Friday, July 12, 2024

Molefe, Showa score court victory against BBS board

Lobatse High Court Judge, Tebogo Tau has ruled in favour of axed Managing Director of Botswana Buildings Society Limited, Pius Molefe and Board Secretary Sipho Showa by the Board.

Molefe and Showa were dismissed from work after they had objected the Board of Directors’ desire to extend their contracts by 90 days.

According to court records, the respondents (Molefe and Showa) submitted that the effect of not complying with Clause 75 of the BBSL Constitution renders the meeting which was held on the 5th April 2021 null and void and the resolutions which stem from the same meeting invalid.

Tau agreed with the case of MacFoy v United Africa Co Ltd [1961] 3ALL ER 1169 (PC) at p 1121 where Lord Denning MR stated that: “If an act is void, then it is in law a nullity. It is not only bad, but incurably bad. There is no need for an order of the Court to set it aside. It is automatically null and void without more ado, though it is sometimes convenient to have the Court declare it to be so. And every proceeding which is founded on it is also bad and incurably bad. You cannot put something on nothing and expect it to stay there. It will collapse“.

In her ruling Judge Tau said the conclusion the court has arrived at is that the purported meeting of the Board of Directors of the Applicant was in breach of the Constitution of the Applicant. It was therefore a nullity and could not have a binding legal consequence.

“It follows therefore, that the decision which was taken during the meeting which was invalidly constituted was invalid. The resolution which was passed at that meeting was also invalid. As the decision to terminate the contracts of the Respondents stem from an invalid resolution it is automatically null and void. There is therefore, no need for the Court to set it aside. In the circumstances, the application to interdict the respondents which is based on the decision of the Board of Directors at the meeting held on the 5th April 2021, to terminate the Respondents’ contracts of employment is bound to fail and I so find. It is accordingly dismissed with costs, “said Tau.

According to court records, it was on the 1st April 2021, the Board in addition to discussing approval of audited financial statements, discussed and considered extension of its tenure by 90 days. 

The Board then resolved to extend their tenure by 90 days and deferred their election and/or re-election by 90 days. The Managing Director, who had at the meeting of the 1st April 2021, advised the Board that it would be unlawful for it to extend its tenure independent of the shareholders endorsement, sought legal advice from the Applicant’s legal advisors on the legality of Directors appointing or re appointing themselves. 

The legal advisors advised that the Directors could only be appointed and re-appointed by shareholders’ resolution(s). After securing this advise, the 1st Respondent directed the 2nd Respondent to publish the Annual Report and to issue a notice for the Annual General Meeting.

The court found that, after being irked by these developments the non-executive members of the Board called a meeting on the 5th April 2021. They met at 1500 hours. It was at this meeting that the members present, resolved to dismiss the Respondents.

 Letters confirming the termination of Respondents’ contracts of employment were delivered to them on the 6th April 2021 and they were also directed to vacate the offices and remove their personal belongings from the premises of the Applicant by close of business on the 6th April, 2021.

She ordered the Board to pay for the cost of the lawsuit.

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