Sarah Nkombo Malambo v Leonard Malambo and Ors (2021/HPC/0284) [2024] ZMHC 107 (21 February 2024)

,' IN THE HIGH COURT FOR ZAMBIA 2021/HPC/0284 AT THE COMMERCIAL REGISTRY _,..__,..,,.... __ HOLDEN AT LUSAKA (Civil Jurisdiction) ANO LEONARD MALAMBO PATSON MWIINGA MAKATHA NGOZA BARBARA SINKOLONGO AUSTIN MALAMBO AUTOFORCE ZAMBIA LIMITED SHAFTEX LIMITED JERSEY MALL PROPERTIES LIMITED PLAINTIFF 1sr DEFENDANT 2ND DEFENDANT 3Ro DEFENDANT 4TH DEFENDANT 5™ DEFENDANT 6™ DEFENDANT 7TH DEFENDANT Coram: Hon. Lady Justice Irene Zeko Mbewe Appearances For the Plaintiff Mr. Chakoleka of Messrs Mulenga Mundashi For the 1st T'h Defendants , 4th , 5th , 6th & : Legal Practitioners NIA Messrs Haimbe and Company For the 3rd Defendant : Mr Sitimela of Messrs Jonas Sitimela and Partners JUDGMENT 11 I Page Cases referred to: 1. Foss v Harbottle (1843} 2 Hare 461 2. John Paul Mwila Kasengele and Others v Zambia National Commercial Bank (2000] ZR 72 3. Pu/brook v Richmond Consolidated Mining Company [1878) 9 Ch. D 610 4. Re RA Noble (Clothing) Limited [1983] BCLC 273 5. Re Saul D Harrison and Sons Pie {1995] 1 BCLC 14 6. Graney Property (Pty) Ltd v Mana/a [2013} ZASCA 57 7. Doyle B. Kapambwe v Machona Kapambwe, Henry Machina and Rose Madina Kamungu CAZ Appeal No. 143 of 2017 8. Costa Tembo v Hybrid Poultry Farms (Z) Limited SCZ Judgment No. 13 of2003 Legislation referred to: 1. Companies Act No 10 of 2017 2. Zamir and Woolf in Declaratory Judgment 2'lli Edition [1.0) Introduction The delay in delivering this Judgment is profoundly regretted. [1.1] This case involves a feud between directors and shareholders following the demise of the majority shareholder. There is finger pointing as to who constituted meetings and passed resolutions appointing directors, including the purported removal of the Plaintiff as director in the 5th and 6th Defendant and company secretary in the 7th Defendant and whether they had the authority to do so. [1.2] The Plaintiff commenced legal proceedings by way of writ of summons claiming the following reliefs: J2 I P age 1. A declaration that the alleged removal of the Plaintiff as director in the 5th Defendant by resolution dated 28th December 2020 was incompetent and a violation of the provisions of the Companies Act No 1 0 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff from the board of the 5'~ Defendant company a nullity; 2. A declaration that the alleged removal of the Plaintiff as a director in the 6th Defendant by resolution dated 28th December 2020 was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff from the board of the 6th Defendant company a nullity; 3. A declaration that the alleged removal of the Plaintiff as company secretary in the 7th Defendant company was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff as company secretary a nullity; 4. A declaration that the affairs of the 5111 , 6th and 7th Defendant companies by virtue of the 1st , 2nd , 3rd and 4th Defendants which led to the alleged removal of the Plaintiff as director of the 5th and 6th Defendant companies as secretary in the 7th Defendant company was carried out in a manner that is unfairly prejudicial to the Plaintiff's interest as a minority shareholder in the 5th • 6th , and 7'h Defendant companies; J3 I Page 5. A declaration that the 15\ 2nd and 3rd Defendant were illegally appointed to the board of directors of the 7th Defendant as there has been no resolution of the company appointing them as such and any changes effected at the Patents and Companies Registration Agency were effected illegally; 6. An order cancelling the removal from the board of the 6th and 7tti Defendant Companies; 7. An order cancelling the removal of the Plaintiff as the company secretary of the 7th Defendant company; 8. An order directing the Defendants to reinstate the Plaintiff as director in the 5th and 6th Defendants as company secretary in the 7th Defendant and ensure that the records of the 51h, 61 \ and 7tti Defendant companies at Patents and Companies Registration Agency are rectified to reflect that correct information that the Plaintiff as a bona fide director in the 5tti and 6th Defendant companies and company secretary of the 7th Defendant; 9. An order of injunction that: 1. The 5th and 6th Defendant be prohibited and restrained from removing the Plaintiff as a director of the 5th and 6th Defendant companies; 11. The 7th Defendant be prohibited and restrained from removing the Plaintiff as director and company secretary of the 7th Defendant company; iii. The 1st to 4th Defendants be restrained from holding out, acting or doing anything purporting to act as J4 1Page directors in the 51 \ 6th and 7th Defendants and the 5th Defendant be restrained from holding out, acting or doing anything purporting to act as directors in the 7th Defendant company {redundant); 10. An order directing that the affairs of the 51 \ 6th and 7th Defendants be conducted in a manner that is not unfairly prejudicial to the interests of the Plaintiff as a minority shareholder, but in accordance with the provisions of the Articles of Association; 11. Costs; 12. Any other relief the Court shall deem fit. [1.3] The Plaintiff is described as a director and minority shareholder in the 51 \ 6th and 7th Defendant companies as well as company secretary in the ?'h Defendant holding 100 ordinary shares in the 5th Defendant, and holds 1000 ordinary shares in the 61 h Defendant company, 250 ordinary shares in the 7th Defendant of the respective company's total authorised shares. [1.4) The 1s1 to 4th Defendants are trustees of the Reeves Malambo Family Trust a body corporate and duly registered under the Land (Perpetual Succession Act) Cap 186 of the laws of Zambia. [1.5] The 5th , 6th and 7th Defendant are private companies incorporated under the Companies Act, No 10 of 2017 (hereinafter referred to as "CA"). JS I Page [1.6] The 3'0 and 4th Defendant are allegedly directors of the 5th and 6th Defendant companies and the 1 st Defendant was appointed as company secretary of the 5th and 6th Defendant company at a meeting held on 28th December, 2020 at which resolutions were purportedly passed. The 4th Defendant was allegedly appointed as director of the 7th Defendant. [1.7] On 8th May, 2018 the 1st to 4th Defendants were appointed executors of the estate of the Late Reeves Malambo who held 1900 ordinary shares in the 5th Defendant company, 4750 shares in the 6"' Defendant company and 9000 ordinary shares in the ?'h Defendant company. [1.8] The Plaintiff avers that contrary to the provisions of the law, the 1st to 4th Defendants sanctioned the transmission of shares held by the late Reeves Malambo in the 5th and 6th Defendants to the Trust without any resolution of the said companies. [1.9) On 28th December 2020, the 1st to 4th Defendant purportedly held meetings of the 5th and 6th Defendant companies respectively at which the meetings resolutions were passed relating to the 5th and 6th Defendant companies and appointing the 2nd Defendant as company secretary of the 5th and 6"' Defendant companies respectively. (1.1 O] According to the Plaintiff, contrary to the law and articles of association the Plaintiff was removed as director in the 5th and 6th Defendant companies without a validly constituted shareholders meeting which requires that at least two members be present and without any resolutions passed at J61 Page such meeting for the removal of the Plaintiff as director of the 5th and 6th Defendants respec1ively. [1.11] That no notice of intention to move a resolution to remove her was ever issued and as such did not have an opportunity to be heard. The article of association requires two members to convene a meeting but the meetings convened to determine the removal of the Plaintiff purportedly only had one shareholder present [1.12] The Plaintiff was removed as the company secretary in the 7th Defendant without any company resolution. That the 1•«, 2nc1 and 3rd Defendant were illegally appointed to the board of directors of the 7'h Defendant and there has never been any resolution of 1he company appointing them as such. [1.13] The affairs of the 5th , 6th and 7th Defendants have been conducted by the 1 st to 4th Defendants in a manner 1hat can be considered as bad faith and unfairly prejudicial to the Plaintiff amounting to a breach of the provisions of the CA and articles of association. [2.0) 3rd Defendant's defence [2.1] Basically, the 3rd Defendant avers the 4th Defendant was never appointed as executor. Resolutions were passed in respect of the 5th and 6th Defendant and mediation settlement order to effect the transmission of shares and further that valid meetings were constituted in that regard. J7 I Page [2.2} It is averred that the Plaintiff was not validly appointed as director and she acted alone for one year and joined by Lydna Mataka as director who she appointed alone without a valid meeting and resolution to that effect. The threshold for holding the meetings was met in respect of the 5th and 6th Defendants. [2.3] According to the 3"' Defendant, there were resolutions passed to remove the Plaintiff from the 7th Defendant as director and valid meetings were constituted by the majority shareholders of the subject properties. That all along the Plaintiff's conduct amounted to oppressive conduct which has been prejudicial to the affair to the 3rd Defendant. (3.0) 1•1, 41 \ \ 6 th and 7th Defendants defence and counterclaim (3.1] The said Defendants aver a resolution was passed to conform to the legal requirement that a company should have at least 2 directors and the 1st and 4th Defendant took the said action in their capacity as