Urgent
Application
MOYO
J:
This
is an urgent application wherein the applicant seeks an order that
the Deputy Sheriff be authorized to enter the premises leased by the
respondents and attach and seize all movable assets therein including
motor vehicles.
The
applicant alleges that respondents owe a total sum of $52,950 in
rental arrears since May 2013. The applicant alleges that the lease
agreement expires on 1 February 2015 and therefore they are
apprehensive that respondents will flee without making good the
arrears.
It
is important to note at this stage that this application was in fact
heard after 1 February 2015.
The
applicant has instituted legal proceedings for the recovery of the
rentals in HC360/13 a matter which is still pending before this
Honourable court.
Applicant
alleges that it was prompted into action by respondent's plea filed
of record in HC360/13. Applicant further alleges that the plea was
filed and served on 2 December 2014, prompting it to file this
application on 19 December 2014. It further alleges that the plea is
frivolous and vexatious.
Paragraph
9 of the founding affidavit states thus:
“On
the 25th
of November 2014 respondents were called upon to file a plea to the
claim on the merits and such plea was filed on 2 December 2014. It is
patently clear from the contents of the plea, that respondents have
no bona
fide
defence to the applicant's claim on the merits and have only raised
frivolous and vexatious defences to the claim. I propose to
demonstrate this by reference to material aspects of the plea.”
In
paragraph 14 of the applicant's heads of argument it is stated
thus:
“In
casu,
the respondents filed their plea in the main action on the 2nd
December 2014. The plea obviously caused alarm bells to ring due to
the nature of the frivolous defences raised.”
The
applicants heads of argument go further and correctly state in
paragraph 12 that in the case of Kuvarega
vs Registrar
General and Others
1998
(1) ZLR 188, it was held that the supporting affidavit should always
contain an explanation for the non-timeous action if there is a
delay.
In
paragraph 13 thereof, the applicant proceeds to submit that the
non-timeous action is not always fatal to an application and that the
court has a discretion to hear an application on the merits if there
is an explanation for the delay.
Applicant
further submits in paragraph 15 of the heads of argument that
technically the lease agreement expired on 21 November 2014, that is
when applicant's provisional liquidator was appointed.
The
respondents on the other side raised points in
limine
with regard to this application.
The
first point that respondents raise is that of failure to seek leave
to institute these proceedings by the liquidator.
Respondents
submit that the liquidator of applicant is mandated in terms of
section 221 of the Companies Act [Chapter
24:03]
to seek leave of the court before instituting any proceedings. The
respondents aver that since no leave was sought the applicant is not
properly before this court and can thus not be heard.
Section
221(2)(a) provides as follows:
“The
liquidator shall have power, with the leave of the court or with the
authority mention in subsection 4 or in paragraph (a) of subsection
(4) of Section 218 –
(a)
To bring or defend in the name and on behalf of the company any
action or other legal proceedings of a civil nature and, subject to
any law relating to criminal procedure, criminal proceedings ----.”
Section
221 on the Companies Act gives the liquidator a series of powers
including the power to institute court process on behalf of the
company but such power is to be exercised specifically with the leave
of court.
Section
221(4) provides that:
“He
may, with the authority of a resolution of creditors and
contributories duly passed at a joint meeting, thereof, do any act or
exercise any power for which he is not by this Act expressly required
to obtained leave of the court.”
Respondents
also contend that the case is not urgent.
Section
221 in my view specifically requires that the liquidator acts with
the leave of the court in legal proceedings of any nature. This
especially applies in a winding up by the court. Section 221 falls
under the provisions of the Companies Act specifically applicable in
a winding up by court.
The
applicant's Counsel contends that the liquidator has already been
given those powers as stated in the provisional order, and that there
is therefore no need for leave to have been sought first prior to
instituting this application.
I
do not agree with this view, for this simple reason that the
provisional order in my view simply incorporated the powers as
provided for in the Companies Act and did not go beyond stipulating
them.
The
provisional order does not state that where leave need be sought to
exercise the powers therein, that requirement is dispensed with.
A
look at the authorities also supports this view.
In
the case of Gainsford
and Others NNO v
Hiab
AB 2000 (3) SA 635, the court held that where the liquidator requires
authority to exercise any power, he may approach the court and that a
litigant against whom a liquidator has instituted action without
apparent authority, may except to the action.
I
find the Lesotho case of Liquidator Lesotho
Bank vs
Lesotho Handicraft Co-op Ltd
LSHC
8/10 to be persuasive authority in this regard.
Section
188(2) of the Lesotho Companies Act is identical to Section 221(2) of
our Companies Act.
In
that case challenge was being made to the action by the Liquidator in
so far as failure to seek leave of the court was concerned. The court
in that case held that leave of the court was required of a
liquidator in a winding up by the court, and not in a voluntary
members winding up. It was held in that case that in a winding up by
the court, in terms of section 188 of the Lesotho Companies Act (an
equivalent to our section 221), the liquidator was duty bound to seek
leave of court before instituting court proceedings.
It
is common cause that the applicant is being wound up by the court and
therefore is governed by the provisions of section 221 of the
Companies Act [Chapter
24:03].
In
my view, applicant should have sought leave to institute these
proceedings in terms of the law.
The
application should fail for want of compliance with the law.
Even
if one could have held otherwise on this point, the application would
still fail on the basis of lack of urgency.
This
is an application premised on the exercise of the landlords hypothec
where a tenant has allegedly fallen into arrears.
The
papers show that as at 2013, two years ago, the tenant had fallen
into arrears, the lessor was entitled as at that juncture to seek to
exercise the landlord's hypothec as clearly the law of Landlord and
Tenant provides that the landlord's hypothec is exercisable anytime
from the occasion of the tenant falling into arrears.
The
tenant allegedly fell into arrears dating back to 2013, no action was
taken to exercise the landlord's rights except that a civil suit
for the arrears was initiated.
It
is at that juncture that the process of exercising the landlord's
lien on the movables of the tenant should have been initiated.
Again,
the applicant further states that the application was prompted by the
imminent expiry of the lease, this in my view does not formulate any
basis for urgency at all as, the applicant has always known that come
February 2015, the lease expires, the applicant had all the time
prior to the expiry of the lease to exercise its rights and seek
protection in terms of the law.
We
are also not told why nothing was done to protect the landlord's
interests for all this time.
There
is in my view no reasonable explanation for the delay to act.
The
Kuvarega
case (supra)
states clearly that there must be a reasonable explanation for the
inaction. None has been given in this case.
I
accordingly uphold the points in
limine
and dismiss the application with costs.
Joel
Pincus Konson & Wolhuter,
applicant's legal practitioners
Calderwood,
Bryce Hendrie & Partners,
respondents legal practitioners
