REPORTABLE ZLR (66)
Judgment
No. SC 69/07
Civil
Appeal No. 362/06
DORBROCK
HOLDINGS (PVT) LIMITED
v
(1)
TURNER & SONS (PVT) LIMITED (2) ANTHONY
TURNER
SUPREME
COURT OF ZIMBABWE
CHEDA JA,
MALABA JA & GWAUNZA JA
HARARE,
OCTOBER 1, 2007 & SEPTEMBER 11, 2008
A P de Bourbon SC, for the appellant
Miss J Wood, for the respondents
CHEDA JA: The appellant launched a court application at the
High Court seeking an order in the following terms
IT
IS ORDERED:
That
the respondents jointly as well as severally, the one paying the
other to be absolved, shall forthwith undertake all that
is
necessary and required, including making all payments and completion
and signing all documents required, in order to procure
transfer
without delay by the first respondent to applicant of the first
respondents entire shareholding in Zambezi Paddle
Steamer (Pvt)
Ltd.
That
immediately upon registration of the aforesaid transfer in the share
register of Zambezi Paddle Steamer (Pvt) Ltd the applicant
shall pay
the first respondent the balance of the purchase price for the said
shares such balance being the sum of $138 000 000.00.
That
the respondents jointly and severally the one paying the other to be
absolved shall pay the costs of this application on
the scale of
legal practitioners and own scale.
The application was opposed by the respondents.
The first respondent also launched a counter application seeking an
Order for the provisional liquidation of the appellant in terms
of
the Companies Act [Cap 24:03].
The two applications were eventually consolidated by consent and
heard together.
After hearing argument on the two matters the High Court made the
following order -
1. The application in case HC 5186/2005 be and is hereby dismissed
with costs.
In
case No. 5264/2005
The
first respondents company Zambezi Paddle Steamers (Pvt) Ltd is
provisionally wound up pending the granting of an order
in terms of
para. 2.3. or the discharge of this order.
This appeal is against the above judgment and orders of the High
Court.
At the hearing of the appeal the respondent raised a point in
limine as follows:
It is submitted that the appeal in case No. 362/06 is not properly
before this Honourable Court as the order granted was interlocutory
in that it does not have a final and definitive effect and it may be
set aside by the Judge who granted it see Hunt v Hunt 2000(1)
165(HC); South Cape Corporation (Pvt) Ltd v Engineering Management
Services (Pvt) Ltd 1977(3) 534(AD) 549 et seq. that being
so, leave to appeal was required in terms of s 43 of the High Court
Act.
It was not obtained.
A lot of information was placed before the Judge in the court a
quo in the form of documentary exhibits and many issues were
raised in that court as well as in the Heads of Argument on appeal.
However, the main issues for consideration by this court which can
resolve or settle the matter are as follows:
1. Whether the appeal against the Provisional Order
for liquidation is properly before this Court.
Whether
the payment arrangements entered into by the parties constituted a
legally binding contract which is enforceable through
a court of
law.
I now proceed to deal with the point in limine raised by the
respondents.
Section 43 of the High Court Act [Cap 7:06] provides as
follows:
43.
Right of appeal from High Court in civil cases
(1) Subject to this section, an appeal in any civil case shall lie to
the Supreme Court from any judgment of the High Court, whether
in the
exercise of its appellate jurisdiction
No
appeal shall lie
(i)
(ii)
From
an interlocutory order or interlocutory judgment made or given by a
judge of the High Court, without the leave of that judge
or, if that
has been refused, without the leave of a judge of the Supreme Court,
except in the following cases
(i)
(ii)
Mr de Bourbon submitted that it was wrong to say a provisional
liquidation order is not appealable as it was interlocutory. He said
s 241 of
the Companies Act [Cap 24:03] gives a right
of appeal.
While he is correct in relation to an order for liquidation proper, I
do not agree that he is correct in relation to an interlocutory
order. The order given by the court a quo was not a final order for
liquidation but a provisional one. Its correctness is still
open to
be tested on the return date. (See Hunt v Hunt 2004 (1) ZLR
165(H)).
