SWAZILAND
HIGH COURT
SHABANGU
STHEMBILE DORAH
Plaintiff
Vs
MDLULI
PHATHAPHATHA
1st
Respondent
THE
REGISTRAR OF COMPANIES
2nd
Respondent
NEDBANK
OF SWAZILAND
3rd
Respondent
THE
ATTORNEY GENERAL
4th
Respondent
Civ.
Trial No. 10/2002
Coram SAPIRE,
CJ
For
Plaintiff Mr. B. Magagula
For
Defendant Mr. Magongo
JUDGMENT
(13/05/2002)
The
applicant has made this application utilising the urgency provisions
of the rules and she seeks an order that the first respondent be
interdicted from effecting any
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withdrawals
on a certain account conducted by a company Active Distributors (Pty)
Limited with Nedbank Mbabane. She also wishes for interdict as far as
the third respondent is concerned from allowing any withdrawals on
the same account pending finalisation of the action. She also
requires an order declaring the Form J filed in respect of Active
Distributors (Pty) Limited with the Registrar of Companies who is the
3rd Respondent as null and void and irregular and directing the 3rd
respondent to cancel the same in its records. The applicant also
seeks the costs against the 1st respondent only.
The
applicant together with the first respondent who is, I understand, a
Government employee, entered into a business relationship with the
intention to trade inter alia with Government Departments. For this
purpose they became the co-formers of the company Active Distributors
(Pty) Limited. As appears from the Memorandum and Articles of the
Company they were the first directors and they were signatories to
the founding papers.
The
application has become necessary because the first respondent has
caused to be filed a document reflecting the resignation of the
applicant as a director. The applicant denies that she has ever
resigned. 1st Respondent's object was according to the founding
papers to enable the 1st respondent and a person nominated by him as
a new director to open and operate on a bank account in the company's
name. 1st Respondent would then to the exclusion of the applicant
operate on this account in order to clear a cheque of which the
company was the payee, which had been received from a Government
Department.
The
actions of the first respondent, as so alleged appear, to he highly
irregular.
In
his answering affidavit apart from taking technical points, he has
very little to say to repudiate or contradict the Applicant's very
serious allegations.
His
denial that he and the applicant were the founders of the company and
its first directors is futile and contradicted by the very founding
documents of the company themselves.
He
has been able to produce no record of a meeting of directors or other
documentary evidence to substantiate his allegation of the
applicant's resignation.
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It
is perhaps inappropriate to give relief in a form of a declaration
that Form J is null and void. This could require greater powers than
this or any other court has. The form J exists but clearly it is not
a document to which effect should be given.
A
point taken by the respondent is that the account that is sought to
be frozen belongs to the company, a legal person distinct from its
members comprise it. A company is a distinct person from its members.
That does not stop one director from interdicting another director
from performing what are in fact irregular acts designed to deprive
another shareholder or director from participating in the operations
of the company. There is no reason to cite the company itself. The
interdict is only sought against the respondent from to prevent him
persisting in his irregular conduct. The company is still free to
operate on its account through a properly constituted Board of the
company, instructing the bank accordingly.
Another
point taken by the 1st respondent is that argument would be advanced
that the company had not yet issued shares to anyone to enable the
applicant to be a shareholder. That would apply with equal force to
him. He also would not be a shareholder if there wee any substance to
this contention. If they have not issued shares, why haven't they?
But the issue of a certificate is not necessary to constitute the
person as shareholder. I already found that in documents of the
company that the applicant is a member of the company and is entitled
to the rights and other duties thereof.
The
respondent also says that the mere fact the applicant's name appears
on the Memorandum and Articles of Association does constitute her a
director. This is quite incorrect and when one looks at the founding
documents especially the Articles of the company one sees that the
applicant is in fact one of the first directors.
The
submission that she has no locus standi to approach this court is in
view of her obvious interest, without basis in fact or law.
Other
technical points were taken but they were even of less ground or
foundation than those I have already mentioned.
The
order I therefore make is that the first respondent is interdicted
from affecting any withdrawals on account number 0240161207 held by
Acting Distributors (Pty) Ltd with the 3rd Respondent at the Mbabane
Swazi Plaza Branch. I
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make
it quite clear that this does not prevent the company from operating
on its account provided that the operation is on the signature of
both directors who are the applicant and the first respondent.
I
also declare that the applicant is a director of the company, and is
to remain registered as such in the records of the 2nd respondent and
the person mentioned or substituted for her is declared not to be a
director.
The
first respondent to pay the costs of this application and as a mark
of disapproval of this court of his conduct such costs are to be paid
on an attorney and client basis.
I
also refer these papers to the relevant head of department so that he
may consider whether the 1st respondent's participation in commercial
transactions with the Government is in accordance with Rules and
Regulations applying to public servants
SAPIRE,
CJ
