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.
This appeal is against that judgment.
FACTUAL BACKGROUND
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 Holdings (Pvt) Ltd 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.
In 2008 and 2009, the appellant sought loans on behalf of
SMM Holdings (Pvt) Ltd 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.
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
Holdings (Pvt) Ltd in terms of section 6 of the Reconstruction of State-Indebted
Insolvent Companies Act [Chapter 24:27].
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
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 [Chapter 10:28].
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 Holdings (Pvt) Ltd and thereafter
proceed to execute on that judgment, SMM Holdings (Pvt) Ltd would, in the
result, have to be liquidated, thus negating the whole purpose of
reconstruction.
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….,.
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 [Chapter 10:28]. 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 paragraph [2] of the
operative part of its judgment.
APPELLANT'S SUBMISSIONS
ON APPEAL
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 SC34-12, 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.
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
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 [Chapter 10:28], no
time limits apply to applications in terms of section 4 of the Administrative
Justice Act [Chapter 10:28]…,.
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 Holdings (Pvt) Ltd.
On the facts, it is quite clear that the decision of the
appellant was irrational and unreasonable.
The respondent has further argued that section 6(b) of the
Reconstruction of State Indebted Insolvent Companies Act [Chapter 24:27] 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.
Lastly, the respondent has submitted that section 4 of the
Reconstruction of State Indebted Insolvent Companies Act [Chapter 24:27] cannot
be interpreted as preventing the High Court, in an appropriate case, from
substituting its own decision for that of the administrative authority.
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…,.
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….,.
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.”
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 s 6(b) of the Reconstruction Act.”
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.
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.
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.
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).
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
HH106-06; Muchapondwa v Madake & Ors 2006 (1) ZLR 196 D-G, 201 A (H); GMB v
Muchero 2008 (1) ZLR 216, 221 C-D
(S).
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.
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.
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
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.
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.
