RioZim Limited v Zimbabwe Diamond & Allied Minerals Workers' Union & 2 Ors

### Preamble
1
HH 526/25
HCH 4204/25
REF HCH 3619/25
---------




RIOZIM LIMITED

versus

ZIMBABWE DIAMOND & ALLIED MINERALS WORKERS’ UNION

and

MASTER OF THE HIGH COURT N.O.

and

THE REGISTRAR OF COMPANIES N.O.

HIGH COURT OF ZIMBABWE

DEMBURE J

HARARE: 2 & 9 September 2025.

Chamber Application for Leave to Appeal

T Mpofu, for the applicant

T L Mapuranga, for the 1st respondent

No appearances for the 2nd & 3rd respondents

DEMBURE J:

1.	This is a chamber application for leave to appeal to the Supreme Court in terms of r 94(8) as read with r 60(1) of the High Court Rules, 2021. The applicant intends to appeal part of the judgment of the court relating to the dismissal of the points in limine raised by the applicant, as the first respondent in the urgent chamber application in Case No. HCH 3619/25 and the grant of the provisional order, which was an interim interdict in nature. The judgment thereof was handed down on 5 August 2025 as number HH 467-25. The applicant seeks the following order:

“1. 	The application for leave to appeal against judgment number HH 467/25 dated 5th August 2025 be and is hereby granted.

2. 	The Applicant shall file its notice of appeal within ten (10) days of the granting of this order.

3. 	There is no order as to costs.”

BACKGROUND FACTS

2.	The following facts are common cause:

2.1.	On 23 July 2025, the first respondent (then the applicant) filed an urgent chamber application for an interim interdict. The application followed its court application together with two other persons on 28 April 2025 for the placement of the applicant (then the first respondent) under supervision in terms of s 124(1) of the Insolvency Act [Chapter 6:07] (“the Act”) in Case No. HCH 1945/25. The said application was opposed by the applicant herein and is still pending.

2.2. 	The urgent chamber application was triggered by the cautionary statement issued by the applicant on 21 July 2025. In terms of that cautionary statement, the applicant advised its shareholders and the investing public that the company was in the final stages of negotiations for transactions that would significantly affect the company’s balance sheet and that those imminent transactions may include the disposal of some of its mining and non-core assets.

2.3.	On 5 August 2025, I handed down the court’s judgment following hearings held on 29 and 30 July 2025. In the judgment, I granted a provisional order in the following terms:

“INTERIM RELIEF GRANTED

Pending confirmation or discharge of this Provisional Order, the Applicant is granted the following interim relief:

1.	The first respondent’s board be and is hereby interdicted and barred from proceeding with the contemplated transactions and actions contained in its cautionary statement published in the Herald Newspaper of 21 July 2025.”

2.4.	Aggrieved by the said interlocutory judgment, the applicant filed this application on 21 August 2025 seeking leave to appeal to the Supreme Court as required in terms of s 43(2)(d) of the High Court Act [Chapter 7:06]. The application could not be made orally since the judgment was handed down through the IECMS after I had reserved my judgment sine die on 30 July 2025. The draft notice of appeal was attached to the application in terms of the law. In the said draft notice, the following are stated as the grounds of appeal:

“1. 	The court a quo misdirected itself in finding that the first respondent had locus standi to institute proceedings by way of an urgent chamber application to halt the disposal of the appellant's assets when the first respondent is not a trade union which is registered to specifically represent the employees of the appellant as opposed to representing employees in the entire mining industry.

2.	The High Court erred in holding that the filing of an application to place a company under corporate rescue proceedings brings into effect the provisions of section 127 of the Insolvency Act yet at that stage there would be no corporate rescue practitioner to oversee the running of the company’s affairs until an order placing the company under
corporate rescue is granted and a corporate rescue practitioner is subsequently appointed in terms of the Insolvency Act.

3.	The High Court erred in holding that at law there is a moratorium against the disposal of a company's assets by the company under section 127 of the Insolvency Act [Chapter 6:07] if a pending application for placing the company under supervision and corporate rescue is yet to be determined.

4. 	The court a quo erred in granting a provisional interdict against the disposal by the appellant of its assets in order to recapitalise its business when there is no law which prohibits such a disposal, a fortiori, in circumstances where the appellant is entitled to do so under the provisions of Sections 64 and 71(2) of the constitution.

5.	The first respondent having accepted the need to serve its urgent chamber application on affected persons by standard notice, the High Court erred in holding that the compliance or otherwise with the requirement to notify affected persons by standard notice was an issue to be determined only in respect of the main application for the placement of the appellant under corporate rescue and not in the proceedings which were before it.

6.	The court a quo erred in failing to find that the dies induciae of 24 hours which the 1st Respondent inserted on its urgent chamber application was alien to the rules thereby rendering the application fatally defective and liable to be struck off the roll.

7.	The High Court erred in not engaging or giving effect to the provisions of section 35(a) (v) of the Labour Act [Chapter 28:01] which require a trade union to consult its members in any matter of considerable significance to the members when no evidence of such consultation had been presented before it.”

3.	The applicant averred that the intended appeal has good prospects of success and that, in the interests of justice, it must be allowed to exercise its right of appeal and test the correctness of the court’s judgment.

4.	The application is opposed. The first respondent in its opposing affidavit raised a point in limine that the application was fatally defective for non-compliance with r 63. I have observed that r 63 relates to interpleader proceedings. Possibly, the first respondent intended to refer to r 60(1), which provides the procedure for chamber applications. The point in limine was, however, abandoned at the hearing, and nothing, therefore, turned on the arguments raised thereto. On the merits, the first respondent contended that the applicant had failed to demonstrate any prospects of success for the intended appeal. It concluded that the application was an abuse of court process and ought to be dismissed with costs on an attorney-client scale.

