Bluebird Investissements SARI v Ramadoss & Ors (MA 114/2017 (arising in CC 37/2014)) [2018] SCSC 8084 (20 February 2018)

IN THE SUPREME COURT OF SEYCHELLES Civil Side: MA ] 14/2017 (arising in CC37/2014) In the matter of Bluebird Investissements S. A. R. L, a limited liability investment company incorporated and existing under French law and in the matter of an application under section 20 I of the Companies Act 1972 12018]SCSC I :fcJ_ BLUEBIRD INVESTISSEMENTS S. A. R. L Petitioner Versus VAITHINATHASAMY RAMADOSS First Respondent EMERALD HOLDINGS COMPANY LTD Second Respondent SARAH ZARQANI RENE Third Respondent SEYCHELLES INTERNATIONAL SPECIALIST MEDICAL CENTRE LTD Fourth Respondent MUKESH VALABHJl Fifth Respondent THE REGISTRAR OF COMPANIES Sixth Respondent Heard: Written submissions Counsel: Mr. Chang-Sam together with Mr. Chang-Leng for the petitioner Mr. Ferley for the 151respondent Mr. Hoareau together with Mr. Chetty for the 2nd, 3rd and 4th respondents Mrs. Valabhji for the 5th respondent Mr. Chinnasamy for the 61h respondent Page 1 of 12 Delivered: 21 February 2018 ORDER ON MOTION Robinson J I. THE PARTIES 2. Mark Inch the Petitioner is the "gerant" of Blue Bird Investissements S. A. R. L of "Numero d'immatriculation 332 652 148 R.eS Paris". The First and Second Respondents, Dr. Vaithinathasamy Ramadoss and Emerald Holdings Company Ltd, respectively, incorporated Seychelles International Specialist Medical Centre Limited, the Fourth Respondent, on 15 November, 2006, under the Companies Act 1972. The First and Second Respondents hold between them the majority of the shares of the Fourth Respondent and the First and Third Respondents are the sole directors of the Fourth Respondent. On 27 March, 2009, the Petitioner was issued with a share certificate for 500 shares of the Fourth Respondent of nominal value of Seychelles Rupees 10 each. On 21 March, 2015, the court made order directing the Petitioner that Mukush Valabhji the Fifth Respondent and the Registrar of Companies the Sixth Respondent should be made Respondents to CC37/2014, in accordance with Rule 5 (1) of the Companies (Supreme Court Proceedings) Rules 1972 (SI 93 of ] 972). The Companies (Supreme Court Proceedings) Rules 1972 (SI 93 of 1972) are hereinafter referred to as the "Rules". 3. 4. THE BACKGROUND CC37/2014 is brought under section 201 of the Companies Act 1972. CC37/2014 is supported by an affidavit sworn, on 4 September, 20 I4, by the Petitioner, exhibiting miscellaneous documents marked "BB I" to "BB9". The Petitioner complains that the affairs of the Fourth Respondent are being conducted by the First and Second Page 2 or 12 Respondents as the majority shareholders and the First and Third Respondents as the sole directors of the Fourth Respondent, in a manner, which has, as a result, prejudicially affected the interest of the Petitioner and that of the other shareholders. 5. The particulars of the Petitioner's complaints are that, since its incorporation, the Fourth Respondent has failed to comply with the following requirements of the Companies Act 1972 by, among others- "(i) not obtaining the authorisation of a general meeting to increase the share capital of the Company and to dispose of its leasehold title no. V 12348 that is substantially the whole asset of the Company; (ii) not holding annual general meetings; (iii) not submitting annual returns; (iv) not properly altering the nominal share capital of the Company; (v) not lodging a return of allotment within the prescribed time; (vi) generally withholding information from the shareholders; and (vii) managing the affairs of the Company as if it were their private affairs.". 6. The Petitioner seeks the following orders from the court- "(a) for an order appointing a person to investigate into the affairs of the Company and the conduct of the directors of the Company and to report to this Honourable Court; Page30fl2 (b) for an order requiring the Respondents and any other person having in his or her possession or control any record, information or document belonging to or relating to the affairs of the Company to disclose the same to the inspector and to allow the inspector to make copies or take extracts from the same; (c) for an order preventing the disposal of or dealing with any assets including but not limited to any bank account or rights in land belonging to the Company until after the report of the investigation; (d) for an order declaring any transfer of assets of the Company made without proper authority of the Company void and that the assets be returned to the Company forthwith and in the case of the leasehold title in V 12348 that the land Registrar rectifies the Register accordingly; (e) for an order that all persons holding any assets of the Company shall forthwith return the same to the Company; (f) for an order that any person found to have acted contrary to law with regard to the conduct of the affairs of the Company be dealt with as the law prescribes and for any person who has suffered in consequence of the conduct of the first-mentioned person to be paid compensation by the first mentioned-person; (g) for an order for the Respondents, jointly and severally, to refund the Petitioner the amount it invested in the Company together with interest at the rate to be determined by this Honourable Court from the date of the Investment; (h) for an order that the Respondents shall jointly and severally be liable for costs of this petition; Page 4 of 12 (i) for any other order as the court may deem fit In the circumstances.". 7. On 10 March, 2015, on the day of hearing of CC37/2014, Counsel for the Petitioner informed the court that the Petitioner seeks only orders (a) and (b) of the prayer of CC37/20 14. On that date the court dealt only with a plea in limine litis raised by the Second, Third and Fourth Respondents through Counsel. The court stated in its Order, dated 31 March, 2015, on the plea in "limine litis", that "the substantive issue of whether or not the court will grant orders (a) and (b) is meant for an eventual determination". 