Company Law

Before Their Lordships

Between

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Before Their Lordships

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Before Their Lordships

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IBRAHIM TANKO MUHAMMAD, J.S.C. (Delivering the Leading Judgment): The respondent herein, was the plaintiff at the High Court of Rivers State (trial Court). It is an incorporated limited liability Company which carries on the business of marine construction and equipment leasing.

Before Their Lordships

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MARY UKAEGO PETER-ODILI, J.S.C. (Delivering the Leading Judgment): This is an appeal against the judgment of the Court of Appeal, Lagos Division or Court below or Lower Court Coram: Adamu Jauro, Rita Nosakhare Pemu and Fatimo Omoro Akinbami JJCA which lead judgment was delivered by Rita Pemu JCA on the 18th day of January, 2013 affirming the decision of the Federal High Court, Lagos dated 6th July, 2010 per A. O Ajakaiye J.

Before Their Lordships

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The contents of a brief are no more than arguments on the law which point the way to the court the direction in which it should go. Arguments constitute a form of assistance to the court but briefs, notwithstanding, courts are bound to give judgments according to law.
Order 6 rule 5 of the Court of Appeal Rules provides:
The appellant may also, if necessary, within fourteen days of the service on him of the respondent’s brief, but not later than three clear days before the date set down for the hearing of the appeal file and serve or cause to be served on the respondent a reply brief which shall deal with all new points arising from the respondents brief,”
The point which the court below made in its judgment in the excerpt reproduced above is that the necessity to file an appellant’s Reply brief did not arise as there were no new points raised in the respondent’s brief. A careful perusal of the respondent’s brief before the court below shows that no new issues were raised therein which necessitated the filing of an appellant’s Reply brief. The said appellant’s Reply brief was no more than an effort at re-arguing or emphasizing matters which had been fully discussed by the appellant’s counsel in the appellant’s brief. The work of justices who have to read these briefs is needlessly made cumbersome if they have to read and digest briefs which are a repetition of submissions previously made. I am with respect unable to agree with appellant’s counsel that the court below was in error in its decision not to take into account the appellant’s Reply brief.
Appellant’s Issues 2, 3 and 4 will be considered together. I observed earlier in this judgment that the trial court struck out the appellant’s claims VI to VIII following the withdrawal of same. The claims (i) – (v) which were pursued by the appellant relate to the interpretation of the provisions of the Companies and Allied Matters Act as to the legal consequence of the Defendant’s/Respondent’s Board of Directors holding a meeting at which certain decisions were taken when notice of such meeting was not given to the Plaintiff/Appellant. The, relevant paragraphs of the averments in plaintiff/appellant’s Statement of Claim are 3,7,8,9 which read:
“3. On the 24th of February 2000, the Defendant at the meeting of its Board of Directors held at the Board room of the Head Office unanimously decided to appoint the Plaintiff as the Managing Director/Chief Executive of the Defendant Company for a period of 6 years but subject to an annual assessment of the Plaintiff’s performance, the Plaintiff will at the trial refer to the Board Resolution for its full terms and effect.
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7. At a meeting of the Defendant’s’ Board of Directors; held on the 13th of June 2002; the Board wrongfully and unlawfully resolved to revoke the Plaintiffs appointment with the Defendant.
8. Contrary to the Articles of Association of the Defendant Company and to section 266(3) of the Companies and Allied Matters Act 1990, the Plaintiff was not issued any notice of directors meeting of 13th June 2002 when the resolution to revoke his appointment was passed, accordingly the said meeting of the Board on 13th June 2002 is invalid, null and void and incapable of having any legal consequence.
9. By letter of 13th June 2002, the Defendant wrongfully and in repudiatory breach of the said agreement terminated the employment and wrongfully and unlawfully dismissed the plaintiff therefrom.”
It is apparent from the above averments that the kernel or cornerstone of the plaintiff/appellant’s case was the failure of the defendant/respondent to serve him a notice to be present at the meeting whereas a decision was made to dismiss him from the service of the defendant/respondent. The defendant(respondent in paragraphs 9 to 15 and 18 to 42 of its Statement of Defence pleaded facts to the effect that the plaintiff/appellant had been negligent to reckless in the manner he granted an unauthorized loan to a company called Investors International (London) Ltd: for the acquisition of shares in NITEL.

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A perusal of the Statement of Defence filed by the defendant respondent conveys that the defendant/respondent pleaded and relied on facts which were not directly necessary to defeat the claims made by the plaintiff/appellant. It is plaintiff who by his Statement of Claim primarily nominates the issues to be tried in a suit and on which he relies to have the judgment of the court for a defendant it is only necessary to resist the plaintiff’s claims on the facts pleaded. It is not for the defendant to set up facts which would convey that it is not just setting up a defence to plaintiff’s suit but setting up a new case of his own; He is only permitted to do this when he is setting up a counter-claim. The approach of the defendant/respondent in the manner it crafted its Statement of Defence needlessly made the matter complex and unwieldy. If the reason which the defendant/respondent intended to rely upon for not serving the notice of the meeting at which plaintiff/appellant’s employment was brought to an end was because he had given an authorized loans, the defendant would be entitled to plead as it did. But in its paragraph 17 of the Statement of Defence, the defendant/respondent pleaded:
“17. The plaintiff was not entitled to attend the Board meeting and (sic) where his appointment was determined and dismissed. The plaintiff was suspended effective from April 22, 2002 and he was dismissed as Managing Director/Chief Executive from June 13, 2002 at a meeting of the Board of the Defendant. The plaintiff knew that to be the correct procedure of the Board.”

What are the facts relevant to the claims made by the plaintiff/appellant? It was undisputed that the plaintiff was appointed the Managing Director/Chief Executive of the defendant on 24-2-2000. Before that date, the plaintiff had been the defendant’s Executive Director. Following an improper grant of loan to a customer of the defendant, the plaintiff was on 22-04-02 suspended by the defendant’s Board of Directors, and on 13-06-02 his appointment was revoked. The plaintiff was not given the Notice of the meeting of the Board of Directors of the defendant at which the decision to terminate him was taken. It was plaintiff’s contention that under section 266 of Companies and Allied Matters Act (hereinafter abbreviated as C.A.M.A.), he was entitled to be given Notice of the meeting and that the failure to give him such notices would render his termination null and void.
Now the letter by which the plaintiff was placed on suspension written on 22-4-2002 and tendered as an exhibit reads:

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“FIRST BANK OF NIG. PLC,
35, Marina,
P. O. Box 5216, Lagos.
22nd April 2002
Mr. Bernard Ojeifo Longe, OON.,
Managing Director/CEO,
First Bank of Nigeria Plc.,
35, Marina, Lagos.
Dear Mr. Longe,
LETTER OF SUSPENSION
I regret to convey to you the decision taken by the Board of Directors of the First Bank of Nigeria Plc, at its Extraordinary Board Meeting of 22nd April 2002 held at Coommasie House Abuja to suspend you from office with effect from today, 22nd April 2002. During the suspension period, you are expected to concentrate on the recovery of the Credit Facility granted to the Investors Group Nigeria Limited (I.G.N.L.).
The Board expects that you will do your utmost best to help in the collective efforts towards the recovery of the money.
Yours faithfully,

(Sgd.)
Alh. (Dr.) Mutallab, CON
(Chairman )”
The extract of the minutes of the meeting at which the appointment of plaintiff was terminated reads:
“FIRST BANK OF NIG. PLC,
Samuel Asabia house,
35 Marina, (11th Floor),
P. O. Box 5216, Lagos.

