Milanese and Ors v Marandola and Ors (Appeal 133 of 2011) [2015] ZMSC 165 (26 August 2015)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO 133/2011 HOLDEN AT LUSAKA SCZ/8/ 127/2011 (Civil Jurisdiction) BETWEEN: GIANPIETRO MILANESE (cid:9) GUIESEPPE DELLA BIANCA (cid:9) 1ST APPELLANT 2ND APPELLANT SUSSY DELLA BIANCA CRAGNO (cid:9) 3RD APPELLANT VINCENZO MILANESE (cid:9) ALBERTO MILANESE (cid:9) AND PAOLO MARANDOLA (cid:9) CANDY MARANDOLA (cid:9) IVAN MARANDOLA (cid:9) 4TH APPELLANT 5TH APPELLANT 1ST RESPONDENT 2ND RESPONDENT 3RD RESPONDENT CORAM: Hamaundu, Kaoma JJS and Lengalenga Ag JS On the 9th of July, 2014 and 26th August, 2015 For the Appellant: Mr. M. H. Haimbe - Malambo & Company For the Respondent: Mr. N. E. Eyaa - K. B. F Partners JUDGMENT Kaoma, is, delivered the Judgment of the Court (cid:9) J2 Cases referred to: 1. New Plast Industries v The Attorney General (2001) Z. R. 51 2. Development Bank of Zambia and another v Sunvest Ltd and another (1997)Z. R. 187 3. BP Zambia Plc v Interland Motors Limited (2001) Z. R. 37 4. Isaac Tantameni Chali (executor of the late Mwalla Mwalla) v Liseli Mwala (single woman) (1997) Z. R. 22 5. Chikuta v Chipata Rural Council (19 74) Z. R. 241 6. Re Company (19 74) 1 ALL ER 256 7. Amadeus International Limited v Rana Marketing Limited - Appeal No. 84 Of 2008 (unreported) Statutes referred to: 1. Companies Act, Cap 388 2. Companies (Winding-Up) Rules 2004 3. High Court Act, Cap 27 4. The Interpretations and General Provisions Act, Cap 2 This is an appeal against the ruling of the High Court dated 29th July, 2013, dismissing the appellant's application for an order to appoint a provisional liquidator pending an application for winding-up of Widland Company Limited. The facts not in dispute are that the parties have a long on- going dispute relating to shareholding in Widland Company Limited (the company). The respondents are majority shareholders and directors of the company and are in control and possession of the company assets, including Invadale farm. In an attempt to resolve the dispute, the parties entered into an agreement on 24th December, 2011 which later materialised into a consent order filed J3 into court on 161h April, 2012. Despite the execution of the consent order the dispute has not been resolved. Consequently, on 22nd February, 2013, the appellants filed an application by way of summons and accompanying affidavit, pursuant to Order 30 of the High Court Rules, Cap 27 and sections 239(1), (2) and (3)(d), and 282 of the Companies Act, Cap 388, for winding-up of the company and that one Shuko Ndhlovu be appointed liquidator of the company. The application was made within the existing action. On 261 February, 2013, Mr. Justice Kajimanga granted an ex-parte order appointing Shuko Ndhlovu provisional liquidator. The matter was to be heard interpartes on 19th March, 2013. Unfortunately, Mr. Justice Kajimanga was unable to continue dealing with any court matters, and so the matter was not heard until 26th July, 2013, after Mr. Justice Wood took over. Prior to that, on 23rd July, 2013, the appellant filed summons to join the company to the proceedings. The application was also made returnable on 26th July, 2013. On that date, Mr. Haimbe only made the application for appointment of a provisional liquidator. However, the judge invited him to address the court on the mode of J4 commencement of the application and whether such an order could be obtained when the company was not a party to the proceedings. When addressing that question, Mr. Haimbe did not refer to the application for joinder of the company. And in his reply to the argument by the respondents opposing the appointment of the provisional liquidator, Mr. Haimbe said the fact that the company was not a party to the proceedings should not be a bar to such remedy, particularly as the court was clothed with inherent jurisdiction to order the joinder of the party where appropriate. In his ruling, the learned judge did not address the merits of the application. He looked at the mode of commencement of the application to wind-up the company. He found that although the application was to wind-up the company, the company was not a party to the proceedings and that the mode of commencement was irregular, so there was no need to address the issue of the appointment or continuation of the provisional liquidator. He went on to discharge the ex-parte order appointing the provisional liquidator and ordered him to vacate office. He also ordered the appellants to meet the provisional liquidator's costs, charges and expenses reasonably incurred during the exercise of his duties. J5 Dissatisfied with the decision, the appellants appealed on seven grounds, which we shall discuss shortly. At the hearing of the appeal both counsel relied on their heads of argument which they augmented orally. Mr. Haimbe argued the grounds of appeal in two clusters. The first cluster involved grounds 1, 2, 3 and 6 and dealt with the issue of mode of commencement of winding-up proceedings. Grounds 1 and 3 were argued together whilst grounds 2 and 6 were argued separately. We shall deal with the four grounds at once as they are related. The second cluster involved grounds 4, 5 and 7 and dealt with the discharge of the provisional liquidator. Mr. Haimbe argued these grounds individually. In brief, grounds 1 and 3 alleged error in law and fact on the part of the trial judge when he held that the application by the appellants for an order to wind-up the company pursuant