SUBMISSIONS BY COUNSEL

5.	Mr Mpofu, counsel for the applicant, submitted that there was a point not taken in the papers before me. He argued that the position of the first respondent is simply that once it files the application for corporate rescue everything was frozen. If that position is taken to its logical conclusion, the urgent chamber application is hit by the provisions of s 126(1) of the Act. Counsel further submitted that it is common cause that the urgent chamber application was not preceded by the grant of leave of the court. That would make those proceedings invalid. It was counsel’s submission that this is a point of law that can be taken at any time, even on appeal for the first time. See Devaris N.O. v Tetrad Investment Bank HH 516-23. The applicant, he further argued, ought to be granted leave on that point.

6.	Counsel further argued that the main submission deals with the construction of s 127. He argued that when it comes to corporate rescue, there are two periods governed by two different legal regimes and which have different consequences. The first is the period that commences upon the filing of the application. See 125(1)(b). Once an application for corporate rescue is filed, corporate rescue proceedings begin. Section 126(1) brings a moratorium upon the mere filing of the application. This is a moratorium in favour of the company. Upon filing, one can no longer execute, sue and do any of the associated acts, but at this stage, there is no Corporate Rescue Practitioner (“CRP”) and the control of the company is not removed from the hands of the directors.

7.	He went on to argue that the second period is that which commences upon the granting of the order for corporate rescue. A CRP is appointed and takes the place of the board. It is deemed dissolved, but it can take action. In the first period, the board is alive. The second period is what is covered by s 127. The period governed by s 127 is a period when a CRP has been appointed. This is clear upon a consideration of subsection (2). This is a point which was not argued: that is what legal regime applies and at what time. The judgment conflates the two periods and assigns the same legal regime to both periods. The correct approach is the one taken by the court at p 31 in para 34 of the judgment. For the first period, the board exists, and it makes decisions. After the second period, when the order is granted, the deeming provision would start to apply. Section 127 is confined to the second period for what the board may or may not do. The board is the executive arm, and all executive decisions would be taken by the board. See City Centre Hotel (Pvt) Ltd v Nyamanhindi 1999 (1) ZLR 81.

8.	Mr Mpofu also submitted that the issue that was placed before me was based on the principle of legality. It was that this board do not have the power to undertake the transaction. The issue was that it cannot do that, not that it should not do this. He argued that the case placed before me was that this board has no power to conduct itself as a board. It was not that the court was called upon to exercise the discretion and stop the transaction. If a party comes and says that the board should not do this, the judge may use his inherent powers to assess the situation and then extend protection on the facts and not on the law. But if the case is that the board cannot do this because this is unlawful, it is a question that can be answered by the law.

9.	Counsel’s argument was further that in the first period, there is no bar to the board acting. This must ground an opportunity for debate. When these two periods are set apart, the applicant has an arguable case. When the board is still alive, there is nothing that bars it from taking decisions to avoid it being placed under corporate rescue. It is not wrongful to make decisions, but to act unlawfully. An application that calls for the court to exercise its discretion is an application that says this is unlawful. The fear that the board can asset strip does not arise. The existence of that discretion, which applies at all times, can be triggered by the facts and will need a case that is made on the facts to trigger that discretion. We do not have that case before the court. We instead had a case in which it is said the board’s hands are tied, and this is unlawful and cannot be done. The board’s hands were not tied.

10.	It was also argued that the principle of the residual powers of the board applies. Counsel submitted that the principle was developed under insolvency, winding up and judicial management. It says under certain circumstances, where a judicial manager or liquidator has been appointed, the board would still retain certain residual powers. See Venbar (Pvt) Ltd v Vendaland Development (Pty) Ltd t/a M Store 1989 (2) SA 613, which deals with the principle of the residual powers which survive even the issuance of an order. This common law principle applies in an application of this nature where the statute preserves the powers of the board during the first period. The board has not been deemed dissolved because no order has been issued yet. Even after the order, the board can still act. In terms of s 127, they need the consent of the CRP and s 127 is only triggered by the order. The principle of residual powers is still part of our law. See also O’Connell, Manthe & Partners Inc v Vryheid Minerale (Edms) Bkp 1979 (1) SA 553 (T). This is also the position in the United Kingdom. See In re Union Accident Insurance Co. Ltd 1972 All ER 1105 at 1113C. This is an important principle still to be debated and resolved.

11.	Section 127 deals with property interests. It is a provision that protects the property from the board and the CRP. Counsel argued that it is a provision that arises upon an order being granted. There is a chance the Supreme Court can hold that s 127 can only be triggered once a CRP has been appointed. The filing of the application for corporate rescue grants a moratorium in favour of a company. It is meant to benefit the company. It is granted against the actions of third parties. The filing does not impose an inhibition on the company. What imposes an inhibition is the granting of the application. Once the application is granted, a CRP is appointed and replaces the board. The board is deemed dismissed. When we look at s 130(2), the question answered is at what stage does the board lose its power. The judgment brings that to the application stage, and the Supreme Court would differ.

12.	Mr Mpofu also submitted that in all other respects, he would stand with the grounds raised. When the court queried whether it can be said that there is a mandatory dies induciae for the respondent to file a notice of opposition in an urgent chamber application the non-compliance of which would render the application a nullity, counsel referred me to the case of Reverend Clement Nyathi v The Trustees for the Time being of the Apostolic Faith Mission of Africa & Ors SC 63/22. He argued that for an application to be valid, it must set out the procedural rights. A party cannot be allowed to create its own dies induciae and impose it on the respondent. Once you have created your own dies induciae, the application is invalid. The fact that there is another judgment in Vislink Investments (Pvt) Ltd t/a Trauma Centre Hospital & Anor v Condev Property Development (Pvt) Ltd & Ors (an ex tempore judgment handed down on 16 June 2025 in Case Number HCH 2693/25 before Deme J) means that we now have different positions and the issue must still be up for discussion in the Supreme Court. See Chikafu v Dodhill (Pvt) Ltd SC 28-09. There are divergent opinions on the issue, and either party has prospects of success. That ground warrants the leave to appeal to be granted.

