The
background facts are as follows:-
The
applicant sued the first respondent in his official capacity as provisional
liquidator of ZEXCOM (Pvt) Ltd under case numbers HC210/13 and
HC419/13. The two cases were consolidated and heard together by MAKONESE J
on 23 January 2014. The court then delivered its judgment whose operative
part reads as follows:
“(1)
The provisional ...
The
background facts are as follows:-
The
applicant sued the first respondent in his official capacity as provisional
liquidator of ZEXCOM (Pvt) Ltd under case numbers HC210/13 and
HC419/13. The two cases were consolidated and heard together by MAKONESE J
on 23 January 2014. The court then delivered its judgment whose operative
part reads as follows:
“(1)
The provisional order granted to the applicant on 27th February 2013,
under case number HC419/13, be and is hereby confirmed save for the 6th
respondent against whom the provisional order is hereby discharged.
(2)
The 1st respondent shall pay the costs of the application on an
attorney and client scale.
(3)
It is hereby declared that the 1st respondent does not hold the
office of liquidator of the 2nd respondent and accordingly all
actions, all deeds of whatsoever nature, performed or undertaken by him while
purporting to hold the office of liquidator be and are hereby declared null and
void and of no force or effect.
(4)
1st respondent be and is hereby removed from the office of
Provisional Liquidator of the 2nd respondent with effect from the
date of this order.
(5)
1st respondent be and is hereby ordered to render to 3rd
respondent full accounts in respect of all financial activities undertaken by
him in respect of 2nd respondent with effect from 17th
February 2010 to the date of this order; such accounts to be filed with 3rd
respondent within ten (10) days of the service of this order upon 1st
respondent.
(6)
1st respondent be and is hereby ordered to surrender to 3rd
respondent all assets of 2nd respondent including movables and
immovables, documents, deeds, records, including financial records, bank
accounts, liquidation files, legal documents, equipment and any other assets
whatsoever nature in his possession within ten (10) days of this order failing
which the Deputy Sheriff be and is hereby authorized to carry out a diligent
search and recover all such assets from 1st respondent.
(7)
3rd respondent be and is hereby [directed] to appoint Barbra Lunga
as Provisional Liquidator of the 2nd respondent with powers
conferred by section 221(2)(a) or (g) of the Companies Act [Chapter 24:03].
(8)
1st respondent shall pay the costs of this application on an
attorney and client scale.”
Dissatisfied
with and miffed by this order, the first respondent, in his official capacity,
and ZEXCOM (Pvt) Ltd (in liquidation), noted an appeal to the Supreme Court on
4 February 2014 against the whole judgment of MAKONESE J. The appeal is
pending before the Supreme Court under case number SC33/14. The grounds of
appeal are listed as follows:
“1.
The court a quo erred in coming to the conclusion
that 1st respondent had no authority to dispose of the assets of
second appellant; such conclusion being at variance with an earlier and extant
order of the same court of the 18th October 2011.
2.
The court a quo also erred in coming to the
conclusion that second appellant was not under final liquidation contrary to an
earlier and extant order of the 22nd July 2011 which held that if
funds to pay where (sic) not availed, second
appellant would go in to final liquidation.
3.
A fortiori, and it having been common cause that second
appellant had failed to pay and thereby went into final liquidation, the court a quo erred in concluding that first appellant was not the
liquidator notwithstanding that post the order of the 22nd July 2011,
he had been recognized by the court as the liquidator.
4.
The court a quo erred in coming to the conclusion
that first appellant had failed to execute his duties as a liquidator, such
conclusion having been arrived at on the unsubstantiated allegations of an
interested minority shareholder who could not prove that his application was
supported by the majority.
5.
A fortiori, the court a quo erred in
failing to consider that relief could only be afforded after proof of first
appellant's unsuitability at the instance of contributors, creditors as well as
the Assistant Master of the High Court.
6.
The court a quo erred in appointing Barbra Lunga
as the liquidator without assessing her propriety for office and
notwithstanding that she had clearly sought to overreach second appellant after
it had gone into liquidation.”
The
applicant has approached this court by way of urgent chamber application
against the first respondent, both in his official and personal capacities, and
ZEXCOM (Pvt) Ltd (in liquidation) as the first, fourth, and fifth respondents…,.. The
second respondent is the Assistant Master of the High Court while the third
respondent is the Registrar of Deeds.
The
relief sought by the applicant is a provisional order couched in the following
terms:
“Terms
of final order sought
That
you show cause to this honourable court why a final order should not be granted
in the following terms:
1.
The operation of the judgment HB10-14 granted by the Honourable Mr Justice
Makonese on the 23rd January 2014 in the consolidated matters
HC310/13 and HC419/13 shall not be suspended by reason of the appeal noted by
the 1st respondent to the Supreme Court under SC33/14 or any other
appeals, and shall have full legal effect regardless of such appeal, and 1st
respondent be and is hereby ordered to comply with all its applicable
provisions with immediate effect.
2.
The 1st respondent pays the costs of this application on an attorney
and client scale.
Interim
relief granted
Pending
the finalization of this matter, applicant is granted the following interim
relief:
3.
The 1st respondent be and is hereby interdicted and prohibited from
disposing of, selling, transferring, alienating or in any way encumbering all
of the movable and immovable properties of ZEXCOM (Pvt) Ltd.
4.
The 1st respondent be and is hereby further interdicted and
prohibited from performing any act of any nature purporting to be liquidator or
provisional liquidator of ZEXCOM (Pvt) Ltd pending the outcome of the legal
proceedings instituted by the 1st respondent in the Supreme Court
under SC33/14.
5.
