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Harare High Court
The Liquidator of Afrasia Bank Zimbabwe Limited v Zimbabwe School Examinations Council and Chief Registrar of Deeds N.O.
HH 575-18
Case Details
Court
Harare High Court
Date
26 September 2018
Citation
HH 575-18
Neutral Citation
[2018] ZWHH 575
Outcome
unknown
Case Type
Application
Bench
Presiding
Mushore J
Full Bench
Mushore J
Areas of Law
Insolvency LawBanking Law
Keywords
voidable preferencesimpeachable transactionsliquidationmortgage bondsdisposition of property
Tags
insolvencyimpeachable transactionsvoidable preferencesmortgage bonds
legislation
Statutes Cited
- Insolvency Act
- “immediately” means instantly/at once
- “fairly valued” means objectively/honestly/equitably
- “prefer” presupposes other creditors over whom one creditor is elevated
- s 42(2): "Subject to this section, every disposition of his property made by a debtor within the period of six months immediately preceding … which has the effect of preferring one of his creditors above another may be set aside by a court if, immediately after the making of the disposition, the liabilities of the debtor exceeded the value of his assets."
- s 42(3): "A disposition shall not be set aside … if the person … proves that the disposition was made in the ordinary course of business and that it was not intended thereby to prefer one creditor above another"
ai analysis
Case Summary
Key Issues
- {"issue_text":"Whether the mortgage bond registrations are voidable preferences under section 42 of the Insolvency Act","issue_type":"law","dispositive":"yes","related_facts":"Mortgage bonds registered 20 November 2014; liquidation within six months"}
- {"issue_text":"Whether the applicant proved that bank's liabilities exceeded assets immediately after dispositions","issue_type":"fact","dispositive":"yes","related_facts":"No clear financial evidence provided for November 2014"}
- {"issue_text":"Whether dispositions were made in ordinary course of business","issue_type":"mixed","dispositive":"yes","related_facts":"Mortgage bonds offered after judgment; normal banking practice"}
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background
Facts of the Case
Background
Afrasia Bank Zimbabwe Limited, after failing to repay fixed deposit investments to Zimbabwe School Examinations Council (ZIMSEC), offered mortgage bonds on its properties as security. ZIMSEC had already obtained judgment for the debt. The bank's liquidator later sought to set aside these mortgage bonds as impeachable transactions under section 42 of the Insolvency Act, claiming they were made to prefer ZIMSEC over other creditors within six months of liquidation.
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