E. F. Harvey Limited v William David Carlisle Wise (Appeal No. 8/146/1987) [1989] ZMSC 127 (24 February 1989)

.· . I. IN THE SUPREME COURT OF ZAMBIA :· Appeal No. 8/146/1987 HOLDEN AT LUSAKA :,. : ~:: j •• :: : • • , ,. (Civi l Jurisdiction) . I .. I £. F. HARVEY LIMITED AppeUanf :. and _. l,.-··. ( I r 'i WILLIAM D~V/ D __ C~lSLE..,~l•Sr - . . Respondent ; , 13efore the Hon; Deputy Chief Jus~!ce,- in . Chambert .'{1~g 24th February, 1989. - - ·· ... ·- · - ... -~---· r .• - •-· J ..11,.: ...,.: ._~ : ... ... .. I • t ' , . . , , A. M. Hamir, Messrs Solly Patel Hamir & Lawrence,: for the respondent · It> appearance for the appellant ·' · · :;i · · _: . .', ·,. :0 · · ·. ··; ; --~· , · ...... , RU LIN .(; • ' ' ' ' ' ' . . ) . ; I • • • . \•. :· . , ; ' ' . ,•, ,, . . . . •. . . . . 1 • • .. , . . . . ' . . . : . . . . . · '. ~ ,',_. In this case. I had made an order on the hearing .9f·a previ9us ..... { . . .. . ... .- !· application that certain moneys payable under .t~e liigh .'.fC01,1rt ·. , . ··: , · judgment by the appell-ant to the! respondent :~hould _be :paid in~o a . : • ,. : \t bank account jointly operated by the· two si~es' ,ad\'. O_cates. in ·this . matter. Quite clearly, th_e orde~ ·wa~ in c·o.nt~~Pl.~t\o.n·:. of~. the·:·:~P,P~·a.1 . :.·. ', then pending . As of now, -however, there is a withdrawal of appeal :· on record wh ich was filed by Messrs Ituna Partners 0~ behalf {Qf,'their : ·. client on 27th December, 1988. This means that ~hereJs. no appeal pendi ng and t her efore no justifiction for keeping :t~.e . respondent, wh~ ,; .' was the beneficiary of the funds in the joint' account under the High · . \ Court judgment. out of tog__ said funds. The applica,tion is allow~d. and it i.s ordered t hat t he sum of KS00,000 plus inter~st accrued/ .if :any. : . now lying in a joint account in the names of the respective advocates of t he parties with Messrs Standard . Chartered Bank, Main. Branch, be paid out to Messrs Solly Pat~l Hamir and Lawrence; 'on behalf of their client in part satisfaction of the aforesaid High Court judgment. It i s order ed t hat in default of the signatory __ on the ap~ellant 's side_ : :-' executing the necessary documents for :such payment ou~~:.the .said . Messrs standard Chartered Bank- Zambia Limited. Main Branch. are • hereby directed t o make the said payment out to Messrs Solly Pa.tel . . . ',·.'. . : . . . . ' ' Hamir and Lawrence for which this order shall be sufficient authority • . I 2/ •• ; ••••••• The : ! ,; ... .. J2 °t• " 1, : ..... ~ . • •. ' ' .• ; • • • • ~ . . . •' . . ' - . . . . . . .. . - . . . -; . . that. ~ase ~as delivered _by .~!~; C. qrL:23rd: ~?-~~~r.