High Court dismisses ZSE application

The High Court has dismissed Zimbabwe Stock Exchange's application for exception in a case where the local bourse is facing a $50 million lawsuit for damages by listed diversified group, Meikles Limited. The ZSE in 2013 suspended the trading of Meikles shares and the suspension was carried out without affording Meikles Limited an opportunity to make representations before action was taken prompting the group to approach the High Court.

Meikles Limited (plaintiff) issued summons against the Zimbabwe Stock Exchange and chief executive Alban Chirume in his personal capacity claiming damages in the sum of $50 million.

The ZSE, however, appeared before the High Court to defend and filed an exception on behalf of both defendants and a special plea in bar in respect of Mr Chirume.

Meikles Limited had previously filed a complaint alleging a breach of administrative law duties of Administrative Justice (Chapter 10:28) in order to justify the declaration and claim for the damages.

The diversified group argued that the ZSE acted outside the law and did not accord Meikles the right to be heard which was in breach of Section 3 of the Administrative Justice Act.

Meikles further submitted that "if one attack's the reputation of a company, shares of the company will suffer a loss. The price at which a share trades is directly linked to how the company peforms. The question of quantum is an actuarial issue. Plaintiff claims for purely economic loss."

The ZSE defence team argued that Meikles Limited failed to establish a cause of action against the defendants in that it failed to avert, with particularity, all the essential requirements for liability in delictual claim.

ZSE further said there was no link between the alleged negligence and the loss suffered by the plaintiff and the declaration did not state the manner in which the patrimonial loss arose.

Justice Lavender Makoni who presided over the case dismissed ZSE's application for exception.

"I want to conclude by saying that one can sympathize with the position taken by the defendants in that although one can discern a cause of action for the summons and declaration, it is a long winding and inelegantly drafted pleadings.

"For this reason although the plaintiff has succeeded, I will depart from the norm that costs follow the cause.

This is due to the fact that had been drafted in terms of the rules; the exception would not have been taken. As a result the exception is hereby dismissed," said Justice Makoni while delivering his judgment.

Justice Makoni however upheld the special plea in bar where Meikles Limited was suing Mr Chirume in his personal capacity as chief executive of the bourse.

"The claim for the alleged fail in that share price of the plaintiff's shares cannot be made by the plaintiff as it does not own the shares," ZSE in its defence.

"There is no allegation that Chirume acted willfully, maliciously and deliberately ignored the law which he must uphold. There are no facts pleaded that suggest that he went beyond the scope of his calling of the CEO of the ZSE. He is therefore entitled to protection in his personal capacity. In the result, the special plea in as far as it relates to Mr Chirume, in his personal capacity is upheld," said Justice Makoni in his judgment.

The judgment was after ZSE defence team had argued that Mr Chirume avers the claim against him in his personal capacity is bad in law and ought not to have been instituted.

This was based on the fact that it is common cause that Mr Chirume is employed by the ZSE as its chief executive and at all times relevant to the plaintiff's claim, he acted as an official on behalf of his employer ZSE.