SUMMARY
REPORTABLE

CASE NO.: A
209/2009

IN
THE HIGH COURT OF NAMIBIA

In the matter
between:

REMA
TIP TOP NAMIBIA (PTY) LTD AND OTHERS v SEPP THALMAIER AND OTHERS

PARKER J

2011 March 17

Company
Law - Jurisdiction
- Second respondent challenging jurisdiction of

the Court over him
on account of the second respondent being resident and domiciled in
South Africa - Court finding that the first applicant is a Namibian
company in terms of the Companies Act (Act 61 of 1973 (as amended),
the second respondent is a director of the first applicant, the
application relates to allegations of second respondent's breach of
fiduciary duty towards first applicant and the relief claimed is
limited to Namibia - Consequently, Court finding that the second
respondent is subject to the jurisdiction of the Court in the instant
proceedings -Accordingly, Court dismissing second respondent's
preliminary objection.

Company
Law - Notice
of motion - Application launched by artificial person

(a company (first
applicant)), a natural person (second applicant), and third applicant
(a close corporation) -

Respondents
challenging locus standi and authority of applicants to bring the
application - Court accepting respondents' contention that in the
absence of an unanimous resolution of the shareholders made by voting
in general meeting in terms of a clause in the shareholders agreement
relating to first applicant, applicants lack locus standi and
authority to launch application - Furthermore, Court rejecting
applicants' reliance on the doctrine of 'derivative' action (or
'application') as clothing second applicant with authority to bring
application - Court reasoning that the company on whose behalf the
second applicant purports to act is the first applicant but that
company has not been joined and cited as a respondent.

Held,
where
a legal persona applicant on whose behalf a natural person applicant
purports to act is a company that company must be cited and joined as
a respondent.

CASE
NO.: A 209/2009

IN
THE HIGH COURT OF NAMIBIA

In
the matter between:

REMA
TIP TOP NAMIBIA (PTY) LTD
…......................................................................1^st
Applicant

SEPP
MATHIAS ROM
…...........................................................................................2^nd
Applicant

ROMTEETZ
INVESTMENTS CC
….............................................................................3^rd
Applicant

and

SEPP
THALMAIER
…..........................................................................................1^st
Respondent

THORSTEN
WACH
….........................................................................................2^nd
Respondent

STAHLGRUBER
OTTO GRUBER AG
….................................................................3^rd
Respondent

NENANA
MANAGEMENT SERVICE (PTY) LTD
…...................................................4^th
Respondent

CORAM:
PARKER
J

Heard
on: 2010
March 29; 2010 September 16; 2011 February 9

Delivered
on: 2011 March 17

JUDGMENT

PARKER
J:
[1]
In this application the applicants, represented by

Mr
Heathcote SC, assisted by Mr Dicks, have moved the Court by notice of
motion for an order in terms contained in the notice of motion.
Affidavits of the second applicant, inter alios, were used in support
of the application. The respondents (i.e. the first, second and
fourth respondents) have moved to reject the application; and in that
behalf the first respondent and the second respondent (the managing
director of the fourth respondent) filed opposing affidavits. In his
affidavit, the second respondent, represented by Mr Graves SC, has
raised preliminary objections, including the question of jurisdiction
of this Court to the effect that he is 'a resident of, and domiciled,
in the Republic of South Africa from where I conduct all of my
business dealings for the Rema Tip Top group of companies which
includes - (significantly and unwittingly, I must say) - RTT Namibia,
and Rema Tip Top South Africa (Pty) Ltd ('RTT South Africa'). That
being the case, so the objection goes, 'The applicants have not taken
any steps to clothe this Court with the necessary jurisdiction to
grant the orders sought in prayers 2 and 3 of the notice of motion.'
The second respondent concludes, 'In the absence of any prospect of
the orders sought in prayers 2 and 3 being effective there is, I
submit, no basis for this Court to assume jurisdiction in respect of
me whilst I am resident and domiciled in the Republic of South
Africa.

[2]
The other preliminary objection properly so called challenges the
locus standi and authority of the first applicant to launch the
application. That is to say; according to the second respondent, in
the second applicant's founding affidavit the second applicant
'alleges that he was authorized to launch this application against
Thalmaier (the first respondent) in terms of a resolution of the
board of directors of RTT Namibia (the first applicant) of 11 March
2009 ... Significantly Rom (the second applicant) does not allege
that he is authorized by the first applicant to represent it in this
application against me, Stahlgruber (the third respondent) and Nenana
(the fourth respondent).' As respects this point, the first
respondent, represented by Mr Totemeyer SC, makes common cause with
the submission made on this point by counsel for the second
respondent in counsel's heads of argument.

[3]
I shall treat the preliminary objection on the question of
jurisdiction first and after that the preliminary objection on locus
standi and authority because a determination of these objections may
be dispositive of the application.

[4]
The applicants content that this Court has jurisdiction to grant the
relief sought against the respondents. Mr. Heathcote argues as
follows. The first applicant is a Namibian company, and it is
registered and incorporated in Namibia in accordance with the
provisions of the Companies Act, 1973 (Act 61 of 1973, as amended).
It has its principal place of business in Namibia, and its management
is situated and conducted in Namibia. Furthermore, it is not in
dispute that at all relevant times hereto the second respondent was a
director of the first applicant in Namibia. Counsel submitted further
that the second respondent breached and continues to breach his
fiduciary duty to the first applicant, inter
alia, in
Namibia; and the relief claimed by the applicants is limited to
Namibia. Counsel concluded that in virtue 'of the aforegoing the
second respondent was subject to the jurisdiction of this Court; and
finally, it is common cause that this Court has jurisdiction over
first respondent.'

