Tsekelo v Majalle (C OF A (CIV) NO.23/2002 )

Media Neutral Citation: 
[2003] LSHC 51
Judgment Date: 
14 April, 2003

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C OF A (CIV) NO.23/2002

Summary


AMELIA TSEKELO v STEPHEN SETENANE MAJALLE


The respondent in this matter launched an urgent ex parte application seeking relief against the appellant her husband and certain other parties'. No grounds of urgency were suggested in the certificate of urgency or in the founding affidavit and there was no justification for an urgent ex parte hearing of the matter.


The respondent inter alia sought an order terminating the directorships of the appellant and her husband. The allegations set out in the respondent's founding affidavit were however disputed by the appellant in her answering affidavit with the result that there was a serious bona fide dispute of fact on the papers. This court has often warned practitioners that where in proceedings on notice of motion disputes of fact have arisen, a final order may only be granted if the facts averred by the applicant and admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The orders granted by the court a quo were certainly not justified in view of the serious disputes of fact.


The respondent brought the application in his own name but sought to claim orders on behalf of a company which he allegedly controlled. The court a quo granted some of those orders despite the fact that the respondent had no locus standi.


In the result the following order is made:

  1. The appeal is upheld with costs.

  2. The order of the court a quo is set aside and the following order is substituted therefor:


"Application dismissed with costs."


C OF A (CIV) NO.23/2002

IN THE HIGH COURT OF LESOTHO


In the matter between:-

AMELIA TSEKELO Appellant

and

STEPHEN SETENANE MAJALLE Respondent


HELD AT MASERU on 2 April 2003


CORAM:

Ramodibedi JA

Grosskopf JA

Plewman JA


Urgent application for an interdict brought by a director of a company in his own name - question of locus standi of such director - problem of bona fide disputes on the affidavits.



JUDGMENT


GROSSKOPF JA


[1] The respondent brought an urgent ex parte application for an interdict against the appellant, the appellant's husband and four other parties. The respondent sought an order in the following terms:


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A rule nisi returnable on Friday 2 August 2002 calling upon the respondents to show cause, if any, why-


  1. " The rules, forms, and time limits as to notices and service of process may not be dispensed with on account of the urgency of this application.


  1. The directorships of 1st and 2nd Respondents of M & K Security Guards (Pty) Ltd, may not be terminated and annulled as having been deceitfully and /or fraudulently obtained.


  1. First and Second Respondents may not be restrained and interdicted from masquerading and/or otherwise holding themselves out as directors of M & K Security Guards (Pry) Ltd.


  1. First and Second Respondents may not be ordered to reinstate the possession and/or full control of arms and ammunition to Applicant which arms and ammunition were removed by stealth from his possession. (These arms and ammunition are the personal property of Applicant).


  1. First and Second Respondents may not be restrained and interdicted from fraudulently and by misrepresentation using the personnel uniforms of M & K Security Guards as if they were the uniforms of M & A Security Company which is an unregistered and unlicensed Company which 1st and 2nd Respondents formed solely for the purpose of mulcting the business of M & K Security Guards in order to misappropriate its revenues.


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  1. First and Second Respondents my not be directed to provide a full account of the monies they have misappropriated under the guise of M&A Security Company and which they deposited in the account of 1st Respondent or into a fictitious account at the Standard Bank; and why they may not be ordered to reimburse same to Applicant's company account No. 1100585111 at BOLIBA SAVINGS AND CREDIT BANK.


  1. Third and Fourth Respondents may not be restrained and interdicted from releasing any cheques drawn in the favour of M & K. Security Guards or M&A Security Company to 1st or 2nd Respondents howsoever.


  1. Fifth Respondent may not be directed to freeze and keep on hold any or all the bank accounts in which 1st or 2nd Respondents and/or both 1st and 2nd Respondents, jointly and severally, are signatories pending the final determination of this application.


  1. Sixth Respondent may not be directed to allow and admit applicant as a single signatory for the time being, in the account of M & K Security Guards pending the determination of this application.