to section 239 of the Companies Act falls within the provisions of Order 6 of the High Court Rules, Cap 27; that the application should have been commenced by writ of summons endorsed with an appropriate claim; and that the mode of commencement was irregular. In ground 2, the appellants attacked the court for holding that the questions for determination before it were as to the mode of J6 commencement and as to whether the application could ride on the existing proceedings even though the company was not party to the proceedings. In ground 6, the appellants assailed the court's decision to discharge the ex-parte order appointing the provisional liquidator and ordering him to vacate office forthwith on the basis that the mode of commencement of the application was irregular before having heard the parties on the application. In support of grounds land 3, Mr. Haimbe submitted, in brief, that the application was made by summons and supporting affidavit pursuant to section 239 of the Companies Act (the Act) within the existing cause; that the court below found as a fact that section 239(2) of the Act while providing for the winding-up of a company 'on application' does not state the mode of commencement of such action nor does any other section of the Act. It was argued that by referring to the mode of commencement, and assuming that the application contemplated under section 239 ought to be a separate action amenable to the originating process prescribed under Order 6 of the High Court Rules, the court read words into the otherwise clear provisions of section 239 without employing any of the accepted tools of statutory interpretation. J7 It was further submitted that section 239 in its plain and ordinary meaning provides that a shareholder that alleges oppression may apply to the court for various reliefs, which include winding-up of a company and it does not require that such application be by way of fresh action or prohibit the making of such application within an existing cause, particularly where there is a long standing dispute between the parties to the action. In response, Mr Eyaa submitted that the court below was right when it held that the application to wind-up the company falls within Order 6 of the High Court Rules because the said provision is in conformity with our decision in the case of New Plast Industries v Commissioner of Lands and Attorney General'. He also argued that section 273 of the Companies Act has provided the procedure for the winding-up of a company and section 280(1) of the Act shows that a company can only be wound-up by petition. It was argued that here the procedure was not followed and the appointment of the provisional liquidator was untenable as there was no petition for winding-up. It was further contended that the appellants did not prove the oppression they alleged under (cid:9) (cid:9) J8 section 239, so it would have been irregular for the court to use that section in the manner the appellants wanted to. In support of ground 2, Mr. Haimbe argued that the facts relied on by the appellants in seeking to wind-up the company stemmed from an existing cause of action and the same matters in dispute and that to avoid multiplicity of actions, it was necessary to bring the application for winding-up and the ancillary application for appointment of a provisional liquidator within the existing proceedings. And that the High Court has inherent jurisdiction to adjudicate upon matters brought before it in terms of section 13 of the High Court Act. We were referred to a number of our decisions on multiplicity of actions and abuse of court process, including the cases of Development Bank of Zambia and another v Sunvest Limited and another2 and BP Zambia Plc v Interland Motors Limited3 . In answer, Mr. Eyaa submitted that the application for winding-up could not be fused into the existing matter where the company was not even a party and that the case of Development Bank of Zambia and another v Sunvest Limited and another2 is distinguishable as the subject matter was different. Based on our decision in the case of Isaac Tantameni Chali (executor of the will of J9 the late Mwalla Mwalla) v Liseli Mwalla4, it was submitted that since the company was not a party to the proceedings, the court was precluded from considering its interests. It was also argued that even if the parties were at a stalemate that could not be cured by the irregular commencement of winding- up of the company which was not a party to the action. That in a judgment of 291h July, 2013, the court ordered that there be a variation of the consent order to break the stalemate and mandated the applicants to find a buyer for Ivandale farm within 3 months. And in support of ground 6, Mr. Haimbe submitted that the application that was before the court on 26th July, 2013 was for the appointment of a provisional liquidator and not to wind-up the company. That this fact was brought to the attention of the court but it still went on to rule on an application that was yet to be argued and in so doing, pre-empted the issues in the pending application and denied the parties a chance to be heard. We were urged to reverse the ruling of the court below and to reinstate the provisional liquidator. In reply, Mr. Eyaa submitted that the court below was on firm ground in dismissing the application to wind-up the company at the J10 hearing of the application for the appointment of the provisional liquidator as the whole process was untenable at law due to the irregular