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Supreme Court sends Post case to High Court

THE Supreme Court has referred the Post Newspaper Limited liquidation case back to the High Court under a different judge to re-open the insolvency proceedings to ensure compliance with the relevant legal provisions. 

It has described the liquidation process of The Post undertaken by the Provisional Liquidator, legal counsel Lewis Mosho, as a faux.

The Supreme Court in its judgement rendered yesterday has also ordered Mr Mosho to join the matter as a third party.

Supreme Court Judges, Chief Justice Mumba Malila, Albert Wood and Jones Chinyama in their judgement said that the appointment of Mr Mosho as provisional liquidator and his subsequent confirmation were all done outside the prescription of the winding up rules and without affording The Post and its managing director Dr. Fred M’membe, whose interests would be affected, an opportunity to be heard.

The Court discerned that Judge Nkonde behaved in an intemperate or unjudicial way by literally shutting the door to justice in the applicants ’fate. The Supreme Court said that because of the anomalies noted in the High Court Judgement, it was referring the matter back to High Court.

“We refer the matter to the High Court before a different judge to re-open the liquidation proceedings with a view to ensuring compliance with the relevant legal provisions. The action shall be between the original parties as they were when the petition was filed. However, for purposes of receiving all the necessary reports from the liquidator and considering his possible personal liability, we order joinder of the liquidator,” said the court.

In this matter, Dr. M’membe appealed against a consent judgment that Judge Sunday Nkonde granted provisional liquidator to Mr Mosho, declaring the newspaper insolvent.

Dr M’membe, who is the first plaintiff while Post Newspapers Limited (in liquidation) is the second, has cited former employees Abel Mboozi, Roy Habaalu, Andrew Chiwenda, Mwendalubi Mweene, Bonaventure Bwalya and Zambia Revenue Authority (ZRA) as respondents in the appeal.

Reading the Judgement of the Court, Justice Malila said that despite Dr M’membe having applied to set aside the order appointing Mr Mosho as provisional liquidator and to stay the execution of the order of appointment, for no clear reasons the applications were never heard by Judge Nkonde.

The court also said that it was not clear whether the liquidator did submit to the court a report in accordance with action 288 of the Companies Act (repealed).

The act which include whether there was any committee of inspection appointed, whether the liquidator acted with the authority of such committee of inspection ; and whether he applied to court to be released at the purported conclusion off the winding up.

The court noted that judgment of the Court of Appeal that upheld the High Court decisions did not deal with the issue of residuary powers of directors of a company in winding up proceedings, nor did it consciously address the arguments brought to it by the appellant.

“For the avoidance of doubt, we hold that the actions of the liquidator prior to and post the purported liquidation of the Post Newspaper limited, are of no legal effect whatsoever.  The net result is that this appeal has merit and must succeed. In light of all the anomalies we have pointed out, the liquidation of the Post Newspaper limited in the manner undertaken by the liquidator, was a faux,” read the judgement.

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