WEST AFRICAN OILFIELD SERVICES LIMITED v. MR. SCOTT GREGORY
(2019)LCN/12895(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 19th day of March, 2019
CA/L/802/2012
RATIO
COURT AND PROCEDURE: SERVICE AND ACTION
“…considering the issue of service of the originating process on the appellant. In doing so the presumption that the record of the Court is correct until the contrary is proved by an order of Court predicated on an application successfully challenging the record of the Court stands inviolable and entitles the Court to draw conclusion therefrom vide Ogli Oko Memorial Farms Ltd. v. N.A.C.B. Ltd. (2008) 12 NWLR (pt. 1098) 412, Gbadamosi v. Dairo (2007) 3 NWLR (pt. 1021) 282, Brittania-U (Nig,) Ltd. v. Seplat Pet. Dev. Co. Ltd. (2016) 4 NWLR (pt. 1503) 541.” PER JOSEPH SHAGBAOR IKYEGH, J.C.A.
EVIDENCE: WHEN A DOCUMENT IS INADMISSIBLE
“In effect, any document that falls below the above mandatory threshold is inadmissible as a certified copy of a public document, Omisore v. Aregbesola and Ors (2015) 15 WLR (Pt. 1482) 205, 294; Ndayako v. Mohammed (2006) 17 WLR (Pt. 1009) 676; Tabik Investment Ltd. v. Guaranty Trust Bank Pic (2011) LPELR-3131 (SC); (20 II) 17 WLR (Pt. 1276) 240; Nwabuoku v. Onwordi (2006) All FWLR (Pt. 331) 1236,1251-1252.” PER JOSEPH SHAGBAOR IKYEGH, J.C.A.
JUSTICES
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
UGOCHUKWU ANTHONY OGAKWU Justice of The Court of Appeal of Nigeria
TOBI EBIOWEI Justice of The Court of Appeal of Nigeria
Between
WEST AFRICAN OILFIELD SERVICES LIMITED – Appellant(s)
AND
MR. SCOTT GREGORY – Respondent(s)
JOSEPH SHAGBAOR IKYEGH, J.C.A. (Delivering the Leading Judgment):
The appeal is against the decision of the Federal High Court sitting in Lagos (the Court below) whereby it granted the respondent the leave to institute a derivative action in the name and on behalf of the appellant for the protection of the interest of the appellant.
Briefly stated, the appellant?s case was that respondent sought the leave of the Court below to commence a derivative action as a minority shareholder on behalf of the appellant, but the appellant was not served with the originating summons, nor was the appellant and/or its directors given notice by the respondent of his intention to bring the said application; yet the Court below granted the respondent the leave to commence the derivative action on behalf of the appellant. The appellant was aggrieved and filed an original notice of appeal with three grounds of appeal which was amended and further further amended resting on a 3rd amended notice of appeal filed on 03.06.16, but deemed as properly filed on 27.04.17.
The brief of argument of the appellant filed on 03.06.16, but deemed as properly filed on 27.04.17 framed these issues for determination ?
1. Whether the court below had jurisdiction to entertain the originating summons.
2. Whether the failure of the court below to hear the Appellant, in respect of the Respondent?s originating summons does not constitute a breach of the Appellant?s right to fair hearing guaranteed under section 36(1) of the 1999 Constitution.”
The respondent filed a motion on notice on 11.04.17 in which he raised the preliminary objection praying that issues 1(b) and issue 2 formulated and argued by the appellant in its brief filed on 03.06.16 be struck out on the grounds that the respondent did not give reasonable notice of his intention to the directors of the company (the appellant) of intention to sue on the appellant?s behalf to protect the interest of the appellant, and that the respondent not being a director of the appellant company could not be given the requisite notice which offended Sections 303(1) and 303(2)(b) of the Companies and Allied Matters Act Cap. C20, Laws of the Federation of Nigeria, 2004 (CAMA); that the appellant not being a director for whose benefit that provisions was made cannot complain or does not have a right of complaint alleged non-compliance with the said provisions, therefore the arguments contained in issues 1(b) and 2 of the appellant?s brief purporting to argue on behalf of the directors who had voluntarily withdrawn their separate appeal against the respondent/applicant in Appeal No.CA/L/384/2012; consequently, the respondent urged that the respondent is a busy-body and issues 1(b) and 2 of the issues for determination be struck out.
