Judgment No. HB 108/14
Case No HC 388/14
X REF HC 310/13 & HC 419/13
ELIPHAS KAWA
Versus
VICTOR MUZENDA
And
THE ASSISTANT MASTER OF THE HIGH COURT
And
THE REGISTRAR OF DEEDS
And
VICTOR MUZENDA N.O.
And
ZEXCOM (PVT) LTD
IN THE HIGH COURT OF ZIMBABWE
TAKUVA J
BULAWAYO 6 MAY & 17 JULY 2014
Advocate Mrs H. Moyo for the applicant
Advocate L. Nkomo, for 1st, 4th & 5th respondents
Urgent Chamber Application
TAKUVA J: This is an urgent chamber application for leave to execute pending appeal. The case has a long, tortuous history dating back to 2009 resulting in numerous court orders being issued.
The background facts are as follows:-
The applicant sued the 1st respondent in his official capacity as provisional liquidator of ZEXCOM (Pvt) Ltd under case numbers HC 210/13 and HC 419/13. The two cases were consolidated and heard together by MAKONESE J on 23 January 2014. The court then delivered its judgment whose operative part reads as follows:
“(1) The provisional order granted to the applicant on 27th February 2013 under case number HC 419/13, be and is hereby confirmed save for the 6th respondent against whom the provisional order is hereby discharged.
(2) The 1st respondent shall pay the costs of the application on an attorney and client scale.
(3) It is hereby declared that the 1st respondent does not hold the office of liquidator of the 2nd respondent and accordingly all actions, all deeds of whatsoever nature, performed or undertaken by him while purporting to hold the office of liquidator be and are hereby declared null and void and of no force or effect.
(4) 1st respondent be and is hereby removed from the office of Provisional Liquidator of the 2nd respondent with effect from the date of this order.
(5) 1st respondent be and is hereby ordered to render to 3rd respondent full accounts in respect of all financial activities undertaken by him in respect of 2nd respondent with effect from 17th February 2010 to the date of this order, such accounts to be filed with 3rd respondent within ten (10) days of the service of this order upon 1st respondent.
(6) 1st respondent be and is hereby ordered to surrender to 3rd respondent all assets of 2nd respondent including movables and immovables, documents, deeds, records, including financial records, bank accounts, liquidation files, legal documents, equipment and any other assets whatsoever nature in his possession within ten (10) days of this order failing which the Deputy Sheriff be and is hereby authorized to carry out a diligent search and recover all such assets from 1st respondent.
(7) 3rd respondent be and is hereby [directed] to appoint Barbra Lunga as Provisional Liquidator of the 2nd respondent with powers conferred by section 221 (2) (a) or (g) of the Companies Act [Chapter 24:03].
(8) 1st respondent shall pay the costs of this application on an attorney and client scale.”
Dissatisfied, with and miffed by this order, 1st respondent in his official capacity and ZEXCOM (Pvt) Ltd (in liquidation) noted an appeal to the Supreme Court on 4 February 2014 against the whole judgment of MAKONESE J. The appeal is pending before the Supreme Court under case number SC 33/14. The grounds of appeal are listed as follows:
“1. The court a quo erred in coming to the conclusion that 1st respondent had no authority to dispose of the assets of second appellant such conclusion being at variance with an earlier and extant order of the same court of the 18th October 2011.
2. The court a quo also erred in coming to the conclusion that second appellant was not under final liquidation contrary to an earlier and extant order of the 22nd July 2011 which held that if funds to pay where (sic) not availed, second appellant would go in to final liquidation.
3. A fortiori, and it having been common cause that second appellant had failed to pay and thereby went into final liquidation, the court a quo erred in concluding that first appellant was not the liquidator notwithstanding that post the order of the 22nd July 2011, he had been recognized by the court as the liquidator.
4. The court a quo erred in coming to the conclusion that first appellant had failed to execute his duties as a liquidator, such conclusion having been arrived at on the unsubstantiated allegations of an interested minority shareholder who could not prove that his application was supported by the majority.
