David Whitehead Textiles Ltd (Under Judicial Management) v Kala & Ors (HC 8441 of 2014) [2015] ZWHHC 442 (11 May 2015)

1 HH 442-15 HC 8441/14 DAVID WHITEHEAD TEXTILES LIMITED (under judicial management, represented by KNOWLEDGE HOFISI, in his capacity as Final Judicial Manager) versus JYOTSANAGEN KALA and LISTON CHAKUPA and MASTER OF THE HIGH COURT HIGH COURT OF ZIMBABWE MAFUSIRE J HARARE, 7 & 11 May 2015 Opposed Application N. Ruzengwe, for the applicant Adv. T. Zhuwarara, for the first respondent F. Machokoto, for the second respondent No appearance for the third respondent MAFUSIRE J: In this application one Knowledge Hofisi (“Hofisi”) was the final judicial manager of the applicant company, David Whitehead Textiles Limited, which was under final judicial management. The application was for an order that the applicant be joined as the second defendant in an action under the case reference number HC 8549/13. In that action the first respondent herein (“Kala”) was the plaintiff therein. She sought an order that the sale to her of a certain immovable property in Kadoma (“the property”) be declared “legal and valid”. She claimed she bought the property through an estate agent and subsequently obtained transfer. In the action, she also sought an eviction order against the second respondent. The second respondent counter-claimed that he was an employee of the applicant and the sitting tenant in occupation of the property on the applicant’s rent-to-buy scheme with its employees. The applicant was not a party to that action. In the present application Hofisi said the applicant was the original owner of the property. He said through a series of fraudulent transactions involving representatives of the purported majority shareholder and the sham management in place at the time, the property, together with several other assets of the applicant, had unlawfully been disposed of. Nothing HH 442-15 HC 8441/14 had come to the applicant’s coffers. After his appointment as the final judicial manager he set about investigating the affairs of the applicant. He unearthed a massive scam by the fake majority shareholder and its sham executive management. Hofisi said he wanted to reverse all the illicit transactions pertaining to the applicant’s affairs. The sale and transfer of the property to Kala was one of them. Therefore, Hofisi said, the applicant had real and substantial interest in Kala’s action. Hofisi’ application was made in terms of Order 13 r 87 of the Rules of this court. The relevant portions of that rule read: “87 Misjoinder or nonjoinder of parties (1) ……………………………………………………………. (2) At any stage of the proceedings in any cause or matter the court may on such terms as it thinks just and either of its own motion or on application— (a) ….………………………………………………..; (b) order any person who ought to have been joined as a party or whose presence before the court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon, to be added as a party; …………………………………………………………….. (3) A court application by any person for an order under subrule (2) adding him as a defendant shall, except with the leave of the court, be supported by an affidavit showing his interest in the matters in dispute in the cause.” Kala opposed the application. Her argument was that she had innocently bought the property on the market. She had not been aware of the illicit dealings alleged in the application. She said Hofisi had not demonstrated such cogent interest in her action as would warrant the applicant’s joinder. Therefore, she wanted the application dismissed with costs. The second respondent did not oppose the application. Mr Machokoto who appeared for him at the hearing said his was just a watching brief. But none of the parties said who the second respondent was, or what his interest in the matter was, or whether he was one of the parties in Kala’s action. The record for that action was not before me. I had to obtain on my own copies of the pleadings in the action to get these details. Be that as it may, and given the manner the matter eventually panned out, this aspect, and many others, became unnecessary. HH 442-15 HC 8441/14 The matter panned out like this. It turned out that Kala’s heads of argument had been filed out of time. Therefore she had automatically been barred in terms of Order 32 r 238, particularly sub-rule (2b) thereof. The relevant portions of that rule read: “(2) Where an application, exception or application to strike out has been set down for hearing in terms of subrule (2) of rule 223 and any respondent is to be represented at the hearing by a legal practitioner, the legal practitioner shall file with the registrar, in accordance with subrule (2a), heads of argument clearly outlining the submissions relied upon by him and setting out the authorities, if any, which he intends to cite, and immediately thereafter he shall deliver a copy of the heads of argument to every other party. (2a) Heads of Argument referred to in subrule (2) shall be filed by the respondent’s legal practitioner not more than ten days after heads of argument of the applicant or excipients, as the case may be, were delivered to the respondent in terms of subrule (1): Provided that— (i) no period during which the court is on vacation shall be counted as part of the ten-day period; (ii) the respondent’s heads of argument shall be filed