N11408
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

MP (COMM) No. 9 OF 2024 (IECMS)

IN THE MATTER OF COMPANIES ACT 1997 

IN THE MATTER OF MANI NAKA INVESTMENT LIMITED (1-120868)

WAIGANI: ANIS J
10 JULY, 11 AUGUST 2025

COMPANY LAW – action by petition brought under s.152 of the Companies Act 1997 – aggrieved former director and shareholder – claim that removal as a director and shareholder were done in breach of the mandatory provisions of the Companies Act 1997 – consideration – whether the actions of the company in breach of sections 87(1) & (2), 103, 130, 133(1), 134(1) & (2), Schedule 2, section 2(1) & (2) of the Companies Act 1997 – whether alterations made to the company’s record at the Company Register at Investment Promotion Authority contravened sections 36, 40(2), 41(1), 65(2)(3)(4) and (6), and 69(1) o the Companies Act 1997 – consideration - ruling

PRACTICE AND PROCEDURES – whether there is a respondent that is named in the proceeding – if not, whether the proceeding is an abuse of process and therefore should be dismissed pursuant to section 152(3) of the Companies Act 1997 and Rules 3 and 14 of the Companies Rules – interpretation of section 152(3) – interpretation of rules 3 and 14 – consideration - ruling

Cases cited
Traisa Transport Limited v. Mountain Property Holdings Ltd (2024) N10694
In the Matter of the Companies Act, In the Matter of Petroleum Exploration Joint Venture Limited (1-35304) (2021) N9027
Papa Resource Development Ltd (In Liquidation) v. Laba Holdings Ltd (2025) N11326
Koi Wak Trucking and Hire Cars Ltd v. Simon Lakeng and Ors (2025) N11214
James Kruse v. Beatrice Geita and Ors (2015) SC1849
Gibson Nad v Bank South Pacific Limited (2010) SC1278
Jimmy Mostata Maladina v Posain Poloh (2004) N2568
Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC837
Peter Sharp v. Warwick Andrew (2016) N1797
In the Matter of the Companies Act 1997, In the Matter of Bernal No. 8 Ltd (1-77801) (2024) N10933
Gawan Kuyan v Andrew Sallel (2008) N3376
Jennifer Gawi v. Anna Gawi and 2 Ors (2024) N10869
Culture Shock Ltd, In Re, (2016) N6786
Rondugl Investments Ltd v. Maipson (2021) N9317
Gigira Development Corporation Ltd v. Talu (2021) N9027

Counsel
R Kasito, for the petitioner
L Baida, for the respondent

DECISION

1.	ANIS J:  The matter was heard on 10 July 2025.  I reserved my ruling thereafter to a date to be advised.

2.	Parties have been notified so I will rule on it now.

BACKGROUND

3.	The petitioner Timuku Irali (Petitioner) is an aggrieved former director and shareholder of Mani Naka Investment Limited (MIL/company).  He files a petition under s.152 of the Companies Act 1997 (CA) because he claims that he was unlawfully removed as a director and shareholder of the company.  The petition was filed on 29 April 2024 (Petition).  In the Petition, he alleges (i), that the actions of the company amount to an act that has been, or is, or is likely to be oppressive, unfairly discriminatory or prejudicial to him as a former shareholder pursuant to s.152(1) of the CA and, (ii), that the actions of the company contravened ss. 87(1) & (2), 103, 130, 133(1), 134(1) & (2) and Schedule 2, s.2(1) & (2) of the CA.  He also alleges that the company’s conduct also breached or contravened ss.36, 40(2), 41(1), 65(2)(3)(4) and (6), and 69(1) of the CA.  

4.	The Petitioner founded the company on 16 January 2019.  The company does not have a constitution.  At the time of its incorporation, the directors and shareholder were as follows:

Directors	Shareholders	No. of Shares	
Luke Alewa	Timuku Irali	1	
Jim Iragali	Luke Alewa	1	
Andy Ken	Andy Ken	1	
Junior Pape Punga			

5.	On 17 March 2023, the company’s records were changed and showed the following persons as directors and shareholders:

Directors	Shareholders	No. of Shares	
Junior Pape Punga	Andrew Kewa	1	
Timuku Irali	Jackson Huguba	1	
Jim Iragali	Joseph Andayogo	1	
Andy Ken	Junior Pape Punga	1	
	Mana Kutugu	1	
	Poralia Wakaya	1	
	Thomas Robert	1	
	Timuku Irali	1	
	Tomape Pipi	1	

6.	And on 7 March 2024, the company records were changed and showed the following persons as directors and shareholders:

Director	Shareholders	No. of Shares	
Junior Pape Punga	Andrew Kewa	1	
	Jackson Huguba	2	
	Joseph Andayogo	1	
	Junior Pape Punga	1	
	Mana Kutugu	1	
	Poralia Wakaya	1	
	Thomas Robert	1	
	Tomape Pipi	1	

7.	The Petitioner’s claim is that the 2 latter changes made by the company were done without his knowledge, and also, that the changes were effected without the company observing the mandatory provisions as provided under the CA.  

8.	The company denies the allegations.  It asserts that all the processes under the CA had been duly complied with to effect the changes to the company records, and that those persons currently holding the positions of directors and shareholders of the company were duly elected and had validly acquired the shares in the company.