trustees. [3.2) That the removal of the Plaintiff as a director of the 5th Defendant and 6th Defendant was done without their consent or knowledge. It was not their intention to remove the Plaintiff from any other companies but the only intention was to rectify the issue of having one director. [3.3] The Defendants aver the 1st Defendant was appointed as director of the 7•n Defendant to ensure the latter was in compliance with the requirement that a company has at least JBI Page two directors and any anomaly if any regarding the appointment could be remedied by rectification. They deny acting in bad faith or unfairly as they are not in control of the said companies since the Plaintiff assumed control sometime in 2018. They admit holding a meeting was held on 28th December 2020 with shareholders of the 5th and 6th Defendant companies but deny removing the Plaintiff as director in the 5th and 6'h Defendants. [3.4] It admitted two new directors were appointed and that 1st to 4111 Defendants as trustees of the Reeves Malambo Family Trust are personal representatives of the late Reeves Malambo and as such the shares held by the latter in the 5th , 6th and 7th Defendants devolved on them by transmission hence they are entitled to take the necessary action to protect the assets of the estate pending distribution. [3.5] They have never had the intention to remove the Plaintiff as director of secretary of any company and have no issue with her continuing in such capacity as long as the proper procedure is followed to appoint a second director. (3.6} The 1st to 4th Defendants deny the allegation that the Plaintiff was removed as secretary of the 71!1 Defendant but admits convening a meeting to appoint directors in addition to the Plaintiff in order to be in conformity with the law. [3.7] They admit notices of change of directors or secretaries were filed confirming the appointment of the new directors but aver any filing to remove the Plaintiff as director in the 5th and 6th J9 1Page Defendants were without the knowledge or consent of the 1 &t and 4th Defendants but solely initiated by the 3rd Defendant. [4.0} Plaintiff's evidence [4.1] The Plaintiff adopted her witness statement which embodies her evidence in chief. She produced her bundle of documents. [4.2) In cross examination, the Plaintiff confirmed her date of birth as 21 st July 1998 and is a director in the 5th , 6th and 7'h Defendant. [4.3] She confirmed the 5th Defendant was incorporated in 1997, the 6th Defendant in 2006 and the 7th Defendant in 2015. Her national registration card is 527141/10/1. [4.4] The Plaintiff confirmed holding 100 shares in the 5th Defendant and became a shareholder in 2000. She holds 250 shares in the 6th Defendant and became a shareholder in 2006, and became a shareholder in the 7th Defendant in 2015. [4.5] When shown the notice of change of secretary and director, she confirmed it showed the name Nkombo Malambo and confirmed those are her names but the date of birth and national registration number being 720811 /11/1 did not belong to her and did not know who completed and filed the documents at PACRA on ]1h April, 1999. [4.6] In relation to Autoforce Zambia Limited the 5th Defendant herein, PW confirmed the incorporation was in 2006 and her name appeared as director but the national registration number did not belong to her. She confirmed the documents Jl O I Page were filed on 23rd August, 2006. Similarly, the document appearing at page 128 had her name as a director but the signature did not belong to her. [4.7] In respect to Jersey Mall Limited the 7th Defendant herein, the Plaintiff confirmed the name Nkombo Malambo appeared but the registration number and signature did not belong to her. She confirmed in 2006 at the time of incorporation, she was only 8 years old and did not have a national registration card nor was she able to sign and never had sight of the incorporation forms and never subscribed to the same. [4.8] In 2015, Shaftex Limited, the 61~ Defendant herein was incorporated and at the material time she was 17 years of age. She recollected Reeves Malambo her late father was the managing director of the 6t11 and 7th Defendant and at the material time she was in school having graduated from high school in 2017 and attended university in the United Kingdom from 2017 until her return in September 2020 upon her father's demise. [4.9] The Plaintiff told the Court she was an employee in the 5'\ 61 " and 71!1 Defendant company and was not the managing director. She testified her father had previously shown her the incorporation documents with her siblings and informed them they were directors and shareholders. She confirmed only her name appeared on the incorporation documents and not her siblings. Jll I P age [4.1 OJ She told the Court the incorporation names had Nkombo Malambo whilst her national registration number had the names as Sarah Nkombo Malambo. She denied being a managing director in any of the companies but a director. She returned to Zambia when her father passed on in January 2017 and the family convened a series of meetings but no company meeting was convened. [4.11) When pressed, the Plaintiff conceded said she had no capacity to be a shareholder as she was not of age. However, she no1ed she was a shareholder in Shaftex Limited in 2006 and in the 7th Defendant in 2015. (4.12] In re-examination, she clarified the names of the incorporation documents were hers as appearing on her birth certificate and the address was where she resided with her late father. As to where her authority to ran the companies stems from, the Plaintiff clarified it was from the Patents and Companies Registration Agency (hereinafter referred to as "PACRA") documents which shows her as a director and shareholder. (5.0) 3rd Defendant's evidence (5.1) The 3rd Defendant adopted her witness statement as her evidence in chief. She testified that in December 2020, the personal representatives called for a meeting to discuss the allocation of shares into a trust and to open the office for the late managing director. The Plaintiff was invited in her capacity as the purported director. She maintained the Plaintiff was not Jl2 I Page invited as a shareholder and the attendees were part of the trust that holds 95% shares and were therefore shareholders. [5.2] The 3rd Defendant was unable to respond to the question as to who held the 5% shares but presumed it was a Mr Nkombo Malambo as she had sight of his national registration card though it was not in her bundle of documents. [5.3] She told the Court she was aware of the incorporation of the 5th to 7th Defendant as companies though she was not part of the companies and only saw the documents after incorporation. She presumed Nkombo Malambo was a relative but upon carrying out a due diligence she found he did not exist. She agreed and confirmed that the document at page 124 of the Plaintiff's bundle of documents in the column 'occupation', it referred to a business woman. (5.4] She agreed Nkombo Malambo stated on the incorporation documents had the same residential address as Reeves Malambo. She told the Court a settlement order had been done and a Trust incorporated of which she is a member. [5.5] She told the Court the names of the deceased children are Nkombo Sarah Malambo. Lenesah Malambo, Wanji Malambo, Jayden Malambo and Shuko Malambo out of which Lenesha and Jayden Malambo were her children born in December 2008 and 17th October 2004. [5.6] Relating to the document appearing at page 22 of the Plaintiff's bundle of documents, DW confirmed Wanji Malambo was her late husband's son and Kahumbu was her daughter otherwise J13 I P age known as Lenesha owning 500,000 shares. The 3rd Defendant was unable to confirm whether Nkombo Malambo appearing on the form was the man she had earlier made reference to. [5.7] The 3rd Defendant confirmed her daughter did not sign any consent to be a director of the company nor did she have a national registration card at the time of incorporation of the company as she had no capacity to sign though according to the PACRA documents she was a shareholder and director. [5.8] In relation to Spare Pro Limited, the 3rd Defendant recalled she had not done a due diligence and not attended to it as a Trust, as it was the lawyers who registered the Trust and was not aware Spare Pro Limited had been registered as well. [5.9] The 3tt1 Defendant confirmed Wanji and Nkombo Malambo were shareholders and directors in Spare Pro Limited. In respect to Autoforce Limited the 5th Defendant herein, she told the Court the late Reeves Malambo was running the company with a relative by the name of Nkombo Malambo. [5.1 OJ DW testified she was an administrator of the estate and a majority beneficiary of the estate as she and her children hold about 42 - 43% of the estate and therefore she has an interest in running the companies. She testified the 95°/o shareholding had not been distributed to the beneficiaries and confirmed the Plaintiff is one of the beneficiaries. [5.11] Relating to the company meeting of 28th December, 2020 she maintained the chairperson and secretary called for the meeting however, there was no notice of the meeting issued J14 I Page by the respective company secretaries. She conceded no notice was given to the Plaintiff of her removal as director and company secretary nor was she heard prior to that. [5.12] On the Plaintiffs mother attending the meeting as her attorney, the 3rd Defendant stated the power of attorney was never presented to the 95% shareholders and never presented to the Trust nor was it revoked and did not know in what capacity she attended the