CGM Industrial (PTY) LTD V MADHAV VASANT DALVI (CCA/0045/2023) [2023] LSHC 143 (14 September 2023)

CGM Industrial (PTY) LTD V MADHAV VASANT DALVI (CCA/0045/2023) [2023] LSHC 143 (14 September 2023)

Citing the company as applicant in a derivative action, rather than as respondent, is a fatal procedural irregularity. The shareholder seeking leave must be the applicant, and the company must be cited as respondent. Ms Chang lacked standing and authority to bring the application in the manner she did.

Source-derived case information.

Citation
[2023] LSHC 143
Parties
Applicant: CGM Industrial (Pty) Ltd; Applicant: Presitex Enterprises (Pty) Ltd; Respondent: Madhav Vasant Dalvi; Respondent: Sushama Dalvi; Respondent: Chaitanya Madhav Dalvi; Respondent: Sharmala Roya; Respondent: Denimagic (Pty) Ltd; Respondent: Nedbank Lesotho Limited; Respondent: Standard Bank Lesotho Limited; Respondent: Directorate on Corruption and Economic Offences; Respondent: Lesotho National Development Corporation; Respondent: Land Administration Authority; Respondent: Master of the High Court; Respondent: Attorney General; Respondent: Lesotho Housing and Land Development Corporation; Respondent: Alchemy Textiles (Pty) Ltd; Respondent: 'Maneo Poopa (Executrix to the Estate of the Late Clark Taelo Poopa)
Court
High Court
Jurisdiction
Lesotho
Judgment Date
14 September 2023
Case Number
CCA/0045/2023
Procedural Posture
Derivative Action (application for Leave to Sue on Behalf of Company) / Ruling on Preliminary Objection and Dismissal of Application
Outcome
Application dismissed with costs against Ms Eugenia Shia Chang.
Legal Topics
Derivative Actions, Proper Parties to Derivative Proceedings, Section 77 Companies Act 2011, Standing to Sue on Behalf of Company
Source Language
english
Company Law Derivative Actions Proper Parties to Derivative Proceedings Section 77 Companies Act 2011 Standing to Sue on Behalf of Company

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Parties

CGM Industrial (Pty) Ltd

Applicant

Presitex Enterprises (Pty) Ltd

Applicant

Madhav Vasant Dalvi

Respondent

Sushama Dalvi

Respondent

Chaitanya Madhav Dalvi

Respondent

Sharmala Roya

Respondent

Denimagic (Pty) Ltd

Respondent

Nedbank Lesotho Limited

Respondent

Standard Bank Lesotho Limited

Respondent

Directorate on Corruption and Economic Offences

Respondent

Lesotho National Development Corporation

Respondent

Land Administration Authority

Respondent

Master of the High Court

Respondent

Attorney General

Respondent

Lesotho Housing and Land Development Corporation

Respondent

Alchemy Textiles (Pty) Ltd

Respondent

'Maneo Poopa (Executrix to the Estate of the Late Clark Taelo Poopa)

Respondent

Procedural Posture

Derivative Action (application for Leave to Sue on Behalf of Company) / Ruling on Preliminary Objection and Dismissal of Application

Legal Issues

  1. 1 Whether Ms Chang had authority to depose affidavits on behalf of the companies
  2. 2 The correct procedure for bringing a derivative action under section 77 of the Companies Act 2011

Ratio Decidendi

Citing the company as applicant in a derivative action, rather than as respondent, is a fatal procedural irregularity. The shareholder seeking leave must be the applicant, and the company must be cited as respondent. Ms Chang lacked standing and authority to bring the application in the manner she did.

Court Disposition

Application dismissed with costs against Ms Eugenia Shia Chang.

Orders

  • The application is dismissed with costs to be paid by Ms Eugenia Shia Chang.