[5]
In support of his submission counsel referred to the Court a number
of South African cases on the point. I have visited those
authorities, but I have decided that it is safer to apply the
Namibian case of Mahe
Construction (Pty) Ltd v Seasonaire 2002
NR 398 (SC) only; not least because it is a Supreme Court decision,
but also one does not need to embark on an excursion of
conceptualization to comprehend the term 'domestic companies' as it
applies to Namibia. When the South African cases speak of 'domestic
companies'; the question is: is it 'domestic' qua
the
State of South Africa in relation to foreign States or 'domestic' qua
a
Province of South Africa in relation to other Provinces of South
Africa?

[6]
Be that as it may, having considered Mr Heathcote's submission and
the second respondent's contentions in the light of the
interpretation and application of the provisions of s. 16 of the High
Court Act, 1990 (Act No. 16 of 1990) to which Mr. Heathcote drew my
attention and upon the authority of Mahe
Construction (Pty) Ltd v Seasonaire supra,
I have come to the conclusion that the second respondent is subject
to the jurisdiction of this Court. The preliminary objection
respecting the Court's jurisdiction therefore fails.

[7]
I now proceed to determine the preliminary objection that the
applicants lack locus standi and authority to launch the present
application. The first and second respondents aver that the first
applicant lacks authority and has no locus standi to bring the
present application. It is trite, so Mr Totemeyer says - and I accept
the point of law contended by counsel - that an applicant which is a
legal persona bears the onus of proving that an application is duly
authorized when such authority is challenged (Wlotzkasbaken
Home Owners Association v Erongo Regional Council 2007
(2) NR 799 (HC) at 805F-806C and the cases there reviewed and relied
on). In this regard, I find that the first and second respondents
have properly challenged the authority of the applicants to launch
the present application. In that event upon the authorities, e.g.
National

Union
of Namibian Workers v Naholo 2006
(2) NR 659; Wlotzkasbaken
Home Owners Association v Erongo Regional Council supra,
the second applicant bears the burden of meeting the challenge by
placing sufficient evidence before the Court that he or she has such
authority.

[8]
Counsel submitted that legal representatives could not have been
appointed 'to prosecute such proceedings' because of the absence of
an unanimous resolution of the shareholders made by voting in general
meeting in terms of clause 11, read with clause 11.1.17, of the
shareholders agreement (Annexure 'SR4B' to the second applicant's
affidavit). In buttressing their argument counsel submitted further
that from the proceedings of the meeting of the board of directors of
11 March 2009 it is indisputable that the first applicant was not
authorized to institute proceedings against the second respondent. I
accept counsel's submission. It is clear from 'Resolution 2' (being a
part of Annexure 'SR42' to the affidavit of the second applicant)
that no valid resolution was made that could possibly clothe the
applicants with authority to institute proceedings against the second
respondent.

[9]
In an attempt to meet the challenge respecting locus standi and
authority to bring the proceedings against the second respondent and
having realized that the reliance on 'Resolution 2' could not
succeed, the second applicant then says he relies on the doctrine of
'derivative action' ('application') in the following terms:

'I also launched
the application on behalf of the first applicant against the first
and second respondents derivatively, in my own name and on behalf of
the third applicant who authorized me to do so.'

Mr
Graves's response thereto in submission is that the second applicant
who is a member of the third applicant has no right himself to
proceed derivatively. Counsel goes on, 'Furthermore, the company on
whose behalf the second applicant purports to act is the first
applicant. The first applicant should have been cited and joined as a
respondent.'

[10]
I accept counsel's submission that 'the first applicant should have
been cited and joined as a respondent' in order to sustain derivative
proceedings; that is to say, the first applicant must be made a
respondent in the present application (Gower, Principles
of Modern Company Law :
p.

590;
Beattie
v Beattie Ltd [1938]
Ch. 708 at 718 (CA); Spokes
v Grosvenor

Hotel
[1897]
2 QB 124, cited with approval by Mathews J in Desai
v A H Moosa (Pty) Ltd 1932
NPD 157 at 159, also relied on by LAWSA First Reissue, Vol. 4, Part
2: para 205). The first applicant has not been made a respondent in
this matter. It follows reasonably and inevitably that I should
uphold the point in
limine on
locus standi and authority. Accordingly, I find that the applicants
lack locus standi and authority to bring this application. I hasten
to add that this holding is dispositive of the present application.
Therefore it would make no sense to treat any other issues. For the
aforegoing, I hold that there is no application properly before the
Court.

[11]
In the result I make the following order:

The
application is dismissed with costs, including costs consequent upon
the employment of one instructing counsel and one instructed counsel;
in favour of -

(i)
the
first respondent;

(ii)
the
second and fourth respondents.

PARKER
J

COUNSEL
ON BEHALF OF THE APPLICANTS:

Adv.
R Heathcote SC Adv. G Dicks

Instructed
by: H
D Bossau & Co.

COUNSEL
ON BEHALF OF THE FIRST RESPONDENT:

Adv.
R Totemeyer SC

Instructed
by: LorentzAngula
Inc.

COUNSEL
ON BEHALF OF THE SECOND AND FOURTH RESPONDENT:

Adv.
N J Graves SC

Instructed
by: LorentzAngula
Inc.