-in S.A Nabi & Sons Ltd. case
THE Guyana Court of Appeal in September 2004 upturned a decision of Judge Rishi Persaud in a ruling for appellants in a case involving S.A. Nabi & Sons Ltd.
But on May 23, 2011 the Caribbean Court of Justice (CCJ) restored the ruling of Justice Rishi Persaud following a hearing of the appeal that lasted several days.
The CCJ judgment was delivered by its Retired President Mr. Justice Michael de la Bastide who sat along with Justices R. Nelson, D.P. Bernard, Hayton and Winston Anderson.
The appeal had arisen from the Court of Appeal of the Co-operative Republic of Guyana between (1) Ashmid David Sheermohamed (2) Aslim Sheermohammed, deceased, (through Kathleen Sheermohamed the executrix of the estate)- Appellants and S. A. NABI AND SONS LIMITED- Respondent.

Mr. Christopher Roy Parker, Q.C., appeared for the appellants while Fenton Ramsahoye, S.C. and Mr. Sanjeev Datadin represented the respondent.
Justice de la Bastide began his judgment with the observation:
“The dramatis personae in this appeal are the two original appellants (whom I shall refer to respectively as “Ashmid” and “Aslim” and jointly as the appellants), Ashmid being the son of Aslim (who is now deceased), and two brothers of Aslim, namely, Shir Amineen Nabi (“Amin”) and Azeez Sheermohammed (“Azeez”) also now deceased.  The respondent, S.A. Nabi and Sons Limited (“the Company”) is a family company engaged in the construction business.  It was incorporated in Guyana in 1965. The three brothers, Aslim, Amen and Aziz, between them owned the great majority of shares in the Company and for some time comprised the Board of Directors of the Company.
The Notice of Motion