The affidavit in support of the motion on notice has the notice of appeal filed by Ukiri Ovie and Others v. Mr. Scott Gregory and others attached to it as well as the notice of withdrawal of that appeal, upon which it was urged that the directors of the appellant have waived their right of complaint by withdrawing the appeal No.CA/L/384/2012 and that the respondent did not give notice to the directors of the appellant to file the action at the Court below as a minority shareholder; therefore the respondent is a busy-body.
The appellant’s reply brief responded to the preliminary objection that the failure of the respondent to comply with the provisions of Section 303(2)(b) of CAMA is one that goes to the root of the jurisdiction of the case as the condition precedent for bringing the derivative action was not fulfilled citing in support Madukolu v. Nkemdilim (1962) 2 SCNLR 341, Nwankwo v. YarAdua (2010) 12 NWLR (pt.1209) 518 at 560, Skenconsult v. Ukey (1981) 1 SC 6, Agip Nigeria Ltd. v. Agip Petroli International and Ors. (2010) 5 NWLR (pt.1187) 348; and that the entire cases (supra) cited by the respondent do not arise from or pertain to section commencing derivative action, neither do the said cases relate to applications for leave to bring an action in the name of a company, nor was Section 303 of CAMA considered in the said cases.
The appellant contended in response to the preliminary objection that parties and the Court cannot waive an issue of jurisdiction such as the one in Section 303 of CAMA citing in support the cases of Gafar v. Government of Kwara State (2007) 4 NWLR (pt.1024) 375, Odu?a Investments Co. Ltd. v. Talabi (1997) 10 NWLR (pt.523) 1 at 21, Agip (supra); therefore the preliminary objection should not be countenanced.
The notice of appeal and the notice of unilateral withdrawal of appeal are uncertified copies and being documents earlier filed in Court they are public documents making their non certification an infraction of Sections 102, 103, 104 and 105 of the Evidence Act which drained both documents of evidential value and I hereby disregard them vide Udom v. Umana No.1 (2016) 12 NWLR (pt.1526) 179 at 234 – 235 thus, From the phraseology of the italicised clauses of Subsection (2) (supra), a document can only be called a certified copy of a public document if, in addition to the “payment of legal fees prescribed in that respect, together with a certificate written at the foot of such a copy that it is a true copy,” (Subsection 1, supra), it (the certificate) “is … dated and subscribed by such officer with his name and his official title …
In effect, any document that falls below the above mandatory threshold is inadmissible as a certified copy of a public document, Omisore v. Aregbesola and Ors (2015) 15 WLR (Pt. 1482) 205, 294; Ndayako v. Mohammed (2006) 17 WLR (Pt. 1009) 676; Tabik Investment Ltd. v. Guaranty Trust Bank Pic (2011) LPELR-3131 (SC); (20 II) 17 WLR (Pt. 1276) 240; Nwabuoku v. Onwordi (2006) All FWLR (Pt. 331) 1236,1251-1252.
The whole essence of the Court’s insistence on the scrupulous adherence to the above certification requirement of public documents is to vouchsafe their authenticity, vis-a-vis, the original copies, to third parties. G & T.I. Ltd. and Anor v. Witt & Bush Ltd. (2011) LPELR-1333 (SC) 42, C-E; (2011) 8 WLR (Pt. 1250) 500. That explains why, in the absence of the original document only such, properly, certified copies are admissible as secondary copies of public documents “but no other kind of secondary evidence”, G. & T. I. Ltd. and Anor v. Witt and Bush Ltd. (supra); Araka v. Egbue (2003) 33 WR 1; (2003) 17 NWLR (Pt. 848) 1; Minister of Lands, Western Nigeria v. Azikiwe (1969) I All LR 49; Nzekwu v. Nzekwu (1989) 2 NWLR (Pt. 104) 373; Tabik Investment Ltd. and Anor v. Guarantee Trust Bank Plc (2011) 6 MJSC (Pt.1) 1, 21; (2011) 17 NWLR (Pt. 1276) 240.”