meeting. The 3rd Defendant conceded there was no evidence the Plaintiff's mother attended as a member or attorney for the Plaintiff. [5.13] The 3rd Defendant referred to the minutes of the meeting and indicated the Plaintiff had taken the handwritten ones to have them typed and never returned them. She admitted this was not in the pleadings. She could not recall what the articles of association stated on the number of shareholders to attend a meeting. [5.14] The 3rd Defendant testified there was a notice of intention to remove the Plaintiff as director though she never signed off. She maintained they were removing the non-existent Nkombo Malambo from the PACRA documents. This was despite her earlier position that Nkombo Malambo the Plaintiff herein was never a director. The 3rd Defendant admitted she reported the Plaintiff to the police as she had not been paying upkeep for some of the beneficiaries of the estate. [5.15] In further cross examination by Mr Nalishuwa, when pressed as to whether there was an agenda item relating to the removal JlSI Page of the Plaintiff as director since it came up in matters arising, the 3rd Defendant conceded that in the document appearing at page 6 of the 3ro Defendant's BOD, it did not reflect the same. [5.16) The 3rd Defendant confirmed she typed the minutes which were a true reflection of what had transpired at the meeting. She maintained the purpose of the meeting was to remove the Plaintiff from the PACRA documents as she was not a director in the 5th and 6th Defendant companies. [5.17) The 3ro Defendant effected the changes at PACRA based on the minutes and board resolution dated 281 h December, 2020 which never indicated the removal of the Plaintiff as director. The 3rd Defendant denied the decision to remove the Plaintiff was her personal decision but for those who held 95% shareholding. She admitted the PACRA documents were filed by Leonard Malambo and Austin Malambo the 4th Defendant herein. [5.18] When referred to page 4 of the 4th Defendant's BOD where it stated the removal of the Plaintiff as director in the 51 h and 6th t Defendants was without the knowledge or consent of the 1 s and 41 h Defendants, the 3rd Defendant responded in the affirmative with a caveat it was based on what had been read out to her in Court. [5.19] When queried as to whether her earlier statement on the members present at the special meeting agreed to remove the J16 I Page Plaintiff as director in the 5th and 6th Defendant companies, she agreed it was an afterthought. [5.20] When questioned as to whether the Plaintiff was actually a director after all, the 3rd Defendant admitted it was based on what was presented to her in Court. (5.21) Relating to the change of director or secretary form, the 3'd Defendant admitted her signature appeared on the form and none of the other members appended their signature to it. She could not remember the bank account allegedly closed by the Plaintiff and reopened at ZANACO. [5.22) On the Plaintiff's mother attending the meeting, the 3rd Defendant said it was in her capacity as a member and there was nothing on record to indicate it was as an attorney. There was no proxy from the Plaintiff. She confirmed a resolution was passed to remove the Plaintiff as a director though there was nothing in the minutes of 28th December, 2020. [5.23) In re-examination, the 3"' Defendant clarified the shares had not been distributed as each time meetings were called, the Plaintiff was never present. Further, the Plaintiff was not heard on her removal as director or company secretary as she did not appear on the PACRA documents. [5.24] The 3rd Defendant maintained the Plaintiff was never a director as Nkombo Malambo mentioned in the documents was not her. She clarified the removal of the Plaintiff as director was not her personal decision as on several occasions meetings were called and one issue was to resolve the 5% shareholding. J17 I Page (5.25] She conceded the issue of removal of the Plaintiff as director was not in the minutes or agenda as they did not know how to resolve the issue. (6.1] The said Defendants did not appear at trial neither did they file any witness statements. (7.0) Submissions (7.1] The Plaintiff and 3rd Defendant filed written submissions which are insightful and useful, and shall make reference to where necessary. Even though I have not reproduced the written submission, the parties be rest assured, the Court has taken them into account. (8.0) Analysis and determination The Plaintiff seeks the following reliefs: [8.1) A declaration that the alleged removal of the Plaintiff as director in the 5th Defendant by resolution dated 281 h December 2020 was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff from the board of the 5th Defendant company a nullity (8.2) A declaration that the alleged removal of the Plaintiff as a director in the 6th Defendant by resolution dated 28th !18 I Page December 2020 was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff from the board of the 6th Defendant company a nullity (8.3] A declaration that the alleged removal of the Plaintiff as company secretary In the 7th Defendant company was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff as company secretary a nullity [8.4] The Plaintiff seeks several declaratory orders. I adopt the definition of a declaratory Judgment expressed by the learned authors Zamir and Woolf in Declaratory Judgment 2nd Edition, paragraph 1.02 as follows: "A declaratory judgment is a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs. It is to be contrasted with an executory, in other words, coercive, judgment which can be enforced by the courts. In the case of an executory judgment, the courts determine the respective rights of the parties and then order the defendant to act in a certain way........ In a declaratory judgment, on other hand, pronounces upon a legal relationship but does not contain any order which can be enforced against the defendant" J19 I P age In other words, the declaration simply pronounces on what is the legal position. [8.5] The Plaintiff seeks a declaration that her alleged removal as director in the Slh and 6th Defendant by resolution dated 28th December, 2020 was incompetent and a violation of the provisions of the CA and as such, rendering the alleged subsequent removal of the Plaintiff from the board of the 5th and 6th Defendant company a nullity. The two claims are interconnected and shall be dealt with together. [8.6] Counsel for the 3rd Defendant point of contention is whether the Plaintiff was properly appointed as director of the 5th and 6111 Defendant companies and as company secretary in the 7th Defendant company as there was no ordinary resolution passed to that effect. [8.7] Counsel for the Plaintiff argues there was no need at the material time for a resolution as the Plaintiff was a director from incorporation of the said companies and relied on section 12 of the CA where two or more persons may apply to incorporate a company by subscribing their names to an application. [8.8] It is trite law that a director can be appointed at incorporation of a company. It is of importance to note that at the time the \ 6th Defendant companies were incorporated, going by her evidence, the Plaintiff was a minor at the material time and under the repealed Companies Act, Cap 388 of the laws of J20I Page Zambia to qualify for appointment as a director, one had to be eighteen years, which she was not. [8.9] In further argument, Counsel contends that a perusal of the PACRA documents shows the Plaintiff is not the same person stated as Nkombo Malambo as the national registration card number is different from the PACRA printout appearing at page 52 and 49 of the Plaintiff's BOD. [8.10] However I find that with the passage of time, the Plaintiff was treated as a director in the 5th and 6th Defendant companies. On the material before me, I draw the inference that the Plaintiff legally became a director upon attaining the age of eighteen as required under section 92 (3) (a) of the CA. [8.11] In cross examination, at first instance the 3'0 Defendant denied the Plaintiff was a director but later conceded the Plaintiff was a director in the 5th and 61 h Defendant company. This position is confirmed by paragraph 1 of her defence where she admits the Plaintiff was a director in the subject companies. (8.12] In light of the documentary evidence, I cannot accept the 3rd Defendant's evidence on this aspect as she flip-flopped on this issue and in the end her evidence was contradictory and unreliable. [8.13] Interestingly, in paragraph 12 of its defence, the 5th and 6th Defendant allude to the fact that the Plaintiff was director in the 5th and 61 h Defendant companies. J21 I Page [8.14] I accept Counsel for the Plaintiff's submission there is no dispute the Plaintiff was a director in the 5th and 6th Defendant. Having established that the Plaintiff was duly appointed as a director in the 5th and 6th Defendant company, I now move to the thrust of the matter on her purported removal as director in the 5th and 6th Defendant company. 