HAKAIR LIMITED & ANOR v. STERLING BANK PLC
(2019)LCN/13327(CA)
In The Court of Appeal of Nigeria
On Thursday, the 23rd day of May, 2019
CA/L/709/2014
RATIO
CORPORATE LAW: WHO IS A CORPORATE PERSONALITY
Much has been said in expounding the law on who is a corporate person and what the concept of corporate personality entails, the concept foist a status of body corporate on the company in that the company becomes a sue juris with all the powers of a natural person of full capacity, Section 38 of CAMA. This confers on the company, the ability to sue and consequently be sued, as provided in Section 37 of CAMA, and also, the often cited cases of SALOME v SALOME & CO LTD (1877) AC 22 and ACB PLC v EMOSTRADE LTD (2002) 8 NWLR (Pt 770) at 505. PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
COMPANY LAW: UNDER WHAT RULES ARE COMPANIES GOVERNED?
The law has stated emphatically as reproduced above; a company is governed and regulated through its registered articles and no more. However, it is important to note that the Act magnanimously provides for valid amendment of the Articles of Association of any incorporated company, such amendment may be in form of alteration or addition. And it is to the effect, that such alteration or addition will have the same validity as the originally registered provisions. See Section 48 (1) (2) CAMA and the case of YALAJU-AMAYE v A.R.E.C (1990) NWLR (Pt 145) 422.PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
JUSTICES
MOHAMMED LAWAL GARBA Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
Between
1. HAKAIR LIMITED
2. CAPTAIN HARISSON ADEKUNLE KUTI Appellant(s)
AND
STERLING BANK PLC Respondent(s)
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the Lagos Division of the Federal High Court, delivered on 2nd April, 2014 by MUSA H. KURYA, J in Suit No: FHC/L/CS/680/2013. The brief facts leading to this case as gleaned from the records before the Court is that the Appellants were approached by the pre-merger officials of the Respondent to invest in the proposed merger of several banks that metamorphosed to the Respondent-Bank. This was said to be in line with the Re-Capitalization policy of the then Federal Government directing the existing banks to raise their capital bases to certain mark within a stipulated time frame. Overtures were said to have been made to the Appellants that, should they invest as shareholders in the proposed bank; the 2nd Appellant will be made a director for life in the Respondent-Bank. To this end, the sum of N2, 000,000,000.00 (Two Billion Naira) was said to have been invested by the Appellants. Apparently in line with the assurance, the 2nd Appellant was made a Non-Executive Director of the Respondent-bank on 22/12/2005 and was equally
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appointed to some of the standing committees of the bank until 15/5/2012 when he was removed in an Annual General Meeting held on that date. The ground for the removal was said to be to the effect that the 2nd Appellant had attained 70 years of age. Being dissatisfied, the Appellants then as ?Plaintiffs? initiated a suit against the Respondent herein at the lower Court vide an Originating Summons dated and filed on 16/5/2013, supported by a 39 – paragraph Affidavit deposed to by the 2nd Appellant with exhibits annexed, it was also accompanied by the Applicant?s Written Address (see pages 3-144, Record of Appeal). Various declarative reliefs and Orders were prayed from the Court in the Originating Summons. In its judgment, the lower Court found in favour of the Respondent in the suit, the trial judge held that the Originating Summons lacked merit and was subsequently struck out.
?The Appellants were displeased with the finding of the lower Court and approached this Court to file this appeal. The appeal was initiated vide an Amended Notice of Appeal dated 6/5/15 and filed on 8/5/15. And in furtherance to the Rules of the Court, parties
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exchanged pleadings and settled their records. The Appellants? Brief of Argument dated 11/5/2015 and filed on 25/6/2015 with the Reply Brief filed on 8/6/2016 and deemed properly filed on 26/2/2019 were settled by Lotanna Chuka Okoli of Jurislaw, Lagos while the Respondent?s brief of Argument dated 16/10/2015 and filed on 19/10/2015 but deemed properly filed on 27/11/18 was settled by Chief Anthony Idigbe, SAN, Nnamdi Oragwu, Esq, Olapeju Anozie of Punuka Attorneys and Solicitors, Lagos. In the Appellants? Brief, four (4) issues were nominated for the determination of the appeal by the Court, the issues are:
1. Whether the Respondent is governed by its registered deeds of settlement and other internal policies. (Ground 1)
2. Whether the Court can rely on the hearsay evidence of the Respondent as against the real and direct evidence of the Appellants. (Ground 3)
3. Whether the 2nd Respondent’s removal as director in the Respondent was in compliance with the relevant provisions of the Companies and Allied Matters Act, Cap. 20 Laws of the Federation, Articles 92, 93 and 94 of the Memorandum and Articles of Association of the
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Respondent, and Section 10 of the Banks and other Financial Institutions Act (BOFIA) LFN 2004. (Grounds 4, 5 and 7)
4. Whether the learned trial judge was right to have held suo motu that the Courts will not grant specific performance in respect of breach of contract of service or declare that service will subsist where the point was not raised before him nor was he addressed thereon and thereafter went on to treat the 2nd Appellant as an employee of the Respondent and dismissed the claims of the Appellants. (Grounds 2 and 6)
The Appellants canvassed the following argument per the issues nominated:
On Issue 1, the counsel to the Appellants, while relying on Section 33 of the Companies and Allied Matters Act 1990 (CAMA), submitted that only the registered Articles Of Association of a company is the document which prescribes the regulations for which a company will be bound and obligated to follow. It was further stated that, the Memorandum and Articles of Association (referred to here as MEMART) of a company, when registered, is binding on the stakeholders of the company. Reliance was placed on the decision in LONGE v FBN PLC (2010) 36 WRN, PG 1
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to submit that it is mandatory for a company to have recourse to its Articles of Association for its decisions and policies to be valid. Appellants contended that the removal of the 2nd Appellant as a director of the Respondent based on the Registered Deed of Settlement and Internal Policy of the Respondent, contravened the Articles of Association of the Respondent and is in violation of CAMA.
On issue 2, which borders on whether or not facts deposed to in the Affidavits of the Respondent is caught in the web of the rule of hearsay evidence making it inadmissible in evidence; the Appellants? counsel wondered why the lower Court did not find on the issue even though it was raised at trial by the Appellants. He urged the Court to make a finding on same. In arguing this issue, the Appellants contended that the Respondent?s counter affidavit and further affidavit are inadmissible being hearsay evidence, reliance was placed on the Court of Appeal decision in U.B.A. LTD V S.G.B. LTD (1996) 10 NWLR (PART 478) PAGE 381 and the decision of the Supreme Court inOLADIPO MAJA v COSTA SAMOURIS (2002) 15 WRN, PAGE 69 were cited in support of the
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submission. Section 37 of the Evidence Act 2011 and the Court of Appeal decision in SALISU v AMUSAN (2011) 18 WRN 103 were referred to on what hearsay denotes. Counsel submitted that the only evidence before the Court is that of the 2nd Appellant being direct evidence, the Court is urged to resolve the issue in the Appellants? favour.
