Reginald McGillivray Dawson and Others v Nerry Investment (Pvt) Ltd

The applicants, who were directors of the respondent company Nerry Investment (Pvt) Ltd, sought to have the company placed under liquidation. On 4 July 2012, the High Court issued a provisional order placing the company under provisional liquidation and appointing Barbra Lunga of Impact Trust and Executors (Pvt) Ltd as provisional liquidator. The return date was set for 23 August 2012. Upon receipt of the provisional order, the respondent filed an urgent chamber application on 13 July 2012 seeking to anticipate the hearing date, but this was not persisted with and was abandoned. On 18 July 2012, the respondent filed notice of opposition through John Josias Moyo, a director of the company, who deposed to an affidavit raising only a point in limine and explicitly stated he saw no need to delve into the merits of the applicants' founding affidavit, which he described as voluminous and defamatory. The other director, Kembo Mohadi, against whom substantial allegations were made, did not file any opposing papers.

• Whether the applicants used the correct procedure for winding up a company under sections 206 and 207 of the Companies Act [Chapter 24:03]
• Whether filing a chamber application instead of a court application violated mandatory provisions of the Companies Act
• Whether non-compliance with procedure could be remedied under Rule 229 of the rules of court
• Whether the applicants complied with section 5 of the Companies (Winding Up) Rules published in RGN 841/72
• Whether the provisional order for liquidation should be confirmed

The provisional order issued by the High Court on 4 July 2012 was confirmed with costs. This meant that Nerry Investments (Pvt) Ltd was placed under final liquidation, Barbra Lunga of Impact Trust and Executors (Pvt) Ltd was appointed as liquidator in her personal capacity, and the costs of the application were to be costs of the liquidation.

The binding legal principles established are: (1) When the Companies Act [Chapter 24:03] provides for winding up 'by court' in sections 199 and 206, this refers to the High Court as the court of jurisdiction, not to a specific procedural form of application; (2) A 'petition' under section 207 of the Companies Act must be construed in accordance with section 15(2) of the Interpretation Act as an application to the court or judge made in accordance with the rules of court; (3) A chamber application is a proper procedural mechanism for seeking the winding up of a company; (4) In opposing papers, allegations not denied are taken as having been admitted; (5) Compliance with section 5 of the Companies (Winding Up) Rules, 1972 requires stating the objects and nature of the company, identifying the petitioners and their standing, detailing reasons for winding up, and naming a proposed liquidator.

The court made non-binding observations regarding the respondent's conduct in opposing the application. Kamocha J expressed difficulty understanding why the deponent would describe the founding affidavit as defamatory but then refuse to address its merits. The court observed that the allegations were very serious and detailed, and that any injured party would reasonably refute them to defend their good name and reputation. The court noted with apparent disapproval that the other director, Kembo Mohadi, against whom substantial allegations were made, did not even file opposing papers. The court also commented negatively on the respondent's tactic of filing an urgent chamber application to anticipate the hearing date before filing opposing papers or allowing publication of the provisional order, which application was subsequently abandoned.

This case clarifies important procedural aspects of company liquidation under Zimbabwean company law. It establishes that the term 'court' in sections 199 and 206 of the Companies Act refers to the High Court as the court of jurisdiction, not to a specific procedural form. The judgment confirms that the word 'petition' in section 207 should be interpreted in accordance with section 15(2) of the Interpretation Act as meaning an application to the court or judge made in accordance with court rules. The case also demonstrates the application of the principle that failure to deny serious allegations in opposing papers will result in those allegations being taken as admitted. It reinforces proper compliance with company winding-up procedures and the importance of addressing matters on their merits rather than relying solely on technical procedural objections.