5. A fortiori, the court a quo erred in failing to consider that relief could only be afforded after proof of first appellant’s unsuitability at the instance of contributors, creditors as well as the Assistant Master of the High Court.
6. The court a quo erred in appointing Barbra Lunga as the liquidator without assessing her propriety for office and notwithstanding that she had clearly sought to overreach second appellant after it had gone into liquidation.”
The applicant has approached this court by way of urgent chamber application against 1st respondent both in his official and personal capacities and ZEXCOM (Pvt) Ltd (in liquidation) as 1st, 4th and 5th respondents – see amended urgent chamber application. The second respondent is the Assistant Master of the High Court while the 3rd respondent is the Registrar of Deeds.
The relief sought by applicant is a provisional order couched in the following terms:
“Terms of final order sought
That you show cause to this honourable court why a final order should not be granted in the following terms:
1. The operation of the judgment HB 10/14 granted by the Honourable Mr Justice Makonese on the 23rd January, 2014 in the consolidated matters HC 310/13 and HC 419/13 shall not be suspended by reason of the appeal noted by the 1st respondent to the Supreme Court under SC 33/14 or any other appeals, and shall have full legal effect regardless of such appeal, and 1st respondent be and is hereby ordered to comply with all its applicable provisions with immediate effect.
2. The 1st respondent pays the costs of this application on an attorney and client scale.
Interim relief granted
Pending the finalization of this matter, applicant is granted the following interim relief:
3. The 1st respondent be and is hereby interdicted and prohibited from disposing of, selling, transferring, alienating or in any way encumbering all of the movable and immovable properties of ZEXCOM (Pvt) Ltd.
4. The 1st respondent be and is hereby further interdicted and prohibited from performing any act of any nature purporting to be liquidator or provisional liquidator of ZEXCOM (Pvt) Ltd pending the outcome of the legal proceedings instituted by the 1st respondent in the Supreme Court under SC 33/14.
5. The 1st respondent be and is hereby ordered to forthwith render to 2nd respondent a full account of all assets of ZEXCOM (Pvt) Ltd in his custody including rentals collected in respect of all immovable properties since his assumption of control of ZEXCOM (Pvt) Ltd to date of service of this order upon him and to surrender to 2nd respondent all assets of the company including movable and immovable, documents, deeds, financial and legal records, bank accounts, and other assets of whatsoever nature in his possession, failing which the Sheriff of Zimbabwe, Bulawayo, be and is hereby directed to conduct a diligent search and recover all such assets from 1st respondent and all those claiming through him.
6. 2nd respondent be and is hereby ordered and directed to appoint Barbra Lunga as provisional liquidator of ZEXCOM with powers conferred by section 221 (2) (a) or (g) of the Companies Act [Chapter 24:03] in terms of the judgment of this honourable court under case number HB 14/14.”
The facts of this matter are simple and straight forward. The applicant is a shareholder of the 5th respondent. On 27th February, 2013, this court issued a provisional order against the 1st respondent. The applicant sought confirmation of this order and the matter was placed before MAKONESE J under case number HC 419/13. At the same time applicant under case number HC 310/13 sought the removal of 1st respondent from the office of provisional liquidator and other ancillary relief. The two matters were consolidated and heard at the same time after KAMOCHA J so ordered. MAKONESE J then dealt with the two matters and in judgment number HB-10-14 issued the order referred to earlier in this judgment.
The applicant’s argument is that 1st respondent’s appeal to the Supreme Court is clearly without merit and is in fact frivolous and vexatious in that the issues raised as grounds of appeal were dealt with extensively by the applicant in the court a quo. In particular, the following facts are indisputable:
(a) that there is to date no final order for the liquidation of ZEXCOM (Pvt) Ltd.
(b) that the 1st respondent was never appointed liquidator of ZEXCOM either by order of this court or by the 2nd respondent.