The motion on notice is accordingly impotent on the issue whether the directors of the appellant filed a notice of appeal and subsequently withdrew it in respect of the same matter as the present appeal.
The preliminary objection is interwoven, out of abundance of caution, however, I wish to observe that with the arguments in the appeal which if determined would entail pre-determination of the substantive appeal on the issue which would not be countenanced; more so an issue of jurisdiction is raised in the appeal and has to be determined first in tandem with the practice of determining issues of jurisdiction with priority over other issues first. The preliminary objection is therefore superfluous and is hereby struck out vide by the analogy of the case of Kente v. Ishaku (2017) 15 NWLR (pt.1587) 94 to the effect that a preliminary objection is to terminate the appeal or proceedings in limine and is inappropriate where there are other grounds or grounds to argue the appeal as in this case where there is also an issue of jurisdiction with respect to alleged failure to serve originating process or the process on the appellant which was raised and argued in the appeal which was not covered by the preliminary objection. I must stress that even though the respondent took the course to file the motion to dispose of some of the issues which were also argued in the appeal, the said issues having been intertwined with the arguments in the preliminary objection, it does appear good sense to decide the issues in the main appeal alongside the issues presented as the preliminary or threshold issues.
The appellant argued that the originating process was not served on it, which rendered the entire proceedings a nullity citing in support the cases of Mbadinuju v. Ezuka (1994) 8 NWLR (pt.364) 5, Skenconsult v. Ukey (1981) 1 S.C. (no pagination), Kida v. Ogunmola (2006) 13 NWLR (pt.997) 377; that the respondent did not give reasonable notice to the directors of the company of his intention to commence the action under Section 303 of CAMA thus not fulfilling condition precedent for the Court below to have the requisite jurisdiction, therefore the proceedings at the Court below were conducted without jurisdiction and should be declared a nullity citing in support the cases of Madukolu v. Nkemdilim (1962) 1 All NLR 587 at 595.
The appellant submitted on the second issue that after the Court below had recorded that there was an affidavit of service in the file of the Court below it sought for the leave of the Court below to file counter affidavit to challenge the non service of the respondent?s application dated 23rd January, 2012 for leave to bring minority action on it which was slated for hearing on that date which denied the appellant the right to fair hearing and rendered the proceedings a nullity citing in support Section 36(1) of the 1999 Constitution, Adigun v. A.-G., Oyo State (1987) 1 NWLR (pt.53) 678, Ogboh v. FRN (2002) 10 NWLR (pt.774) 21, Orugbo v. Una (2002) 9 ? 10 SC 61; and that the order sought and obtained by the originating summons was such that the directors should have been heard citing in support the case of Agip (Nig.) Ltd. v. Agip Petroli International and Ors. (2010) 5 NWLR (pt.1187) 38.
The appellant added in argument that failure to hear its directors who are primarily authorised to commence derivative action was in breach of the appellant?s right to fair hearing for whose benefit CAMA provides that its directors must be notified of any prospective action on its behalf; therefore the appellant argued that having failed to serve the required notice on the appellant?s directors, the Court below should have refused the respondent?s application for leave to institute the action on behalf of the appellant; upon which the appellant urged that the appeal should be allowed and the decision of the Court below be reversed.
