Ali v Subamma [2005] FJHC 709; HBC 0061.2001L (18 April 2005)

IN THE HIGH COURT OF FIJI
AT LAUTOKA

Civil Action HBC0061.01L

ABBAS ALI
and Others

v

ANITA'S SUBAMMA
and Others

Gates J

Mr. S. Maharaj for the Plaintiffs
Mr F. Koya for the Executrix of the 1^st named Defendant [Subamma]
Mr R. Singh for the 2^nd named Defendant [Jai Prasad]
Mr J. Sharma for 3^rd named Defendant [Thompson]

18 April 2005

RULING

[1] On the 14^th October 2004 the plaintiffs issued a summons which sought various declarations and orders. In chambers on 21 February 2005 these orders narrowed down to 4 matters. Three of them were concerned with the register of shareholdings of members of the Fantasy Company of Fiji Ltd the 2^nd plaintiff.

[2] It is said that the 1^st and 3^rd named defendants have forfeited 33,600 and 4,000 ordinary shares respectively.

[3] The 4^th order sought a mandatory injunction for the return of company documents said to have been taken away unlawfully by the 3 defendants from the registered office.

[4] Counsel for the defendants in question raise a preliminary objection to the hearing on the issue of forfeiture. It is said the court has ruled on this issue in its previous ruling of 22 March 2004 and that the court is now functus. They refer to para 42 of that ruling which reads:

"[42] Chaudhary would today have held 40,000 shares. The Plaintiffs' submission that he had failed to pay for all of his block and therefore could only be counted for his entitlement of 8,000 shares cannot be accepted. The procedure for forfeiture of shares pursuant to Articles 17-23 has not been shown to me as having been put into effect. His exclusion from the Return of Allotments is not decisive. I therefore hold Chaudhary's shareholding to remain at 40,000 shares, until such time as that procedure is instituted. Thompson's is a shareholding as corrected of 40,000 shares as also is Urwin's."

[5] Mr Maharaj's point is that because the court had no evidence before it as to whether the procedure for forfeiture of shares had been put into effect the issue had not been ruled upon and that it remained a side issue still open for determination. The phrase "until such time as that procedure is instituted" was to be read as conveying the meaning "until such time as the court is shown that that procedure had been instituted."

[6] I had commenced the ruling of 22 March 2004 by saying:

"[1] The issue for determination here is whether 10,000 shares of the Fantasy Company of Fiji Ltd [2^nd Plaintiff, the company] were held by one of the 1^st named Plaintiffs or by one of the Defendants. On this finding hangs the question of majority control of the company. A secondary issue for determination but also of importance is the exact shareholdings of the members of the company."

[7] In our system of justice the courts have consistently and for long applied the procedure that all relevant evidence must be adduced at a trial. Rarely can decisions be varied on the basis that fresh evidence has come to light. Forfeiture of shares affecting the shareholding of the company, and for the purposes of that ruling the balance of power amongst the members, was an issue. The ruling had to be made upon the evidence presented by the parties at the time and at the correct time for the procedure. Forfeiture is a draconian step to follow against a shareholder. It is not a light or incidental matter.

[8] On whether there was forfeiture prior to the ruling, I have already ruled. It is of course open for the company's board to pursue forfeiture from this point on.

[9] I accede to the preliminary objection raised. I strike from the summons all matters relating to forfeiture. There remains the mandatory injunction matter alone. I shall provide fuller reasons if required upon written request.

A.H.C.T. GATES
JUDGE