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REVOCATION OF THE APPOINTMENTS OF MESSRS. BERNARD O. LONGE AND UZOMA NWANKWO FROM THE BOARD
The Board reflected and pursuant to article 105 of the Memorandum and Articles of Association of the Bank, resolved to revoke the appointment of Messrs. Bernard O; Longe and Uzoma Nwankwo from the Board as Managing Director/Chief Executive and Executive Director respectively, hence they ceased being members of the Board with effect from June 13, 2002.
This is a certified true copy of the minutes of the meeting referred to above.
(Sgd.)
Tijani M. Borodo,
COMPANY SERCRETARY”,
And the letter which conveyed the decision of the Board of Directors of the defendant to the plaintiff on 13-6-2002 reads:
“FIRST BANK OF NIG. PLC.,
35 Marina,
P.O. Box 5216, Lagos.
13th June, 2002.
Mr. Bernard O. Longe, OON.,
c/o 10 Murtala Mohammed Drive,
Ikoyi,
Lagos.
REVOCATION OF APPOINTMENT AS MANAGING DIRECTOR/CHIEF EXECUTIVIE OF FIRST BANK OF NIGERIA PLC.
I write to advice you that the Board of Directors at its meeting of 13th June, 2002 has resolved to revoke your appointment as Managing Director/Chief Executive. Consequently, your appointment is hereby revoked with effect from the date of this letter.

I wish you success in your future endeavours.

Yours faithfully,

(Sgd.)
ALHAJI (DR. V.A. Mutallab, CON
CHAIRMAN
cc: Mr. J. M. Ajekigbe ‘
Managing, Director/Chief Executive”

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There is no dispute as to the fact that the plaintiff was placed on suspension on 22-04-02 and that his appointment was revoked on 13-06-02. Section 262 of C.A.M.A. provides:
“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) 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 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 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.

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The provision of section 262 above clearly show not only that a company may remove a director, it also sets out how that may be done. The case of the plaintiff is founded on Section 266 of C.A.M.A. which provides:
“266(1)Every director shall be entitled, to receive notice of the direct meetings, unless he is disqualified by any reason under the Act from continuing with the office of director.

(2) There shall be given fourteen 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

(4) Unless the articles otherwise provide, it shall not be necessary to give notice of a meeting of directors to any director for the time being absent from Nigeria; provided that if he has given an address in Nigeria, the notice shall be sent to such an address.”
(Underlining mine)

The only persons disqualified from being given notice of directors meetings are those setout under section 257 of C.A.M.A. The section reads:
“257. The following persons shall be disqualified from being directors –
(a)an infant, that is, a person under the age of eighteen years;

(b) a lunatic or person of unsound mind;
(c) a person disqualified under sections 253, 254 and 258 of this Act;
(d) a corporation other than its representative appointed to the board for a given term.
It was never part of the case of the plaintiff that he did not commit any offence justifying the revocation of his appointment. His case was simple and straightforward; it was that whereas Section 266(1) states that he shall be entitled to receive notice of the meeting at which the revocation of his appointment was to be discussed, no such notice was given to him. The combined requirement of Sections 266(1) and 262 is that a director to be removed must be given a notice of the meeting. It is not the requirement of the law that such director about to be removed must be present at the meeting. He may receive the notice and refuse to show up at the meeting. What Section 266(3) above punishes is the failure to give such notice. For emphasis I repeat Section 266(3) of C.A.M.A.:
“(3) Failure to give notice in accordance with subsection (2) of this section shall invalidate the meeting.”
Subsection 3 of Section 266 above is in mandatory terms and the court has no discretion to exercise in the matter where a director to be removed was not given a notice of the meeting at which his removal was to be discussed. There are three possible defences to Section 266 of C.A.M.A. namely:
1. That the director removed was given the notice of the meeting.
2. That the person involved has ceased to be a director of the company.
3. That the person involved is disqualified under Section 257 of C.A.M.A. from getting the notice.
Now what was the defence put forward by the defendant in its pleadings? I bear in mind that it is only on the pleadings of parties that issues to be tried at the trial are joined. See Egonu v. Egonu [1978] 12 S.C 111; Sagay v. M N. I. [1977] 5 S.C. 143; African Continental Seaways v. Nigerian Roads & General Works Ltd. [1977] 5 S.C. 110.

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The only relevant facts pleaded by the defendant are to be found in paragraphs 4, 9, 11, 16 and 17 of its statement of defence and they read:
“4. The Defendant avers that the contract of the Plaintiff with the Defendant was brought to an end lawfully.
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9. The Defendant avers that the Plaintiff was in breach of the following implied terms of his contract of employment as Managing Director/Chief Executive which were that the Plaintiff would:
(a)perform his duties with reasonable care and skill, and/or;
(b) perform his duties with reasonable competence and/or; (c) render honest and faithful service and/or,
(d) the relationship of mutual trust and confidence between himself and the Defendant and/or;
(e) the relationship of mutual trust and confidence between himself and the Defendant and/or
(f) discharge his fiduciary duty to the Defendant in his capacity as the Managing Director/Chief Executive and/or;
(g) not negligently or knowingly mislead the Chairman of the Board of the Defendant and/or the Defendant and/or;
(h) not suppressing facts or information from the Chairman of the Board or from the Board itself which might affect adversely the Defendant’s finances or result in financial loss to the Defendant or its shareholders.

11. The plaintiff was guilty of incompetence and/or contracts incompatible with or prejudicial to the Defendant’s business.
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16. The Defendant avers that it was entitled, as it has done in the circumstances, to dismiss the Plaintiff, for any reason or for no reason at all without notice and without any financial benefits to the Plaintiff or at all.
17. The plaintiff was not entitled to, attend the Board meeting, and (sic) where his appointment was determined and dismissed. The plaintiff was suspended effective from April 22, 2002 and he was dismissed as Managing Director/Chief Executive from June 13, 2002 at a meeting of the Board of the Defendant. The plaintiff knew that to be the correct procedure of the Defendant..

It is easy to see that only paragraph 17 above is relevant to the case brought by the plaintiff. The defendant there under contends that the plaintiff was suspended effective from April 22, 2002 and dismissed on June 13, 2002.

