Court name
High Court of eSwatini
Case number
Civil Case 904 of 2003

Swaziland Meat Industries Ltd v TWK Agriculture Ltd and Others (Civil Case 904 of 2003) [2003] SZHC 108 (20 November 2003);

Law report citations
Media neutral citation
[2003] SZHC 108
Coram
Maphalala, J









1


THE
HIGH COURT OF SWAZILAND


SWAZILAND
MEAT INDUSTRIES LIMITED


1st
Applicant


TWK
AGRICULTURE LIMITED


2nd
Applicant


And


REGISTRAR
OF COMPANIES


1st
Respondent


THE
ATTORNEY GENERAL


2nd
Respondent


Civil
Case No. 904/2003


Coram S.B.
MAPHALALA - J


For
the Applicants Advocate P. Flynn


(Instructed
by Robinson Bertram


For
the Respondent Miss J.L. Tsabedze


(Attached
to the Attorney


General's
Chambers)


JUDGMENT


(20/11/2003)


The
relief sought


Serving
before court is an application on motion by long form for an order as
follows:


1. That
the Registrar of Companies be and is hereby ordered to sign the
memorandum and articles of association and certificate of
incorporation with


2


respect
to Simunye Cattle Company Limited registration number 349/2001
(Registrar of Companies reference R7/17675) within seven (7) days of
the grant of this order.


2. In
the event of the Registrar of Companies failing to comply with prayer
1 above, the Registrar of High Court be and is hereby empowered to
sign any and all documentation, memorandum and articles of
association and/or certificate of incorporation to give effect to
this order.


3. That
Simunye Cattle Company Limited be and is hereby deemed to have been
registered on the 27th of March 2001 and that any and all agreements
and/or transactions entered into by the said Simunye Cattle Company
Limited from that date are ratified and confirmed effective as at
that date.


4. That
Simunye Cattle Company Limited (registration number 139/2003)
Registrar of Companies reference R7/20335 which registered on 12
February 2003 be and is hereby struck off the roll and its
registration cancelled.


5. That
the Petitioner pays the costs of this application only in the event
of non-opposition thereto.


6. Further
and/or alternative relief.


The
founding affidavit of one Jonathan Charles Williams who is a Managing
Director of the Applicant is filed in support thereto. Various
annexures pertinent to the Applicant's case are filed of record. A
confirmatory affidavit of one Petrus Jacob Dupooy who is the General
Manager of the Applicant is also filed. A further confirmatory
affidavit of one Jabulile L. Tsabedze is filed.


The
Respondent opposes the application and an answering affidavit of one
Gibson Dingane Ndlovu is filed where six points of law are raised in
limine. I must hasten to state that these points were argued together
with the merits of the case. Therefore this judgment will address the
points of law in limine as well as the merits.


In
turn the Applicant filed a replying affidavit and thus completing the
pleadings in this matter.

The
Parties


3


The
1st Applicant is Swaziland Meat Industries Limited, a company
registered and incorporated with limited liability according to the
company laws of the Kingdom of Swaziland which has its principal
place of business at 1st Avenue Industrial Sites, Matsapha, district
of Manzini, Swaziland.


The
2nd Applicant is TWK Agriculture Limited, a company registered and
incorporated in accordance with the company laws of the Republic of
South Africa which has its principal place of business at Piet
Retief, Mpumalanga, South Africa.


The
1st Respondent is the Registrar of Companies a statutory office set
up in terms of the provisions of the Companies Act No. 7 of 1912
being an entity responsible for registration of companies in
Swaziland.


The
2nd Respondent is the Attorney General of the Kingdom of Swaziland,
in his capacity as legal representative of the 1st Respondent, care
of the Ministry of Justice Building, Usuthu Link Road, Mbabane,
district of Hhohho, Swaziland.


The
Applicants' case


During
or about January 2001, the 1st and 2nd Applicants both of whom are
extensively involved in the marketing and sale of livestock, entered
into negotiations which culminated in a proposal that a company be
formed in Swaziland for inter alia, the commercial rearing of cattle
in feedlots which cattle, after having been reared by SCCL (Simunye
Cattle Company Limited) be sold to the Applicants.


It
was proposed that the subscribers to this company would be 1st and
2nd Applicants'. Instructions were duly given to attorneys Robinson
Bertram to form the company and the Memorandum and Articles of
Associations were duly prepared.


The
proposed company was to be called the "Simunye Cattle Company
Limited".