mode of commencement of the winding-up proceedings. We have seriously considered the record of appeal and the arguments by learned counsel. The main question that arises from these grounds is whether proceedings for winding-up of a company can be made as an interlocutory application within an existing action. The appellants have taken issue with the judge dealing with the mode of commencement of the winding-up proceedings instead of the application for appointment of the provisional liquidator. Clearly, Order 6 of the High Court Rules provides for the mode of commencement of actions. It reads as follows: "(1) Except as otherwise provided by any written law or these Rules every action in the High Court shall be commenced by Writ of Summons endorsed and accompanied by a full statement of claim. (2) Any matter which under any written law or these Rules may be disposed of in chambers shall be commenced by an originating summons." It can be seen from this provision that all actions in the High Court must be commenced by writ of summons accompanied by a full statement of claim except where any written law or the High Court Rules specify another mode of commencement. ill In the case of Chikuta v Chipata Rural Council5, we held, inter alia, that where any matter is brought to the High Court by means of an originating summons when it should have been commenced by writ, the court has no jurisdiction to make any declarations. We reiterated that in the New Plast Industries' case where we held that the mode of commencement of any action is generally provided by the relevant statute and that where a statute provides for the procedure of commencing an action, a party has no option but to abide by that procedure; thus where any matter under the Lands and Deeds Registry Act, is brought to the High Court by means of judicial review when it should have been brought by way of an appeal, the court has no jurisdiction to grant the remedies sought. On the basis of the above authorities, we do not agree with the appellants that the learned judge had no jurisdiction to look at the mode of commencement of the winding-up proceedings when the application for appointment of the provisional liquidator was made within the summons to wind-up the company and the issue was one of procedural law. We agree with the appellants that section 239 of the Companies Act provides for the winding-up of a company 'on J12 application' made under section 239(2) but it does not state the manner of bringing such application before the court. We also agree that the learned judge erred when he held that the application for winding-up should have been made by writ of summons, in accordance with Order 6 of the High Court Rules. Nonetheless, the learned judge was right that commencing winding-up proceedings by chamber summons, within an existing action was erroneous. Section 271(1) of the Companies Act clearly provides that a company may be wound-up on the petition of, inter alia, the company, or any creditor of the company, a member, or the Registrar. Section 272(1) also provides that the court may order the winding-up of a company on the petition of a person other than the Registrar on the grounds given in paragraphs (a) to (f). The same applies to a winding-up at the instance of the Registrar under section 272(2). Furthermore, sections 273 to 276 of the Companies Act and the Companies (Winding-Up) Rules, Statutory Instrument No. 86 of 2004 refer to a petition as the mode of commencing winding-up proceedings. The Companies Act is also clear on the appointment of a provisional liquidator. Section 280(1) provides as follows: (cid:9) (cid:9) J13 "The court may appoint the official receiver or any other person to be liquidator provisionally at any time after the presentation of a winding-up petition and before the making of a winding-up order". In addition, Rule 8(1) of Companies (Winding-Up) Rules reads: "Where a petition for the winding-up of a company has been presented to a court, a creditor, petitioner, contributory or a, company may make an application ex-parte, supported by an affidavit stating sufficient grounds for the appointment of a provisional liquidator". Section 282(1) of the Companies Act also provides that the court may in the winding-up order appoint a liquidator or give directions as to the appointment of a liquidator by the members or creditors of the company or otherwise as it sees fit. Plainly, these provisions show that there must be a petition to wind-up a company before a provisional or substantive liquidator may be appointed. 'In our view, since it is trite law that an application for • winding-up must be by petition, it matters not that section 239(2) of the Companies Act is silent regarding the manner of bringing the 'application' for winding-up. In actual fact, the Companies (Winding-Up) Rules indicate that the Rules apply to any winding-up proceedings. This includes an application under section 239(2) and (3)(d) of the Companies Act. J14 Indeed, section 239(5) of the Act provides as follows: "Where an order is made under this section that a company be wound-up, Part XIII shall apply to the winding-up, with any necessary modifications, as if the order had been made upon an application duly filed by the company for a winding-up by the court". In our view, this provision simply means that an application for winding-up of a company under section 239 of the Act should be made in accordance with the provisions of sections 270 onwards of the Act and according to these