After the respondent indicated in his brief of argument filed on 11.04.17, but deemed as properly filed on 21.04.17 that he adopted the issues for determination formulated by the appellant, the respondent then submitted these issues for determination
1. WHETHER THE HONOURABLE TRIAL COURT HAD THE JURISDICTION TO ENTERTAIN THE ORIGINATING SUMMONS
2. WHETHER HEARING OF THE ORIGINATING SUMMONS WAS PREJUDICIAL AGAINST THE APPELLANT
It was argued that the bailiff’s affidavit of service which is in pages 209 – 210 of the record of appeal (the record) is prima facie evidence of service of what is contained therein unless rebutted vide Ifa Int. Ltd. v. I.M.B. Plc (2005) 9 NWLR (pt.930) 274; that in this case, counsel to respondent also confirmed on the appellant vide page 212 of the record as well as the appellant’s counsel vide page 213 of the record; and that in light of the fact that the appellant did not challenge service of the originating process on it by way of filing counter affidavit, the bailiff?s affidavit of service stood unchallenged citing in support the case of I.B.W.A. (now Afribank Nigeria Plc) v. Fola Sasegbon (2007) LPELR CA-8246.
The respondent argued that the appellant was given the opportunity to be heard but failed to utilize it; and that all the arguments and references regarding denial of fair hearing on behalf of the other directors of the appellant who had voluntarily withdrawn their Appeal No.CA/L/384/2012 should not be countenanced as the appellant cannot canvass argument on behalf of the directors as they have not themselves alleged denial of fair hearing, not being parties in the appeal citing in support the cases of Union Bank of Nigeria Plc v. Astra Builders (W.A.) Ltd. (2010) LPELR 3383, Strabag Construction Ltd. v. Ugwu (2005) LPELR 7549, Ceekay Traders Ltd. v. General Motors Co. Ltd. and Ors. (1992) LPELR 834, Inakoju v. Adeleke (2007) 4 NWLR (pt.1025) 427 at 460, NAFDAC v. Onwuka (2014) 4 NWLR (pt.1398) 593 at 620 ? 621, Kabau v. Rilwan (2014) 4 NWLR(pt.1397) 284 at 305 and 308, Jonason Triangles Ltd. v. C.M. and P. Ltd. (2002) 15 NWLR (pt.789) 176 at 192, Mfa v. Inongha (2014) 4 NWLR (pt.1397) 343 at 369, Jolabon Inv. (Nig.) Ltd. v. Oyus Intl Co. (Nig.) Ltd. (2015) 18 NWLR (pt.1490) 30 at 45, Lagos Sheraton Hotel and Towers v. H.P.S.S.S.A. (2014) 14 NWLR (pt.1426) 45, Orugbo v. Una (2002) 16 NWLR (pt.792) 175 at 211 ? 212; upon which the respondent urged that the appeal be dismissed.
The appellant’s reply brief which was filed on 02.05.17 stated that the two issues formulated by the respondent are outside the grounds of appeal in the appellant?s 3rd notice of appeal and should be treated as incompetent and struck out citing in support the cases of Idika v. Erisi (1988) 2 NWLR (pt. 78) 563, Animashaun v. U.C.H (1996) 12 SCNJ 179 at 184.
The ground of appeal in the 3rd amended notice of appeal without their particulars read –
GROUND ONE
The learned trial Judge erred in law and occasioned a miscarriage of justice by denying the Appellant an opportunity to challenge the Affidavit of service dated 28th February 2012 filed by the Bailiff in respect of the Respondent’s Application dated 23rd of January, 2012 for leave to commence an action as a minority shareholder on behalf of the Appellant pursuant to S.303 of the Companies and Allied Matters Act Cap C20 Laws of the Federation of Nigeria 2004(‘CAMA’).
GROUND TWO
The learned trial Judge erred in law and denied the Appellants a right to fair hearing as contained in S.36 of the 1999 Constitution of the Federal Republic of Nigeria when he failed to allow the Appellant the opportunity to file a counter affidavit and written address to the Respondent’s Application dated 23rd of January 2012 for leave to commence an action as a minority shareholder on behalf of the Appellant pursuant to S.303 of the Companies and Allied Matters Act Cap C20 Laws of the Federation of Nigeria 2004 (‘CAMA”).
