IN
THE HIGH COURT OF LESOTHO

HELD
AT MASERU CIV/APN/403/2008

In
the matter between:-

LESOTHO
PUBLIC MOTOR

TRANSPORT
COMPANY (PTY) LTD APPLICANT

AND

MALUTI
MOTORS LESOTHO (PTY) LTD 1^ST
RESPONDENT

‘MAMATABOE
LEUTA 2^ND
RESPONDENT

ZHENG
S.X. 3^RD
RESPONDENT

MAKHOABE
MOHALEROE 4^TH
RESPONDENT

JAVEDI
c/o FURNITURE WORLD 5^TH
RESPONDENT

MEMUTI
c/o M.T. CELLPHONES 6^TH
RESPONDENT

JUDGEMENT

Delivered
by the Honourable Acting Judge Mr. G.N. Mofolo

On
the 12^th
March, 2009

[1] The
Applicant has approached this court for an order in the following
terms:-

1. 
   Dispensing
   with the Rules regulating the service of process and time limits
   thereto and directing that this application be heard
   as an urgent
   application.

   
   

2. 
   A
   Rule Nisi issue returnable on the date and time to be determined by
   this Honourable Court, calling upon the respondents to show
   cause
   (if any) why

   
   

1. 
   2^nd
   and 6^th
   Respondents shall not be interdicted forthwith from paying their
   monthly rental to anyone except the Registrar of the High
   Court
   pending finalization hereof.

   
   

2. 
   1^st
   Respondent shall not be interdicted forthwith and restrained from
   collecting monthly rentals from 2^nd
   to 6^th
   Respondents.

   
   

3. 
   1^st
   Respondent shall not be interdicted and restrained from claiming
   any right and dealing in every way with the Applicant’s
   rented
   property situated at Cathedral Area, Maseru urban area near Shell
   oil Garage main bus stop.

   
   

4. 
   2^nd
   to 6^th
   Respondents shall not be directed to pay their monthly rentals to
   the Applicant herein.

   
   

5. 
   1^st
   Respondent shall not be directed to continue paying his monthly
   rentals to the Applicant herein.

   
   



1. 
   Costs
   of suit in the event of opposition.

   
   

2. 
   Granting
   the Applicant further and/or alternative relief.

   
   

The
application is opposed.

[2] In
his Founding Affidavit, Moeketsi Tsatsanyane has deposed at paragraph
1 of his affidavit that he is Director of the Applicant
and he has
been authorized to depose to the affidavit as evidenced by an extract
of minutes attached marked “A”. There is
no “A” annexed to
the Founding Affidavit except an extract of minutes of the Board of
Directors dated 22 November, 2008.

[3] In
terms of paragraphs 2.2, 2.3 and 2.4 of the Founding Affidavit, 2^nd,
3^rd
and 4^th
Respondents are tenants of the Applicant and the relationship of 1^st
Respondent, 5^th
and 6^th
Respondents is at this stage not clear to the court.

[4] Paragraph
4 claims Applicant to be owner and title holder of business site and
premises at Maluti Garage otherwise known as
Shell Oil Filling
Station, main bus stop, Maseru and paragraph 5 claims the site in
paragraph 4 is the property of an association
called Lesotho Bus and
Taxi Association otherwise known as LBTOA registered in the name of
Lesotho Public Motor Transport Company.
According to paragraph 8,
the site was developed and business premises erected by Shell Oil
Company on behalf of the company and
1^st
and 6^th
Respondents became tenants of the Applicant (para 9).

[5] According
to paragraph 10 original Directors of the Applicant have all died
giving rise to appointment of new directors and
the paragraph goes
on:

“I
then appointed along with ‘Mampai Lebeko,

“Mamosala
Mokitimi, Motlatsi Mabote and Mahakane Mosala as Directors of the
Applicant herein.”

[6] Paragraph
11 is to the effect 1^st
Respondent is tenant of Applicant at Shell Oil Garage, Cathedral
Area, Maseru and had a sub-lease with Applicant registered No.16671

of 11 March, 1983 and in terms of paragraph 11.3, 1^st
to 6^th
Respondents used to pay their monthly rentals to Directors of the
Applicant company who are all deceased. According to paragraph
11.4,
since the demise of the last Director, Mr. Mapheleba who was laid to
rest in September 2008, the 1^st
Respondent started collecting monthly rentals from the other tenants
ceasing to pay rentals to the Applicant. Paragraph 12 claims
the
deponent and other incoming directors tried to normalize the
company’s affairs with the six (6) Respondent tenants in vain
1^st
Respondent claiming he had authority to do so.

