[1]
In a judgment handed down on 16 April 2014, the High Court made an
order setting aside the decision of the appellant refusing the
request made by the respondent for leave to institute civil
proceedings against SMM Holdings (Pvt) Ltd. The court further
granted leave to the respondent to institute the proceedings and
ordered the appellant to pay the costs of the application.
[2]
This appeal is against that judgment.
FACTUAL
BACKGROUND
[3]
SMM Holdings (Pvt) Ltd (“SMM”) is a company under a
reconstruction order issued by the Minister of Justice, Legal &
Parliamentary Affairs in terms of the Reconstruction of
State–Indebted Insolvent Companies Act, [Chapter
24:27]
(“the Reconstruction Act”). The appellant was appointed
administrator of SMM in September 2004. Upon such appointment, the
appellant was conferred by law with the power, inter
alia,
to
raise money, in order to turn around the fortunes of the company.
[4]
In 2008 and 2009, the appellant sought loans on behalf of SMM in
order to purchase spares and other consumables from various South
African suppliers. The spares and consumables were meant to
capacitate Shabani Mine so that its mining operations could continue.
As at 31 December 2010, the total amount outstanding on the two
loans was US$3,635,158,31 which amount the appellant acknowledged was
due and owing.
[5]
Efforts by the respondent to recover the debt were in vain.
Accordingly, in June 2012, the respondent made a written request to
the appellant to grant it leave to institute proceedings against SMM
in terms of section 6 of the Reconstruction Act. On 28 August 2012,
the appellant, through his legal practitioners, declined to give such
leave. Consequently the respondent filed a court application in
November 2012 seeking an order setting aside the decision of the
appellant refusing it leave to institute civil proceedings and for
the court itself to grant such leave.
PROCEEDINGS
IN THE HIGH COURT
[6]
The application before the High Court was made in terms of section 4
of the Administrative Justice Act, [Chapter
10:28].
The basis of the application was that the decision of the appellant
refusing leave to institute proceedings was contrary to the intention
of the legislature, grossly unreasonable, made in bad faith and
constituted an abuse of authority; that it was an unlawful
deprivation of the right of the respondent to obtain judgment in a
court of competent jurisdiction; that it was not a fair decision,
regard being had to the fact that the debt in question was incurred
during the administration period; that there was no rational basis
for the decision and lastly that the appellant had failed to comply
with his duty and obligations as an administrative authority as
provided for in section 3 of the Administrative Justice Act.
[7]
In his opposing papers the appellant justified the refusal of the
grant of leave on the basis that there was need in the short term
period to preserve the assets of the company pending its full
recapitalisation and subsequent reopening of operations. He further
averred that, were the respondent to obtain judgment against SMM and
thereafter proceed to execute on that judgment, SMM would in the
result have to be liquidated, thus negating the whole purpose of
reconstruction.
[8]
In heads of argument filed by both parties, various issues were
identified as requiring determination. The appellant, inter
alia,
submitted that the application filed by the respondent was a review
application. He further submitted that, on the papers, the
application did not comply with the requirements for review. Indeed
the presiding judge, in his judgment, accepted that the issue that
fell for determination, amongst others, was whether the application
was properly before the court.
[9]
Notwithstanding the fact that the propriety of the application had
been put in issue, the court a
quo,
in
its judgment, did not deal with the submission but took the view that
the substantive issue falling for determination was the extent to
which the respondent could exercise the discretion bestowed on him.
[10]
The court reached the conclusion that the decision to refuse leave
was wrong, unfair and in breach of section 3 of the Administrative
Justice Act. The court consequently set aside the decision. The
court considered it unnecessary to decide whether or not the decision
refusing leave was grossly unreasonable “in the Wednesbury sense”.
The court was also of the view that this was a proper case for it to
grant the leave which the appellant had refused. Consequently the
court granted such leave in para [2] of the operative part of its
judgment.
APPELLANT'S
SUBMISSIONS ON APPEAL
[11]
In submissions before this Court, the appellant has argued that the
court a
quo
erred
in failing to determine the question whether the application filed by
the respondent was properly before it
and
in particular whether the application complied with the requirements
of order 33 of the Rules of the High Court. He further submitted
that the fact that the court a
quo
proceeded
to deal with the merits of the application suggests a tacit
acceptance by the court that the matter was properly before it. The
absence of reasons for such tacit acceptance and the failure by the
court to expressly deal with the issue constitute a serious
misdirection. He has further submitted that, on the authority of
Minister
of Local Government, Rural and Urban Development & Anor v Silas
Machetu & 3 Ors SC
34/12, there is little doubt this was an application for review. The
present application, having been filed some three months after the
making of the decision, was therefore not properly before the court.
[12]
The appellant also submitted that the refusal to grant leave was not
unreasonable, unfair or wrong. Lastly he submitted that, in terms of
the Administrative Justice Act, it is not permissible for the court
itself to substitute its own decision in place of that of the
administrator.
RESPONDENT'S
SUBMISSIONS ON APPEAL
[13]
In submissions before us, the respondent has argued that the
Administrative Justice Act, in effect, created a new jurisdiction not
only in respect of the obligations of an administrative authority but
also in respect of the manner in which challenges to such
administrative authority could be made. In the absence of a
provision in the Act requiring applicants to comply with Order 33 of
the High Court Rules, no obligation arises to comply with the various
provisions under Order 33. To the contrary, it is the provisions of
Order 32, and in particular Rule 226 of the High Court Rules, 1971,
which are applicable. Consequently, in the absence of any period
stipulated by the Minister in terms of section 10(2)(b) of the
Administrative Justice Act, no time limits apply to applications in
terms of section 4 of the Act.
