On 19 November 2012, the High Court granted default judgment in favour of the respondents (Ray Mavhusa and Sarudzai Mavhusa) against the applicant (McDowell's International (Pvt) Ltd). The applicant had entered an appearance to defend out of time and was therefore barred. On 1 December 2012, the applicant filed an application seeking to have the default judgment set aside. On 22 November 2013, the applicant was placed under Judicial Management. The founding affidavit was deposed to by Member Chifamba, who was not the Judicial Manager. The appearance to defend had been filed on 10 October 2012, which was out of time. On 22 October 2012, the Judge noted the late appearance, and on 2 November 2012, the respondents explained to the Judge's clerk that the appearance was filed out of time. On 19 November 2012, the Judge heard the matter in chambers and granted the default judgment.
The application to set aside the default judgment was dismissed with costs.
When a company is placed under judicial management, only the judicial manager has the legal authority to bring proceedings before the court on behalf of that company. An application brought by any other person, including officers of the company, is legally invalid unless ratified by the judicial manager. This procedural irregularity is fatal to the application. Furthermore, an appearance to defend filed out of time is a nullity and a court does not erroneously grant default judgment when it has properly exercised its mind on the issue of the late appearance before granting judgment.
The court observed that all parties had ignored the legal aspect regarding the judicial management status of the applicant. The court also noted, obiter, that even if the procedural defect regarding standing were overlooked, the application would still fail on its merits because the original Judge had properly considered the issue of the late appearance to defend before granting the default judgment. The court's reference to Rule 449 not applying suggests that the rule concerning setting aside judgments does not extend to situations where an appearance to defend is a complete nullity due to being filed out of time.
This case is significant in Zimbabwean law (which shares similar principles with South African law due to their common legal heritage) for clarifying that when a company is placed under judicial management, only the judicial manager has the legal authority to institute or continue legal proceedings on behalf of the company. The case also reinforces the principle that an appearance to defend filed out of time is a nullity and that a court does not erroneously grant default judgment when it has properly exercised its mind on the issue of late filing. The case demonstrates the importance of proper legal standing and procedural compliance in court applications.