5th Defendant's special resolution [8.15] The issue centres on the special resolution of the 5th Defendant dated 28th December, 2020 and whether it removed the Plaintiff as a director in the 5th Defendant (page 139 Plaintiffs 800}. The document records as follows: "Minutes of the Special resolution of AUTOFORCE ZAMBIA LTD held at our registered office at 11.00HRS on the 28th December, 2020. The Undersigned being the Trustees of the REEVES MALAMBO TRUST and being 95% shareholders in AUTOFORCE ZAMBIA LIMITED here sign the following resolution: PRESENT 1. MR LEONARD MALAMBO 2. MR AUSTIN MALAMBO 3. MRS NGOZA BARBRA SINKOLONGO MALAMBO 4. MS CH/LEKWA MATSOTSO 5. MRS SARAH KAMOTO 6. COL PAUL CHILANGA - Attendee J22 I Page AGENDA APPOINTMENT OF DIRECTORS AND SECRETARY During a Members Resolution meeting of the Company, it was resolved that Directors and Secretary of the company be appointed It was further RESOLVED that NGOZA BARBRA SINKOLONGO and AUSTIN MALAMBO be appointed as the New Directors of the COMPANY and that PATSON MAKA THA MWIINGA be appointed as New Secretary of the COMPANY with immediate effect. There being no other business, the meeting closed at 12.30. Leonard Malambo and Ngoza Barbra Sinkolongo signed as members." [8.16) From a reading of the special resolution, the 3rd and 4th Defendant were appointed as direc1or whilst Patson Makatha Mwiinga was appointed company secretary of the 5'h Defendant. [8.17] Can the Court upset a resolution of a company? It is trite law, that a Court shall not interfere wi1h the internal management of companies acting within their powers as set out in the articles of association and the CA. This position was postulated in the old English case of Foss v Harbottle <11• [8.18] The reverse is that a Court will interfere where the acts complained of are ultra vires or fraudulent or cannot not be J23 1 Page rectified. The rationale is that companies are legal persons operating under constitutive documents such as the articles of association and shareholders' agreements including under statutory law. {8.19] I accept Counsel for the 3rd Defendant's useful submission where the Court's attention was drawn to section 3 of the CA which defines a special resolution as: " ... a resolution passed by not less than seventy-five per cent of the votes of members of a company entitled to vote in person or by proxy at a meeting duly convened and held at which the resolution is moved as a special resolution, or such higher majority percentage as the articles of association may require. " [8.20] The substance of the provision is a special resolution shall be passed by not less than 75% of the votes of the members entitled to vote, secondly, a meeting is duly convened and thirdly, the resolution is moved as a special resolution. [8.21) One has to ascertain whether the attendees were members of the 5th Defendant company and if so whether they had the authority to pass a resolution allegedly removing the Plaintiff as a director in the said company. [8.22] To put matters in context, section 2 of the CA defines a member as follows: J24 I P age "member means a shareholder or stockholder of a company or a subscriber to a company limited by guarantee." [8.23] The shareholders of a company have an overriding authority over a company's affairs and have a controlling voice over the wishes of mere directors and nominees as pronounced by the Supreme Court in the case of John Paul Mwila Kasengele and Others v Zambia National Commercial Bank <2l. This means the majority shareholders have a superior claim of right and title over the wishes of the board of directors. [8.24] In dissecting the attendees at the meeting held on 28th December, 2020, the record shows those in attendance were Leonard Malambo, Austin Malambo, Ngoza Barbara Sinkolongo Malambo, Chilekwa Matsotso. Sarah Kamoto and Col Paul Chilanga (page 39-42 Plaintiff's BOD). These hold shares according to the terms of the Trust and are shareholders through the Trust as specified in the annual returns. With the exception of Col Paul Chilanga, it is my finding that those present at the meeting had the authority to pass resolutions. [8.25] In the case of Sarah Kamoto, the 3'0 Defendant argued she represented the Plaintiff at the board meeting. At this juncture, I find Sarah Kamoto is the Plaintiffs mother and her attorney as stated in the mediation settlement Order (page 1-2 the 3rd Defendant's bundle of documents). I cannot impute that the J25 I Page said Sarah Kamoto attended the members meeting as attorney of the Plaintiff. (8.26] I shall make a brief comment on the issue of Nkombo Malambo the purported shareholder in the 51 \ 6th Defendant company. The 3rd Defendant when referred to the PACRA list of documents, said she did not know who Nkombo Malambo was but alluded to the fact it was a male person and not the Plaintiff. This position is disputed by the Plaintiff who testified her identification documents shows her names as Sarah Nkombo Malambo. I take the view it is unsafe for me to rely on the 3rd Defendant's evidence relating to Nkombo Malambo in the absence of independent corroborating evidence. [8.27] I accept Counsel for the Plaintiffs submission that the Plaintiff was able to ascertain the names Nkombo Malambo related to her as those names appear on her birth certificate and the residential and postal address was where she lived with her late father who incorporated the companies. I further agree this piece of evidence was not challenged by the 3rd Defendant. [8.28] Coming to the resolution. a special resolution is passed at an extraordinary meeting which may be convened whenever necessary (section 59 of the CA). The key point is whether those who passed the special resolution follow the laid out procedure? I shall proceed to highlight the prerequisites of a meeting. J26I Page Notice {8.29) It is trite law that a notice shall be sent to all those who are entitled to receive a notice of meetings and this includes a member such as the Plaintiff herein. Instructive is section 62 {1) (a) of the CA. Whilst, Section 61 (6) of the CA requires twenty-eight days' notice for a meeting at which a special resolution shall be passed. [8.30] Counsel for the Plaintiff called in aid the case of Pulbrook v Richmond Consolidated Mining Company 131 where the Court held that a director has a right by the constitution of the company to take part in its management, to be present and to vote at meetings of the board. This indeed is a correct statement of the law. [8.31] From the evidence adduced, I find there is no evidence a notice was issued to the Plaintiff for her removal as director in the 5'h Defendant company. The 3rd Defendant had contact with the Plaintiff or at least knew where to locate her and should have effected personal service. [8.32] All in all, it is apparent the Plaintiff was not notified of the special meeting, nor was there a notice of intention by any member to move a resolution to remove a director in the prescribed manner and form as contemplated under section 98 of the CA. [8.33] The attendant question is whether the none attendance of the Plaintiff at the meeting invalidated the special resolution J27 1 Page passed at the meeting of 28th December, 2020? The answer lies in section 62(2) of the CA, which prescribes that: "(2) The proceedings of a meeting shall not be invalid by reason only of the (a) accidental omission to give notice of the meeting to a person entitled to receive notice; or (b) non-receipt of a notice of the meeting duly sent to a person entitled to receive notice." [8.34] The purpose of section 62 (2) of the CA is to provide a speedy procedural remedy to overcome any difficulties a company convening or conducting a meeting may have in the face of obstacles such as the insistence of a minority shareholder to block the holding of any meeting. This provision enables a company to function notwithstanding any impediment. I find he company could convene a meeting for removal of a director. Quorum (8.35] Moving to the quorum for a meeting, it is a requirement that a quorum is formed and proper resolutions made. [8.36] Clause 62 of the 5th Defendant's articles of association states that at a meeting of directors, the quorum shall be two, or such larger number as is determined by resolution. J28 I Page Removal of Plaintiff as director [8.37] Firstly, a director may be removed if a company considers such removal is necessary and the requisite legal procedures governing such removal has been followed. [8.38] The process of removal of a director is not expressly stated in the 5th and 6th Defendant articles of association. Where the articles of association do not prescribe a process, the CA regulates the same. (8.39] In advancing his submission, Counsel for the 3rd Defendant passionately argued that the removal of the Plaintiff as director of the 5th Defendant by resolution dated 28th December, 2020 was competent and compliant with the provisions of the CA as the Trust holds 95% shares in the 5'\ 6th and 7rn Defendant, and as such her removal from the board is not a nullity. The resolution in part read as follows: "During a members' resolution meeting of the Company, it was resolved that the directors and secretary of the company be appointed." [8.40] In paragraph 7 of the defence, the 1st and 4th Defendant averred that any filing to remove the Plaintiff as director in the 5th and 6th Defendant company was without their knowledge or consent and solely initiated by the 3rd Defendant. It is apparent there is bad blood between the Plaintiff and 3rd Defendant. [8.41] All in all despite the arguments advanced by the parties herein, the evidence does not point to the Plaintiff's purported J29 l Page removal as director in the 5th Defendant company as the resolution relied upon is silent in this respect. [8.42] In the PACRA annual return dated 22nd December 2020, it shows the Plaintiff as a director, secretary and shareholder in the S'h Defendant including the Reeves Malambo Family Trust Registered Trustees as shareholders {page 14 of the 3rd Defendant's BOD}. [8.43] A reading of the PACRA annual return filed on 28th December, 2020 shows the Plaintiff's