Russo and Ors v Valenza (Appeal 107 of 1998) [1999] ZMSC 69 (2 March 1999)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO. 107 OF 1998 HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN: ARMANDO RUSSO 1ST APPELLANT MAURO RUSSO 2ND APPELLANT ROBERTO RUSSO 3RD APPELLANT FRANCESCO RUSSO 4TH APPELLANT DRILLAFRICA COMPANY LIMITED 5TH APPELLANT DERUKE TEE 6TH APPELLANT AND GUISSEPPE VALENZA RESPONDENT CORAM: NGULUBE, CJ, SAKALA AND MUZYAMBA, JJS. On 1st December, 1998 and 2nd March, 1999 For appellant - G. Kunda, of Kunda and Company For respondent - D. E. Ndhlovu, of Luso Chambers. JUDGMENT Ngulube, CJ, delivered judgment of the court. On 1st December, 1998, when we heard this appeal, we allowed it with costs. We ordered that the interlocutory injunction obtained below to prevent normal company meetings be discharged but on the condition that no meeting should attempt to vary or touch upon issues of directorship or shareholding which issues were the subject of the pending litigation. We said we would give our reasons later and this we now do. The respondent is the plaintiff in the action and the appellants the defendants. The endorsement on the writ reads: "(a) The Plaintiffs claim is, as a shareholder in Drillafrica Company Limited for an account of all the income and expenditure of the said Company from 19th July, 1993 up to the date of this writ and further that similar account should be rendered in respect of the 2nd Defendant. (b) An Order of restitution to Drillafrica Company Limited of all the moneys paid by the said Company in respect of the salaries of the employees of the 2nd Defendant; together with the value of all the assets and materials put into the 2nd Defendant by Drillafrica Company Limited. (c) An Order compelling the 1st and 3rd Defendants to comply with the provisions of the Articles of Association of Drillafrica Company Limited to audit the books of account and to declare dividend for the period 1993 to 1997 and pay out to the Plaintiff the dividend due to him. (d) An order of restitution against the 1st Defendant and his sons to pay back to Drillafrica Company Limited all the moneys taken out of the Company to pay for the Construction of A. Russo's house, money transferred into the personal accounts of the said persons together with all company money spent on their domestic needs. (e) A declaration that one PERUKE TEE ceased to be a shareholder in Drillafrica on 10th June, 1997. (f) Further and other relief. (g) Costs. The plaintiff had at first obtained an interlocutory injunction freezing the bank accounts of the Company Drillafrica Company Limited in which the plaintiff and the natural persons who are defendants are shareholders and directors or alleged shareholders and directors. This Order was, by Consent, discharged and the discharge enabled, among other things, the defendant Mr. Tee whose shareholding is disputed by the plaintiff to nonetheless continue to be a signatory to the bank accounts as shareholder and director. The subsequent order of interlocutory injunction appealed against restrained the Russo's from attending any meetings whatsover of the Company Drillafrica Company Limited, thus effectively paralyzing the operations of the board of the Company and the conduct of normal business management. This was the injunction appealed against. We have in the past given guidelines as to when and in what circumstances it would be appropriate to grant an interlocutory injunction. The cases include Shell and BP Zambia Limited -v- Conidaris and Others (1975) ZR 174 and Turnkey Properties -v- Lusaka West Development Company and Others (1984) ZR 85. In terms of the principles therein discussed which it is here unnecessary to repeat, it was neither necessary nor justifiable to have to restrain the conduct of all normal business meetings when the action is essentially for an account and to resolve shareholding disputes. We are aware that there has been a falling out between the parties with the Russo's even trying to sideline or exclude the respondent plaintiff who was even allegedly suspended from employment by a disputed managing director. These personal differences could not support paralysing the company in the fashion proposed by the terms of the second injunction. It was for the foregoing reasons that we allowed the appeal in manner already indicated. M. M. S. W. NGULUBE SUPREME COURT JUDGE. E. L. SAKALA SUPREME COURT JUDGE. W. M. MUZYAMBA SUPREME COURT JUDGE.