[7] With
regard to deponent’s claim that after the passing away of the last
Director Mr. Mapheleba, the directorship of the Applicant
was
renewed, reference is made to annexure “C” dated 10 November,
2008 reflecting new Directors of the Company to be:

Chairman :
Moeketsi Tsatsanyane

Secretary : ‘Mampai
Lebeko

Treasurer : ‘Mamosala
Letšekha

Members : Motlatsi
Mabote

Mahakane
Mosala

and
it is noteworthy Mr. Moshe was invited to a meeting of 15/11/2008 at
Maluti Motors to handover administration property to the
new
directors. I also note annexure “E” shows an amount of M5,000.00
having been paid as rent for September on 01/09/2008
by Maluti
Motors; an amount of M5,000.00 paid as rent by Maluti Motors on
01/10/2008 as October rent and superimposed with Lesotho
Public Motor
Transport stamp. Another sum of M5, 000.00 paid by Maluti Motors for
November rent on 01/11/2008 also superimposed
with Lesotho Public
Motor Transport stamp. An annexure folio 07 dated 01/10/2008 shows
an amount of M4,000.00 to have been paid
by Furniture World for
October rent and superimposed with Lesotho Public Motor Transport
stamp while folio 08 dated 01/10/2008
shows an amount of M5,000.00
paid by Zheng Shu Xian for October rent and superimposed with Lesotho
Public Motor Transport stamp.

[8] Folio
06 dated 01/10/2008 shows M270.00 to have been paid by ‘Mamataboe
for October rent and superimposed with Lesotho Public
Motor Transport
as in folio 05 of 01/11/2008 paid by ‘Mamataboe Leuta for November
rent also superimposed with Lesotho Public
Motor Transport stamp. To
be noticed all receipts certified as true copies of the original
except for receipts comprising annexure
“E”. There is another
receipt by Furniture World folio 07 dated 01/09/2007 being rent for
the amount of R4,000.00 and superimposed
with Maluti Motors Lesotho
(Pty) Ltd and I may further mention in CIV/APN/97/1995 page 8
paragraph 21 of one of the original Directors
of the Applicant,
Setenane Habofanoe Mapheleba in his Founding Affidavit paragraph 21
aforesaid shows 4^th
Respondent herein as tenant of the company premises at Maseru Bus
Stop Area. Moreover, audit report of 31 December, 1999 shows
Maluti
Motors and Mohaleroe as tenants of the Applicant.

[9] As
shown above, the application was opposed and in opposing it, Makhoabe
Mohaleroe has deposed in his Answering Affidavit at
paragraph 3 that
he is Managing Director of the Applicant Company Form L registered
with the office of the Registrar of Companies
in terms of Section 158
of the Companies Act 1967.

He
has also taken points in
limine
namely:

1. 
   Jurisdiction

   
   

2. 
   Urgency

   
   

3. 
   Interdict

   
   

4. 
   Locus
   standi

   
   

5. 
   Material
   dispute of fact

   
   

6. 
   Non-disclosure

   
   

And
it seems to me wise to deal with these first.

[10] On
jurisdiction, Mr.
Chobokoane
both before me and in his heads of argument has claimed the court has
no jurisdiction to decide the matter basing himself on High
Court Act
1978 Section 6 that “no civil cause or action within the
jurisdiction of Subordinate Court …shall be instituted
in or
removed into the High Court save:

(a) by
a Judge of the High Court acting on his motion; or

(b) with
the leave of a Judge upon application made to him in Chambers and
after notice to the other party” and

Herbstein
and Van Winsen page 364 to the effect:

“If
the court is not satisfied on the facts stated in the application
that it has jurisdiction, it will not entertain the proceedings”.

In
this particular case this court is satisfied on facts in the
application that it has jurisdiction and on court’s own motion
the
court finds the application has been properly instituted in the High
Court.

[11] As
per urgency, assuming Applicant is entitled to the rentals, he is
losing huge sums of money impossible to recover except
by expeditious
resolution. On interdict, it’s a case of choice by the Applicant
whether to interdict Respondents or to evict
them and the Applicant
has chosen to interdict them and he stands to succeed in his remedy
so long as he can prove a clear right.