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The court below correctly in my view did not permit itself to be drawn into a consideration of the issue whether or not the plaintiff had committed in the course of his employment offences justifying his removal. The trial court fell into that error. The court below however fell into a very serious error by accepting that the fact that the plaintiff was first suspended on 22-4-02 deprived him of the entitlement to be given notice of his removal as conferred by section 266(2) of, C.A.M.A.
At pages 1240 and 1242 the court below reasoned thus:
“See Lewis v. Heffer & Sons (1978)1 All ER 254. At page 364 Lord Denning exposed the legal situation thus-
‘Very often irregularities are disclosed in a government department or in a business house; and a man may be
suspended on full pay pending, inquiries. Suspicion may rest on him; and so he is suspended until he is cleared of it. No one, so far as I know, has ever questioned such a suspension on the ground that it could not be done unless he is given notice of the charge and an opportunity of defending himself, and so forth. The suspension in such case is merely done by way of good administration. A situation has arisen in which something may be done at once. The work of the department or the office is being affected by rumours and suspicions. The others will not trust the man. In order to get back to proper work, the man is suspended. At that stage the rules of natural justice do not apply.’
Also in the case The Shell Petroleum Development Company Ltd. vs. Lawson Jack (1998) 4 NWLR (Pt. 545) 249 this court observed as follows at pg. 270:
‘What it has done from the facts available was to set up an investigating panel to look into certain complaints
bordering on alleged impropriety committed by one Mr. Nuk Ntuk, a member of staff of the appellant company. In the process the respondent was suspended from duty on full pay pending the investigation. He was the head of the department directly concealed with the allegation against Mr. Ntuk Ntuk.

A suspension of an employee is not an unusual procedure taken in order to facilitate such an investigation. The person affected can hardly complain, in the process, of not having been given a hearing;; nor can he demand that
the rules of natural justice should apply. The interest of the business of the defendant becomes paramount and the
plaintiff is made to keep of the premises thereof until later.

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In the process the respondent was suspended from duty on full pay pending the investigation. He was the head of the department directly concerned with the allegation against Mr. Ntuk Ntuk.
The case of Mallock v. Aberden Corporation (1971) 2 All ER 1278 at 1294 (1971) 1 WLR 1578, 1595 cited in the respondent’s brief of argument is being referred to in connection with exclusion of requirement of natural justice and the nature of remedy available to a plaintiff. A plaintiff can only ask for, in pure master and servant cases, at the most damages, Lord Wilberforce states as follows at the relevant pages of the reports –
“The argument that, once it is shown that the relevant relationship is that of master and servant, this is sufficient to exclude the requirements of natural justice is often found, in one form or another, in reported cases. These are two reasons behind it.
The first is that, in master and servant cases, one is normally in the field of common law of contract inter partes so that principles of administrative law, including those of natural justice, have no part to play.
The second relates to the remedy; it is that in pure master and servant cases, the most that can be obtained is damages, if the dismissal is wrongful; no order for reinstatement can be made, so no room exists for such remedies as administrative law may grant, such as a declaration that the dismissal is void.
I think there is validity in both of these arguments.”
And at page 1245 the court below said:
“The suspension of the appellant is not an issue in this appeal. The appellant’s grouse is predicated on the appellant being a director. There could not be a valid decision removing him as the managing director at a meeting he was not served a notice inviting him to attend. Since the appellant is comfortable with the suspension of his appointment as managing director/chief executive the plank on which his claim rests collapsed. Having accepted the suspension of his only subsisting appointment with the respondent he was not entitled to the notice of the meeting. On suspension of the appellant’s appointment of managing director/chief executive all his rights, privileges and powers consequential or attached to the employment, including attending boards meetings, ceased.
The notice of the board meeting is not given for the fun of it. It is given for serious business of the company. It is,
therefore, not issued informally to a person who is otherwise entitled to attend but barred by reason of his suspension.
All authorities show that he was not entitled to the notice of the meeting except to enable him to be there to disrupt the meeting or cover up his tracks. Assuming he was entitled to the notice, without so deciding the practice is that the person being discussed would step out to enable other members of the board freely take their decision concerning him.”
(underlining mine)

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With respect to their Lordships of the court below, I find the proposition made in their reasoning above very unacceptable. It is in my respectful view a clear encouragement to bodies governed by C.A.M.A. to circumvent the applicability of Section 266 of C.A.M.A. by first suspending a director without notice before removing him again without notice so that they could claim in a later litigation in court that the earlier suspension robs the director concerned of the right to notice as given by section 266 of C.A.M.A.
Let me say with all the necessary force and emphasis that when the law vests a right on a citizen, a court of law will resolutely resist any attempt and by whatever method to deny the citizen the enjoyment of the right conferred by law. The plaintiff’s case was not founded on the principles of administrative law including those of natural justice. It is simply on whether or not an extant provision of law was obeyed.
In University of Calabar v. Esiogu [1997] 4 NWLR (Part 502) 719 at 723, the Court of Appeal discussing the nature of the consequences of suspension of an employee reasoned:
“The word ‘suspension’ means a temporary privation or deprivation, cessation or stoppage of or from, the privileges and rights of a person. The word carries or conveys a temporary or transient disciplinary procedure which keeps away the victims or person disciplined from his regular occupation or calling either for a fixed or terminal period or indefinitely. The disciplinary procedure gives the initiation of the discipline a period to make up his mind as to what should be done to the person facing the discipline. Although in most cases, suspension, results in a disciplinary action, it is not invariably so. There are instances when the authority decides not to continue with the matter. This could be because the investigations did not result in any disciplinary conduct.”
Also in Boston Sea Fishing Co. v. Ansell [1886 – 90] All ER 65 the court said:
‘Mr. Ansell was dismissed and I think his dismissal must be taken to date from that meeting on October
19 and not from the day in September when he was suspended by the board because suspension is very different from dismissal. When a man is suspended from the office he holds, it merely amounts to saying “so long as you hold the office and until you are legally dismissed, you must not do anything in the discharge of the duties which under your office you ought to do towards your employer.” (underlining mine)

I think, with respect, that the court below completely misunderstood, the import of suspension. Admittedly, an employer suspending his employee may impose terms of the suspension but in a general sense suspension of an employee from work only means the suspension of the employee from performance of the ordinary duties assigned to him by virtue of his office. Suspension is not a demotion and does not entail a diminution of rank, office or position. Certainly it cannot import a diminution of the rights of the employee given to him under the law. To accept as the court below did, that suspension of the plaintiff would deny him the protection afforded him under Section 266 is to confer the right on the defendant to vary the status of the plaintiff without complying with the procedure laid down for doing so. The defendant cannot first suspend the plaintiff without notice to him of the meeting at which the suspension was discussed and agreed and then turn round to say that that suspension had removed the necessity to give him the notice as mandatorily required under Section 266(1) of C.A.M.A. The court cannot grant to a litigant the right to disobey the law under any artifice or guise.
In any case, the letter of suspension to the plaintiff did not say that he had ceased to be a director. If it had said so, the plaintiff would have founded his action on that letter. Rather what the letter said was “During the suspension you are expected to concentrate on the recovery of the credit facility granted to the Investors Group Nig. Limited. The Board expects that you will do your utmost best to help in the collective efforts towards the recovery of the money.”