provisions, proceedings for winding- up of a company are commenced by petition. Without doubt, this Court frowns upon multiplicity of actions. However, since the Companies Act and the Companies (Winding-Up) Rules provide for the mode of commencement of winding-up proceedings, we are not persuaded that commencing a fresh action by petition, to wind-up the company on the ground of oppression under section 239(2) and (3)(d) of the Companies Act would amount to multiplicity of actions. Ordinarily, the existing action would have to be stayed pending the hearing of the petition. The decision of Lord Megarry, J in the case of Re a Company6, although not binding on this Court, is very helpful. In that case X presented a petition for the compulsory winding-up of a company. He alleged that the company was indebted to him in the sum of J15 £23,000 as money had and received by the company in relation to abortive property contracts and in particular to a contract for the sale of land; and that the said sum was by order of the Chancery Division ordered to be brought into court or otherwise secured by the company in proceedings between X and the company. He also alleged that the said order had not been complied with although a notice of appeal had been served in relation thereto. X also applied for a provisional liquidator to be appointed under s. 238(1) of the Companies Act 1948, which provided that subject to the provisions of that section, the court may appoint a liquidator provisionary at any time after the presentation of a winding-up petition. This is similar to our section 280(1) of the Companies Act, Cap 388. X also applied for an order pursuant to s. 226 that all litigation be stayed pending the hearing of the petition or further order. The company sought to restrain X from taking any further steps in the prosecution of the petition and to have the petition struck out as being an abuse of court process. Evidence was led that X had brought an action earlier against the company claiming specific performance of a contract for the sale of a house and or damages and he had signed judgment in default of defence for J16 damages to be assessed, and it was agreed that £23,000 paid as deposits by X to the company in respect of other houses where the transactions had later gone off, should be applied towards the consideration payable in respect of the house and when the company had applied to have the judgment set aside, the court ordered that, on the company paying into court £23,000, the judgment would be set aside without further order. The petition was struck out for reasons, inter alia, that there had been a misrepresentation in paragraph 6 of the petition as an order setting aside a judgment if a sum was paid into court was not an order that a sum was to be paid into court. It was also held that since the petition would be struck out, the court had no power to appoint a provisional liquidator under s. 238 or to stay proceedings under s. 226 for there was no longer any subsisting petition against the company, and both those sections indicated that the petition must subsist; the mere fact that a petition had been presented did not satisfy the words 'after the presentation of a winding-up petition' in those sections if it had been struck out or dismissed. In this case, as the learned judge was on terra firma to consider the mode of commencement of the winding-up proceedings J17 before determining the application for appointment of the provisional liquidator, we do not agree with the appellants that in doing so, the judge pre-empted the application to wind-up the company. Certainly, the court has a duty under section 13 of the High Court Rules to determine all issues in dispute between the parties, but the judge could not determine the applications on merit as he had no jurisdiction to determine an ancillary application predicated on an application to wind-up the company that was wrongly commenced and was bound to fail of sheer inanition. Moreover, once it was established that the provisional liquidator was wrongly appointed as the application to wind-up the company was wrongly commenced, there was no reason for the provisional liquidator to remain in office. Accordingly, the ex-parte order of 26th February, 2013 was properly discharged and the provisional liquidator properly ordered to vacate office. We now turn to ground 4 of the appeal which alleged error on the part of the judge for holding that it was irregular for the appellants to apply for an ex-parte order for appointment of a provisional liquidator when the company was not a party to the proceedings considering the provisions of Order 14 rule 5 of the J18 High Court Rules; and the fact that there was pending for determination as at that date the application to join the company. To substantiate this ground, Mr. Haimbe submitted that the court weighed heavily the fact that the company was not a party to the proceeding and determined that it was irregular for the appellants to apply for the ex-parte order for appointment of a provisional liquidator when Order 14 rule 5(1) of the High Court Rules confers on the court jurisdiction to direct that all persons who may be entitled to or claim some share or interest in the subject matter of the suit or who may be likely to be affected by the result be made either plaintiffs or defendants in the suit. Further, that as the application for joinder was scheduled to be heard on the same date as the application for appointment of a provisional liquidator, despite