Jonga v Napole Ukana Breweries Limited (Civil Cause 1418 of 1992) [1993] MWHC 12 (18 May 1993)

iu lf 'Y I IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY CIVIL CAUSE N0.1418 OF 1992 JONGA (MALE) PLAINTIFF -and -UKANA BREWERIES LIMITED DEFENDANT MWAUNGULU, REGISTRAR Mandala, Counsel fur the Plaintiff KasambaJa, Cuunsel for the Dc[cnrl;crnt 0 R D E R .}This is a summons by the plaintiff for summary judgment }der 14 of the Rules of the Supreme Court. For reasons }11 be apparent later, it may be important to reproduce :,1l rule 3 ( l) : "!i, 111Unless on the hearing of an application under rule l either the Court dismisses the application or the defendant satisfies the Court with respect of the claim or part of the claim, to which the application relates that there is an issue or question in dispute which ought to be tried or that there ought for some other reason tu be a trial of that claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed. 11 ,.vision altered the practice on summary judgments which fted for over a century. Prior to this rule the ff had to show that the defendant had no defence or the ,·. Ft had to show that there was an issue or question in -~ Under Order 14 rule 3(1), however, the Court may deny plntiff his entitlement to judgment even where the . a.'li)t has raised no substantial issue provided 11that there -~o6gtrtJ.ihr some other reason to be a trj_al of that claim or iiar ''"101/ j There are aff1.davi ts in support and in opposition to pJication. 2/ .... -? -, The plaintiff was appointed Managing Director uf the nt Company in January, 1989. He was one of the al shareholders. He sold his shares in the Company. On h of November, 1992 he took out this action tu claim ation amounting tu K53,693.92, being sums due to him . was a Director of the defendant Company. His clajm is n a managem~nt meeting that took place on the 31st uf 1989 where 1t was resolved that Directors would be d to house rent of Kl,000.00 per month and telephone s of up to K750.00 per month. When he retired from the rship in 1990 he wrote to the Company on 25th of March, manding the monies. All these issues arc raised 1n the ff's statement ur claim. ;!f; ,~ The dcfendant.s put. 1n an amended defence 1-n wh1-ch Lhcy ~~ ~d that the pJa1nL1ff was their Managing Director aL some -~~-.~ f,They deny that there was a meeting on 31st March >i?'l:.~'$}::Jly-~ng that the sums claimed by the plajntiff be paid tu ~~;-,qectors of the Company. They also claim that the sum of +:}5,~ •}:,~,?X-OO appearing in the Directors Account was a ploy to ig':.~r evade tax. They also allege that the plaintiff who ~•ear'7.minded it and promulgated, this was aware that no monies lj/~e paid out tu Directors. There is a counter-claim 1n ··c,;.h jhe dcfendan ts arc c la1ming the sum of KS, 000. 00 for a it,ril;>;:t,or vehicle which the plaintiff took away when leaving the i:.s!P'., a_nt Company. There is also a claim for KS, 075 .14, being ,' ~-!:W 1~unt the defendant paid on the plaintiff's behalf when ~riff executed against the plaintiff. • .lfJ}• '~ :\; The affidavits in support of the application and in p fion to the application verify the facts as postulated in · e~ 1:!i ~ad in gs . In my v i e w , u n con di ti on al le ave to defend il"~l\?[l'f(i·i e gj_ven to the defendant. I think I state the t:prin'~J.1le correctly when 1 say that where there is serious , di sp:utGJ as to the facts in a particular case the rightful ):·~. OU£;.$~.lis not to give the plaintiff the judgment but rather to ~giy1~lt.) defendant the right. to defend himself so that the . 'plai[ktl·ff can clearly establish his case and the Court be given ·,/he1!9'pqprtuni ty to decide the fact after hearing the defendant I .and·wtth. plaintiff. I would have thought that this is well L,kno.wn:,. but if any authority is needed then Saw v. Hack in ( 1889) . ,fl ' ' .1,(•~ ,: 1 . . _'5~,'I,\L I it 7 2 is such authority. ~¥.., J ';.';{\. ' ~!i:1-<,": ,, . · In this case the cl aim is based on a management mce ting ~pf ~he13lst of March, 1989. On the face of it Directors of a ~90.mpap~ cannot claim remuneration. Dunston v. Imperial Gas l!Ligh~~and Coke Company (1831) 3 Band Ald. 125; Harton v. West 0Coc~~R~ilways (1883) 23 Ch. D 654, 672. But the Articles of t. 1:f.