…………………….N…………………….

It is apparent that the defendant wanted the plaintiff to use the period of his suspension primarily to pursue the recovery of the loan granted to Investors Group Nig. Ltd. (I.G.N.L.). That implies that he would do so only in his capacity as Managing Director/Chief Executive of the defendant. If he was no longer Managing Director/Chief Executive of the defendant, how could he go out to collect money for the defendant?
It is my firm view that the court below was wrong to have held that the suspension of the defendant on 22-04-02 robbed him of his status as a director of the defendant.
The court below also in its judgment laboured strenuously to show that the plaintiff was not a director within the meaning of C.A.M.A. It needs be said here that the defendant never raised any such defence. The court below engaged in the dichotomy between an executive director and a non-executive director which the parties had not raised in their pleadings. It has been said repeatedly that a court must not decide a case on issues not raised by parties in their pleadings. In George v. UB.A. [1972] 8/9 S/C/264 this Court per Fatayi Williams J.S.C. (as he then was) said:
“The first point to be considered in this appeal is whether the plaintiffs/respondents pleaded the assignment by the British and French Bank to them of the debt which they had claimed from the defendant/appellant. -If the assignment is not pleaded, evidence regarding it goes to no issue and should not have been admitted; if admitted, it should have been ignored by the learned trial judge in his judgment. (See George v. Dominion Flour Mills Ltd. (1963) 1 All NLR. 71 at pp. 78-79). In this respect, we also wish to refer to our decision in Chief Sule Jimbo and Others v. Aminu Asani and Others, SC.373/67 delivered on 13th March, 1970, where we observed as follows:-
‘We are also concerned at the obvious departure from their pleadings of the two sets of plaintiffs. The object
of pleadings is to fix the issues for trial accurately and to apprise the other side of the case which it would meet
in court. To allow a party to give evidence in direct contradiction of his pleadings is to allow that party to make a different case at the trial and should not have been allowed. Such evidence must be regarded as not belonging
to the issues raised on the pleadings and should have been rejected. We think the learned judge was wrong to have allowed such evidence to be given.-See Erinle v. Adelaja SC.332/1966 delivered on the 6th June, 1969; also N.I.P.C v. Thompson Organization Ltd. and Others, SC.192/67 delivered on 11th April, 1969.

…………………….O…………………….

Again, we refer to our decision in Ogboda v. Adulugba delivered on 12th February, 1971, where we emphasized the same point as follows:-
‘We have pointed out numbers of times that the evidence  in respect of matters not pleaded really goes to no issue at the trial and the court should not have allowed such evidence to be given. (See Chief Sule Jimbo and Others v. Aminu Asani and Others, SC.373/67 delivered on 13 March 1970). Even when such evidence had been wrongly allowed, the trial court should disregard it as irrelevant to the issues properly raised by the pleadings.’
And similarly in Okafor v. Okitiakpe [1973] 2 SC 49 at page 54 this Court per Coker JSC said:
“…….it is correct that facts not pleaded may not be given in evidence at a trial and if for any reason at all, any evidence was given of such facts the court of trial, and indeed the appeal court must disregard such evidence. This is trite law and if authority is needed for this we refer to the observation of this Court in Tomori v. Matanmi, SC.146/68 decided on the 1st July 1970; also Conway v. George Wimpey [1951]2 Q.B. 266 at p.274 et seqq”
Now at pages 1246-1247 of the record, the court below reasoned thus:
“The appellant made a mountain out of a mole hill on the strength of Yalaju-Amaye’s case (supra). That case on the facts and the law are not on all fours. Firstly article 106 of the First Schedule of Table A of Companies Act, 1968 and Article 105 of the Article of Association of First Bank of Nigeria Plc. Are not impari material as demonstrated earlier in this judgment. Article 106 along with the Companies Act 1968 which gave it live was repealed on the inception of the Companies and Allied Matters Act, Cap.59 of the Laws of the Federation, 1990. Yalaju-Amaye’s case recognizes the fact that a person, irrespective of his description who has a contract of service with the company is an employee and found that Yalaju-Amaye was a director and not an employee in the absence of contract of service between him and the first respondent. Yalaju-Amaye was a director in his own right who was so designated by the article of association of that respondent company. He was not only a director but also the founder and promoter of that first respondent company. Yalaju Amaye who was appointed a director as well as managing director in the article of association was allegedly removed as managing director of the strength of a purported oral resignation. Yalaju-Amaye can only be removed from these positions by alteration of the articles of association. It is clear on authorities, that a power exercisable under the article of association can only be changed or altered by a special resolution. But the appellant in the instant appeal was an employee who was appointed a managing director by the board of directors of respondent under article 105 of the respondent’s article of association. The appellant was made or appointed a managing director by the directors exercising their power under Article 105 of First Bank of Nigeria Plc; Article of Association. The same article empowers the directors to revoke any appointment made by them. It seems to me that the power of the board of directors of the respondent to remove anyone appointed by it is further strengthened by the provisions of section 41(3) of the Companies and Allied Matters Act which reiterates the right of the directors to enforce the power donated to them under the article to appoint or remove any director or other officer of the company. The section provide thus-
‘(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.’
It seems to me that the power to appoint person or persons of proven ability as executive or managing director as well as the power to revoke such an appointment conferred by article 105 is now repeated in the Act. So the power given to directors to appoint and remove executive and managing directors transcends by virtue of section 41(3) of Companies and Allied Matters Act, article 105″