13.	On the other hand, Mr Mapuranga, for the first respondent, submitted that the first respondent was opposed to the application for two reasons. The first was that the court order is a provisional order. By its nature, the court still has jurisdiction to set it aside. It is for that reason that there is no good reason to prefer an approach to the Supreme Court instead of proceeding with the confirmation. The order also ceases to be of great importance upon the determination of the application for corporate rescue. They have another relief still available to them.

14.	His second rung of the argument was that the application before me is unmerited. Counsel submitted that the application before me was not what Mr Mpofu had sought to argue. He argued that counsel was arguing a separate application. The application before the court was in writing and required the judge to gauge the grounds of appeal as stated in the draft notice of appeal. Rule 51(2) of the Supreme Court Rules provides that an appellant is not allowed to argue any ground of appeal without the leave of the Supreme Court.  Counsel for the first respondent cannot, in this application, argue the two issues he presented, the one about the leave to apply and the two-stage approach. He cannot argue those two issues because if the judge grants him leave to appeal, they are confined to filing the notice of appeal attached. They can only argue those two issues by introducing new grounds, and for that, they will need the leave of the Supreme Court.

15. 	It was further argued that if the court grants the application, they are confined to the grounds filed and can only argue the two issues by introducing new grounds, and for that, they will need the leave of the Supreme Court. That counsel can only argue those two issues if he first seeks leave before his Lordship to expand the grounds under consideration, so that when they go to the Supreme Court, they will file the notice with the amendments that the judge would have allowed and granted leave for. Otherwise, the points cannot be granted leave as they cannot be argued. It does not matter that they are points of law. In the Supreme Court, the respondents are at large to raise a point of law even if not raised a quo, but appellants are not at large to do so without leave of the court.

16.	Mr Mapuranga went on to submit that in relation to the application as presented before the court, the first point was that the applicant was picking and choosing which aspect of the moratorium to enforce. When it is in the interest of the board, they want the moratorium. When it is contrary to their interests, they do not want it. On p 28 of the urgent chamber application, there is a letter where the applicant responded to a writ saying there is a moratorium. The issuance of a writ shows that the applicant is unable to pay its debts. In the cautionary statement, they disclosed that they were in the process of negotiating a transaction, and the purpose is to address their liquidity challenges. They want to hide under s 126 as a board when it is convenient to do so.

17.	Counsel further argued that the transaction under discussion is not a sale in the ordinary course of business, but a major sale of the company's assets. There is no doubt that it is the board which has put the company in the current mess. Their board, having presided over the mess, to argue that the law allows them to dispose of assets during the pendency of corporate rescue is without merit. The overarching judgment is the Metallon Gold Zimbabwe (Pvt) Ltd & Ors v Shatirwa Investments (Pvt) Ltd & Ors SC 107/21, where Malaba CJ outlined the law. It says the moratorium applies upon the filing of the application. It protects the company from creditors. It also protects the company from the current managers who have failed. Section 127 comes in. The judgment is not interdicting them from mining. It is an expansion of the ratio in Metallon (supra). During corporate rescue proceedings, a company can only dispose of its assets under s 127. They cannot do what they want. They are prohibited by the law from undertaking the transaction. They are admitting by their conduct that they are under financial distress.

18.	Counsel also argued that the grounds of appeal were completely without merit. The first ground on locus standi is not the point that was raised before the court. The argument is that the first respondent lacks locus standi because it is a mining union representing employees in the greater mining industry rather than employees specifically in the applicant’s enterprise. That is obviously unmerited. The Act just says a union representing employees of the company. That is all that is required in the Act. Even if the union represents secretaries only, it will still have locus standi. Ground number 1 is also contradictory to ground number 7. The second ground is arguing that the filing of an application does not prevent them from proceeding with the transaction until there is a CRP. It is also unmerited. It is contrary to the Metallon case. On the third ground, it is the same point about s 127 as the second.

19.	It was further submitted that the fourth ground is bringing in the constitution. That is a point not made before the court. The constitution has no application; otherwise, they must argue that the entire concept of corporate rescue is unconstitutional, which they are not willing to do. The fifth ground is the standard notice question, which must be determined in the actual application for corporate rescue.

20.	Mr Mapuranga also argued that the sixth ground is the ground on notice. It is not a controversial point. The Nyathi case (supra) was not an urgent application. It was a standard application and does not apply to this case. In an urgent application, the applicant is at large in terms of the appropriate modifications. The issue has been litigated quite a bit on whether, in an urgent chamber application, the applicant is allowed to specify the dies induciae, which is not 10 days prior to a determination by a judge. The court has said that if the applicant does not do so that the judge will still do so. It is not sufficiently controversial to be taken to the Supreme Court. There is no controversy on the point. The judges are unanimous in that, in urgent matters, if you specify any dies induciae, there is no contravention of any mandatory rules. It can be ignored. The issue needs no further opinion of the Supreme Court.