The
said Robinson Bertram presented the Memorandum and Articles of
Association to the Registrar of Companies in accordance with Section
17 of the Act who then examined the said Memorandum and Articles of
Association, issued a certificate of


4


incorporation
and allocated the company a registration number 349/2001. A copy of
the certificate of incorporation is annexed marked "JCW3".


According
to the Applicant upon receipt of the Memorandum and Articles of
Association, the subscribers thereto duly held the requisite
meetings, agreed amongst themselves with regard to the transfer of
shares, and appointed the first directors and public officer of the
said company.


In
pursuance thereof, and on the assumption that SCCL had in fact been
lawfully registered, an application was made for a trading licence.


According
to the Applicant on the further assumption that SCCL had been
lawfully registered the company entered into a number of business
transactions with other parties. These are detailed in paragraphs
9.8.1, 9.8.2, 9.8.3, 9.8.4, 9.8.5, 9.8.6 and 9.8.7 of the founding
affidavit.


During
or about November 2002, the SCCL's auditors noticed that the
Memorandum and Articles of Association of SCCL and also the
certificate of incorporation of SCCL had not been signed for by the
Registrar. The auditors pointed this anomaly out to SCCL's attorneys
Robinson Bertram and requested them to obtain the signature thereof.


The
person duly mandated to carry out this task by SCCL's attorneys
Robinson Bertram was a certain Jabulile Tsabedze who approached the
Registrar of Companies to seek to explain the anomaly and also to
obtain his signature on the documents. Unbeknown to either the
Applicants the Registrar of Companies refused to sign the Memorandum
and Articles of Association of SCCL. The Registrar indicated that he
required that afresh company altogether be formed and that the main
object, which is SCCL's number of submission was one of the major's
objects thereof, namely:


"to
hold investment of all forms in Swaziland and elsewhere and conduct
any other activity to investment holding".


Be
deleted all together.


5


The
deponent avers that he is advised and verily believed that the
Registrar of Companies took the view that because the word
"investment company" did not appear in the name of SCCL, it
was not an investment company and as such this object would, in his
view, need to be deleted.


The
Applicant avers at paragraph 9.14 that thereafter, the said Jabulile
Tsabedze, without seeking a specific mandate from SCCL, and bona

fide
believing that she was attending to SCCL's concerns, carried out the
instruction of the Registrar of Companies by forming a fresh company
altogether. That company which although bore the same name of SCCL,
was allocated a fresh number namely 139/2003 (Registrar's file
127/2003) but most importantly was only registered on the 12th
February 2003. Furthermore, the main object thereof had been deleted.


Upon
delivery of the newly registered SCCL no. 2, to the company's
auditors it was only at that stage and during or about March 2003
that the Applicant became aware that another company by the name of
Simunye Cattle Company Limited had been registered. The Applicants
had no knowledge of this fact prior to that.


SCCL
has been carrying on business for approximately two (2) years, has
entered into various binding commercial agreements both nationally
and internationally and has sought finance from SIDC and the 2nd
Applicant. SCCL has for the past two (2) years, carried on operations
and business on the assumption that it has been regularly and
properly registered.


The
Applicants contend that the actions of the Registrar of Companies in
refusing to sign, alternatively to register the original Memorandum
and Articles of Association of SCCL are not only unreasonable but
unlawful and ultra vires his powers in terms of the Act in that the
object with which he has taken issue is neither unlawful nor does it
offend against any of the provisions of the Act. Section 6 of the Act
provides that the Memorandum of a limited company shall state inter
alia:


13.1. The
name of the company with "limited" as the last word in its
name;


13.2. The
place in Swaziland in which the registered office of the company is
to be situate;


13.3. The
object of company;


6


13.4. That
the liability of the members is limited;


13.5. That
the amount of share capital with which the company proposes to be
registered and division thereof into shares of fixed amount.


At
paragraph 17 the Applicants contended that the balance of convenience
favours them in this matter in that the company SCCL has entered into
valid and lawful binding commercial agreements with third parties and
has strictly complied therewith. On the other hand, to refuse the
Applicants relief which they seek would be disastrous and would
prejudice third parties who dealt with and contracted with SCCL in
the bona

fide
belief that it has been registered.

The
Respondent's case.


The
answering affidavit of the 1st Respondent is filed in opposition. The
Respondent raises points of law in limine and also addressed the
matter on the merits.