~:~:1987t~nd,·; on :i\~i the lssues then falling for d~tern,itnatton, .the -leaf'.fl~d.tonmissioner held that the first appellant was a member of H1wa ·.m1nes ,and entitled to 29 p~r cent of the . shares; that 11 ls oi~er ~~~pany_: 111>1 ~ ients -lim1 ted.11 , were -c:on_sultants 1:o ~iwa mines •. b~~-~~i: lhe,.first .. appell~nt.,:was -not ·a d1~cto~, in Hiwa mines. , The i~'.8Co_nd :~Pp~l-l~nts.,,~t~l'.'te.d}o_ff as •;:c• • .. :, c9ntractors ·:~ngaged t~ p~~:1~e., ;~!rt~{~ ~.ervic~:'~n<h;o,t~arry. OU~-:, certain dutils: at the m~rie in ~ons1deratlon of .. wh1c~ .. they were to be given shares i'n Hiwa mi,nes. ~~ ~n~erstand t~at .at .. ,~n~ther stage the first appellant ob~alned :a. court order restralnin9,,the ,s.econd =, appellant from ~~prying ,ou~ thp~e _dutie~. :: , Th.,f thir,g_ '~ppel,lant. a ft!~ber of the Hlwa family. appeirs to ha!Je fallen out of favour with the rest of her clan preswna~l. Y. t;on atten~lng a .. ~e~ing .. on_ ·3Q.th August~_:;,·1988.. Thi~ was a meeting cpJ)yened, .by th,. ,~pp~Jl~~t.s~th~~gh'.th.e1r: 'ilawyer,s/'"an~ not · atten~ed by th~ rest of. ;t~ ~~,r~91,~~r~Jl~ ~h.1<:h ·f .~r 1re.aching: ... dec~stons were made: , appointments tq th9: board.; _th~1_,.cpmp,ny_ s~~re.tar.ies}~nd .accountants)": ., were to be changed; a new board chainnan.-was -named;;, bank· signatories,,'. : were to be changed;: t~ere-.~~s to -~ n,w ~~,g•ni.;iJln~;·,SO on.);:,' Jt seems clear .also (~-n~ iJ11(. is bor.1,,1•·:-,o~t:,bY: -~he _mln~t.e.i ;;of; the -meeting referred to and confirmed by counsel on both .. sides .and,·the·. affJdavits) the. board of. direc.~~rs:,was•1 ~l~s~lyecL~nd~_the~,were new that the· shar~_holdert :f ~g,r,d~ tl}~se1~,s~:~,:· be'i~ng-~ng,,~to .three • •• 1 • • ' · • ' ' . , . • • • . • . . . . -1.· distinct camp$t.- vlz,..,;t~e ~-i~a:_..f,m!JY,.:1:-tl! ~1.~n.a~-~!~t ffld;_the-:..,wL~::;:i. U.1.•~ contractor's si~e. Th~·Hiwa famHy, , ~,sp~~e ,~e qe~t.s•on of .. thet,learned conmissioner K~~~lata, d_o ~of r,gard the . f1rsf',app~~l~t . (along·:,ith · the. other two appellants) as hav~n,g an1, •~~u~ s~an~k.11'.l:· Hiwa: mines .. It 1.s aho 11ot in dispute J~at~ J~~ug~~ ,ij_lw~; Mln~:r,L~.~i hfl.s an : i_nterest 1n the case and fS . named~as .. t~J:,pl~lrttiff),.in;,th,Lac;tio1f:Jl)d,ithe:'.-r ;_ .. :i respondent to this appeal. the_ tn:ie .. ,~isputin~s . ate ,.,i~e .m.rs of the Hiwa family. The writ 1s su~d ._..seets to -nulU fy . t~e p)'.'Oc~e:fY!\~~ . ~of. 30th August, 1988. to resolve ~he, qu.s\ion ".fh~~~~~ .-t.h~: ap~Uants 1.are.:sttll members or not; whether., th_e .fl.rst., ~nd:;~h1f4· fPP.f. UaQ.lSJ:.are .d!_rec;~qf.$ or not; and an_ ..tnjun~tlon 1 ~ga.~_n$,_t ;.r-i~ . appe_l_l_a~ts.:··: th~s . ." _-.t~e ~domestfc ;, .. problems and ~ffait7s qf ;Hiw~ :-!1lines ~re_~ b.e/(eo~O~~~ in.the courts · , .: ... _.. '· .. .- . once again. • .1I1 . I . , . • • /.,.~1:{i;~·'.