Manase v Bazil [2023] SBHC 87; HCSI-CC 703 of 2019 (19 September 2023)

HIGH COURT OF SOLOMON ISLANDS

Case name:	Manase v Bazil
Citation:
Date of decision:	19 September 2023
Parties:	Chief Lonsdale Manase, Mitchel Manase v Clifton Bazil
Date of hearing:	25 July 2023
Court file number(s):	703 of 2019
Jurisdiction:	Civil
Place of delivery:
Judge(s):	Kouhota; PJ
On appeal from:
Order:	I gave Judgment for the Claimant and grant the Orders sought. Cost for the Claimant to be assed if not agreed.
Representation:	Pitakaka M for the Claimants Abe R for the Defendant
Catchwords:
Words and phrases:
Legislation cited:
Cases cited:

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 703 of 2019

BETWEEN

CHIEF LONSDALE MANASE
1^st Claimant

AND

MITCHEL MANASE
2^nd Claimants

AND:

CLIFTON BAZIL
Defendant

Date of Hearing: 25 July 2023
Date of Judgment: 19 September 2023

Pitakaka M for the Claimants
Abe R for the Defendant

Judgment

Kouhota PJ:

The Claimants on 23^rd December 2019 file a category (A) Claim against the Defendant seeking the following orders;

1. A declaration that the First Claimant is a shareholder of one hundred ( $100) in KNSI,
2. A declaration that the purported transfer of his 50 shares in KNSI to Wilson Mapuru is contrary to law and therefore unlawful, invalid and void ab-intio
3. A declaration that the purported transfer of his 50 shares in KNSI to Clifton Bazil was contrary to law and therefore unlawful, invalid and void ab-intio.
4. Further or alternately a declaration that the transfer of the Claimant’s shares in KNSI to Wilson Mapuru was fraudulent and is unlawful, invalid and void ab-intio.
5. Further or alternately a declaration that the transfer of the Claimant’s shares in KNSI to Clifton Bazil was fraudulent and is unlawful, invalid and void ab-intio.
6. A declaration that the purported transfer of 23 shares of Clifton Bazil KNSI to GUNSYND is contrary to law and therefore unlawful, invalid and void ab-intio
7. Further or alternately a declaration that the purported transfer of Clifton Bazil’s shares in KNSI was fraudulent and is unlawful, invalid and void ab-intio.
8. An order for rectification of the shares of KNSI by entering into the following entries
   • (i) Lonsdale Manase as shareholder of 100 shares;
   • (ii) Father Wilson Mapuru as shareholder of 100 shares;
   • (iii) Clifton Bazil as shareholder of 100 shares.
9. An order for rectification of Director’s of the Directors Register of KNSI by reinstating Lonsdale Manase and Mitchel Manase as Directors of KNSI.

The parties have file a Court book on 12th November 2021, the agreed facts are contained in page 3 of the Court Book are as follows;

1. Kolosori Nickel (SI) was incorporated on 12^th May 2017.
2. The three landowning groups of Kolosori are;

1. Group 1 is from Pirega to Beahutu
2. Group 2 is from Beahutu to Kokoila vatha’ and

100. Group 3 is from kokoiolo Vatha to Havihua.

3. KNSI adopts the Module Rules for private company pursuant to section 15(1) and schedule 2 of the Company At [2009] regulate it affairs.
4. The Shareholders of KNSI on incorporation who represent the Landowning groups are
   1. Lonsdale Manase 100 shares
   2. Father Wilson Mapuru 100 shares and’
   100. Clifton Bazil 100 shares.

In his sworn statement the Defendant Clifton Bazil deposed that he is the one who incorporated the KNSI and issues the 100 shares each to representative of the 3 Land owning groups. He stated the reason why he reallocated or transfer the shares of the First Claimant was that the Claimants Land owning group intend to engage another company to carry out prospecting in their tenements. His sworn statement however does not address the legal issues raised in the claim. The Claimant asserts in his claim that his shares were unlawfully transferred and seeks rectification. There are three legal issues to be determine by the Court, these are;

1. Whether the transfer of the Claimants shares in KNSI to other shareholders is lawful?
2. The validity of the director’s meeting.
3. Whether the sales of the shares of the Defendant Clifton Bazil to Gunsynd is lawful?

