Motor Cycle (Private) Limited v Old Mutual Property Investments Corporation (Private) Limited

On 22 October 2002, the parties entered into a lease agreement in terms of which the respondent leased to the applicant property known as Unit 3 of Stand 4491 Lisburn Road, Harare. On 22 May 2006, the respondent issued summons claiming arrear rentals of $67,428,009.94 plus interest, holding over damages, cancellation of the lease agreement, and ejectment from the leased premises. On 29 May 2006, the applicant purported to enter an appearance to defend through a representative of the company and not through a legal practitioner. On 10 July 2006, the respondent notified the applicant in writing that the notice of appearance was defective as it ought to have been entered by a legal practitioner, as companies cannot represent themselves in the High Court. The applicant failed to remedy the defective appearance to defend. The respondent applied for default judgment on 25 July 2006, which was granted on 18 July 2006. The applicant then applied for rescission of the default judgment.

• Whether the default judgment was erroneously granted within the meaning of Rule 449(1)(a) of the High Court Rules
• Whether a company can enter an appearance to defend in the High Court without legal representation
• Whether the applicant fell within the exceptional circumstances exception to the common law rule requiring companies to be represented by legal practitioners
• Whether the applicant was the alter ego of its managing director such that it could represent itself

The application for rescission was dismissed with costs on an ordinary scale.

A default judgment granted against a company that entered appearance to defend through a representative rather than a legal practitioner is not erroneously granted where the company does not fall within the exceptional circumstances exception to the common law rule requiring legal representation. A company operates through its directors and does not qualify as appearing through its alter ego merely because one of its directors is involved in its management, particularly where decisions are made through board resolutions and multiple directors are involved. To succeed with rescission under Rule 449(1)(a), an applicant must establish: (1) that the judgment was erroneously granted; (2) that such judgment was granted in the absence of the applicant; and (3) that the applicant's rights or interests are affected by the judgment.

The court observed that there are three separate ways in which a judgment in default of one party may be set aside: in terms of Rule 63, or Rule 449(1)(a), or in terms of common law, and these should not be conflated. The court noted that rescission under Rule 63 and common law requires the applicant to show 'good and sufficient cause', which means: (a) giving a reasonable and acceptable explanation for the default; (b) proving that the application is bona fide and not made with the intention of merely delaying the plaintiff's claim; and (c) showing a bona fide defence to the plaintiff's claim. The court also commented that counsel cannot give evidence from the bar regarding facts not pleaded in the affidavits, particularly when responding to matters put in issue by the opposing party.

This case reinforces the common law rule in Zimbabwe that companies cannot represent themselves in the High Court and must be represented by legal practitioners, except in exceptional circumstances where the company can be said to appear through its alter ego. The judgment provides guidance on when a company may fall within the exception to this rule, emphasizing that the exception is narrow and requires the company to be the embodiment of a human being (typically small companies where one person is the directing mind). The case also clarifies the different bases for rescission of default judgments (Rule 63, Rule 449(1)(a), and common law) and their respective requirements, confirming that these are separate grounds that cannot simply be read together.