Washington Frera and Others v Chief Registrar Deeds, Companies and Intellectual Property N.O and Another

The applicants were directors of Showmate Industrial Holdings (Private) Limited. The Registrar of Deeds, Companies and Intellectual Property, purporting to act in terms of section 156 of the Companies Act [Chapter 24:03], made a decision to cancel and remove from the Companies registry records the CR14 and CR6 forms and annual returns that had been filed by the applicants. The Registrar then declared Mrs Yan Yu (second respondent) as Director and Secretary of the company and invited her to update the company records by filing annual returns. The applicants were aggrieved by this decision and sought a review, arguing that the Registrar acted unlawfully in violation of section 3 of the Administrative Justice Act [Chapter 10:28] and the Companies Act. The first respondent (Registrar) filed no meaningful opposition, stating only that they would abide by the court's decision. The second respondent opposed the application.

• Whether the application was fatally defective for non-compliance with Form No. 29 as required by Rule 230 of the High Court Rules 1971
• Whether the Registrar had the power under section 156 of the Companies Act to cancel company documents and appoint a director
• Whether the Registrar acted lawfully, reasonably and fairly as required by section 3 of the Administrative Justice Act
• The proper interpretation and scope of section 156 of the Companies Act relating to the Registrar's investigation powers

The application for review was granted as prayed for in the draft order filed of record. The court added an additional clause (e) ordering that the second respondent's legal practitioners shall not receive payment for defending the application as the opposition was ill-conceived and the legal practitioners should have advised their client accordingly.

The binding legal principle established is that section 156 of the Companies Act [Chapter 24:03] confers only investigative powers on the Registrar of Companies, limited to: (1) issuing written orders calling for production of company books or provision of information/explanations; and (2) initiating criminal proceedings where there is failure to comply with such orders. Section 156 does not empower the Registrar to cancel company documents from the registry or to appoint or remove company directors. Any exercise of such powers constitutes unlawful administrative action in violation of section 3 of the Administrative Justice Act [Chapter 10:28], which requires administrative authorities to act lawfully, reasonably and fairly. Where an administrative authority acts beyond its statutory powers, such action is ultra vires and subject to judicial review.

The court made obiter observations about the ethical duties of legal practitioners as officers of the court. Munangati-Manongwa J commented that legal practitioners owe a duty to the court to be truthful and professional regarding proper interpretation of the law, and that spending time "saying absolutely nothing pertaining to the question at hand is by all means not ethical at all." The judge observed that upon receiving the application, both respondents should have conceded that the Registrar exceeded his powers, rather than pursuing ill-conceived opposition. The court also noted, though did not decide on, the applicants' complaint that they were not served with the written order, which would have violated their right to be heard (audi alteram partem), though the court found this argument became superfluous given that the Registrar lacked the power to make the impugned decision in any event.

This case is significant in Zimbabwean administrative and company law for clarifying the limited scope of the Registrar of Companies' investigation powers under section 156 of the Companies Act. It establishes that the Registrar's investigative powers are procedural in nature - limited to calling for information and initiating criminal proceedings for non-compliance - and do not extend to making substantive decisions such as cancelling company documents or appointing directors. The case reinforces the principle that administrative authorities must act within the scope of their statutory powers as required by section 3 of the Administrative Justice Act. It also serves as a reminder to legal practitioners of their duty as officers of the court to properly interpret the law and advise clients accordingly, even when doing so may be contrary to their client's interests. The judgment demonstrates the court's willingness to impose costs sanctions on legal practitioners who pursue ill-conceived opposition.