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And at pages 1249-1250; the court below said:
“The appellant is not contesting his removal on the facts. He has conceded to the facts of this case. But he is challenging the legitimacy of the board meeting at which the decision to revoke his appointment was taken on account that as a director he was not given notice of the meeting, contrary to section 266 of Companies and Allied Matters Act. It is common ground that he was suspended at the material time, which he is not contesting. Moreover, it is clear that being a managing director who could be suspended and was on suspension he was not entitled to the; notice of the meeting. Further on this point, being a director appointed by the directors, under article 105 of the article of association, he was not a director appointed under the Companies and Allied Matters Act and that his working directorship was not within the contemplation of s.266(1) of the Companies and Allied Matters Act, therefore, was not entitled to the notice envisaged under section 266(1) of the Act which provides thus-
‘266(1) Every director shall be entitled to receive notice of the directors’ meeting, unless he is disqualified by any reason under the decree from continuing with the office of director.
(2) There shall be given 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 appellant as observed earlier is disqualified to attend the meeting and was consequently not entitled to the notice of the meeting. He was disqualified by reason of his suspension by the board of directors under article 105 read in conjunction with the provisions of section 41(3) of the Companies and Allied Matters Act.”
The sum total of the approach of the court below is that because, the plaintiff was a Managing Director/Chief Executive of the defendant appointed by the defendant on a contract of employment he was not a director within the meaning of section 266 of the C.A.M.A. The standpoint of the court below was a derivative of the earlier conclusion it had come to at pages 1235 – 1236 of the record where it said:
“The appellant’s misapprehension of the article stems from his reading article 105 of respondent’s Article of Association as if it were the repealed article 106 in the First Schedule in Table A of the repealed Companies Decree, 1968 which provides thus.;
‘The directors may from time to time’ appoint one or more of their body to the office of Managing Director for such period and on such terms as they think fit.’
‘This article allowed the board of directors to appoint one of their members as the managing director. It follows that, under article 106 of First Schedule in table A of Companies Decree, 1968, a person to be appointed a managing director must himself be a sitting director as he ought to come from amongst the directors. He was consequently permitted to retain his directorship along with his present status. The meaning of that article, which is, in any case, repealed, cannot be imported or read into article 105 of respondent’s Article of association, the qualification under article 105 for being a managing director or an executive director no longer includes being a director; all that is required for the two offices are ‘person or persons of proven relevant ability or experience.’ It follows that appellant was not a director appointed as a managing director; He was an executive director, a fact he admitted in evidence, immediately before he was appointed the managing director. He testified to this effect in his evidence-in-chief as well, as cross-examination. The submission of the appellant that he was, a director and managing director and there is no provision in the Companies and allied Matters Act to suspend the plaintiff as a director may be ingenious but not candid. It is not candid because there is no shred of evidence on the record supporting the claim that appellant was ever a director of respondent. There is no provision in the Companies and Allied Matters Act for appointment of executive director. It is therefore not surprising that the same Act has no provision for suspension or discipline of an executive director, a situation adequately covered by article 105 already recited earlier in this judgment.

…………………….Q…………………….

The appellant was employed an executive director by way of promotion by virtue of exhibit V. He was subsequently promoted as Managing Director/Chief Executive by virtue of exhibit A. The two documents were made pursuance of the power of the Board of Directors under article 105 of the articles of association of the First Bank of Nigeria Plc. The two positions do not run concurrently but consecutively: the former appointment terminates on the elevation of its holder to the position of a managing director.”

I say with due respect to ‘their Lordships of the court below that the power to amend or vary the meaning of a director under C.A.M.A. has not been vested in a company concerned or the court. The reasoning that, after all, if the issue of a director to be removed is to be discussed, the director concerned will be asked to step out is with respect, untenable because that reasoning speculates on the intendment of the legislation. Section 262 reproduced earlier in this judgment gives the director whose removal is under consideration the priviledge to make written presentation in his own defence to the Board of Directors. The case of the plaintiff is that he was not given such a notice: How could a director who was not given a notice of the meeting of the Board make a written presentation at the meeting of the Board.’
Section 244(1) of C.A.M.A. defines a director thus:
“Meaning of directors. Directors of a company registered under this Act are persons duly appointed by the company to direct and manage the business of the company.” (underlining mine)
The statutory definition of directors above does not recognize the nomenclature raised by the court below as between executive and non-executive directors. Rather directors are those appointed by the company “to direct and manage the business of the company.” How does one conclude that a ‘managing director/chief executive’ of a company is not a director of the company? The truth of course is that under any definition a, managing director is the directing mind and will and the alter ego of the company through which the company acts. It is indeed by virtue of his office that the plaintiff was able to give out some substantial amount as loan on behalf of the defendant. As I observed earlier, it is fair to say that the defendant on their pleadings did not plead that the plaintiff was not their director.
The emergence of directors in a company is governed by sections 247, 248 and 249 of C.A.M.A. which provide:
“247. Subject to section 246 of this Act, the number of directors and the names of the first directors shall be determined in writing by the subscribers of the memorandum of association or a majority of them or the directors maybe named in the article.

…………………….R…………………….

248. (1) The members at the annual general meeting shall have power to re-elect or reject directors and appoint new ones.
(2) In the event of all the directors and shareholders dying, any of the personal representatives shall be able to apply to the court for an order to convene a meeting of all the personal representatives 6f the shareholders entitled to attend and vote at a general meeting to appoint new directors to manage the company, and if they fail to convene a meeting, the creditors if any, shall be able to do so.
249. (1) The board of directors shall have power to appoint new directors to fill any casual vacancy arising out of death; resignation, retirement or removal.
(2)Where a casual vacancy is filled by the directors, the person may be approved by the general meeting at the next annual general meeting, and if not so approved, he shall forthwith cease to be a director.
(3) The directors may increase the number of directors a long as it does not exceed the maximum allowed by the articles, but the general meeting shall have power to increase or reduce the number of directors generally and may determine in what rotation the directors shall retire:
Provided that such reduction shall not invalidate any prior act of the removed director.”
The plaintiff may have been a director appointed under section 248 or 249 as one appointed to fill a vacancy occasioned by death, resignation, retirement or removal of the previous holder of the position of managing director. The scheme under sections 247 to 249 recognises (1) directors appointed by the subscribers of the memorandum of association or majority of them or those named in the articles, (2) directors appointed in the annual general meeting, or (3) directors appointed to replace such directors as may have died, resigned, retired or be removed.
It is eye-opening that section 244(3) criminalizes the situation where a person who is not a director holds himself out at such: the subsection provides:
“(3). Where a person not duly appointed acts or holds himself out as a director, he shall be guilty of an offence and on conviction shall be liable to imprisonment for two years or to a fine of N100 for each day he so acts or holds out himself as a director or to both such imprisonment or fine and shall be restrained by the company.”

…………………….S…………………….