21.	Counsel also submitted that the last point says that the first respondent should have consulted its greater membership because the matter was of considerable significance to its greater membership. After reading the said s 35(a)(v) of the Labour Act, counsel argued that the argument by the applicant was a complete misrepresentation of the relevant section. This is about the Constitution. The Constitution must provide for this. There was absolutely no factual background provided by either party to make the Supreme Court conclude that this is a matter of considerable significance to the members of the first respondent. This contradicts ground number 1. Ground number 1 says you are just an ordinary union, not a mining union in our undertaking. You are not a RioZim employees’ trade union. You are a diamond workers' union. There is no factual basis for the point. It was not engaged in this court and cannot possibly be engaged in the Supreme Court.

22. 	It was also submitted that the grounds are unmerited. In his response to the issues which were not in the grounds, he argued that the application was against the board. It was to protect the company. We are saying stop the dissipation of the assets, and that does not require leave. See Zambezi Gas v N. R. Barber & Anor SC 3/20. The first respondent does not require leave to proceed in this case.

23.	On the two-stage approach, counsel argued that he agreed that there are different effects in the two stages. He absolutely agreed with the judgment that in the first stage, the board cannot do a disposal except in the ordinary course of business. They can dispose in the ordinary course, they can sell the minerals, pay the employees and the day-to-day creditors. But a disposal as outlined in the cautionary statement cannot be done during the pendency of the corporate rescue proceedings. They want to have their cake and eat it. They are hiding behind s 126. They are arguing not to pay because of the same protection, and they are saying they are allowed to dispose of the assets. It is inconvenient when they want to do things not in the ordinary course. There are no grounds for the Supreme Court to decide.

24.	In reply, Mr Mpofu submitted that the intended appeal is arguable. The court issued a provisional order, and that is why leave was sought. The applicant took issue with certain issues in relation to the judgment. There are issues which must be dealt with now and cannot be heard on the return day. At p 66 are the grounds of appeal. He argued that he had dealt with s 127 and that is also contained in ground number 2. There is then a charge on s 127 in ground number 3, but now dealing with the issue of the moratorium. In ground 4, the argument is that the court cannot stop the board. Ground number 6 was dealt with. Counsel argued that he rejected the charge that he had argued his own separate application. The rules of the Supreme Court allow the appellant to amend its grounds and they can raise new points of law. Amending is a matter of form.

25.	He further argued that the applicant is not blowing hot and cold. In terms of s 126, the applicant says I have the moratorium. The moratorium is taken in its favour. The board is allowed to take decisions. It has not been disputed that the disposal of assets is a decision that can be made by the board. It does not matter that there is a writ. The Applicant is entitled to dispose of its assets. That is a side issue. What we are dealing with is whether a board has the power to make decisions after the application has been filed, but no order has been granted. The board is alive.

26.	Counsel also argued that Mr Mapuranga had submitted that they do not require any leave, but s 126 is too wide and sweeping. If an application for corporate rescue is started, leave ought to have been sought. He further argued that counsel for the respondent said the application is against the board. It is incompetent to bring an application against the board. The respondent is the company. They said it is an application for the benefit of the company. Section 126 is clear. The company thinks that it is in its interests to dispose of the assets.

27.	It was further argued that counsel for the first respondent accepted that there are two regimes. It is the consequences of that acceptance that there are prospects of success. The judgment does not deal with that issue. Our contention is that s 127 is only triggered when there is a court order. It is taken in the second stage. Section 127 was not dealt with in Metallon. What we find in Metallon is a sweeping statement of the law. The first respondent said its application was an extension of the application for corporate rescue. If it says so, then it must show that it served the application by standard notice. There was a concession regarding the standard notice. Metallon and Redwing Mining Company (Pvt) Ltd v Associated Mine Workers Union of Zimbabwe & Ors SC 96/22 settled the law on non-compliance with that requirement.

28.	On the dies induciae, Mr Mpofu argued that counsel for the first respondent did not cite one case. There is a judgment which deals with that in Vislink. Deme J’s view is that it is fatally defective. There is no doubt that these are different opinions. Chikafu is clear that once that happens, either party has prospects of success. The question of which approach must be correct must now be decided by the Supreme Court. The appeal has merits and it ought to be granted.

THE LAW

29.	The applicable statute law requires that leave to appeal against the interlocutory judgment in question must be sought. Thus, in terms of s 43(2)(d) of the High Court Act, an appeal shall only lie to the Supreme Court from an interlocutory judgment or order with the leave of the judge who handed down that judgment or order, except in the specified cases. The said provisions read as follows:

“43 	Right of appeal from High Court in civil cases

(2) 	No appeal shall lie —

(a) 	…

(b) 	…

(c) 	…

(d) 	from an interlocutory order or interlocutory judgment made or given by a judge of the High Court, without the leave of that judge or, if that has been refused, without the leave of a judge of the Supreme Court, except in the following cases —

(i) 	where the liberty of the subject or the custody of minors is concerned;

(ii) 	where an interdict is granted or refused;

(iii) 	in the case of an order on a special case stated under any law relating to arbitration.”

30.	It is settled law that, in an application for leave to appeal to the Supreme Court in general, the overriding factor is the prospects of success on appeal.  In Chikurunhe v Zimbabwe Financial Holdings SC 10-18, the Supreme Court emphasised that:

“The party seeking leave to appeal must show inter alia that he has prospects of success on appeal.  In other words, leave is not granted simply because a party has sought such leave.”