  1. First and Second Respondents may not be ordered to pay sales and Income Taxes due from M & K Security Guards for this period of their misrepresentation and misappropriation of the Company revenues and other funds howsoever, estimated at a total of M200,000.00 and more.


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  1. First and Second Respondents may not be ordered to reimburse the misappropriated funds to Applicant as above stated and to pay all debts incurred in the name of M & K Security Guards during the period of such misappropriation.


(1) First and Second Respondents may not be directed to pay the costs of this application on an attorney and client scale."


[2] There is no record that the rule nisi sought was in fact granted, but I shall assume that the court ordered a rule nisi to issue. The appellant and her husband, who were the fust and second respondents in the application, were the only parties to oppose the application. The appellant deposed to an answering affidavit in which she denied many of the factual allegations set forth in the respondent's founding affidavit. The Independent Electoral Commission, the Water and Sewerage Authority, Standard Bank Ltd and Boliba Savings and Credit Bank who were cited in the application as thud, fourth, fifth and sixth respondents respectively. apparently elected to abide the decision of the court.


[3] The respondent brought the application in his own name. M & K Security Guards (Pty) Ltd ("the company") does not feature as an applicant in the case. The respondent nowhere alleged that he was acting on behalf of the company or that he had been authorised by the company to act on its behalf. (Cf Wing On Garment (Pty) Ltd v Lesotho National Development Corporation 1999-2000 LLR & LB 72 (LAC)). The court a quo in my view therefore correctly held that the respondent was not entitled to claim property allegedly belonging to the company. The court a qua accordingly refused to confirm the rule in respect of prayers (e), (f). (g). (h) and (k)


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set out in paragraph [ 1 ] above. The court a quo did however grant prayers (a), (b), (c), (d), (i) and (1). The appellant is the only one of the original six respondents to appeal against this order of the court a quo.


[4] The original application was brought on an urgent ex parte basis. No grounds were suggested in the certificate of urgency by counsel as to why the matter was to be heard on an urgent basis, while the founding affidavit disclosed no justification for an urgent ex parte hearing. It has often been held by this court that such procedure is wholly unacceptable. (Wing On Garment (Pty) Ltd. supra). Prayer (a) should therefore not have been granted by the court a quo. There is however no way to set it right at this stage.


[5] The second prayer which was granted by the court a quo was prayer (b) in terms whereof the respondent sought an order terminating the directorships of the appellant and her husband in the company. It appears from the respondent's founding affidavit that he actually invited the appellant to join him as a director of the company when his previous co-director resigned as a director in 2001. He says he did so in order to comply with the requirements of the Companies Act. 25 of 1967 ("the Act"), but section 140 (1) of the Act does not require a private company to have more than one director. The respondent's complaint was that the appellant was not authorised to send a return in the prescribed form L to the Registrar of Companies to notify him that she and her husband had been appointed directors of the company. She alleged in her answering affidavit that she, her husband and the respondent consulted a certain advocate Thabo Makeka during February 2002 with a view to forming a partnership and that he advised them to return the required form L to the Registrar in order to regularise their proposed arrangement. This is confirmed by the said Makeka


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in a supporting affidavit The appellant alleged that form L was prepared with the full knowledge of the respondent. This form L shows the appellant and her husband as newly appointed directors of the company


[6] The respondent applied for the "termination" of these directorships, thereby implying that the appellant and her husband were in fact directors of the company The appellant actually signed two service contracts m her capacity as 'managing director"on behalf of the company, one on 17 January 2002 with the Water and Sewerage Authority (fourth respondent in the court a quo) and another on 2 April 2002 with the Independent Electoral Commission (third respondent in the court a quo) The appellant alleged that these contracts had been brought to the respondent for his approval before she signed them There is not a categorical denial of these allegations in the respondent's replying affidavit The only reasonable inference on the undisputed facts is that the respondent at least knew that the company was providing the required services to these parties in accordance with contracts entered into by the company


