First applicant, Warman Zimbabwe (Pvt) Ltd, was a company registered in Zimbabwe with 99.9% shares held by second applicant, C H Warman Holdings (Pvt) Ltd (an Australian company), and 0.1% held by the Estate of the Late C H Warman. The company was managed by Weir Minerals Africa from 2008. First respondent, Stewart Dhliwayo, was appointed as Branch Manager and Company Secretary of Warman Zimbabwe in August 2002. In 2015, first respondent commenced indigenisation initiatives to comply with Zimbabwe's indigenisation laws, engaging the Ministry of Indigenisation and Economic Empowerment. This resulted in the indigenisation of the company, the appointment of first, second and third respondents as directors, and the allotment of shares to certain respondents. The applicants alleged that first respondent fraudulently allocated shares to himself and others without the knowledge and consent of the shareholders. A resolution was passed on 12 October 2015 authorizing Tariro Memezi Nyoni to institute legal proceedings and manage the company's business affairs. The applicants sought orders to cancel the indigenisation and declare the appointments and share allotments unlawful.
The matter was referred to trial with the papers filed of record to stand as pleadings. The applicants were ordered to pay the costs of suit.
A company resolution authorizing legal representation must be validly passed at a properly constituted Board meeting, and failure to convene such a meeting renders any purported resolution invalid, making an application not properly before the court. Where there is a genuine material dispute of fact that cannot be resolved on affidavit evidence alone, the court has discretion to either dismiss the application or refer it to trial, and such matters should proceed by way of action proceedings to allow parties to lead viva voce evidence. Directors of a company can only act validly when assembled at a board meeting, as a company is a separate legal persona from its directors.
The court observed that the applicants treated the issue of whether a dispute of fact existed in a very cursory manner in their heads of argument. The court also noted that at the time the founding affidavit was deposed to, the deponent was aware of the factual disputes in the matter, particularly concerning whether first respondent acted with express or implied authority of the shareholders in indigenizing the company. The court remarked that this was not a matter where dismissal would be appropriate in the exercise of its discretion, but rather referral to trial was the proper course.
This case is significant in South African (and Zimbabwean) company law jurisprudence as it reinforces the fundamental principle that a company, as a separate legal persona, can only be validly represented in legal proceedings through proper authorization by its Board of Directors acting at a duly constituted meeting. The case also demonstrates the proper application of the rule regarding material disputes of fact in motion proceedings, confirming that where there are genuine factual disputes that cannot be resolved on affidavit evidence, the matter should be referred to trial for viva voce evidence rather than being adjudicated on the papers. The judgment also touches on important issues regarding indigenisation compliance and corporate governance in the context of foreign-owned companies operating in Zimbabwe.