\'ss0:0i1tion usually provide remuneration to Di rec tors. In this ,~ca,s~ttft e Articles of Association did so provide. It appears to l. · ,\ :.t1t f' . A ;,•! 3/ .... " :i . ;, .-,."'. ~., n: ,t-,:., .f. ~ ... ::_~ -~.,. ;f 1' rf ! ;;~~ .·; ,,,? '·~-... • ~lrr.i: 'q , .. ,.,•~, !D ''#~. '.:':'f ·~ . -~, -3 -~?t t;~ '~ im,_~_'4'J)}<if_ this 1s whnL L~w plcu11l.1 ff WcJ.nLcd Lu c-,ay in Uic urw I (car \P~~ad1ng in paragraph 2. This seems to be confirmed by }pl·~,.ag'r-aph 2(b) of the affidavit in support of the applicat1.un. !T.g~f-ctJif e ndan t, howcve r, tool< real i ssuc that lac I< or c Jar 1 ty in ~pari,9-graph 2 of the s ta temen t of cl aim, he thought, and I dun' t ,' _I')\""·.,> , ,,P!1_9_8'lft;tand why, 1s 3 scr1ous legal issue wh1ch the Court shuuld f~S~ql,v~1• I must cunfcss that it must have been obvious to the t,d~ftnctant that the" pla1ntiff would not have intl;nded that Lhc 'A'P.ticles of Association would get remuneration. Assuming that ,. i~. JI\ ,;..,, V-~~;vas 1;;1 n fact a l cgal J_ ssue that Articles of Association would fr:119\Bl·vti1. remuneration, I would have thought thjs is a very "'s"I'M le JihegaJ qucs tion and whuly unarguable that I would nut ;.[l}i'7e·,gi¼cn leave tu dc,fend. (Cow v. Casey (1949) . L KB 47Ll, ,4,8 .. ~~• f9} lowcd and app l 1cd j n E:urupean Asian Ban_~ /\G v. Pun j__;-::.l_l'~ Manq· $ind Bank Nu.2 (J9U:3) 2 /\11 E. R. SOS, SJb. J Thlc Art1c\(;S ';of, Associatl.lm, accurcJ1ng Lu Lhc pleadings and Lhc afC1dav1 l.r;, 7P·r,}Slrict€{d for rcmuneraL1on. ArL1.cles of Assoc1at1.on cummunJy ;p '·o"'. Vide: that Di. rec l:ors shaJ l be en t 1 tl ed to sue h remunc rat1 un ~'.a'i:r'.'):st1al-l be voted to them at a general meeting. If that is the tp'a,e;e ti;len there must be a resolution duly passed by the Cmnpany J;1:~-&~that~· effect. 1r, however, Lhc rcmuneral:Jun 1s appruvcd by l!f"" ? ,, :{~~1fsh~rcholders ent1Lled Lu at.tend and vote at a generc. Jl ~m.~_~ing, this has the same effect as a resolution duly passed ibbY}"'rthe, Company at a general meeting. Re: Duomat i c Ltd. ( 1969) 2 !chJ 365 and Cane v. Jones and Others (1981) l All E. R. at page 1§>3.~-·. _ In some cases, however, the resolution of the members !agh;rovtng the accounts may be sufficient authorization, so long ;~a$,~the-'.members are aware that they are being asked to apporve f~. D~;-~counts, they arc also being asked to approve the 1~,t'~U\Uhe.ration. (Felix Hadley and Co. Ltd. v. Hadley (1897) A. C. ~gif!~-.r1-A. JJ. It j_s not clear to me in this case, e1 ther from the fp'l'ead;lr}gs or the affidavits, whether remuneration was to be ,~f. 1.. . ,ti " . tftvote~.' at a general meeting. I may concede for purposes of this .\cas~:t at probably this was not the case. The case might very f~we}.l:'\bl\, as 1s always the case, that the amount of remuneration i1to ~~. 1aid t? OJ.c tors 1. s a matter of internal management. That 'twast~th~· case,,t(Burland v. Earl (1902) A. C. page 83, Normandy v. ~}:Ind.~Woope and Co. Ltd. ( . I. 908) J Ch. page 84) . This is whc re /j''the,,\~is'pute arises-:--·-1'~~--,\·~i:· '! jH i ::i{i};.: .f. The plain tiff has exhibited the minutes of, I think, a ~man~ie~ent meeting held on 31st March, .1.989. The minutes arc ,-·s1gn/id'}by the plaintiff as Chairman and a Mrs A. A. Bowler as ); .. • C -~ ttsecr:etq,I'Y. It does appear as this was not a Board meeting LbecausQ the Board was to be informed of this meeting. The i~minub:~s. of this meeting show that the rental and the telephone -~ills~~ere to be paid by the Company as the plaintiff claims. f~Jf this was all, I would have given judgment for the plaintiff. 1rrhe,;?,.e11.endants, however, d:Lsputc thl; authenticity of these iii .1i~ .... 'i\c r l <+-~'I l.,_;;: ,.}-,, . ~if ~ j".~\ •itt ,, , ;fi ·,_1-..,·. I' ~ ,, ., 4/ .... -4 -G!, _tt.,::. ~-:;f,, .· \~s. They state that the signature of the. secretary is not , ~ne. They have proffered another set of signatures Lo ~ ~ t 1 • :~ff-iJ)Ve this. The defendants further allege that this meet1ng ilJ,'efilp took place at all. They contend that the actual mel~t1ng f A /, ·I:' .,he~~f: the amount of remuneration was decided touk place on the OtH~f January, 1990. There, there was no suggest1on that ~~,~"'\;--~: . , 1:epbone b 1 l ls would be pa1 d. Of course, they do not seem tu 1 ' •) ~~pµ~e that the rentals of Kl,000.00 were payable. They ;ff~e,nd, however, that those rents were paid to the plaintiff ~c9raing to their journal/ledger entries. They have pruduced he~mjnutes of the same meeting. In my view, this dispute ennoJ be resolved by looking at the affidavits. The matter ·µ$t. io to full trial so that the plaintiff can be :.kc:r.o.