DISTRIBUTABLE (11)
Judgment
No. SC 13/08
Civil
Appeal No. 147/06
GILNAT
INVESTMENTS (PVT) LTD v ART CORPORATION
LIMITED
SUPREME
COURT OF ZIMBABWE
HARARE,
SEPTEMBER 11, 2008
R Y Phillip, for the applicant
P C Paul, for the respondent
Before MALABA JA: In Chambers in terms of r 4 of the Rules of the
Supreme Court (the Rules).
This is an application for condonation of non-compliance with r
43(2) of the Rules and re-instatement of an appeal dismissed
in terms
of r 44(1).
On 17 May 2006 the High Court dismissed with costs on a legal
practitioner and client scale an application made under s 196 of
the
Companies Act [Cap 24:03] (the Act) for an
order of relief under s 198 of the Act on the ground that
the manner in which the affairs of
the respondent company were being
or had been conducted was oppressive or unfairly prejudicial to the
interests of holders of 5%
preference shares including the applicant.
Notice of appeal against the whole judgment of the High Court was
filed with the Registrar on 7 June 2006. On 6 March 2007 the
Registrar sent a letter to the applicants legal practitioners
calling upon them to file heads of argument in the appeal within
fifteen days. The applicants legal practitioners received the
letter on 8 March. In the founding affidavit deposed to in support
of the application, Mr B G Venturas said he immediately sent a
brief to counsel who had argued the applicants case in the High
Court with instructions to prepare
heads of argument. He said
despite several telephone calls to counsel the heads of argument were
not available for filing within
the time limit. The appeal was
dismissed.
Counsel admitted receiving the brief from the instructing legal
practitioner on 9 March 2007. He said it was placed in a heap
of six
other briefs on his table. Pressure of other court work and a
reduced level of concentration due to occasional ingestion
of
morphine tablets for the mitigation of excruciating pain from the
degeneration of the lumbar spine caused him to overlook the
need to
prepare the heads of argument for filing timeously. The heads of
argument were made available ten days out of time.
In Maheya v Independent African Church S-58-07 it is stated
at p 5 of the cyclostyled judgment that:
In considering applications for condonation of non-compliance with
its Rules, the Court has a discretion which it has to exercise
judicially in the sense that it has to consider all the facts and
apply established principles bearing in mind that it has to do
justice. Some of the relevant factors that may be considered and
weighed one against the other are: the degree of non-compliance;
the
explanation therefor; the prospects of success on appeal; the
importance of the case; the respondents interests in the finality
of the judgment; the convenience to the Court and the avoidance of
unnecessary delays in the administration of justice. Bishi v
Secretary for Education 1989(2) ZLR 240(H) at 242D-243C.
It is clear from the affidavits filed in support of the application
that the fault for the applicants non-compliance with r
43(2) lies
in the negligence of counsel. Whilst not underrating the
contribution of ill-health to the oversight pleaded by counsel
as the
immediate cause of his failure to prepare the heads of argument for
timeous filing in the appeal, the fact that he was able
during the
same period of time to attend to other court work makes oversight a
difficult explanation to accept as a justification
for granting the
applicant the indulgence it seeks. That is particularly the case
when regard is had to the fact that counsel
did not deny the averment
by the instructing legal practitioner that several telephone calls
were made reminding him of the need
to comply with the time for the
filing of the heads of argument.
I would have granted the applicant condonation on the basis of what
the instructing legal practitioner did in an attempt to comply
with r
43(2) of the Rules if the appeal had prospects of succeeding. There
are no prospects of the appeal succeeding. The relief
for applied in
the High Court related to matters which arose from the implementation
of the special resolutions of 23 August 1996
and 31 July 1999. The
court a quo had to make a finding that the special resolutions
were unlawful to the extent in which they introduced matters which
were oppressive
or unfairly prejudicial to the interests of holders
of 5% preference shares including the applicant.
Only after making a finding that the special resolutions were
unlawful as being in contravention of s 196 of the Act and setting
them aside to the extent of the contravention could the court a
quo be in a position to grant the relief in the terms of the
draft order.
The cause of action arose at the time the special resolutions were
passed by the majority of shareholders of the respondent company
at
the extraordinary general meetings convened for the purposes. The
court a quo was correct in holding that the relief sought was
a debt which would be due to the applicant from the date the special
resolutions
were passed. Section 15(d) of the Prescription Act [Cap
8:11] provides that a debt shall be extinguished by prescription
after three years. The period of three years commences to run
as
soon as the debt becomes due. Section 2 provides that debt:
Without limiting the meaning of the term, includes anything which
may be sued for or claimed, by reason of an obligation arising
from
statute, contract, delict or otherwise.
Proceedings were not instituted until 4 February 2003. As the
applicants cause of action arose at the time the special
resolutions
it alleges were unlawful were made in 1996 and 1999 it
had prescribed at the time the application was made.
It is important to note that whilst the court a quo dismissed
the application on the ground that the relief sought had prescribed,
the incorrectness of the decision was not one of
the grounds stated
in the notice of appeal filed with the Registrar on 7 June 2006. No
application has been made in terms of r
32(3) for an order of
amendment of the grounds of appeal. The notice of appeal upon which
reinstatement of the appeal is sought
does not attack the correctness
of the finding of the court a quo that the relief claimed had
prescribed. I have, however, taken into account the fact that even
if an application to amend the
grounds of appeal was to be made at
the hearing, the appeal would not succeed. The court a quo
did not misdirect itself in finding that the relief sought had
prescribed. Although I agree with the court a quos finding
on the merits of the application, it is not necessary to deal with
them as I am satisfied that the decision that the relief
sought had
prescribed disposed of the dispute between the parties.
The application is dismissed with costs.
Byron Venturas & Partners, applicants legal
practitioners
Wintertons, respondents legal practitioners