Company law - Fraudulent Misrepresentation - Resolution void ab initio. Payment
made without just cause and against the law.The directors of the appellant purported to take a resolution to pay a sum ofmoney to the first respondent. The transaction was justified as dividends for his shareholding. On trial it was proved that the first respondent did not have shares in the appellant. The resolution was a sham and a fraudulent misrepresentation with a sole purpose to defraud the appellant. The first respondent was among the directors who took the resolution which benefited him. He did not declare his interest in the meeting that took the resolution. This was against the law and or his fiduciary duties. This decision was also not ratified in order to bring it in line with the law as required by the companies Act. Consequently, on appeal the resolution was found to be void ab initio. The first respondent was ordered to pay the money received in terms of that resolution to the appellant. The appeal was upheld.