removal as a director in the 5th Defendant company (page 34 of the Plaintiff's BOD). I find this erroneous as there is no accompanying board resolution to anchor the purported removal. [8.44] For the avoidance of doubt, from the material on record, any purported removal of the Plaintiff as director in the 5th Defendant is null and void. 6th Defendant special resolution [8.45] In the case of the 6th Defendant, the special resolution purportedly appointing directors reads as follows: The undersigned being the TRUSTEES of the Reeves Malambo TRUST and being 95% shareholders in SHAFTEX LIMITED here sign the following resolution ..... "AGENDA APPOINTMENT OF DIRECTORS AND SECRETARY J30 I P age During a Members Resolution meeting of the Company, it was resolved that Directors and Secretary of the company be appointed" It was further RESOLVED that NGOZA BARBRA SINKOLONGO and AUSTIN MALAMBO be appointed as New Directors of the Company and that PATSON MAKA THA MWIINGA be appointed as New Secretary of the COMPANY with immediate effect. There being no any other business the meeting closed at 12.30." [8.46] The special resolution is signed by Leonard Malambo as a member and Ngoza Barbra Sinkolongo the 3'd Defendant herein in her capacity as secretary of the S'h Defendant (page 43 Plaintiff's BOD). The PACRA document printed on 22nd December, 2020 shows the Reeves Malambo Trust Registered Trustees and the Plaintiff as shareholders in the 5th Defendant (page 13-14 of the 3rd Defendant's BOD). This goes to prove the attendees at the said meeting are shareholders/members in the 6th Defendant company. [8.4 7] I am inclined to agree with Counsel for the 3rd Defendant that the 75% threshold required to pass a special resolution was met through the attendees present at the meeting of 28th December 2020, that is, Sarah Bwanali Kamoto. Chilekwa Matsotso, 1st , 3rd and 4th Defendant. [8.48] Counsel for the 3'd Defendant has strenuously argued that the removal of the Plaintiff as director in the 6th Defendant by the J31 I Page resolution of 2 81 h Oecem ber. 2020 was valid and the resolution is not a nullity. [8.49] It is interesting to note that from a reading of the special resolution, it does not. by any stretch of imagination remove the Plaintiff as a director. The correct inference to draw is the Plaintiff was never removed as a director in the 6th Defendant company. [8.50] In the PACRA annual return dated 4th November, 2020, it shows the Plaintiff is not listed as a director in the 6th Defendant company (page 30 Plaintiff's BOD). There is no board resolution confirming her removal. Therefore, any action taken of her removal is not in line with the CA and is a nullity. [8.51] For all intents and purposes, it is my finding that the Plaintiff is an existing director in the 6th Defendant. [8.52] For the reasons stated above, I grant a declaratory order that the alleged removal of the Plaintiff as director in the 5th Defendant by resolution dated 28th December, 2020 was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff from the board of the 5th Defendant company a nullity. (8.53] Similarly, I grant a declaration that the alleged removal of the Plaintiff as a director in the 6th Defendant by resolution dated 28th December, 2020 was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, J32 I Page rendering the alleged subsequent removal of the Plaintiff from the board of the 6th Defendant company a nullity. Removal as company secretary in the 7lh Defendant [8.54] Coming to the question as to whether the Plaintiff was appointed company secretary in the 7th Defendant company, section 82 (3) of the CA prescribes as follows: "A company secretary, other than the first company secretary, shall be appointed by the board of directors for such a term as the board considers appropriate, unless the articles provide otherwise." [8.55] Counsel for the 3rd Defendant submitted that the board of directors have discretion to remove a company secretary of the company and her only recourse available for the company secretary is a claim for damages where it is done in breach of contract as provided under section 82 of the CA. Counsel argued the Plaintiffs removal was validly done through a resolution at a duly constituted meeting making her removal valid at law. [8.56) Section 82 of the CA prescribes as follows: "(4) A company secretary shall be appointed on such remuneration and other conditions as the board of directors considers appropriate and may be removed by the board, subject to the company secretary's right to claim damages from the company if removed in breach of contract." J33 I Page [8.57) As rightly submitted by Counsel for the 3rd Defendant, a board of directors has the powers to removal a company secretary provided such removal is necessary and adheres to the requisite legal procedures governing such removal. [8.58] Having set out the law, is there any evidence adduced by the Plaintiff to convince the Court she was company secretary in the 7th Defendant company? As at 29th October, 2020 the PACRA printout shows the Plaintiff as company secretary in the 7th Defendant company. {8.59] Counsel for the Plaintiff questions whether there was any validly constituted meeting of the directors of the 7th Defendant for purposes of moving a resolution to remove the Plaintiff as company secretary in the 7th Defendant company. Counsel argued the Plaintiff was neither informed of, nor invited to any meeting of the 7th Defendant company. [8.60] Under cross examination, the 3re1 Defendant admitted the Plaintiff was company secretary for the 7th Defendant company implying that was the status quo. In the absence of any contrary evidence, I am inclined to accept that the Plaintiff is company secretary in the 7th Defendant company. [8.61] For the foregoing reasons, I grant a declaration that the alleged removal of the Plaintiff as company secretary in the 7th Defendant company was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff as company secretary a nullity. J34 I Page (9.0) An order cancelling the removal of the Plaintiff of the Plaintiff from the board of the 6th and 7th Defendant [9.1] The Plaintiff seeks an order cancelling her removal from the board of the 6th and 7th Defendant. (9.2] As to the alleged removal of the Plaintiff as director in the 61h Defendant, the PACRA annual return dated 29th March 2021 and printed on 11 th May. 2021 shows the Plaintiff was no longer a director in the 6th Defendant (at page 5-8 of the Plaintiff's BOD}. [9.3] Surprisingly, the PACRA documents exhibited by the 3'd Defendant are all prior to the board resolution of 28th December, 2020 which does little to assist this Court. (9.4] However. in the absence of a valid board resolution, I find the removal of the Plaintiff as director in the 6th Defendant a nullity. [9.5] Coming to the 71n Defendant company, in the PACRA annual return of 19th February, 2021 printed on 11th May, 2021 it shows the Plaintiff appearing as a director (page 9-11 of the Plaintiff's BOD}. In the absence of a board resolution purportedly removing the Plaintiff as a director in the 71h Defendant, the same would be a nullity. [9.6] For the reasons above, I grant an order cancelling the removal of the Plaintiff from the board of the 61h Defendant. In the case of the 7th Defendant, it shows the Plaintiff is still a director. The PACRA documents shall be amended accordingly. J3SI Page (10.0] A declaration that the affairs of the 5th, 6th and 7th Defendant companies by virtue of the 1•t, 2nd, 3rd and 4th Defendants which led to the alleged removal of the Plaintiff as director of the 5th and 6th Defendant companies as secretary in the 7'h Defendant company was carried out in a manner that is unfairly prejudicial to the Plaintiff's interest as a minority shareholder in the 51 \ 61\ and 7th Defendant companies. f 10.1] The Plaintiff seeks a declaration that the affairs of the 5th , 6th and 7th Defendant companies by virtue of the 1st , 2nd , 3'd and 4th Defendants which led to the alleged removal of the Plaintiff as director of the 5th and 6th Defendant companies and as secretary in the 7th Defendant company was carried out in a manner that is unfairly prejudicial to the Plaintiff's interest as a minority shareholder in the 5th , 61h , and 7th Defendant companies. (10.2) In order for the Plaintiff to be successful, she has to establish a lack of probity or fair dealing, or a visible departure from the standards of fair dealing, or a violation of the conditions of fair play on which every shareholder is entitled to rely on, or unfair discrimination against the minority. [10.3] Counsel for the Plaintiff called in aid the case of Re RA Noble (Clothing) Limited <4> where unfairly prejudicial was described as the conduct of exclusion from the management of the company. I accept the description and adopt it as my own. J36I Page [10.4] I am further persuaded by the approach taken in the case of Graney Property (Pty) Limited v Manala <5> where the South African Supreme Court pointed out that the conduct complained of must not merely be prejudicial or disregardful of the minority shareholders interest but do so unfairly. [10.5j Therefore, has the Plaintiff as a minority shareholder made out a case for relief? In my view section 134 ( 1) of the CA is instructive and deals with shareholders and directors of a company. "(1) The Court may, on the application of a member, make an order, in accordance with subsection (3), if it is satisfied that- (a) the affairs of the company are being conducted, or the powers of the directors are being exercised, in a manner that is oppressive; (b) an act or omission, or