ATTORNEY GENERAL, IMO STATE & ANOR v. IMO RUBBER ESTATES LIMITED & ORS
(2019)LCN/13230(CA)
In The Court of Appeal of Nigeria
On Friday, the 10th day of May, 2019
CA/OW/287/2016
RATIO
COMPANY LAW: THE LEGAL IMPLICATION OF INCORPORATION OF A COMPANY
The law is well defined on the formation of a limited liability company, and the fact that, when that is done, via the Companies and Allied matters Act, Cap 26, Laws of the Federation, 2004, (Section 18 thereof), the company so formed acquires a legal personality, different from the persons who came together to float it as a business outfit. See Ezekwere Vs Golden Guinea Breweries Ltd (2000) LPELR 6823 CA; Afolabi & Ors Vs Western Steel Works Ltd & Ors (2012) LPELR 9340 SC (relied upon by the trial Court).
And once the company is formed, it acquires a life of its own and becomes a distinct person (corporate person) in the eye of the law, though it will require the minds of those constituting its Board of Directors and management, to think and do what a normal human being would do. See Okoro & Anor Vs UBN Ltd (2004)3 NWLR (Pt.859) 87; UBN Ltd Vs Penny Mart Ltd (1992) NWLR (Pt.240) 228; Marina NOMINEES LTD Vs Fed. Board of Inland Revenue (1986)2 NWLR (Pt.20) 48; Okomu Oil Palm Co. Ltd Vs Iserhienrhien (2001)3 SC 140; Isoko Community Bank Ltd Vs Edofren Nigeria Ltd & Ors (2018) LPELR 44998 (CA).PER ITA GEORGE MBABA, J.C.A.
ADMISSION: WHATEVER IS ADMITTED IN LAW REQUIRES NO FURTHER PROOF
Of course the law is that, what is admitted needs no further proof.PER ITA GEORGE MBABA, J.C.A.
APPEAL: WHEN THERE IS NO APPEAL AGAINST A JUDGMENT, IT REMAINS BINDING AND CONCLUSIVE
The law is that, where there is no appeal against the findings of a Court, the same remains binding and conclusive, Nmanumeihe Vs Njemanze (2016) LPELR- 40212 CA; Ebenighe Vs Achi (2011)14 NWLR (Pt.1268) 530, Nze Vs Aribe (2016) LPELR-40617 CA, Chudi Verdical Co. Ltd Vs Ifesinachi Industries (Nig) Ltd & Anor (2018) LPELR 44701 (SC); Igbojionu & Ors Vs Uko & Ors (2018) LPELR 45875 CA.PER ITA GEORGE MBABA, J.C.A.
JUSTICES:
RITA NOSAKHARE PEMU Justice of The Court of Appeal of Nigeria
ITA GEORGE MBABA Justice of The Court of Appeal of Nigeria
IBRAHIM ALI ANDENYANGTSO Justice of The Court of Appeal of Nigeria
Between
1. ATTORNEY GENERAL, IMO STATE
2. HON. COMMISSIONER FOR AGRICULTURE AND NATURAL RESOURCES – Appellant(s)
AND
1. IMO RUBBER ESTATES LTD
2. CHIEF DON OKWU
3. THE COMMISSIONER OF POLICE, IMO STATE – Respondent(s)
ITA GEORGE MBABA, J.C.A. (Delivering the Leading Judgment): This Appeal emanated from the decision of the Federal High Court, Owerri, in Suit No. FHC/OW/CS/253/2011, delivered on 20/2/19 by Hon. Justice O.O. Oguntoyingbo, on 12th November, 2014, wherein the learned trial Judge granted the reliefs sought by the Plaintiff and awarded it Seventy Five Million Naira (N75,000,000.00) from the losses the Company incurred in respect of its business for the commencement of the State interference, which resulted in this dispute, and thereafter.