(c) that the 1st respondent does not have the legal authority to sell and was never authorized to sell any immovable property of ZEXCOM by any order of this court.
Further, it was submitted that the 1st respondent’s conduct in relation to the maladministration of ZEXCOM’s affairs, its properties and its funds is also clearly documented in the submissions made before this court in previous applications. In particular, the following issues were highlighted:
(i) the failure by 1st respondent despite being afforded reasonable opportunity to account for ZEXCOM funds since his appointment, in light of the fact that none of the membership of the company or any other beneficiary has received any disbursements.
(ii) 1st respondent once undertook to deliver to the 2nd respondent by 31st January, 2014 a detailed report of the affairs of ZEXCOM since his appointment. No such report has been furnished to the 2nd respondent by 1st respondent to date.
Applicant also submitted that 1st respondent has ignored all other attempts to have him conduct himself responsibly including orders of this court and instructions of the Deputy Master. There is therefore no other alternative remedy in the circumstances other than to have the judgment executed pending appeal. This is particularly so because after filing his appeal at the Supreme Court on 4 February, 2014, 1st respondent on 7 February, 2014 wrote a letter to Barbra Lunga copied to the Deputy Master and others stating that following his appeal, the High Court judgment of the 23rd January, 2014 had been “set aside” pending the final determination of the appeal and demanded that all rentals revert to him on this account.
As regards urgency, it was argued that there is urgent need to interdict the 1st respondent from continuing to access the funds of ZEXCOM and masquerade as liquidator of ZEXCOM or as provisional liquidator. In respect of irreparable harm, it was submitted that if applicant does not obtain the relief sought it will suffer irreparable harm in that several thousands of dollars remain unaccounted for as 1st respondent stonewalls and thumbs his nose at the judgment refusing to account for the funds.
Applicant further submitted in respect of the requirements for an application for leave to execute pending appeal that the court has a general discretion to grant or refuse leave, and if leave be granted, to determine the conditions upon which the right to execute shall be exercised. Reliance was placed on the following authorities:
(a) South Cape Corporation (Pty) Ltd v Engineering Management Services (Pvt) Ltd 1977 (3) SA 534
(b) Zimbabwe Distance (Correspondence) Education College (Pvt) Ltd v Commercial Careers College (1980) (Pvt) Ltd 1991 (2)
(c) Econet (Pvt) Ltd v Telecel Zimbabwe (Pvt) Ltd 1998 (1) ZLR 149 (H)
The legal principle enunciated in these cases is that in an application for leave to execute on a judgment, pending appeal against that judgment, the court, whilst retaining a wide discretion, will only order execution in such circumstances where the order would cause irreparable harm to the respondent, if it feels that an appeal has been noted with no bona fide intention of seeking to reverse the judgment, but merely to buy time, or where the appeal stands no prospects of success whatsoever.
In casu, it was submitted that the appeal had been noted with no genuine intention of seeking to reverse the judgment but merely to buy time. It was further submitted that the 1st respondent’s prospects of success are non-existent.
Having been served with the urgent application, the 1st respondent filed an opposing affidavit wherein he raised the following issues:
(a) that the matter is not urgent in that no event has accrued that warrants the matter to be treated as urgent.
(b) that there is improper citation, of the 1st respondent. The argument is that the 1st respondent has been wrongly cited in his personal capacity when the judgment sought to be enforced pending appeal is against the 1st respondent in his official capacity.
(c) that the urgent chamber application is bad at law in that it is not exactly an application for leave to execute pending appeal.
(d) that the urgent chamber application and the interim relief sought render nugatory or abrogates the 1st respondent’s right to appeal.
(e) that the applicant has failed to establish the relevant factors which ought to be considered in determining whether to grant leave to execute pending appeal.
(f) that the appeal filed by the 1st respondent and ZEXCOM (Pvt) Ltd (in liquidation) has merits and the applicant’s contention that it is frivolous and vexatious or mala fide is totally without foundation.