proposed act or omission, by or on behalf of the company has been done or is threatened, which was or is likely to be oppressive; or (c) a resolution of the members, or any class of hem, has been passed or proposed which was or is likely to be oppressive. (3) Despite this Act, where the Court makes an order in accordance with subsection (1), which alters the share capital or articles, the company shall not, without leave, without leave J37 I P age of the Court, make any further alteration to the share capital or articles hat is inconsistent with the order. [10.6J By virtue of section 134 of the CA it seeks to protects a minority shareholder where the affairs of a company are being conducted or the powers of directors are being exercised in a manner that is oppressive. [10.7) A reading of section 134 of the CA as a whole show that the two categories of persons entitled to apply for protection against oppressive conduct and unfair prejudice to interests of members of a company generally are shareholders and directors including those whom shares of a company have been transferred or transmitted by operation of law. [10.8] Counsel for the 3rd Defendant argued that the interests enjoyed by the Plaintiff in her capacity of director and company secretary are different from her interests as a shareholder. The basis of this contention is that it is unjustifiable for the Plaintiff to claim redress for her interests as a shareholder of the company in her capacity as director as it is tantamount to abuse of power as a shareholder of the company. Counsel did not back this submission with any legal authorities. (10.9] Further, Counsel for the 3rd Defendant argued it is unjustifiable for the Plaintiff to claim for redress as company secretary who is an officer of the company and whose function and responsibilities are clearly distinct from that of the shareholder. I agree as section 134 of the CA applies to a 138 I Page shareholder and director and not to a functionary of a company such as a company secretary. [10.10] In determining whether the conduct complained of was oppressive, unfairly prejudicial or unfairly disregarded the interests of the Plaintiff, it is not the motive for the conduct complained of that the Court must look at, but the conduct itself and the effect which it has on the other members of the company. [10.11] The Plaintiff testified she was involved in the day to day management of the 5th, 6th and 71t1 Defendant prior to the demise of the majority shareholder Reeves Malambo. This was uncontroverted by the 3"' Defendant and I accept the said evidence as the truth. [10.12) It has been established in the preceding paragraphs that the Plaintiff was not notified of any meeting by the majority shareholders. It follows the same actions were carried out in a manner unfairly prejudicial to the Plaintiff's interest as a minority shareholder and also as director in the 5th, 6th and 7th Defendant companies. This can be seen from the Plaintiff being shut out in decision making processes. [10.13] In my view, the Plaintiff has proved she was unfairly treated by the majority shareholders has proved her claim. [10.14] For the above reasons, I grant a declaration that the affairs of the 5th , 6th and 7th Defendant companies were carried out in a manner that is unfairly prejudicial to the Plaintiff's interest as a J39 I P age minority shareholder in the 51h, 61 \ and 7th Defendant companies. [11.0] A declaration that the 1 •1, 2nd and 3rd Defendant were illegally appointed to the board of directors of the 7th Defendant as there has been no resolution of the company appointing them as such and any changes effected at the Patents and Companies Registration Agency were effected illegally (11.1] The Plaintiff seeks a declaration that the 1st, 2M and 3rd Defendant were illegally appointed to the board of directors of the 7th Defendant as there has been no resolution of the company appointing them as such and any changes effected at the Patents and Companies Registration Agency were effected illegally. [ 11.2] It is trite law that a company is regulated by its articles of association. The appointment of directors is regulated by the articles of association. By virtue of section 85 of the CA, the appointment of directors is done at a general meeting of the company and by ordinary resolution. Clause 10 of the 71 h Defendant's articles of association provides: "A director may whenever he thinks fit, convene a general meeting. [11.3] In clause 11 of the articles of association on proceedings at a general meeting: J40 I P age "No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to business" [11.4J The quorum for such a meeting is two members as stipulated in clause 10 (43) (a) of the 71!1 Defendant's articles of association. (11.5] Section 60 of the CA provides as follows: "Unless the articles provide otherwise, a meeting of members of a particular class may be convened by: (a) the board of directors whenever it considers necessary; or {b) two or more members of that class holding, at the time the notice of the meeting is sent out, not less than five percent of the total voting rights of all members having a right to vote at meetings of that class." [11.6] The question that begs an answer is whether the 1 st, 2nd and 3rd Defendant were validly appointed as directors. [11. 7] Counsel for the Plaintiff contends that neither the 1st to 4th Defendants were directors of the Jlh Defendant at the material time and any meeting to appoint the 161 to 3rd Defendant as directors was contrary to the articles of association of the 7th Defendant and section 60 of the CA. The Plaintiff argument is premised on the fact there was no board resolution passed to this effect. J41 I Page [11.8] In the case of the 3rd Defendant, she alludes to being a director in the 7th Defendant by virtue of the Trust holding shares. (11.9] A trust can hold shares on behalf of its beneficiaries and the process of transmission of shares and the actual appointment as directors should still be adhered to and in line with the articles of association. [11.10] The onus is on the Plaintiff to prove the 1•1, 2nd , 3rd and 4th Defendant were illegally appointed as directors in the 7th Defendant. [11.11] In my view, there is no conclusive evidence adduced to prove procedure was followed in the appointment of the 1•1, 2nd , 3rd and 4th Defendants as directors to the 7th Defendant as there was no meeting of members held for purposes of effecting changes at director level. [11.12] On the material before me I am inclined to agree with the Plaintiffthatthere is no board resolution appointing the 1st , 2nd , 3rd and 4th as directors in the 7tti Defendant despite the PACRA annual returns, showing to the contrary. (11.13) My finding is bolstered by the provisions of section 78 ( 1) of the CA which prescribes as follows: "(1) A company shall within twenty-one days after the passing of a special resolution, lodge with the Registrar a certified copy of the resolution." J421 Page [11.14j I find there was no legitimate board resolution to back up and validate the appointment of the 1st, 2na, 3rd and 4th Defendant as directors in the 7th Defendant. [11.15) For the above reasons, I grant the declaration that the 1st, 2nd 3rd and 4th Defendant were illegally appointed to the board of directors of the 7th Defendant as there has been no resolution of the company appointing them as such and any changes effected at the PACRA were illegal. [12.0J An order cancelling the removal of the Plaintiff as the company secretary of the 7th Defendant company [12.1) The Plaintiff seeks an order cancelling her removal as company secretary of the 7th Defendant company. (12.2] Section 82 (3) of the CA is worded as follows: "A company secretary, other than the first company secretary, shall be appointed by the board of directors for such a term as the board considers appropriate unless the articles provide otherwise." [12.3] My reading of this section is, it is imperative for the board of directors to convene a meeting to appoint a company secretary. The mode of doing so is regulated by the articles of association. [12.4] l agree with Counsel for the Plaintiff that the quorum at a meeting could only be formed if at least two (2) directors are present or such larger number as determined by resolution of the board. J431 Page [12.5l In stark contrast to the Plaintiff's averments of her alleged removal as company secretary in the ?1h Defendant, the 1st and 4th Defendant deny the Plaintiff was ever removed as a company secretary in the 71t1 Defendant. I accept this and he same has not been challenged by the 3"' Defendant. [12.6] Consequently, any cancellation of the Plaintiff as the company secretary of the 7th Defendant is a nullity. I Order the records at PACRA to reflect and give effect to this Court order. (13.0] An order directing the Defendants to reinstate the Plaintiff as director in the 5th and 6th Defendants and as company secretary in the "71h Defendant and ensure that the records of the 5 th , 6th, and 7th Defendant companies at PACRA are rectified to reflect that correct information that the Plaintiff as a bona lidedirector in the 5th and 6th Defendant companies and company secretary of the 7th Defendant (13.1] The Plaintiff seeks an order directing the Defendants to reinstate the Plaintiff as director in the 5th and 6th Defendants as company secretary in the 7th Defendant and ensure that the records of the 5th , 6th , and 7th Defendant companies at PACRA are rectified to reflect the correct information that the Plaintiff as a bona fide director in the 5th and 6th Defendant company and