The test that has to be applied, therefore, in considering an application for leave to appeal is whether the applicant has prospects of success on appeal. The leave to appeal must be granted if the applicant has such prospects of success. See S v Mutasa 1988 (2) ZLR 4 (S). What constitutes reasonable prospects of success was further explained in Zimbabwe Consolidated Diamond Company (Pvt) Ltd v Adelcraft Investments (Pvt) Ltd CCZ 2-24 at pp 11-12, where PATEL JCC restated the law aptly as follows:

“The test for reasonable prospects of success postulates an objective and dispassionate decision, based on the facts and the applicable law, as to whether or not the applicant has an arguable case in the intended application should direct access be granted. The prospects of success must not be remote but must have a realistic chance of succeeding. In this respect, a mere possibility of success will not suffice. There must be a sound rational basis for the conclusion that there are prospects of success in the main matter. In short, this Court must be satisfied that the applicant has an arguable prima facie case and not a mere possibility of success. See Essop v S 2016 [ZASCA] 114; S v Dinha CCZ 11-20, at p 6.

Subsequent decisions of this Court in cases involving the grant of leave to appeal propound the application of a more rigorous test in evaluating the prospects of success on appeal. In any such case, the applicant must demonstrate reasonable prospects that this Court is likely to reverse the findings of the lower court or materially alter the judgment a quo if leave to appeal is granted. See Cold Chain (Pvt) Ltd t/a Sea Harvest v Makoni 2017 (1) ZLR 14 (CC), at 15G-16E; Chombo v National Prosecuting Authority & Anor CCZ 8-22, at pp 7-8.”

APPLICATION OF THE LAW

THE PRELIMINARY QUESTION

31.	The first issue that arises is whether the new ground of appeal in which the applicant raises a point of law that the urgent application was invalid because leave of the court was not sought in terms of s 126(1) of the Act is properly before me. Applying the principles above, I am enjoined to consider whether the intended appeal is reasonably arguable or is manifestly a doomed failure. In doing so, the question is whether or not I am restricted to the grounds of appeal placed before me in the draft notice of appeal. In casu, Mr Mpofu raised a new ground of appeal, which he submitted would be taken on appeal. The new ground was not stated in the draft notice of appeal at p 66 of the record. He argued that it is a point of law which can be raised at anytime, even for the first time on appeal. The point of law was that the urgent chamber application was not preceded by the leave of the court as required by s 126(1) of the Act and was consequently invalid.

32.	Mr Mapuranga argued that the applicant can only argue the grounds of appeal it had placed before the court, and without seeking an amendment thereof, to expand its grounds, leave to appeal cannot be granted for such grounds not before the court in the notice of appeal. I entirely agree with Mr Mapuranga. A ground of appeal not pleaded in the draft notice of appeal and the application before me, or duly incorporated thereto following leave to amend such draft notice of appeal before this court, cannot be properly before me. It is trite that a court can only determine issues placed before it through pleadings. To do otherwise would be to exceed its mandate or to go on a frolic of its own. See Nzara & Ors v Kashumba & Ors SC 18-18 at p 11 where Uchena JA said:

“There is no doubt that the court a quo exceeded its mandate which was to determine the issues placed before it by the parties through pleadings and proved by the evidence led.

The function of a court is to determine disputes placed before it by the parties. It cannot go on a frolic of its own.”

Further, specifically, in relation to an application of this nature, the peremptory provisions of the proviso to r 94(2) are very clear that:

“(2) 	Where application has not been made in terms of subrule (1), an application in writing may be filed with the registrar within twelve days of the date of the sentence:

Provided that such application shall state the reason why application was not made in terms of subrule (1), the proposed grounds of appeal and the grounds upon which it is contended that leave to appeal should be granted.” (emphasis added)

This means that the proposed grounds of appeal must be stated in the application. The ground of appeal relating to the failure to obtain leave to file the urgent chamber application was not stated in the application. The applicant’s failure to comply with the mandatory provisions of statute or the rules made that ground fatally defective and not properly before me.

33.	Additionally, the mandatory provisions of r 51(2) of the Supreme Court Rules, 2025 are also clear that the appellant “shall not without leave of the court urge or be heard in support of any ground of appeal not set out when the appeal is entered.” The law is that the appellant will be confined to the grounds as outlined in the draft notice of appeal if leave is to be granted. It means that unless and until the application for leave to amend the notice of appeal is made and granted by the superior court, the ground relating to the point of law that there was no leave of the court before the application was filed cannot be argued by the appellant on appeal save that the Supreme Court itself is not confined to determining the matter on the grounds of appeal stated in the notice of appeal. This legal position applies whether or not the ground raises a point of law. The appellant is not at large to raise any new ground on appeal, as is the case with the respondent. The leave of the Supreme Court to amend the grounds must be sought and granted before any new ground can be argued on appeal. The ground, by extension, cannot also be argued and considered before me.

34.	The applicant did not seek to amend or expand its grounds of appeal stated in the draft notice of appeal. The court can only, by virtue of the proviso to r 94(2), consider the prospects of success of the appeal based on the grounds of appeal stated in the application. I cannot speculate that the applicant will, in the future, and before the Supreme Court, be granted leave to amend its notice of appeal to raise a new ground. The leave to appeal is granted on those grounds stated and substantiated before me. In an application of this nature, the court may, in appropriate circumstances, even decide to grant leave only in respect of one or more of the proposed grounds of appeal.

35.	In any case, it is trite that an application stands or falls on its founding affidavit. In other words, it is settled that an application is disposed of on the founding affidavit. See Ahmed v Docking Station Safaris Private t/a CC Sales SC 70-18 at p 3. In para 15 of the founding affidavit, the applicant averred that it intends to raise only 7 grounds of appeal, and those grounds are as per the draft notice attached, marked annexure ‘C’ and the same is at p 66 of the record. I agree with Mr Mapuranga on this part that Mr Mpofu was not arguing the application before me. The new ground of appeal raised concerning a point of law on failure to obtain leave of the court to apply was not raised in the application before me. It is not properly before the court, and it, therefore, does not raise a valid issue for me to consider in this application.