I now deal with these grounds seriatum.
As regards urgency my view is that the matter is one of extreme urgency. The urgency arises from 1st respondent’s conduct and what he intended or planned to do shortly after noting his appeal to the Supreme Court on 4 February 2014. It is abundantly clear that he adopted the attitude that it was business as usual and he could perform those functions he had been barred from performing by MAKONESE J. He did not deny penning a letter dated 7 February, 2014 to Barbra Lunga (the incoming liquidator) advising her that in fact MAKONESE J’s judgment had been “set aside” pending the finalization of the appeal, and that all rentals should be sent to him. When applicant got wind of these not so good intentions, it filed this application on or about the 19th February, 2014. Applicant was fortified in doing this by MAKONESE J’s specific findings on 1st respondent’s numerous misdeeds.
Most importantly however, it is not so much of what he did after noting the appeal than what he intended to do coupled with his previous conduct of lack of transparency, gross incompetence and non-accountability that alarmed the applicant. In my view, the issue is not that applicant must prove that 1st respondent is abusing ZEXCOM funds, but rather that applicant suspects on reasonable grounds that 1st respondent is abusing those funds, a fortiori when the court has found that 1st respondent is not properly performing the duties imposed upon him by the Companies Act [Chapter 24:03].
In respect of the improper citation my view is that it was cured by the amendment in accordance with Rule 87 (1) and (2) (b) of this Court’s rules. The effect of the amendment is to join 1st respondent in his official capacity as 4th respondent and ZEXCOM becomes 5th respondent. Linked to this ground is a related ground raised rather belatedly by Advocate Nkomo namely that applicant has cited a non-existing party in that there is no legal entity called ZEXCOM (Pvt) Ltd but ZEXCOM Foundation Investment Fund (Pvt) Ltd. It was further submitted that 4th respondent was never appointed as a liquidator of ZEXCOM (Pvt) Ltd but of ZEXCOM Foundation Investment Fund (Pvt) Ltd. Also it was submitted that 1st respondent has since filed this as a supplementary ground in the Supreme Court, for these reasons it was submitted that these and earlier proceedings are null and void abinitio. Reliance was placed on the following cases:
(a) JDM AGRO Consultancy & Marketing (Pvt) Ltd v Editor The Herald & Anor 2007 (2) ZLR 71 (H) at 75C – E
(b) Garia Safaris (Pvt) Ltd v Van Wyk 1996 (2) ZLR 246 (h)
Finally, it was argued on 1st respondent’s behalf that this supplementary ground of appeal strengthens his prospects of success on appeal. This court was then urged not to “speculate” on what the Supreme Court might do on appeal. The court was referred to two authorities, namely; J.G. Construction v Chadwick & Anor 2012 (1) ZLR 358 (H); and Maydale International Marketing (Pvt) Ltd v Dr Kelly & Anor HH-04-10.
Applicant’s response was that 1st respondent did not raise this issue at all during the previous proceedings only to adopt it midstream after it was raised in a separate application for joinder by some shareholders. The 1st respondent knew of the correct citation since 2010 but has never objected to this mis-description. The 1st and 5th respondents did not suffer any prejudice as a result. In fact, 1st respondent in all his papers including the appeal to the Supreme Court has been referring to the 5th respondent as ZEXCOM (Pvt) Ltd and not ZEXCOM Foundation Investment (Pvt) Ltd. Applicant denied that this mis-description of 5th respondent bolsters 1st respondent’s appeal in that applicant can apply for an amendment in the Supreme Court, which amendment is likely to be allowed since it is not mala fide or prejudicial to the other side.