\ ~: I j • . · · , · l ·• t- t•~.' • •-.. :· .:. :·:. · ~ ·- • ' , ... ,. .. • • ("> ' t· · • -- -~•-- • :·. ... • : • _. • • 1, • • .. . • ' ' .· .3/~\-~.'-. ••••• Hiwa · . ..,,., .............. ,.. . ·:: ;. . - t .. .. . . . ' . • •.• '· ·,, ' • • • • • '· > ' • • ,: .. t < . .. ·' • : : J3SI .: · : . • . <~:} . i.:1:.·. • ,:,·-,.:· '. ·?!' ' ' · , j ' I • • . : I \ I . , I • ' ' . '. • •• i • • . . . , ' • • • • • • - . . , . •• J \, ,. "l ' O · . · ' •• ), i, • . .. l ·1 •. : • • ' ,,_. ,~ ;., : ' ' ' ,. . •• 1 '. •. •'- , . . . · . ! • : .. ! • ; · ' ---~ • • ; · · . • 1•♦ t ·• "'• \ I ' - ' O ~ • ' l r,,.4, •t; . \, . · • • · • ·. - . - t" . f • • o ~)II\ • ' . ., _.... l'• ••. 1 ·'' . ;, J } . ... f ~ [, ,,J .. . . . • ..•.•• •• •. '•1 •••• ! ,( ' '"" ,C" t.~ 51 • • •. i ' \ t ' ·~··. ''J ' .• • ., ·•.f· l j f'" . • . • • ·:·,"£ :•1 ' r "'"\ "', ' : ·_. ·:. .• ,, rlr.:..t, •• ,-. :~ · -• - - - - · I .: ~-r-- '\ : '• ?, ·,i Hiwa mines obtained, ex parte. an interim injunction to restrain -the appellants from visltln~ 'the 'minl.-a~d fr~m interfe~l~g-";'itt/ thet i;IT,. ~- ' ', · · operations of the mine, as well as from preventing the auctioning of H1wa Mines' emeralds on 17th October. 1988.· The appellants countered this by obtaining a c~oss-lnJunctton to simil~r ~ff~~t-'ag_~i~si' th/ ' members of the Hiwa famUy. At th~ _subsequenf inter'·partes ~earing~ . the cross-~nj~n~tion -,was. dJ~sol vef 9r. A~/ b~: :i~,:t,frJj.p,;~t-~~~!io~ .m~~-~n i· • ~-~ · interlocutory with the additional admonition that the appellants .. • ~' should not participate in the pp~ra~iol)s· of the' c~pany in any · '·· "'•f ;.~~·1,1,,)•~~· manner whatsoever untll final dUposa.l of the proceedings. The · · ' : , i nj unctl on was granted on. the •. usu a 1 -undertakl ng 'as'. to. damages ·· 1 f ''any~ .. ·.('. Ll';:,-~·; , ... l·,:•·:, :r_~ .. ~rr,r.• ' t:-"':.,1: .-.. l tr(f1,·· "There were varlous'•'affida~its': on:'.both · sldes·:·ln .whfcti· the·partles·•. ,, . ., .._,,fr-• ,1 " y,,~ -~9,t •'ti ·--.. : ~-:-··: ._:. 1r-~:i ·.:;. 1 ;_• _..t..__1 .~_t..:. " f ' , ', 1 .... , , , . , . • ,,._ .. , J•, j -,; ,. ., ... '·i ;•· I·.~ ·- .. ~~:~~l._.\•t~!· ·, • !i :;•r f .", 1 ... . : .. 11 · , ~ , : . : ' · .... i:· ti.th n '· ,,,,.. sought to establi~h their contending claims ) n~ to -~lsprove ,tho~e-•· . .. . of the opponent. The appellants complained that thei/ were··wrongfully •r ! • • ! being excluded from participating ln the management 'and other · ,. ·:·· affairs of the company and argued th~t. in order to put matters ·right. they had every right, as shareholders; to convene the' meeting comP.lal.ned of and to make changes. Hlwa _mine$, on behalf. of the ~iwa family,: .. · , 1 • :i.4~h:·._, ~ ~ ·· ) • •"\! •" 1 H•.. argijed that none of the appellants was entitled to -participate in ·· the