Cecil Madondo (In his capacity as the duly appointed Liquidator of Century Discount House Ltd) v Zimbabwe Banking Corporation

HH 4-2008

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Case Details

Court

Harare High Court

Date

30 January 2008

Citation

HH 4-2008

Neutral Citation

[2008] ZWHH 4

Outcome

unknown

Case Type

Application

Bench

Presiding

Garwe JP

Full Bench

Garwe JP

Areas of Law

Banking LawInsolvency LawCommercial Law

Keywords

Overdraft facilityOvernight accommodationSecurityGMB billsUndue preferenceLiquidation

Key Issues

{"issue_text":"Whether the GMB bills delivered as security constitute assets of CDH in liquidation","issue_type":"mixed","dispositive":"yes","related_facts":"Delivery of bills on 5 December 2003, CDH in liquidation"}
{"issue_text":"Whether the disposition of bills constituted undue preference under section 42 of the Insolvency Act","issue_type":"law","dispositive":"yes","related_facts":"Disposition within 6 months of liquidation, CDH's precarious financial position"}
{"issue_text":"Whether the disposition was made in ordinary course of business","issue_type":"fact","dispositive":"yes","related_facts":"Banking relationship, timing of disposition, CDH's financial difficulties"}

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background

Facts of the Case

Background

Century Discount House (CDH) operated an overdraft facility with Zimbabwe Banking Corporation (Zimbank) and delivered GMB bills worth $4 billion as security when its account was overdrawn by $12 billion. After CDH was placed in liquidation, the liquidator sought to recover the bills' maturity value, arguing the security constituted an undue preference under the Insolvency Act.

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