The Appellants further in their argument, argued issue 3 by submitting that the appointment and removal of a director of a corporate entity like the Respondent, is governed by CAMA in conjunction with the MEMART of the company and also Banks and other Financial Institution Act (BOFIA). The counsel relied on the following statutory and judicial authorities: Section 262 (2) of CAMA, the Supreme Court?s decisions in LONGE v FIRST BANK OF NIGERIA PLC (2010) 36 W.R.N. at pg 1; IWUCHUKWU v NWIZU (1994) 7 NWLR (PART 357) at 379 and YOUNG v LADIES IMPERIAL CLUB (1920) 2 KB 523 amongst others to submit that failure to effect a proper service on the 2nd Appellant against the provisions of the mandatory statutory notice of the AGM invalidates the 2nd Appellant’s removal as a director. It was further submitted that the Notice
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of Annual General Meeting as issued, fell short of the statutory requirements. Section 262 of CAMA was cited to submit that failure to deliver to the 2nd Appellant personally, the said notice of AGM, 21 days before the date scheduled for the meeting invalidated the meeting and the proceedings there from, counsel further argued that the following provisions of law were breached; Section 10 of BOFIA, Section 256 of CAMA and Articles 52, 92, 93 and 94 of the Article of Association of the Respondent. The Court was then urged to resolve the issue in Appellant?s favour in line with the decision in LONGE v FBN PLC (Supra).
On the fourth issue, the Appellants? arguments were to the effect that the lower Court raised an issue suo motu but neglected to allow the parties to address it on same. Counsel relied on the decision in ADEDAYO v PDP (2013) LPELR ? 20342 (SC) and submitted that the rule of fair hearing had been breached and that the decision arrived at therein is liable to be stuck out. The Court is then urged to allow the appeal and grant the reliefs sought in the Appellants? Originating Summons at trial.
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In its response, the Respondent nominated four issues for determination. The issues are as reproduced hereunder:
1. Whether the Respondent is governed by its internal policy and if same constitutes a binding agreement between the Respondent and the 2nd Appellant.
2. Whether the Respondent?s counter affidavit dated 9th September, 2013 amounts to hearsay evidence and effect of Court?s reliance on it.
3. Whether the 2nd Appellant was validly removed as a Director of the Respondent having failed to be re-elected as a Director of the Respondent by the Respondent?s members in General meeting.
4. Whether the trial Court erred in law on the 2nd of April, 2014 when it dismissed the Appellant?s originating summons.
The Respondent?s arguments were canvassed in the following manner, with respect to the aforesaid issues: It was the Respondent?s argument on issue 1, that affairs of a company are regulated by the provisions of the Companies and Allied Matters Act, (CAMA) as well as Memorandum and Articles of Association of the Company (MEMART) amongst others. The Respondent?s Counsel contended that the
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Respondent?s Board Policy provides 70 years and 60 years retirement age respectively for its Non-Executive and Executive Directors. The learned Counsel further relied on the decision of the Supreme Court in KOPEK CONSTRUCTION LTD v EKISOLA (2010) 3 NWLR (PT 1182) PG. 663, PARAS C-D to submit that since the facts were not challenged or controverted by the 2nd Appellant, it is deemed admitted. The Respondent?s counsel raised a poser; whether the said Board Policy, being contractual in nature, is binding between Respondent and the 2nd Appellant amongst other directors, Section 41 of CAMA was referred to. It was submitted that Respondent?s Board policy is a binding agreement between it and its directors. He then urged the Court to so hold. The following cases were cited;JERIC (NIG) LTD v UNION BANK NIGERIA PLC (2000), 15 NWLR (PT 691) PGS 462-463, PARAS G-A and LSWC v SAKAMORI CONST. (NIG) LTD (2011)12 NWLR (PT 1262) at 569, amongst others to support the proposition that parties are bound by the agreements they voluntarily entered into. It was stated that the policy did not, in any way, contravene the provisions of CAMA. The Respondent
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asserted that the 2nd Appellant was removed as a director having failed to be re-elected at the Annual General Meeting held for the purpose. Counsel reiterated that, without prejudice to the provisions in the company?s Articles of Association, any contract freely entered into with its Directors or members remains binding. The Court was urged to so hold.
On issue 2, the learned Counsel averred that affidavit is governed mainly by statute and that the Respondent?s deponent has fully complied with the statutory provisions to the effect. It was further reiterated that a Company can only act through its servants and agents. The Court was urged to note that there is no legal provision stating specifically the persons termed ?servants/agents?. The learned Counsel relied on the decision in the case of SALEH v BANK OF THE NORTH LTD (2006) 6 NWLR (Pt 976) PG 326-327 PARAS H-C on the submission. The Respondent submitted further that the Appellants are required to prove their case by adducing oral evidence and cannot be entitled to the declaratory or any reliefs sought on ground of the Appellants? failure to adduce oral evidence in proof
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of those reliefs sought. The Court was then urged to so hold. The Respondent?s counsel canvassed strong arguments to ground its submission that the 2nd Appellant?s removal was valid in law and in accordance with the doctrine of ?Corporate Democracy?. It was contended that the 2nd Appellant was removed by the corporate will of the shareholders, being the majority vote of the shareholders at the Respondent?s 50th Annual General Meeting. It was also emphasized by the Respondent that the 2nd Appellant was not removed for attaining 70 years simplicita, but coupled with rotation as entrenched in the Respondent?s policy. Section 248 (1) CAMA was cited as basis for the act of the shareholders in the re-election of any director. The recourse to Section 10 of BOFIA by the Appellants was contended by the Respondent as it was said not to have been raised before the lower Court.
The Respondent on issue 3 restated that the removal of the 2nd Appellant as a director of the Respondent was in compliance with the statutes and the Respondent?s Policy, the Court was urged to so hold.
?The Respondent stated on issue 4 that the
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lower Court did not err when it declined to order specific performance, it was argued that the Appellants prayers before the lower Court amounts, in essence, to praying the Court for specific performance being reliefs arising from an alleged breach of the provisions of the Respondent?s Articles, hence not a fresh issue raised suo motu by the lower Court. He relied on the Supreme Court?s decision in HELP NIG LTD v SILVER ANCHOR NIG LTD (2006) 5 NWLR (PT 972) at PG 218 – 219, PARAS E-D to submit that, the Court ought not to order specific performance as such will work undue hardship on the Respondent. The Court was urged to so hold. It was the Respondent?s further contention that the Appellant failed to substantiate his claim of being made a director for life, with any credible documentary evidence. Whilst relying on the case of A.G ANAMBRA STATE v OKAFOR (1992) 2 NWLR (PT 224) at PG 405, the Respondent submitted that the Appellants are not entitled to an Order of Mandatory Injunction and he urged the Court to so hold. The Respondent also cited the following: NBN v ALAKIJA (1978) 2 LRN 78, OLOYO v ALEGBE (1983) 2 SCNLR 35 at 67 and ORUK ANAM LG
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v IKPA (2003) 12 NWLR (PT 835) at 558 and also Order 3 Rule 6 & 7 of the Federal High Court (Civil Procedure) Rules, 2009 and submitted that the mode of commencing the suit ought not be by Originating Summons being contentious in nature and the Court was urged to so hold. The case of OGOLO v OGOLO (2006) 5 NWLR (PT 972) PG 184, PARAS C-E was cited to submit that neither the declarative reliefs nor the mandatory injunction being sought by the Appellants ought to be granted having failed to adduce oral evidence in support. The cases of NITEL v ICIC (DIRECTORY PUBLISHERS) LTD (2009) 16 NWLR (Pt 1167) PG 383 and KWANKWASO v AG KANO STATE (2006) 14 NWLR (PT 1000) 444 at 472 amongst others were cited in support of the assertion. The Respondent urged the Court that the Appellants? case be dismissed for lacking in merit.