company secretary of the ?1h Defendant [13.2) I have reasoned earlier in this Judgment that the Plaintiff is a director in the 5th and 6th Defendant company and company secretary in the 7th Defendant. Accordingly, I Order the J441 Page Patents and Companies Registration Agency to rectify its records and reflect the correct information. (14.0] An order directing that the affairs of the 51 \ 6th and 7fh Defendants be conducted in a manner that is not unfairly prejudicial to the interests of the Plaintiff as a minority shareholder, but in accordance with the provisions of the Articles of Association [14.1] The Plaintiff seeks an order directing that the affairs of the 5th , 6th and 7th Defendant companies be conducted in a manner that is not unfairly prejudicial to the interests of the Plaintiff as a minority shareholder, but in accordance with the provisions of the articles of association. [14.2] By virtue of section 134 of the CA, it confers all shareholder's basic rights and protections. These are also accorded to minority shareholders including in the articles of association. The said section 134 (1) provides as follows: "The Court may, on the application of a member, make an order, in accordance with subsection (3), if it is satisfied that- (d) the affairs of the company are being conducted, or the powers of the directors are being exercised, in a manner that is oppressive; (e) an act or omission, or proposed act or omission, by or on behalf of the company has been done or is threatened, which was or is likely to be oppressive; or .14S I Page • (f) a resolution of the members, or any class of hem, has been passed or proposed which was or is likely to be oppressive. [14 .3] The term oppressive is defined in section 134 (9) of the CA as follows: (a) unfairly prejudicial to, or unfairly discriminatory against, a member or members of a company; or (b} contrary to the interests of the members as a whole." (14.4] Counsel for the Plaintiff has usefully placed reliance on the case of Re Saul D Harrison and Sons Pie <6> where the Court in discussing the word unfair prejudice aptly stated: ''The words "unfairly prejudice" are general words and they should be applied flexibly to meet the circumstances of the particular case. The conduct must be both prejudicial (in the sense of causing prejudice or harm to the relevant interest and also unfairly so; conduct may be unfair without being prejudicial or prejudicial without being unfair, and it is not sufficient if the conduct satisfied one of these tests." [14.5] From this passage, it is my understanding that unfair prejudice is where one or more minority shareholders find their interests are prejudiced by a majority shareholder, who also control the board. This can lead to the company being run for the advantage and benefit of the majority shareholders. J46I Page [14.6] In 69making a determination as to whether there is unfair prejudice, the Plaintiff has to prove the alleged unfair prejudicial activities relate to the running of the 5th , 6"' and 7th Defendant companies and the impact upon her as a shareholder, and the tangible or real detriment. [14.7] In respect to the unfairness concept, I have examined the nature of the 5th , 6th and 7th Defendant companies which are family oriented including how the shareholders have historically operated the companies. [14.8] The Plaintiff alleges she was removed from being a director in the 5th and 6th Defendant and company secretary in the 7th Defendant. Further, she has not been part of meetings that arrived at a resolution to remove her. [14.9] The 3rd Defendant avers the Plaintiff joined the meeting at some point and refused to be included in the resolution as having attended the meeting. However, in cross examination, the 3rd Defendant admitted the Plaintiff was not in the meetings that resolved to remove her as director nor was she notified of such meetings. [14.10] On this issue, the 3rd Defendant adduced contradictory evidence. I am unconvinced of the veracity of her evidence. [14.11] In regard to the non-notification of meetings, I find the 3rd Defendant deliberately withheld vital information and it appears the 1st, 2nd and 3rd Defendant had monopoly on such information to the exclusion of the Plaintiff who had an interest in the 5th , 6th and 7th Defendant. J47 I P age [14.12] The fact the Plaintiff did not attend any board meetings constitutes a violation of her right to vote on major decisions and the right to participate in meetings. {14.13) l will go further and state the shareholders and directors owe each other a fiduciary duty to the company and its minority shareholders and to act in the best interest of the 5th , 6th and 7th Defendant companies. [14.14] From the evidence adduced by the Plaintiff she has had no access to information about the company's affairs as meetings were held without her knowledge or participation hence her complaint of unfair prejudice. [14.15] I accept Counsel for the Plaintiff's submission that the Defendants have conducted themselves in a manner calculated to exclude the Plaintiff from the affairs of the company as being oppressive. It is for the above reasons, that I reject Counsel for the 3'd Defendant's contrary submission. [14.16] I am inclined to accept the Plaintiffs evidence over the 3rd Defendant who at best was elusive during cross examination whilst the Plaintiff gave straightforward responses without any hesitation. [14.17] For the above reasons, I grant an Order directing that the affairs of the 5th , 6th and 7tti Defendant companies be conducted in a manner that is not unfairly prejudicial to the interests of the Plaintiff as a minority shareholder, but in accordance with the provisions of the articles of association and the CA. J48 I Page [15.0) Costs [15.1] The Plaintiff seeks costs of this action. The awarding of costs is well settled in our jurisdiction and is discretionary. I have no reason to depart for the well-established principle that costs follow the event. In the case of Doyle B Kapambwe v Machona Kapambwe 171 the Court held that costs are generally awarded to the successful party unless there are reasons to depart from the rule. [15.2] Further, in the case of Costa Tembo vs. Hybrid Poultry Farms (Z) Limited 1s1, the Supreme Court stated that: "a successful litigant is entitled to costs. " [15.3] The Plaintiff having been successful in her claim is awarded costs against all the Defendants to be taxed in default of agreement. (16.0) Disposal (16.1] By way of disposal, on a balance of probability, I find the Plaintiff has proved her claims against the 1&1 - 7th Defendant. I therefore grant the following Orders: 1. I grant a declaratory Order that the alleged removal of the Plaintiff as director in the 5th Defendant by resolution dated 28th December, 2020 was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff from the board of the 5th Defendant company a nullity; J49 I Page 2. I grant a declaratory Order that the alleged removal of the Plaintiff as a director in the 6th Defendant by resolution dated 28th December, 2020 was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff from the board of the 6th Defendant company a nullity. 3. I grant a declaratory Order that the alleged removal of the Plaintiff as company secretary in the 7"' Defendant company was incompetent and a violation of the provisions of the Companies Act No 10 of 2017 and as such, rendering the alleged subsequent removal of the Plaintiff as company secretary a nullity. 4. I grant a declaratory Order to the extent that the affairs of the 5th , 6th and 71 h Defendant companies by virtue of the 1 &I. 2nd , 3((1 and 41 h Defendants actions were carried out in a manner that is unfairly prejudicial to the Plaintiff's interest as a minority shareholder in the 5th , 61 \ and 7th Defendant companies. 5. I grant a declaratory Order that the 1•1, 2n " and 3rd Defendant were illegally appointed to the board of directors of the 71 h Defendant as there has been no resolution of the company appointing them as such and any changes effected at the Patents and Companies Registration Agency were effected illegally. 6. I grant an order cancelling the removal of the Plaintiff from the board of the 61 h Defendant. In the case of the Jlh JSO I P age Defendant, the Plaintiff remains a director on the board. The PACRA documents shall reflect the same accordingly. 7. I grant an Order cancelling the removal of the Plaintiff as the company secretary of the 7th Defendant company. 8. I grant an Order directing the Defendants to reinstate the Plaintiff as director in the 5th and 6th Defendants as company secretary in the 7th Defendant and ensure that the records of the 5th , 6th and 7th Defendant companies at the Patents and Companies Registration Agency are rectified to reflect that correct information that the Plaintiff is a bona fide director in the 5tti and 6th Defendant companies and company secretary of the ?1h Defendant. This shall be done within 14 days herein. 9. An Order of injunction is redundant. 10. I grant an Order directing that the affairs of the 5tti, 6th and ?1h Defendants be conducted in a manner that is not unfairly prejudicial to the interests of the Plaintiff as a minority shareholder, but in accordance with the provisions of the articles of association and the Companies Act; 11. Costs to the Plaintiff against the 1st, 2 nd , 3rd , 4th , 5th,6th and 7th Defendant to be taxed in default of agreement. {17.0] 1•1 , 41 \ 5111 , 6th and '71h Defendant's counterclaim [17.1) The 1•', 4'h, 5'\ 6th and 7th Defendants' counterclaim they are trustees and amongst the properties comprising the estate are shares in the 51h , 6th and 7'h Defendants that were held by the late Reeves Malambo who was in all respects the majority shareholder. After his death. the shares devolved to the Trust. JSl I Page [17.2] The 1st , 41h - 71h Defendants filed a counterclaim against the Plaintiff seeking the following: 1. A declaration that the appointment of Lydna Mataka and Patson Mwiinga Makatha was incompetent and a violation of the provisions of the Companies Act and articles of association hence a nullity. 