at least five days before the hearing. (2b) Where heads of argument that are required to be filed in terms of subrule (2) are not filed within the period specified in subrule (2a), the respondent concerned shall be barred and the court or judge may deal with the matter on the merits or direct that it be set down for hearing on the unopposed roll.” The applicant’s heads of argument having been filed and served during vacation, there was a dispute over the number of days by which Kala’s heads had been filed out of time. Mr Ruzengwe, for the applicant, said Kala’s heads were twenty four days out of time. Mr Zhuwarara, for Kala, argued that the number of days was fourteen only. The difference was significant to Mr Zhuwarara’s two-pronged argument. In his first line of argument Mr Zhuwarara maintained that Kala had in fact not been barred. He relied on the proviso to sub-rule (2a) that says that a respondent’s heads of argument shall be filed at least five days before the hearing. In Kala’s case the heads had been filed on 16 February 2015. The hearing of this matter had initially been scheduled for 31 March 2015. However all the matters set down for that date had subsequently been rescheduled to 7 April 2015 owing to a sudden and unforeseen commitment on my part. So the argument was that since Kala’s heads of argument were filed well outside the five day period to the date of hearing, she was not barred. HH 442-15 HC 8441/14 It was evident the above argument was raised tongue in cheek. The main sub-rules (2), (2a) and (2b) of r 238 direct unequivocally that a respondent who is to be represented by a legal practitioner at the hearing of, inter alia, an application, is to file heads of argument; that such heads are to be filed within ten days after the applicant’s heads have been filed and served on him; and that where such heads have not been filed as such (or at all) the respondent “shall” be barred. It is a command. It is peremptory. Mr Zhuwarara was undoubtedly reading proviso (ii) to sub-rule (2a) out of context. Courts need sufficient time to prepare for the hearing. They can only prepare adequately after all the relevant documents have been filed. In my view, the five day period is designed to give the court that much time to prepare. It is not to grant a respondent an extension of time beyond the designated ten days. In my view, the significance of the five day rule in the proviso becomes apparent where, for example, the period between the date the respondent receives the applicant’s heads of argument and the date the matter is scheduled to be heard is ten days or less, for the reason that, for example, the court was on vacation when the applicant’s heads were served. The respondent cannot insist on ten days to file his own heads. If he does, he will run foul of the proviso. He has to ensure that his heads are filed at least five days before the hearing. Furthermore, and at any rate, the barring of a respondent is mentioned in sub-rule (2b). The sub-rule refers to barring for failure to file heads of argument in accordance with the time stipulated in sub-rule (2). That time is ten days. Therefore, in this case, whether Kala’s heads of argument were filed twenty four days out of time or only fourteen days, was immaterial. When the ten days were up she became barred. In practice the above problem is largely moot. A matter will not be set down for hearing unless the applicant has filed and served his heads of argument in accordance with sub-rules (1) and (1a) of r 238. These sub-rules provide as follows: “238. Heads of Argument (1) If, at the hearing of an application, exception or application to strike out, the applicant or excipient, as the case may be, is to be represented by a legal practitioner— (a) before the matter is set down for hearing, the legal practitioner shall file with the registrar heads of argument clearly outlining the submissions he intends to rely on and setting out the authorities, if any, which he intends to cite; and (b) immediately afterwards, he shall deliver a copy of the heads of argument to every other party and file with the registrar proof of such delivery. HH 442-15 HC 8441/14 (1a) An application, exception or application to strike out to which subrule (1) applies shall not be set down for hearing at the instance of the applicant or excipients, as the case may be, unless— (a) his legal practitioner has filed with the registrar in accordance with subrule (1)— (i) heads of argument; and (ii) proof that a copy of the heads of argument has been delivered to every other party; and (b) in the case of an application, the pages have been numbered in accordance with paragraph (c) of subrule (1) of rule 227.” (my emphasis) Thus, in practice, it is often more than ten days between the time the applicant’s heads of argument are filed and the date the matter is set down for argument. So the respondent has ample time to comply with the ten day rule. For these reasons I dismissed Mr Zhuwarara’s argument. Mr Zhuwarara changed tack. He sought condonation for the late filing of the heads. He urged me to exercise my discretion in favour of hearing the matter on the merits rather than deciding it on a mere technicality. He invoked the provisions of Order 1 r 4C. They read: “4C Departures from rules and directions as to procedure The court or a judge may, in relation to