The first respondent was the liquidator of Interfin Banking Corporation (Interfin), a bank in final liquidation. The third respondent owned immovable property (Lot 3 of Bannockburn, Harare) held by Deed of Transfer Number 9068/2008. The third respondent surrendered its title deed to Interfin as security for a debt, and Interfin registered Mortgage Bond No. 5818/2011 on it. Interfin then obtained money from the appellant and provided the third respondent's title deed as security to the appellant. The third respondent later repaid all its debts to Interfin, obliging the liquidator to cancel the mortgage bond and return the title deed. However, the appellant refused to surrender the original title deed despite demand. The liquidator then applied for and obtained a replacement title deed from the Registrar of Deeds on 7 September 2021. The appellant filed an urgent application on 13 October 2021 seeking to compel the third respondent to surrender the replacement title deed and bar its use, claiming the third respondent was selling properties using it. The High Court struck off the application on the basis that the appellant had not sought or obtained leave to sue the liquidator of a company in liquidation. The appellant appealed without seeking leave to appeal.
The appeal was struck off the roll. The appellant was ordered to pay costs on a legal practitioner and client scale.
The binding legal principles established are: (1) Leave of court is required before instituting proceedings against a liquidator of a company in liquidation, as liquidation creates a concursus of creditors and no creditor can alter the rights of other creditors without court sanction (following Chikura N.O & Anor v Alshams Global BVI Ltd SC 23/20); (2) A judgment or order striking off proceedings for failure to obtain leave to sue a liquidator is interlocutory in nature where it does not determine any substantive issue but merely halts proceedings pending compliance with procedural requirements; (3) An interlocutory order that does not fall within the exceptions listed in s 43(2)(d) of the High Court Act (liberty of subject, custody of minors, grant or refusal of interdict, or special case stated under arbitration laws) may only be appealed with leave of the High Court judge or, if refused, a Supreme Court judge; (4) An appeal lodged without the required leave is incompetent and improperly before the appellate court.
The Court made several non-binding observations: (1) The requirement for leave to sue serves the broader purpose of protecting economically fragile companies in liquidation from unnecessary litigation, beyond merely protecting creditor interests; (2) While the constitutional right of access to courts under s 69(3) is fundamental, it is subject to reasonable procedural requirements imposed by statute; (3) The Court noted that it could take judicial notice of other proceedings (HC 6264/21) instituted by the appellant after the striking off, which raised issues of possible preemption, though the Court found it unnecessary to fully determine this issue given its conclusion on the leave requirement; (4) The Court characterized the appellant as a "repeat offender" for persistently disregarding procedural requirements despite clear judicial guidance, justifying the imposition of punitive costs; (5) The Court noted that a conscientious litigant would have proceeded with caution after being advised of the procedural requirements in the earlier Chikura case.
This case reinforces fundamental principles of insolvency law and civil procedure in Zimbabwe (which shares similar legal traditions with South Africa). It confirms that: (1) leave of court must be obtained before instituting proceedings against a liquidator of a company in liquidation, to ensure orderly distribution of assets among creditors and prevent disruption of liquidation proceedings; (2) an order striking off proceedings for failure to obtain leave to sue is an interlocutory order requiring leave to appeal under s 43(2)(d) of the High Court Act; (3) the right of appeal, while constitutionally protected, is subject to procedural requirements imposed by statute; and (4) persistent disregard of procedural requirements and judicial guidance justifies punitive costs orders on the legal practitioner and client scale. The case emphasizes the importance of complying with insolvency procedures designed to protect the concursus creditorum (community of creditors) and the supervisory role of the court in liquidation proceedings.