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, section 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 section 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 4:20pm.
In
opposing the application the first respondent raised two preliminary
issues.
(i)
Firstly, that the matter was not urgent; and
(ii)
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 re-attach 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
1.
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.
2.
The court a
quo
erred in not holding that, upon a proper construction of section 9A
of the Air Zimbabwe Corporation (Repeal) Act, No.4 of 1998, as
inserted by section 8 Finance (No.2) Act, 2012, both appellants are
successor companies to the Air Zimbabwe Corporation.
3.
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 section 9A of the Air Zimbabwe Corporation (Repeal) Act, No.4 of
1998, as read together with the provisions of section 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 section 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 p6 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 section 5 for the transfer of assets and
liabilities of the Corporation to the successor company.
The
company nominated by the Minister in terms of section 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 section 9A.
Section
8 of the Finance Act provided:
“8
New section inserted in Act No.4 of 1998
1.
The Air Zimbabwe Corporation (Repeal) Act (No.4 of 1998) is amended
by the insertion of the following section after section 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.'
2.
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 section 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 section 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 section 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 section 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