At the trial Court, the plaintiff (now 1st Respondent) had sued the 4 Defendants (now Appellants and the 2nd and 3rd Respondents) by way of originating summons, seeking the following reliefs:
1) Declaration that Imo Rubber Estates Limited is a Private Limited Liability Company having separate and distinct legal personality from the shareholders of which Imo State Government is just a shareholder.
2) Declaration that in accordance with the allotment of shares filed at the Corporate Affairs Registry, Vitals Services Limited has a majority shareholding and the Imo State Government a minority
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shareholding.
3) Declaration that the Board of Directors of Imo Rubber Estate Limited is the body, by law, entitled to direct the affairs and management of the Imo Rubber Estates Limited
4) Injunction restraining the Defendants jointly and severally, their servants, agents, privies, assigns from further interfering with the property and running of the affairs of Imo Rubber Estate Limited
5) N200,000.000 (Two Hundred Million Naira) only, General, special and aggravated/or punitive damages against the defendants, jointly and severally for unlawful interference with the contractual rights and detinue of the plaintiffs property.
The Grounds for seeking the Reliefs were:
a) The Plaintiff is a Limited Liability Company with distinct legal personality from shareholders
b) Imo State Government, through the Ministry of Finance has shares, albeit minority shares, in the plaintiff Company as indeed other shareholders of which Vitalis Services Ltd has the majority shares
c) The plaintiffs management and activities as by law are done by the management and the Board of Directors of which the Imo State Government has an
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appointee.
d) Without justification in law or morality and inspite of supplications, the Defendants ,viet armis with storm troopers ceased (sic) vehicles and product of plaintiff and have (sic) same force invaded (sic) the premises of plaintiff and are carting away products of plaintiff.
e) Unless restrained by the Honourable Court, the Defendants will continue in their brigandage, believing that the profit they would make from lawlessness will outweigh the damages the Court may impose. See pages 3-5 of the Records of Appeal.
In the originating summons, the plaintiff had set the following questions for the determination of the Court:
i) Having regard to the privatization of Imo Rubber Estates of Imo State Government as the Imo Rubber Estates Limited (the plaintiff) and which the shares were distributed in accordance with Form C.O.2, whether the plaintiff has the legal and enforceable right over the assets, including the plantation, premises, equipments and structures of the said Imo Rubber Estates Limited. If the answer to the above is in the affirmative:
ii) Whether the Defendants acting in concert purportedly on behalf of
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Imo State Government, which has minority shares in the said Rubber Estates Limited, can unilaterally take over or in any way interfere in the processes of the plaintiff which is a limited liability Company from the shareholders, including the Imo State Government. If the answer to this question is in the negative, the plaintiff shall seek reliefs from the Honourable Court as follows:-(Already stated in page 2 of this judgment).
The Defendants had filed counter affidavits and written addresses to the suit. The 1st and 2nd Defendants (Appellant herein) even raised a counter claim, seeking:
1) A declaration that at no time was Imo Rubber Estate Ltd privatised, especially in favour of Vitalis Services Ltd, the said Chief Ferdinard Anaghara (whether in his personal capacity or through his Ferdinard Group or any of his incorporated Companies) but remains an Imo State Government owned Company till date.
2) A Declaration that the purported allotment of share and/or the filing of Forms C.A.C.2 and 7 at the Corporate Affairs Registry in 1998 is irregular unauthorized, null and void and of no effect.
3) A declaration that having regard to the fact
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that prospective shareholders were never invited to take up shares through an issuing house, that the purported allotment of shares was done without authority and did not follow due process.
As grounds for the said counter-claim, the 1st and 2nd Defendants said:
1) Imo Rubber Estates Ltd is a government wholly owned Company.
2) At no time whatsoever was the Rubber Estates Ltd privalized
3) At the expiration of Five (5) years Private placement under the interim Board headed by Chief Ferdinand Anaghara, Imo Rubber Estate Ltd set up by Imo State Government, in January, 1991, has had no Board but sole Administrators at one time or another.
4) The purported allotment of shares and or the filing of Forms CAC 2 and 7 by any person was an act done without authority.