[7] There are two reasons in my view why the respondent was not entitled to the relief claimed in prayer (b) Fust because there is a serious dispute of fact arising on the affidavits with regard to the appellant's appointment as a director of the company The same applies to a lesser degree to her husband's appointment This court has often warned practitioners that where in proceedings on notice of motion disputes of facts have ansen on affidavit, a final order may only be granted if those fact averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order The denial by the respondent of a fact alleged by the applicant must of course be more than a bare


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denial and should also raise a bona fide dispute of fact. (Plascon -Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634E - 635 C.) Here there clearly was a serious dispute of fact. For this reason alone prayer (b) should not have been granted by the court a quo.


There is a second reason why prayer (b) should not have been granted on these papers. I have already pointed out that the respondent was not authorised by the company to bring the application on its behalf. The respondent was acting on his own behalf and in his own name. There was no application on behalf of the company for their removal as directors. The court a quo held that the respondent was entitled in terms of section 91 (1) of the Act as a person aggrieved, or as a member of the company, to apply to court for the rectification of the register. The register to which reference is made in section 91(1) does not, however, concern directors but members of the company. Section 146 of the Act provides for the removal of directors by the company by ordinary resolution. There is no allegation on the papers that such a procedure had been followed. It is further not disclosed in the papers whether the appellant and her husband held the specified share qualification (section 143 of the Act) or whether they were disqualified as directors on any other ground.

For the reasons set out above the court a quo should not have granted prayer (b).


[8] Prayer (c) was for an order interdicting the appellant and her husband from holding themselves out as directors of the company. In view of the factual disputes on the affidavits referred to in paragraphs [5] and [6] above, and for the reasons set out in paragraph [7] above, prayer (c) should not have been granted by the court a quo.


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(9) The appellant and her husband were ordered in terms of prayer (d) to return certain amrs and ammunition to the respondent. It is common cause that the respondent held a firearm certificate in respect of the relevant firearms and that these firearms belonged to the respondent personally. The appellant pointed out in her answering affidavit that the firearms were "hired out to the company" by the respondent on 8 April 2002. This appears from a document marked "'E" and signed by the respondent and the appellant as directors of the company. The respondent confirmed this in his replying affidavit:


"11.2 The arms and ammunition were not surrendered to the 1st and 2nd Respondent [the appellant and her husband) as this would have been unlawful. "Annexure E" of 1st Respondent's opposing affidavit confirms that the arms are the personal property of Applicant [the respondent] and they were only rented to the company."


There is no allegation in the affidavits that the appellant and her husband ever possessed these firearms or that they removed the firearms "by stealth" from the respondent's possession, as claimed in prayer (d). There were therefore no grounds on which the court a quo could have granted this prayer.


(10) Prayer (i) was for an order directing sixth respondent in the court a quo. Boliba Savings and Credit Bank, "to allow and admit applicant [the respondent] as a single signatory for the time being, in the account of M & K Security Guards [the company] pending the determination of this application". The respondent in his founding affidavit described Boliba Savings and Credit Bank as "the bankers of my company".


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The company was not a party to this application, as pointed out before. The respondent clearly had no locus standi to ask for an order allowing him. as a single signatory, to withdraw money from the company's bank account. Prayer (i) should therefore not have been granted.


[11] There remains prayer (1) claiming costs on an attorney and client scale from the appellant and her husband. The Court a quo made an order in terms of prayer (1). The application should in my view have been refused in its entirety by the court a quo for the reasons set out above. Costs should have followed the event.


[12] In the result the appeal succeeds and the following order is made:


  1. The appeal is upheld with costs.


  1. The order of the court a quo is set aside and the following order is substituted therefor:


"Application dismissed with costs."


Delivered at Maseru this 14th day of April 2003.


F H GROSSKOPF JUDGE OF APPEAL


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M RAMODIBEDI

JUDGE OF APPEAL


C PLEWMAN

JUDGE OF APPEAL


Counsel for the appellant : T. Matooane

Counsel for the respondent : T J Moruthoane