8. THE PRESENT PROCEEDINGS 9. On 4 May, 2017, the Petitioner through Counsel files a Notice of Motion supported by an Affidavit praying the court to make the following orders - "1. In particular, with regards to paragraph (b) of the prayer of the Petition, the Petitioner seeks the following directions - (i) For the Court to call the Inspector to disclose whether he had access to all the necessary information and documentation to prepare his report, and; (ii) If not, what additional information he would have required for this purpose; and (iii) To ask the Court to direct any persons including, but not limited to, the Respondents, to adduce the necessary information and documents in their possession or control in connection with the affairs of the Company to the Petitioner. 2. With regards to paragraph (c) of the prayer of the Petition, the Court's responses thereto. Page 5 of 12 3. with regard to paragraph (d), (e) and (f) of the prayer of the Petition, the Applicant, as the Petitioner under the Petition, in Iight of the findings of the Inspector in his report, and all the information that may subsequently be provided in the above, seeks the directions of the court under rule 5 of the Companies (Supreme Court Proceedings) Rules 1972 with regard to - (i) The identity of any person who has acted contrary to the law with regard to the conduct of the affairs of the Company; (ii) The identity of any person who has suffered on consequence of the conduct of the person referred to in paragraph (i) above; (iii) The amount of compensation, if any, which a person referred to in paragraph (ii) above is entitled to and from whom; 4. Any other direction or order that the court may deem fit, all with costs ... ". 10. The Petitioner avers the following in his affidavit in support of the Notice of Motion - "... I, Mark INCH, of Barbarons, Mahe, make oath and states as follows 2. Following the Petition, the Registrar of Companies, on the 14th April, 2015, wrote to Counsel for the Applicant that she would appoint an Inspector, but it was a year later, after a lot of pleadings by the Petitioner, (Please see bundle of correspondences attached and produced herewith and marked as Exhibit BB2), on the 15th March, 2016, that she decided to appoint an inspector, in person of Bernard Page 6 of 12 POOL, and on the 19th September, 2016, almost 6 months later, Mr. POOL present the Report attached and produced herewith and marked as Exhibit BB3. 3. The Applicant finally obtained a copy of the Report in January, 2017. As usual, as with all its previous demands to the office of the Registrar of Companies, the Registrar was slow to react and appeared to be reluctant to accede to a legitimate request of the Applicant and it was only after numerous letters (a bundle containing a copy of the correspondences referred to herein is attached and produced herewith and marked as Exhibit BB4) both from the Applicant and its Counsel, that Counsel for the Applicant received the attached copy of the Report. 4. In his letter of the 30'h November, 2016, to the Registrar which letter was written on behalf of the Applicant specifically requested that copy of the Report be sent to the Court. A copy of the letter is attached and produced herewith and marked as Exhibit BBS. 5. A copy of the Petition is attached and produced herewith and marked as Exhibit BB6 ... ". II. All Respondents oppose the Notice of Motion supported by an Affidavit and each file an Affidavit in Reply. 12. In the main, the First respondent contends, with reference to paragraph 3 (i), (ii) and (iii) of the prayer of the Notice of Motion, that the court should hear CC37/20 14 before making any orders with regard to the said paragraph 3. 13. The Second, Third and Fourth Respondents contend that the Notice of Motion is not in accordance with the law and as such it should be dismissed by the court. They did not file written submissions in these proceedings. Page7 or 12 14. The Fifth Respondent disputes only paragraph 3 of the prayer of the Notice of Motion. He contends that the request made by the Petitioner in paragraph 3 of the prayer of the Notice of Motion falls outside the ambit of rule 5 of the Rules. 15. The court has considered all documents and materials on file. The court states the relevant provisions of the Companies Act 1972. 16. Section 20 I of the Companies Act, so far as relevant provides- "201-{1) Any shareholder of a company who complains that the affairs of the company are being conducted in a manner which is oppressive or unfairly prejudicial to some part of the shareholders (including himself) or, [... ] may make an application by way of petition to the court for an order under this section. (2) If on the hearing of the application the court is satisfied either: - (a) that the applicant, either alone or together with other shareholders, has been treated oppressively in one or more respects over a period of time, or that action has been taken by the persons who are or were in control of the affairs of the company, being action which was known by them to be likely to prejudice unfairly the interests of the applicant, either alone or together with other shareholders; or (b) the persons who are or were in control of the affairs of the company have been guilty of serious misconduct or breaches of duty which has or have prej udicially affected the interests of Page 8 of 12 the applicant, either alone or together with other shareholders; the court may, with a view to bringing to an end or remedying the matters complained of, make such order as it thinks fit, whether for regulating the conduct of the company's affairs in future, or for the purchase of the shares of any shareholders of the company by other shareholders of the company or for the acquisition of any such shares by the company and, in the case of such an acquisition by the company, for the reduction accordingly of the company's capital, or otherwise.". 