36.	While Mr Mapuranga argued that the issue of the two-stage approach, which relates to the different legal regimes and consequences applicable under corporate rescue proceedings, was also not covered by the grounds of appeal in the draft notice, I am of the view that the issue would arise in respect of grounds number 2 and 3. The issue would not require that the grounds of appeal be expanded or amended. The arguments on the correct legal regime applicable can still arise in respect of the consideration of the appeal on the grounds number 2 and 3 already before me.

37.	Before I deal with the grounds of appeal, I must state that the mere fact that the applicant has the other relief arising from the confirmation proceedings of the provisional order or that the determination of the main application for corporate rescue will render the order of no significance is not a valid ground or reason for the court to refuse leave. Mr Mapuranga argued that there was no good reason to approach the Supreme Court since the applicant had opposed the confirmation and should anticipate the return date, or would still be heard in the application for corporate rescue. As the above principles of law clearly show, the test is simply whether or not there are prospects of success on appeal. Whether there are any other remedies available to the applicant is not the issue. To that extent, the applicant ought to be heard in its application on the intended appeal. That it has other remedies is irrelevant to the issue of leave. It may be a consideration on the issue of the appropriate order for costs.

WHETHER OR NOT THERE ARE PROSPECTS OF SUCCESS ON APPEAL

38.	I now turn to deal with the grounds of appeal as presented in the application before me. As I said above, I am required by the law in determining this application to consider whether or not there are any prospects of success on appeal. What constitutes prospects of success is as enunciated in Zimbabwe Consolidated Diamond Company (supra) that the court must be satisfied that the applicant has an arguable prima facie case and not a mere possibility of success.  There must be a rational basis to find that the application is reasonably arguable and not hopeless.

GROUND NUMBER 1

39.	In this ground, the applicant argued that the first respondent lacked locus standi to institute the urgent chamber application as it is not a trade union which is registered to specifically represent the employees of the appellant, as opposed to representing employees in the entire mining industry. Mr Mpofu, on this issue, chose to abide by the position already taken in the application. The argument in the applicant’s opposing affidavit, as the first respondent in the urgent chamber application, captured from para(s) 23-28, is different from the position taken in ground number 1. In the proceedings before me, the challenge to locus standi was on the basis that the first respondent “is not a registered trade union representing employees of the company”, but a trade union registered to represent employees in the Diamond, Mining and Allied Industries. But the ground now relates to that the first respondent “is not registered to specifically represent employees of the appellant” as opposed to the entire industry.

40.	The argument is taken in the context of s 121(1)(a), which defines an “affected person” who, in terms of s 124(1), may apply for the placement of the company under corporate rescue. The Act specifically relate to “any registered trade union representing employees of the company” as an “affected person” having the locus standi to apply for corporate rescue. The application before me was clearly not an application for the placement of the company under corporate rescue in terms of s 124(1). The statement in the founding affidavit that it was a continuation of the main application does not detract from the substance of the averments therein that it was a different and separate application from that under s 124(1). The locus standi in terms of that provision cannot surely apply in relation to the application for an interdict which was before me. It would be the common law principle of locus standi in respect of any proceedings before the court that was applicable. Clearly, the applicant had such locus standi. The point in limine was not seriously taken, and it is completely hopeless.

GROUNDS NUMBER 2 AND 3

41.	The issue arising from both grounds is that s 127(1) is not effective upon the filing of the application but when the order for corporate rescue and the appointment of a CRP is made in terms of s 124(4)(a) as read with subsection (5). Mr Mpofu argued for what he called the two-stage approach, or that there are two periods governed by two different legal regimes and which have different consequences. He argued that the first stage or period is the one which commences upon the mere filing of the application for corporate rescue and the second upon the granting of the application. He argued that s 127(1) is triggered by the order placing the company under corporate rescue and that before that, the board is in charge and there is no bar from the board proceeding with the transactions in question. Mr Mapuranga agreed that there are two stages in corporate rescue but argued that the law is clear that s 127(1) is applicable immediately upon the commencement of corporate rescue proceedings arising from the mere filing of the application, and that this was also supported in the Metallon case.

42.	In my view, the issue is not necessarily resolved by simply adopting the so-called two-stage approach but through adopting the proper construction of s 127(1), given also what was stated by the Supreme Court in the Metallon case, in particular at p 16 thereof. When corporate rescue proceedings commence is clearly set out in s 125(1)(b). The Supreme Court has already pronounced the legal position in Metallon at p 16, where Malaba CJ said:

“The mere filing of the application with the Registrar of the High Court, even before the merits of the application are considered, has the effect of commencing corporate rescue proceedings. The temporary moratorium regarding the suspension of the rights of creditors will therefore start at this stage. The law requires the protection of the troubled company’s assets so that corporate rescue practitioners do not inherit shells. This is an important change to the old regime.

In JVJ Logistics (Pty) Ltd v Standard Bank of South Africa Ltd and Ors 2016 (6) SA 448 (KZD) at 448 the court dealt with the moratorium on business rescue proceedings. The court held that:

“During business rescue proceedings, no legal proceeding, including enforcement action, against the company, or in relation to any property belonging to the company, or lawfully in its possession, may be commenced or proceeded with in any forum …”.