In the Appellants? reply brief, it was contended that the company’s Memorandum and Articles of Association is the only document that regulates the affairs of the company and having the effect of a contract under seal as between its members and officers. The case of LONGE v FBN PLC (Supra) was restated. The Appellants countered the
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submission of the Respondent on the prior dealings based on the said internal policy. Its learned counsel cited the cases of C. A. P PLC v VITAL INV LTD (2006) 46 WRN 74 at PG 110 lines 30-40; H.M.S. Ltd. v F.B.N. Ltd (1991) 1 NWLR PT 167 PG 290 at 302 PARA B-C and UDECHUKWU v NGENE (1992) 8 NWLR PT 261 PAGE 565 at 586 and submitted that the onus is on the Respondent to show evidential proof of the existence of the alleged internal policy. It was also submitted that the concept of corporate governance cannot be used to waive the provisions of extant law, Sections 33 and 41 (1) of the Companies and Allied Matters Act 1990, was called in support of this assertion. The Appellants also contended that the notice of the meeting served did not comply with the extant law and should therefore be discountenanced. The case of DR OLADIPO MAJA v MR COSTA SAMOURIS (2002) 15 WRN PAGE 69-91 at 35 and COMPO HOME ENT v HENRY STEPHENS ENG. CO. (1993) 9 NWLR Pt 316 PAGE 208 at 221, were cited to submit that the Respondent?s Counter-Affidavit and further affidavit are inadmissible in evidence. Contending the Respondent?s argument, the Appellants submitted that the
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suit was validly commenced by Originating Summons, the learned counsel relied on the following authorities; OFORDUM v NIGERIAN ARMY (2014) 19 WRN 105 at 136; FALOBI v FALOBI (2002) 30 WRN PAGE 50 and AZUOKWU v NWOKANMA (2005) 43 WRN 107, as well as the provisions of Order 3 Rule 6 and Order 3 Rule 9 of the Federal High Court (Civil Procedure) Rules, 2009 in support of the submission, the Court was urged to discountenanced the arguments of the Respondent on this issue and resolve same in favour of the Appellants. The Appellants further contended that failure of the Respondent to tender the minutes of the AGM in evidence is fatal to its case, decisions in the cases of C. A. P. PLC. v VITAL INV. LTD (Supra) and H.M.S. Ltd. v F.B.N. Ltd (Supra) were cited to buttress the assertion. The Court was urged to resolve the issue in favour of the Appellants. Other sundry issues were controverted in seriatim and with relative additional judicial and statutory authorities as it relates to the case of the Appellants, this ranged from; whether or not the issue of the Banks and Other Financial Institutions Act were raised at the trial; issue bordering on specific performance
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raised suo motu by the trial Court; the mode of commencement of the suit as well as the issue bordering on the relief of mandatory injunction sought before the lower Court, the Appellants canvassed materially similar argument as in the Brief of Argument. It was submitted that the Appellants met all the requirements for the grant of the reliefs sought. The Court was urged to allow the appeal.
RESOLUTION
In the resolution of this appeal, regards will be had to the issues formulated by the parties to the effect of either adopting or reformulating same by the Court, as required by law, towards the effective determination of the appeal. See the case of BANKOLE v PELU (1991) 8 NWLR (Pt 211) 523 and GOV. EKITI STATE v OLUBANWO (2017) 3 NWLR (PT 1551) 1 at 23. Having stated as above, I portend that the parties herein raised issues that are materially similar, adoption of any of which will effectively determine the questions in the appeal, to this end, I will adopt the issues as nominated by the Respondent herein. The issues are reproduced hereunder, for the reason of emphasis:
1. Whether the Respondent is governed by its internal policy and if same
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constitutes a binding agreement between the Respondent and the 2nd Appellant.
2. Whether the Respondent?s counter affidavit dated 9th September, 2013 amounts to hearsay evidence and effect of Court?s reliance on it.
3. Whether the 2nd Appellant was validly removed as a Director of the Respondent having failed to be re-elected as a Director of the Respondent by the Respondent?s members in General meeting.
4. Whether the trial Court erred in law on the 2nd of April, 2014 when it dismissed the Appellant?s originating summons.
?On issue 1, the parties deployed their respective arsenal in the judicial combat of arguing out this head of the law. The question substantially here is, how in essence, are the incorporated companies governed? It is an elementary knowledge of corporate law that upon the fulfillment of incorporation requirements, an incorporated company assumes a corporate personality status. Much has been said in expounding the law on who is a ?corporate person? and what the concept of corporate personality entails, the concept foist a status of ?body corporate? on the
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company in that the company becomes a sue juris with all the powers of a natural person of full capacity, Section 38 of CAMA. This confers on the company, the ability to sue and consequently be sued, as provided in Section 37 of CAMA, and also, the often cited cases of SALOME v SALOME & CO LTD (1877) AC 22 and ACB PLC v EMOSTRADE LTD (2002) 8 NWLR (Pt 770) at 505. The company appears to be more a ?regimented personality?, a person whose entire dealing is subject to the strict compliance with the dictate of the laws, hence the major recourse to the Companies and Allied Matters Act, 1990 (CAMA), and other similar statutes which BOFIA is principally one, for it to be properly and effectively governed and regulated. The parties in this appeal no doubt, had had a swell time together, obviously when the going was good. The parties seemed to have become enraged over the issue of retention of the 2nd Appellant as a director of the Respondent. While the 2nd Appellant vehemently contended that the combined construction of the provisions of CAMA and BOFIA, as well as the Memorandum and Articles of Association of the Respondent and no more, should regulate
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the question of the appointment/election and re-election of directors of a company like the Respondent. The Respondent, on the other hand, maintained that the improvised internal policy term, as in the instance, is what is applicable. It will be pertinent at this juncture to look through the prism into what the law provides in this regards. The parties canvassed strong arguments on this point and call in various judicial and statutory authorities in support. The Appellants relied on Sections 33 & 41 (1) of CAMA and the decision in the case of LONGE v FBN (Supra) to ground its argument that the Respondent ought not to have resulted to the said internal policy which was not provided for in the Articles of Association of the Respondent. The Respondent however asserted that other ?internal corporate policies, regulations, agreements or contracts? to which the company, inclusive of the 2nd Appellant, agrees to be bound, are relevant in the regulation of such company. Several judicial authorities including JERIC (NIG) LTD v UNION BANK NIGERIA PLC (Supra) were cited to reiterate the binding-ness of such contract. The Appellants however strongly
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contended the existence of the said internal policy. It was further stated that what, at best, could be regarded as such was an attempt to introduce a policy but that could not sail through at the Board level which made the proposed policy to be referred out for legal opinion. The Appellants cited Sections 131, 132 & 133 of the Evidence Act and the case of C. A. P. PLC v VITAL INV. LTD (Supra) amongst others in submitting that failure of the Respondent to adduce evidence as to the said policy as ?adopted? by the Board of the Respondent-Company is fatal to its case. The contention of the parties herein as to the existence of the much disputed policy, in my opinion, is secondary to what the law says should govern and regulate a regimented personality like the Respondent herein. I will be taking sufficient guide in what Sections 33 & 41 (1) of CAMA says in this instance, I reproduce hereunder, the provisions:
33. There shall be registered, with the memorandum of association, articles of association signed by the subscribers to the memorandum of association, and prescribing regulations for the company
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41. (1) Subject to the provisions of this Act, the memorandum and articles, when registered, shall have the effect of a contract under seal between the company and its members and officers and between the members and officers themselves whereby they agree to observe and perform the provisions of the memorandum and articles, as altered from time to time in so far as they relate to the company, members, or officers as such.
