SUN INTERNATIONAL’S E60K FOR SECURITY COSTS

MBABANE – The Registrar of the High Court has directed Sun International Limited to provide E60 000 as security for costs instead of the E1 million that was demanded by the master of the High Court.

Security for costs is demanded when there is litigation between a local entity and a foreign entity and the local one (entity) has good reasons to believe that the foreign entity would not be able to pay costs if it loses. This is in the matter where Sun International Limited, which is a South African registered company, and other creditors want Paul Mulindwa to be removed as co- liquidator. The registrar directed that the sum of E60 000 should be deposited in the first respondent’s (master of the High Court) lawyer’s trust account. The lawyer representing Sun International Management Limited, Zweli Jele has been directed to furnish proof of deposit. The first respondent (master of the High Court) argued that the reason she was demanding such security was because the matter was very complex and it required the determination of her power to appoint a co- liquidator in a very complex and involved liquidation.

Urgent

Sun International Management Limited and other creditors in the liquidation of Swazi Spa Holdings have filed an urgent application for the removal of Mulindwa as a co- liquidator. In June 2021, the High Court of Eswatini issued a final order for the liquidation of five companies under Sun International Management Limited. Mulindwa is the co- liquidator together with lawyer Marissa Boxshall Smith. The affected companies include Swazi Spa Holdings, which was operating SwaziSpa Hotel and Casino, Lugogo Sun and the Ezulwini Sun. Other applicants in the matter for the removal of Mulindwa are Nedbank Swaziland Limited, former employees of Swazi Spa, Eswatini National Provident Fund (ENPF) and Chick- Fil- A Swaziland (PTY) Limited.  Respondents in the matter are the master of the High Court, Mulindwa, Smith and the attorney general (AG). The application is opposed by the master of the High Court, who is the one who appointed Mulindwa as co-liquidator. Mulindwa was appointed as co-liquidator by the master of the High Court.

In appointing Mulindwa as co- liquidator, the master of the High Court invoked Section 316 of the Companies Act of 2009, Section 316 reads: “Whenever the Master of the High Court considers it desirable he may appoint any person not qualified from holding the office of the liquidator and who has given security to his satisfaction, as co-liquidator with the liquidator or liquidators of the company concerned.”

Restrain

Sun International Management and the other applicants  want the High Court to interdict and restrain  Mulindwa from performing the functions of a co-liquidator in the liquidation  of Swazi Spa Holdings and its subsidiary companies pending  finalisation of the relief of setting aside his appointment. They contended that the matter was urgent and had to be dealt with immediately because the appointment of Mulindwa by the master of the High Court was disruptive to the liquidation process and would have a prejudicial effect on the smooth running of same. In his founding affidavit, Graham Wood, who is the director of Sun International Management Limited submitted that SwaziSpa International and its subsidiaries were placed into provisional liquidation by an order of the High Court. He said the application to place the companies into liquidation was instituted by Sun International Management Limited and Smith was appointed the liquidator.

According to Wood, thereafter, Smith was confirmed as a liquidator pursuant to a meeting of creditors and she was required by Sun International Limited to provide a bond of security for the discharge of her duties, in the sum of E50 million.  He brought it to the attention of the court that Smith had discharged this obligation. “The process of liquidating the companies, commenced in the earnest from July 2021 and notwithstanding the number of difficulties associated with the liquidation of such a large enterprise, the third respondent (Smith) had acquainted herself admirably to the satisfaction of the shareholders,” submitted Wood. He pointed out that in her (Smith) last report to the creditors on March 18, it was demonstrated that at the very least some 85 per cent of the liquidation work had been completed and the last phase being the disposal of assets, was on track. Wood argued that the appointment of Mulindwa by the master of the High Court as a co-liquidator would invariably derail the work that had been undertaken and inevitably cause undue delay in the finalisation of the liquidation to the prejudice of the concursus creditorium (coming together of creditors.

Divert

It was further his averment that Smith would have to divert her attention from the finalisation of the liquidation to bringing the co-liquidator up to speed on all the issues as well as the event that had taken place for a period in excess of nine months. “It is conceivable that some of the decisions taken by the third respondent ( Smith) that have the support of the creditors and shareholders, particularly those relating to the disposal of assets by means of private party, may be contested by the co-liquidator, thus occasioning further delay in the liquidation of the companies,”  he argued. He went on to submit that offers for the assets had now been made and like in any commercial transaction, there was a fair element of urgency in dealing with those offers and concluding the ensuing sale agreements. The master of the High Court is represented by Assistant Attorney General Mbuso Simelane.

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