Nature Trails Travel & Tours v Wild Africa Travel t/a ZITT

The parties entered into a transport agreement whereby the applicant (Nature Trails Travel & Tours) was to supply buses to carry the respondent's (Wild Africa Travel t/a ZITT) touring clients. After being invoiced, the respondent refused to pay, alleging that the agreement was concluded with an employee (Elisha Munuwa) who had no authority to bind the company and who also had an interest in the applicant company. The applicant's directors were Elisha Munuwa and his wife Thamary Regina Munuwa. The respondent contended the contract was fraudulent because Munuwa dealt with himself. At the close of the plaintiff's case, the court a quo granted absolution from the instance on the grounds that Munuwa did not have a company resolution authorizing him to conclude the contract and had not disclosed to both companies that he was an interested party.

• Whether the test for absolution from the instance was correctly applied by the court a quo
• Whether Munuwa could bind the respondent to a contract
• Whether the applicant had established a prima facie case for payment for services rendered
• Whether fraud was established to justify lifting the corporate veil
• Whether the absence of a company resolution and non-disclosure of interest justified absolution from the instance

1. The appeal is allowed. 2. The order for absolution from the instance is hereby set aside. 3. The matter is remitted to the trial magistrate for continuation of trial. 4. Costs in the cause.

At the close of the plaintiff's case, absolution from the instance may only be granted if there is no evidence upon which a reasonable court might find in favour of the plaintiff. A company is a separate legal person from its directors and shareholders, and the corporate veil may only be lifted in specific instances, such as where fraud is proved. Where a plaintiff has led evidence of services rendered and established a prima facie case for payment, the defendant bears the burden of proving defenses such as fraud. Absolution from the instance is inappropriate where fraud has not been proved and a prima facie case has been established.

The court observed that it is a basic tenet of company law that a company is a factitious person completely separate from its directors and shareholders, and emphasized that courts are not at liberty to lift the corporate veil except in specific instances. The court noted that the matter fundamentally turned on whether Munuwa could bind the respondent to a contract and whether the applicant rendered service to the respondent for which it should be bound.

This case clarifies the proper application of the test for absolution from the instance in Zimbabwean civil procedure. It reinforces the fundamental principle of company law that a company is a separate legal entity from its directors and shareholders, and that the corporate veil should not be lifted absent proof of fraud or other exceptional circumstances. The case emphasizes that at the absolution stage, allegations of fraud must be proven before such a drastic step can be taken. It also demonstrates that where services have been rendered and a prima facie case established, the burden shifts to the defendant to prove any defenses such as fraud, and absolution should not be granted merely on allegations without proof.