GROUND THREE
The learned trial Judge erred in law and occasioned miscarriage of justice when he treated the Affidavit of Service deposed to by the bailiff of Court in respect of the Application dated 23rd January, 2012 by which the Respondent sought leave of Court to institute an action as a minority shareholder on behalf of the Appellant pursuant to S.303 of CAMA as if such Affidavit of Service were a final and conclusive proof of service.
GROUND FOUR
The learned trial Judge erred in law when he granted the Respondent’s application dated 23rd January, 2012, by which the Respondent sought leave of court to institute an action as a minority shareholder on behalf of the Respondent pursuant to 5.303 of CAMA.
The second issue (supra) formulated by the respondent is therefore outside grounds of appeal (supra) filed by the appellant, therefore the appeal shall be determined on the issues formulated by the appellant as the respondent did not file cross-appeal vide Idika v. Erisi (supra), Animashaun v. U.C.H (supra) cited by the appellant read with the case of Nwabueze v. The People of Lagos State (2018) 11 NWLR (pt. 1630) 201 at 211 following Sha v. Kwan (2000) 8 NWLR (pt. 670) 685, African International Bank Ltd. v. Integrated Dimensional System Ltd. (2012) 17 NWLR (pt. 1328) 1.
Service of originating process or any process of Court on the parties is fundamental to vesting a Court with the jurisdiction to entertain an action. Accordingly, I will start the discourse by considering the issue of service of the originating process on the appellant. In doing so the presumption that the record of the Court is correct until the contrary is proved by an order of Court predicated on an application successfully challenging the record of the Court stands inviolable and entitles the Court to draw conclusion therefrom vide Ogli Oko Memorial Farms Ltd. v. N.A.C.B. Ltd. (2008) 12 NWLR (pt. 1098) 412, Gbadamosi v. Dairo (2007) 3 NWLR (pt. 1021) 282, Brittania-U (Nig,) Ltd. v. Seplat Pet. Dev. Co. Ltd. (2016) 4 NWLR (pt. 1503) 541.
The bailiffs affidavit of service contained in pages 209 ? 210 of the record sworn to on 05.04.12 indicated that the appellant was served the writ, affidavit in support, further writ of summons, statement of claim and Exhibits by the bailiff, one Mr. Abengowe Hendyson, on 15.02.2012 by delivering the same personally to one Mr. Steven, secretary of the appellant at No. 26 Marina Lagos.
The record indicated in page 213 thereof that the appellant?s learned counsel at the Court below, Ocheni Esq., had stated that – A.S. Ocheni Esq., I have seen the proof of service in the Court?s file which states that the 1st respondent was served on 15.02.12 through Steven (Secretary). In the circumstances I ask for an adjournment to enable us take up the issue of service with our client.?
The reliefs sought in the proposed derivative action are contained in pages 13 ? 16 of the record as follows ?
1. A DECLARATION that the purported intrusion into the business premises of the 1st Defendant on or about 22nd December 2011 and persistent repeated intrusion thereinto by the 6th Defendant under direction of 7th Defendant and or persons parading themselves as so authorised at the instance of the 2nd, Defendant by virtue of its majority shareholding in the 1st Defendant, and which intrusion continues up until the filing of this suit and has not ceased, is unlawful, an act of trespass, oppressive and constitutes a derogation/fraud on the rights of the Plaintiff and 1st Defendant entitled to be protected under Section 300 of the Companies and Allied Matters Act Cap C20 LFN 2004.
2. A DECLARATION that by the agreement to execute a Share Purchase Agreement (SPA) between Plaintiff, the 1st Defendant and the 2nd Defendant and in consideration of the Plaintiff’s services as finder and original promoter of the bid to purchase the 1st Defendant, the parties agreed and assured the Plaintiff of 5% in the issued and paid-up share capital of the 1st Defendant to be thereby acquired free of all deductions, taxes and other advances; to the intent that upon completion of acquisition the respective holdings assured to Plaintiff shall be recognized and duly registered in the share register of the company and returns reflecting same shall be filed with the Corporate Affairs Commission.
