GOWORA
J: The applicants are father and daughter. In 1978 a company called Monomotapa
Garden Furniture (Pvt) Ltd was incorporated. The first respondent subscribed to
950 shares in the said company and one Mukopi Ushahwengavi subscribed to
another 50. In 1999 the later died and his shares were then acquired by the
second applicant. The first applicant and the minority shareholder were the
directors to the company and when Ushwahwengavi died the second applicant was
appointed director by virtue of being a shareholder.
In about June or July 2005 the first
applicant on his own behalf and also acting as agent for the second applicant
entered into an agreement with second and third respondents who were also
representing the fifth respondent in which he disposed of the entire
shareholding in Monomotapa Garden Furniture, (the company) at an agreed
purchase price of US$400 000. Although the purchase price was meant to have
been paid with four months of the agreement payment was not effected with the
result that new terms for payment were negotiated not once but twice according
to the applicants. The applicants contend that due to the failure by the
respondents to effect payment either in terms of the original agreement or the
renegotiated terms, they verbally cancelled the agreement on 24 November 2008 and
demanded that the respondents vacate the applicants' immovable property and
return the assets that had been handed over at the time of the agreement.
Despite
the cancellation the applicants appear not to have taken any further steps
against the respondents, as the first applicant avers in the founding affidavit
that on 30 November 2009 he approached his legal practitioners and on his
instructions they formally terminated the agreement in writing by letter dated
7 December 2009. On 8 December 2009 the respondents' legal practitioners wrote
to the applicants' legal practitioners indicating that the respondents had paid
US$300 000. This letter was responded to on 6 January 2009 disclaiming any
receipt by the applicants of the purchase price. The end to all this was that
summons was instituted by the applicants against the respondents under Case No
HC 2480/10 issued on 16 April 2010. In the meantime however, the respondents
had issued summons against the applicants and the company on 10 March 2010
claiming delivery of the company documents and title deeds to the immovable
property. Following receipt of a request for further particulars from the
respondents' legal practitioners to the summons issued by the applicants, the
applicants instructed their legal practitioners to peruse the records relating
to the company at the offices of the sixth respondent and made a number of
discoveries which then propelled the applicants into filing this application on
an urgent basis.
The
grounds of urgency being relied on are the following:
a)
That the applicants had written to the
respondents in relation to certain alleged irregular transactions but the
respondents were not forthcoming and had not produced documentary evidence
supporting the said transactions
b)
That the purported appointment of first,
second and third respondents as directors and the purported removal of the first
applicant as director if not declared null and void by the court would have
adverse and critical ramifications in so far as the applicants' interest in the
company was concerned. It was stated in the certificate of urgency that there
was danger that the respondents would be tempted to act as directors and
shareholders of the company and dispose of assets belonging to the company as
well as alienating the shareholding.
c)
That the respondents had, through their
activities paralysed and incapacitated the company as well as the directors and
shareholders of the company. It was stated that the situation was
extra-ordinary requiring an extra-ordinary and speedy response to the put an
immediate halt to the illegitimate activities of the respondents.
d)
That the situation, if allowed to
subsist and flourish for yet another day constituted an affront to all notions
of justice and is contrary to public policy and that faced with a situation as
this the law must and should respond swiftly to address the situation in a
decisive way
I was sufficiently moved by the sense of
urgency displayed in the certificate to have the matter set for hearing before
me on an urgent basis. The respondents all filed opposing papers and all took
issue with the contention that the matter was urgent. The respondents also
contended that the applicants were peregrini and were therefore obliged to file
and lodge with the court security for costs. I will therefore proceed to deal
with the points in limine seretiam below.
Urgency.
It
was contended by Messrs Hussein and Harvey
that the transactions complained of had occurred on 15 April 2005, which is a
document purportedly signed by the first and second applicants. Indeed in para
12 of the founding affidavit there is confirmation that the alleged agreement
occurred in 2005. The paragraph further confirms that the entire shareholding
in the company was sold to the respondents in or about June or July 2005. The second,
third and fifth respondents have attached to their opposing papers a
declaration filed by the applicants under Case No HC 2480/10. In paras 6 and 8
of that declaration the applicants aver:
“In
or around June/July 2005, and at Harare, the second plaintiff, in his capacity
as director and shareholder of the first plaintiff and also agent of the third
plaintiff entered into an oral agreement with the first defendant, duly
represented by the second and third defendants, in terms of which the second
and third plaintiffs sold their entire shareholding in the first plaintiff
company including the business of the company as a going concern to the first
defendant
It
was also agreed that the first defendant, through the agency of the second and third
defendants, would assume with immediate effect, full control of the first
plaintiff company and all its assets, which they duly did, including
particularly running the first plaintiff company's factory for their benefit
using the first plaintiff's stocks, business bank balances and labour. This was
agreed to and implemented in anticipation of payment of the purchase price in
full within four months as averred herein.”