The
points of law in limine are couched in strange language which I found
not only improper but intemperate. I will proceed to reproduce the
points in extenso, thus:


"2.3. AD
POINTS IN LAW IN LIMINE.


I
would like to raise and to rely on the following points of law in
limine before the hearing of this application on the merits thereof.


2.3.1. I
submit and 1 am verily advised that the relief sought by Applicants
in the notice of motion under prayer 1 is incompetent in law in that
the Registrar of Companies has a discretion to exercise in relation
to the Registration of Companies. He cannot act on dictation of
another in the exercise of his duties and this is wide enough to
include a court of law. I submit that a public officer, in my
position, would be failing to exercise his discretion independently
if he acts on what somebody else or institution says he must do and I
am advised that this is an irregularity which is sufficient to be a
ground of setting aside any exercise of power and to support a
finding of failure to exercise his discretion according to law on
review. Applicant is attempting to make this Honourable Court to
usurp the functions of my office by indirectly


7


making
it Registrar of Companies. I submit that I am the only Registrar of
Companies in this Kingdom and my functions cannot be delegated to
this court.


2.3.2. I
submit further, that the argument raised under the above mentioned
paragraph 2.3.1 are also reiterated as fully applicable with regards
to the alternative prayer number 2 of the Notice of Motion. The same
alternative prayer 2 is also incompetent and is even worse than
prayer 1 in that it asks this court to make an order it has no legal
competence to make because the functions of the Registrar of Deeds
are well outlined under Section 5 of the Deeds Registry Act of 1968
and there is nowhere therein where the function of being an
alternative Registrar of Companies is mentioned. His duties are
confined to registration of immovable property and such other real
rights which emanate from transactions involving immovable property.
This has nothing to do with my office and I am advised that express
mention of those duties mentioned under Section 5 thereof mean the
automatic exclusion of my duties. This Honourable Court has no
jurisdiction to extend the functions of the office of the Registrar
of Deeds office and further arguments in support of this point shall
be strongly advanced on my behalf in court during the hearing of this
application.


2.3.3. I
submit further that prayer number 3 is also incompetent in law
because there is no legal basis of a retrospective registration of a
company. This will, prejudice members who were dealing with it before
Registration in that its liability will be unduly limited yet at the
time of a possible transaction they were not aware of the limited
liability of the person they were dealing with at the time. I submit
further that I do not have such power in law, to register a company
retrospectively, and that the further arguments in support of this
point will be advanced in court on my behalf.


2.3.4. Prayer
number 4 is also incompetent because the company sought to be
deregistered has not been cited nor served with the court papers. I
had expected that this court be approached by the company itself
seeking deregistration and that before this court is approached on
application of this nature that Applicant should have exhausted the
statutory remedies for deregistration. I am advised therefore that my
office has not refused to deregister the company, the fact is that it
has not been approached by any one with such an application. I submit
and I am verily advised that this application is a gross abuse of
court process and ought to be thrown out as such with costs.


2.3.5. I
submit that prayer 5 is also irregular because this is not a petition
but is an application on notice presumably in terms of Rule 6 of the
High Court rules and as such there is no petitioner who can be
ordered to pay costs. I am advised that instead the best thing in the
circumstances is that the Applicant be ordered to pay costs if the
points in limine are upheld". (my emphasis).


8


On
the merits the Respondents deny that the Registrar of Companies
issued a certificate of incorporation. The 1st Respondent refused to
sign the Memorandum and Articles of Association because they have an
object which he found undesirable, viz object 3 (a) (1).


The
Respondents deny that there would be no prejudice to any party by the
granting of this order in particular the Registrar of Companies
because the effect of that order would be stripping off the Registrar
of Companies of his discretionary powers to scrutinize the Memorandum
and Articles of Association of a company to determine if it has
"lawful" objects or not and then sign them if they are in
order and reject them if they are not in order. The Registrar of
Companies exercised his discretionary powers in terms of Section 212
of the Companies Act.


Arguments
for and against the application.


As
I have already mentioned the points of law in limine were argued
together with the merits of the matter.


Mr.
Flynn for the Applicant filed very comprehensive Heads of Arguments,
for which I am grateful. Miss Tsabedze on the other hand argued from
the bar in an incoherent address which was in line with the language
used in the Respondents' answering affidavits. I must say Miss
Tsabedze was not helpful to the court at all. The court was subjected
to an emotional tirade not befitting of counsel. In the main the
arguments advanced on behalf of the Respondents centred around the
averments contained in the answering affidavit.


