Francis Urayayi Chingozho N.O (In his capacity as the Judicial Manager of Myrammar Farming (Pvt) Ltd t/a Cottzim) versus Chandra Mohan Goyel and Others

On 8 June 2016, the first respondent issued summons against Myrammar Farming (Pvt) Ltd, a company under judicial management, and six other defendants for recovery of a loan advanced in December 2011 that was due in December 2012. The summons was served on Alex Dera at Grant Thornton Chartered Accountants, where the judicial manager Reggie Saruchera was based. No appearance to defend was entered within the stipulated 10 days, and Myrammar Farming was automatically barred. The second to seventh defendants entered appearance to defend and the matter proceeded against them. In 2017, Francis Chingozho was appointed as the new judicial manager. He claimed he was not given any court documents by the previous judicial manager and only became aware of the pending case in March 2020 when a director contacted him about a trial date set for 12 March 2020. The applicant then filed for condonation of late filing on 25 June 2020, four years after the summons was served. The second to seventh respondents subsequently settled their debts and were no longer parties to the litigation.

• Whether condonation should be granted for failure to enter appearance to defend and plea timeously
• Whether the explanation for the delay in compliance with the rules was reasonable and acceptable
• Whether the applicant had good prospects of success on the merits
• Whether the respondent's claim had prescribed
• Whether the acknowledgment of debt interrupted the running of prescription
• Whether the respondent would be prejudiced if condonation was granted
• Whether leave of court was required to institute proceedings against a company under judicial management

The application for upliftment of bar and condonation for late filing of appearance to defend and plea was dismissed with costs.

Condonation for non-compliance with rules is a discretionary indulgence, not a right, and requires the applicant to show good cause by providing a full, reasonable and acceptable explanation for all periods of delay. Material non-disclosures to the court warrant dismissal of a condonation application. An applicant must bring a condonation application immediately upon becoming aware of the default. Where delay is inordinate and unexplained, condonation should be refused regardless of prospects of success. Section 301(1)(c) of the Companies Act [Chapter 24:03] only applies to stay existing proceedings against a company under judicial management and does not bar institution of fresh proceedings. In assessing prospects of success in a condonation application, the defence must be properly pleaded with sufficient detail to enable the court to assess its merits. An acknowledgment of debt interrupts the running of prescription. Where an applicant has no bona fide defence on the merits and the application appears designed to frustrate legitimate claims, condonation should be refused. The court must consider prejudice to the respondent, convenience of the court, and the need for finality in litigation when exercising its discretion on condonation.

The court observed that litigants should take courts seriously, commenting critically on the applicant's approach of challenging the existence of an acknowledgment of debt without having seen it, and then suggesting it was signed by someone without authority. The court noted that the applicant appeared to have made the application in bad faith simply to frustrate the respondent's efforts to recover the outstanding loan, particularly given that other respondents who guaranteed the loan had shown willingness to settle and had paid part of the debt. The court remarked that it would be a waste of time and money to grant condonation in a hopeless case. The judge also commented that the applicant had no luxury to simply 'fly into the proceedings' at the trial stage after years of inaction.

This case is significant in Zimbabwean civil procedure for establishing important principles regarding condonation applications. It emphasizes that condonation is an indulgence, not a right, and requires a full and candid explanation for all periods of delay. The judgment reinforces that material non-disclosures and lack of candor with the court will result in refusal of condonation. It also clarifies that section 301(1)(c) of the Companies Act relating to judicial management only stays existing proceedings and does not bar fresh proceedings against a company under judicial management. The case demonstrates that where an applicant relies solely on a technical defence such as prescription in a condonation application, it must be properly pleaded with sufficient detail to enable the court to assess its merits. The judgment shows courts will refuse condonation where the delay is inordinate, the explanation inadequate, prospects of success weak, and granting condonation would cause prejudice to the other party and delay the administration of justice.