management of the company or in the operations· of-.. i-ts mine; and further, that the flrst··and second· appeilants ·were"not even 1 members of the company • . ~e'.arg~ntf ·:af ~h~:~111'.';~p o~ ;~he ' ~p~llc~~ion ' for interlocutory relief ranged far ··and wide and · touched upon the merits and demerits of the case. The rullng ·complained·of in this appaal respondend to th~se arguments by touching upon some of the • I '•~ f f•~ ty i issues to be resolved ·at 'tbe trhl_. .. Tha, ·app_roach fonnecf"the bas!$ ' of three grounds of appeal · whi~h · complaloec;I.' about · co·ndu~ting ~ t~ial' ,. ·:t· i~ . of the issues at that stage; the finding that the appellants had not paid for their shares; . and 'what was the ··effect:;of s'uch' ai'I°eged •~-- · \ :(i•j ti) ,• · • ..... ·"- t r i ,.\, .. , . , . . ..... ? ~ •: 10- " •: .,,_•) \ .. ., .,'f: J ~ ~r 4 no~-payment on their ,,.~,~~~!,~~-,r i-R~~~~~~~t? !,~~;h~(\a~~i.~i~!~S. t• : ~ :· :i 1 c••,.~•, 1•r ' 1::;•,j,-.... of the company. There was als~ a ground of appeal concerning th~ standing of the company ln_t~ese pro~~dings whlc~ will ln effect • r· \ ' t concern groups of shareholders or' alleged "shareholders~· · · · ··. "':!J,~1 .. --: J'L .. : >" ~,.,tr ... J, ,._.,.._ ~~: ; r .... ,-.~,.·· ,.) • !1 f••<~: ~ .... "•·! :· ~1 :t'(rJ •!.""';"•• f ' '"'! ;,.1) '!~·· :. :. t·' .-.... •·••· •··"-~'. Vf•t•_...('; ,• ' "• t•y•,~1 -' J•, •. ~ ..-/,.~ ... ;"" .: '''l\•':\ ~'~··, i~ •-!'• t-""'- .. , •• ,, ... . > ~- ; · 1~ l"': f "'! •, · · . , ~ • . - ··~'· •. •t•,-. ::-:,, • 1 · ~ · , ~ :•J\,;lt ., , .. ,,, i ,,·ru-: ·--:, '{(."' •. ~ ! ~ ""' · ,,-.,. {'' v.t-•~ ~ - ··r r -~~·,,· '· V f; ~- .• -~ J ' •• t fr", •: !-·~::-- ' l.'l " '• t .... . ~ 1"" • ~ f •! "' j r•,•;, , · , • . , ; • \, •; ' : ' ... ; ; .1 " 1 ·· ·~) · . \ .1 • ' " • ' .,.t .... '"' • ,.,. .... 'i""-' 1 ( !i : .. Ii •t •. • . , .. , f,f' ,. •· ~· . } ' ·- 1 .. 1 • •• ........ •• ' ' , ! - -t•)'.\ ·• t ~ i ~ ":JI • , • '!; ,.-~. ~ " < • ,( - (! _. 1 • • ' .,. . ' • -~ ~. 11 ' ! ~ ._ , 1 • ( (':- - ♦ 1 ·• -. , 11, ·• · · ... • , , . ,_ , , ( ,_ •• ... '. •·· ' •. l •'"t ' ~- ,t, : 1 ~ . . : ·• ' • • ; _: • • f ~ ~ \ •. • • •, · .. , • , ., ' • 't • ' 1' .. t , . . . 1 f!o'I • • • • • f I l • 1 " t : • • • • • • • • I I I I • • ; ; - o, · • • • '· • , , - • . · , I , I I I .= f ' : • , : : ; , , < ' ' O I l , ' ' • . .'. I • • ... ·, t !:;,,;; ·u ,f .. -, tr,~,:,·::r-:-r-1 1 \- ,," ·· " .(!~! .ii' lf:Tl·S i•:t!•.tr \1t.~;:1t[:i n ~1~l'l '!]tl:r?:t,,FY, _r;,;,l.:·,~C:.;:.ffi!~>H.'.!.: . ;'.'• :t::.;n !]i;t ['{':flfl(;tli:.lJ b1~tnJ 't~f1\fl9" tr,12. ~l.).~iii!Y · (.;S •:; L<''~ ::w~d nnd Hurt. tlto$e_ tth-0 -wi!)./l'~ ,~i11in{ng'thr: ,::,;lrt,l~ny' ·•:: - . . ; '. 1 . . 