I also do not consider it correct to say that the property of a
company under provisional liquidation can be sold before the
Provisional
Order is confirmed.
In Van Leggelo v Transvaal Celocrete (Pty) Ltd & Anor,
1953 (2) SA. 287T it was held that an order by a magistrate granting
leave to execute pending an appeal was interlocutory and
consequently
not appealable in terms of s 83 of the Magistrates Court Act 32 of
1944, in that it did not have the effect of a final judgment.
(my underlining)
The above decision also received support from Corbett JA (as he
then was) in the case of South Cape Corporation v Engineering
Management Services, 1977(3) SA 534.
I do not believe that any good purpose is achieved by getting this
appeal court to make a determination on a matter which can possibly
be altered by the court that granted the order on the return day.
The Court that makes a Provisional Order obviously leaves room for
itself to reconsider the merits of the matter on the return
day, so
it does not appear proper that an appeal court should interfere by
pronouncing a final order on such a matter.
I therefore find that the point in limine raised by the
respondent is well-founded.
Accordingly, the appeal against the provisional liquidation order
should be struck off the roll with costs.
In view of the above finding I do not intend to deal with the other
issues raised concerning this matter because to do so would
amount to
dealing with the merits of a matter that is not properly before this
Court.
I now turn to deal with the legality of the agreement of sale.
Once more, the determination of the legality of the agreement entered
into by the parties resolves the matter once and for all,
without
going into the detailed submissions on the merits of the matter.
Both parties agree that the agreement was that payment for the shares
would be made to Tony Turners daughter in the United Kingdom.
Section 11 of the Exchange Control Regulations 1996, S.I. 109 of 1996
provides as follows:
Payments outside Zimbabwe
11 (1) Subject to subsection (2), unless otherwise
authorized by an exchange control authority, no Zimbabwean resident
shall
(a) make any payment outside Zimbabwe; or
incur
any obligation to make payment outside Zimbabwe.
Subsection
(1) shall not apply to
any
act done by an individual with free funds which were available to
him at the time of the act concerned;
or
any
lawful transaction with money in a foreign currency account.
Subject
to subsection (4) unless authorized by an exchange authority, no
foreign resident carrying on any trade, business or other
gainful
occupation or activity in Zimbabwe shall
make
any payment outside Zimbabwe; or
incur
any obligation to make payment outside Zimbabwe;
in respect of that trade, business, occupation or activity.
Subsection
(3) shall not apply to any lawful transaction with money in a
foreign currency account.
The following paragraph from the appellants Heads of Argument
gives a very clear background of the position of the parties and
the
role each played in the sale agreement.
I quote from p 8 para 6 of the Heads
6. The parties met in Harare in the period between 28 June and 14
July 2004. Representing their respective companies, an agreement
was
concluded in terms of which Turner and Sons would sell its
shareholding in ZPS to Dobrock Holdings for $250 million.
At a meeting, see para 12, p 38, as read with para 13, p 68, Peter
Dobson told Tony Turner that he would procure payment where
and
whenever Tony Turner wanted. Tony Turner claimed he urgently needed
pounds in the United Kingdom, and that payment was to
be made to his
daughter in that country.
In my view, the above shows, firstly that the shares were being
purchased by or on behalf of a company, and that Tony Turner was
to
make the payment again on behalf of the company.
Both companies are based in Zimbabwe but payment was to be made
outside Zimbabwe in the United Kingdom.
The source of funds was not disclosed and there was no suggestion at
all that there were free funds available to pay for the shares.
For that reason, I have no basis to fault the court a quos
finding that the agreement was illegal and is un-enforceable by the
Court.
Having come to that conclusion, I see no reason to deal with the
other issues raised on appeal as they will not change the above
conclusion.
The appeal cannot succeed.
I therefore make the following order
1. The appeal in case No. SC 36/06 is dismissed with costs.
2. The point in limine in case No. SC 361/06 is upheld and the
appeal in that case is struck off the roll with costs.
MALABA JA: I agree.
GWAUNZA JA: I agree.
Atherstone & Cook, appellants legal practitioners
Byron Venturas, respondents legal practitioners