The agreed issues for determination are related mainly to the Orders the Claimant is seeking, which are outline above. By the time of the trial the First Claimant has deceased so only the Second Claimant was able to give evidence in support of the claim? The evidence of late the Claimant however, was admitted under section 25 of the Evidence Act because the Evidence was relied on earlier in an interlocutory proceeding in the same matter. The Second Claimant confirm that the contend of his sworn statement filed on 11^th December 2019 as true and correct .He was not cross examine on his evidence and his sworn statement was admitted as evidence.

The Defendant Clifton Bazil also gave evidence. He confirmed his sworn statement filed on the 20^th of February 2020 and sworn statement was tendered and admitted as evidence. He was also cross examine on his sworn statement.

It seem that the facts of this case are not disputed but only the legality of the actions taken by the Defendant are in dispute. I had read the sworn statement of the Claimants and their contents were mainly on the issues in his claim.

There is no dispute that KNSI adopted the Company Act Modules Rules for a private company as Rules to governing the management and operation of KNSI.

As alluded to earlier the facts of this case are not in dispute, only the legal issues relating to the facts are in dispute and need to be considered and determined by the Court. Since the KNSI adopted the Company Act Module Rules governing private companies, the Rules will apply to KNSI.

While the Claimant in his claim has separated the Legal Issues of the claim they can all be considered together as the issues arise out of the actions of the Defendant and are connected to transfer of the shares of the Claimant in KNSI without his consent and sale by the Defendant of his shares in KNSI to another company.

Transfer of Claimants shares

Section 19 of the Company Act 2009 states “A shares in a company is a personal property. Section 21 of the Rule states “If shares are to be transferred, a form signed by the holder or by or her agent or attorney must be deliver to the company”

In the present case there is no dispute that the Claimant owned 100 share in KNSI. There is also no dispute that his shares were transferred to other shareholders without his consent. Section 19 of the Act is clear it says that shares in a company is personal property. Since shares are personal property only the owner of the shares can decide what to do with his shares.

The evidence in this case is clear that the First Claimant did not consent for his 100 shares to be transferred to other shareholders or any other person or that he or his attorney or agent signed a form to transfer and gave it to the company as require by section 21 of the Company Rules.

Meeting of Directors

The Defendant had deposed that a meeting of Directors and Members of the Land owning group was held on 25^th August 2019. On the evidence only two Directors out of the 5 Directors were present at that meeting plus two other Members of the Land owning group. It was at that meeting that the Defendant and another Directors Mr David Mapuru and two Members of the land owning group passed a resolution to remove the First and Second Claimant and Martin Tango as Directors of the Company.

The quorum for the meeting of Directors is provide in Rule 57 of the Modules Rules adopted by the KNSI. The Rules states that “a quorum for meeting of directors is a majority of directors. The meeting held by the Defendant on 25^th August 2019 only two Directors out of 5 Directors were present. The meeting was clearly in breach of Rule 57 of the Company Rules as only two of the five Directors of KNSI were present. In view of this, the removal of the Claimants as Directors of KNSI was unlawful as there was no quorum. Even if the meeting was lawful and the removal of the Claimants as Directors was lawful, those who attended the meeting have no right or authority to transfer the shares of the Claimant in the Company to any person including to other share holders. I therefore find that transfer of the Clamant shares in KNSI to Father Wilson Mapuru and Clifton Bazil illegal and void ab- into.

Sale of Clifton Bazil shares

With regard to the Sale of Clifton Basil share to GUNSYND, Section 12(1) of the Companies Rules states “A shareholder is not entitled to sell or otherwise dispose of his or her shares in the company without first offering to sell to other holders of the same class in accordance with the procedure set in clause 13 – 20 of the rules, unless all other shareholders agree otherwise”

There was evidence that the defendant Clifton Basil did not comply with section 12(1) of the Company Rules when he sell his shares to Gunsynd hence his sale of his shares are made contrary to company Rules and are therefore invalid, unlawful and void ab-initio. Having considered the materials before the Court, I am satisfied that the Claimant has proven his case on the balance of probabilities. I gave Judgment for the Claimant and grant the Orders sought. Cost for the Claimant to be assed if not agreed.

The Court
Emmanuel Kouhota
Puisne Judge