[14]
On the question whether the court a
quo
failed
to resolve the issue raised by the appellant, namely, that the
proceedings, being of the nature of a review, were subject to the
provisions of Order 33 of the High Court Rules, the respondent has
submitted that it is quite permissible for a court not to deal with
each and every submission raised by the parties and instead confine
itself only to those issues which are critical to its decision.
[15]
The respondent has further submitted that the central issue that
fell for determination before the court a
quo
was
whether the appellant, as an administrative authority, acted
lawfully, reasonably and in a fair manner in declining to give the
necessary leave for the institution of proceedings against SMM. On
the facts, it is quite clear that the decision of the appellant was
irrational and unreasonable.
[16]
The respondent has further argued that section 6(b) of the
Reconstruction Act is not valid in terms of the current Constitution,
regard being had to the provisions of section 69 of the Constitution,
which provide for the right of access to the court for the resolution
of any dispute.
[17]
Lastly the respondent has submitted that section 4 of the
Reconstruction Act cannot be interpreted as preventing the High
Court, in an appropriate case, from substituting its own decision for
that of the administrative authority.
ISSUES
FOR DETERMINATION BEFORE THIS COURT
[18]
A number of issues arise from the heads of argument and oral
submissions made by counsel. However it is essential to deal first
with the submission whether the court a
quo
erred
in not dealing with the preliminary point taken by the appellant in
the Court
a quo
that
the application before it, having been one of review, was not
properly before it. That this submission was made by the appellant
in argument before the court a
quo
is
not in dispute. Indeed, in its judgment, the court a
quo
confirms
that the appellant had argued that “the application failed to
satisfy the requirements for review”.
[19]
Although it was alive to the fact that the appellant had raised this
preliminary point, the court a
quo
said
nothing further on the matter and instead concluded that “aside
from the constitutional point…… the substantive issue before [the
court] was the extent to which the respondent could exercise the
discretion bestowed on him by section 6(b) of the Reconstruction
Act.”
[20]
I am inclined to agree with the respondent that, in proceeding to
determine the substantive issue that fell for determination before
it, the court must have tacitly accepted that the application was
property before it. Had the court concluded otherwise, it would not
have proceeded to deal with the merits of the application.
[21]
In general, I agree with the respondent's
submission
that, in a case where a number of issues are raised, it is not always
incumbent upon the court to deal with each and every issue raised in
argument by the parties. It is also correct that a court may well
take the view that, in view of its finding on a particular issue, it
may not be necessary to deal with the remaining issues raised.
However this is subject to the rider that the issue that is
determined in these circumstances must be one capable of finally
disposing of the matter.
[22]
In the present case, the substantive issue that was determined by the
court a
quo
did
not dispose of the matter. The question still remained whether the
application was, in the first instance, properly before the court.
This was not an issue that the court a
quo
could
ignore or wish away. The court was obliged to consider it and decide
whether the matter was properly before it. It was, in short,
improper for the court to proceed to determine the substantive
factual and legal issues without first determining the propriety or
otherwise of the application itself. If the court, as it appears to
have done, tacitly accepted that the matter was properly before it,
then reasons for such tacit acceptance should have been given.
[23]
The position is well settled that a court must not make a
determination on only one of the issues raised by the parties and say
nothing about other equally important issues raised “unless the
issue so determined can put the whole matter to rest” – Longman
Zimbabwe (Pvt) Limited v Midzi & Ors
2008 (1) ZLR 198, 203 D (S).
[24]
The position is also settled that where there is a dispute on some
question of law or fact, there must be a judicial decision or
determination on the issue in dispute. Indeed the failure to resolve
the dispute or give reasons for a determination is a misdirecton, one
that vitiates the order given at the end of the trial – Charles
Kazingizi v Revesai Dzinoruma
HH 106/2006; Muchapondwa
v Madake & Ors
2006 (1) ZLR 196 D-G, 201 A (H); GMB
v Muchero
2008
(1) ZLR 216, 221 C-D (S).
[25]
Although it is apparent in this case that the judge in the court a
quo
may
have considered the question whether the matter was properly before
him when he considered the merits, a large portion of those
considerations remained stored in his mind instead of being committed
to paper. In the circumstances, this amounts to an omission to
consider and give reasons, which is a gross irregularity – S
v Makawa & Anor
1991 (1) ZLR 142.
[26]
Consequently the failure by the court a
quo
to
specifically determine the question whether or not the application
was properly before it, its tacit acceptance that this was the
position and the consequent failure on its part to give reasons why
it had proceeded to deal with the substantive issues in the light of
the preliminary point taken, vitiated the proceedings.
[27]
In the light of the above conclusion, it becomes unnecessary to deal
with the rest of the issues raised by the parties to this appeal.
DISPOSITION
[28]
In the circumstances, it seems to me that the most appropriate course
would be for this matter to be remitted to the court a
quo
for
a determination whether, in the first instance, the application was
properly before it, and, if so, whether the decision of the appellant
denying leave is, on the facts and the law, sustainable.
[29]
In the result this court makes the following order:
1.
The appeal is allowed with the costs of the appeal being in the cause
with those in case No HC13496/12.
2.
The judgment of the court a
quo
is
set aside.
3.
The matter is remitted to the court a
quo
for
a determination of the preliminary point taken by the appellant and,
thereafter, if need be, the substantive issues raised by the parties.
ZIYAMBI
JA: I
agree
HLATSHWAYO
JA: I
agree
Dube,
Manikai & Hwacha,
applicant's legal practitioners
Kantor
& Immerman,
respondent's legal practitioners
