The Judge in Chambers of the Commercial Division of the Supreme Court of Mauritius decided in favour of our client in a recent ruling pertaining to joinder of parties, whilst highlighting the importance that management companies be made party to legal proceedings pertaining to a global business company (GBC). The salient facts of the ruling are detailed in this synopsis.
The law
Rule 19 of the Supreme Court Rules 2000 provides as follows:
“19. Addition and substitution of parties
(1) Any misjoinder or non-joinder of parties shall not defeat any cause of action and the Court may deal with the matter in controversy so far as regards the rights and interests of the parties actually before it.
(2) The Master or the Court may, at any stage of the proceedings, on the application of any party and on such terms as may appear to the Master or to the Court to be just, order the names of a party who –
(a) has been improperly joined be struck out;
(b) ought to have been joined, or whose presence before the Court may be necessary in order to adjudicate upon and settle all questions involved in the case be added
[…]”
The aforesaid Rule 19 is akin to Rule 56 of the Supreme Court Rules 1903, which advocates the prevention of multiplicity of actions and allows the Court to properly determine issues in the case.
Issues in the present matter and application of the law
- Addition of a newly appointed management company to the present application
The Applicant has carriage of the legal proceedings and it is, in the circumstances, habilitated to decide which party it wishes to add.
It was held in the case of Khoody Y. & Anor v. The Municipal Council of Vacoas-Phoenix [2020 SCJ 109], that: “However strongly the defendant feels that they should have been joined as parties, it cannot dictate to the plaintiffs, who have the carriage of proceedings, against whom they should direct their case.”
In deciding whether a person or legal entity ought to be added as a party in a case, the relevant consideration is whether the said person or legal entity has an interest in the matter at hand. In the case of Gopal v. Beejadhur [1985 MR 112], the Court held that: “[…] it is clear that, whether one goes by the Code de Procédure Civile, by rules 56 and 57 of our own Rules of Court or by the English Rules, a party can … be made to intervene if it has ‘un intérêt’, or, in other words, if he is someone who could have been a ‘partie à l’instance’ (see Dalloz Enc. Jur. Rep. de proc. Civ Vo. Intervention. N. 76)”.
Another interesting case is that of Cellplus Mobile Communications Ltd v. Gellé [2001 MR 193] wherein the Court highlighted that: “it is a cardinal principle that only interested parties need to be joined as parties to a case. This applies both to a matter heard by a judicial authority in the exercise of its original jurisdiction as well as one exercising appellate jurisdiction. […] Although a Judge in Chambers should […] be particularly careful not to allow the joinder of unnecessary parties (see R. Lesage v The Town and Country Planning Board [1997 SCJ 188], the general principle – contained in rule 56 of the Rules of the Supreme Court 1903 – is that a party is properly joined if his presence before the Court is necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter” (emphasis is ours).
Reference was also made to the case of International Society for Krishna Consciousness v. Ascencia Ltd and Ors [2012 SCJ 215a], where it was held that: “Our case-law based on the rule of law, derived from the English common law and continental law, decides that all interested parties should be put into cause for the determination of the real issue between the parties. […] In this case, ample reasons have been given as to why the three proposed parties have become interested parties. If they were not so at the time the action was lodged, they became so by the nature of the averments made by the respondents and the co-respondent in their affidavits”.
- Motion made on behalf of the two former management companies to be put out of cause
The first former management company of the GBC moved to be put out of cause as it is no longer the management company and company secretary. It further raised the issue that the application did not disclose any cause of action against it and neither any remedy is being sought quoad it.
It was argued on behalf of the Applicant that the presence of the first former management company is warranted for the Judge in Chambers to have a holistic view of the matter in lite. The mere fact that no relief is asked for or against a party will not be a sufficient reason for that party to be put out of cause, if he is otherwise a party, who should be joined as held in the case of Canarapen L. v. J. Anne [1999 SCJ 293].
The real matter in issue between the parties could not be effectively and completely adjudicated upon in the absence of the first former management company, which played an important role at the material time.
The second former management company argued that it is no longer the management company and company secretary of the GBC and that, in the face of affidavit evidence on record, all the acts complained of occurred prior to its appointment as management company and company secretary of the GBC. It is also the contention of the second former management company that the application did not disclose any cause of action against it, whether directly or indirectly and, in addition, no remedy or prayer is being sought against it.