It is obvious as well as obligatory, that the Court in interpreting the foregoing statutory provisions ought to interpret same to arrive at the intention of the drafters of the law, which in the meantime, involves the use of the plain meaning of the words used in the provision of such statute. See: SKYE BANK v IWU (2017) LPELR -42595 (SC) and AMAECHI v INEC (2008) 5 (Pt 1080) 227. It is apparent, from the provisions of Section 33 as reproduced above, that the Regulations guiding the operations of the Respondent is to be prescribed by the Article of Association of the Company. And by the provision of Section 41(1) of CAMA, the said Article of Association signifies a contract under seal between the company and its officer on one hand, and the
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officers of the company and the members on the other hand, this was the holding of the Court in UNITED FOAM PRODUCTS LTD v OPOBIYI (2017) LPELR ? 43166 (CA). The arguments of the parties seem not at variance with the foregoing provisions of the Act, rather the contention of the parties centers round the Respondent?s ?Board Policy? whether it applies alongside the Article of Association of the company as canvassed by the Respondent or whether it does exist at all or is permissible by the said article as argued by the Appellant. The answer to this is not far-fetched. The law has stated emphatically as reproduced above; a company is governed and regulated through its registered articles and no more. However, it is important to note that the Act magnanimously provides for valid amendment of the Articles of Association of any incorporated company, such amendment may be in form of alteration or addition. And it is to the effect, that such alteration or addition will have the same validity as the originally registered provisions. See Section 48 (1) (2) CAMA and the case of YALAJU-AMAYE v A.R.E.C (1990) NWLR (Pt 145) 422.
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I have carefully perused the record before the Court, it was not ascertainable that the articles of association of the Respondent, was expectedly altered to accommodate the much talked about ?Board Policy?, upon which the action that led to the current judicial warfare was premised, neither was further proof tendered in evidence to its pre-litigation valid existence. I found the submissions made by the counsel to the Respondent as regards this issue, insufficient. Terse reference made by the Respondent of the existence of the said policy was unsubstantiated in the record before the Court. Painstaking efforts were made by the Court to peruse the record for clear guide on the issue. The combined construction of the exhibits attached, to wit; the minutes of the 339th Board Meeting of the Respondent and the opinions sought from notable law firms on the subject was clearly at variance with the argument of the Respondent in support of the policy manual. I am more persuaded by the argument canvassed in the reply brief of the Appellant wherein it was submitted that affidavit evidence of the Respondent will not suffice at overriding the extant provisions of the law, which
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validly provide only for ?updated articles? of association of the company as applicable to regulate and govern the company. Affidavit evidence, in my view, is not inviolable, it may indeed, be fallible. See the case of OKOYE v CENTRE POINT MERCHANT BANK (2008) 15 NWLR (Pt 1110) 335 SC and Section 63 (2) of CAMA. The Respondent, at no point, lay before the Court, further proof as to the approval by the General meeting of the Board Policy. I have no hesitation thereby, to hold that the policy remain an ordinary proposal to which approval of the company at General Meeting only, could make it an extant policy. This is achieved when the Article of Association is validly amended in line with Section 48 (1) of CAMA. The said policy, as it were, could at present be best described as ?amorphous? it would only take the proper form upon its validation by the General Meeting of the company. I resolve issue 1 herein in the Appellants favour and restate the law that only the Articles of the company and other regulation policies allowed in the articles will govern the internal policy of the Respondent.
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?In NATIONAL PALM PRODUCE ASSOCIATION OF NIGERIA v UDOM & ORS (2013) LPELR – 21134 on importance of the Memorandum Of Association after incorporation of a company; effect of going outside the scope of the stated objects in the memorandum;
“…The questions can be determined only by an examination of the contents of Exhibit “A” which is the Memorandum and Articles of Association of the 1st appellant. Section 41(1)-(4) of the Companies and Allied Matters Act Cap C20 Laws of the Federation of Nigeria, 2004 reads as follows: “41 (1) Subject to the provisions of this Act, the memorandum and articles, when registered, shall have the effect of a contract under seal between the company and its members and officers and between the members and officers themselves whereby they agree to observe and perform the provisions of the memorandum and articles, as altered from time to time in so far as they relate to the company, members, or officers as such. (2) … (3) Where the memorandum or articles empower any person to appoint or remove any director or other officer of the company, such power shall be enforceable by that person notwithstanding that he is not a member or officer of the company. (4) In any
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action by any member or officer to enforce any obligation owed under the memorandum or articles to him and any other member or officer, such member or officer may, if any other member or officer is affected, by the alleged breach of such obligation with his consent, sue in a representative capacity on behalf of himself and all other members or officers who may be affected other than any who are defendants and the provisions of Part XI of this Act shall apply.” The parties in this appeal are bound to observe and perform the provisions of the memorandum and articles of association of the National Palm Produce Association of Nigeria Limited by Guarantee. All the acts of the respondents are ultra-vires the memorandum and articles of the 1st appellant. They are accordingly declared null and void.”
per TUR , J.C.A (PP. 23-24, PARAS. B-D)
And further that, in as much as the Articles of the company is not comprised of the said internal policy, same has no binding effect whatsoever, either on the company and the Appellants herein or with other functionalities of the company.
Issue 1 is resolved in favour of the Appellants.
?The issue 2 as nominated by
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the Respondent seeks to determine; whether the Respondent?s counter affidavit dated 9th September, 2013 is caught in the web of hearsay evidence. The Appellants contended that facts deposed to in both the Counter-Affidavit and further affidavit dated 9/11/13 and 25/2/14 respectively amounted to hearsay having been sworn to by a deponent who relied on information ?supplied by a person without personal knowledge of those fact?, the cases of U.B.A v S.G.B LTD (Supra) and OLADIPO MAJA V SAMOURIS (Supra), were cited to submit that the hearsay evidence is inadmissible. The Respondent countered the Appellants argument on this issue to submit that, relevant provisions of the statute were complied with in the Respondent?s counter-affidavit. Section 115 (1), (3) & (4) of the Evidence Act was relied on in support of this assertion. It will be pertinent to affirm succinctly here what is and what amounts to hearsay evidence, our law reports are replete of guides on this subject, out of which I reproduced hereunder; this Court in the case of OBOT v STATE (2014) LPELR ? 23130 (CA) stated ardently that;
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?hearsay evidence is evidence which does not derive its value solely from the credit given to the witness himself but which rests also, in part, on the veracity and competence of some other person. Thus, where a third party relates a story to another as proof of the contents of a statement, such story is hearsay?. See also ADETA v NIGERIAN ARMY (2016) LPELR-40235(CA) and JUDICIAL SERVICE COMMISSION v OMO (1990) 6 NWLR (Pt 157) 407 CA.
it was further stated that;
?a testimony will be regarded as hearsay where the person making the statement is not the one who either saw it, heard it, perceived it or gave it as his own personal opinion but rather as what was said to him (by) another person (sic).
per FASANMI, JCA in SALISU v AMUSAN (2010) LPELR ? 9103 (CA), the position of the Apex Court validates this submission, the Supreme Court in OLALEKAN v THE STATE (2001) LPELR -2561 (SC), per KARIBI-WHYTE, JSC, stated thus;
?It is well established law that the evidence of a statement made to a witness by a person who is not called as a witness is called ?hearsay? if the object of such evidence is to establish the truth of what is
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contained in the statement
The SC stated the law with judicial finality when it held that ?neither the Court nor the consent of the parties is capable of making such evidence admissible in law?. But we must ask the question here that ?do facts deposed to in the Respondent?s set of affidavits fall into the judicial pitfall of hearsay evidence Of importance is the provision of the Evidence Act wherein Section 115 (3), which gives a clue to the effect of what may qualify as exception to the general rule as explicitly highlighted above, the provision is hereunder reproduce for clarity purpose;
115(3). When a person deposes to his belief in any matter or fact, and his belief is derived from any other source other than his own personal knowledge, he shall set forth explicitly the fact and circumstances forming the ground of his belief.