[12] It
is not contended that Applicant is owner of premises subject-matter
of unpaid rentals; in so far as Moeketsi Tsatsanyane
is concerned, he
appears to have been properly elected as Chairman of the Applicant
and it cannot be said that Applicant has no
locus
standi.

[13] Certainly,
there is no material dispute of fact in that on the original
directors dying, new directors appear to have been
elected to replace
them and there appears to be evidence that Respondents paid their
rentals to the Applicant. Unless I am mistaken,
non-disclosure
appears to have been dispensed with, of course new facts in a
Replying Affidavit are not allowed in that they prejudice
a party’s
case not unless he is allowed to have another bite by denying them.
Mr.
Potsane
for Applicant has alleged he adverted to so called new facts in his
Replying Affidavit because some were raised by Respondents
in their
Answering Affidavits. I have gone through these Answering Affidavits
and find the contentious paragraph of the Replying
Affidavit is
paragraph 10 in which the Applicant in reply to paragraph 9 of the
4^th
Respondent’s Answering Affidavit and to put everything in its
proper perspective, 4^th
Respondent’s paragraph 9 reads:

4. 
   … I
   am not a tenant over the property of Applicant, but I am the
   Managing Director of the Applicant.

   
   

Applicant’s
reply at paragraph 10 of the Replying Affidavit:

The
deponent is not a Director of the Applicant, but he is a tenant over
Applicant’s premises. Attached hereto is a copy of the
auditor’s
report to confirm that the deponent was and still is tenant over the
Applicant’s premises.

[14] I
do not think that these facts in any way compromise 4^th
Respondent’s case in that they were resorted to in order to
buttress Applicant’s defences. Of course a much argued fact was

whether the audit report of 1999 could be taken as showing 4^th
Respondent is still a tenant of Applicant which in any case cannot
be. As for the objection regarding the assertion that 4^th
Respondent could never be a Director of the Applicant because he is
not a taxi owner, taxi ownership is not in issue in this application

rentals being in issue. In any event, Applicant’s Memorandum has
to do with vehicular transport and the name of the company
speaks for
itself. I have not hesitated to reject points in
limine
taken.

[15] Merits

Parties
have agreed issues for decision are:

(1) Whether
4^th
Respondent
is Director of Applicant.

(2) Whether
on the contrary, 4^th
Respondent is tenant of the Applicant this also going for other
Respondents.

(3) Whether
Mr. Moeketsi Tsatsanyane is a Director of the Applicant.

[16] In
his paragraph 7 (7.1) 4^th
Respondent claims Moeketsi Tsatsanyane is disputing the validity of
annexure “A” (Form L) filed by 4^th
Respondent in that it is not a true document - I have perused Form L
filed pursuant to section one hundred and fifty-eight of the

Companies Act 1967 as amended. Form L is accompanied by “Transfer
of Shares, Stock, Debentures or options” duly signed by
the
transferor and transferee the rule, in the usual mercantile way,
being that where a directorship is offered and accepted the
nominee
being a fit and proper person, a circumstance may nevertheless arise
whether he was engaged full time in the affairs of
the company
though, it would appear, it is not helpful to say of a particular
director that, because he was not an executive director
his duties
were less onerous than they would have been if he had been an
“executive director” and whether the inquiry be one
in relation
to negligence, recklessness or fraud, the legal rules are the same
for all directors (see Howard
v Herrigel and Another NND 1991 (2) SA 660 (AD).
Of the 4^th
Respondent before me, there is no evidence of 4^th
Respondent being a member of the Applicant or its Director until 30^th
May 2008 when, purportedly, he was appointed Director of the
Applicant or Managing Director as he has alleged this before the
demise of the founding director Setenane Mapheleba who became
director on July, 1979 according to Form L the said Setenane
Mapheleba
being one of the right and proper directors to have
appointed 4^th
Respondent as director since when 4^th
Respondent was appointed director Setenane Mapheleba was still alive.
All that 4^th
Respondent has done to prove his directorship is filing Form L in
terms of Section 158 of the Companies Act, 1967 as amended and
the
question is whether filing Form L is alone sufficient prove that 4^th
Respondent is Managing Director of the Applicant 4^th
Respondent in his Answering Affidavit having only asserted he is
Managing Director of the Applicant. It has been submitted on
behalf
of the Applicant that 4^th
Respondent is not Managing Director of Applicant and further, that
4^th
Respondent’s purchase of Moshe’s shares is against Applicant’s
Articles of Association. Before me, too, there is no evidence
of 4^th
Respondent having taken any interest in the affairs of the Applicant
or being a member of the Applicant save when he purchased
Moshe’s
share catapulting him into position of Director or Managing Director
of Applicant almost at the same time on purchasing
M20 or 0.5% shares
of Lesotho Public Motor Transport Company (Pty) Ltd. Agreeably,
though, particularly in a Private Company,
a majority shareholder and
Managing Director of the Company may sell his shares with the
purchaser assuming the position of the
seller on purchase of the
latter’s majority shares, something which did not happen in the
case of 4^th
Respondent who, according to the transfer form purchased a paltry
percentage fixing the percentage share from nowhere in the absence
of
a share certificate.

