ZIYAMBI JA: This is an appeal against a judgment of the High
Court dismissing with costs an urgent application brought by the appellants for
the release from 'attachment and execution' of certain motor vehicles and other
assets attached by the second respondent (“the Deputy Sheriff”) on the appellants'
premises on 12 April 2013.
THE BACKGROUND
The first and second appellants are
companies duly incorporated according to the laws of Zimbabwe and whose
registered office and principal place of business is situate at the Harare
airport.
The first respondent is an
ex-employee of the second appellant. Sometime in October 2010, an
arbitral award for outstanding salary and benefits was made in his
favour. No appeal was lodged against the decision of the arbitrator and
the award was registered with the High Court on 5 September 2012. On
19 October 2012 he caused to be issued a writ of execution on the strength
of which the Deputy Sheriff attached and removed twenty–nine vehicles which
were found on the appellants' premises at the Harare airport. The appellants
alleged that interpleader notices were filed to 'safeguard the claimants'
interests which notices are still pending'. Indeed it appears that
interpleader proceedings in the name of the first appellant as claimant and the
first respondent as judgment creditor were commenced in the High Court on or
about 15 November 2012 and not concluded. (I pause here to observe that in
terms of the High Court Rules, interpleader proceedings in respect of property
attached in execution are required to be brought by the Deputy Sheriff, as
applicant, and the person(s) claiming ownership of the attached property as
claimant(s)[1]).
The appellants further alleged that
in December 2012, s 8 of the Finance Act (No.2) of 2012 (“the Finance
Act”) was enacted with the sole purpose of protecting, from attachment or
execution, the property of the appellants as the successor companies of the Air
Zimbabwe Corporation and that following this enactment, and in February 2013,
the first respondent released the attached motor vehicles subject to the
appellants paying to the Deputy Sheriff storage fees which had accumulated in
the sum of US$10 000. The appellants were therefore surprised when, on 12 April
2013, the Deputy Sheriff returned with the same writ of execution and attached
the same motor vehicles which had previously been released from
attachment.
They alleged that by virtue of the
provisions of s 8 of the Finance Act as read with the State Liabilities Act [Chapter
8:14] the attachment of the appellants' property to satisfy debts owed by
either the first or the second appellant is in violation of the law and
therefore illegal. In the premises, they urged the court to intervene as a
matter of urgency to prevent the removal of the assets set for 22 April
2013 for public auctioning and so put an end to the illegality perpetrated by
the respondents. Failure by the court to intervene and save the attached motor
vehicles would result in paralysis of the business operations of the first
appellant in a dispute to which it is not a party.
It is of interest to note here that,
notwithstanding the alleged urgency, the application was filed on 22 April
2013, the day scheduled for the removal of the attached property, and served on
the first respondent the following day at 4.20 pm.
In opposing the application the
first respondent raised two preliminary issues. Firstly, that the matter
was not urgent and, secondly, that the application was defective by reason of
its non-compliance with Rule 241 (1) of the High Court Rules which requires the
applicant to set out the facts of his application in Form 29B. No mention was
made of the second issue in the judgment and it is not raised in the notice of
appeal.
With regard to the first point
raised, in limine, it was averred by the first respondent that the
appellants had shown no satisfactory reason, whether in the certificate of
urgency or their founding affidavits, as to why the matter should be heard as a
matter of urgency. In particular, there was no disclosure as to when the
alleged urgency arose regard being had to the fact that the writ was issued on
19 October 2012; that when the Finance Act on which the appellants
rely was enacted in December 2012, no action was taken by the appellants; and
that the appellants had concealed from the court an earlier attempt by the
Deputy Sheriff, on the 10 April 2013, to attach their property before the
actual attachment took place on the 12 April 2013. In addition, there
was no explanation from the appellants as to why they failed to file this
application before the 22 April 2013. In the premises, the urgency was
self-created.
As to the merits of the matter, the
first respondent averred that the property attached belonged to the second
appellant ('Air Zimbabwe Holdings') which was not protected by the provisions
of the Finance Act, such protection having been afforded only to the first
appellant ('Air Zimbabwe'). While admitting that he had ordered the
Deputy Sheriff to release the attached motor vehicles, it was averred that the
release was not on account of the provisions of the Finance Act but was in
consequence of a tender by Air Zimbabwe Holdings of a payment plan in terms of
which the latter promised to pay the debt owed to the first respondent in
agreed instalments. When that commitment was not honoured, the Deputy
Sheriff was instructed to reattach and remove the goods formerly released,
hence the attempt at attachment on 10 April 2013.