The 1st respondent be and is hereby ordered to forthwith render to 2nd
respondent a full account of all assets of ZEXCOM (Pvt) Ltd in his custody
including rentals collected in respect of all immovable properties since his
assumption of control of ZEXCOM (Pvt) Ltd to date of service of this order upon
him and to surrender to 2nd respondent all assets of the company
including movable and immovable, documents, deeds, financial and legal records,
bank accounts, and other assets of whatsoever nature in his possession, failing
which the Sheriff of Zimbabwe, Bulawayo, be and is hereby directed to conduct a
diligent search and recover all such assets from 1st respondent and
all those claiming through him.
6.
2nd respondent be and is hereby ordered and directed to appoint
Barbra Lunga as provisional liquidator of ZEXCOM with powers conferred by
section 221(2)(a) or (g) of the Companies Act [Chapter 24:03] in terms of the
judgment of this honourable court under case number HB14/14.”
The
facts of this matter are simple and straight forward.
The
applicant is a shareholder of the fifth respondent. On 27th
February 2013, this court issued a provisional order against the first
respondent. The applicant sought confirmation of this order and the matter
was placed before MAKONESE J under case number HC419/13. At the same time,
the applicant, under case number HC310/13, sought the removal of the first
respondent from the office of provisional liquidator and other ancillary relief. The
two matters were consolidated and heard at the same time after KAMOCHA J so
ordered. MAKONESE J then dealt with the two matters and in judgment number
HB10-14 issued the order referred to earlier in this judgment.
The
applicant's argument is that the first respondent's appeal to the Supreme Court
is clearly without merit and is, in fact, frivolous and vexatious in that the
issues raised as grounds of appeal were dealt with extensively by the applicant
in the court a quo. In particular, the following
facts are indisputable:
(a) That
there is, to date, no final order for the liquidation of ZEXCOM (Pvt) Ltd.
(b)
That the first respondent was never appointed liquidator of ZEXCOM (Pvt) Ltd
either by order of this court or by the second respondent.
(c)
That the first respondent does not have the legal authority to sell and was
never authorized to sell any immovable property of ZEXCOM (Pvt) Ltd by any
order of this court.
Further,
it was submitted that the first respondent's conduct, in relation to the
maladministration of ZEXCOM (Pvt) Ltd's affairs, its properties and its funds
is also clearly documented in the submissions made before this court in
previous applications. In particular, the following issues were
highlighted:
(i)
The failure by the first respondent, despite being afforded reasonable
opportunity, to account for ZEXCOM (Pvt) Ltd's funds since his appointment, in
light of the fact that none of the membership of the company or any other
beneficiary has received any disbursements.
(ii)
The first respondent once undertook to deliver to the second respondent, by 31st
January 2014, a detailed report of the affairs of ZEXCOM (Pvt) Ltd since his
appointment. No such report has been furnished to the second respondent by
the first respondent to date.
The
applicant also submitted that the first respondent has ignored all other
attempts to have him conduct himself responsibly, including orders of this
court and instructions of the Deputy Master.
There
is, therefore, no other alternative remedy in the circumstances other than to
have the judgment executed pending appeal.
This
is particularly so because after filing his appeal at the Supreme Court on 4
February 2014, the first respondent, on 7 February 2014, wrote a letter to
Barbra Lunga, copied to the Deputy Master and others, stating that following
his appeal, the High Court judgment of the 23rd January 2014 had
been “set aside” pending the final determination of the appeal and demanded
that all rentals revert to him on this account….,.
The
applicant further submitted, in respect of the requirements for an application
for leave to execute pending appeal, that the court has a general discretion to
grant or refuse leave, and if leave be granted, to determine the conditions
upon which the right to execute shall be exercised. Reliance was placed on
the following authorities:
(a)
South Cape Corporation (Pty) Ltd v Engineering Management Services (Pvt) Ltd 1977 (3) SA 534.
(b) Zimbabwe Distance (Correspondence) Education
College (Pvt) Ltd v Commercial Careers College (1980) (Pvt) Ltd 1991
(2).
(c)
Econet (Pvt) Ltd v Telecel Zimbabwe (Pvt) Ltd 1998 (1) ZLR 149 (H).
The
legal principle enunciated in these cases is that in an application for leave
to execute on a judgment pending appeal against that judgment, the court,
whilst retaining a wide discretion, will only order execution in such
circumstances where the order would cause irreparable harm to the respondent,
if it feels that an appeal has been noted with no bona fide intention of
seeking to reverse the judgment but merely to buy time, or where the appeal
stands no prospects of success whatsoever.
In casu, it was submitted that
the appeal had been noted with no genuine intention of seeking to reverse the
judgment but merely to buy time. It was further submitted that the first
respondent's prospects of success are non-existent.
Having
been served with the urgent application, the first respondent filed an opposing
affidavit wherein he raised the following issues:
(a)
That the matter is not urgent in that no event has accrued that warrants the
matter to be treated as urgent.
(b)
That there is improper citation of the 1st respondent. The
argument is that the 1st respondent has been wrongly cited in his
personal capacity when the judgment sought to be enforced pending appeal is
against the 1st respondent in his official capacity.
(c)
That the urgent chamber application is bad at law in that it is not exactly an
application for leave to execute pending appeal.
(d)
That the urgent chamber application and the interim relief sought render
nugatory or abrogates the 1st respondent's right to appeal.
(e) That
the applicant has failed to establish the relevant factors which ought to be
considered in determining whether to grant leave to execute pending appeal.
(f)
That the appeal filed by the 1st respondent and ZEXCOM (Pvt) Ltd (in
liquidation) has merits and the applicant's contention that it is frivolous and
vexatious or mala fide is totally without foundation.
I
now deal with these grounds seriatum.
