On 23 August 2003, the applicants jointly petitioned for Shagelok Chemicals (Private) Limited to be placed under liquidation. The first respondent was appointed liquidator. At a creditors' meeting before the Master, the applicants proved claims of US$1,600,000 (first applicant) and US$1,944,757.70 (second applicant). The liquidator disposed of assets and paid creditors' proven claims. The second respondent dispatched cheques in Zimbabwe dollars to the applicants. The applicants returned the payments, arguing that the conversion rate used was that prevailing at the time of liquidation rather than at the time of actual payment. The Final Liquidation and Distribution account was confirmed by the Master on 29 September 2004, and the applicants became aware on 4 October 2004. The application to set aside the confirmation was only launched on 18 November 2005, over a year later and after all creditors had been paid.
The application was dismissed with costs awarded to the respondents.
Once a liquidation and distribution account has been confirmed by the Master under section 283 of the Companies Act and any dividend has been paid thereunder, the court is precluded from re-opening the account. The confirmation of a distribution account by the Master has the effect of a final sentence. Challenges to the Master's decisions in liquidation proceedings must be brought by way of review in accordance with section 296 of the Companies Act and the procedural requirements of the High Court Rules, including the eight-week time limit prescribed in Order 33 Rule 259. Payment of a dividend to even one creditor is sufficient to trigger the prohibition on re-opening an account; there need not be full distribution to all creditors.
The court noted that it was not necessary to determine whether grounds for restitutio in integrum might assist the applicants, given the clear statutory prohibition on re-opening accounts after dividend payment. The court also observed that determining the question of concursus creditorum would be an unnecessary exercise given the finding that the account could not be re-opened. Gowora J commented that the applicants and their legal practitioners appeared not to have properly consulted the Companies Act, as they would otherwise have noted that the correct procedure was to file an application for review. The court also noted that the second respondent's citation, while questioned, did not require determination as nothing turned on it, though an improper citation could result in a costs order in favor of the second respondent.
This case establishes important principles regarding the finality of liquidation and distribution accounts in Zimbabwean company law. It confirms that once the Master has confirmed a liquidation and distribution account and any dividend has been paid, the court has no power to re-open the account, even on equitable grounds. The judgment emphasizes the importance of the statutory framework governing liquidations and the need for creditors to timeously object to accounts before confirmation or to launch review proceedings within the prescribed time limits. The case demonstrates the strict procedural requirements and time limits that must be observed when challenging decisions in liquidation proceedings, and the limited discretion of courts once statutory deadlines have passed and distributions have been made.