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....,.
Militala worked as provisional judicial manager for Tetrad Investment Bank Limited (the Bank) from the date of his appointment (i.e 29 January 2015). He continued to work as such up until 29 June 2015 when he resigned from the same. His effective date of resignation was 1 July 2015. It was for the mentioned reasons, if for no other, that Militala submitted to the Bank his fee notes for March, April, May and June, 2015. Those were additional to the fee note of February 2015, which note is the subject of the present review application.
In his opposition to the application, Militala moved the court not to consider the fee notes for March, April, May and June 2015 as part of the review process. He stated in regard to paragraphs 20-21 and 23-25 as follows:
“6. The content of these paragraphs is extraneous as it related to matters that transpired after the delivery by the first respondent of the decision which the applicant applies to be reviewed. The inclusion of these paragraphs and the appendices thereto is thus unwarranted and should be disregarded by the court.”
The first respondent echoed the views of Militala in regard to the matter at hand. It did so when it made comments on the applicant's grounds for review. It stated as follows:
“DECISION BEING BROUGHT UNDER REVIEW
Though the application does not expressly identify the decision being brought under review, it is apparent that the decision is the decision of the Master of High Court of 25 June 2015 fixing the remuneration of the Provisional Judicial Manager of Tetrad Investment Bank Limited (“the Bank”). The comments that follow are thus made on the premise that the above–cited decision is the decision being brought under review….,.
The particularisation of the decision being brought under review is important because everything that happened after the making of the decision could not form the basis of the review. It will be seen that paragraphs 20,21, 23, 24 and 25 of the applicant's founding affidavit relate to events that occurred well after the decision of 25 June 2015 and would be irrelevant to the review of the said decision.”…,.
Militala and the first respondent took a correct approach of the matter which related to the current application.
The court remains of the firm view that the four fee notes for March, April, May and June 2015 do not fall within the scope of what it was called upon to review. The notes fall outside the review application. They are not part of the decision which the first respondent made on 25 June 2015. A reading of the applicant's grounds for review supports the position which the court took of the matter. None of the six grounds which the applicant advanced has any bearing on the four fee notes which Militala submitted after his first fee note of February 2015. All the six grounds for review related to the decision of the first respondent as regards Militala's fee note of February 2015.
The court established that Militala was properly and validly appointed in terms of the law. It accepted that he worked for Tetrad Investment Bank Limited (the Bank) as its provisional judicial manager. He necessarily had to receive remuneration for his work.
The first respondent was, in terms of the law, charged with the responsibility of fixing Militala's remuneration. He drew his powers in the mentioned regard from section 308 of the Companies Act. The section reads:
“REMUNERATION OF JUDICIAL MANAGERS
(1) A provisional judicial manager and a final judicial manager shall be entitled to such reasonable remuneration for their services as may be fixed by the Master from time to time.
(2) In fixing the remuneration of a judicial manager, the Master shall take into account the manner in which the provisional judicial manager or the final judicial manager has performed his functions and any recommendations by the members or creditors of the company relating to such remuneration.
(3) Section 192 of the Insolvency Act [Chapter 6:04] shall apply, mutatis mutandis, with regard to any fixing of remuneration by the Master under this section.”…,.
Two important matters stand out clearly from a reading of the above cited section.
(i) The first is that the Master cannot have a one-size fits all tariff when he fixes the remuneration of a provisional judicial manager or a final judicial manager. The law-maker was alive to the fact that companies differ in size, scope as well as in their operations; such that when they fall sick and are due for judicial management, the appointed judicial manager has to use his or her skills to bring to life that small, or that medium-sized company, or that once upon-a-time, very big corporation back to life. The Master, therefore, was or is enjoined at law to apply the reasonable man test; the objective, as opposed to the subjective, test to ascertain if the work which the judicial manager performed in an effort to breathe life into the company was or is commensurate with what the judicial manager proposed as his/her fees for the work.
Where the Master remains satisfied, on an objective test, that the work which the judicial manager conducted is in sync with the proposed fee(s), the Master fixes the fee(s) as proposed or with some adjustment(s).
It was for the mentioned reasons, if for no other, that the legislature stated that the Master has a discretion to fix the fees proposed by the judicial manager on a “from time to time” basis.
(ii) The second matter which stands out in the section is that, in fixing the judicial manager's fees, the Master is invariably guided by the recommendations of the members or creditors of the company. It is such recommendations, as measured against the work of the judicial manager, read together with his or her proposed fees, that the Master makes adjustments in the interest of fairness and a desire to do justice as between the parties whose case may be before the Master at any given time.
A recommendation and a criticism are words which are miles apart.
Oxford Dictionaries Language matters define the word recommendation to mean “advice, counsel, guidance, submission, suggestion, proposal, exhortation.” Cambridge Advanced Learner's Dictionary & Thesaurus define recommendation as “advice telling someone what the best thing to do is.”
Cambridge English Dictionary define the word criticism as the act of saying that something or someone is bad. Dictionary.com refers to criticism as the act of passing judgment as to the merits of anything.