9.	The company also raised preliminary issues at the hearing.  The preliminary issues were raised in its notice of motion which had been filed but which was overtaken by the hearing of the matter.  However, prior notice had been given by the company to the petitioner as well as to the Court, and so the issues were raised at the hearing.

10.	I will determine the preliminary issues before I proceed to deal with the substantive matter.

EVIDENCE

11.	The parties tendered their evidence without the benefit of cross-examination.  The plaintiff tendered 3 affidavits which were marked as Exhibit P1, Exhibit P2 and Exhibit P3.  The company tendered a total of 11 affidavits which were marked as exhibits D1 to D11.

PRELIMINARY ISSUE

12.	The preliminary issue raised is this.  The company claims that the Petition is substantially defective thus should not stand and must be dismissed because the Petitioner did not properly name the parties in the Petition.  It claims the Petition contravenes the requirements under s.152(3) of the CA and rule 14 of the Companies Rules (CR).  The preliminary issue is derived from relief 2 of the company’s notice of motion that was filed on 11 June 2025 (NoM).  By consent, relief 2 in the NoM was permitted to be raised as a preliminary matter at the hearing, as such, it is properly before me for consideration.  Term 2 of the NoM states,

2.	Pursuant to Order 12, Rule 40(1)(c) of the National Court Rules, and/ or the inherent jurisdiction of the Honourable Court under section 155(4) of the Constitution, the entire proceedings herein be dismissed for being incompetent and/ or abuse of process for failing to comply with the mandatory requirements under section 152(3) of the Companies Act 1997 and Rule 14 of the Companies Rules.

13.	The Petitioner denies these allegations.  He claims that the petition is competent and is not defective as alleged by the company.

14.	I note the submissions of the parties.

15.	Section 152(1), (2) & (3) of the CA and Rules 3, 14,15, 18, 19, 20 and 21 of the CR, are relevant for this purpose and so I set them out herein,

152. PREJUDICED SHAREHOLDERS.

(1)  A shareholder or former shareholder of a company, or any other entitled person, who considers that the affairs of a company have been, or are being, or are likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, or are likely to be, oppressive, unfairly discriminatory, or unfairly prejudicial to him in that capacity or in any other capacity, may apply to the Court for an order under this section.

(2)  Where, on an application under this section, the Court considers that it is just and equitable to do so, it may make such order as it thinks fit including, without limiting the generality of this subsection, an order–

(a)	requiring the company or any other person to acquire the shareholder’s shares; or
(b)	requiring the company or any other person to pay compensation to a person; or
(c)	regulating the future conduct of the company’s affairs; or
(d)	altering or adding to the company’s constitution; or
(e)	appointing a receiver of the company; or
(f)	directing the rectification of the records of the company; or
(g)	putting the company into liquidation; or
(h)	setting aside action taken by the company or the board in breach of this Act or the constitution of the company.

(3)  No order may be made against the company or any other person under Subsection (2) unless the company or that person is a party to the proceedings in which the application is made.

(4)  Failure to comply with any of the following sections is conduct which is unfairly prejudicial for the purposes of this section:–

(a)	Section 45;
(b)	Section 47;
(c)	Section 51;
(d)	Section 57;
(e)	Section 63;
(f)	Section 98;
(g)	Section 110.

……

3. TITLE OF PROCEEDINGS.

Every petition, notice of motion and summons and all notices, affidavits and other documents in any proceedings under the Act shall be entitled “In the National Court of Papua New Guinea, in the matter of the Companies Act 1997, and in the matter of ...” (the company to which the proceeding relates) with the addition of the words “in liquidation” where the company is in liquidation.
……

PART II. – PETITIONS.

14.  APPLICATIONS REQUIRED TO BE BY PETITION.

Applications under the following provisions of the Act shall be made by petition, and shall be heard and determined in open court:–

(a)	Section 66 (application to confirm a reduction of capital); and
(b)	Section 186 (application by the Attorney-General for the winding-up of a company or a foreign company after a report has been presented by an inspector appointed under Division VII.4); and
(c)	Section 197 (application for relief against oppression); and
(d)	Section 239 (application for the winding-up of a company by the Court); and
(e)	Section 326 (application for the winding-up of an unregistered company).

15.  PRESENTATION OF PETITION.

(1)  Presentation of a petition shall be effected by filing the petition in the Registry.

(2)  The date and time of the presentation shall be endorsed on the petition by the Registrar.

(3)  Except in the case of a petition to confirm a reduction of capital, the Registrar, on the presentation of the petition, shall appoint a time and place for the hearing.
……

18.  SERVICE OF PETITION.

(1)  A petition shall, unless presented by the company, be served on the company.

(2)  If there is no registered office, the petition may be served on the company–

(a)	at the principal or last-known principal place of business of the company–

(i)	by leaving a copy with any member, officer or servant of the company there; or
(ii)	if no such member, officer or servant can be found there–by leaving a copy at the principal or last-known principal place of business; or

(b)	by serving it on such member, officer or servant of the company as the Court directs.

(3)  Where a petition in relation to a company in the course of being wound up is presented by a person other than the liquidator of the company, the petition shall be served personally on the liquidator.

19.  COPY OF PETITION FOR MEMBER OR CREDITOR.

Each member or creditor of the company is entitled to be furnished by the petitioner or his lawyer with a copy of the petition within 48 hours after requiring it, on payment at the rate of 14t per folio of the copy.