[17] According
to annexure “C” being election of Directors of the Applicant, the
election took place on 10/11/2008 when Form
L was submitted to the
Registrar on 08/09/2008 apparently by the 4^th
Respondent. In terms of Article 158 (2) of the Companies Act, 1967
as amended, Register of Return of Directors and Secretaries
is to be
submitted within twenty-one (21) days of their appointment and there
is penalty for submitting them later. I am not able
to say why the
return in respect of the directors appointed several years before was
submitted after the expiry date and by the
4^th
Respondent who, until his alleged purchase of shares from Moshe on 6
June, 2008 was not a member of the Applicant Company.

[18] Looking
at Form K, the consent form, it appears 4^th
Respondent has filed the form as evidence, alone, that filing it is
proof of his directorship of a company and need I say 4^th
Respondent has gone a long way to prove his bona fides of the
directorship of the Applicant Company. Another queer form is Form
I
of a notice of meeting on 28 May, 2008 and Resolution passed on 30
May, 2008 which conveniently omits who were in attendance
and the
quorum only showing T. Moshe resigning as Director of Company and
transferring all his shares to the 4^th
Respondent. When the meeting set, the founding director Setenane
Mapheleba was still alive and if for some reason he was incapacitated

to attend, this should have been shown or simply that he was absent
having been served notice of the meeting, otherwise this meeting
was
surreptitious intended to invade rights of other directors bearing in
mind according to Article 95 the quorum is two unless
fixed by the
directors and nothing shows it was so fixed. This certainly is a
false form apart from the fact that, on resignation
of a director,
anybody does not become a Director of the Company.

[19] Masupha
Katiso appears to feature as Director in Form L notwithstanding
judgement in CIV/APN/289/1985 by Molai J declaring
him not to be a
Director of the Applicant. As remarked above, 4^th
Respondent could only have become a Director on buying majority share
of a Managing Director which qualifies the purchaser to become
by
operation of law a Managing Director. He could also have become a
Director or Managing Director (1) if he qualified and (2)
nominated
from existing directors by a properly constituted meeting of
Directors and I have shown as I do, that meeting of 30 May,
2008 was
not properly constituted. Except by saying he is Managing Director
of Applicant Company, as to and by whom 4^th
Respondent was appointed Managing Director of the Applicant this is
not very clear save, for an unknown reason, this having been
a case
of rapid promotion but not through the ranks. Quite significantly
though, it appears on Moshe resigning 4^th
Respondent wasted no time to install himself as Director of the
Applicant for Moshe in his Supporting Affidavit he has deposed:
“…
I have been a Director of the Applicant company since 19^th
August 1981 … until the 3^rd
June 2008 when I resigned” and yet, according to Form I and
resolution of 30 May 2008 Moshe resigned as Director of the Company

on 30 May, 2008 though, it seems, he remains a Director until a
transfer of shares has been effected being 06/06/2008. Moshe also

deposes “upon my resignation the 4^th
Respondent was appointed as director” as if the appointment was
automatic for if there was a meeting to appoint 4^th
Respondent he would have said so this showing the scarcity of
necessary details in the appointment of 4^th
Respondent as Director or Managing Director of the Applicant Company,
I am of the view that 4^th
Respondent was appointed Director and Managing Director of the
Applicant Company is not enough considering the Applicant is a
creature of the law governing it.

[20] Mr.
Potsane
has applied for viva
voce
by Moshe considering there is no record of what happened and Mr.
Moshe may shed light on this. He has however changed his mind
and
Mr.
Chobokoane
is of the view no viva
voce
evidence is required or at least that he does not need it.