~sfexam1ned un these matters. These are ['ac Ls whj_ch by :i,f~,ne1r;.:inaturc cnt1tlc the defendant to 1ntcrr·ugatc the ft:!'P. Jiai n.t if f. : ~•' ' .. ifi ·~•'> :~i! ~ ~ There is more than that. The plaintiffs are claiming a further sum of K29,397.00 as money standing to their account which, the defendants must pay. This money j_ndeed seems to be '.>I • spanding to the plaintiff's account according tu the f1nal •.. aqcougts prepared by the defendants' Accountants, Graham Carr & .. !-,r .. ·-tV;JJ:pmpany. The defendants argued that this money was in fact not ~!~~yable to the plaintiff. They argue that the money was put · ·tito;; the Directors Account just to inflate the lj_abil1 ty of the 8mpany in order to evade tax. They contend that 1t was very .' .. -1,ec;r ·;to all Dirccturs including the plaint1ff that these Jii-:~ ' ~·-,, -. {~l»?11l.e~J; would not. be, payable. I th1.nk that these are matters on it~ wh~,qp ~ithe pl a1 n t1 ff should be in te rroga ted. See Har r1 son v. ·· otten;· Heim (1878) 26 WR 362. ,· 'i-':11\~~1 As I pointed out at the beginning, there are some ,,f,mag~:Cal words that have been introduced in rule 3( l) of Order t-014: .. nthat there ought for some other reason to be a trial". In .]\Mil'es•ti\f. Bull (1968) 3 All E. R. 632, 637 Mcgarry, J. consj_dered :i~ th::if~{ect of these new words. He said at page 637: Si,c' ,. ,.•S¥.~ _'.p "If the defendant cannot point to a specific issue ''.it,· '•·~·· ! which ought to be tried, but neve rthe less satisfies /ifr.~·. e,;. the Court that the re are circumstances that ought ·.;,i.{ii, ,I; to be investigated, then I think those concluding ~~-j words are involved. There are cases when the .:t;J;\. ~ plaintiff ought to be put to strict pn)of of hj_s l1} ~ claim, and exposed to full investigation possible , ;,i;~\; ~ at a trial; and in such cases it would, in my ;'~)k j judgment, be wrong to enter summary judgment for the ·.~;;,,. f, plaintj_ff." ....... ~i;.,, 1 ~·~}/;: r·· kin this case if the m1nutes of the meeting in which the iff relics arc questionable then this is a matter that S/ .... -s -' " ',· ?, , ,,, .'fC ·_g; full 1nvestigaL1lrn aL Lhe trial. In thjf, cuse thl:r'(: 1 it , i'.a} than that. If, as the defendants allege that certain [11Q.!1~,{l•~0ere put 1nto the DJ rectors Accounts to inflate Ul\'at:,f.f:1,\ty in ordt-'r to evade or avoid tax and 1t was not i\n'tenctfct that these rnornes would be paid out to the Di rec turs and that the plaintiff himself master-minded that decision, 1t ,).s,diff.icult to Sl;\o how he should claim that money on summary ,judgment without fully inquiring whether this was so. This, in hT\_y; • i.eWi.' would be covered by the final words in Order 14 rule •~_(_). I. """ ,\.' Finally, there 1s a counter-claim to the plaintiff's The claim is in fact connected to the plaintiff's He wants to get dues payable to him when he was a ·'ni'rector of th8 Company. The Company is allcgj_ng that he Louk awfy with him Company property and at one stage the Company had :toJbail him out when the Sheriff' came. I think these claims Jpr9perly relate to the plaintiff's action. In Zocdan Co. v. ~Barrett (1882) 26 SJ 657 Lord Justice Cotton observed that ·although a counter-claim is for many purposes a cross-claim it \·ought to be treated as a defence: for purposes of Order 14. I would, therefore, djsmiss the application 1n th1s e_~nd give uncond1t1onal leave to the defendant to defend tion. ! ! < .,,. , t Within 14 days the re wi 11 be discovery by exchange of ts,Of documents verifi8d by affidavits. This will be ~~~~d by inspection 14 days thereafter. The case should be ~~o~n by 30th June, 1993. The case will be tried by a Judge ta jury at the Principal Registry. ' r ' • The parties can appeal to the Judge 1n Chambers. 1n Chambers on this 18th day of May, . . -\ --... -----------.. ---,/ I' . I · I·· REGI S_TR-AiZ -) ,' ( / ' ' 1993, at