No S.C. 100\2002
Appeal No 344\2000
INCORPORATED v SURGIMED (PRIVATE) LIMITED
COURT OF ZIMBABWE
CJ, CHEDA JA & GWAUNZA AJA
JUNE 20 & NOVEMBER 11, 2002
Fitches, for the
Girach, for the
JA: The appellant (hereinafter referred to as Apotex) made
an application to the High Court for an order for the
winding up order of the respondent (hereinafter referred to as
Court dismissed the application with costs. Apotex appealed against
hearing both counsel, we dismissed the appeal with costs, reserved
our decision on the level of costs and said our reasons
These are the reasons.
Canadian company, entered into an agreement with Surgimed in 1992,
whereby Surgimed was granted exclusive agency to import
Apotexs products in Zimbabwe.
able to pay for the products initially, but by 1995 Apotex said
Surgimed was in arrears in the sum of US$280 000.
Surgimed could not pay, Apotex applied for a provisional winding-up
order against Surgimed.
hearing of the application Apotex argued that it had shown that
Surgimed was unable to pay its debt and the provisional winding-up
order should be granted.
conceding that to be so the court still refused to grant the order
and gave other reasons for doing so.
now proceed to deal with those reasons. The main grounds of appeal
by Apotex were that having found that Surgimed was unable
to pay its
debts the court should have issued the order, and the court erred in
taking into account mero
motu the issue of
stated above the main ground was conceded by the court and there is
no basis for raising the same ground on appeal.
On the issue
of prescription Apotex applied and was granted leave to file an
amendment to its grounds of appeal, raising the issue.
his judgment, the judge who heard the application stated that the
issue of prescription was raised by Mr Girach
in his argument. The record also shows that Mr Fitches
appeared for the appellant. In that case he would have been aware
that the issue was raised in court at the hearing of the application.
of the Prescription Act, [Chapter 8:11] provides as follows:-
20. Prescription to be raised
court shall of its own motion take notice of prescription.
that a court may allow prescription to be raised at any stage of the
it would have been a misdirection for the court to take notice of
prescription mero motu,
in this case, it was raised and argued during the proceedings. It
is, therefore, not correct to state that the court took notice
The point was raised as it was said that Surgimed had admitted
owing a certain amount in a letter written three years before the
judge went into detail to discuss whether the running of prescription
was interrupted by the service of the application. He
this was not so. His decision is supported by the authority of
Roller v Nobel Str. Central Inv.
1979 (2) SA 1127.
made it very clear that an application for a winding-up order is not
a legal proceeding for the enforcement of a right
relating to the
applicants debt and it is not a process whereby the applicant
claims that debt. The service of such an application
therefore, have the effect of interrupting the running of the
prescription of a debt in terms of s 6(1) of Act 18 of 1943
15(1) of Act 68 of 1969.
Act had the same provisions as s 19 of our Prescription Act 8:11.
of our Act reads as follows:-
19. Judicial interruption of
this section -
document whereby legal proceedings are commenced.
running of prescription shall, subject to subsection (3) be
interrupted by the service on the debtor of any process whereby
creditor claims payment of a debt.
It was also pointed out that an
application for the winding-up of a company is not process for the
purposes of enforcing payment.
See also Prudential
Shippers SA Ltd v Tempest Clothing (Co) Pvt Ltd and Ors
1976 (2) SA 856 (W) and Collet
v Priest, 1931 AD 290.
The court a
quo also dealt with
the point of a disputed liability although in this case liability was
not disputed completely but the quantum.
The court found support
for its decision in Stambolie
& Anor v Nyamutamba Transport (Pvt) Ltd
1985 ZLR 320 wherein SANDURA JP, as he then was, pointed out that
winding-up proceedings should not be resorted to in order to enforce
payment of a debt, the existence of which is bona
fide disputed on
reasonable and substantial grounds; the procedure is not designed
for the resolution of disputes as to the existence
of a debt. See also McLeod
v Gesade Holdings (Pty) Ltd
1958 (3) SA 672.
cases clearly support another ground for not granting the order
There was a
further ground that the court found to be also a good basis for not
issuing the order.
was pointed out in Badenhorst
v Northern Construction Enterprises (Pvt) Ltd
1956 (2) SA 346, that the liquidation of a company affects the
interest of all creditors and shareholders and an order for its
should not be lightly granted on the application of a
also took into account that there had been a long delay in making the
application and it was possible that Surgimeds
could have changed.
for this was found in Clarke
v Protein Foods (Pvt) Ltd
1970 (2) ZLR 278.
above authorities show that the court a
quo did not determine
the application on the basis of Surgimeds inability to pay or the
issue of prescription only but on all the
various reasons given.
we dismissed the appeal with costs we reserved the issue of the level
of costs. Mr Fitches
conceded that the application was for winding-up and not for
enforcement of payment of the debt. He said it was left open to the
court whether it could grant an order for winding-up on a claim that
pointed out that there was no service of a claim for the debt. He
submitted that the court should show its displeasure by ordering
costs on a legal practitioner and client scale as there were no
merits at all for the appeal and it was an abuse of the court
conceded that if there were no merits the court should exercise its
agree with Mr Girachs
was based partly on what the court had conceded on the proof of
failure by the respondent to pay its debts. The court
that the evidence led was sufficient to prove that, but based its
decision on other grounds.
the issue of prescription, the court did not take the point mero
motu as stated by the
appellant. The point had been raised in argument as stated in the
points were, therefore, not proper points to base an appeal on. The
court made clear several other reasons for dismissing
view of the above I agree that this was an abuse of the court process
and I therefore order as follows:
The appellant is ordered to pay
costs on a legal practitioner and client scale.
CJ: I agree