Smethwick Trading (Private) Limited and Simba Mangwende v Rome Furniture Manufacturers (Private) Limited

The respondent sold its furniture manufacturing business as a going concern to the first appellant (represented by the second appellant as managing director) effective 1 June 2013. The purchase price was US$110,000, payable by way of deposit of US$92,000 and the balance in installments. The first appellant was to pay occupational rent for the premises (which belonged to the respondent) until 31 January 2014 when it was to vacate. The second appellant signed a deed of suretyship binding himself as surety and co-principal debtor. The appellants moved onto the premises but made no further payment beyond the deposit and failed to vacate by 31 January 2014. The respondent obtained a default judgment for eviction and payment of US$75,000 in outstanding occupational rent when the appellants failed to file opposition within the dies induciae. The appellants then applied for rescission of the default judgment, claiming they miscalculated the deadline due to misinformation from their security guard, and that the agreement was subject to a suspensive condition and they had not taken over the business.

• Whether the High Court properly exercised its discretion in dismissing the application for rescission of judgment
• Whether the court erred in proceeding on the assumption that the first appellant had taken control of the business when this was allegedly in dispute
• Whether the appellants had established grounds for rescission: absence of willful default and bona fide defence
• Whether an appellate court can interfere with the exercise of judicial discretion in rescission applications

The appeal was dismissed with costs on the ordinary scale (not the punitive legal practitioner and client scale originally sought by the respondent).

The binding legal principles established are: (1) An appellate court may only interfere with a lower court's exercise of discretion in rescission applications on limited grounds, following the principle in Barros & Anor v Chimphonda 1999 (1) ZLR 58 (S). (2) To succeed in a rescission application, an applicant must establish both absence of willful default and a bona fide defence with reasonable prospects of success. (3) In determining whether a bona fide defence exists, courts will examine the totality of evidence on record, including conduct of the parties that may be inconsistent with their stated position. (4) Where an applicant's own conduct (such as seeking return of business assets or exercising management control) contradicts their stated defence, this undermines their claim of having a bona fide defence.

The Court commended both counsel for their proper conduct of the appeal as officers of the court, particularly noting that the respondent's counsel elected not to press for costs on the punitive legal practitioner and client scale in view of the manner in which the appellant's counsel conducted the matter. This demonstrates the Court's appreciation for professional conduct and reasonable approaches to costs in civil litigation.

This case reinforces important principles in Zimbabwean civil procedure regarding rescission of default judgments. It confirms that: (1) rescission is an indulgence of the court requiring demonstration of both absence of willful default and a bona fide defence; (2) appellate courts will only interfere with the exercise of judicial discretion in rescission applications on limited grounds; (3) applicants for rescission must substantiate their claims with credible evidence, and courts will examine the totality of evidence on record; (4) conduct inconsistent with an applicant's stated position (such as seeking return of goods while claiming not to have taken over a business) can be fatal to rescission applications. The case also demonstrates proper conduct by legal practitioners in moderating costs applications in appropriate circumstances.