[21] Among
some of the objects of the Applicant are:

(xv) To
carry on business of motor garage owners, and dealers in motor cars,
motor vehicles, motor accessories of every description,
and other
wheeled vehicles; motor fuel, lubricants, etc.

3(i) Properties
of public transport vehicles, etc.

To
construct, equip, maintain and work public transport vehicles, motor
coaches or other vehicles, appropriate for the carriage
of passengers
or goods, and to carry on the business
of
carriers of passengers and goods, both public conveyance and in
private vehicles, in such places as may from time to time be
thought
fit and it appears it is from this object that a taxi association was
formed whose parent company, if so formed, is, in
may view, the
Applicant though I am to repeat in the present application the taxi
association is not in use.

[22] As
to transfer of shares, this is governed by Articles 24 and 25 of the
Articles of Association and Article 25 reads:

No
Member shall be entitled to transfer any share otherwise than in
accordance with the following provisions:

(a) A
member desirous of selling his shares or any of them (hereinafter
called “the Selling Member”) shall give written notice

(hereinafter called “the notice of sale”) to the Secretary of the
Company containing and offer to sell the same, and stating
the number
and class of shares which he desires to sell and the price which he
is willing to accept for such shares and the manner
of payment
thereof.

(b) The
Secretary shall thereupon send to each of the other Members of the
Company a circular containing the same particulars, and
naming a day
(being fourteen days after the service on him of the notice of same)
on or before which offers to purchase the same
will be received. If
on or before the day so named offers to purchase all or any of the
shares referred to in the notice of same
at the price named shall be
received from Members of the Company by the Secretary, he shall, as
agent for the Selling Member and
the proposing purchaser or
purchasers, declare a contract of sale to be concluded and shall give
notice thereof to the Selling
Member and the purchaser or purchasers.

(c) If
the offers to purchase shall together constitute offers to purchase a
greater number of shares than those offered for sale,
the shares
offered for sale shall be divided among the proposing purchasers in
the proportions as nearly as possible in which they
already hold
shares in the Company; provided that no proposing purchaser shall be
liable to take more shares than those he shall
offer to purchase.
The Selling Member and Members declared to be the purchasers of the
shares shall give effect to the contract
or contracts so made as
aforesaid by the execution of proper transfers and the payment of the
purchase price.

(d) If
within twenty-one days after the service of the notice of sale on the
Secretary, the Selling Member shall not receive notice
that his offer
to sell has been accepted on behalf of some Members or Members of the
Company, he may within six months from the
date of serving the notice
of sale (but subject to Article 26 hereof) sell or dispose of the
shares referred to in such notice
of sale. From the foregoing, if
written notice of sale of shares given, it would be part of Form L
and bundle of forms submitted
to the Registrar of Companies or part
of 4^th
Respondent’s evidence after all Mr.
Chobokoane
submitted no evidence was necessary on merits. So far as Articles
24, 25 and 26 above are concerned, number and class of shares
to be
sold not identified whether they are ordinary or preference shares or
for that matter controlling shares and there’s the
danger that
shares purportedly sold could have encroached on other Members’
shares in that again, shares purportedly sold were
not valued. Also
please note where there is the intention to sell according to these
articles, the Secretary of the Applicant
has to be involved for
he/she is agent of the seller and in this case he/she does not appear
to have been involved at all the transactions
having been restricted
to a resolution by contrivance and circumspection of Applicant’s
statute by the 4^th
Respondents. Articles referred to above make it clear for any
Member’s shares to be sold there has to be notice of sale making

the sale not a private deal but one of public knowledge to Members of
the Applicant who, on proposing to buy a contract is created
between
the seller and the purchaser such a contract of sale not having been
created as is envisaged by the articles of the Applicant
above but
4^th
Respondent having resorted to the shoddy expedient of a resolution
not sanctioned by the articles another problem being by what
vested
authority 4^th
Respondent acted as he did in terms of the resolution part of Form I
which has nothing to do with articles of the Applicant regarding
sale
of shares, for according to Form I in contradiction with articles of
the Applicant above, it was resolved that Moshe resign
as Director of
Applicant and his shares be transferred to 4^th
Respondent upon which, on the stroke of a pen, 4^th
Respondent became and was appointed Director of Applicant. Oh, no,
hold it, not so fast … This looks more a coup d’ etat
than
negotiated appointment, sort of appointment not envisaged by
Applicant’s Articles 24, 25 and 26 above in disposing of shares
and
appointment of directors. Powers of Article 24 and 25 are wide
requiring several transactions between seller and purchaser(s)
for
the procurement of shares, it’s not a case of toss a coin heads I
win tails I lose as was the case with 4^th
Respondent purchasing Moshe’s shares and appointment as Director of
the Applicant for while shares may be sold and purchased,
they are
nevertheless protected from invasion by unscrupulous non-members.
These articles make it clear sale of shares cannot
depend solely on
passing a resolution of company though, as I have said above, even
resolutions require quorum and proper efficacy
of directors passing
them. It is to be noted in accordance with these articles a contract
of sale so formed may not be between
seller and purchaser only but
among seller and several willing member purchasers so that unlike
sale between 4^th
Respondent and Moshe, in law according to Applicant’s articles of
association above, sale of shares is not restricted to a single

