HLATSHWAYO & ORS v GEOZING PAWNBROKERS (PVT) LTD & ORS

HIGH COURT, BULAWAYO

[Opposed Application HB 117-16]

February 26 and May 12, 2016

TAKUVA J

Company law  –  Companies Act [Chapter 24:03]  –  Winding up and judicial management  –  Whether a company may be removed from winding up and placed under judicial management  –  Circumstances in which it may be desirable to set aside winding up and place company under judicial management.

In principle, a winding up order may be cancelled, the liquidators discharged and the company placed under judicial management provided it is desirable to do so and the requirements for a judicial management order have been satisfied.

Cases cited:

Storti v Nugent and Others 2001 (3) SA 783 (W), referred to

Ward and Another v Smit and Others: In re Gurr v Zambia Airways Corporation Ltd 1998 (3) SA 175 (SCA), referred to

Zimbabwe Textile Workers Union v David Whitehead Textiles Ltd & Ors 2014 (1) ZLR 319 (H), referred to

Legislation considered:

Zimbabwe:

Companies Act [Chapter 24:03], ss 221 (2)(a) to (h), 227, 303, 305, 305 (1)

South Africa:

Companies Act, 1976, s 354

Book cited:

Christie RH Business Law in Zimbabwe (1st edn, Juta & Co Ltd, Cape Town, 1998) p 433

R Ndlovu, for the applicants

S Collier, for second and third respondents

No appearance for the first respondent

TAKUVA J:

The first respondent was placed under provisional liquidation on the 13th of June 2013 which was confirmed on the 11th of July 2013. The second and third respondents were then appointed provisional liquidators.

Subsequently, on 19 December 2013 the creditors held a meeting before the fourth respondent where they passed a resolution that the first respondent be placed under judicial management. At this meeting over 200 creditors voted that the company be placed under judicial management while four creditors were for liquidation. The applicants then filed an application seeking an order removing the first respondent from liquidation and placing it under provisional judicial management. This Court per Kamocha J granted an interim order on the 14th day of March 2014 in the following terms:

“Interim relief granted

Pending the finalisation of this matter, applicants be and are hereby granted the following relief:

1. The first respondent be and is hereby removed from provisional liquidation and placed under provisional judicial management.

2. Pending the return date, this order shall operate as a Provisional Order of Judicial Management.

3. The Assistant Master be and is hereby ordered to appoint Thabani Lihle Siziba of Waterbuck Trust (Pvt) Ltd as the Judicial Manager of the applicant with powers conferred by section 221 (2)(a) to (h) as read with section 303 of the Companies Act [Chapter 24:03].

4. A copy of this order shall be served on the Assistant Master.

5. This order shall be published once in the Government Gazette and in one Friday edition of the Chronicle newspaper.

6. All court actions and proceedings and the execution of all writs, summons and other court processes against the company be and are hereby stayed and must not be proceeded with without the leave of the court.

7. Whilst the Provisional Judicial Management Order is in force, all actions, executions of writs, summons and other proceedings against the first respondent shall not be proceeded with without leave of this honourable court. Any goods attached or removed shall forthwith be released from such attachment and placed in the custody of the Provisional Judicial Manager.

8. Any existing directors of the company be and are hereby divested of their power and authority as directors and managers of the first respondent.

9. Any interested party may inspect a copy of the application at the office of the Assistant Registrar of the High Court, Bulawayo or at the office of the Assistant Master of the High Court, Bulawayo.

10. Any interested party may appear before this court sitting at Bulawayo on the 17th day of April 2014 to show cause why a final order should not be made placing the respondent’s company in Judicial Management.

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