?Can we then view it that affidavit evidence, as provided for in the Act, seems to permit what could ordinarily be regarded as ?hearsay?, as it was stated that affidavit evidence is a statement in writing made and signed by a person and declared by him on oath
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to be true. The SC held in the case of MAGNUSSON v KOIKI (1993) 9 NWLR (PT 317) 287 at 297, per KUTIGI, JSC, that;
?affidavit evidence upon which application or motions are largely decided are not the same thing as pleadings in Civil Suits which are written statements (and not evidence) generally of facts relied upon by a party to establish his case? unlike pleadings which will have to be supported by evidence at trial…?
The Apex Court further stated that affidavit evidence is deserved of being given weight, especially where there is no conflict or upon resolution of same by oral evidence. See; NWOSU v IMO STATE ENVIRONMENTAL AUTHORITY (SUPRA) and SHITTA-BEY v AGF (1998) 10 NWLR (PT 570) 392. But in essence, the Court is protected from walloping in the dark on this subject as the Supreme Court had warned in the case of OKOYE v CENTRE POINT MERCHANT BANK (Supra) that affidavit evidence is not sacrosanct and that ?affidavit evidence cannot change the legal position as the process of affidavit is evidence and not law?. See KRAUS THOMPSON ORG v NIPSS (2004) 17 NWLR (PT 901) P44 per Tobi, JSC. The caveat was further
30
dropped that an affidavit meant for use in Court stands as evidence and must as near as possible conform to oral evidence admissible in Court. The facts as deposed to in the Respondent?s affidavits by one Martins Nwakwo, a litigation officer in the Firm of the Respondent?s Counsel and sworn to have been obtained from the information supplied to him by one Miss Olapeju Banwo, one of the counsel at the firm and who was said to be ?seised of the facts of this case?. The SC has provided sufficient guide on the test for knowing facts and circumstances of any affidavit evidence, it was stated the test is to ?examine each of the paragraphs deposed to in the affidavit?, it will pass the test if and only if, it is ?such that a witness may be entitled to adduce them in his testimony on oath and are legally admissible as evidence to prove a fact in issue or dispute.? See GENERAL & AVIATION SERVICES LTD v THAHAL (2004) 10 NWLR (PT 880) P50.
?I found many of the deposition therein as being beyond the accepted threshold of facts that may be protected most of which are not legally admissible as evidence to prove a fact
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as contained in the Respondent?s affidavit?.
The trend of or practice, though very rampant amongst counsel, is truly worrisome, I observe that no body from the Respondent company deposed to the counter ? affidavit, none of the management board or company secretary deposed to the counter – affidavit. It has been said times without number that counsel can depose to non-contested applications or its staff depose to affidavit of facts so that the need in some cases where the need to resolve conflict in affidavit may arise and counsel may have to be put in the witness stand to be cross examined in a matter he is acting counsel and not party. This will avoid breaching Section 115(1), (2) & (4) of the Evidence Act. See;ALHAJI ADEKUNLE AGBALAJOBI & ANOR v GOVERNOR OF LAGOS STATE (2017) LPELR ? 41955 (CA); DR MAJA v SAMOURIS (2002) 7 NWLR (PT 765) 178; ALHAJI KACHALLA MUSA v ATTORNEY-GENERAL OF TARABA STATE & ANOR (2014) LPELR ? 24183 (CA). I found many of the deposition therein as being beyond the accepted threshold of facts that may be protected most of which are not legally admissible as evidence to prove a fact as
32
contained in the Respondent?s affidavit, NEITHER Miss Banwo nor Martins Nwakwo who work in the company did claim to be the company secretary nor to have gotten the information from them, they also were not present in the annual general meeting nor were briefed of events therein; the following in my humble opinion, amount to hearsay, to wit; paragraph 3 vi-x, xii-xvi, xix, xxiii amongst others. In paragraph 3 of the said counter affidavit it states thus;
3. That I have the consent and authority of PUNUKA ATTONEYS & SOLICITORS counsel to the Respondent in this suit and by virtue of my duties; That on Tuesday 31st July 2013 at about 2.30pm in our Lagos office, I was informed by Miss Olapeju Banwo, one of the Counsel in the Lagos office of our firm seised of the facts of this case and which information I verily believe to be true and state as follows;
i. That all investments made by the Applicant in the then Magnum Trust bank was done on their own volition and not based on any alleged assurances of being made a director for life by the Respondent. The above does not explain the source of knowledge which in this case is clearly above her
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knowledge neither can it be a client/solicitor teate, they are board room information that can only be within the knowledge of the company secretary Director or chairman of the Company,.
i. That the Respondent is a public quoted company that engages in commercial banking practices in Nigeria and has its registered office address at 20 Marina, Lagos.
ii. That the 2nd Applicant is the Managing Director of the 1st Applicant and both are shareholders in the Respondent?s Bank.
iii. That sometimes in 2004, the Central Bank of Nigeria being the regulatory body that oversees the activities of the Respondent mandated all banks operating in Nigeria to raise their minimum share capital to Twenty Five Billion Naira (N25,000,000,000.00).
iv. That the Respondent is a product of merger between five banks to wit; NBM Bank, NAL Bank, Magnum Trust Bank, Trust Bank and Indo-Nigerian Bank.
v. That each of the constituent banks that made up the Respondent declared its share capital to raise the Authorized minimum share capital of Twenty Five Billion Naira (N25,000,000,000.00) as required by the Central Bank of Nigeria.
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vi. That no particular quota was assigned to any of the five constituent Banks rather each bank declared what it had financially, as its share capital towards the merger process.
vii. That in the process towards the merger, all the legacy banks declared specific sums as their share capital and it was on the basis of the specified agreement was signed. No individual interest whatsoever was reckoned with the process.
viii. That contrary to paragraph 4 and 5 of the Applicants affidavit in support of its Originating Summons the Applicants; decided on their own volition to invest their fund in the then Magnum Trust Bank, and neither the Respondent nor the then Magnum Bank gave the 2nd Applicant any assurance or promise that he would be a director in perpetuity?
Above are some extracts of the depositions in question.
This Court in BAKARE v ODUNEYE (2010) LPELR -3844 had cause to hold on the circumstance where it would be unsafe for the Court to rely on affidavit evidence thus;
“Where a deposition in an affidavit is based on information and belief such evidence ought not to be acted upon unless the Court can ascertain the source of
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the information and belief and unless the facts deposed to be corroborated by someone who speaks from his own personal knowledge. See Maja v. Samouris (2002) 7 N.W.L.R. (pt.765) SC 78; Re J. L. Young Manufacturing Co. Ltd. (1900) 2 CH 758 at 754.”
per NWODO ,J.C.A (P. 15, PARAS. A-C) the following, in my humble opinion, amounts to hearsay. The cases of UBA v SGB (Supra) and MAJA v SAMOURIS (Supra) cited by the Appellants are apt in the instance. I disagree with the agency theory as proposed by the Respondent, as the circumstance of the facts deposed to in the affidavit could not be reasonably said to be within the scope of the said source of the information. More importantly, the answers to the following posers will throw more light on the sources of information contained therein;
?Does the said Olapeju work in the Respondent?s company? Is she a director or has attended the said Annual general meeting? Is she a company secretary or a shareholder? Can she stand in examination in chief or cross examination on the depositions? If answers to these posers are in the negative, the information supplied are hearsay and offends Section 115(3) of the
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Evidence Act. I hold that the counter affidavit together with the further affidavit dated 9/11/13 and 25/2/14 respectively, are inadmissible, the facts in paragraphs 3 (i ?lxxxiv) page 150-161 deposed to therein being hearsay. I resolve issue 2 of this appeal in favour of the Appellants.