any particular case before it or him, as the case may be— (a) direct, authorize or condone a departure from any provision of these rules, including an extension of any period specified therein, where it or he, as the case may be, is satisfied that the departure is required in the interests of justice; (b) give such directions as to procedure in respect of any matter not expressly provided for in these rules as appear to it or him, as the case may be, to be just and expedient.” In terms of Order 12 r 84, a party that has been barred can make a chamber application or an oral application at the hearing, for the removal of the bar. The judge or court may allow the application on such terms as to costs and otherwise as he or it may think fit. In my view, a party seeking the removal of a bar, or condonation in terms of r 4C, must show “good and sufficient cause”. The court or judge hearing the application has a discretion to grant or reject the application. There must be a reasonable explanation for the HH 442-15 HC 8441/14 default. The applicant must also show his defence on the merits. Dealing with r 84 GARWE JA stated as follows in Grain Marketing Board v Muchero1: “It is clear from the above provisions that, once a party is barred, the matter is treated as unopposed unless the party so barred makes an application before the court for the upliftment of the bar. It is also clear that, in making the application to uplift the bar, the party that has been barred can either file a chamber (not court) application to uplift the bar or, where that has not been done, the party can make an oral application at the hearing. The practice in the High Court, so far as I am aware, is that only in very few instances have oral applications to uplift the bar been entertained by the court. This is because, in such a case, the applicant must explain the reason for the delay, and thereafter convince the court that he has a bona fide defence on the merits” (emphasis added). What constitutes wilful default and a bona fide defence depend on the merits of each case. In Netone Cellular (Private) Limited v Bacnet Trading (Private) Limited & Ors2 I said3: “In my view, in bar situations, wilful default amounts to a deliberate failure or neglect to file process timeously, or to refrain from doing so altogether. Thus “good and sufficient” cause is the sum total of all the facts explaining the default and merits of the defence. These facts are considered cumulatively. No single aspect is decisive.” In the present case, Mr Zhuwarara’s application for condonation was doomed. There was simply no explanation for the delay in filing Kala’s heads of argument. All there was by way of an explanation was that the applicant’s heads of argument had been received by some “functionary” at the offices of the legal practitioners acting for Kala. It was not explained who this “functionary” was; what he or she had done with the heads of argument; when had the legal practitioner of record become aware of the heads; what action he had taken, et cetera. As for the merits of Kala’s opposition to the application for joinder, they were practically non-existent. That she was an innocent buyer of the property was not the point. Hofisi gave cogent reasons why the applicant had to be joined to her action. He said the applicant had been defrauded. The sale and transfer of the property to her had been done following an illicit transaction. Thus, prima facie, her title to the property was defective. Those were issue for trial. If she had excluded the applicant in her action in HC 8549/13 then she had fallen foul of r 87 (2)(b). The applicant was a necessary party to that action. 1 2008 (1) ZLR 216 (S), at p 220D -F 2 HH 214 -15 3 At pp 7 – 8 of the cyclostyled judgment HH 442-15 HC 8441/14 Therefore, soon after argument, I dismissed Kala’s application for condonation and granted the order sought by the applicant. The order was as follows: “Whereupon after reading documents filed of record, it is ordered that:- 2 The applicant be and is hereby joined as ... 2nd defendant in Case No. HC 8549/13. The applicant shall file its plea within twelve days of this order. Costs shall be in the cause.” Rule 238(2b) provides that where the respondent has been barred for failure to file heads of argument within the stipulated time, the court “may” deal with the matter on the merits or direct that it be set down for hearing on the unopposed roll. But rule 239 provides that at the hearing of an application, provided that if one of the parties has been barred, the court “shall” deal with the application as though it were unopposed, unless the bar is lifted. In Muchero’s case the Supreme Court held inter alia that it was clear from rules 83, 84, 2334 and 239 that once a party is barred the matter is treated as unopposed unless the respondent makes an application to lift the bar. It was on this basis that as I pronounced the granting of the order I made it clear that it was being granted in default. 11 May 2015 F. G. Gijima & Associates, applicant’s legal practitioners C. Nhemwa & Associates, first respondent’s legal practitioners Machokoto & Partners, second respondent’s legal practitioners 4 Sub-rule (3) of r 233 provides that a respondent who has failed to file a notice of opposition and opposing affidavits within the time prescribed (ten days) shall be barred.