Issue link: https://maltatoday.uberflip.com/i/1468438
maltatoday | SUNDAY • 22 MAY 2022 15 LAW CLASSIFIEDS SHAREHOLDERS may take action against other sharehold- ers only when it is impossible that the company will take action itself. This was held in a judgement delivered by the Civil Court (Commercial Sec- tion) presided by Mr Justice Ian Spiteri Bailey on 13 May 2022 in Ingrid Fiorini -v- Anna Zer- afa and Josianne Miceli. The Plaintiff asked the First Hall of the Civil Court to de- clare that the Defendants are responsible for the maladmin- istration of Nova Co Limited and the liquidate damages. The Plaintiff explained that the company was set up by her parents and her father ran the company. When he died the compa- ny passed on to his daugh- ters, who are the Parties to the case. However, the Plaintiff was edged out of the company, since she received no informa- tion on the company. The De- fendant Zerafa's daughters set up a competing company and although Zerafa was a director of Nova Limited, she acted in conflict of interest. She sold the company's stock to her daughter's company and decided to keep most of the money because of a claim she had against her sister with re- gard to her mother. Zerafa ran Nova Limited aground by not presenting annual return and audited accounts until the Mal- ta Business Registry struck off the company. The defendants filed a state- ment of defence in that this action should have been filed before the Civil Court, Com- mercial Section and not the First Hall of the Civil Court. The Defendants also held that the action should have been di- rected at the company and not the individual shareholders. They accused the Plaintiff of abandoning the company and they acted in good faith. On 15 December 2020, the First Hall of the Civil Court agreed with the Defendants that the action should have been filed before the Commer- cial Section. The Commercial Court then decided on whether the action could have been filed against fellow shareholders. Mr Justice Spiteri Bailey made reference to Fiorini's affidavit where she made reference to the fact that she was employed with the company, but left em- ployment when she started a family. In 1998 she fell ill and her sisters left her out of the decision making process, until in 2008 Zerafa took complete control of the company. The relationship was so bad that the Defendants did not inform her that her mother died. The Court commented that it is obvious that there are person- al issues between the parties of the case. The main complaint is that Zerafa took control of the company and mismanaged it, because she had a conflict of interest. Nova Limited was struck off because none of the interested parties attempted to regularise the company status. As regard to the Defendant's plea that the Plaintiff does not have any juridical interest or locus standi because the fiduci- ary obligations are vested in the directors of the company and not the shareholders. The com- pany should have taken action against the shareholder and not the individual shareholder. The Court held that the De- fendants argued in court that juridical interest in this case should be view from the Com- panies Act and not the general law. The action was filed a few days after the Nova Limited was struck off. The Plaintiff did not take an action to revive the company in order for the com- pany to take action against the shareholders for damages. The Court pointed out that the premises of the sworn ap- plication is that the action is a personal one against other shareholders. Professor An- drew Muscat in his book Prin- ciples of Maltese Company Law wrote: "If the action by the sharehold- er is merely to redress a wrong done to him personally, then the proper plaintiff should clearly be the shareholder himself act- ing in his personal name and capacity." The Court made reference to UK caselaw Foss -v- Harbottle where a shareholder does not need to depend on the compa- ny to advance his or her claims. The Court quoted from anoth- er book, Minority Sharehold- ers Rights by Robin Hollington who said that the objection for a shareholder to file a personal action is that the losses of the company is the losses of the shareholders: "A shareholder can, therefore, only pursue a personal cause of action for breach of duty against the directors or other shareholders or third parties, if he establishes that in the spe- cial circumstances of the case : (a) he has suffered personal loss distinct from the loss suffered by the company and therefore indirectly by him as a share- holder, and (b) the defendants were in a sufficiently proximate relation- ship to him that they owed him the duty (whether it be a fiduci- ary duty App. Civ. 214/93 18 or the common law duty of care) which they are alleged to have broken." The Court held that it agreed with this position and there- fore, the Plaintiff had a right to proceed against the Defend- ants. The Constitutional Court also dealt with this issue in Lawrence Borg pro et noe -v- Avukat ta' l-Istat et decided on 17 March 2022. The Court held held that a shareholder if he or she is a victim and shows that it would be impossible for the company to take action, then the shareholder has a right of redress. The Court then moved to turn down the plea, as long as the parties present their evidence against each other as share- holders of the company. Shareholders may ssue other shareholders for damages only in certain circumstances LAW REPORT MALCOLM MIFSUD Mifsud & Mifsud Advocates HOLIDAY ACCOMMODATION MARSALFORN, Gozo - holiday apartments for short or long lets with magnificent sea-views. Call 21556021, 27556021, 79426883 PROPERTY TO LET SAN GWANN – Ironmongery as a going concern. Key money plus daily rent. For further information kindly contact 99474953. 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Interested please call LOGIC International Ltd 21245982 FOOD KINGDOM LTD – we have vacancies for a part time waiter/ waitress for 20 hours weekly. Also, there are vacancies for a restaurant cashier, Asian Food Chefs and Sushi Chefs. A full-time position is availa- ble for a Restaurant Manager. Hours include weekends and public holi- days. Phone 27833888 or 99504694. SPA THERAPIST - required for a busy spa within a hotel in Naxxar. Must be flexible with hours on a rota full time and fluent in English. Experience required. Please con- tact The Village Boutique & Spa on 27988357 for more info. VIDI LTD - We are seeking the ser- vice of waiters, cleaners and shop attendants on a full-time basis. Applicants must be English speak- ing and have 6 months of experi- ence in the job they are applying in. Apply by sending an email with your CV to admin@vidi.com.mt CLASSIFIEDS INFO @MEDIATODAY.COM.MT