willing buyer. It is also to be noted according to the articles and
particularly Article 25 that publicity of sale of shares to
members
is a sine qua non except where, members duly notified, show no
interest in which case, within six months of the notice
to sell, the
seller may dispose of his shares to anybody subject, notwithstanding
to Article 26 that Directors shall nevertheless
refuse to register
any transfer of shares or transfer of a share to a person of whom
they do not approve so that, according to
Article 26 sale of a share
undergoes several mutations in that even where a sale is concluded,
Directors may, for the reason that
a purchaser is not approved by
them, fail to have the sale transferred and the question may be posed
whether 4^th
Respondent passed this ultimate test posed by Article 26 and as far
as this court is concerned, it does not seem that 4^th
Respondent has done so considering against the spirit of the
applicant’s articles he played a major role both in the purchase
of
shares and their transfer.

[23] In
this court’s view, the so-called sale of shares by Moshe and their
alleged purchase by 4^th
Respondent was no more than a backdoor transaction and invalid. I am
well aware details of transactions have not been given since
this is
an application unlike a trial but I am of the view at least
considering applicant’s locus
standi
is not challenged it having been alleged 4^th
Respondent is not either Director or Managing Director of the
Applicant, it was up to 4^th
Respondent to prove, on a balance of probability, that he is, in
fact, either Director or Managing Director of the Applicant and
in my
view 4^th
Respondent has failed to do so for I fail to comprehend, if this is
4^th
Respondent’s defence, how 0.5% purchase of shares against the
spirit and dictation of Applicant’s statute would make 4^th
Respondent Managing Director of the Applicant; on the other hand, if
this is 4^th
Respondent’s other defence that having bought his shares he is
majority shareholder and hence Managing Director, at least this

should have been alleged by the 4^th
Respondent and he has not done so. I reject with the contempt it
deserves that the highly specious and inadequate resolution Form
I of
30 May 2008 is sufficient evidence to make 4^th
Respondent either Director or Managing Director of Applicant.

[24] I
have already said that the alleged sale of shares and acquisition of
Management of the Applicant by 4^th
Respondent is suspect for why, if 4^th
Respondent was desirous of joining forces with shareholders of the
Applicant did he not make hay while the sun shines by announcing
his
intentions to the Board of Directors of the Applicant or by simply
paying his share instead of waiting until ranks of the directorship

were thin? Even if this was not his intention, why did the 4^th
Respondent in joining Applicant not go through the front door instead
of the back door by following Applicant’s statutes? Clearly
he
appears to have furtively and surreptitiously stolen a march on the
Applicant who, at the time he was approached, membership
of his
directorship was depleted and although Mapheleba was still alive he
was not invited to a meeting of 30 May 2008 or being
invited and not
turning up for the meeting, 4^th
Respondent should have said so instead of preferring to deal alone
with a director from whom he sought some benefit. This conduct
by
4^th
Respondent was certainly underhand, it cannot be said to be overboard
in that it appears to me 4^th
Respondent awaited a suitable opportunity to pounce on Applicant’s
interest and at a time when there would be little or no opposition
to
his designs. I find though articles relating to this company, a
Private Company, closely related to articles of a Public Company

recalling membership of a Private Company unlike that of a Public
Company is limited with Private Companies not holding general

meetings and appointment of directors depending on shareholding of
individual shareholders. However, this court is not called
upon to
decide this save to say Article 90 of Applicant’s Articles of
Association is to the effect:

“No
person other than a director retiring at a meeting shall be eligible
to the office of director at any general meeting unless
not less than
three or more than twenty-one days before the date appointed for the
meeting there shall have been left at the registered
office of the
company notice, in, writing, signed by a member duly qualified to
attend and vote at the meeting for which notice
is given of his
intention to propose such person for election, and also notice in
writing, signed by that person, of his willingness
to be elected.”

