the following order:-

1.	The preliminary point raised by the respondents, namely that the application for condonation and extension is not properly before the court for failure to comply with paragraph 5 of Practice Directive 3/13, is dismissed with costs.

2.	For the avoidance of doubt, the application for condonation and extension of time within which to appeal is properly before the court.

3.	The preliminary objection raised by the applicant on the lack of authority of the deponent to the opposing affidavit is upheld with costs.

4.	The Registrar of this Court is to set this matter down for determination on the merits in due course.

5.	The contents of this judgment are to be brought to the attention of the Chief Justice so that he may, as suggested earlier in this judgment, take appropriate action to regularise Practice Directive 3/13.

Venturas & Samkange, applicant’s legal practitioners

Muzangaza Mandaza & Tomana, respondents’ legal practitioners