Christine Peta v Edward Buwu and Cristed (Pvt) Ltd

The applicant and first respondent were in a marital relationship and cohabited together. During their relationship, they formed a company, Cristed (Private) Limited (the second respondent), in which each held a 50% shareholding. The company acquired an immovable property (House number 656 Glenwood Drive, Glen Lorne, Harare) which was registered in its name and was the company's only asset. After several years, the relationship deteriorated and both parties eventually moved out of the property, which was then rented out to tenants. The relationship broke down completely to the point where the parties were no longer on speaking terms. The first respondent effectively excluded the applicant from the management and administration of the company and did not share rental proceeds with her. In 2009, the applicant obtained a Magistrate's Court order requiring the first respondent to pay her USD 300 per month from rental proceeds, but he did not comply with this order. On 4 February 2010, the applicant applied for the winding up of the second respondent on the grounds that the company had never traded since inception and that the relationship between the two shareholders was untenable.

• Whether the application was defective for non-compliance with section 79 of the Deeds Registry Act for failure to cite the Registrar of Deeds
• Whether the applicant was competent to bring the application under section 207 of the Companies Act when there were still two members
• Whether section 206(c) of the Companies Act applied where the company was formed to own property and achieved this purpose
• Whether the 'just and equitable' ground under section 206(g) of the Companies Act was established
• Whether alternative remedies under section 208(2) of the Companies Act precluded a winding-up order

The court ordered: (1) That Cristed (Private) Limited be provisionally wound up pending grant of a final order or discharge; (2) Wilbert Nyamupfukudza be appointed as Provisional Liquidator with powers under section 221(2)(a) to (g) of the Companies Act; (3) The respondent company and interested parties may appear on a return date to show cause why a final winding-up order should not be made; (4) Service of the order on the second respondent and Edward Buwu; (5) Publication in the Government Gazette and a daily newspaper; (6) Requirements for any person intending to oppose on the return day. The court did not award costs at this stage or grant the relief regarding 50% share of rentals.

In a small domestic company formed on the basis of a personal relationship involving mutual confidence (quasi-partnership), where one shareholder/director has been effectively excluded from participation in management and denied benefits despite holding equal shares, and where confidence and trust between the parties has irretrievably broken down, it is just and equitable under section 206(g) of the Companies Act to wind up the company. Alternative remedies under section 208(2) will not preclude a winding-up order unless they are realistic, sufficient, and capable of protecting the excluded shareholder's interests and restoring confidence. Where a party has demonstrated unwillingness to respect court orders protecting the excluded shareholder's interests, alternative remedies cannot be considered realistic. For purposes of section 207(1)(a), where one of two shareholders has been effectively excluded from the company, the company may be considered as operating with only one member in substance.

The court observed that the prayer for 50% share of rentals appeared to be a recitation of the magistrate's court order, and if that order had not been complied with, there were other ways to enforce it rather than through the winding-up application. The court also noted that while the application would not have been costly had the respondents not opposed it, the circumstances did not justify an award of costs against respondents at the provisional stage, suggesting that opposition was not entirely without just cause despite being unsuccessful.

This case is significant in Zimbabwean company law for its application of the 'just and equitable' winding-up ground under section 206(g) of the Companies Act to quasi-partnership companies. It illustrates how courts will look beyond the corporate veil in small domestic companies formed on the basis of personal relationships, particularly where one shareholder has been excluded from management and denied benefits. The case reinforces the principles from Ebrahimi v Westbourne Galleries in the Zimbabwean context and clarifies that alternative remedies under section 208(2) must be realistic and sufficient, not merely theoretical. It also demonstrates that courts will consider substance over form when determining whether enough members remain for purposes of section 207.