In resolving issue 3 of this appeal, regard would be had to the procedure employed by the Respondent to achieve the said removal; this is with a view to determine the validity of the removal of the 2nd Appellant as a Non-Executive Director of the Respondent at the 50th Annual General Meeting of 15/5/12. Whilst relying on Section 262 of CAMA, Articles 92, 93 & 94 of the Respondent?s MEMART as well as the Supreme Court?s decision in LONGE v FBN (Supra), the Appellants submitted that the removal of the 2nd Appellant was not validly carried out hence, is null and void. This was however contended by the Respondent, who reiterated that in line with the provisions of the Articles of Association of the Respondent, the removal of the 2nd Appellant as one of the Directors of the Respondent was validly carried out, the Respondent also maintained that the Board
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Policy among other regulations, alongside the Articles of Association, is applicable in the instance. Succinctly put, a director is a person duly appointed by the company to direct and manage the affairs of the company, he is one in whose direction and instructions the Directors are accustomed to act. See Sections 244, 245 & 650(1) of CAMA and the decision in OLUFOSOYE v FAKOREDE (1993) 1 NWLR (Pt 272) 747, SC; MARINE MANAGEMENT ASSOCIATION INC & ANOR v NATIONAL MARITIME AUTHORITY (2012) LPELR ? 20618 (SC), described a Director as the alter ego of the company. It is crucial to ask the question that ?What laws and procedures are applicable in removal of a director of a public company like the instant respondent It is a restatement of the law that a director may generally be removed from office and that the manner of removal may be as specified in the Articles of Association of the concerned company, otherwise recourse by default would be made to the statutory provisions. See IWUCHUKWU v NWIZU (1994) 7 NWLR (PT 357) 379. The SC provided the necessary guide in its decision in LONGE v FBN (Supra) wherein it was stated that provisions of
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Section 262 of CAMA is relevant in the instance. It was further stated that the power to remove a director under the Articles of Association of a company is made subject to provisions of CAMA, non compliance of which would render nugatory any exercise so conducted. This Court pointed out in the case of CADBURY NIGERIA PLC v ONI (2012) LPELR ? 19821 (CA), the relevance of Section 266 of the Act in the instance as well. For clarity reason, the provision ofSection 262(1)& (2) and Section 266(1) ? (3) of the Actis reproduced hereunder:
262(1). A company may by ordinary resolution remove a director before the expiration of his period of office, notwithstanding anything in its articles or in any agreement between it and him.
(2). A special notice shall be required of any resolution to remove a director under this section, or to appoint some other person instead of a director so removed, at the meeting at which he is removed, and on receipt of notice of an intended resolution to remove a director under this section, the company shall forthwith send a copy of it to the director concerned, and the director (whether or not he is a member of
39
the company) shall be entitled to be heard on the resolution at the meeting.
266(1). Every director shall be entitled to receive notice of the directors? meeting, unless he is disqualified by any reason under the Act from continuing with the office of director.
(2). There shall be 14 days? notice in writing to all directors entitled to receive notice unless otherwise provided in the articles.
(3). Failure to give notice in accordance with Subsection (2) of this section shall invalidate the meeting.
The insistence of the Respondent on the applicability of its board policy has been laid to rest having been held inapplicable earlier on in this judgment, it is then my opinion, that the procedure to remove a director in any public company is as permitted in its Articles premised on the statutes, CAMA especially and BOFIA based on the nature of business of the Respondent, being a bank. See MR STANFORD WARIBOKO v IMAGO GROUP OF COMPANY ENTERPRISE NIG. (2014) LPELR ? 2428 (CA), this Court spelt out the Procedure for dismissal or removal of a director, thus;
“The manner of removal of directors is as stated in Section 262 of CAMA
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and provides as follows: SECTION 262 [REMOVAL OF DIRECTORS] 1. A company may by ordinary resolution remove a director before the expiration of his period of office, notwithstanding anything in its articles or in any agreement between it and him. 2. A special notice shall be required of any resolution to remove a director under this Section, or to appoint some other person instead of a director so removed, at the meeting at which he is removed, and on receipt of notice of an intended resolution to remove a director under this Section, the company shall forthwith send a copy of it to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting. 3. Where notice is given of an intended resolution to remove a director under this Section and the director concerned makes with respect to it representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so – a. in any notice of the resolution given to members of the
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company, state the fact of the representations having been made; and b. send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company); and if a copy of the representations is not sent as required in this Section because it is received too late or because of the company’s default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting: Provided that copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or any other person who claims to be aggrieved, the Court is satisfied that the rights conferred by this Section are being abused to secure needless publicity for defamatory matter and the Court may order the company’s costs on an application under this Section to be paid in whole or in part by the director, notwithstanding that he is not a party to the application. 4. A vacancy created by the removal of a director under this Section, if not filled at the meeting at which
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he is removed, may be filled as a casual vacancy. 5. A person appointed director in place of a person removed under this Section shall be treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last appointed a director. 6. Nothing in this Section shall be taken as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as a director or of any appointment terminating with that as director, or as derogating from any power to remove a director which may exist apart from this Section. Underlining Mine By the wordings of Section 262 (7) Supra, in the matter of removal of Directors, it is clear that this Statute prevails over any provision in the Articles of Association of the company and is binding on the company. The provision above requires a special notice to remove a Director before the expiration of his term. The various types of notices have been defined in Section 217 of CAMA as follows:… SECTION 217 [LENGTH OF NOTICE FOR CALLING
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MEETINGS]. By Section 262 (2) of CAMA supra, a notice of the resolution to remove a Director must be given to him and he shall be entitled to be heard on the resolution at the meeting.”
per ADEFOPE – OKOJIE,J.C.A (PP. 42-46, PARA. D).
I resolve issue 3 in favour of appellant.
The parties on issue 4 of the appeal, argued at variance on the decision arrived at by the lower Court. It was the Appellants case that the lower Court raised suo motu, issue of specific performance and did not allow the parties to address it on the issue before ruling on same thereby violating the rule of fair hearing against the Appellants, it was contended that there was no dispute over any contract of service between the parties before the lower Court, and that injustice had been occasioned and the decision ought to be set aside. The Respondent contended that the lower Court did not err to have declined specific performance as the reliefs being sought before the lower court by the Appellants amounts in essence to order of specific performance. HELP NIG LTD v SILVER ANCHOR NIG LTD (Supra) was cited in support.