The
applicable law


In
terms of Section 17 (1) of the Companies Act, 1912, the Memorandum
and Articles together with a copy thereof certified by a notary
public shall be transmitted or delivered to the Registrar.

The
Registrar is required, in terms of Section 17 (2) to deliver, the

Memorandum
and Articles, if they are in accordance with the Act, by filing the
certified copy. The


9


Registrar
is further required to return to the company the original Memorandum
and Articles with the date of registration endorsed thereon.


Section
17 (2) therefore clearly provides that the act of registration is
constituted by the filing of the certified copy. The date of this
registration is endorsed on the original.


Section
18 has the heading "effect of registration ".


In
terns of Section 18(1) the Registrar shall certify under his hand
that the company is incorporated. He is required to do this upon the
registration of the Memorandum which registration has been effected
in terms of Section 17 (2).


The
purpose of a certificate of incorporation is set out in Section 19 of
the Act. The Section provides that the certificate of incorporation
given by the Registrar shall be conclusive evidence that all the
requirements of the Act in respect of registration have been complied
with.


The
act of registration comes about by the filing of the certified copy
of the Memorandum and Articles. The certificate under the Registrar's
hand merely certifies that the registration has taken place in
accordance with the Act.


The
law applied to the facts in casu.


It
is evident in the papers filed of record that the Memorandum and
Articles of Simunye Cattle Company were duly prepared by attorneys
Robinson Bertram. The Memorandum and Articles were presented to the
Registrar in terms of Section 17 of the Act.


The
Registrar endorsed a date of registration on the 27th March 2001, on
the Memorandum and Articles and returned them. The endorsement also
has a registration number and the Registrar's file number viz
349/2001.


10


The
Registrar issued a certificate of incorporation dated the 27th March
2001, which also has the file number 349/2001

on
it. The Registrar failed to sign the certificate".


During
November 2003, the company's auditors noted that the Memorandum and
certificate had not been signed.


I
agree with Mr. Flynn for the Applicants that in terms of Section 17
(2) it is not a legal requirement that the Memorandum and Articles be
signed by the Registrar. The Registrar is merely required to endorse
the date of registration thereon which has been done. Section 17 (2)
was complied with and the company was therefore registered as
provided for by that Section.


The
Registrar had not raised any objection to the Memorandum and Articles
as he was entitled to when the company was registered and the
documents were returned thus satisfying all the requirements of
Section 17 (2). The Registrar is obliged to sign the certificate in
terms of Section 18 of the Act as the company had been registered in
compliance with Section 17 (2).


I
agree in toto with the Applicants' contention that the Registrar's
refusal to sign the certificate is unlawful and that his demand that
a new company be registered is ultra vires his powers in terms of the
Act.


As
to the complaint advanced by the 1st Respondent at paragraph 2.3.1 of
the points of law in limine, I find that it is without basis. The
complaint is that "Applicant is attempting to make this
Honourable Court to usurp the functions of my office by indirectly
making it Registrar of Companies in this Kingdom and my functions
cannot be delegated to this court".


Clearly
the sentiments expressed by the 1st Respondent are misplaced. The
present application is a mandamus. A mandatory order is one requiring
the performance of an act or duty, i.e ad factum praestandum, and is
commonly sought to enforce the discharge of a statutory duty. (see
Minister of Finance vs Barberton Municipal Council, 1914 A.D. 355 -
6, Aziz vs Vryburg Municipality, 1954 (1) S.A. 427 (GW) and Classen,
Dictionary of Legal Words and Phrases (Vol. 2) at page 385).


11


The
mention of the Registrar of Deeds by the Applicants in prayer 2 in my
view was clearly a misnomer and therefore nothing much turns on this
point of law in limine taken by the 1st Respondent at paragraph
2.3.2.


As
regards point 2.3.4 of the points in limine that prayer number 4 is
incompetent because the company sought to be deregistered has not
been cited nor served with the court papers, the short answer to this
is that there was no need for that as the same company is involved in
this case.


Furthermore,
point 2.3.5 of the points in limine do not take this matter any
further either way and therefore is of no consequence.


In
the result, an order is granted in terms of prayers 3 and 4 of the
notice of motion.

Costs
to follow the event including costs of counsel in terms of Rule 68
(2) of the High Court rules.


S.B.
MAPHALALA


JUDGE