Infinity Asset Management Limited v Totenville Investments (Pvt) Limited and 3 Others

### Preamble
1
HH 483 -13
HC 10322/13
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INFINITY ASSET MANAGEMENT LIMITED

versus

TOTENVILLE INVESTMENTS (PVT) LIMITED

and

EFFECTIVE PROPERT GROUP (PVT) LIMITED

and

REGISTRAR OF DEEDS

and

COMMERCIAL BANK OF ZIMBABWE

HIGH COURT OF ZIMBABWE

MATHONSI J

HARARE, 11 December 2013 and 18 December 2013

Urgent Chamber Application

G.R. Tsivama, for the applicant

A.T.Toto  , for the 1st and 2nd  respondents

3rd and 4th respondents in default

MATHONSI J:  The applicant is an incorporation under provisional liquidation and is, through its provisional liquidator, seeking an interlocutory interdict preventing the second  respondent  from transferring, encumbering or dealing with stand 5205 Salisbury Township of Salisbury Township lands (“the property”).  It also seeks an interlocutory interdict preventing the fourth respondent, a commercial bank, from releasing the purchase price of US$280 000-00 to anyone or registering any bond or other form of security on the title deed of the property and another interlocutory interdict against the third respondent, the Registrar of Deeds, from processing any transfer, mortgage bond or other security on the property.

In his founding affidavit, Cecil Madondo, the provisional liquidator of the applicant, stated that the applicant is the sole shareholder of the first respondent a company formed as a vehicle to own the property which the applicant bought from one Ivy Wilhelmina Hartmann in September 2006 but transferred to the first respondent, its investment vehicle.  He has decided to sell the entire issued shares of the first respondent, whose sole asset is the property, in order to pay off the applicant’s debt, and enlisted the services of Hammer & Tongues auctioneers to do so managing to obtain a highest bid of $US490 000-00 for the property.

It was only after the auction had been conducted that a deeds office search was conducted which revealed that the property was in fact registered in the name of the second respondent it having been transferred on 20 November 2013 for a purchase price of

$280 000-00.  Madondo went on to say that the price was way below the market value of the property and it was conducted without the knowledge and approval of the applicant, the sole shareholder of the first respondent.

To support his assertion that the applicant is the sole shareholder of the first respondent, he annexed a copy of a letter from Scalen & Holderness dates 21 November 2013 to that effect and a share certificate dated 21 July 2006 showing that as at that time, the applicant owned 100 fully paid up shares of $1,00 each in the first respondent.  He also attached a companies form CR14 filed with the Registrar of Companies on 29 August 2007 showing that the directors of the first respondent then were Ternard Kwashiri (now deceased) and Eliphas Moyo, adding that since Kwashiri’s death in February 2013, he has not been replaced.

The applicant would like to challenge the sale of the property to the second respondent on the basis that there was no resolution authorising the sale, no meeting of directors was held, let alone that of shareholders, where in a decision to sell was taken and as such the sale and transfer are a nullity.  Frank Masaza who signed the documents for the sale and transfer did not have authority to do so.  Pending that, it seeks an interdict a foresaid.

In its opposing affidavit, deposed to by Frank Masaza, a director and shareholder, the first respondent contested the claims made by the applicant.  Masaza argued that Madondo based his application on wrong information and an outdated share certificate.  He stated that Eliphas Moyo resigned as a director a long time ago.  He produced a Form CR14 for the first respondent filed at the companies office on 17 November 2009 much later than that relied upon by the applicant, which lists the directors as Ternard Kwashiri and Frank Masaza and an annual return filed on 17 November 2009 showing that the first respondent had a nominal share capital of $250-00 divided into 250 ordinary shares.  Masaza denied that the applicant owns the property as its shareholding of 100 shares was extinguished by a transfer of same back to the first respondent on 30 April 2009.

The requirements of an interlocutory interdict were set out by CHATIKOBO J in Bozimo Trade Developments Co (Pvt) Ltd v First Merchant Bank of Zimbabwe & Ors 2000 (1) ZLR 1 (H) 9 E-G as follows:

“One must then recall the traditional requirements for an interdict.  They were originally set out in Setlogelo v Setlogelo 1914 AD221 and have been repeated in numerous subsequent cases.  STEGNANN J repeats them in Knox & Arcy (supra) at 593C-D.  What the applicant needs to establish is:-

a prima facie right even if it is open to doubt;

an infringement of such right by the respondent or a well – grounded apprehension of such an infringement;

a well-grounded apprehension of irreparable harm to the applicant, if the interlocutory interdict should not be granted and if he should ultimately succeed in establishing his right finally;

the absence of any other satisfactory remedy;

that the balance of convenience favours the granting of an interlocutory interdict.”

In my view, this application fails the test, it falls on the very first hurdle.  The applicant has not been able to establish a prima facie right.  The papers placed before me show that it was divested of all its rights in the first respondent as far back as 2009 when its shareholding was transferred.  There is nothing in the papers to suggest that it is a shareholder, let alone a sole shareholder.  To that extent, it could not have been consulted when the sale was conducted.

More importantly, it cannot possibly challenge the actions of Masaza who is shown as a shareholder and director of the first respondent especially in light of the fact that Mr Tsivama who appeared for the applicant could not even challenge the validity of the company documents submitted on behalf of the first respondent.

There is therefore no merit in the application.  It is accordingly dismissed with costs.

Sawyer and Mkushi, applicant’s legal practitioners

Mwonzora and Associates, 1st and 2nd respondents’ legal practitioners