During a company’s corporate rescue, the company can only dispose of its assets in circumstances prescribed in s 127(1) of the Insolvency Act.” (emphasis added)

43.	Once the Supreme Court has spoken, its decision is considered correct and, on non-constitutional matters, final. The Supreme Court having authoritatively spoken on the legal position, it follows that the arguments by Mr Mpofu are completely academic. I fully associate myself with the following remarks made by Chatukuta JA in Shah v Nherera SC 55-24 that:

“26. The Supreme Court had spoken. Decisions of this Court are absolute as the Supreme Court is the final court of appeal in all matters, except in matters of a constitutional nature.  The court in Kasukuwere v Mangwana SC 78/23, at p 17, quoted with approval the case of Lytton Investments (Pvt) Ltd v Standard Chartered Bank Zimbabwe Limited & Anor 2018 (2) ZLR 743 (CCZ) at 757 A wherein it was held that:

“What is clear is that the purpose of the principle of finality of decisions of the Supreme Court on all non-constitutional matters is to bring to an end the litigation on the non-constitutional matters. A decision of the Supreme Court on a non-constitutional matter is part of the litigation process. The decision is therefore correct because it is final. It is not final because it is correct.

The correctness of the decision at law is determined by the legal status of finality. The question of the wrongness of the decision would not arise. There cannot be a wrong decision of the Supreme Court on a non-constitutional matter.”

27. The Supreme Court decision, being final was correct. Because of the principle of stare decisis, the decision was binding on the court a quo.  The principle of stare decisis is that a lower court cannot depart from findings on questions of fact and law made by a superior court. See Denhere v Denhere & Anor CCZ 9/19, Diana Farm (Pvt) Ltd v Madondo NO & Anor 1998 (2) ZLR 410 (H).” [my emphasis]

44. 	While the statement of the law in relation to the operation of s 127 may not have been part of the ratio for the decision, the decision settled the point as to when corporate rescue commences. The Supreme Court was emphatic that it commences upon the mere filing of the application for corporate rescue by an affected person. It also went on to clearly point out that under s 127(1) the company can only dispose of its assets in the circumstances prescribed by the said section. Clearly, the effects of ss 126(1) and 127(1) are immediately brought into effect by the mere filing of the application with the Registrar. The law is very clear, and nothing should arise in seeking to simply raise academic arguments on a matter that is settled. The argument that s 127(1) is triggered by the granting of the application is clearly not supported by the law. The applicant, unfortunately, cannot choose which provision should apply; the law applies with full force.

45. 	The rationale of the provisions of ss 126(1) and 127(1) is to protect the assets of the company to avoid the CRP inheriting shells. The moratorium under s 126(1) protects the company against creditors. The provisions under s 127(1) are also meant to protect the company’s property, which may be disposable. The provision thus protects the company’s property from its managers. As outlined in Metallon, the immediate effect of 127(1) means that the company can only dispose of assets in the circumstances prescribed in s 127(1). It is no longer business as usual once the application for corporate rescue has been filed. That is the reality which must have dawned on the applicant.

46.	It is not in doubt that the company is only an artificial person whose activities and conduct would be undertaken by its board. The directors being human agents, it is not always the case that they will act in the best interests of the company itself. Hence, the law provides such restrictions. This is the same reason why there are instances where the directors may also be liable for breaching their legal duties to the company. See s 197 of the Companies and other Business Entities Act [Chapter 24:31]. Accordingly, s 127(1) ensures that once the application has been filed and is pending, the directors can no longer do what they want. They must comply with the law. Section 127(1) comes in to ensure that the company does not dispose of its assets save in the specified circumstances. The applicant did not argue that the disposals of the company’s mining assets and non-core assets constitute disposals or transactions in the ordinary course of its business. Clearly, they are not. The arguments raised are, in my view, not reasonably arguable. They are manifestly doomed to fail. The applicant’s counsel misread the Metallon case and s 127(1).

47.	In addition, there seems to be a misapprehension of the ratio of my judgment relating to the company’s right to be heard in the first part of the judgment. In terms of s 86(3)(e) of the Constitution, the right to a fair trial, whether in civil or criminal proceedings, enshrined in s 69, is absolute and no law can limit that right. The court’s decision that s 130(2) would be triggered when the court makes an order to place the company under corporate rescue and appoint a CRP in terms of s 124(4)(a) as read with subsection (5) was meant to give the company a voice during the proceedings for corporate rescue. The position is not that because the board can still act, it follows that s 127(1) is not triggered. Section 127(1) is clear and unambiguous, and no absurdity can arise if its literal meaning is adopted. It immediately applies upon the mere filing of the application, and as confirmed in Metallon the company can only dispose of its property interests as prescribed under s 127(1).

48.	The restrictions on the disposal of the company’s property only come in because corporate rescue has commenced, and are by operation of the law. There is no controversy arising requiring a new position from the Supreme Court. The Supreme Court has already said that s 127(1) applies immediately upon the filing of the application in Metallon. The argument on directors’ residual powers does not take away the provisions of s 127(1), which took effect upon the filing of the application. There is absolutely no point in seeking to create an entirely academic debate in the superior court over the issue. To this extent, the grounds numbered 2 and 3 are also without any prospects of success on appeal.

GROUND NUMBER 4

49.	This ground is also without any prospects of success at all. There is an applicable law which prescribes the disposals the company may make during corporate rescue proceedings. That is s 127(1). Its provisions apply by operation of the law, and it takes effect upon the mere filing of the application for corporate rescue. It does not matter the merits or otherwise of the pending application for corporate rescue. The legal regime applies with full force. This was also confirmed by the Supreme Court in Metallon. The ground also raises a constitutional point or argument. That point was not fully argued before me. The applicant cursorily referred to s 71(2) of the Constitution in para 69 of its heads of argument. There was completely no argument about the operation of the provisions of s 64 of the Constitution. The constitutional argument was, therefore, not fully presented and argued before me. It cannot be an issue to be argued on appeal that the court a quo erred on a point not properly pleaded and argued before it, and was not a question for it to determine.

