Evolution Group Limited v Pan African Building Society

The respondent, Pan African Building Society, a Zambian incorporated company under liquidation, obtained a judgment against the applicant in the High Court of Zambia ordering payment of US$150,000.00 plus interest. To enforce this foreign judgment, the respondent filed a chamber application under HC 9471/19 for registration of the order in Zimbabwe. The application was granted as a default judgment on 19 December 2019. The applicant only became aware of the judgment in April 2021 when served with a notice of execution. The founding affidavit in the chamber application was sworn to on 12 November 2019 by a Zambian legal practitioner, Kingstone Musaila. However, the respondent had been placed under compulsory liquidation by the Bank of Zambia on 17 October 2019, and a liquidation manager was only appointed on 19 December 2019. These material facts were not disclosed to the court when the chamber application was filed on 20 November 2019. The applicant filed an application for rescission of the default order under HC 2484/21 and a separate application for stay of execution under HC 2085/21.

• Whether the application for rescission was filed within a reasonable time under Rule 449 and/or within one month under Rule 63 of the High Court Rules, 1971
• Whether the notice of renunciation by respondent's legal practitioners was valid
• Whether the respondent had locus standi in judicio to bring the chamber application given its status as a company under liquidation
• Whether there was material non-disclosure of facts to the court that would have affected the granting of the default order
• Whether the person who deposed to the founding affidavit in the chamber application had authority to do so
• Whether punitive costs should be awarded

1. The application for rescission was granted with costs on a legal practitioner-client scale. 2. The default order granted under HC 9471/19 on 19 December 2019 was set aside.

1. An application for rescission under Rule 449 must be made within a reasonable time, which depends on the circumstances of each case. Where an applicant becomes aware of a default judgment upon attempted execution, an application filed within one month satisfies both the Rule 63 requirement and the Rule 449 requirement for reasonable time. 2. A notice of renunciation by legal practitioners must give reasonable notice considering the circumstances, including the location of the client and adequacy of the address provided for service. Two weeks is unreasonable where the address is in a foreign jurisdiction and lacks sufficient detail for proper service. 3. Material non-disclosure of facts in chamber applications or default proceedings is fatal to the validity of an order obtained. Where a company is under liquidation and has no appointed liquidator, it cannot bring proceedings through unauthorized persons. 4. The placement of a company under compulsory liquidation strips it of the right to sue in its own name and must be disclosed to the court as a material fact. 5. A person who deposes to a founding affidavit on behalf of a company under liquidation without authority from a properly appointed liquidator has no standing to do so.

The court observed that locus standi is a matter of law and is not lost as a result of change of status since the real and substantial interest remains, but the issue is whether a party can exercise its locus standi without leave of the court. The court noted that while the applicant contributed to its problems by insisting on security for costs instead of filing a response, the issue of service 'pales in light of the uncontroverted fact that there was a deliberate non-disclosure of pertinent facts.' The court commented that legal practitioners must exercise restraint in making serious allegations of fraud against officers of the court in the absence of tangible evidence. The court also noted that engagement between parties must not detract an applicant from filing its response timeously. The court emphasized that punitive costs are granted in exceptional cases to signal the court's displeasure at conduct amounting to an attempt to 'snatch at a judgment.'

This case reinforces important principles regarding material non-disclosure in ex parte and default proceedings in Zimbabwean courts. It emphasizes that parties have a duty of utmost good faith when approaching the court without the presence of the other party, particularly regarding disclosure of facts that could materially affect the court's decision. The judgment also clarifies that companies under liquidation lose their right to sue in their own name and must act through properly appointed liquidators. The case provides guidance on what constitutes 'reasonable time' for purposes of Rule 449 rescission applications, particularly in the context of international service. It also addresses procedural issues regarding validity of notices of renunciation by legal practitioners, particularly where service must be effected in foreign jurisdictions. The award of punitive costs signals the court's intolerance of attempts to obtain judgments through material non-disclosure.