20.  NOTICE OF INTENTION TO APPEAR.

(1)  A person who intends to appear on the hearing of a petition shall serve on the petitioner or his lawyer notice of his intention.

(2)  The notice shall–

(a)	be signed by the person or by his lawyer; and
(b)	give the address of the person signing it; and
(c)	be served, or (if sent by post) posted in such time as in the ordinary course of post to reach the address of the petitioner as shown in the petition–
(i)	not later than 4 p.m. of the day before the day appointed for the hearing of the petition; or
(ii)	if that day be a Monday, or a Tuesday following a public holiday, not later than 4 p.m. of the Friday before that day.
(3)  A person who has failed to comply with this section shall not be allowed to appear on the hearing of the petition without the special leave of the Court.

21.  LIST OF PERSONS INTENDING TO APPEAR.

(1)  The petitioner or his lawyer shall prepare a list of the names and addresses of the persons who have given notice of their intention to appear on the hearing of the petition and of their respective lawyers.

(2)  On the day appointed for hearing the petition, a copy of the list referred to in Subsection (1), or if no notice of intention to appear has been given a statement to that effect, shall be filed by the petitioner or his lawyer, before the hearing of the petition.

16.	Let me begin with this observation.  Some of the procedural provisions and rules under the CA and CR are expressed in mandatory terms.  They are also exclusive and unique, and they cannot be generally linked or compared to the general provisions including the court forms that are provided for in the National Court Rules (NCR).  For example, Rule 3 of the CR states,

2.  GENERAL RULES AND PRACTICE OF NATIONAL COURT TO APPLY.

Subject to the Companies Act 1997 and these Rules, the Rules of Court of the National Court and the general practice of that Court, including the course of procedure and practice in chambers, apply in relation to proceedings to which these Rules relate as far as is practicable. [Underlining mine]

17.	The other example which is relevant to the present case is Rule 14, that is, for those actions that must be commenced by way of a petition.  See case:  Traisa Transport Limited v. Mountain Property Holdings Ltd (2024) N10694.  References that are made to the sections under Rule 14 of the CR are sections under the old Companies Act Chapter 146 (Old Act).  However, Courts have since and as a matter of practice, applied their equivalent provisions to or under the CA since the CA was passed into law in 1997.  Thus, the equivalent of s.197 of the Old Act is s.152.  See cases:  Traisa Transport Limited v. Mountain Property Holdings Ltd (supra), In the Matter of the Companies Act, In the Matter of Petroleum Exploration Joint Venture Limited (1-35304) (2021) N9027 and Papa Resource Development Ltd (In Liquidation) v. Laba Holdings Ltd (2025) N11326.

18.	Let me now directly address the preliminary issue.  Section 152(3) states,
“No order may be made against the company or any other person under Subsection (2) unless the company or that person is a party to the proceedings in which the application is made.  [Underlining is mine]

19.	The key wordings (phrase) for this purpose are as underlined above.  For the Court to make an order against the petitioned company, the company must be named.  And further, for the Court to make an order against a third party, the third party has to be named.  What this means to me is this.  The provision applies to orders made by the Court against a party in relation to the substantive matter.  The provision is not unusual in my view because it is aimed at giving parties the right to be heard.  This is not, however, the same as the Court making orders on procedural matters against a third party like the Registrar of Companies.  If the Court makes an order that is directed at the Registrar of Companies to rectify a company record, that is what it is.  The Registrar of Companies may not have any interest or business in relation to the substantive matter.  It will be the Court ordering compliances in relation to procedure or enforcement.  The same applies to an order that is directed at the police or the Registrar of the National Court.  Thus, s.152(3), in my view, applies to the petitioned company or a third party where they have actual interest in the substantive matter where an order may be made against them in the petition.  However, s.152(3) does not, in my view, apply to those persons that the Court may issue orders on procedural matters or matters that require administrative measures to be taken or on matters concerning enforcement.

20.	In the present matter, the Petition is directed at the company, and the relief that are sought in the Petition are premised on the actions or inactions of the company.  No relief is sought against any other person in relation to the substantive matter in the Petition.  And the company is expressly named in the Petition.

21.	On that premise, I reject the company’s submission in regard to s.152(3).

22.	The company also raises similar arguments by referring to Rules 3 and 14 of the CR.  Let me begin with Rule 3.  Rule 3 is mandatory.  As such, the NCR and its practice and procedures cannot apply there.  Parties filing petitions are required to observe this rule.  A petition that is filed must, under Rule 3, be titled “In the National Court of Papua New Guinea, in the matter of the Companies Act 1997, and in the matter of ...(the company to which the proceeding relates) with the addition of the words “in liquidation” where the company is in liquidation.  That has been the practice over the years.  It has always been the practice, and this is also reflected in the case law, that petitions, unlike the normal civil originating process (i.e., whether it be WS or OS proceedings), must only contain these requirements as stipulated by Rule 3.

23.	In the present matter, the Petition, in my view, is filed in compliance with Rule 3 of the CR.  However, the company’s challenge in regard to want of compliance of the CR expressly refer to Rule 14.  Rule 14, as quoted above, states that an aggrieved person such as the Petitioner who wishes to sue or petition a company must do so by filing a petition.  I fail to see how this rule will improve or support the company’s argument.  It is not disputed that the Petition is filed under s.152 of the CA.  I dismiss the company’s claim that the Petition breached Rule 14 of the CR.