4 •••••••••• . , . • I I' . , ' 'L . u V J4 .. • I • ' : ; • • • • • ' ~• :- l ' l . I . . . • • , . • •, ; - • • • • : ', • ,' ·•, •· • - ... "'\ •' l , •, ~ • •• ~. • • . ,. , :, :•, : ~ .:. • ,, · • ' • ' .~, , "> ~( "'' ·.. . '. . .' •. ,.. -; • ~ ,., ' . , . '·, ., • •..,, . , ' • •. ,e j• • l •~ ~ : ,l._4-..t• ;,_,;.,, 1. • , · : · ~ .... ~ ... 1 ~ •. r.. ·''··' .. .... c; •••; . ,. (?i, ; ' • . . ~- )· ~- '. - We must specifically decline to make any pronouncements at this ·stage which may preempt·~ or havftthe· eff~ct ·of' preemi)tlng; a'ni Sef! ~n prejudging, the very issues that mu$t be resolved·nt·the trial ... In this' r~gard,' we mu~t· refra1'n' from<:!making. any .findi'ngr tou~h-in~{ui>onlY, the iss~es to be tried· save·to point· out', , in· relation' to the grounds 1 of appeal already men~ioned, that· if'was and it ls no part of the court's functio~ ai. th,~~ s~ag_e ~f,. ~~e._'.\ Jf ~t.~1~i~n;. t<r ;ttY:JO:: ;~,ts.olrir-: NIX 4~8!1f. H cts of ev_ide_nce on. a~f~~ayi~,as_,Jo:.f~~,t~ __ .o? "'~:lc_~J~;tEJ~~"l;1of,i~h.rS,, [';id party may ultimately depe_nd .. no~ :~o. ,dec~de: intri_cate ,Q_,U~fti~!IS ~f~. cprppany law which will call for detailed_ argument and mature .<:onsiderations at the tria,l. . We have parap~r,$~p A~.~-. hRfr9¥~~; t~-~ J.'?.fJ!J.<?1r!1 r~art from ~a.judgment of ~or.d,:DJpl~ckJn Amer.lean Cyanam1d ·-v- Ethicon LtdJ. U.•i·:•~ Lord' Qlplock hast; 1r. ~h~~ ~~se, ~~~i. P;~ge~ ,.~tpl i ~~dj_,~,1Jt,,s_,t; .o~~ ·,!'~.~~' w~., r.espectf~lly conside~ to, bei: very -~~ef~l-'._g~i~~-~ 1~~, t CJr,,~e-~l trg :-~,iJhio Interlocutory inJun_cti_ons; •. _ i Fc;,J_lo,~l~g, tp_~~ :Ju~g~n.~!~!~e.., a_c~!Pt rth~~;! ·l~ough, the. r~~p0,~9~~t C:OJ!IPA!IY;Jll,aY,,.~~Jr .9~t. J~ 1~~~~~r ,,··r9f!l!"i\J, . ~la,ln~iff: on ~-~h~~'- ,of,~P~·~\":,i·t~~,Jr (~O~P. J!¥ e.r)\m .. ~!r!JPF Mtsrsi~,~iSUJ Jo~n~ .1~ _,t~~ .a~n,,.l),_t,.~ i~,,; ~~gh . Court WI 11 see .fit) the claims in . _· the writ do not appear to be frivolous or vexatio~s.: There Is indeed a serious question to be tried wh. Jch. hopefully~ ·will put a final end to the recurring litigation. Again following Lord D1plock I s guidelines, . we have considered whether or not damages would be an adequate remedy so that it is not neces$ary to award an interlocutory injunction. _ In this regard. we note that the far-reaching ·1decisions made at the meeting of 30th August, 1988 wou~_d, lf allowed to be' 'implemented, completely and drastically alter the structure and'management of Hlwa mines ·from what it has been so far. Additionally. this would eff~ct a radical departure from the status. quo. which_ we. have. no, doubt.- it. is,~ .. , ~ ~, desirable to maintain until trial. '8fi~~.