The learned Judge having heard the
matter dismissed it on the basis that it lacked both urgency and merit. The
following grounds of appeal were relied on by the appellants:-
GROUNDS OF APPEAL
- The court a quo erred in declining to hear and
determine the matter on an urgent basis by the exercise of its discretion
on whether to hear and determine the matter on an urgent basis on a wrong
premise, such wrong premise amounting to an irregular exercise of judicial
discretion.
- The court a quo erred in not holding that, upon
a proper construction of s 9A of the Air Zimbabwe Corporation (Repeal)
Act, No.4 of 1998, as inserted by s 8 Finance (No.2) Act, 2012, both
appellants are successor companies to the Air Zimbabwe Corporation.
- The court a quo erred in not holding that
judicial attachment and sale in execution of any property belonging to
either of the appellants is proscribed by s 9A of the Air Zimbabwe
Corporation (Repeal) Act, No.4 of 1998, as read together with the
provisions of s 5(2) of the State Liabilities Act [Cap 8:14]
The first ground of appeal makes no
sense because the court a quo did not decline to hear the matter.
Indeed, having found that the matter was not urgent it nevertheless proceeded
to hear and determine it on an urgent basis. In so doing the court a quo
contradicted itself. What it should have done once a finding of lack of
urgency was made, was to strike or remove the matter from the roll of urgent
matters and not proceed to hear the merits for, once a hearing has taken place
and a decision made on the merits, the question of urgency becomes
irrelevant. For this reason a determination on the first ground of appeal
would be unnecessary. Suffice it to say that no wrong premise was
disclosed to this Court (and indeed none was apparent on perusal of the
judgment) and the evidence on the record adequately supports the finding of the
learned Judge that any urgency there was, was self-created.
The second and third grounds of
appeal raise the issue whether Air Zimbabwe Holdings is a successor company of
Air Zimbabwe Corporation as contemplated in s 9A of The Air Zimbabwe
Corporation (Repeal) Act (No. 4 of 1998)(“the Repeal Act”). If it is, then it
would follow that the attachment of its property by the Deputy Sheriff was
illegal.
It was the appellants' contention
before this Court, as before the court a quo, that the word any
was meant to convey the meaning that any company formed by the shareholder or
Board of the National Airline would automatically enjoy the same immunity
provided by the amendment and that, in the premises, Air Zimbabwe Holdings was
such a successor company as would enjoy the immunity. The learned Judge
rejected this contention. At p 6 of the cyclostyled judgment he
said:
“I do not accept that it was the
intention of the legislature to extend such immunity to an indeterminate number
of companies some shareholders or board somewhere could think of floating. I do
not see the provisions of the amending section aforesaid as granting the power
to anybody, let alone some shareholder or board of directors somewhere, to
create a successor company, let alone several of them, to the defunct
Corporation. The words used in the amendment are '… or any successor company'.
The word 'company' is used in the singular. I do not accept applicants'
argument that the use of the pronoun 'any' before the noun 'company'
transformed the word 'company' from the singular to 'companies' in the plural.
A reading of the whole amendment leaves me in no doubt that it was intended to
refer to one successor company. If it was meant to refer to more than one
company, the legislature could have easily used plurals so that that portion of
the amendment would have read '… or all successor companies',
or '… or any of the successor companies'”.
(Emphasis is contained in the judgment).
The correctness of the learned
Judge's ruling becomes evident when the legislative history is
considered.
The Repeal Act was brought into
operation on May 8 1998. Its purpose, as set out in the
preamble, was 'to provide for the dissolution of Air Zimbabwe Corporation and
the transfer of its functions, assets, liabilities and staff to a company
formed for the purpose; to provide for the repeal of the Air Zimbabwe
Corporation Act [Cap 13:02]; and to provide for matters connected with
or incidental to the foregoing'. (The underlining is mine)
Section 3 of the Repeal Act
provided:
3.
Formation of a successor company
Subject to this section, the
Minister shall take such steps as are necessary under the Companies Act [Chapter
24:03] to secure the formation of a company limited by shares, which
shall be the successor company to the Corporation for the purposes of
this Act:
Provided that, if such a company
has been incorporated for the purpose before the date of commencement of this
Act, the Minister may, by notice to the Corporation, direct that that
company shall be the successor company to the Corporation for the
purposes of this Act.” (Emphasis provided)
Section 4 of the Repeal Act made
provision for the shareholding of the successor company and s 5 for the
transfer of assets and liabilities of the Corporation to the successor
company.
The company nominated by the
Minister in terms of s 3 was Air Zimbabwe (Private) Limited. See Jayesh
Shah v Air Zimbabwe Corporation[2].