In my view, the authorities support this position – see for example GOWORA J’s sentiments in Old Mutual Asset Management (Pvt) Ltd v F & R Travel Tours & Car Sales HH-53-07 wherein she stated:
“It is trite that an amendment even where it is intended to substitute a party will be granted unless the application to amend is mala fideor would cause prejudice to the other side which cannot be cured by costs.” (my emphasis)
In Devonia Shipping Ltd v M V Luis (Yeoman Shipping Co. Ltd Intervening) 1994 (2) SA 363 at p 369F-I it was stated that:
“The general rule is that an amendment of a notice of motion as in the case of a summon or pleading in an action will always be allowed unless the application to amend is mala fide or unless the amendment would cause prejudice to the other side which cannot be compensated by order for costs, or in other words, unless the parties cannot be put back for the purposes of justice in the same position as they were when the notice of motion which it is sought to amend was filed … The risk of prejudice will usually be less in the case where the correct applicant has been incorrectly named and the amendment is sought to correct the misnomer than in the case where it is sought to substitute a different applicant. The criterion in both cases, however, is prejudice which cannot be remedied by an order as to costs and there is no difference in principle between the two parties.” (my emphasis)
In casu, there can be no question of prejudice because the correct parties were brought before me. For these reasons, I am not persuaded that the proceedings before me are a nullity for want of 5th respondent’s proper description. This point in limine being without merit is hereby dismissed.
The 1st respondent also contended that the application is defective for lack of clarity. I do not agree for the simple reason that the application as it is, does not offend any rule of this court. While the interim relief sought is on the nature of an interdict, the final order sought is for leave to execute pending appeal. Both the applicant’s founding affidavit and the certificate of urgency support this position. I do not find any merit in this point and it is therefore dismissed.
As regards the contention that applicant does not want the 1st respondent to exercise his right to appeal to the highest court, I am of the view that the authority cited by the 1st respondent namely – Zimbabwe Mining Development Corporation & Anor v African Consolidated Resources PLC & Ors 2010 (1) ZLR 34 does not support his case. In that case, CHIDYAUSIKU CJ did not say that an application for leave pending appeal renders nugatory or abrogates a litigant’s right to appeal. Far from it, the learned Chief Justice at page 39G-40A expressed himself with utmost clarity as follows:
“Once a judgment is given, the losing party who has a right to appeal is entitled, if he so wishes, to note an appeal. The noting of an appeal has the effect of suspending the judgment. It is only then that the successful party can make a special application for leave to execute the judgment despite the noting of an appeal. The losing litigant is entitled to respond to that application. It is only after hearing both parties to the special application for leave to execute that a court can properly exercise its discretion on the matter …”
In the absence of exceptional circumstances, due process must be observed before issuing such an order. The litigant’s right to appeal should not be abrogated lightly and without due process.” (my emphasis)
In casu, due process has been observed and there is no question of lightly abrogating 1st respondent’s right to appeal. Consequently this ground is dismissed.
The last two grounds relate to the same thing namely the requirements for an application for leave to execute pending appeal. I shall consider them at once. The factors to take into account in determining whether to grant leave to execute pending appeal were set out in South Cape Corporation v Engineering Management Services 1977 (3) SA 534 (A) at p 544H-545H where it was held that:
“The court to which application for leave to execute is made has a wide general discretion to grant or refuse leave and if leave be granted, to determine the conditions upon which the right to execute, shall be exercised … In exercising this discretion, the court should, in my view, determine what is just and equitable in all the circumstances, and in doing so, would normally have regard, inter alia to the following factors:
(1) The potentiality of irreparable harm or prejudice being sustained by the appellant (respondent in the application) if leave to execute were to be granted;
(2) The potentiality of irreparable harm or prejudice being sustained by the respondent on appeal (applicant in the application) if leave to execute were to be refused;
(3) The prospects of success on appeal, including more particularly, the question as to whether the appeal is frivolous or vexatious or has been noted with the bona fide intention of seeking to reverse the judgment but for some indirect purpose, e.g. to gain time to harass the other party; and
(4) Where there is the potentiality of irreparable harm or prejudice to both appellant and respondent the balance of hardship or convenience, as the case maybe.”