24.	That said, I must address or give clarities to rules 20 and 21 to avoid confusions by litigants wanting to commence proceeding by way of a petition under the CA.  A petition and how the parties are to be named therein, should not be mistaken (or confused) and compared in similar fashion with a normal civil proceeding that is filed which is governed by the provisions of the NCR.  A petitioner must comply with the wording of Rule 3.  In the case where a petitioner is petitioning a company, the name of the company only must be named in the petition.  If a ‘person’ wishes to be heard on the petition that is filed, he or she may do so by following the mandatory requirement under Rule 20.  Notice that Rule 20 makes reference to a ‘person’ and not a ‘defendant’ or a ‘respondent’.  And after that, the petitioner or his or her lawyer shall prepare a list of names of these persons and have that filed before the hearing.  The unique measures that are stipulated under rules 20 and 21 are there to address persons with interests who may wish to be heard on the matter.  It is also, in my view, aimed to address persons who could not be expressly put down as respondents to the petition which may be prohibited by Rule 3.

25.	I note that the company has also raised other preliminary matters that have not been pleaded in its notice of motion.  I refuse to deal with them on that basis as well as on the basis that it would be unfair and a breach of the Petitioner’s right to fairness, that is, his right to be given notice to respond.  See cases: Koi Wak Trucking and Hire Cars Ltd v. Simon Lakeng and Ors (2025) N11214, James Kruse v. Beatrice Geita and Ors (2015) SC1849, Gibson Nad v Bank South Pacific Limited (2010) SC1278, Jimmy Mostata Maladina v Posain Poloh (2004) N2568, Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC 837 and Peter Sharp v. Warwick Andrew (2016) N1797.  I am only bound to consider the preliminary issue as raised under term 2 of the company’s notice of motion.

26.	In ending my findings on the preliminary matter, I note that the company had relied on the case In the Matter of the Companies Act 1997, In the Matter of Bernal No. 8 Ltd (1-77801) (2024) N10933.  In that case, the respondent applied to dismiss the proceeding for abuse of process.  The Court upheld the first issue and dismissed the proceeding on the premise that the petitioner did not name the company that was petitioned in the matter.  With respect, I would differ from the case for 2 reasons.  First, I am unable to see whether the parties in the said case had assisted the Court or brought matters as considered in the present case before the Court to consider and rule upon. Rule 3 of the CR was not considered in the said case.  I also note that the Court only considered and determined the first issue in favour of the respondent, which was within its prerogative, to dismiss the matter.  The first issue was Whether Bernal No. 8 Limited is a party to the proceeding?  The other issues that were not considered were:

b.	Whether the Respondent is being sued in his personal capacity?
c.	Whether the Petition is filed in compliance to Rule 14 of the Companies Rules?
d.	Whether the Orders of 19th March 2024 should be set aside?

27.	Secondly, the decision is a National Court decision, and I am not bound by it under Schedule 2.9 of the Constitution which states,

(2)  Subject to Section Sch.2.10 (conflict of precedents), all decisions of law by the National Court are binding on all other courts (other than the Supreme Court), but not on itself (except insofar as a decision of the National Court constituted by more Judges than one is of greater authority than a decision of the Court constituted by a lesser number).

28.	In summary, I dismiss the preliminary issues raised by the company.

MAIN ISSUES

29.	The main issues in my view are (i), whether the company did not follow the processes under the CA for removal of a director, creation and allocation of new shares and registration of purchased shares, before it effected changes to its records as kept by the Registrar of Companies as at 17 March 2023, (ii), if, not, whether further changes that were purportedly made and recorded in regard to the company’s directors and shareholders thereafter are inconsequential given the first breaches, and whether they only go to demonstrate the unlawful actions of the company, (iii), whether the company’s actions amount to acts that have been, or are, or are likely to be oppressive, unfairly discriminatory or prejudicial to the Petitioner as a former shareholder of the company, (iv) whether the company also breached other provisions of the CA especially ss.36, 40(2), 41(1), 65(2)(3)(4) and (6), and 69(1) of the CA, and (v), if the answer to the 4 issues are in the affirmative, what relief or amount of compensation should be awarded to the Petitioner.