So
that whenever a director retires not less than twenty-one (21) days
before a date appointed for the meeting, there is to be left
at the
registered office of company notice signed by a member of his
intention to propose an eligible person as director and the
person
proposed of his willingness to be elected. In other words, on Moshe
retiring twenty-one (21) days before a date appointed
for a meeting
to elect a director on account of a director having retired, a notice
in writing is left at offices of the company
by a competent and
qualified member of his intention to propose a person for election as
director and the person proposed is to
reciprocate in writing that he
is willing to be elected. On Moshe retiring no such procedure as
laid down by articles of the Applicant
was put in place notice of a
meeting having been purportedly given, a resolution adopted and
without much ado 4^th
Respondent appointed director of the Applicant. I can think of
nothing more arbitrary and capable of usurpation of powers though
it
seems to me, once again, for a person to be director he must be
elected though I say this with reservation in that Directors
in a
Private Company are not elected but appointed bearing in mind, also,
that the quorum necessary for the transaction of business
of
directors may be fixed by the directors and unless so fixed, it is
two and when 4^th
Respondent purportedly appointed living and active directors were
Mapheleba and Moshe notwithstanding that according to Article
104 of
the Articles of Association of Applicant from time to time directors
appoint one or more of their body to office of Managing
Director and
there is no evidence before court that 4^th
Respondent at any stage was one or more of Applicant’s Body of
Directors to be appointed to office of Managing Director for it

appears one to be appointed by Directors to be Managing Director one
is to be one of their body, a far cry from the 4^th
Respondent.

[25] Mr.
Chobokoane
has made heavy weather of the Applicant’s Replying Affidavit saying
it raises new issues of which Respondents are unable to respond
to
and it accordingly prejudices Respondents’ case. In this court’s
view allegations raised are not new and in no way prejudice

Respondents’ case mindful of the fact that as far as this court is
concerned, 4^th
Respondent is guilty of grave misrepresentation of facts and in any
event given circumstances of each particular case a court has
a
discretion to permit evidence in a Replying Affidavit of
retrospective ratification of relevant conduct as this court has done

(see
Cyberscene Ltd and Others v in Kirch Internet and Information (Pty)
Ltd 2003 (3) SA 406 (C).

[26] As
for proceedings by and authority of person acting for Company, there
has to be proof of authority to act for Company in
that a court is
unable to imply such authority from Managing Director’s Affidavit -
see Griffiths
and Inglis (Pty) Ltd v Southern Cape Blasters (Pty) Ltd 1922 (4) SA
249 (C).
This court is satisfied by minutes of the Board of Directors of the
Applicant, a Board elected on 10 November, 2008 that it did
resolve
on 22 November, 2008 to authorize Moeketsi Tsatsanyane to sign all
the affidavits and related documents on behalf of the
Company. On
the contrary, this court is not satisfied that 4^th
Respondent was so authorized to represent the Applicant in that save
claiming that he is Managing Director of the Applicant there
is no
resolution of Directors giving him authority to act on behalf of the
Applicant for the reason that such a requisite Member
of Directors to
give him such authority does not exist. Annexure “A” faulty in
many ways as it is, in no way authorizes 4^th
Respondent to act on behalf of the Applicant.

[27] On
sale of shares, this court has expressed its view articles of
Applicant’s Company restrict transfer of shares to non-members

unless it can be shown that notice of sale having been served on
members the latter showed no interest in purchase of shares in
which
case the shares can be sold to any other person provided
that such sale or disposal be at a price not less than that named in
the notice of sale (Article 25 (c) and (d).
(I have underlined). There is no evidence 4^th
Respondent acted in accordance with Article 25 (c) and (d) of
Articles of the Applicant.

