The board of Old Mutual has launched a stinging rebuttal, saying a High Court application by axed CEO Peter Moyo to have its conduct declared to be in contempt of court is “invasive” and has “severe” implications.
The hearing of Old Mutual’s application for a declaratory order into whether Moyo could be reinstated as CEO because the insurer is appealing a recent court judgment, which paved the way for him to get his job back, started on Friday at the High Court in Johannesburg.
Moyo launched a counter application on Monday, asking the High Court for an order to declare the conduct of Old Mutual’s board to be in contempt of court for “failing” to comply with the High Court judgment. Old Mutual’s board comprises 14 individuals and is led by board chair Trevor Manuel.
A contempt of court offence relates to being disobedient or disrespectful towards a court of law regarding its judgments and comes with sanctions including hefty fines or imprisonment. Moyo is pushing for these sanctions, as he wants Old Mutual’s board to explain to the court why it should not be committed to imprisonment for six months or a period determined by the court.
Acting for the Old Mutual board, John Dickerson SC, said the contempt of court application is “fatally flawed and cannot be entertained” because Moyo didn’t follow proper processes in launching the application. Dickerson wants the application to be dismissed.
This is the first time that Old Mutual has responded publicly to Moyo’s contempt of court application in what is shaping up to be a nasty battle between both parties. Moyo was suspended on May 23 on the grounds of “a material breakdown in the relationship of trust and confidence” and was dismissed on June 18.
Although Dickerson acknowledged Moyo’s request to censure the conduct of Old Mutual’s board, he said Moyo didn’t cite all 14 directors in his application and serve them with a notice. Instead, Moyo launched a court application that only cited Old Mutual, which means the 14 directors are not joined in the matter on an individual basis.
Without following proper processes in launching the contempt of court application, Dickerson asked Judge Brian Mashile to dismiss it and not render it as urgent.
“The lack of urgency makes it egregious as the order is of a severe nature [as it seeks to impose sanctions on directors] and [it is launched] without the directors being notified. A counter application is only permissible against the applicant [Old Mutual] and doesn’t bring other parties,” said Dickerson.
He added that a contempt of court finding amounts to a final order as it has “severe” sanctions – especially the sanction of imprisonment.
Moyo’s request for a contempt of court declaratory order intensifies the relief that he wants against Old Mutual board members. In a separate legal challenge, he wants them to be declared delinquent directors under Section 162 of the Companies Act, which would result in the entire Old Mutual board being purged.
Moyo’s lawyer responds
Dali Mpofu SC, acting for Moyo, objected to Dickerson addressing the court because Old Mutual’s board didn’t submit a responding affidavit to Moyo’s contempt of court application.
Mpofu said Old Mutual should blame itself for its board members not receiving a notice about the contempt of court application.
When the insurer launched its application to appeal the High Court judgment that reinstated Moyo as CEO, it said the judgment shouldn’t have included the 14 board members on the cost order. And when the insurer applied for a declaratory order, it removed the 14 directors in the application and only cited Old Mutual as an applicant. “They simply decided to only cite Old Mutual and remove the directors in the declaratory order application without providing reasons.”
But Dickerson believes that the Old Mutual board was entitled to explain in court why Moyo’s relief shouldn’t be granted. “It [the contempt of court application] is the most outrageous infringement on the right to be heard … They [Moyo’s lawyers] cannot, by law or equity, deny my clients [Old Mutual’s board] the right of audience.”
Judgment was reserved on Old Mutual’s declaratory order application and Moyo’s contempt of court application.