The counter-claim was filed on 7/3/2014 (the date they also filed further and better counter-affidavit) and supported by written address. The 3rd Defendant (now 2nd Respondent) filed his counter-affidavit on 12/6/12 and maintained that the plaintiff was not privatized (see pages 169-171 of the Records of Appeal).
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After hearing the case and considering the evidence and addresses of Counsel, the trial Court held:
To my mind, all the facts relied on by the Defendants are lame and puerile.
The law requires the Defendants to show evidence of majority shareholding to lay claims to ownership of the plaintiff and even at that, every decision of the plaintiff must be taken at the Board meeting of the Board of Directors, where the Imo State Government will utilize its majority shareholding (if any). I am therefore persuaded by the argument of learned Counsel for the plaintiff that the Board of Directors is the directing mind of the plaintiff. In the circumstances of this case, therefore, it is my view that the 2nd Defendant cannot treat the plaintiff as property of the Imo State Government, and I so hold
It is in the light of the foregoing discourse that prayers (i), (iii) and (iv) of the reliefs sought are granted, same having been proved on the balance of probability. Prayer (ii) sought by the plaintiff is without foundation and therefore dismissed, because Vitalis Services Ltd would be the direct beneficiary of the order of this Court but is not a party to this suit See
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pages 185 and 187 of the Records of Appeal)
On the damages awarded, the trial Court said:
The plaintiff is asking this Court for N200,000.00 (Two Hundred Million Naira) damages from the defendants jointly and severally for unlawful interference with the contractive rights and detinue of the plaintiffs property. As earlier held, the Defendants did not dispute the plaintiffs complaints as expressed in Exhibits C and D
In my mind, the plaintiff is entitled to general damages which I assess at N75,000.000.00 (Seventy Five Million Naira) Pages 187 -188 of the Records.
That is the judgment Appellants have appealed against, as per their Amended Notice of Appeal, filed on 9/5/18, with the leave of this Court, granted on 24/4/18. They filed their Brief of Arguments on 6/6/18, upon the Records of Appeal being regularized on 24/4/18. They distilled 6 issues for the determination of the Appeal, as follows:
1) Was the trial Court not in error when it failed to determine and pronounce on the primary issue in controversy between the parties, that is, whether Imo Rubber Estate Ltd Was privatized either in
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favour of Vitalis Services Ltd, or any person at all? (Grounds 2, 5 and 6).
2) Was the learned trial Court right to have granted reliefs (i) (iii), (iv) and (v) after it had dismissed prayer (ii) and when there was no credible evidence before the Court that a board of the plaintiff was in existence, and in particular, with the uncontroverted evidence that the plaintiff is a parastatal under the Imo State Ministry of Agriculture and Natural Resources (Grounds 1,3,4,& 5)
3) Whether the trial Court was right to have dismissed the counter-claim of the Defendants, when the said counter-claims were not defended or the plaintiff did not file any counter-affidavit? (Grounds 3, 5 and 6)
4) Whether the trial Court was not in error when it failed to review and properly evaluate the evidence proffered before it by the parties Grounds 2 and 5
5) Whether, upon the holding of the trial Court in respect of Exhibit B of the plaintiff, the document was not rendered irrelevant for the purposes of proving the plaintiffs case? (Grounds 1,5,6,and 9)
6) Whether the trial Court applied the correct principles in the award of damages and cost as enunciated
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by the Apex Court in the case Ariolu Vs Ariolu (2013) All FWLR (Pt.684)146 (Grounds 7 and 8)
Appellants also filled a Reply brief on 27/2/2019, which was deemed duly filed on 27/3/19, upon being served with the Respondents briefs.
The 1st Respondent in its brief on 17/12/18, which was deemed duly filed on 21/1/19, nominated 4 issues for the determination of the Appeal, namely:
1) Whether Imo Rubber Estates Ltd is a Private Limited Company having separate and distinct legal personality to sue and be sued?
2) Whether the learned Trial Judge was