On 28 December 2012 the Finance Act
amended the Repeal Act by inserting a new s 9A. Section 8 of the Finance
Act provided:
“8 New section inserted in Act
No.4 of 1998
- The Air Zimbabwe Corporation (Repeal) Act (No.4 of
1998) is amended by the insertion of the following section after s 9-
'9A Legal proceedings against
Corporation or Successor Company
The State Liabilities Act [Chapter
8:14] applies with necessary changes to all legal proceedings against the
Corporation or any successor company.'
- Subject to subsection (3), the amendment effected by
subsection (1) applies to all legal proceedings against the Corporation or
successor company (as those terms are defined in s 2 of the Air Zimbabwe
Corporation (Repeal) Act (No.4 of 1998)), that were commenced or completed
before the date of commencement of this
Act.
The term 'successor company' was
defined in s 2 of the Repeal Act as follows:-
'“successor company” means the
company referred to in section three.'
It admits of no doubt, therefore,
that the legislature clearly had in mind one successor company. It is
also clear that had the appellants' contention to the contrary been correct,
the legislature would have expressed itself in words which lend themselves
clearly and unambiguously to the meaning contended for by the appellants.
As submitted by Mr Mpofu by way of illustration, the Air Zimbabwe
Corporation was only one of the many companies which were unbundled.
Similar provisions were made in legislation repealing the Electricity
Act. For example s 68 of the Electricity Act [Chapter 13:19]
provides:
“68 Formation of successor companies
(1) The Minister shall, not later
than six months after the fixed date, take such steps as are necessary under
the Companies Act [Chapter 24:03]
to secure the formation of one or more of the following companies limited by
shares, which shall be the successor company or successor companies to the
Authority—
(a) a company to take over
the electricity generation plants of the Authority;
(b) a company to take over
the transmission system of the Authority;
(c) a company to take over
from the authority the distribution and supply of electricity;
(d) such other companies as
the Minister may approve;
(e) a company to hold the
shares of the State in the companies referred to in paragraphs (a) to (d).”
Clearly, then, the learned Judge's
finding that Air Zimbabwe Holdings is not the successor company referred to in
s 9A of the Repeal Act is unassailable. It follows, therefore, that the
property of Air Zimbabwe Holdings is not protected from execution by the
statutory provision.
As to the ownership of property
attached, it was alleged by the appellants that that property belonged to Air
Zimbabwe and not to Air Zimbabwe Holdings. In support of this allegation
a number of registration books were attached to the appellants' papers.
The learned Judge determined this issue as follows:
“Applicants alleged that the
attached assets did not belong to Air Zimbabwe Holdings against which Nhuta had
a judgment, but against Air Zimbabwe which not only was not indebted to Nhuta
but also the assets for which are immune from attachment. But not a shred of
evidence was placed before me that the assets belonged to Air Zimbabwe. During
argument it was contended from the bar that the evidence of ownership was in
the interpleader proceedings. It will be remembered that until I had requested
a copy of the pleadings in those proceedings, none had been placed before me.
No case reference number had been given. Nonetheless, having perused those
papers I find that Air Zimbabwe laid claim to 20 out of 29 of the attached
vehicles and to 1 motor cycle. As proof of ownership of those vehicles some
registration books were copied and attached. From those registration books
about six of the vehicles were in the name of “Air Zimbabwe Corporation”
which could be either or both of the applicants according to their argument
that both are successor companies. The rest of the vehicles were in the name of
“Air Zimbabwe” which again could mean either or both of the applicants.
At any rate emblazoned on every registration book was a “WARNING”
that read “This registration book is not proof of legal ownership.
(My emphasis)”
I find no fault with the above
reasoning. It is trite that registration books are not proof of
ownership. In any event the appellants have, still open to them, the
option of pursuing the interpleader proceedings in which the issue of ownership
can properly be ventilated and determined.
The appeal, for the reasons set out
above, lacks merit and is hereby dismissed with costs.
GARWE JA:
I agree
PATEL JA:
I
agree
Messrs Mutumbwa Mugabe &
Partners, appellants' legal
practitioners
Matsikidze & Mucheche, respondents' legal practitioners
[1] Rule 205A which provides:-“(2) In regard to conflicting
claims with respect to property attached in execution, the Sheriff or
DeputySheriff shall have the rights of an applicant and an execution creditor
shall have the rights of a claimant”
.
[2] HH133/10 KUDYA J remarked:
“Section 3 of the Repeal Act
mandated the Minister of Transport and Energy to secure the formation of a
company limited by shares in terms of the Companies Act [Cap 24:03]
to succeed the Corporation. If such a company was in existence before the
commencement of the Act, the Minster was empowered to notify the Corporation
and direct the company to become the successor to the Corporation. The company
he nominated as the successor company, Air Zimbabwe (Private) Limited, was
already in existence by the time the Repeal Act was published. It had been
incorporated on 20 November 1997”.
