TOTAL ZIMBABWE (PVT) LTD V POWER COACH EXPRESS (PVT) LTD 2010 (2) ZLR 1 (H)

Flynote

Company - legal proceedings - authorization for - what must be shown - not always necessary for proof of resolution by company's board

Contract-compromise - agreement between parties to litigation - judgment ordering respondent to deliver items to applicant - agreement by applicant to not to execute upon judgment against delivery of alternative items by

Respondent - effect of agreement - not an abandonment by applicant of judgment in its favour - no unequivocal abandonment by applicant of its right to enforce judgment - onus upon respondent to establish its case by facts set out in its papers

E Practice and procedure - abandonment - of claim or judgment - what constitutes abandonment

Practice and procedure - affidavit -founding affidavit - affidavit filed on behalf of a company - what deponent must aver - not always necessary to prove resolution by company to authorize litigation

F Practice and procedure - joinder - of parties to litigation - interest of third party - no contractual bond between applicant and the third party - joinder of third party not necessary

Practice and procedure - party - company - litigation by - board authorization to institute such litigation - challenge by other party as to the existence of such authorization - not necessary in every case to produce such board resolution to establish authorization - circumstances where such production to a court is not necessary

Words and phrases - "abandonment" - of a right - meaning - connotes relinquishment of right to the control or in favour of another

Headnote

Where a company litigates, it is not necessary to produce, in every case, a board resolution to prove that the company has authorized such litigation. Where a minimum of evidence has been adduced establishing that the company has set litigation in process, in the absence of some evidence from the respondent pointing to a lack of authority for the litigation, the court should not require the production of a resolution.

The word "abandon" connotes a relinquishment by a party of a right or an item to the control of or in favour of another party and that such relinquishment would have to amount to an absolute surrender and the party so surrendering the right or item shall not reclaim the item or seek to enforce the right. The abandonment must be absolute in its effect and the person so abandoning must make his intention to abandon unequivocal. There can be no abandonment where a party alleged to have abandoned something still seeks a benefit from the thing he is alleged to have abandoned.

In 2006, the applicant had obtained a judgment in the High Court ordering the respondent to hand over certain diesel and petrol tanks. The respondent thereupon noted an appeal, which led to correspondence between the parties in which the applicant tried to persuade the respondent as to the lack of merit in its appeal. In the result, however, the applicant agreed to a compromise in terms of which the respondent undertook to engage a third party to manufacture, within a specified period, tanks of the same specifications and material as the ones it claimed from the respondent. The tanks were, however, not manufactured by the third party within the specified period and a dispute then arose as to whether they were manufactured according to the required specifications. This led to the respondent bringing a separate action seeking relief against the third party. Ultimately there was no delivery of the tanks in terms of the judgment of 2006 and the applicant brought the respondent to court once again for an order enabling it to obtain delivery thereof. The applicant sought a declaratory order as to its rights to enforce the 2006 judgment. In resisting this claim, the respondent submitted that the compromise agreed upon by the parties amounted, on applicant's part, to an abandonment of its right to enforce the judgment. In so doing, it relied not upon any correspondence between the parties nor anything else in the papers but upon a paragraph in the applicant's heads of argument which read:

"Applicant submits that it entered into an agreement with the respondent in terms of which it agreed to abandon the judgment... against delivery of alternative tanks with the same specifications as the tanks it was entitled to recover in (that) judgment..."

This, the respondent submitted, was evidence of abandonment of the earlier judgment by the applicant. The respondent also took the technical point that as the applicant had failed to join the third party as a party to these proceedings, its action should be dismissed.

Held, that there was no merit in the technical point. In the absence of a contract between applicant and the third party, the joinder of the latter to the present dispute would not have assisted either party in the resolution of this dispute.

Held, further, that the paragraph in the applicant's heads of argument, upon which the respondent relied, did not mean that the judgment of 2006 had been abandoned by the applicant. Any abandonment of that judgment was subject to the delivery by the respondent of the tanks with the same specifications as that ordered in that earlier judgment. There was no unequivocal abandonment by the applicant of its rights to have the judgment enforced. In any event, the abandonment, if it was made, should have appeared in the respondent's papers filed in relation to the relief being sought.

Held, further, granting judgment with costs in favour of the applicant, that although the question of whether or not there had been abandonment by the applicant was a legal issue, it could only be answered when reference was had to the facts pertaining to the particular aspect determined. In casu, the respondent had not placed before the court any facts that would justify such a conclusion.