VALIDITY OF CHANGES MADE ON 17 MARCH 2023

30.	I have considered the evidence and submissions of the parties on this issue.

31.	With that, I make the following observations:

•	The company, in all its 11 exhibits, attaches copies of its company extract dated 17 March 2023;
•	The Petitioner has also attached a copy of the same in his evidence;
•	The company, however, did not provide in its evidence any company extracts for periods that precede 17 March 2023;
•	The Petitioner, on the other hand, has provided a company extract of the company that preceded 17 March 2023 which is dated 16 January 2019;
•	A copy of the company’s extract dated 16 January 2019 is located at Annexure A to Exhibit P2 (in his affidavit filed 14 May 2024);
•	The company does not contest the said company extract;
•	Also attached together with the company extract dated 16 January 2019 is a copy of the company’s Certificate of Incorporation which had been issued by the Acting Registrar of Companies;
•	All the arguments raised by the company on the issue focused on the company’s extract dated 17 March 2023 and the events that had unfolded immediately before and after 17 March 2023, and further, events that had occurred thereafter including further purported board meetings and changes that the company had purportedly made to its company records;
•	The company’s other main argument is its claim that the Petitioner himself had requested to be removed as a director and shareholder of the company by his letter dated 19 February 2024; the letter is adduced into evidence and is not disputed; a copy of the letter is attached to nearly all the 11 exhibits of the company;
•	Having considered the letter of 19 February 2024, I note that the letter did not expressly state that the Petitioner had consented to be removed as a director or shareholder; the letter had conditions to which the Petitioner had demanded from the company before the Petitioner could consider resigning from his posts in the company;
•	The company also relies heavily on its evidence of a purported resolution in lieu of meeting dated 29 October 2019; evidence of the purported resolution is contained in almost all the 11 exhibits of the company;
•	The Petitioner denies that such a meeting was carried out; he also denies ever receiving a notice of the meeting; further, the Petitioner also denies signing the purported resolution in lieu of the meeting;
•	I observe that the said purported resolution contains signatures that cannot be verified with the names of the persons whose names are listed in the purported resolution;
•	The company also adduced evidence that shows that a purported ‘special meeting’ was conducted on 23 February 2024 where the company had replaced the Petitioner as a Director; evidence of that is contained at annexures H and I to Exhibit D1, that is, the affidavit of Junior Pape Punga filed 21 June 2024;
•	The Petitioner denies he was ever properly informed of the said purported ‘special meeting’; he also asserts that the provisions of the CA were breached in relation to the said meeting which was why he filed the Petition.

CONSIDERATION

32.	Premised on the evidence, I find that the Petitioner was the founder of the company; that he had invested in the company at its initial stages in 2019.  However, this finding is inconsequential to the material issue.

33.	It is not disputed, and I also find, as a matter of fact, that the following persons were listed as directors and shareholders of the company when it was first established on 16 January 2019:

Directors	Shareholders	No. of Shares	
Luke Alewa	Timuku Irali	1	
Jim Iragali	Luke Alewa	1	
Andy Ken	Andy Ken	1	
Junior Pape Punga			

34.	When I consider the evidence filed in totality, and premised on my observations above, I find that the Petitioner has established, by way of evidence, his claim that the company may not have followed the mandatory provisions under the CA when it purportedly made changes to its records as at 17 March 2023.

35.	The burden of proof shifts to the company.  

36.	Having considered all the 11 affidavits filed, I see no material evidence at all that disputes the allegations raised in regard the first issue.  The company focused its attention on what transpired in 2023 where it had to re-register due to IT changes that were carried out at the Investment Promotion Authority (IPA) or the Office of the Registrar of Companies.  There is, however, no explanation provided of how the company had purportedly:

•	removed Luke Alewa and Andy Ken from its list of shareholders;
•	acquired the shares of the 2 persons, or if not, who purchased their shares?
•	created and issued the additional 6 new shares;
•	listed Andrew Kewa, Jackson Huguba, Joseph Andayogo, Junior Pape Punga, Mana Kutugu, Poralia Wakaya, Thomas Robert and Tomape Pipi as shareholders, and further, an explanation of how these persons were issued with or had acquired shares in the company;
•	terminated Luke Alewa as a director; and
•	appointed the Petitioner as a director of the company.

37.	The appointment and termination processes for directors are expressly provided under the CA.  The case law is also settled on this.  In the leading case of Gawan Kuyan v Andrew Sallel (2008) N3376, Cannings J sets out with clarity the steps and processes for appointment and removal of a company director under the CA. In regard to appointments of directors, I adopt para 35 of His Honour’s judgment, which reads:

35.  This means that, in most cases, unless the company’s constitution provides otherwise or if directors are appointed by the court (s 132), if a director is to be lawfully appointed, the following procedure applies:

•	there must be a meeting of shareholders OR a resolution in writing in lieu of a meeting (s 103);
•	the resolution must be for the appointment of one director OR if the resolution is a single resolution for the appointment of two or more persons as directors, a separate resolution that it be so voted on must first be passed without a vote being cast against it (s 133(1));
•	if there is a meeting of shareholders, at least 14 days written notice of the meeting must be given to all shareholders, directors and auditors of the company (Schedule 2, s 2(1));
•	the notice must state the nature of the business to be transacted at the meeting in sufficient detail to enable a shareholder to form a reasoned judgment in relation to it (Schedule 2, s 2(2));
•	the question of appointment of a director must be passed by ordinary resolution, ie a resolution approved by a simple majority of votes of those shareholders entitled to vote and voting on the question (s87(1), s87(2), s133(1));
•	if there is no meeting of shareholders, the resolution for appointment of a director must meet the 75% requirements of s 103;
•	the person appointed must consent to being a director and certify that he or she is not disqualified (s 130).

38.	In regard to the processes for removal of directors, his Honour stated at paras. 31 and 32, which I also adopt and quote:

31.  The Companies Act provides for removal of directors in Section 134 (removal of directors):

(1)	Subject to the constitution of the company, a director of a company may be removed from office by ordinary resolution passed at a meeting called for the purpose or for purposes that include the removal of the director.

(2)	The notice of a meeting referred to in Subsection (1) shall state that the purpose or a purpose of the meeting is the removal of the director.