The
averments in para 8 are a pointer as to the extent that the applicants
surrendered control of the company and business to the respondents. Full
control of a company can only refer to the persons in control having been
appointed directors in the companies as that is the vehicle through which a
company is run. On 10 January 2010, the first respondent had sent an e-mail to
the first applicant advising him of the sale effected on 15 April 2005 and the
implications thereof. The first applicant demanded sight of the document in
question and it was sent to him. He took no action.
From
the above it is clear that what is contained in the certificate of urgency on
the alleged illegal acts of the respondents having been fraudulently appointed
directors of the company is not borne out by the record especially pleadings
filed on behalf of the applicants themselves in the main cause. It is also clear
that it is not news to the applicants that the second and third respondents
have been running the affairs and business of the company clandestinely. They
were given full control. As for the applicants just having discovered these
alleged irregularities is again not borne out by the record. By 11 January 2010
the disputed document of 15 April 2005 in terms of which disposal of the shares
and assets of the company had been effected had been sent to the first
applicant and he took no action. It took him almost four months to issue
summons for a vindicatory action and another month before launching an
application to interdict the respondents from running the affairs of the
company and posing as directors.
These
courts have time and time spelt out the requirements to be met by an applicant
seeking to have his matter jump the queue and have such heard on an urgent
basis. Every litigant would wish to have his or her matter heard on an urgent
basis. It is for that reason that the rules provided for discretion on the part
of the judge to decide whether or not the matter is urgent. There are no set
criteria for the determining of urgency in relation to a matter and it is often
difficult for judges to decide before setting down the matter whether or not it
is urgent. Equally legal practitioners and their clients use the arrival of on
the doorstep of the client crisis as the reason for having the matter heard on
an urgent basis. However, not every crisis can be considered urgent as a lot of
factors have to be taken into account by the judge in deciding urgency. Where a
litigant has been aware for some time of the existence of facts or a set of
circumstances that could be detrimental to his interest, it cannot be justified
for that party to allow those same circumstances to gather momentum until a
crisis is reached and thereafter cry foul and demand a hearing from this court
on the alleged grounds that the matter is urgent. In such a case the urgency
has been self created. A party should not wait to seek relief from the court
until the eleventh hour and expect that the court would grant him the
indulgence of having his dispute jump the queue and be heard urgently.
The
arrival of a crisis on his doorstep is not the only benchmark the court has to
consider in determining the question of urgency. As to urgency, each case must
be judged upon its merits facts surrounding the application must such that the
urgency is evident from the certificate and the founding affidavit. The
existence of a catastrophe or an imminent crisis on its own, cannot and should
not be basis upon which urgency id determined. A set of circumstances which to
the knowledge of the applicant or his legal practitioners have existed for a
period of time no matter how devastating the facts and the effect of their
existence may be, cannot be considered to constitute urgency especially where
it clear that the applicant or his legal practitioner did themselves not react
with urgency when the circumstances became evident. The urgency of the
situation in my view must also be exhibited by equally urgent reaction on the
part of the applicant.
In
casu, the first applicant if he is to
be believed, was aware by the middle of January 2010 that the respondents were
passing themselves off as directors to the company. That is the time when he
should have been spurred to act. He did not. He issued summons cancelling the
agreement and demanding the eviction of the respondents from the immovable and
it was only after being served with a request for further particulars that it
occurred to him and his legal practitioners that there was need to stop the
respondents from acting as directors to the company, and this coming almost
five years after the respondents had been given full control of the company is
hard to comprehend. I agree with the submissions by counsel for the respondents
that this matter is not urgent and the application ought to fail on that score
alone. There is however another preliminary issue raised which I should dispose
of before concluding the matter.
The
respondents have also contended that the applicants are peregrini and as such they should have provided for security for
costs for the respondents. The applicants deny that they are peregrine. As such
they are not obliged to provide security. I think the first rung is to
determine whether or not the applicants are peregrine as averred by the
respondents. In an answering affidavit the applicants have filed with the court
a Deed of Transfer in respect of an immovable property which is jointly owned
by the first applicant and one Liliana Dias who is stated to be his wife. She
however is not before me. In addition to this there is an electricity bill
dated 14 January 2010 in the name of Liliana Dias, a telephone bill in the name
of Chantelle Dias and an account from a security firm in the name Mr L Dias.
Lastly there is a Special Power of Attorney executed by the two applicants on 3
May 2010 at Cape Town and giving one Lilian Dias
living in Harare
power of substitution to handle their affairs relating to Monomotapa Garden
Furniture (Pvt) Ltd. Another power of attorney had been granted to the same L
Dias on 1 May 2010 to peruse the documents relating to the same company.
The
opposing affidavit filed by the first respondent in fact suggests that the
applicants are resident in South
Africa. There is however sufficient dispute
on the residency of the applicants arising from the documents that I am unable
to state categorically that they are peregrine. In any event I do not consider
it necessary to determine this particular point in view of my finding that the
matter is not urgent.
Accordingly
in view of the lack of urgency displayed herein I find that the matter was not
properly filed and the application is accordingly dismissed with costs.
Oliver Mushuma, applicants' legal practitioners
Granger
& Harvey,
respondents' legal practitioners
