Winding up

Civil procedure – Judgment – Characteristics of a judgment – Court to reveal its reasoning
Civil procedure – Judgment – 7 essential elements
Civil procedure – Party seeking main relief and alternative reliefs – Whether court is bound to
consider granting alternative reliefs

There was animosity between the shareholders of the 1st Appellant. The 2nd Appellant was the
majority shareholder and the Respondents, who are mother and son, were minority shareholders.
The Respondents came to Court accusing the 2nd Appellant as majority shareholder, of
conducting the affairs of the company in a manner which was oppressive to the Respondents.
They filed a petition to wind up the Company pursuant to sections 271(1) (c), 272(1) (f) and 239
(2)(3) of the Companies Act, Chapter 388 of the Laws of Zambia. The ground on which the petition
was made, was that it was just and equitable that the Company should be wound up, because
the relationship between the 2nd Appellant and the Respondents had broken down irretrievably
and this had resulted in a deadlock. The Respondents cited numerous acts of oppression that
they had allegedly suffered at the hands of the 2nd Appellant. The main relief which the
Respondents were seeking in their petition was that the Company should be wound up. In the
alternative, the Respondents were seeking such other orders under section 239 (3) of the
Companies Act, such as for purchase of the Respondent’s shares, or regulating the affairs of the
Company.

The trial Judge was satisfied that the respondents proved their case on a balance of probabilities and that it was just and equitable to wind up the Company. Accordingly, he granted the order to wind up the Company. The Appellants were not happy with the decision of the Court below hence the appeal. They argued firstly that the judgment did not meet the benchmarks of a judgment, and secondly, that since the Company was still a going concern, the Court below should have granted the alternative reliefs sought, as opposed to winding up.

Held
1. Every judgment must reveal a review of the evidence, where applicable, a summary of the arguments and submissions, if made, findings of fact, the reasoning of the court on the facts and the application of the law and authorities, if any, to the facts. Finally, a judgment must show the conclusion. A judgment which only contains verbatim reproduction and recitals is no judgment. In addition, a court should not feel compelled or obliged and moved by any decided cases without giving reasons for accepting those authorities. In other words, a court must reveal its mind to the evidence before it and not just simply accept any decided case. The learned trial Judge revealed his reasoning when he found from the evidence that was before him, that the relationship between the parties had broken irretrievably because they had lost trust and confidence in each other and could not work together. It was from this evidence that the trial Judge deduced that it was just and equitable to wind up the Company. Minister of Home Affairs, Attorney General v Lee Habasonda (2007) ZR 207 followed
2. A judgment should be thorough, exhaustive, and clear on issues. There are seven essential elements of a judgment, namely: an introductory structure, setting forth the nature of the case and identifying the parties; the facts; the law relevant to the issues; the application of the law to the facts; the remedy; and the order. Zambia Telecommunications Company Limited v Aaron Mulwanda and Paul Ngandwe (2012) 1 ZR 405 followed.
3. In cases where parties are seeking a main relief and some alternative reliefs, the Court is not bound to consider alternative reliefs. This is especially in cases where the Court has granted the main relief. In such cases, it ought to look no further. The rationale behind alternative reliefs is that if the main relief fails, the Court can consider granting the alternative reliefs. This does not however mean that if the main relief fails, then the alternative reliefs should automatically succeed. There is still need for a party seeking an alternative relief to prove that he is entitled to it. In this case, the Court below held that the Respondents proved their case on a balance of probability that it was just and equitable to wind up the Company. It was, therefore, not bound to consider alternative reliefs. It is trite law that a Company may be wound up on the ground that winding up is just and equitable, where it is impossible to carry on its business, owing to internal disputes which have produced a state of deadlock; or where improprieties in management have led to the loss of mutual confidence between shareholders and directors.