It was argued on behalf of the Applicant that, without the second former management company, the Judge will not be in a position to fully appreciate the material issue in question.
Paragraph 14.7 of the Guidelines for Management Companies issued by the Financial Services Commission (FSC) reads as follows:
“In the event of a Management Company wishing or being forced to cease the conduct of company formation and management business or to merge with or take over another business whether licensed or not, the FSC is to be informed at the earliest opportunity and the requisite permission obtained. Where a Management Company is to cease conducting such business, the interests of the clients are paramount. Handover to another licensed Management Company acceptable to the FSC is to be arranged in an orderly fashion and only with the specific permission of the beneficial owner or his properly appointed representative […]” (emphasis is ours).
The findings of the Judge in Chambers
- Rule 19 of the Supreme Court Rules provides inter alia that the Court may, at any stage of the proceedings, on the application of a party, order that the name of a party who ought to have been joined or whose presence before the Court is necessary, be added to the case.
- In the present matter, it is the Applicant that has moved that the new management company be added and, since it has the carriage of proceedings, it would be for the Applicant to satisfy the Judge in Chambers that the newly appointed management company is a necessary party to the proceedings as decided in the case of The Financial Services Commission v. Independent Commission Against Corruption and Ors [2020 SCJ 164]).
- The arguments put forward on behalf of the Applicant suggest that the newly appointed management company is an interested party. Hence, the addition of the newly appointed management company as a party to the present proceedings will shed light as to whether it has been properly appointed as the Applicant’s management company and, as rightly submitted on behalf of the Applicant, to confirm any agreement that it has with the Applicant’s ultimate beneficial owner pursuant to the FSC Guidelines for Management Companies, which is a matter that the newly appointed management company should surely be able to confirm.
- It may well be that the outcome of the application may have an incidence on the interested party and, therefore, the presence of the interested party to the present proceedings is considered vital in the circumstances. The Learned Judge in Chambers, therefore, ordered that the newly appointed management company be joined as a party to the present proceedings.
- In the same vein, the presence of the two former management companies should be maintained at this juncture as they may also help shed light as regards their involvement vis-à-vis the GBC.
- As stated in the case of Canarapen L. v. J. Anne [1999 SCJ 293], the mere fact that no relief has been asked for is not a sufficient reason for that party to be put out of cause if he is otherwise a party who should be joined. The two former management companies cannot say that they are so unconnected with the subject matter to be removed from the present proceedings if the new management company is added as a party. Their presence may still be material to enlighten the Judge in Chambers on issues that may arise albeit that they may have been the management companies at different periods of time. The motion of the two former management companies to be put out of cause was not acceded to.
Conclusion
A few words on the power of the Judge in Chambers when dealing with joinder of parties: it was held in the case of Ning Ho Enterprise Ltd v. Tabac Ltee and Anor [2008 SCJ 144] that it is clear that the Judge in Chambers does have the power inter alia to allow the joinder of parties inasmuch as the same power available to the Court under Rule 56 of the Supreme Court Rules 1903 (now Rule 19 of the Supreme Court Rules 2000) should also apply to the Judge in Chambers in relation to Chambers cases.
The Learned Judge in Chambers reiterated that “the Judge in Chambers retains similar powers as under Rule 19 of the Supreme Court Rules 2000, in relation to Chambers cases” in the Chambers case of Teck Yan Chan Sui Co v. Mauritius Freezone Logistics Ltd [2006 SCJ 38].
The recent ruling of the Judge in Chambers highlights the role of management companies in the realm of GBCs necessitating their presence when the latter are involved in legal proceedings, notwithstanding that they may have been management companies of the said GBCs at different instances.
- Hemsley Holdings Ltd v. Sreetharan Vallipuram & Ors (2022 SCJ 244) ↩
- The Court held that it is for the applicant to satisfy it that the joinder/presence of the third parties to the application it has lodged against the respondent is necessary and justified in order to enable the Court to effectually and completely adjudicate upon and settle whatever questions are now left for the Court’s determination, bearing in mind the nature of the applicant’s prayers and the Court’s observations regarding the dispute which is now left between the applicant and the respondent. ↩