In resolving this issue, the concept of specific
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performance must be critically looked into with a view to determine this question. The Supreme Court in the case of IBEKWE v NWOSU (2011) 9 NWLR (PT 1251) P 1, described specific performance as a kind of remedy that oblige the exact doing of a contract in the specific form and manner in which it was made and in accordance with the precise terms agreed upon by parties. It is;
?The rendering, as nearly as practicable, of a promised performance through a judgment or a decree: a Court ordered remedy that requires precise fulfillment of a legal or contractual obligation when monetary damages are inappropriate or inadequate
As provided in Black Law Dictionary 9th edition, pg 1529 and the case of BEST NIG LTD v BLACKWOOD HODGE NIG LTD (2011) LPELR -776(SC). It is an equitable remedy grantable at the discretion of Court when it is satisfied that legal or common law remedy would not meet the end of justice. ACHONU v OKUWOBI (2017) LPELR ? 42102. The Court is however charged to exercise this discretionary power judicially and judiciously, where it is certain to inflict hardship on the defendant, Court should refrain from granting
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same, as it is anchored on inadequacy of the remedy of damages at law, see UNIVERSAL VULCANIZING NIG LTD v IJESHA UNITED TRADING & TRANSPORT CO LTD (1992) LPELR ? 3415 (SC), EZENWA V OKO (2008) LPELR ? 1206 (SC). The argument of the Appellants was that the Court raised this issue on its own motion, I have carefully perused the reliefs sought from the lower Court as couched in the Originating Summons filed by the Appellant, I do not agree that such amount to specific performance as argued by the Respondent, once the provision of law stipulating a procedure is violated, the resultant action is void, and deemed not taken at all in the eyes of the law,LONGE v FBN (Supra).
In understanding why the lower Court would raise the issue of specific performance suo motu in respect of breach of contract of service, it’s important to understand what a contract of service is. A contract of service is a formal legally binding agreement which is between an employer and an individual who then becomes employed by the company. And this honorable Court held in RICHARD OMIDIORA & ANOR v FEDERAL CIVIL SERVICE COMMISSION & ORS;
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?In law, the Courts will not enforce specific performance of the mere contract of service or employment under common law. There is a wide difference between unlawful termination of appointment with statutory flavour & wrongful termination of appointment of contract of service or master servant relationship under common law.?
per OGUNWUMIJU, JCA (P.13, PARAS F ? G).
?The question that arises in our minds is; is a company ? director relationship a contract of service one? The relationship between a company and a non-executive director is not simple as that of master and servant such that the normal rules for termination and engagement would apply. It is rather a special relationship/ more like an investor that is statutory in nature. The Appellant is not only a shareholder but a director but represents a block in the formation of the company. The appointment and removal of directors is regulated by the CAMA, and therefore the rules of master and servant under the civil service rules or common law rules cannot be applicable. On whether the companies decree provides for damages in actions for wrongful dismissal of directors or managing directors,
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the Apex court in YALAJU-AMAYE v ASSOCIATED REGISTERED ENGINEERING CONTRACTORS (1990) LPELR ? 3511 (SC);
“I agree with the submission of counsel to the appellant that the Court of Appeal was wrong to have regarded the claim as one for wrongful dismissal of a servant by a master and for holding that the companies decree did not provide for damages in actions for wrongful dismissal of directors or managing directors. That damages could be awarded is clear from the provisions of Section 175(6) of the Companies Decree which states as follows- “Nothing in this section shall be taken as depriving a person removed there under of compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director, or as derogating from any power to remove a director which may exist apart from this section.” This provision enables the award of monetary damages in actions founded on the removal of director, or managing director. Decided cases abound in support of the proposition that pecuniary damages may be claimed and if proved awarded in actions for wrongful dismissal of director or
48
managing director. See Nelson v. James Nelson & Son Ltd. (1914) 2 KB.770; Southern Foundries Ltd (1926) v. Shirlaw (1940) AC.701; Shindler v. Northern Raincoat Co. Ltd. (1960) 1 WLR.1038.”
per KARIBI-WHYTE, J.S.C (PP. 45-46)
Therefore, the trial court erred when he raised the issue of specific performance suo motu from the Appellants reliefs sought and held that the Respondent is governed by the registered deed of settlement and other internal policies, also that court or law cannot foist on them . The lower court relied onIMOLOAME v WAEC (1992) 11/12 SCNJ PG 121 and held thus:
?The 2nd Defendant (sic) did not tender the terms and conditions of service of a Director for life under the services of the Respondent.
In conclusion, I hereby find that the Applicants Originating Summons dated 16th May, 2013 lacks merit, and is hereby struck out.?
Pages 309 – 316 of the Record of Appeal.
?In my opinion, the lower court adopted the ?easy-way-out-approach? when it refused to pronounce on vital and momentous issues raised by the parties before it. Courts are not permitted to abdicate the avowed and undoubted
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judicial duty of ensuring justice being done, this should not be encouraged. The Supreme Court in an admonition directed specifically to courts of first instance, held in ITO v EKPE (2000) 3 NWLR (PT 650) P 678, per BELGORE, JSC thus:
?Trial court must in considering its decision address all the issues before it. The issues are matters averred in the parties? pleadings on which evidence has been led?.
A court of law can grant specific performance once it is satisfied that what was done ought not to have been done, having found that the lower court adopted the wrong parameter in law it behooves on the court to do justice and equity and reverse the wrong.
?The Respondent further contended that the mode of commencement of the Appellants? suit before the lower court was wrong. It was submitted that it ought not to have commenced with the Originating Summons, in law even if it was wrongly used, it amounts to mere irregularity. It could be converted to writ of summons. In my view, having looked at the affidavit and counter affidavit the issues in this matter are statutory which will apply to documents tendered on events
50
complained of. I do not find a serious contention on facts, therefore, the mode of commencement is apt. In the case of UNIVERSITY OF JOS & ANOR v ARO (2019) LPELR ? 46926 (CA) the court considered whether every matter commenced by originating summons is devoid of dispute and held thus;
“Another issue agitated by the parties was whether the suit was properly commenced by the use of originating summons. Counsel to the Appellants contended that the lower Court was wrong to have entertained the suit on an originating summons in view of the dispute in the facts as deposed in the affidavits and counter affidavits of the parties. It is elementary that facts make cases and that it is disputes in the facts that lead to litigation – Pam Vs Mohammed (2008) 16 NWLR (Pt 1112) 1. Thus, it is not the law that matters commenced by originating summons are devoid of dispute on the facts and the use of the procedure is proper as long as the dispute on the facts do not affect the live issues in the matter – Sani Vs Kogi State House of Assembly (2019) LPELR 46404(SC). Counsel to the Appellants did not show how the dispute on the facts in the instant case affected
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the live issues for determination in the matter. The agitation of the Appellants on the point was thus misconceived.”
per ABIRU, J.C.A (PP. 37-38, PARAS. B-A)
The apex court further held in DSS & ANOR v AGBAKOBA (1999) LPELR ? 954 (SC) in distinction between an originating summons and a writ of summons held;
“…an originating summons is not the same as writ of summons. In the case of the former no pleadings are employed while in the case of the latter there are pleadings in the form of statement of claim, statement of defence, reply etc. see Re: Busfield, Whaley v. Busfield (1886) 32 Ch. D 123 CA. at p.126 and Re Holloway, ex parte Pallister (1894) 2 Q.B. 163, C.A. at pp. 166 and 167. With the vital distinction between an originating summons and a writ of summons it was wrong of the learned trial Judge to bring to bear on this case the principle laid down by the cases of Wallersteiner’s (supra) and Ozowala (supra). The Court of Appeal was, therefore, right in holding that the trial court acted wrongly in following the principle in the cases mentioned to hold that the respondent’s prayer for a declaratory relief had failed.”
per UWAIS, J.S.C (P. 27, PARAS. C-E)
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The Supreme Court held in ATAGO v NWUCHE (2013) 3 NWLR (PT 1341) PG 337, thus:
?The form of commencement of an action does not necessarily make it incompetent. It does not matter whether the action begun by writ of Summons or by Originating Summons. What is most important is the question of justice of the case.?