The unchallenged evidence was that the plaintiff was made a managing director in the year 2000. He acted as such till 2002 when he was removed. Why did the defendant not disclaim him as a director during the period?
The two courts below were wrong in their conclusion that the suspension of the plaintiff from work had the effect of removing him as director. If the defendant believed that the plaintiff had ceased to be a director by his suspension on 22-04-02, why did they proceed to revoke his appointment on 13-06-02? In any case, the provision of section 266(1) is that a director may not be removed unless he is first given a notice to attend a meeting at which the removal will be discussed.
If the contention of the defendant is valid, that the plaintiff had ceased to be a director by his suspension on 22-04-02, it follows that if it was the suspension of 22-04-02, that removed plaintiff as such director, it would not be necessary to further revoke his appointment on 13-06-02 as was done by the defendant. The further reasoning of the court below that an executive director is not the same as a non-executive director is untenable. From other angles it may be correct but for the purpose of removal 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 in accordance with law. The plaintiff must be deemed to be still 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:
“(i) A declaration that the Defendant’s Board of Directors cannot lawfully hold any meeting of the said Board without giving notice thereof to the Plaintiff and accordingly all decisions taken at any such meeting is unlawful, invalid, null and void and incapable of having any legal consequence;
(ii) A declaration that in particular the decision of the Defendant’s Board of Directors held on the 13th of June 2002 to revoke the Plaintiff s appointment as Managing Director/Chief Executive is wrongful, unlawful, invalid, null; and void and incapable of having any legal consequence;
(iii) A declaration that any purported implementation of the said decision made by the Board on the 13th of June 2002 (including any appointment to the office held by the Plaintiff in the Defandant Company) is ineffective, unlawful and null and void;

…………………….T…………………….

(iv) An order of injunction restraining the said Defendants from giving effect or continuing to give effect to any of the decisions of the Board mentioned in claims (i) and (ii) hereof without first complying with the mandatory procedural requirements stipulated in Section 266(3) of C.A.M.A.;
(v) A declaration that the Plaintiff is entitled to remain in the premises allocated to him by the Defendant including the enjoyment of all associated services until the expiration of a reasonable time from the date of any lawful and valid termination of his contract of service with the Defendant;”
Let me observe here that the defendant has by its unwillingness to respect the provisions of Section 266 brought about this unfortunate situation on itself. The plaintiff’s suit was filed on 4-07-02 about a month after he was purportedly removed. All the defendant needed to do on being served with the summons was rescind the ill-advised action and follow thereafter the prescription under Section 266. Within a few weeks thereafter, the defendant would have been able to effectually remove the plaintiff. What could have been done validly within 3 months has been made to last eight years.
In this Court, I must uphold the law of the land. The appeal, succeeds. The plaintiff/appellant is awarded costs as follows:
(a) For appearance in the High Court N20,900.00.
(b) For appearance in the court below N30,000.00
(c) For appearance in this Court N50,000.00

DAHIRU MUSDAPHER, JSC: I have read before now the judgment of my Lord Oguntade, JSC with which I entirely agree. For the same reasons set out. I too, allow this appeal and set aside the decisions of the courts below and enter judgment in terms of the appellant’s claims which were not withdrawal also abide by the orders for costs proposed in the aforesaid lead judgment in the trial court of Appeal and this court.

FRANCIS FEDODE TABAI, JSC: I have had the privilege to read, in draft, the lead judgment of my learned brother OGUNTADE JSC and I agree with the reasoning and conclusion that the appeal be allowed.
This appeal turns on the construction to be placed on Section 266 of the Companies and Allied Matters Act (C.A.M.A) which provides for the service of notice of directors’ meeting. The Appellant being a director was entitled to be given 14 days notice of meeting of directors. Section 266(3) of the C.A.M.A. specifically provides that failure to give notice in accordance with subsection (2) of this section shall invalidate the meeting.
The Appellant was not given the notice as require by Section 266(3) of C.A.M.A. Although the Appellant was on suspension and retained the right to be given notice of the meeting particularly having regard to the fact that issues affecting his rights were to be discussed.
In conclusion, I also hold that the appeal has merit and same is accordingly allowed. I assess the costs of this appeal at N50,000.00 in favour of the Plaintiff/Appellant against the Defendant/Respondent.

…………………….U…………………….

IBRAHIM TANKO MOHAMMAD, JSC: I read in advance the judgment of my learned brother, Oguntade, JSC. I concur.

OLUFUNLOLA OYELOLA ADEKEYE, JSC: had read before now the judgment delivered by my learned brother, G. A. Oguntade, JSC. My brother had meticulously considered all the facts and the applicable principles of law raised in the four issues for determination in this appeal as follows: –
(1) Whether it is proper in law for the Court of Appeal to have jettisoned suo motu in its judgment the entirety Reply brief on the appellant in their judgment without giving the parties in particular, the Appellant’s hearing even though arguments have been proffered in all the Briefs including the Reply Brief without any objection opposition by the Respondent and in circumstances which resulted in a deprivation of fair hearing.
(2) Whether it was proper for the Court of Appeal to have failed in its judgment to resolve the issue of whether a finding by the trial court that the appellant was suspended under the common law meets the requirement of the Companies and Allied Matters Act that a director must be given a notice of director meeting unless he is disqualified under the Act (CAMA) an issue which if it had been pronounced upon would probably resolve the appeal in favour of the appellant and not doing so occasioned a miscarriage of justice.
(3) Whether it was proper for the Court of Appeal to speculate on an issue which was not part of the grounds of appeal and which was also not an issue for determination before the court
(4) Whether the Court of Appeal was right in holding that although the appellant was appointed pursuant to Article 105 of the Articles of Association of the respondent, he is not a director for that purpose of the Companies and Allied Matters Act [CAMA] therefore his working relation is not within the contemplation of Section 266 (1) and moreover that the office of the executive director is not known to the CAMA.
At the Extraordinary meeting of the respondent, the First Bank of Nigeria held on Thursday 24th of February 2000 in Lagos, the Board of Directors unanimously appointed the appellant, Bernard Ojeifo Longe as the Managing Director/Chief Executive of the bank, after a resolution of the Board in accordance with the Articles of Association of the Company.
Extracts from the minutes of the meeting reads: –
“That pursuant to Article 105 of the Articles of Association of the Company, Mr. Bernard Ojeifo Longe is hereby appointed the Managing Director/Chief Executive Officer of the First Bank of Nigeria Plc with effect from July 3, 2000.

…………………….V…………………….

The Board agreed with the proviso that the above appointment being for a period of six years (i.e. 2 terms of 3 years each) but subject to annual assessment of the performance of the appointees. This being in the spirit of the new First Bank that is performance driven.
At that meeting, Mr. B. O. Longe’s name was listed as a Director of the First Bank of Nigeria PLC (pages 16 and 17 of the Record. Exh. B). A Letter of Appointment Exh. A dated 3/7/2000 was dispatched to him to that effect. The Memorandum and Articles of Association was admitted in evidence by the trial court as Exh. D at another meeting of the Board held on 25/10/01, the issue of tenure of Directors & Board was raised. It was resolved that the provisions of Companies and Allied Matters Act [CAMA] and the Memorandum and Articles of Association of the Bank should apply. The Article of Association at page 28 of the Record under interpretation 2(1) (L) defines that
“The Directors” shall include, and mean the Directors for the time being of the Company and the “Board” shall mean the Directors or any of them acting as the Board of the Company.”
The removal of Directors is as provided for in Article 103 of the Articles of Association whereas:
“In addition to and without prejudice the provisions of the Decree, the company may by ordinary resolution, remove any Director before the expiration of his period of office, and may in like manner fingerprint another in his place. Any person so appointed shall be subject to retirement at the same time as if he had become a Director on the day on which the Director in whose place he is appointed was last elected a director but shall without prejudice to any claim the Director may have for damages for breach of any contract of service between him and the company.”
Article 105 of the Article of Association provides for the post of the Chief Executive and Managing Director to which the appellant was appointed. It states that: –
“The Directors may from time to time appoint one or more person or persons of proven relevant ability and experience to the offices of Managing Director who is to be Chief Executive of the Company and Executive Director for such period and on such terms as they think fit and subject to the terms of any agreement entered into in any particular case, I revoke such appointment but without prejudice to any claim he may have for damages for breach of contract”

…………………….W…………………….