When Militala submitted his first fee note, Annexure D, to Tetrad Investment Bank Limited (the Bank), the applicant recommended that the figures in the annexure be further explained. The first respondent agreed with the recommendation. Annexure F, Militala's Time Sheet for February, was a result of the applicant's recommendation to the first respondent, who was properly guided by the same.
The letter which the applicant addressed to the first respondent on 1 April 2015 was not a recommendation. It was a criticism of Militala's alleged incompetence. Similarly, the second letter which the applicant addressed to the first respondent, on 24 June 2015, was yet another criticism of Militala's work. None of the two letters contained any recommendations which should have assisted the first respondent to see matters more differently than Militala had presented them to it in his Time Sheet for February.
The applicant's conduct fell outside section 308(2) of the Companies Act.
The applicant, therefore, has no one to blame but itself for choosing to follow the route which the law did not prescribe for it. Its grounds for review, based on the work which Militala performed for Tetrad Investment Bank Limited could not, therefore, hold. It did not make any recommendations. It presented a critique which was of no assistance to the first respondent.
On 16 July 2015, the applicant's legal practitioners, Venturas & Samukange, addressed a letter to the first respondent. It called it Annexure G. The annexure reads, in part, as follows:
“…,. We are advised that the former judicial manager, Petwin Executor and Trust Company (Private) Limited was paid almost two weeks ago an amount of US144,900. We have been advised, by the new judicial manager, that Mr Militala intends to submit a further claim.”…,.
The applicant acknowledged, as late as July 2015, that Militala, through his company, performed work as provisional judicial manager for Tetrad Investment Bank Limited (the Bank). In its application for the removal of Militala from the position of provisional judicial manager, the applicant cited Militala as the first respondent and his company, Petwin Executors and Trust Co (Private) Limited, as the second respondent.
Notwithstanding that acknowledgment, the applicant, for some unexplained reasons, insisted that Militala should have worked as provisional judicial manager by himself or with assistance from some members of staff of Tetrad Investment Bank Limited (the Bank). Its argument in the mentioned regard was the basis for the ground which read:
“1st respondent acted grossly unreasonably in accepting that the fees were reasonable when there were only 160 working hours in February and only 672 hours in the entire month.”
Militala's response was loud and clear.
He submitted that his team had to be involved in the judicial management work. He stated, and correctly so, that he could not rely on the management which had failed. He said he could not review the work of the Bank's management using the same management.
The first respondent echoed the substance of Militala's views on the same matter.
The court is in agreement with the view which Militala and the first respondent took on this aspect of the application. It, in this regard, finds fortification in the remarks of TETT and CHADWICK who stated in their Zimbabwe Company Law, 2nd Edition…, as follows:
“…, the effect of a judicial management order is to take away management and control from the directors, and place it in the hands of the judicial manager and his nominees.”…,.
The applicant did not agree with the decision of the first respondent. It is, however, one thing for a party not to agree with the decision reached. It is yet another thing to assert, as the applicant did, that the first respondent failed to provide proper reasons for its decision or that it failed to justify why it dismissed its objection.
Annexure B, which the applicant attached to its application, constitutes the first respondent's decision.
It arrived at that decision, not on the basis of any recommendations which the applicant submitted to it; it reached it on the basis of the applicant's criticism of the work of Militala. The outcome of the applicant's attitude is reflected in paragraph 4 of the first respondent's ruling. The paragraph reads:
“This recommendation is unreasonable and unfair. Firstly, it asks the Master to reject the whole fee note, as if to say the pjm is not entitled to any remuneration. Secondly, and because of the blanket rejection proposed by the members, it does not suggest what level of remuneration would have been reasonable in the circumstances. It is unreasonable for the members to just say the fees are too high without suggesting and justifying a different level of fees.”
The first respondent was candid to state, in the decision, that it ploughed through each and every item which was included in Militala's fee note and the objections which the applicant raised item by item. It saw no merit in the objections. Its judgement was clear, cogent, and to the point. It was balanced and it took into account the concerns of both parties whose case was before it. It justified the conclusion which it reached to the total satisfaction of the court.
The applicant's ground for review which hinged on S.I.107 of 2011 was, in the court's view, just raised for the sake of it.
The applicant, who was ably legally represented, should have known that the instrument was not for, and does not apply to, judicial managers. It applied to legal practitioners and the latter's work. The court was, therefore, at a loss as to the reasons which persuaded the applicant to make reference to a law which was totally inapplicable to its application.
The court considered all the grounds which the applicant advanced for review of the first respondent's decision of 25 June 2015. It was satisfied that none of the grounds which the applicant advanced had any merit. It made up its mind to, and did actually, decide the application on the basis of the substance of the same as opposed to valid technical issues which the second respondent raised in his heads of argument. The application was, in the court's view, an exercise in futility. The applicant's approach, as well as its attitude, did not assist its case. The application fell on all fours.
It is, accordingly, dismissed with costs.