3. AN ORDER OF INJUNCTION restraining the 2nd – 7th Defendants, their servants, agents and or privies from forcefully taking over or continuing to effect such forcible take-over of the business premises, operations, finances, records, data and other proprietary assets of the 1st Defendant under the pre that 6th Defendant or any other entity has bought over or acquired any beneficial interest in the 1st Defendant as to entitle 6th Defendant or any such other person to interfere howsoever in the business undertaking or other activities constituting, acts of the 1st Defendant while claiming to be so doing on the authority or directive of the 2nd Defendant purporting to be sole owner of the 1st Defendant.
4. AN ORDER OF INJUNCTION restraining the 2nd – 8th Defendants, either by themselves, their servants, agents, or assigns or whoever is acting for or under their instruction from giving effect to, seeking to perfect, complete any legal instrument by which the 6th Defendant or any other entity may become entitled to claim to have bought over or acquired any beneficial interest in the 1st Defendant or to interfere howsoever in the business undertaking or other activities constituting acts of the 1st Defendant while claiming to be so doing on the authority or directive of the 2nd Defendant as transferee of an alleged right or interest of 2nd Defendant as sole owner of the 1st Defendant.
5. AN ORDER OF INJUNCTION restraining the 2nd – 7th Defendants from interfering with the mandate and authorized signatories hitherto entitled to run the accounts of 1st Defendant (the particulars of which are set out in paragraph 61 of the Statement of Claim), or from opening any new bank account in the name of the company.
6. AN ORDER DIRECTING that any drawings unlawfully made by the 2nd – 7th Defendants against the said accounts be refunded into the coffers of the 1st Defendant with interest by way of damages at the prevailing bank lending rate from the date of such withdrawal until the repayment.
7. GENERAL AND/OR EXEMPLARY DAMAGES in the sum of N10billion or its dollar equivalent at the date of judgment against the 2nd – 7th Defendants for the benefit of the 1st Defendant by reason of their unlawful intrusion (into the business premises of the 1st Defendant on or about 22nd December, 2011 and persistent repeated intrusion thereinto by the 6th Defendant and or persons parading themselves as so authorized at the instance of the 2nd Defendant), act of trespass, oppressive conduct and derogation from the rights of the 1st Defendant entitled to be protected under Section 300 of the Companies and Allied Matters Act Cap C20 LFN 2004 and which acts continued up until the filing of this suit and have not ceased.
8. A DECLARATION THAT the overlapping function of 4th & 5th Defendants both as directors of the 1st Defendant Company and company secretary and being members of the law firm of Ajumogobia & Okeke (3rd Defendant) appointed by them as such company secretary is prejudicial to the interest of the Plaintiff in the 1st Defendant company.
9. AN ORDER SETTING ASIDE the resolution purportedly passed presumably by the board of directors on 21st April 2011 appointing the 3rd Defendant as company secretary to 1st Defendant on grounds of disqualification and conflict of interest contrary to Sections 294, 295(e), 297 and 298 of the Companies and Allied Matters Act.
10. A DECLARATION THAT it is just and equitable that the entry and returns filed with the Corporate Affairs Commission by way of particulars of directors and shareholding in respect of the 1st Defendant company which are current in the register are liable to be cancelled and or struck off as void and a fraud on the minority interest of Plaintiff as member of the 1st Defendant company.
11. AN ORDER CANCELLING/SETTING ASIDE AND OR STRIKING OFF the entry and returns filed with the Corporate Affairs Commission by way of particulars of directors and shareholding in respect of the 1st Defendant company which are current in the register as void and a fraud on the minority interest of Plaintiff as member of the 1st Defendant company.
12. AN ORDER DIRECTING the 8th Defendant to rectify FORMS CAC 02 and CAC 07 – particulars of shareholding and particulars of directors presently filed with the Corporate Affairs Commission to reflect the Plaintiff as a shareholder and as a director respectively.
