Court emphasized that status quo must be maintained concerning management control and shareholder rights pending trial amidst evidence of uncertainties and inconsistent claims.

The 1st to the 3rd Defendant have applied for a stay of my order of 30th October 2009 pending the disposal of their appeal to the Court of Appeal against this decision.

The grounds for this application are as follows:

a) The 3rd Defendant has contributed substantially to the finances of the 4th Defendant and he fears that unless he is allowed to 'remain' in control of the management of the 4th Defendant there is a genuine risk that the 4th Defendant 'would have been run into the ground and with it my investment therein'. (see paragraph 5 of Enc. 33);

b) The 3rd Defendant was to be repaid his advances by appropriating profits of the 4th Defendant to pay of the debts of the 4th Defendant. This would not be possible unless the 4th Defendant was properly run and further monies injected to increase the business of the 4th Defendant. The Plaintiffs are not in a financial position to do this (see paragraph 11 of Enc. 33);

c) The shares of the 1st and 2nd Plaintiffs were registered in the 1st and 2nd Defendant's name in May 2009. As such the status quo at the time of the application by the Plaintiff for an injunction was in favour of the Defendants and this Court ought to maintain this status quo pending the disposal of the appeal (see paragraph 12 of Enc. 33);

d) At the time the Plaintiff commenced this action four months had lapsed since the 1st to the 3rd Defendants were the registered shareholders and taken over management control of the 4th Defendant. As such for the same reason stated in (c) above, the status quo is in favour of the 1st to the 3rd Defendant, (see paragraph 14 of Enc. 33); and

e) The status of the 4th Defendant arising from the resolutions passed at the Extraordinary General Meeting of the 4th Defendant on 2nd October 2009 (EGM) should be maintained.

Decision of Court

a) As regards (a) above, the 3rd Defendant's financial contributions are undisputed. However, whether the company will run into the ground if the management is allowed to remain in the hands of the Plaintiffs, is not something I am inclined to speculate upon, at this juncture. Accordingly, I do not consider this ground to be of any merit;

b) As regards (b) above, I have already held in my judgment of 30th October 2009 that the terms of the oral agreement is a serious question to be determined at the trial of the action. At this juncture, I am not prepared to rule that one of the terms of the oral agreement is that the 3rd Defendant was to be repaid by appropriating the profits of the 4th Defendant. The contents of paragraph 11 of Enc. 33 gives rise to even more uncertainty about the terms of the oral agreement. I opine to this effect because a comparison of paragraph 11 of Enc. 33 with paragraphs 25 to 29 of Enc. 15 reveals that the 3rd Defendant did not in the earlier affidavit state repaying himself with the profits of the 4th Defendant as a term of the oral agreement. Indeed, the destination of the profits if the 3rd Defendant controlled the 4th Defendant was an issue raised by me in the course of oral submissions. If the 3rd Defendant is now admitting for the first time that the profits were to be applied in satisfaction of the 4th Defendant's indebtedness to him, then, surely one of the terms of the oral agreements ought to be that the 3rd Defendant and his nominees are the beneficial shareholders of the shares of the 1st and 2nd Plaintiffs in the 4th Defendant. However, this is contrary to the 3rd Defendant's own earlier assertions that the indebtedness was to be satisfied by the 1st and 2nd Plaintiff (not the 4th Defendant) and the transfer of the shares were to be by way of security only. The orders made by this Court on the prayers in Enc. 6 were intended to achieve this objective pending trial;

c) As regards the question of management, as pointed out by me in my earlier judgment, the contents of Exh. JK 1 to Enc. 14, is totally inconsistent with the 3rd Defendant's claim that he had taken over control of the 4th Defend