On 29 January 2015, the court appointed the second respondent [“Militala”] in the position of provisional judicial manager for Tetrad Investment Bank Limited [“the Bank”]. The appointment was at the instance of Tetrad Investment Bank Limited (the Bank).On 16 March 2015, Militala submitted to Tetrad Investment Bank Limited his fee ...
On 29 January 2015, the court appointed the second respondent [“Militala”] in the position of provisional judicial manager for Tetrad Investment Bank Limited [“the Bank”]. The appointment was at the instance of Tetrad Investment Bank Limited (the Bank).
On 16 March 2015, Militala submitted to Tetrad Investment Bank Limited his fee note of $144,900. The note was for the work which he, through his company - Petwin Executor and Trust (Pvt) Ltd, performed for Tetrad Investment Bank Limited in February 2015.
On 1 April 2015, the applicant, which claimed to be the beneficial owner of Tetrad Investment Bank Limited (the Bank), raised an objection with the first respondent. The objection related to Militila's fee note for February 2015.
Following the objection, the first respondent invited the applicant and the second respondent to a meeting at its offices. The meeting took place on 15 June 2015. At the meeting, the first respondent agreed with the applicant that Militala should produce an itemized bill of costs which pertained to the work he did for Tetrad Investment Bank Limited in February 2015.
On 18 June 2015, Militala submitted, to the first respondent, an itemized bill of costs for February 2015.
On 25 June 2015, the first respondent handed down a ruling, in which the applicant's objections notwithstanding, it approved of Militala's fee note for February 2015.
On 4 May 2015, Militala presented to Tetrad Investment Bank Limited (the Bank) four invoices. These were for work which he said he did for the Bank in March, April, May, and June 2015. The four invoices had a total of $274,563.
The first respondent's ruling, of 25 June 2015, remained a cause of concern to the applicant. It, therefore, applied to the court for a review of the same. Its grounds for review were, in essence, that the first respondent acted grossly unreasonably and irrationally:
(a) In accepting Militala's February invoice without requesting proper proof of how Militala allocated his time to his work given the fact that he neglected to draft a proper bill of costs;
(b) In authorizing payment to Militala when the latter was illegally appointed by the Bulawayo High Court in contravention with section 57 of the Banking Act;
(c) In failing to apply its mind to the matter and accepting that Militala could have provided meaningful services to the Bank;
(d) In accepting that the fees which Militala charged were reasonable “when there were only 160 working hours in February and only 672 in the entire month”;
(e) In failing to provide proper reasons for its decision and failing to justify why it dismissed the applicant's objection.
It insisted that Militala failed to comply in any meaningful respect with Statutory Instrument 107/2011. He did not provide a taxed bill of costs, it said. It, accordingly, moved the court to:
(i) Set aside the first respondent's decision of 25 June 2015;
(ii) Order Militala to refund $144,900 it paid to him with interest of 5% per annum calculated from the date of his receipt of the money to the date of payment of the same;
(iii) Interdict the first and third respondents from making any further payment to Militala without a court order;
(iv) Order the respondents to pay, jointly and severally, the one paying the others to be absolved, costs of this application on a higher scale.
The first respondent did not oppose the application. It, however, made comments on the applicant's grounds for review. These form part of the record.
The third respondent supported the application in part and opposed it in part.
It opposed the applicant's prayer which called upon it to pay the costs of the application, let alone on a punitive scale. It moved the court not to order it to pay costs of the application on whatever scale.
The second respondent opposed the application in a strenuous manner.
He submitted that the first respondent applied its discretion properly and judiciously to the case which was then before it. He insisted that the applicant's grounds for review were without foundation and were misconceived. He stated that his decision to resign from the position of Provisional Judicial Manager for Tetrad Investment Bank Limited (the Bank) was not as a result of the suit which the applicant filed seeking his removal. He said his decision in the mentioned regard was guided by his personal and professional considerations which were not relevant to the application.
He made reference to Annexure D which the applicant attached to the application. He also referred to Annexure F which he said clarified the contents of Annexure D. He said the time sheets for February, 2015, Annexure F, showed the amount of time which each director, consultant, and clerk spent on the judicial management work of Tetrad Investment Bank Limited and the sum of money which was due to each for February 2015.
The first respondent, he argued, considered the contents of the annexure against the objections of the applicant and properly allowed payment of his fees.
He insisted that the contents of the invoices for March, April, May and June 2015 should be disregarded because they did not relate to the first respondent's decision which the court was called upon to review. He submitted that the court properly and lawfully appointed him as Tetrad Investment Bank Limited's provisional judicial manager. He said he acted as such until the day that he opted to resign. He stated that it was inconsiderate for the applicant to remain oblivious to the fact that several persons performed the work of judiciously managing Tetrad Investment Bank Limited (the Bank).
He averred that S.I.107 of 2011 did not apply to the first respondent or to judicial managers. The instrument, he said, related to legal practitioners and the latter's work.