~Js,.:ep~po~.,.!ci~e cannot ignore the fact that one faction has been running Hlwa mines while the others, represented by the appellants have not hitherto been so involved. It seems to us that the balance of convenience ln such a situation-in ternts of the. test suggested br Lord'DJplR~~=-~!J"1~1gh1ng·the·pros~"~"· -~· ~ and cons of gaantlng or refusing to grantt!nterlocutory:rellef-demands that those who have not previously been running the company be temporarily restrained and that those who were running the company ·,-..._ ,_., { .. . · ,1t •("\.,,:;- ' 1 f." ..,. ~ ,. jl, . . . . . . . ,a, .. ~ . . . . ~ '!lo • , ... , ' i ~::r ... r.:· P!-', ·•··1,1 ... . . . . . J "t -~ - ' ,. . . .. ,to ...... " '-· . . "' t, .,. ~ • . . . ' . . . . . ., ,• I ~ ; ..,. : . . . ~ • • .. •. .. .- ' • " • , • • .5/ ... .. . • ••• .. be ; ., . . .. . ~ ' \ . . . ·, ' '.", ,·,~~L{:~;: i }~t :, ·: ~ .. ,;~!\ .. ··._ } . :. ' .• • • ' be pennltted to continue to do so until the varlo~~ issues raised in the ·act_!on have b~e,:l tried. It seems obvi~us also that a cross .. injunction-Intended to disable ~v~ryone else from running the company- would paralyse Hiwa mln~s · and because this would not be in. the .. in~~$ts o(the' company, it should 'not:-b,fentertilned~-~ r[U , / r:.; /,,,:)00_ llsrat · ~:~ 1·~, ...... ll"'nt At the end of the day, and having reg·ard to the :relative merits .. ,.._~, <u,.,,, · · · - · t,·-..•-. Jrt " It;('' • t : (... R.: · . . .,, ' '.ii _, . . . . • - - ' • • • •. ., . · • •· ,:·. _r • • • :, . ·· ·! , I>'""" .'~·• 1·/I• ,-::- and demerits of upholding···the interlocutory injunction on one hand. and dissolving it on the other·- when all~parties would probably wo~t ,io:~t continue to pursue their own line of action and so add to the confusion - . . .-! we find that this is a suitable' case 'in which to ·uphold ·the fuller injuction which extended -~~ ;~~-~~)!J~-.-.~~~~Q~~,~~:~ .. fr~ a1_1Y: parttc1pat1on whatsoever until trial of the action. ,lhe interlocutory injunction is subject to the usual underta~lng. as· to damages and we vary it· only to the extent of adding .the -further undertaking that ·Hiwa mines and .the Hlwa · family shall not, ·. HJi!\:-af.~ee:-trial ·of--the action, effect~ani-------·-·:--· distribution of th~ _divisible · p·roflts-. r-' In:;sum, the appeal ts dismissed and the· costs· follc.nf;-the::-event·.---•M~-- •"-._,.,, .. ,, .- :-_-,-:1; ':/: · · r·• ;' ":::, " · •.• , ,- ~tf~'ed· \•~, j~w.~l'..t> • ' 1 - - -- - - i,..r;• '1->- I ,.,J_a...;. .• • '--r---..,•~ v, \,,\I'...,. ~iirr.,· • .. . J., -·~·,· ,~ • ~ t'." ,- ' ... le; ' ./,,,, ~ • l : :•: ! r.,. ~ J..• /.. \ • . . •• ,.~ 1 • I ~ .. ._ ...,, .,. ,. . . • . "" ,\ · • ... , .. • • • : - t • • $ . • • ' ' ' • • , , ' - . . . ·, •• f • • "" .. . " . '• . , ; ' : ' I t .i • I • • .. .. . :•,t / : : •,. I t I i t)~ ! • J •.: ~ • t • : I • : .4 • I : • ., l I • 21 .. ~-.... _ .•• tnat : .. . .