This matter arose from litigation involving a banking institution (RMB) that had been placed under curatorship by the Reserve Bank of Zimbabwe on 2 June 2011, with Reggie Saruchera appointed as curator. The matter had previously been heard by the court which delivered judgment under HH 87/16. That judgment was appealed to the Supreme Court, which in SC 47/2016 partially allowed the appeal and remitted the matter to the High Court for proper determination of the special case before it. The Supreme Court found that the court a quo had not clearly and definitively determined the specific legal issue referred to it and had granted relief not specifically sought in the special case. The parties had signed a document on 11 March 2015 (issued by the Registrar on 19 October 2015) indicating that certain issues under s 54 of the Banking Act had to be resolved before the matter could proceed to trial.
The court ordered that: (1.1) Once a banking institution has been placed under curatorship, the shareholder(s), director(s) and officer(s)' powers in relation to the management of the said institution are duly limited to the extent that the appointed curator would by his or her consent permit; (1.2) Proceeding with and or commencing any litigation as against the bank placed under curatorship by any party would be or is a legal nullity without the granting of leave by the High Court; (1.3) The operation of the doctrine of set off by any creditor as against the bank placed under curatorship is peremptorily suspended; (1.4) There is no order as to costs.
The binding legal principles established are: (1) Upon the appointment of a curator to a banking institution under Section 54 of the Banking Act, the powers of all directors, officers and shareholders are suspended except to the extent that the curator permits them to exercise such powers; any actions taken without the curator's approval are a nullity; (2) All legal proceedings against a bank under curatorship are stayed and no litigation may be commenced or continued without leave of the High Court - proceedings without such leave are a legal nullity; (3) The operation of set-off in respect of amounts owed by creditors to the bank under curatorship is peremptorily suspended; (4) These effects operate from the date the curatorship direction is issued and apply comprehensively to protect the curator's mandate to address the bank's financial difficulties.
The court made important observations about procedural compliance, expressing regret that the joint pre-trial conference minutes were not properly part of the record. TAGU J emphasized that it is from such minutes that a trial judge is guided in relation to the issues for trial and other ancillary matters, and that such an important procedure should be "religiously complied with." The court also noted that it was "misled to believe" that a handwritten note by Judge Mangota referring to a jointly signed PTC minute sufficed. The court acknowledged the Supreme Court's comment (per GWAUNZA JA) about the importance of ensuring joint pre-trial conference minutes are part of the record. The court also observed that whether one proceeds under Order 29 Rule 199 or 200 of the High Court Rules was "at this juncture immaterial" given that the parties had signed a clear document identifying the legal issue to be determined.
This case provides authoritative clarification on the legal effect of Section 54 of the Banking Act in Zimbabwean law (which has strong parallels to South African banking law principles). It establishes the comprehensive scope of a curator's powers when a banking institution is placed under curatorship, the suspension of powers of directors, officers and shareholders, the mandatory requirement for High Court leave before commencing or continuing litigation against a bank under curatorship, and the suspension of set-off rights. The case demonstrates the importance of proper procedural compliance, particularly the need for joint pre-trial conference minutes to be part of the court record. It also illustrates the proper role of a special case procedure in determining discrete legal questions and the consequences of failing to properly frame and answer the specific legal issue referred for determination.