He submitted that the application was frivolous, vexatious and an abuse of court process. He moved the court to dismiss it with costs on a punitive scale.
The unlawfulness or otherwise of Militala's appointment as Provisional Judicial Manager does, in a large measure, depend on the circumstances which led to the same. It is evident that Militala did not move the court to appoint him to the position of Provisional Judicial Manager. It is equally evident that the court did not mero motu appoint him to the same. Tetrad Investment Bank Limited (the Bank) petitioned the court to appoint Militala as its Provisional Judicial Manager. In moving the court as it did, the Bank was not oblivious to the existence of section 57 of the Banking Act [Chapter 24:20] [“the Act”]. It was, in the court's view, thoroughly aware of the section. Its knowledge of the section notwithstanding, the Bank petitioned the court to appoint Militala, not in terms of section 57 of the Banking Act, but in terms of section 302 of the Companies Act [Chapter 24:03].
Reference is made in this regard to paragraph (b) of the order which falls under case number HC219/15.
The applicant stated that it was the beneficial owner of Tetrad Investment Bank Limited (the Bank). It did not explain itself on what it meant by the statement “beneficial owner of the Bank”. However, if its relationship with the Bank was that of the owner and the owned, as it would have the court understand, the Bank would not have moved in the direction which it did. It would not, in other words, have petitioned the court to appoint Militala as its Provisional Judicial Manager before it consulted, and agreed with, the applicant in respect of Militala's appointment to the position. It is apparent that the Bank did not consult the applicant when it (the Bank) petitioned the court to appoint Militala. If the applicant was consulted in regard to the appointment, the applicant would have advised the Bank to petition the court and have the Provisional Judicial Manager appointed in terms of section 57 of the Banking Act and not in terms of section 302 of the Companies Act as occurred in casu.
The apparent absence of consultation of the applicant by Tetrad Investment Bank Limited (the Bank) tends to place the applicant's claim, as to its relationship with the Bank, into some doubt....,.
In the interests of fairness and justice as well as a desire on the part of the court to clarify the issue for the benefit of not only the parties to this application but also of all those who may want to raise the same matter in future, the court made up its mind to place a proper and correct interpretation on section 57 of the Banking Act [Chapter 24:20].
The section makes reference to special provisions relating to winding up or judicial management of (a) Banking institution. It reads:
“(1) Notwithstanding anything to the contrary in the Insolvency Act [Chapter 6:04] or the Companies Act [Chapter 24:03] -
(a) The Reserve Bank shall have the right to apply to the High Court for –
(i)…,.
(ii) An order placing any Banking institution under judicial management or provisional judicial management in terms of the Companies Act [Chapter 24:03]; and the Reserve Bank shall have the right to oppose any such application made by any other person:
(b) The Reserve Bank shall appoint the Deposit Protection Corporation as the provisional liquidator, provisional judicial manager, liquidator or judicial manager, of a Banking institution;…,.
(c)…,.
(2)…,.”
Section 57 of the Banking Act, it is evident, confers some rights on the Reserve Bank of Zimbabwe.
It has a right to apply to this court to have any Banking institution placed under judicial management or provisional judicial management. It also has a right to oppose any other person's application to have a Banking institution placed under judicial management or provisional judicial management.
The fact that the Reserve Bank has a right to oppose the application of another person or entity entails that the section does not confer upon it the exclusive right to always apply to court for the placement of any financial institution under judicial management or provisional judicial management. Some person other than it may apply, and, in the event of that occurring, the Reserve Bank has a right to oppose the application. Where it chooses to exercise its right, in terms of the section, the Reserve Bank is, in terms of paragraph (b) of subsection (1) of the section, precluded from appointing a provisional liquidator, provisional judicial manager, liquidator, or judicial manager of a Banking institution outside the Deposit Protection Corporation.
The above is a clear and unambiguous interpretation of the section which MAFUSIRE J exercised his mind upon when the applicant, whose application is before the court, raised the same matter with him in an urgent chamber application filed under case number HH898-15.
The court associates itself with the learned judge's observations which read:
“Thus, section 57 of the Banking Act does not say that whenever a Banking institution is placed under judicial management or provisional judicial management only the DPC shall be appointed as the judicial manager or provisional judicial manager. The section does not say only the Reserve Bank shall be the entity with the exclusive right or power to petition for the placement of Banking institutions under, inter alia, judicial management or provisional judicial management.
All that section 57 of the Banking Act does say, and do, in brief, and for the present context is to add the Reserve Bank to the list of those persons that may move for the placement of a company, that is a Banking institution, under, inter alia, judicial management or provisional judicial management, and to say where the Reserve Bank has done that, its choice of judicial manager or provisional judicial manager, shall be confined to the DPC. The Reserve Bank is also empowered, by section 57, to oppose the placement at the instance of anyone else other than itself, of a company that is a Banking institution, under judicial management or provisional judicial management notwithstanding the provisions of the Insolvency Act or the Companies Act.”