2. An order cancelling the appointment ofthe two as directors in the 5th, 6th and 7th Defendants and a further Order that a properly constituted meeting be convened to appoint directors in the 5th , 6th and 71h Defendants. 3. An order compelling the Plaintiff to render to the 1•1 and 4th Defendants an account of all the expenses and financial transactions of the 51 \ 6th and 71n Defendants from the date the former assumed control of the companies to date. 4. An order compelling the Plaintiff to grant the 1st and 4th Defendants access to information relating to the companies' operations and state of affairs as well as access to latter's bank accounts. 5. An order by way of mandatory injunction compelling the Plaintiff to make provisions for the payment of the school fees and upkeep of the other children as well as upkeep for the other beneficiaries pending the determination of the matters before Court. 6. An order compelling the Plaintiff to convene a general meeting as provided for by the articles of association of the said companies. J52 I Page 7. Any other remedy the Court deem fit. 18.0 Defence to counterclaim [18.1) The Plaintiff denies she has conducted the affairs of the 5th to 7th Defendants in a manner that is prejudicial to them. She the 2nd denies having passed a resolution appointing Defendant as director of the 5th-7th Defendants as the zn<t Defendant is not even known to the Plaintiff. [18.2] At the time of appointment of Ms Lydna Mataka as director in the 5th to 7'h Defendants, the Plaintiff was the only surviving shareholder and director in the said companies following the demise of the majority shareholder Mr Reeves Malambo and the appointment was one for purposes of complying with the requirements to have at least 2 directors and was done prior to establishment of the Trust. [18.3) The Plaintiff avers she did render an account to the Defendants in 2018 and all the trustees of the Reeves Malambo Trust. That she has no obligation to the 5th - 7th Defendants to pay school fees and upkeep as the assets of the 5th - 7th Defendant do not form part of the estate of the late Mr Reeves Malambo. Therefore, the Defendants are not entitled to any of the reliefs sought under their counterclaim. (18.4] The Plaintiff avers the appointment of the 3"' and 4th Defendants as directors in the 5th and 6th Defendant companies and the appointment of the 2nd Defendant as company secretary of the 5th and 6th Defendant companies JS31 Page • were effected in contravention of the article of association of the respective companies and the CA. [18.5] The Plaintiff reiterated she was removed as company secretary of the 7th Defendant without any resolution of the company at a validly constituted meeting of the directors of the company. [19.0) A declaration that the appointment of Lydna Mataka and Patson Mwiinga Makatha was incompetent and a violation of the provisions of the Companies Act and articles of association hence a nullity [19.1) The 1st , 4th and 7th Defendants seeks a declaration that the appointment of Lydna Mataka and Patson Mwiinga Makatha was incompetent and a violation of the provisions of the CA and articles of association hence a nullity. [19.2] Unfortunately, there was no evidence led in this respect to back the claim and allegations, and the counterclaim fails as it is devoid of any merit. [20.0) An order cancelling the appointment of the two as directors in the 51h, 6th and 7th Defendants and a further Order that a properly constituted meeting be convened to appoint directors in the 5th , 6th and 7th Defendants. (20.1] The 1st, 4th and 71h Defendant seek an order cancelling the appointment of the two as directors in the 5th , 6th and 7th Defendants and a further Order that a properly constituted J541 Page .. meeting be convened to appoint directors in the 5th , 6th and 7th Defendants. (20.2] The 1 •t, 4th and 7th Defendants were not present at the trial and resultantly no evidence was adduced to support this claim. It is accordingly dismissed. (21.0] An order compelling the Plaintiff to render to the 1•1 and 4 th Defendants an account of all the expenses and financial transactions of the 5 1h, 6th and 7th Defendants from the date the former assumed control of the companies to date. [21.1J The 1"\ 4 th and 7th Defendant seeks an order compelling the Plaintiff to render to the 161 and 4th Defendants an account of all the expenses and financial transactions of the 5th , 6th and 7th Defendants from the date the former assumed control of the companies to date. [21.2) The 1st , 4th and 7tti Defendants were not present at the trial and resultantly no evidence was adduced to support this claim. It is accordingly dismissed. (22.0J The Defendants seek an order for the Plaintiff to render to the 1$', 2nd , 3rd and 4 th Defendants an account of all expenses and financial transactions of the 51 \ 61 \ 7th Defendants from date the former assumed control of the companies to date. (22.1] The Defendants seek an order for the Plaintiff to render to the 1st , 2nd , 3r<1 and 4th Defendants an account of all expenses and JSS I Page • • • financial transactions of the 5th , 61 \ 7th Defendants from date the former assumed control of the companies to date. [22.2] I find no evidence was led to support this claim. The claim is without merit and fails. (23.0] An order compelling the Plaintiff to grant the 1st and 4tt, Defendants access to information relating to the companies' operations and state of affairs as well as access to latter's bank accounts [23.1} The Defendants seeks an order compelling the Plaintiff to grant the 1 st and 4th Defendants access to information relating to the companies' operations and state of affairs as well as access to latter's bank account. [23.2] The 1 si, 4th and 7th Defendants were not present during the trial and no evidence was adduced to support the counterclaim. In The claim is unsuccessful. {24.0) An order compelling the Plaintiff to convene a general meeting as provided for by the articles of association of the said companies. [24.1] The 1"1. 4th and 7th Defendants seek an order compelling the Plaintiff to convene a general meeting as provided for by the articles of association of the said companies. [24.2] The 1st, 4th and 7tt1 Defendants were not present at the trial and resultantly no evidence was adduced to support this claim. It is accordingly unsuccessful. J56 I Page • , [25.0] An order by way of mandatory injunction compelling the Plaintiff to make provisions for the payment of the school fees and upkeep of the other children as well as upkeep for the other beneficiaries pending the determination of the matters before Court. [25.1] The above claim is redundant and I need not make any determination on the same. (26.0) An order compelling the Plaintiff to convene a general meeting as provided for by the articles of association of the said companies. [26.1] The Defendants seek an order compelling the Plaintiff to convene a general meeting as provided for by the articles of association of the said companies. [26.2} It is trite law that a company holds meetings in accordance with the articles of association. [26.3] The Defendants were not present at the trial and therefore no evidence was adduced to support their counterclaim. I shall not exert any energies on the same. The counterclaim is accordingly unsuccessful. [27.0) 1st , 4th and 7'h Defendant's counterclaim [27.1] On a balance of probabilities, the 1•t, 4th and 7'h Defendant have not proved their counterclaim against the Plaintiff. For the avoidance of doubt: 1. I decline to grant a declaration that the appointment of Lydna Mataka and Patson Mwiinga Makatha was J57 I P age i •# incompetent and a violation of the prov1s1ons of the Companies Act and articles of association hence a nullity. 2. I decline to grant an Order cancelling the appointment of the two as directors in the 5tn, 611> and 71h Defendants and a further Order that a properly constituted meeting be convened to appoint directors in the 5th , 6th and -,U. Defendants. 3. I decline to grant an Order compelling the Plaintiff to render to the 1s ' and 4lh Defendants an account of all the expenses and financial transactions of the 5111 , 6th and 711> Defendants from the date the former assumed control of the companies to date. 4. I decline to grant an order compelling the Plaintiff to grant the 1st and 4th Defendants access to information relating to the companies· operations and state of affairs as well as access to latter's bank accounts. 5. I decline to grant an Order by way of mandatory injunction compelling the Plaintiff to make provisions for the payment of the school fees and upkeep of the other children as well as upkeep for the other beneficiaries pending the determination of the matters before Court. The same is redundant. 6. I decline to grant an Order compelling the Plaintiff to convene a general meeting as provided for by the articles of association of the said companies. JSS I Page • 7. I decline to grant any other remedy the Court deem fit. Leave to appeal granted. Delivered at Lusaka this 21 st day of February, 2024 IRENEZEKO M WE JUDGE I - J59 I Page