See also; FAMFA OIL v AGF (2003) 18 NWLR (PT 852) 453 and PDP v ABUBAKAR (NO 2) (2007) 3 NWLR (PT 1022) 515 at 544 P16, PARAS B-D.
In the light of the above, from the facts of this case affidavit counter affidavit the use of Originating Summons was not fatal to this case; the submission of the Respondent on this issue lacks merit.
?The issue 4 of this appeal is resolved in favour of the Appellants. As I have early adverted to in the course of this judgment, a company being a regimented personality is precluded from throwing caution to the wind and ride roughshod in their dealings, era of corporate haughtiness is far past, for avoidance of doubt, I restate that a company is a person totally under authority, rules and regulations as stipulated in extant laws must be observed to the
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letter.
This is a company matter and deserves to be settled once and for all, it is a proper case for invoking Section 15 of the Court of Appeal Act and the Apex Court had course to hold in LONGE v FBN (2010) LPELR-1793 (SC) in like circumstances that;
?under Section 266(1) of C.A.M.A., all directors, whether executive or non-executive are the same as long as they are all engaged to direct and manage the business of the company.
In the final conclusion, this appeal must be allowed. It is meritorious. The judgment of the Court below is set aside. The removal of the plaintiff as Managing Director/Chief Executive of the defendant without a notice to him, to attend the meeting at which the decision was taken is a clear violation of Section 266(1) and (2) of the Companies and Allied Matters Act; and such violation must attract the penalty prescribed by law under Section 266(3). The said meeting is under the law invalid. I so pronounce it. I declare that the removal of the plaintiff is not
54
in accordance with law. The plaintiff must be deemed to still be the Managing Director/Chief Executive of the defendant. I accordingly grant the reliefs 1-5 claimed by the plaintiff appellant. For clarity, I set out those reliefs hereunder: manage the business of the company.
In the final conclusion, this appeal must be allowed. It is meritorious. The judgment of the Court below is set aside. The removal of the plaintiff as Managing Director/Chief Executive of the defendant without a notice to him, to attend the meeting at which the decision was taken is a clear violation of Section 266(1) and (2) of the Companies and Allied Matters Act; and such violation must attract the penalty prescribed by law under Section 266(3). The said meeting is under the law invalid. I so pronounce it. I declare that the removal of the plaintiff is not in accordance with law. The plaintiff must be deemed to still be the Managing Director/Chief Executive of the defendant. I accordingly grant the reliefs 1-5 claimed by the plaintiff appellant. For clarity, I set out those reliefs hereunder.”
In the light of the analysis the Appeal succeeds and is allowed, the judgment of
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Federal High Court per KUYRA, J is set aside. The reliefs in the originating summons in 1-13 are granted. For clarity, I set out the reliefs thus;
1. A declaration that the Respondent at its 50th Annual General Meeting could not have lawfully presented the 2nd Applicant for reappointment as a Director in the Respondent when the 2nd Applicant was not due for retirement by rotation and did not offer himself for reappointment, accordingly all decisions taken at the said meeting as affecting the 2nd Applicant are unlawful, in bad faith, null and void and incapable of having any legal consequence or effect.
2. A declaration that the notice of the Annual General Meeting of the Respondent held on the 15th day of May 2012 was defective, is wrongful, unlawful, null and void and incapable of having any legal consequences whatsoever because the Respondent was not due for retirement by rotation or any other means.
3. A declaration that the Notice given to the effect that the 2nd Applicant had retired by rotation and his presentation for reelection, when in fact he had neither retired nor did he present himself for reelection amounted to a removal of the 2nd
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Applicant as a Non Executive Director of the Respondent and same is wrongful, unlawful, null and void and incapable of having any legal consequences.
4. A declaration that the Respondent cannot lawfully remove a director without giving the requisite 21 days? notice of such removal to the 2nd Applicant, accordingly all decisions taken based on the said removal of the 2nd Applicant by Retirement are unlawful, null and void and incapable of having any legal consequence or effect.
5. A declaration that the Respondent at its annual general meeting cannot validly remove the 2nd Applicant on the basis of Section 256 of the Companies and Allied Matters Act 2004 and the said Section 256 is not a basis for the removal or re-election of a Non-Executive Director under any known Nigerian Law or the Memorandum and Articles of Association of the Respondent.
6. A declaration that any purported implementation of the said decision retiring and presenting the 2nd Applicant for re-election and any decision or action arising therefrom purportedly made at the Annual General Meeting held on the 15th day of May 2012 including any appointment to the office held by
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the 2nd Applicant in the Respondent is ineffective, unlawful, null and void.
7. An order of mandatory injunction reinstating the 2nd Applicant to his position as a Non-executive Director in the Respondent Company.
8. An order of perpetual injunction restraining the Respondent form giving effect or continuing to give effect to any of the purported decisions of the Annual General Meeting mentioned in the reliefs sought herein without first complying with the mandatory procedural requirements stipulated in Articles 92, 93 and 94 of the Memorandum and Articles of Association of the Respondent and Section 259 of the Companies and Allied Matters Act 2004.
9. An order directing the Respondent not to include the period of the 2nd Applicants absence from the board in calculating his tenure for purposes of determining his due date for retirement from the board.
10. A declaration that the 2nd Applicant is entitled to damages for the ridicule and embarrassment he suffered arising and flowing from proceedings at the 50th Annual General Meeting of the Respondent Company.
11. An order directing the Respondent to pay the Applicants the sum of
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N50,000,000.00 (Fifty Million Naira) being general damages for the ridicule, embarrassment, fear, apprehension, emotional trauma, assault on his person and verbal abuse suffered by the 2nd Applicant pursuant to the process of his wrongful removal as Director in the Respondent.
12. An order directing the Respondent to pay the Applicants the sum of N10, 000, 000.00 (Ten Million Naira) being the cost of the action.
13. Interest at 21% per annum on all monetary sums as may be awarded by the Court from the date the cause of action herein accrued until judgment and thereafter Court interest until the entire sums are fully paid.
MOHAMMED LAWAL GARBA, J.C.A.: I have read a draft of the lead judgement by my learned brother Abimbola Osarugue Obaseki-Adejumo, JCA in this appeal and agree that although the 2nd Appellant can be removed even if appointed as Director for life under Section 255 of the Companies and Allied Matters Act (CAMA), his purported removal did not comply with the provisions of Sections 262(2) and (3) and 266 of the Act and so invalid in law. See Longe v. FBN PLC (2010) 6 NWLR (1189) 1 cited in the lead judgment
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Omenka v. Morison Ind. Plc. (2000) 13 NWLR (638) 147. In the premises, he is entitled the reliefs sought in his action and I join the lead judgement in granting them as set out therein.
JOSEPH SHAGBAOR IKYEGH, J.C.A.: I agree with the judgment prepared by my learned brother, Abimbola Osarugue Obaseki-Adejumo, J.C.A.
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Appearances:
Iotanna C. Okolie with him, Deborah T. AyondeFor Appellant(s)
N. K. Oragwu with him, AnozieFor Respondent(s)
Appearances
Iotanna C. Okolie with him, Deborah T. AyondeFor Appellant
AND
N. K. Oragwu with him, AnozieFor Respondent
