Timothy Gwashero Zakeyo v Godfrey Nyamutambo and Others

The 4th respondent, Voltcon (Pvt) Ltd, was a company with two directors and shareholders: the applicant Timothy Gwashero Zakeyo and the 1st respondent Godfrey Nyamutambo. On 3 June 2011, stand number 2798 Light Industrial Sites, Kwekwe was registered in the name of Voltcon (Pvt) Ltd, being the company's only property. About a year later, the two directors developed irreconcilable differences and decided to dispose of the company's stand. They held a meeting on 2 June 2012 to draw up a resolution to sell the property, which was postponed to 4 June 2012 for finalization. However, the applicant refused to sign the agreement, and consequently there was no agreement to dispose of the property. Out of frustration, the 1st respondent put up the property for sale and erected a sale advertisement billboard despite the absence of any agreement and without approval from the company in a general meeting.

• Whether the applicant had locus standi to bring the application as a shareholder with a direct interest in the company's property
• Whether the 1st respondent, as a director, had lawful authority to sell the company's property without approval from the company in a general meeting
• Whether the provisional order should be confirmed

The court granted the following order: (1) A declaration that the 1st respondent had no lawful authority to act for and on behalf of the 4th respondent to sell stand number 2798 Light Industrial Sites, Kwekwe; (2) The 1st respondent was ordered to remove the sale advertisement billboard erected at the stand; (3) If the 1st respondent failed to comply, the Deputy Sheriff, Kwekwe was ordered to remove the billboard and levy associated costs upon the 1st respondent; (4) The 1st respondent was ordered to pay costs of suit.

A director of a company cannot lawfully dispose of company property without approval from the company in a general meeting as required by section 183(1)(b) of the Companies Act [Chapter 24:03]. A shareholder has locus standi to bring proceedings in his own right to prevent unauthorized disposal of company property where he has a direct interest in that property as a shareholder.

The court noted that while the 1st respondent's legal representative conceded the impropriety of the 1st respondent's actions, he was not prepared to concede that the specific order sought by the applicant should be granted. The court found this position unsustainable and proceeded to grant the order nonetheless.

This case is significant in Zimbabwean company law as it reinforces the principle that company directors cannot unilaterally dispose of company property without proper authorization from the company in a general meeting. It also confirms that shareholders have locus standi to bring proceedings to protect their direct interests in company property, even when not suing derivatively on behalf of the company. The case illustrates the application of section 183(1)(b) of the Companies Act and the limits on directors' powers to deal with company assets.