GURTA     A.G.



HARARE, FEBRUARY 25, 2014 & MARCH 6, 2015

T. Mpofu, for the appellant

F. Girach, for the respondent

GWAUNZA JA:       This is an appeal against part of the judgment of the High Court, Harare, handed down on 16 October 2013.  The specific part of the judgment appealed against reads as follows; “1)       …       

2)        The alternative relief is hereby granted and accordingly the applicant is granted leave in terms of s 6(b) of the Reconstruction of State Indebted Insolvent Companies Act [Cap 24:27] to institute any action or proceedings in any court or tribunal of competent jurisdiction in Zimbabwe against SMM HOLDINGS (PVT) LTD (under reconstruction), to claim payment of US$4 350 000.00 or part thereof together with interest thereon at the prescribed rate of 5% per annum and costs of suit or any other relief available to the applicant at law.

3) The respondent shall bear 50% of the applicant’s costs of suit.”

Although the appellant filed detailed grounds of appeal, it is agreed that two main issues arise in this appeal[1].  These are:-

(a) whether there was a proper application before the court a quo and,

   (b) whether the court a quo was correct in holding that the appellant could not consider the merits of the respondent’s complaint in relation to the question of the grant of leave.

                        In addition to these two issues, the appellant also attacks the decision by the court a quo to award fifty per cent of the costs to the respondent.


The background to the dispute may be summarised as follows:

The appellant was appointed Administrator of SMM Holdings (Private) Limited (“SMM”), an entity under reconstruction, on 6 September 2004.  The appellant on 9 October 2009 entered into an agreement with the respondent in terms of which the latter purchased and paid for certain Chrome Mining claims belonging to SMM (Mashava Area “E”) for US$4 350 000.  Despite registration of the mining claims in the respondent’s name, and its assumption of operations on the location in question, it met with fierce resistance from a third party who claimed ownership of the same location.  The third party also made it virtually impossible for the respondent to enjoy the benefit of the claims that it had purchased.  Lines of communication that thereafter opened between the respondent and the appellant to resolve these problems yielded no positive results.  This led the respondent by letter dated 3 August 2012, to apply to the appellant for leave to commence legal proceedings against SMM for cancellation or confirmation of cancellation of the sale agreement as well as a refund of the purchase price paid.  The application to the appellant was made in terms of s 6(b) of the Reconstruction of State Indebted Insolvent Companies Act [Chapter 24:27] (“the Reconstruction Act”).  Having, for over one year, received no response from the appellant the respondent approached the High Court claiming, in the alternative, the relief  that it was granted and against which the appellant has filed this appeal.  The application was made in terms of s 3 (1) (b) and 4(1) of the Administrative Justice Act [Chapter 10:28].

[1] Appellant’s heads of argument paragraph 1