[28] And
while Sachs
v Gilliland and Others 1959 (2) SA 233 (W.L.D)
appears to be authority for the proposition that articles can
restrict transfer of shares to non-members and a view held by Mr.
Potsane
that the Articles of Applicant restrict transfer of shares to
non-members, Moosa
and Lalloo and Another
1956
(2) SA 237 (N)
appears to go in a different direction in that according to Caney J,
duty to transfer shares not affected by provisions in articles
that
shares not to be sold to outsiders without directors’ consent in
that seller only obliged to tender to purchaser shares
with completed
transfer forms, exactly what the transferor has done in the instant
application and Sachs case being a latter case
than Moosa’s case
this court is disposed to follow Sachs’ case particularly because
this court is of the view it is essential
that provisions of the
articles be complied with by reason of their peremptory nature. I
may also add the court’s contention
is fortified by decision in
Suid-Afrikaanse
Vroue Federasie, Transvaal v Thackery NO en Andere
1867 (2) SA 468 (T) where two brothers S and F held shares in the
proportion of 999 to 1 article 11 providing “a share can be

transferred to any member of the company or with written approval of
all to any person but without such approval the share can
be
transferred to any person who is not a member of the company.” The
executor of S estate had offered the shares to F in terms
of Article
11 and F accepted the offer and the applicant averred that the
articles of association conferred no offer to F and in
an application
for a declaratory, Held,
in terms of the Articles of Association … the executor was
competent to make an offer and the application could not succeed
on
the ground that the articles prevented the sale to F and by the same
token this court although this application is not couched
in similar
terms, it is in effect a declaratory and accordingly the court holds
that the sale to 4^th
Respondent of shares by Moshe is irregular in that it contravenes
Articles of Association of the Applicant which forbid sale of
shares
to non-members except where members, though notified, have not shown
interest and the said shares having been sold to non-members
are
subject to ratification by Directors of the Applicant, something
which does not appear to have transpired in the instant application

the 4^th
Respondent having taken an unfair advantage of laws governing
Applicant in the sale and transfer of shares by members of the
Applicant
nor is this court unmindful of the fact that in its view
Moshe resigned in order to put “stooge” director on his place
making
Moshe’s resignation a sham
de jure
and to be disregarded (S
v Jager 1965 (2) SA 616 (A) 622-623). And
further, may I warn, any company which publishes and every director
or officer of a company who knowingly is a party to the
publication
of the name of any person as a director of the company when such
person is not a director, or has not validly been
appointed as a
director of the company, is guilty of an offence.

[29] As
demonstrated above, 4^th
Respondent has not been validly appointed as Director of the
Applicant Company and he is not Director or Managing Director of the

Applicant in that to be appointed there must be proper quorum at the
meeting - see Nortje
v Fransman NO, 1975 (1) SA 532 (C).

[30] I
am satisfied Plaintiff has affirmatively shown the presence of
persons not entitled to be present or being present did not
form a
quorum in accordance with Plaintiff’s Articles of Association and
that by their presence or lack of necessary quorum their
acts and
proceedings proposed and carried would not otherwise have been
arrived at - see Smuts
v Robertson and Others (1863) 45 128 at 136 and especially
Grundlingh v Beyers 1962 (2) SA 131 (W) at 135 and 152.

[31] Mr.
Potsane
has submitted the 1^st
Respondent Maluti Motors (Pty) Ltd is not properly authorized as
there is no authorization to depose to the application and 1^st
Respondent’s affidavit is to be struck off. The court agrees and
1^st
Respondent’s affidavit is accordingly struck off.

[32] The
court accordingly finds:

(a) 4^th
Respondent is not Managing Director of Applicant but its tenant;

(b) Moeketsi
Tsatsanyane to be Director/Chairman of the Applicant;

(c) 1^st,
2^nd,
3^rd,
5^th,
and 6^th
Respondents to be tenants of the Applicant.

[33] In
the result, the application is granted to the effect:

(i) 1^st
Respondent is stopped and restrained from collecting rentals from 2^nd
to 6^th
Respondents;

(ii) 2^nd
to 6^th
Respondents are stopped and restrained from paying their rentals to
anyone save the Applicant at the latter’s business premises;

(iii) 1^st
Respondent is stopped and restrained from claiming any right and
dealing in any way with the Applicant’s rented property situated

Cathedral Area, Maseru urban area near Shell Oil Garage, Main Bus
Stop save, like all tenants, to pay its monthly rentals to Applicant

at the latter’s business premises;

(iv) 4^th
Respondent is directed to continue paying his monthly rental to the
Applicant herein;

(v) Costs
of suit.

[34] In
course of argument Mr.
Potsane
informed the Court the Registrar of Companies refused audience with
the new directorship of the Applicant; even if this is not
so, the
Registrar of Companies is to be furnished with this judgement for
proper action.

G.N.
MOFOLO

PUISNE
JUDGE

For
the Applicant : Mr. Potsane

For
the Respondents : Mr. Chobokoane