13. A DECLARATION THAT the annual returns filed by 3rd Defendant on 21st September, 2011 is void same having not been preceded by an Annual General Meeting, and further having not correctly reflected the true state of affairs of the company as regards shareholding distribution in line with the interest of Plaintiff in 5% of the paid-up share capital upon the acquisition of 1st Defendant in 2007.
14. AN ORDER CANCELLING, SETTING ASIDE AND OR STRIKING OFF the annual returns filed by 3rd Defendant on 21st September, 2011 same having not been preceded by an Annual General Meeting, and further having not correctly reflected the true state of affairs of the company as regards shareholding distribution in line with the interest of Plaintiff in 5% of the paid-up share capital upon the acquisition of 1st Defendant in 2007.
15. AN ORDER DIRECTING THE HOLDING OF AN EXTRAORDINARY GENERAL MEETING at which the Plaintiff shall be entitled to attend for the purpose of transacting the business of giving effect to the reliefs 1, 2, 6, 8, 9, 10, 11, 12 & 13 or such of them as the Court may grant.
16. COSTS OF THIS ACTION.
The appellant’s learned counsel did not indicate (supra) that he needed time to file affidavit to challenge the bailiff’s affidavit of service. The bailiff’s affidavit therefore stood unchallenged as prima facie evidence of service of the processes in question on the appellant vide Order 6 Rule 27 of the Federal High Court (Civil Procedure) Rules 2009 (the rules of the Court below to the effect that in all cases where service of any writ or document has been effected by a bailiff or other officer of the Court below, an affidavit of service sworn to by the bailiff or other officer shall, on production, without proof of signature, be prima facie evidence of service. See the case of Emeka v. Okoroafor and Ors. (2017) 11 NWLR (pt. 1577) 410 at 469 where the Supreme Court held per the lead judgment prepared by his Lordship, Kekere-Ekun, J.S.C., following the cases of Schroder v. Major (1989) 2 NWLR (pt. 101) 3 at 11, Okoye v. Centre Point Merchant Bank Ltd. (2008) 15 NWLR (pt. 1110) 335, Estate of Late Chief H.I.S. Idisi v. Ecodril (Nig.) Ltd (2016) 12 NWLR (pt. 1527) 355 to the effect that an affidavit of service deposed to by the bailiff shall be prima facie proof of service and is protected by the presumption of regularity of official acts under Section 168(1) of the Evidence Act until challenged by affidavit denying service detailing specific facts showing non service and the Court determines whether or not the party complaining was indeed not served before the bailiff?s affidavit of service would yield ground. There was no such affidavit challenging the bailiff?s affidavit of service therefore the presumption that the appellant was served the originating process by prima facie evidence of the affidavit of service established that the appellant was indeed served the originating process. There is accordingly no substance in this complaint.
As to fair hearing the appellant did not request for an adjournment to respond to the application vide pages 213 – 214 of the record showing the appellant was afforded the opportunity to be heard on the application as its counsel was content not to request for an adjournment to challenge the application indicating he was prepared to respond to the application and was not denied fair hearing vide the series of cases (supra) cited by the respondent on opportunity to be heard constituting compliance with fair hearing provision of Section 36(1) of the 1999 Constitution.
The parties are at one that the action at the Court below was derivative action which occurs where a company refuses, through its board or the managing director to initiate an action to enforce a right that is due to the company or defend itself in an action instituted against it because the persons (directors) through whom the company is to act refused to do so thus entitling a minority shareholder, for example, to initiate or defend the action as an action derived from the company for the enforcement of a right that accrues to the company (Principles of Corporate Law in Nigeria by Professor Joseph Abugu page 598).
Section 303(2)(b) of the CAMA specifically provides that no action may be brought and no intervention may be made under Subsection (1) thereof allowing derivative action unless the applicant has given reasonable notice to the directors of the company of his intention to apply to Court under Subsection (1) of the Section if the directors of the company do not bring, diligently prosecute or defend or discontinue the action.
