Chitrins Garage (Pvt) Ltd (In Provisional Liquidation) v Chycry Trading (Pvt) Ltd and Dumisani Mutorera

The applicant, a company in provisional liquidation, sought an urgent order authorizing the Deputy Sheriff to attach and seize movable assets from premises leased by the respondents. The applicant alleged that respondents owed $52,950 in rental arrears since May 2013. The lease agreement was set to expire on 1 February 2015, and the applicant feared respondents would flee without paying arrears. The applicant had already instituted legal proceedings for recovery of rentals in HC 360/13, which was still pending. The applicant claimed to be prompted into this urgent action by a plea filed by respondents on 2 December 2014, which it characterized as frivolous and vexatious. The application was heard after the lease expiry date of 1 February 2015.

• Whether the provisional liquidator required leave of court to institute proceedings in terms of Section 221(2)(a) of the Companies Act [Chapter 24:03]
• Whether the provisional order appointing the liquidator dispensed with the requirement to seek leave to institute proceedings
• Whether the application met the requirements for urgency
• Whether there was reasonable explanation for the delay in instituting proceedings

The court upheld the points in limine and dismissed the application with costs.

In a winding up by court under Section 221(2)(a) of the Companies Act [Chapter 24:03], a provisional liquidator is required to obtain leave of court before instituting any legal proceedings on behalf of the company. A provisional order appointing a liquidator and conferring general powers does not automatically dispense with the statutory requirement to seek leave where the Act expressly requires it. A litigant may except to proceedings instituted by a liquidator without the requisite authority. In urgent applications, long-standing arrears and known future dates do not constitute urgency, and there must be a reasonable explanation for any delay in taking action.

The court noted that even if it had held otherwise on the point regarding leave of court, the application would still have failed on the basis of lack of urgency. The court observed that the landlord's hypothec is exercisable any time from the occasion of the tenant falling into arrears, and that the appropriate time to initiate such process would have been when the civil suit for arrears was initiated in 2013. The court also commented that the expiry of the lease could not form a basis for urgency as it was a date known well in advance.

This case clarifies the procedural requirements for liquidators in Zimbabwe when instituting court proceedings on behalf of companies in provisional liquidation. It confirms that in a court-ordered winding up, a liquidator must obtain specific leave of court before instituting proceedings, and that a general provisional order appointing a liquidator does not dispense with this requirement. The case also provides guidance on what constitutes urgency in urgent applications, emphasizing that long-standing arrears and known future dates do not create urgency, and that the Kuvarega principle requiring reasonable explanation for delay applies strictly.