The core complaint of the respondent against the appellant was that he disbursed a loan of $131,700,000 (one hundred and thirty-one million, seven hundred thousand dollars) on behalf of Investors International London Limited for 10% purchase price of 51% stake to Nitel to Bureau of Public Enterprises on the Banks Non-Export Domiciliary Account. In particular that the processing of a loan of $50,000,000 (fifty million dollars) and the disbursement was subject to various policy and procedural lapses in that the condition proceed into Drawdown were not met. The US $ one hundred and thirty-five million short-term Bridge Finance Facility to acquire 51% stake in NITEL PLC was to be borrowed by Investors Group Nigeria Limited (IGNL). The lenders were to be a consortium of Financial Institutions with the First Bank PLC as the Lead Arranger. The purpose was to bridge the proceeds of the private equity issue in respect of the Investors International. (London) Limited (IILL)’s acquisition of 51% stake in Nigerian Telecommunications PLC (NITEL) under the Federal Government of Nigeria’s then on-going privatization programme. The facility will be used to fund the required 100%’ down payment (vide pages 594 – 596 of the, Record). According to one Tim Bolade, Head of Credit Risk Management, he put the total exposure of the bank at $111.7 million US dollars, which was approved – but there was no record of approval for the second $50,000,000 fifty million dollars. Bureau of Public Enterprise thereafter declared that the amount was non-refundable. The Board of Directors called an Extraordinary meeting on Monday, April 22nd 2002. The Chairman of the Board disclosed that the purpose of the meeting was to assess the situation of NITEL’s acquisition by International Investors (London) Limited (IILL) and the facility granted to Investors Group Nigeria Limited (IGNL) by the Bank. He thereafter called on the Managing. Director/Chief Executive to brief the Board.
The appellant went ahead to inform the Board that the
(1) Extension of time given to IIIL to pay the balance of $1.37 billion Dollars had elapsed without payment.
(2,) BPE had taken the position that the $131.7 million deposit has been forfeited in line with the terms of the Share Sales Agreement covering the transaction.
He informed the Board of his efforts to contact the major movers of the transaction IILL and the chairman so as to pay money to the defendant.

…………………….X…………………….

The Board set up a committee to compliment effort of the Executive Management in recovering the facility. A report of their activities was reported to the Board Meeting. Members of the Board discussed the situation and offered suggestions as to the best approach to recovering the facility. At the end of the discussion, the Chairman directed the Managing Director/Chief Executive, and all Executive Directors and the Company Secretary to excuse the Non-Executive Director for further deliberations on the matter. The meeting reconvened to invite the three officers back to the Board meeting. The appellant was informed about his suspension and a successor was appointed in his place in an acting capacity. The chairman informed the meeting that the decision was taken in line with the Memorandum and Articles of Association of the Company. The Board confirmed the decision. The Chairman thereafter called for comment/observation on the decision of the Board.
The appellant was reported to have expressed surprise at the decision of the Board and believed that the action of the Board was unfair and unjust to him (vide pages 681, 681A – 689 of the Record). This was followed by a letter dated the 22nd April 2002 confirming his suspension – the contents of which are as follows:-

Mr. Bernard Ojeifo Longe OON
Managing Director/CEO
First Bank of Nigeria PLC
The Marina – Lagos
Dear Mr. Longe
Letter Of Suspension
I regret to convey to you the decision taken by the Board of Directors of the First Bank of Nigeria Plc, at its Extraordinary Board Meeting of 22nd April 2002 held at Coommasie House Abuja to suspend you from office with effect from today, 22nd April 2002. During the suspension period, you are expected to concentrate on the recovery of the Credit Facility granted to the Investors Group Nigeria Limited (I.G.N.L.).
The Board expects that you will do your utmost best to help in the collective efforts towards the recovery of the money.
Yours faithfully,
Alh. (Dr.) Mutallab, CON
(Chairman )”

The Board thereafter set up a 3-man Committee of Senior Management Staff, Head of Corporate Finance. Head Construction and Real Estate and Head, Credit Risk Management to submit a comprehensive report on the loan of the Bank to Investors Group Nigeria Limited on behalf of Investors International London Limited. Vide page 597 of the Record.
The respondent was penalised by the Central Bank of Nigeria for granting a loan to Investors International (London) Limited in contravention of the Provisions of the Banking Act . (page 463 of the Record)

…………………….Y…………………….

On the 13th of June 2002 , the respondent wrote to the appellant that –

Mr. Bernard O. Longe CON
c/o 10 Murtala Mohammed Drive
Ikoyi, Lagos
Dear Sir

Revocation of Appointment As Managing Director/Chief Executivie Of First Bank Of Nigeria Plc.
I write to advice you that the Board of Directors at its meeting of 13th June, 2002 has resolved to revoke your apartment as Managing Director/Chief Executive. Consequently, your appointment is hereby revoked with effect from the date of this letter.
I wish you success in your future endeavours.
Yours faithfully,
ALHAJI (DR.) U. A. Mutallab, CON.

The appellant filed an action at the Federal High Court Lagos challenging the revocation of his appointment. His claims are for (i) A declaration that the defendant’s Board of Directors cannot lawfully hold any meeting of the said Board without giving notice thereof to the plaintiff and accordingly all decisions taken at any such meeting 1$ unlawful, invalid, null and void and incapable of having any legal consequence.
(ii) A declaration that in particular the decision of the defendant’s Board of Directors held on the 13th of June 2002 to revoke. The plaintiff’s appointment as Managing Director/Chief Executive is wrongful, unlawful, invalid, null and void and incapable of having any legal consequence.
(iii) A declaration that any purported implementation of the said decision made by the Board on the 13th of June 2002 including any appointment to the office held by the plaintiff in the defendant company is ineffective, unlawful and null and void.
(iv) An order of injunction restraining the said defendants from giving effect or continuing to give effect to any of the decisions of the Board mentioned in Claims (i) and (ii) hereof without first complying with the mandatory procedural, requirements stipulated in Section 266 (3) of (CAMA).
(v) A declaration that the plaintiff is entitled to remain in the premises allocated to him by the defendant including the enjoyment of all associated services until the expiration of a reasonable time from the date of any lawful and valid termination of his contract of service with the defendant.
(vi) In the alternative to the foregoing, the plaintiff claims the sum of N136,614,584.00 being the amount due owing to the plaintiff as at 13th of June 2002.
(vii) Interest on the said sum of N136,614,584.00 at the rate of 21%, per annum or at such other rate of interest as the court may adjudge to be fair and just.
(viii) In further alternative to claims (i) to (h) the plaintiff also claims the sums of N804,885, 117.00, US $207,360.00 and Sterling 3359,100.00 being special damages suffered by him as a result of the wrongful termination of his appointment.