that it was filed later in time; the court should have first determined the application for joinder. It was also argued that the holding by the learned judge that it was irregular for the appellants to 'lash' the application to wind-up the company to the proceedings in the court below in the absence of the company and to discharge the ex-parte order appointing the provisional liquidator is not tenable at law as it flies in the teeth of J19 Order 14 rule 5(3) of the High Court Rules which provides that no suit shall be defeated by reason of non-joinder or misjoinder of parties; and that the court should have cured the perceived irregularity by ordering the joinder of the company. Mr. Eyaa responded by submitting that the appellants had forfeited the use of Order 14 rule 5(1) and (3) because they had already filed an application for joinder. It was also argued that the non-joinder of the company was not a defeasance of any suit because the sole purpose of joining the company would be to validate the winding-up procedure which was already irregular. We have considered the arguments on this ground. As we have already said, the application for appointment of a provisional liquidator was made within the application to wind-up the company while the application for joinder was filed five months later on 23rd July, 2013. Undoubtedly, at the time the ex-parte order appointing the provisional liquidator was granted on 26th February, 2013, the company was not a party to the proceedings. Besides, even if the application for joinder of the company was also listed for hearing on 26th July, 2013, Mr. Haimbe did not make that particular application. He simply applied for appointment of J20 the provisional liquidator. Even when he was prompted by the court as to whether the application could ride on the proceedings when the company was not a party, Mr. Haimbe did not make or refer to the application for joinder. It was only in his reply to the argument by counsel for the respondents, opposing the appointment of a provisional liquidator, that Mr. Haimbe said the fact that the company was not a party to the proceedings should not be a bar against such remedy, particularly as the court was clothed with inherent jurisdiction to order the joinder of the party where appropriate. Still, no particular reference was made to the pending application for joinder. In these circumstances, the appellants cannot fault the learned judge for not considering the provisions of Order 14 rule 5 of the High Court Rules or the pending application for joinder which Mr. Haimbe did not find necessary to make or mention to the court. And in view of the fact that there was no petition for the winding-up of the company, there was no basis for the judge to use his inherent jurisdiction under Order 14 Rule 5(1) to join the company to the proceedings. Hence, this ground of appeal must fail. J21 On ground 5, the appellants faulted the learned judge for considering the provisions of the Companies (Winding-Up) Rules, without having due regard to the provisions of the Companies Act, when it determined that the provisional liquidator's actions which included the sale of cattle were contrary to Rule 8(5) of the Companies (Winding-Up) Rules. First, Mr. Haimbe acknowledged that the ex-parte order appointing the provisional liquidator was silent as to the nature and description of the property over which he was empowered to take possession and as to his duties. However, he submitted that the court below should have considered the provisions of section 280(2) of the Companies Act; and that where the order of appointment does not prescribe any limitation or restriction, then the provisional liquidator can exercise all the powers and functions of a substantive liquidator as contained in sections 286 and 289 of the principal Act which powers extended to the sale of cattle. Finally on this ground, it was submitted that the court failed to take heed of the fact that the provisional liquidator accounted for his activities to the court in the form of the preliminary report filed on 30th April, 2013 and the affidavit verifying facts as to the A ) • J22 conduct of the affairs at the company filed on 151h July, 2013 and that the provisional liquidator submitted to the control of the court in line with the requirements of section 289(4) of the Act. In response, Mr. Eyaa submitted that the procedure relating to the winding-up of a company has regulations which work in consensus with the principal Act and that there is some lacuna in the Act which the Winding-up Rules have quenched. We were referred to section 400 of the Act which empowers the Minister to make regulations for the efficient administration of the provisions of the Act and to the preamble to the Rules which makes it clear that the Rules were made under section 401 of the Act which empowers the Chief Justice to make the Rules. It was argued that the court below did not err by relying on Rule 8(5) of the said Rules to state that the actions of the provisional liquidator including the sale of cattle was unlawful because the order of appointment was silent as to what exact powers the provisional liquidator had; that section 280(2) of the Act also makes it clear that the functions and powers of a provisional liquidator are subject to limitations and restrictions as prescribed or specified by the court in the order appointing him; and that a I J23 provisional liquidator and a substantive liquidator are two different offices and the ex-parte