17. Rules 3, 4 and 5 (1) of the Rules, enabled by section 340 of the Companies Act 1972, provide- "3. Except in the case of applications by way of appeal to the court from a decision, order, act or omission of the Registrar of Companies and of applications made in proceedings under Part VI of the Ordinance, every application to the court under the Ordinance shall be made by petition in accordance with these rules. 4. The petition, which must be filed in the registry, shall be signed by the petitioner or his attorney. It shall contain a short statement of the facts and of the points of law which are for determination by the court. 5. (1) At any time after the filing of a petition the court, may, by order, give such directions as to the proceedings to be taken or the procedure to be followed before or at the hearing of the petition as it thinks fit including, in particular, directions- (a) as to who should be made respondent to the proceedings; Page 9 of" 12 (b) as to the manner in which service shall be effected on any party, including service by newspaper advertisement; (c) for the publ ication of notices; and (d) for the making of any inquiry.". 18. The court did not make order that the affairs of the Fourth Respondent should be investigated by an inspector appointed by the Sixth Respondent. The Sixth Respondent ordered an investigation into the affairs of the Fourth Respondent and appointed an inspector under section 183 (2) of the Companies Act 1972 at the request of Bluebird Investissements S. A. R. L.. The Petitioner's affidavit avers that it obtained a copy of the inspector's report in January, 2017. Moreover, the Petitioner's affidavit avers that it requested the Sixth Respondent to send a copy of the inspector's report to court. 19. Paragraph I (i), (ii) and om of the prayer of the Notice of Motion 20. Does the court have jurisdiction to direct the inspector with regard to paragraph (1) (i), (ii) and (iii) of the prayer of the Notice of Motion? It is not clear to the court under which provision of the Companies Act 1972 the Petitioner relies. Section 188 (1), (2) and (3) of the Companies Act 1972 provides - "188 (1) It shall be the duty of all officers and agents of the company and of all officers and agents of any other company or body corporate whose affairs are investigated under section 187 to produce to the inspector all books and documents of or relating to the company or, as the case may be, the other company or body corporate, which are in their custody or power, and otherwise to give to the inspector all assistance in connection with the investigation which they are reasonably able to give. PagclOorJ2 (2) An inspector may examine on oath the officers and agents of the company or such other company or body corporate in relation to its business, and may administer an oath accordingly. (3) If any officer or agent of the company or such other company or body corporate refuses to produce to the inspector any book or document which it is his duty under this section so to produce, or refuses to answer any question which is put to him by the inspector with respect to the affairs of the company or other company or body corporate, as the case may be, the inspector may certifY the refusal under his hand to the court, and the court may thereupon inquire into the case, and after hearing any witnesses who may be produced against or on behalf of the alleged offender, and after hearing any statement which, may be offered in defence, punish the offender in like manner as if he had been guilty of contempt of the court.". Underlining is mine It is the court's view that the jurisdiction under section 188 (3) of the Companies Act 1972 is strictly limited to an enquiry into the case and, if thought fit, to the punishment of any offender, who had refused to answer questions, in like manner as if he had been guilty of contempt of court. Clearly the court has no jurisdiction to direct the inspector as prayed for by the Petitioner. 21. Paragraph 2 of the prayer of the Notice of Motion 22. It is the court's view that it has no jurisdiction to entertain paragraph 2 of the prayer of the Notice of Motion (paragraph (c) of the prayer of the petition CC37/2014). The court will hear evidence with regard to paragraph (c) of the petition (CC 37/2014) at the hearing ofCC37/2014. 23. Paragraph 3 (i), (iO and (iii) of the prayer of the Notice of Motion Page l l of 12 24. The court considers the directions prayed for with regard to paragraph 3 (i) (ii) and (iii) of the prayer of the Notice of Motion with regard to paragraphs (d), (e) and (f) of the prayer of the petition CC37/2014 under rule 5 of the Rules. The court reminds itself that an inspector only investigates and reports. It is no part of an inspector's function to take a decision whether or not action should be taken, and a fortiori, it is not for the inspector to finally determine such issues as may emerge if some action eventuates. (See Re Pergamon Press Ltd - [1970] 3 All ER 535). Clearly the court has no jurisdiction to make the directions prayed for by the Petitioner with regard to paragraph 3 (f), (if) and (iii) of the prayer of the Notice of Motion, under rule 5 of the Rules. 25. In light of the above, it is the court's view that it should proceed to hear CC37/2014. 26. THE DECISION 27. For the reasons stated above, the court dismisses the application with costs. Signed dated and delivered at lie du Port this 21 February 2018. Page 12 of 12