Asmdev Incorporated (Private) Limited v Joh and Lewis Investments (Private) Limited & Others

The plaintiff leased a mining site known as Lonhro in Mazowe from the sixth defendant under a lease agreement since 2021. On 16 September 2024, the first to fourth defendants allegedly unlawfully despoiled the plaintiff of the mining shaft using force and threats. The plaintiff launched urgent proceedings for a mandamus van spolie (spoliation order) against the first to fifth defendants only. The sixth defendant (Mazowe Mining Company) was not initially sued as it was under corporate rescue proceedings in Case No. HCHC 84/24. DEME J heard the matter, conducted an inspection in loco, and on 25 October 2024 upheld preliminary points including non-joinder of the sixth defendant. The court referred the matter to trial, converting the application into action proceedings, and joined the sixth defendant as a party, directing the plaintiff to serve process on it. The sixth defendant then entered appearance to defend and filed a special plea in bar on 5 December 2024, arguing that the plaintiff had not sought leave to sue a company under corporate rescue as required by section 126(1)(b) of the Insolvency Act.

• Whether proceedings can be instituted or continued against a company under corporate rescue without leave of court in terms of section 126(1)(b) of the Insolvency Act
• Whether a court-ordered joinder of a company under corporate rescue constitutes leave of court to proceed with the action
• Whether a special plea in bar was properly pleaded and whether the relief sought matched the pleadings
• The binding nature of court orders and when they can be disregarded

The special plea was dismissed with costs. The sixth defendant was ordered to pay the plaintiff's costs of the special plea proceedings.

Where a court, being aware that a company is under corporate rescue, orders the joinder of that company to proceedings and directs that the proceedings continue as a trial action in terms of the court rules, such court order constitutes the requisite leave contemplated by section 126(1)(b) of the Insolvency Act to commence and proceed with legal proceedings against a company under corporate rescue. A valid court order remains binding and must be obeyed unless lawfully discharged, and a party complying with such an order cannot be said to be acting without court authority. Special pleas must be properly pleaded in accordance with Rule 42, and parties are bound by their pleadings - a court cannot grant relief different from what was specifically pleaded in the special plea.

The court made observations on the purpose and nature of pleadings, citing extensively from Medlog Zimbabwe (Pvt) Ltd v Cost Benefit Holdings (Pvt) Ltd SC 24/18 to emphasize that pleadings serve to define issues for determination and parties are bound by them. The court also discussed the three recognized exceptions under common law where court orders may be void ab initio (lack of proper service, lack of proper mandate, or lack of jurisdiction) as set out in Fabio Aponte v Antolini Luigi & C.S.P.A & Ors SC 89/25, noting that none of these exceptions applied in the present case. The court observed that even if the court before DEME J had erred in joining the sixth defendant without properly considering its corporate rescue status, the proper remedy would be rescission under Rule 29(1) or appeal, not disobedience of the order. The court noted that it would be reviewing its own decision if it granted the stay of proceedings sought, and confirmed that courts are functus officio and cannot review their own decisions except in limited circumstances such as rescission of default judgments.

This case clarifies important principles regarding corporate rescue proceedings and civil procedure in Zimbabwe: (1) It establishes that a court-ordered joinder of a company under corporate rescue, where the court is aware of that status and directs proceedings to continue, constitutes sufficient leave under section 126(1)(b) of the Insolvency Act; (2) It reinforces the principle that court orders remain valid and binding even if arguably erroneous, and must be obeyed unless lawfully set aside through rescission or appeal; (3) It emphasizes that special pleas must be properly and formally pleaded in accordance with Rule 42 of the High Court Rules, and parties are bound by their pleadings - the court cannot grant relief different from what was pleaded; (4) It demonstrates that the moratorium on proceedings under section 126(1) is not absolute where court authority has been obtained; (5) It illustrates the distinction between declinatory/peremptory pleas (seeking dismissal) and dilatory pleas (seeking postponement/stay) and the importance of pleading the correct type of special plea.