50.	The constitutional argument is simply an attempt to desperately seek to cling to something. The constitutional argument is hopeless. The applicant did not challenge the constitutionality of the relevant provisions of the Act on corporate rescue, in particular s 127(1). By their nature, once the proceedings have commenced, it cannot be business as usual for the company. It was not pleaded or argued that s 127(1), if it applies immediately upon the filing of the application, would be unconstitutional.

52.	The applicant further incorrectly argues that the interdict has the effect of disabling the directors from discharging their fiduciary duties and conducting the day-to-day operations of the applicant. That is clearly a misrepresentation of the ratio of the judgment and the interim interdict. The provisional order does not prevent the applicant from conducting its day-to-day operations or business. What the provisions of s 127(1) prescribe are simply the circumstances where disposals can be made during corporate rescue. The company is still able to conduct its ordinary business. The court order only interdicted the transactions which amount to disposals of the company’s mining and non-core assets pending the return day, as they contravene s 127(1).

GROUND NUMBER 5

53.	Ground number 5 is equally without any prospects of success. It relates to service by standard notice of the application for the placement of a company under corporate rescue by an “affected person”. That is an argument to be determined by the court in the said pending court application. The urgent chamber application is not an application in terms of s 124(1). The law is clear, and the decisions in Metallon and Redwing Mining Company (Pvt) Ltd (supra) relate to an application for corporate rescue. The point was not seriously taken if one considers that the requirement is specifically restricted to an application for corporate rescue under s 124(2)(b). The applicant surely cannot ask the Supreme Court to determine a point relevant to an application which is yet to be determined by the lower court.

GROUND NUMBER 6

54.	The issue raised in this ground is that the application was fatally defective as the first respondent, the then applicant, did not comply with the dies induciae provided in the court rules. The rules are very clear in my view, and no controversy arises for the superior court to determine. The rules do not provide any mandatory dies induciae applicable to an urgent chamber application. The case is distinguishable from the case of Nyathi (supra), which was not an urgent chamber application. The proviso to r 60(1) mandates the adoption of Form No. 23 with appropriate modifications where the chamber application is to be served on interested parties. That Form No. 23 prescribes the mandatory procedural rights stated therein, and as confirmed in Nyathi, must be complied with. It is beyond any doubt, however, that Form No. 23 does not prescribe any mandatory dies induciae, let alone of 10 days. It is simply blank on the portion where the dies induciae is inserted.

55.	I did not come across any judgments outside the Vislink, where there have been varying opinions on the issue to create a controversy that would warrant the intervention of the superior court as set out in Chikafu (supra). Mr Mpofu could not refer me to any other judgments of this court where the issue in relation to urgent chamber applications has sparked a debate or has generated various opinions of this court to constitute a reasonably arguable ground on appeal. In any case, the applicant in the present application, although not accompanied by a certificate of urgency, inserted its own dies induciae of 2 days on the notice of motion. By its own argument, it would also mean that it is not properly before me. The pursuit of the point is simply not about justice at all. The ground is clearly hopeless.

GROUND NUMBER 7

56.	This ground raised an issue that the first respondent should have consulted its members on the issue of considerable significance to members in terms of s 35(a)(v) of the Labour Act. It argued that this was not done, and the first respondent lacked the authority to institute the proceedings. I dismissed this point for lack of merit. Now the applicant intends to take it up on appeal. I must restate what this provision actually states. It reads as follows:

“35 	Requirements of constitution of registered trade unions or employers organizations

The constitution of every registered trade union or employers organization or federation shall, in addition to the matters referred to in section twenty-eight, provide for —

(a) 	consultation between the various governing bodies or branches of the trade union or employers organization and members thereof before such trade union or employers organization or federation—

(i) 	…

(ii) 	…

(iii) 	…

(iv) 	…

(v) 	assigns an official to represent its members in a particular matter that is of considerable significance to its members; and …” (emphasis added)

Besides that, there was no factual foundation laid out and evidence given to establish this point; the section simply referred to what should be contained in a constitution of every trade union. As correctly argued by Mr Mapuranga, the applicant misrepresented the said section. It simply states that the constitution of a trade union must, among other things, provide for this.

57.	There was nothing placed before me for the superior court to even consider whether or not the filing of the application was a matter of considerable significance to the members of the first respondent. What was clear from the record is that the deponent was duly authorised by a resolution to institute the application that was before me. It was the union litigating as the applicant before me. No issue would arise to detain the superior court. This ground is also manifestly hopeless.

DISPOSITION

58.	While a litigant has a right to appeal and test the correctness of the court’s decision, the application for leave to exercise such right cannot be granted because the applicant has asked for it. See Chikurunhe (supra). There must exist prospects of success on appeal for the leave sought to be granted. Since the judgment in question is interlocutory in nature, the court acts as a gatekeeper in seeking to prevent the flooding of the superior court with frivolous or hopeless appeals, which include appeals intended to be filed for other ulterior motives, such as to harass the respondent or frustrate the enforcement of the provisional order. This is also the case as a provisional order is not yet final since the court may either confirm or discharge the order on the return date. The applicant, in casu, failed to demonstrate that the intended appeal has any prospects of success. A mere possibility of success is not enough. The application cannot, therefore, succeed.

59.	Costs shall follow the cause. I take notice that in the first respondent’s opposing affidavit, there was a prayer for costs on a legal practitioner and client scale. Mr Mapuranga did not, however, motivate the first respondent’s prayer for such costs before me. In any case, I did not find any special circumstances warranting an order for punitive costs against the applicant.

In the result, it is ordered that:

“The application is dismissed with costs.”

Dembure J:   ………………………………………………

Wintertons, applicant’s legal practitioners

Zinyengere & Rupapa, 1st respondent’s legal practitioners