The respondent, Adlecraft Investments (Private) Limited, was a mining company with a board comprising three directors: Ofer Sivan (Managing Director), Munyaradzi Gonyora, and Gilad Shabtai (board chairperson). In August 2021, Ofer Sivan allegedly misappropriated trust funds exceeding USD $1,500,000 and fled to the United States. On 14 August 2021, the remaining board members (Shabtai and Gonyora) passed a resolution appointing Gonyora as Acting Managing Director effective 18 August 2021. The appellants, Cassandra Myburgh and Colin Baker, were employees of the respondent who had been suspended. When Gonyora attempted to assume his duties on 18 August 2021, both appellants barred him from accessing the company's head office and workshop premises. Despite their suspension, the appellants locked up both premises, preventing Gonyora from exercising his functions and thereby impeding the respondent's operations. The respondent sought spoliatory relief in the High Court, which was granted. The appellants appealed to the Supreme Court.
The appeal was dismissed with costs against the appellants.
The binding legal principles established are: (1) Under section 196(1) of the Companies and Other Business Entities Act [Chapter 24:31], a board resolution passed by written consent signed by a majority of available directors has the same effect as if approved by voting at a meeting, and such a resolution is valid even if one director does not respond; (2) In spoliation proceedings brought by a company, the relevant possession is that of the company, not its individual representatives or agents; (3) When employees prevent a company's duly authorized director or managing director from accessing company premises and exercising lawful authority, this constitutes unlawful spoliation of the company itself; (4) Directors acting collectively through valid board resolutions constitute the controlling mind of a company, and their decisions bind employees who cannot lawfully resist or frustrate such decisions based on personal preferences; (5) An authorized agent of a company (such as a managing director appointed by valid board resolution) can properly bring spoliation proceedings on behalf of the company, with the agent acting as deponent to the founding affidavit in the company's name, not in a personal capacity.
The Court made several instructive observations: (1) It cited with approval the principle from First Mutual Investments (Pvt) Ltd v Roussaland Enterprises that "a company, as a legal person, has no mouth through which it articulates its intentions" and "speaks to no one except through its directors, not individually but collectively, through resolutions"; (2) The Court noted that the board of directors is responsible for strategic and operational decisions and ensuring statutory compliance, analogizing that "as the mind is the controlling faculty of a person's whole being, so are directors the controlling mind of the company"; (3) The Court observed that the appellants' approach demonstrated insincerity, as evidenced by their second ground of appeal which implicitly recognized that it was the respondent company (not Gonyora personally) relying on the resolution; (4) The Court commented that the appellants' arguments about employee worklogs showing continued operations were "of no moment" because the issue was whether the company's authorized representative could manage the business as mandated, not whether the appellants approved of how the company conducted its business; (5) The Court emphasized that "Ofer Sivan is not the company" and that employees' preference to receive instructions from him did not invalidate the company's valid resolutions.
This case is significant in Zimbabwean company law and spoliation jurisprudence for several reasons: (1) It clarifies the application of section 196(1) of the Companies and Other Business Entities Act regarding the validity of board resolutions passed by written consent, particularly in circumstances where a director is unavailable, establishing that a majority of available directors can validly pass a resolution; (2) It reinforces the principle that a company is a separate legal entity distinct from its directors and employees, and that directors collectively constitute the "controlling mind" of the company; (3) It establishes that spoliation of a company can occur when employees prevent the company's authorized representative (such as an Acting Managing Director) from accessing company premises and exercising lawful authority; (4) It confirms that employees cannot challenge or frustrate validly made board decisions based on their personal preferences for receiving instructions from a different director; (5) It demonstrates that an authorized agent acting on behalf of a company can properly bring spoliation proceedings in the company's name, not in the agent's personal capacity.