32.  This means that unless the company’s constitution provides otherwise, if a director of a company is to be lawfully removed from office the following procedure applies:

•	there must be a meeting of shareholders (s 134(1)) OR a resolution in writing in lieu of a meeting (s 103);
•	if there is a meeting of shareholders, at least 14 days written notice of the meeting must be given to all shareholders, directors and auditors of the company (Schedule 2, s 2(1));
•	the notice must state the nature of the business to be transacted at the meeting in sufficient detail to enable a shareholder to form a reasoned judgment in relation to it (Schedule 2, s 2(2));
•	the meeting must be called for the purpose or for purposes that include the removal of a director and the notice must state that the purpose, or a purpose, of the meeting is the removal of a director (s 134(2));
•	the question of removal of a director must be passed by ordinary resolution, ie a resolution approved by a simple majority of votes of those shareholders entitled to vote and voting on the question (ss 87(2), 134(1));
•	if there is no meeting of shareholders, the resolution for removal of a director must meet the 75% requirements of s 103.

39. And thirdly, the Court also sets out the process for valid transfer of a share in a company under the CA.  At para. 48, Cannings J states:

48.  This means that, in the usual case, for a valid transfer of a share to take place:

•	property in the share must pass by agreement, assignment, transmission or some other transaction or process recognised by law (ss 36, 41(1));
•	a transfer form is signed by the transferor and transferee and given to the company or its agent (ss 65(2) and (3));
•	the transfer is entered in the share register and becomes prima facie evidence that legal title vests in the transferee (ss 40(2), 65(4), 69(1));
•	notice of the entry is given to the Registrar (s 65(6), form 13).

40.	Thus, and summary, my findings are as follows in regard to the purported changes that were made to the company’s records as kept by IPA as at 17 March 2023:

(i)	the plaintiff has provided evidence to establish his assertion that the material provisions of the CA have not been followed when the company altered its records as kept by IPA as at 17 March 2023;

(ii)	the burden of proof shifts to the company to then show that it had complied with the provisions of the CA when it made alterations to its records (i) on the appointments of and terminations of directors and (ii) on the acquisitions of shares and inclusions of new shareholders of the company;

(iii)	evidence adduced or the lack of it, shows that the company failed to demonstrate that it had complied with the provisions of the CA when it appointed the Petitioner to be a director of the company as shown in the company extract of 17 March 2023;

(iv)	evidence adduced or the lack of it, also shows that the company failed to demonstrate that it had complied with the provisions of the CA when it removed Luke Alewa and Andy Ken as shareholders of the company; there is no evidence adduced to show whether the 2 individuals sold their shares to the company, and if so, evidence of payments made by the company to the 2 individuals to acquire the shares;

(v)	evidence adduced or the lack of it also shows that the company failed to demonstrate that it had complied with the provisions of the CA when it registered the shares in the names of Andrew Kewa, Jackson Huguba, Joseph Andayogo, Junior Pape Punga, Mana Kutugu, Poralia Wakaya, Thomas Robert and Tomape Pipi; there is no evidence that shows how the shares were created and issued by the company to these 8 individuals, and also, how these 8 purported shareholders acquired the shares in the company in 2023.

41.	Premised on these findings, I also find that the company’s record had been unlawfully tempered with to alter the names of its original directors and shareholders.  Consequently, I therefore find that the names of purported directors or shareholders that appeared in the 17 March 2023 and 7 March 2024 company extracts, to be invalid as well as null and void.  Any entry that is made that purports to change the names of the directors and shareholders as originally shown in the company’s records shall be discarded.  

42.	I also find that since the initial actions of the company has been tainted, submissions and issues that arise in regard to what happened or may have occurred afterwards by the company, whether it be meetings, special meetings and resolutions that may have been entered into, are also invalid and void.  They also go to show the unlawful actions of the company in conducting its affairs contrary to the provisions of the CA.

OTHER BREACHES

43.	This leaves this Court with the other liability issue which is whether the company also breaches other provisions of the CA especially ss.36, 40(2), 41(1), 65(2)(3)(4) and (6), and 69(1) of the CA.  

44.	Sections 36, 40(2), 41(1), 65(2)(3)(4)(6) and 69(1) state:

36.  LEGAL NATURE OF SHARES.

A share in a company is personal property.
……

40.  TRANSFERABILITY OF SHARES.
……
(2)  A share is transferred–

(a)	by entry in the share register in accordance with Section 65; or
(b)	in accordance with the terms of any exemption given by the Registrar under Section 77.
……

41.  CONTRACTS FOR ISSUE OF SHARES.

(1)  A contract or deed under which a company is or may be required to issue shares whether on the exercise of an option or on the conversion of securities or otherwise is unlawful and void unless the board–

(a)	has authorized the issue of the shares under Section 43; and
(b)	has complied with Section 47.
……

65.  TRANSFER OF SHARES.

(1)  Subject to the constitution of the company, shares in a company may be transferred by entry of the name of the transferee on the share register.

(2)  For the purpose of transferring shares, a form of transfer signed by the present holder of the shares or by his personal representative shall be given to–

(a)	the company; or
(b)	an agent of the company who maintains the share register under Section 67(3).
(3)  The form of transfer shall be signed by the transferee.

