The plaintiffs (Ritenote Printers (Private) Limited and John Kanokanga) issued summons against three defendants on 20 August 2012 claiming damages totaling over US$4.7 million arising from an allegedly wrongful eviction. The first plaintiff was evicted on 1 November 2010 from premises at 147 Mbuya Nehanda Road and Winston House, 109 Leopold Takawira Street, Harare, where it conducted its printing and photocopying business. The premises belonged to the first defendant (A. Adam & Company). The plaintiffs' claim was founded on injuria and consequent damages including loss of business, chronic depression, and storage charges. The second and third defendants were cited as individuals who controlled the first defendant's activities and through whose agency it acted. The defendants filed a combined exception and plea on 30 January 2013, denying wrongdoing and asserting they acted on a valid eviction order from the magistrate's court.
1. The second and third defendants were ordered to cease being parties to the proceedings in terms of Order 13 rule 87(2)(a), with costs remaining in the cause. 2. The exception was dismissed on the basis that the time within which it ought to have been determined had lapsed and it was rendered baseless by the defendant's plea to the merits. 3. Costs remained in the cause. 4. The summons was to be amended accordingly as provided by Order 13 rule 88.
1. An exception to a summons and declaration is an alternative to pleading to the merits under Order 21 rule 137 of the High Court Rules 1971, and the two cannot be properly combined in a single filing. 2. Once a defendant pleads to the merits, it implies that the summons and declaration disclose a cause of action and contain sufficient particularity, thereby neutralizing any previously filed exception. 3. Order 21 rule 138 prescribes strict time limits within which an exception must be set down for hearing by consent (10 days) or unilaterally (further 4 days), failing which the excepting party must plead over to the merits within a further 4 days, after which the exception cannot be heard before trial. 4. To hold company officers personally liable for corporate actions requires either a proper application to pierce the corporate veil based on established grounds (fraud, alter ego, etc.), or proceeding under section 318 of the Companies Act; mere joinder as defendants with general allegations of control is insufficient.
The court observed that the Trinpac Investments case, while authority for the proposition that courts can pierce the corporate veil mero motu in proper cases, turned on its peculiar facts involving a multiplicity of companies under an umbrella company in an interpleader action, and cannot be said to establish that the corporate veil should be pierced willy-nilly in every case. The court noted that each case depends on its merits and facts. The court also noted the object of an exception, citing Herbstein & Van Winsen, is "either, if possible to settle the case or at least a part of it, in cheap and easy fashion or to protect oneself against an embarrassment which is so serious as to merit the costs even of an exception." The court expressed full agreement with the reasoning in Tobacco Sales Producers (Pvt) Ltd v Eternity Star Investments regarding the incompatibility of exceptions and pleas to the merits, finding those observations "not only persuasive, but instructive in the simplicity with which they explain the correlation between an exception, and a plea to the merits."
This case is significant in Zimbabwean civil procedure for clarifying important procedural principles: (1) It reinforces that an exception and a plea to the merits are mutually exclusive alternatives under Order 21 rule 137 and cannot be combined in the same filing; (2) It establishes that pleading to the merits implies acceptance that the summons and declaration contain sufficient particularity, thereby waiving the right to except; (3) It provides guidance on the strict time limits under Order 21 rule 138 for setting down exceptions for hearing; (4) It confirms that piercing the corporate veil requires a proper application and cannot be achieved merely by joining company officers as defendants without establishing grounds for personal liability; (5) It applies the principle from Salomon v Salomon regarding the separate legal personality of corporations while acknowledging exceptions based on policy considerations in appropriate cases.