In Econet (Pvt) Ltd v Telecel Zimbabwe (Pvt) Ltd 1998 (1) ZLR 149 (HC) at p 154F-155A it was held that:
“In determining an application for leave to execute pending an appeal, the court must have regard to the “preponderance of equities,” the prospects of success on the part of the appellant and whether the appeal has been noted without “the bona fide intention of seeking to reverse the judgment but for some indirect purpose e.g. to gain time or to harass the other party.”
Similarly in ZDECO (Pvt) Ltd v Commercial Careers College (1980) (Pvt) Ltd 1991 (2) ZLR 61 (HC) it was held that in an application for leave to execute on a judgment pending appeal against that judgment, the court whilst retaining a wide discretion, will only order execution in such circumstances where the order would cause irreparable harm to the respondent, if it feels that an appeal has been noted with no bona fide intention of seeking to reverse the judgment, but merely to buy time, or where the appeal stands no prospects of success whatsoever.
In this case it is difficult to imagine how respondent’s removal would cause irreparable harm to him. I say so because the whole purpose of the judgment he is appealing against is to have him removed from the position of provisional liquidator. If he succeeds in his appeal, the status quo will be restored. Therefore, there is nothing irreparable about it. Put differently, Victor Muzenda NO and Victor Muzenda in his personal capacity will not suffer any irreparable harm if leave to execute is granted in that the position of provisional liquidator connotes fiduciary duties to be carried for and on behalf of a company.
As regards prejudice to the 5th respondent i.e. ZEXCOM (Pvt) Ltd, my view is that from the reasons given for respondent’s removal, it is crystal clear that the company will not suffer any prejudice whatsoever. In fact, the removal is potentially beneficial to ZEXCOM (Pvt) Ltd.
In respect of the potentiality of irreparable harm or prejudice being sustained by the applicant if leave to execute were to be refused, I am of the view that such harm or prejudice is massive in that applicant as a shareholder is expected to reap the fruits of his investments in ZEXCOM (Pvt) LTD. 1st Respondent has been mismanaging the affairs of this company for many years. Respondent also has failed to shake off allegations of financial mismanagement or embezzlement during his tenure as provisional liquidator. It is common cause that 1st respondent has not rendered an account of ZEXCOM assets since his appointment as provisional liquidator on 17 February, 2010 in flagrant violation of the provisions of the Companies Act [Chapter 24:03].
MAKONESE J in judgment number HB 10-14 succinctly in my view exposed the irreparable harm that applicant and 5th respondent are likely to suffer if 1st respondent is not removed from the post of provisional liquidator. He stated thus:
“It is clear that 1st respondent has not taken the opportunity to refute the allegations of impropriety, which allegations are of a serious nature. 1st respondent has chosen to studiously stonewall the allegations in the papers filed of record. It is trite that one of the most important functions of a liquidator is to keep creditors and all interested parties including shareholders informed of the proceedings in relation to the liquidation process so that creditors can monitor the payments and receipts to ensure that everything is properly done. The 1st respondent has not called a single meeting with the creditors and has even defied a directive of the Assistant Master to hold such a meeting. The creditors have not had a chance to examine 1st respondent’s accounts or to know how he is utilizing the funds that have been received for and on behalf of 2nd respondent.” (my emphasis)
The 1st respondent was found to be not a fit and proper person to continue as provisional liquidator for inter alia the following reasons:
(a) failure to convene creditors’ meetings from 2009 to date;
(b) failure to render a proper account of 5th respondent’s assets;
(c) failure to account for proceeds of assets of 5th respondent sold without lawful authority;
(d) failure to satisfy a lawful demand by the Assistant Master to convene a creditors’ meetings;
(e) disposing of 5th respondent’s assets without the consent of the Assistant Master of the High Court.