(4)  On receipt of a form of transfer in accordance with Subsections (2) and (3), the company shall forthwith enter or cause to be entered the name of the transferee on the share register as holder of the shares, unless–

(a)	the board resolves within one month of receipt of the transfer to refuse or delay the registration of the transfer, and the resolution sets out in full the reasons for doing so; and
(b)	notice of the resolution, including those reasons, is sent to the transferor and to the transferee within five days of the resolution being passed by the board; and
(c)	the Act or the constitution expressly permits the board to refuse or delay registration for the reasons stated.

……

(6)  Following entry of the name or names of a transferee or transferees on the share register the company shall submit to the Registrar notice in the prescribed form of that entry unless–

(a)	the company is subject to a listing agreement with a stock exchange; or
(b)	the total number of shares transferred since the date of incorporation or the last annual return under Section 215 is less than 50% of the issued shares; or
(c)	the company submits to the Registrar its annual return under Section 215 within one month of the date of entry of the transfer.
……

69.  SHARE REGISTER AS EVIDENCE OF LEGAL TITLE.

(1)  Subject to Section 71, the entry of the name of a person in the share register as holder of a share is prima facie evidence that legal title to the share vests in that person.

45.	In regard to s.69(1), I observe that records of a company that are kept by the Registrar of Companies in the company register are, as regarded under s.69(1), prima facie evidence of a person having a legal title over shares in a company.  That, in my view, may be so (i.e., application of s.69(1)) on the face of the records up until the time that a challenge is raised by a party either with the Registrar of Companies or with the National Court, under the provisions of the relevant legislations including the CA.  In the present matter, the challenge by the Petitioner has reached the National Court to the stage where we are at the moment.

46.	I observe that I have already addressed want of evidence of compliance by the company on acquisition of shares either by itself or by those persons as shown in the company extract of 17 March 2023.  Premised on my findings, I have ruled, amongst others, that the company extract of 7 March 2024 was inconsequential, invalid and void because of the earlier actions of the company which were invalid, unlawful and void.  Further, I found no evidence adduced by the company to show that it had validly created and issued shares following the processes under the CA.  There was also no evidence adduced by the company to show whether the 8 persons as listed as purported new shareholders in 2023 had paid valuable consideration for the shares to the company.  The Petitioner filed evidence that showed that he never sold his share to anyone and did not know how he was removed as a shareholder of the company.  The company had that burden to disprove the assertion, however, it had also failed in that regard.

47.	In summary, I am satisfied and find that the Petitioner has established that the company has infringed or failed to comply with or observed the requirements under ss.36, 40(2), 41(1), 65(2)(3)(4) and (6), and 69(1) of the CA.  

48.	In closing, I note that the company had submitted that the Petitioner should have pleaded breaches of the relevant provisions stipulated under s.152(4) to claim or seek the relief.  It submitted that the pleadings at para. 12 of the Petitioner were insufficient.  I however reject this submission.  Section 152(4), although express and mandatory, does not, in my view, contain an exhaustive provision of the sections under the CA that a petitioner is obligated to plead in order to allege unfair prejudice.  And a breach of any of the provisions therein, in my view, would be limited to establishing conducts that are unfairly prejudicial.  Further and upon perusal of the Petition, I observe that none of the sections under s.152(4) constituted breaches that were alleged by the Petitioner.  The Petitioner has expressly pleaded the various provisions of the CA that he had taken issue with against the company.  The allegations of facts were not limited to establish unfair prejudice but also oppression and unfair discrimination, that is, pursuant to s.152(1) of the CA.

OVERALL FINDINGS ON LIABILITY

49.	Premised on the cause of action which is commenced under s.152(1) of the CA, I find that the affairs of a company have been, or are being, or are likely to be, conducted in a manner that is, or an act or acts of the company have been, or are, or are likely to be, oppressive, unfairly discriminatory, or unfairly prejudicial to the Petitioner in his capacity as a former director and shareholder of the company.

50.	I therefore find the company liable.

RELIEF

51.	The Court has a wide discretion when it comes to the sort of relief that it may award under s.152.  But before it does so and after it has found that a petitioner has satisfied or established s.152(1), s.152(2) shall apply where if the Court considers that it is just and equitable to do so, it may make such order as it thinks fit.  

52.	To determine whether it would be just and equitable to grant relief in this matter, I first refer to the relief sough in the Petition. At page 4, the Petitioner seeks as follows:

a)	Pursuant to section 152 (2)(f) and (h) Companies Act 1997, the purported transfer of the Petitioner’s share be cancelled or the Company’s action be set aside and the Petitioner’s share in Mani Naka Investment Limited be given back to the Petitioner and the records of Mani Naka Investment Limited at Investment Promotion Authority be rectified or changed to reflect the change for breach of the Companies Act 1997.

b)	That pursuant to section 152(2)(f) and (h) Companies Act 1997, the Court declare unlawful, unenforceable, invalid and void and of no effect of each and all actions taken by the Company in breach of the Companies Act 1997 and the Company records at IPA be rectified to correspond with the Court’s order.

c)	That Mani Naka Investment Limited pay compensation to the Petitioner pursuant to section 152 (2)(b) of the Companies Act 1997 for breach of duty;

d)	The costs of and incident to this proceeding be met by Mani Naka Investment Limited.

e)	That the Court makes such other orders as may be just in the circumstances.