order was contrary to the rules as no boundaries were set for the provisional liquidator. It was further submitted that the principal Act does not contemplate the office of the ex-parte appointed liquidator but Rule 8(1) to (3) of the Companies (Winding-Up) Rules makes it clear that an ex-parte appointed liquidator cannot and should not operate without stated powers or limitations; that the import of section 289 of the Act is that a liquidator is appointed after the issuance of a winding-up order and the vast powers under that section do not apply to an ex-parte appointed liquidator. It was further submitted that the preparation and filing of a preliminary report by the provisional liquidator was of no consequence because an ex-parte provisional liquidator should not have been appointed in the first place and there was no order of the court for such a report to be prepared. Rule 14 of the Companies (Winding-Up) Rules and section 287(1) of the Act were also quoted. We have considered the arguments on this ground. Indeed, section 280(2) of the Companies Act provides that the provisional liquidator shall have and may exercise all the functions and powers -P J24 of a liquidator subject to such limitations and restrictions as may be prescribed or as the court specifies in the order appointing him. On the other hand, Rule 8(5) of the Companies (Winding-Up) Rules makes it mandatory that an order appointing a provisional liquidator shall state the nature and description of the property of which the provisional liquidator is ordered to take possession and the duties to be performed by the provisional liquidator. In the present case, we find the assertion that the learned judge erred by referring to subsidiary legislation over and above the principal Act a misconception. Section 20(6) of The Interpretation and General Provisions Act, Cap 2 provides as follows: "Any act done under or by virtue of or in pursuance of a statutory instrument shall be deemed to be done under or by virtue of or in pursuance of the written law conferring power to make the instrument". The Companies (Winding-Up) Rules 2004 derive their authority from the Companies Act and are for all intent and purposes an extension of the principal Act. As Mr. Eyaa rightly submitted, the Rules were made for the efficient administration of the provisions on winding-up in the principal Act and they contain detailed procedures that apply to any winding-up proceedings. I J25 Accordingly, Rule 8(5) of the Companies (Winding-Up) Rules applies to this case. Thus, this ground of appeal lacks merit. Finally we come to ground 7 which attacked the judge's order that the appellants be responsible for the provisional liquidator's costs, charges and expenses reasonably incurred during the exercise of his duties as provisional liquidator. It is Mr. Haimbe's argument that the provisional liquidator was appointed by a valid court order despite the mode of commencement of the proceedings; and that the functions and powers exercised by the provisional liquidator and the costs and expenses incurred by him were done in furtherance of that lawful order. In reply, Mr. Eyaa argued that the provisional liquidator was not validly appointed as the mode of commencement was irregular and so were all the actions and subsequent powers he enjoyed in that capacity and the judge was right to condemn the appellants to bear the costs and expenses of the provisional liquidator. We have considered the submissions by learned counsel. Rule 8(6) of the Companies (Winding Up) Rules, provides that subject to any order of the court, where an order for the winding-up of a company is not made on the petition or an order for the winding-up J26 of a company is rescinded, or all the proceedings on a petition are stayed, a provisional liquidator shall be paid out of the property of the company all the costs, charges and expenses reasonably incurred during the exercise of duties as provisional liquidator. We confirmed this position in the case of Amadeus International Ltd v Rana Marketing Ltd7 when we held that although a provisional liquidator is by virtue of Rule 8(6) entitled as a general rule to be paid out of the property of a company, it is dependant or conditional upon any other order of the Court. In that case we departed from the directory rule that the company should bear the costs of the provisional liquidator since it was not necessary for the respondent to embark on winding-up proceedings concerning a debt that was contested and was found to be statute barred and we said it would be inequitable to expect the company to bear the costs when there was no basis for commencing the winding-up proceedings in the first place. In this case too, there was good cause for departing from that directory rule as there was no basis for the appointment of the provisional liquidator since there was no petition to wind-up the company and the company was not a party to the proceedings at J27 the time the provisional liquidator was appointed. In our view, the court was misled into granting the ex-parte order when there was no petition to wind-up the company; and it would be inequitable to expect the company to bear the costs, charges and expenses when it was not a party to the action. Ground 7 must equally fail. On the whole, this appeal lacks merit and we dismiss it with costs to the respondents to be taxed in default of agreement. E. M. HA11K1JNDU SUPREME COURT JUDGE R. M. C. KAOMA SUPREME COURT JUDGE F. M. LENGALENGA ACTING SUPREME COURT JUDGE