Such conduct, harmful as it is, has caused untold prejudice to the applicant for more than four years. If leave to execute is not granted, the 1st respondent will most certainly continue to inflict more harm on the applicant and other stakeholders. What is more frightening is 1st respondent’s contention that as long as he occupied the position of liquidator, he, is not required to account to anybody. This is a dangerous misconception that must not be allowed to flourish. The 1st respondent has not denied the allegations that he has failed to account for payments he received from the sale of properties belonging to 5th respondent.
The final requirement relates to the prospects of success on appeal and more particularly the question as to whether the appeal is frivolous or vexatious or has been noted with the bona fide intention of seeking to reverse the judgment but for some indirect purpose e.g. to gain time to harass the other party.
I will deal with the question of prospects of success first. Here, it is instructive to closely examine the grounds of appeal. The first ground raises the issue of 1st respondent’s authority to sell 5th respondent’s property. The 1st respondent has attached as annexure A to his notice of opposition an order granted by KAMOCHA J on 21st day of July, 2010 as proof that he had authority to dispose of 5th respondent’s assets. In his notice of appeal, he refers to an order issued on 18th October 2011.
Be that as it may, the order he has attached relates to specific property and has a cut-off date being the 18th September, 2010. The applicant does not explain why in 2014 he was still selling property mentioned in an order issued four years ago. Further and more importantly, 1st respondent has not quantified the proceeds realized therefrom, how much has since been paid to those applicants mentioned in the order and how much is outstanding. The crux of the matter in my view is that, that order did not appoint 1st respondent as a liquidator, he remained a provisional liquidator without authority in terms of the provisions of the Companies Act to dispose of the immovable assets of a company. This is why paragraph 6 of the order he relied on states:
“6. Should the respondents fail to pay out the applicants herein and the 17 applicants under HC 412/10 or those mentioned in 5 above and the other costs or charges mentioned above, the 1st respondent’s properties shall be sold by private treaty to the best advantage, and from the proceeds thereof, the applicants and other shareholders, and costs/charges be paid out and the balance if any, be tendered to the 1st respondent or its lawful agency.” (my emphasis)
It should be noted that this paragraph does not state that the property shall be sold by 1st respondent. Neither does it authorize the seller to dispense with mandatory procedures prescribed in the Companies Act. The 1st respondent was not a party to the proceedings that gave rise to the order he is clinging on to. Ultimately therefore the 1st respondent has no authority to dispose of 5th respondent’s property.
The second ground has no merit in my view because there is no court order placing 5th respondent under final liquidation. The matter is as simple as that. First respondent has not attached any such order. The 5th respondent was placed under a provisional winding up order on the 4th of December 2009. This provisional order was never confirmed by any order of this court. It should be noted that the winding up of a company is done in accordance with the strict provisions of the Companies Act without exception. These statutory provisions make it mandatory to follow the procedure laid down therein. Therefore in the absence of a court order, there is no court that has or will recognize him as 5th respondent’s liquidator.
The fourth ground is hopeless in that in terms of the Companies Act, there is no need for the majority shareholders to apply jointly. As regards the findings on 1st respondent’s suitability, MAKONESE J’s judgment as shown above is very clear on the reasons he came to that conclusion. I would add that in my view, the matter is simply that 1st respondent has not produced an account of how the funds were utilized over the years he has been the provisional liquidator. He has failed, despite numerous demands and requests to produce bank statements or accounts for the 5th respondent. In light of this, what are 1st respondent’s chances that the Supreme Court will uphold his appeal? In my view, they are none.
The last and 6th ground criticizes the appointment of Barbra Lunga as provisional liquidator. The court has a discretion to appoint a liquidator. An appeal court may not interfere unless there is a mis-direction. In casu, there is no such misdirection.
For these reasons, I find that the appeal is frivolous and vexatious and has been noted without the bona fide intention of seeking to reverse the judgment but to harass the applicant. Consequently, the interim relief is hereby granted in terms of the draft order.
Joel Pincus, Konson & Wolhuter, applicant’s legal practitioners
Messrs Dururu & Associates c/o Moyo & Nyoni, 1st, 4th & 5th respondents’ legal practitioners