53.	Is it just and equitable to grant these relief?  Premised on my findings on liability and the various breaches of the provisions of the CA by the company, I find it just and equitable to grant relief (a) and (b).  I grant relief (a) and (b) in general.  I will also issue consequential orders under the auspices of what is just and equitable under the circumstances of the case:  See case: Jennifer Gawi v. Anna Gawi and 2 Ors (2024) N10869.

54.	I also find that it is just and equitable, premised on my findings on liability, that I should award compensation in favour of the Petitioner, that is, for the unlawful actions and conducts of the company in relation to appointments and removal of directors including the removal of the Petitioner as a director.  The unlawful conducts included the company making initial changes to its company records prior to and as at 17 March 2023, and also beyond the said period including as at 7 March 2024.  The unlawful conducts also included making changes to the company records to remove shareholders without adducing supporting documentations to show how the shares had been acquired and by who, especially or including the share of the Petitioner.  Unlawful conducts also included making changes to the company records to alter the names of the shareholders without producing evidence to show how the company created and issued the new shares or otherwise provide evidence of receipt of payments of the shares or copies of the share certificates.

55.	What compensatory sum should this Court award to the Petitioner?  The Petitioner submits that the Court should award him a sum of K400,000 as compensation.  The Petitioner relies on the cases Culture Shock Ltd, In Re, (2016) N6786 and Rondugl Investments Ltd v. Maipson (2021) N9317.  The company submits that the Petitioner has only contributed K10,000 into the affairs of the company since its inception.  As such, it submits that the court should award him a sum of K10,000.

56.	I note the submissions of the parties.

57.	I make these observations:

•	compensation of K25,000 was awarded in Culture Shock Ltd, In Re, (supra) for proceedings brought under s.152 of the CA;
•	compensation of K50,000 each totaling K100,000 was awarded in Rondugl Investments Ltd v. Maipson (supra) in proceeding brought under s.152 of the CA;
•	the Court’s power to make an award for compensation under s.152 is discretionary; see: Gigira Development Corporation Ltd v. Talu (2021) N9027
•	In comparison with the cases, I would label the present case and its circumstances to be somewhat similar but perhaps more serious than Rondugl Investments Ltd v. Maipson (supra);
•	I would consider a sum between the range of K100,000 and K200,000 as reasonable.

58.	In exercising my discretion, I will award a sum of K150,000 as compensation in favour of the Petitioner.

CONSEQUENTIAL ORDERS/RELIEF

59.	As part of the relief, I will also issue the following consequential orders:

(i)	The Petitioner shall be restored as a director and Managing Director of the company;

(ii)	The Petitioner shall have control and authority over the company’s bank account until a proper company meeting is called and held to discuss changes or the affairs of the company.

60.	These additional orders are necessary given the circumstance of the case. Evidence adduced shows that since the Petitioner was removed from the board and as a shareholder, the company’s account had been significantly depleted by those that were in charge.  That had caused the Petitioner to obtain restraining orders from this Court to prevent further depletion of the company account.  

61.	I also get the impression, premised on the conduct of the company or those that are controlling it, that they have provided no valuable assistance towards addressing the grievances of the Petitioner.  I observe that nearly all of their efforts were aimed at trying to summarily dismiss the Petition on technical matters which have failed.

SUMMARY

62.	In summary, I uphold the Petition filed by the Petitioner for the reasons that I have stated in my judgment herein.  In so doing, I will grant the relief as sought with the additional variations.

COST

63.	An order for cost in these types of cases is discretionary.  I will order cost to follow the evident using a party/party cost scale which may be taxed if not agreed.

ORDERS OF THE COURT:

64.	I make the following orders:

1.	Pursuant to section 152 (2)(f) and (h) Companies Act 1997, the Company’s action be set aside and the Petitioner’s share in Mani Naka Investment Limited shall be restored and the records of Mani Naka Investment Limited at Investment Promotion Authority be immediately rectified or changed to reflect the changes as follows:

Directors	Shareholders	No. of Shares	
Timuku Irali	Timuku Irali	1	
Luke Alewa	Luke Alewa	1	
Jim Iragali	Andy Ken	1	
Andy Ken			
Junior Pape Punga			

2.	That pursuant to section 152(2)(f) and (h) Companies Act 1997, the Court declares unlawful, unenforceable, invalid and void and of no effect each and all actions taken by the Company in breach of the Companies Act 1997 and the Company records at IPA shall be rectified to correspond with the Court’s order.

3.	That Mani Naka Investment Limited shall pay compensation to the Petitioner pursuant to section 152 (2)(b) of the Companies Act 1997 for breach of duty in the sum of K150,000.

4.	The Petitioner shall be restored as a director and Managing Director of the company Mani Naka Investment Limited.

5.	The Petitioner shall have full control and authority over the company’s account until a proper company meeting is held to discuss and make further appointments or discuss or report on the business affairs of the company.

6.	The company Mani Naka Investment Limited shall pay the Petitioner’s cost of the proceeding on a party/party basis which may be taxed if not agreed.

7.	Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the National Court which shall take place forthwith.

The Court orders accordingly
________________________________________________________________ 
Lawyers for the petitioner:  Rex Kasito	
Lawyers for the respondent: Nelson