According to Justice de la Bastide: “The proceedings, out of which this appeal arises, were by a notice of motion dated October 21, 2004 in which the company was named as the applicant.  The action was brought against four respondents with Ashmid and Aslim being named as the third and fourth respondents respectively.
“The first two respondents were respectively the Attorney General and the Registrar of Joint Stock Companies, but they took no part in the proceedings and are not parties to this appeal.
“The notice of motion was in fact an application under section 137 (1) of The Companies Act, 199 Chapter 89:01 (“the Act”) although there is no mention of this section in the notice of motion itself or in the affidavit in support. The section is mentioned, however, in the heading of the affidavit by which an ex parte application was made for an interlocutory injunction. This section provides as follows:
“A company or a shareholder or director thereof may apply to the court to determine any controversy with respect to an election or appointment of a director or auditor of the company.”
“The purpose of the substantive application was to challenge the appointment of Ashmid as a director of the Company. The relief claimed consisted of “an order’ (a declaration really) that Ashmid was not lawfully appointed a director of the Company and a number of consequential orders including  an injunction restraining  Ashmid  from acting as a director and a declaration  that certain resolutions passed by Aslim and Ashmid as directors were null and void and of no effect.
“The resolutions that were targeted included those by which shares held by Amin and Azeez were subjected to a lien and then forfeited and subsequently sold to Aslim.
“The basis of the challenge of Ashmid’s appointment was that it was made by two directors, Aslim and Amin, at a meeting held on September 10, 2004  to which a third director , namely Azeez  was not invited. It was contended  that the two directors who attended that meeting  did not constitute a  quorum  and did not have the power to appoint what was alleged to be a fourth director.  The controversial meeting  was convened  by Aslim  for  the express purpose  of increasing the number of directors from two to three and thus satisfying  the requirement contained  in article 80  of the Company’s articles  that there be a minimum  of three directors  –  all of this  on the premise  that Azeez  was not a director  at the material time.  That was a premise which in September, 2004, appears to have been accepted by all three brothers.
“At the meeting Amin proposed Azeez (presumably with Aseez’s consent) to be the third director while Aslim proposed Ashmid. Aslim by means of a casting vote, which he claimed as chairman resolved the deadlock in Ashmid’s favour.
“It was crucial to the case for the applicant that Azeez was a director at the time of the meeting on the 10th September, 2004.  If he was a director, then the admitted failure to invite him to the meeting alone would have nullified any business transacted at it.  It was alleged that in any event there was no quorum at that meeting. These were the applicant’s principal arguments although Aslim’s right to a casting vote was also challenged.   As a result, the central factual issue in this case was whether Azeez, who both sides agreed had been a director up to 1994, was still a director on the 10th September, 2004.
Judgment of Justice Rishi Persaud
“In the High Court Justice Persaud had to decide this issue largely on the basis of the documents which were introduced into evidence as annexure to the affidavits sworn respectively by Amin in support of the application and by Aslim in opposition to it. One of the unsatisfactory aspects of this case is that it was starved of evidence. In their affidavits both deponents simply made contradictory averments that Azeez was and was not still a director in September, 2004.  Aslim produced no evidence of how Azeez’s directorship was terminated.
“On the other hand, Amin offered no explanation of why he (and apparently Azeez as well) had accepted that Azeez was no longer a director or why he changed his mind about that. Moreover, for some reason, which it is difficult to fathom, the attorneys on both sides agreed that there should be no cross-examination.  This had the effect, whether intended or not of depriving the judge of any chance of discovering the answers to these crucial questions.
The trial judge, Justice Persaud considered the documentary evidence in the case.  He paid particular attention to those documents which were signed by Amin who was the Secretary of the Company as well as a director. These included annual returns to the Registrar of Companies for the years 1995, 1996 and 1997 which reported that the Company had only two directors, Aslim and Amin.
“The Judge also referred to evidence that Amin had brought to Aslim’s attention that the Company was in non-compliance with its articles since there were only two directors in place and the minimum number of directors required by the articles was three.
“This position was maintained by Amin in a letter written to Aslim dated September 10, 2004. The Judge also took into account annual returns for the years 2002 and 2003 in which Azeez was shown as a director, but he found that there were aspects of these returns which rendered them unreliable.  In the end, he held that on the evidence it had been established that Azeez was not a director in September 2004. He also found that Aslim and Amin were entitled to fill the gap by appointing a third director and that Aslim was chairman and was entitled to a casting vote.
“Accordingly, he gave judgment in favour of the appellants (respondents to the notice of motion) but made no order as to costs.
Judgment of the Court of Appeal
In the judgment of the Court of Appeal the case took a different turn.  For the Court of Appeal it was crucial that the applicant was not Amin but the Company and therefore the Court of Appeal held that the “out-of-court assertions” of Amin to the effect that Azeez had ceased to be, and was not at the material time, a director of the company, could not be used as evidence of the truth of that which was asserted but only as prior inconsistent statements that could be used to undermine Amin’s credibility.
“All the evidence therefore  that Amin had up to the end of September 2004 demonstrated both in writing and by his conduct that he firmly believed that Azeez  was no longer a director of the company , was held to have no positive probative value whatever. The Court of Appeal stressed that the appellants (respondents in the Court of Appeal) had provided no evidence that anything had occurred which would have resulted in the termination of Azeez’s directorship pursuant either to article 95 of the Company’s articles or to section 69 of the Act.
“The Court held that in those circumstances the appellant had failed to discharge the evidential burden that lay on them to rebut the  presumption  that Azeez who had already been a director from the inception of the company  until 1994, had continued in that office up to 2004.
“Accordingly the Court of Appeal allowed the appeal, set aside the declaration made by Justice Persaud affirming  the lawfulness of Ashmin’s appointment and granted the applicant most of the relief which was sought   including an order for costs against the appellants  though limited to the sum of $100,000.”

After referring to all the issues, in respect to the facts and the law, the Caribbean Court of Justice in its disposition stated:
“For the reasons given we allow the appeal, quash the orders made by the Court of appeal and restore the decision and order of Persaud J. We make no order as to costs either here or in the courts below.”