LEES IMPORT AND EXPORT (PVT) LTD v ZIMBANK 1999 (2) ZLR 36 (S)

Flynote

Company — legal proceedings — representation of company in such proceedings — whether company must be represented by legal practitioner

Constitutional law — Constitution of Zimbabwe 1980 — Declaration of Rights — s 18(1) and 18(9) — right to protection of the law — whether rule that company must be represented by legal practitioner violates right to protection of the law

Practice and procedure — parties — company — whether company must be represented by legal practitioner in superior courts

Headnote

The managing director of a company had sought to represent his company in proceedings in the High Court. The presiding judge expressed concern as to whether the rule that companies may only be represented in the superior courts by a legal practitioner offended against the provisions of s 18 of the Constitution. Counsel for the respondent, with the apparent approval of the managing director, requested that the question be referred to the Supreme Court in terms of s 24(2) of the Constitution. The constitutional issue that was referred to the Supreme Court was whether the rule of practice that only a legal practitioner can represent a company in the superior courts violates s 18(1) and (9) of the Constitution, which guarantee that a person is entitled to the protection of the law and to a fair hearing within a reasonable time by an independent and impartial court in the determination of his civil rights.

Counsel for the applicant argued that the rule seriously abridges the right of a company to the protection of the law and to a fair hearing. If the company cannot afford to engage a lawyer it is denied audience before the superior courts; or if it can afford legal representation it is deprived of the choice whether or not to engage a lawyer.

The respondent argued that the Supreme Court should decline to exercise its power under s 24(4) of the Constitution as the company had an adequate means of redress by way of applying to the High Court for it to exercise its inherent power to regulate its own proceedings in such a way as to allow the managing director to represent the company. The respondent argued that only if this application failed should the Supreme Court be approached on the constitutional issue.

Held, rejecting this argument, that the constitutional issue raised was whether the provisions of ss 18(1) and (9) confer upon a company an absolute right to appear before the High Court without being represented by a legal practitioner. The applicant had not sought, and was not now seeking, relief by way of the exercise of the High Court's discretionary power. Additionally, the determination of the question of the right of a company to be represented by a director or an officer would provide clarity for those other companies which either prefer to litigate without legal representation or are unable to afford the substantial cost thereof. Apart from these reasons, the proviso to s 24(4) of the Constitution gave the Supreme Court the discretion to determine a question referred to it even if adequate means of redress are available to it under any other law.

Held, further, that as regards the rule of practice laying down that a company could only be represented by a legal practitioner, s 9(2) of the Legal Practitioners Act [Chapter 27:07] prohibits anyone other than a legal practitioner from performing various forms of legal work, such as issuing out a summons or carrying on or defending any action or appearing as a legal practitioner on behalf of another in any action. The proviso to s 9(2) provides that nothing in the subsection shall prevent a director or officer in a company from doing these acts. The effect of this proviso is simply to allow authority to be given to a director or officer to do these things. This authority can be provided for in the rules of court. Therefore the provision in the Magistrates Court Rules authorising a director or officer to do these things in cases in the magistrates court are covered by the proviso and are not inconsistent with the prohibition in s 9(2). On the other hand, no such authority has been given in the High Court Rules for a company to be represented by a director or officer.

Held, further, that the rule that a company must be represented by a legal practitioner is a long standing rule in Zimbabwe and in other countries. Although some of the policy considerations upon which this rule is based may be thought to be insufficiently persuasive to warrant continued adherence to the rule, the rule is too well settled to allow its validity to be impugned on grounds other than constitutional grounds. The superior courts, however, have a residual power to regulate its proceedings unless fettered by legislation. In exercising this discretion and in the interests of justice the court may permit a person other than a legal practitioner to appear before it on behalf of a company but only in exceptional circumstances.

As regards the constitutionality of the rule of practice:

Held, that in terms of s 18(1) a person is entitled to protection of the law and in terms of s 18(9) a person is entitled to a fair trial in the determination of his civil rights. Section 113 of the Constitution provides that, unless the context otherwise requires, "person" includes individuals and bodies of persons whether corporate or unincorporated. The rights afforded by s 18(1) and (9) apply to corporations.

Held, further, that the alter ego doctrine and the organic theory recognise that in some situations the acts of certain persons are effectively the acts of the company. Such persons are the directing mind and will of the company and control what it does. They do not act for the company as its agents. Rather, they act, know and form intentions through the persona of the company.

Held, further, that when interpreting a fundamental rights provision of the Constitution the court will not interpret the provision narrowly and rigidly but will interpret it in a way that will serve the interests of the Constitution and best carry out its objects and promotes its purposes. Applying this approach, the common law rule that a company can only be represented in the superior courts by a practising legal practitioner offends against s 18(9) of the Constitution, certainly to the extent that it denies the duly authorised organ or alter ego of the company the right to appear in the person of the company. fundamental right to a fair hearing includes the right of a corporate body to appear through its alter ego.

Held, further, that this approach does not undermine the rule of practice; it merely provides an exception to it. This approach does not permit a company to appear before the superior courts through someone who is a mere director, officer, servant or agent. Companies which cannot be said to be the embodiment of any human body will not qualify under s 18(9) because no human being personifies the company in person. In general, small companies should be able to avail themselves of the exception.