It is manifest that the directors of a company are its directing mind and to paraphrase the apt words of Lord Denning in Bolton (Engineering) Co. Ltd. v. Graham and Sons Ltd. (1957) 1 Q.B. 172 the directors represent the mind and will of the company and these are the state of mind of the company and is treated by law as such. The Supreme Court adopted and followed Bolton (supra) in Trenco (Nigeria) Ltd. v. African Real Estate and Investment Co. Ltd. and Anor. (1978) 1 LRN 146 at 153 where it added per the lead judgment prepared by Aniagolu J.S.C., (now of blessed memory) inter alia that although a company is an artificial legal personality it acts through its human agents and officers, the directors. It follows that by Section 303(2)(b) of CAMA, reasonable notice must be given to the directors of the company who run the company of the intention to take derivative action in Court for or against the company because the directors are primarily responsible for running the affairs of the company as well as protecting the interest of the company vide Section 63(3) of CAMA read with the case of Ladejobi and Ors. v. Odutola Holdings Ltd. and Ors. (2007) 14 W.R.N. 1.
The cases (supra) cited on the issue that directors of the appellant should have been the persons to complain of violation of Section 303(2)(b) of CAMA are distinguishable from the present case as the said cases were not on derivative action under Section 303(2)(b) of CAMA. Since the directors of the appellant are the human personification of the appellant they should have been served the ?reasonable notice? for the intention to file the derivative action by the respondent; and in reality and practicality it is through the directors that the appellant functions making it akin to robbing Peter to pay Paul, (so to say), or dealing with one and the same entity through human personification.
The requirement for giving reasonable notice to the directors under Section 303(2)(b) of CAMA, though not stringent, may be satisfied by a written request to the board of directors or by serving the board of directors with a notice of the application to institute the derivative action before the leave of the Court to file the action is sought and obtained. Thus a letter served on the board of directors or their solicitors was held in the English case of Bellman v. Western Approaches Ltd. (1982) 130 DLR 3d 193 BCCA at 200 to suffice (see Principles of Corporate Practice in Nigeria by Professor Joseph Abugu page 600). See also Williams v. Edu (2002) 3 NWLR (pt.754) 400 at 412, Unipetrol (Nig.) Plc v. Agip (Nig.) Plc (2002) 14 NWLR (pt.787) 312, N.I.B. Investment W/A v. Omisore (2006) 4 NWLR (pt.969) 172 at 196 ? 197.
In the present case, there was no evidence of service of the ?reasonable notice? to the directors of the appellant (through whom the appellant functions) of the intention of the respondent to file the derivative action before the action was filed at the Court below thus not complying with the condition precedent to institute the action which is an issue of jurisdiction under the pioneer Supreme Court case of Madukolu v. Nkemdilim (supra) which cannot be acquiesced in or compromised thereby rendering the derivative action premature.
In the result, I find the appeal meritorious on the preceding issue. I would allow it and set aside the decision of the Court below and enter an order striking out the leave granted the respondent to commence the derivative action for non compliance with the condition precedent under Section 303(2)(b) of CAMA thus striking at the jurisdiction of the Court below to entertain the action. Parties to bear their costs.
UGOCHUKWU ANTHONY OGAKWU, J.C.A.: I was privileged to have read in draft the leading judgment just rendered by my learned brother, Joseph Shagbaor Ikyegh, JCA.
The reasoning process which informed the ultimate conclusion that the appeal is meritorious is in accord with my view. Accordingly, I equally join in allowing the appeal on the same terms contained in the leading judgment.
TOBI EBIOWEI, J.C.A.: I have read in draft the judgment of my learned brother, JOSEPH SHAGBAOR IKYEGH, JCA just delivered. I agree and have nothing to add.
Appearances:
Mr. O. A. Owolabi with him, B. OlajideFor Appellant(s)
Mr. I. J. Okechukwu with him, E. Chuks-Nwolisa, Esq. and V. E. OmileFor Respondent(s)