…………………….Z…………………….

Parties exchanged pleadings whereupon the suit proceeded to trial. Parties gave evidence and tendered documents. The appellant as plaintiff tendered six documents Exhibits A, B, C, D, W and DD and the respondent as defendant tendered 24 documents – Exhibits E to 2, AA, BB, LL and W1. The trial court ordered parties to file written addresses. In the considered judgment of court, the learned trial judge dismissed the plaintiff’s claim, while it struck out the alternative reliefs in Claims V1 to VII basically for monetary payment, which were already abandoned by him. The appellant headed for the Court of Appeal. In the judgment of the Court of Appeal delivered on the 5th of January 2005, the appeal was dismissed. The appeal now under consideration emanated from the decision of the Court of Appeal. My learned brother had given an exhaustive consideration to the four issues distilled for consideration in this appeal, I however wish to re-emphasise issues one and two.
(vii) Interest on the said sum of N136,614,584.00 at the rate of 21% per annum at such other rate of interest as the court may adjudice to be fair an a just.
(viii) In further alternative “to claims (i) to (iii) the plaintiff also claims the sums of N804,885,117.00, US $207,360.00 and Sterling 359,100.00(pounds) being special damages suffered by him as a result of the wrongful termination of his appointment.
Parties exchanged pleadings whereupon, the suit proceeded to trial. Parties gave evidence and tendered documents. The appellant as plaintiff tendered six documents Exhibits A, B, C, D, W and DD and the respondent as defendant tendered 24 documents – Exhibits E to 2, AA, BB, LL and W1. The trial court ordered parties to file written addresses. In the considered judgment of court, the learned trial- judge dismissed the plaintiff’s claim, while it struck out the alternative reliefs in Claims V1 to VII basically for monetary payment, which were already abandoned by him. The appellant headed for the Court of Appeal. In the judgment of the Court of Appeal delivered on the 5th of January 2005, the appeal was dismissed. The appeal now under consideration emanated from the decision of the Court of Appeal. My learned brother had given an exhaustive consideration to the four issues distilled for consideration in this appeal, I however wish to re-emphasise issues one and two
Issue One
Whether it is proper in law for the Court of Appeal to have jettisoned suo motu in its judgment the entire reply brief of the appellant in their judgment without given the parties, in particular the appellant, a hearing even though arguments have been proffered on an the briefs including the Reply brief without any objection or opposition by the respondent and in circumstances which resulted in deprivation of fair hearing?
It is not in dispute that at the hearing of the appeal before the Court of Appeal on the 11th of October 2005, the parties to the appeal, the appellant adopted their briefs. The plaintiff/appellant adopted the plaintiff/appellant’s brief and the Reply Brief. The defendant/respondent equally adopted its respondent’s brief. After hearing the appeal, the court reserved judgment in the appeal. In the judgment of the court delivered on the 5th of January 2006, the Reply brief of the appellant came under the hammer of the court. It was the observation of the court that the appellant’s Reply brief went contrary to the principle governing writing of a Reply Brief. That Order 6 Rule 5 of the Court of Appeal Rules 2002 which provides for a Reply brief does not envisage a situation where the appellant will re-argue or reopen the appeal, by merely re-emphasising argument already contained in the appellant’s brief. The Reply brief was in the circumstance, unnecessary and uncalled for, the court saw it as a waste of time of the respondent and-the court. It was also filed, adopted and argued as a process to the appeal in flagrant disregard of the respondent’s right of Reply. I must agree that the court’s observation was right and proper.

…………………….AA…………………….

In that filing of briefs and purpose are well specified and defined in the Rules of the appellate Courts – the Court of Appeal and the Supreme Court – briefs must be distinguished from the address by counsel at the close of hearing, to round up case of the parties before a trial court. A brief is in a tabloid form as opposed to oral hearing. A brief of argument is a succinct statement of the proposition of law or fact or both, which a party or his counsel wishes to establish at the appeal together with reasons and authorities to sustain them.
Emodi v. Kwenth (1996-) 2 NWLR pt. 433 pgs 656 at 660 SC
UAC (Nig.) Ltd. v. Fasheyitan (1998) 11 NWLR pt 573 pg. 179 SC.
In the process of taking a decision in an appeal it behoves on the court to give a dispassionate consideration to the case of the parties – on printed record, in their brief and the Record of Appeal. Anything inimical or irrelevant to the case of the parties, the court has an inherent right as a judex to discountenance it and expunge from record in the interest of justice. The lower court was confronted with a situation where there was no legal justification to file a Reply brief, it had taken the right step and had exercised its discretion judiciously and judicially in favour of ignoring the Reply brief particularly when considering same will occasion miscarriage of justice, as the respondent’s right of reply would have been breached. A Reply brief is necessary and usually filed when an issue of law or argument raised in the respondent’s brief calls for a reply, where a Reply brief is necessary, it should be limited to answering new points arising from the respondent’s brief. Although an appellant’s Reply brief is not mandatory, where a respondent’s brief raises issues or points of law not covered in the appellant’s brief, an appellant ought to file a reply brief. The appellant in the appeal before the lower court did not specify the new points of law arising from the respondent’s brief which necessitated a Reply brief. It is not proper to use a Reply brief to extend the scope of the appellant’s brief or raise new issue not dealt with in the respondents brief. It is not to afford an appellant another bite at the cherry.
Edjenode v. Ikine (2001) SCNJ pg. 184.
Okonji v. Njokanma (1999) 12 SCNJ pg. 259.
The argument about the lower court considering the Reply brief suo motu before jettisoning the same is an awkward argument. The phrase suo motu is misapplied in the circumstance as once an appeal is reserved for judgment doors are closed to any argument or submission of counsel. The court can only call for argument from parties where substantial issues of law arise in the course of writing their judgment. This is not the position in this case – as the courts see the Reply brief as an irrelevant document.
Issue one is resolved in favour of the respondent.
I observe that issues two and four are interwoven, one leads to the other so I intend to consider them together.V

…………………….BB…………………….

Issue Two
Whether it was proper for the Court of Appeal to have failed in its judgment to resolve the issue whether a finding by the trial court that the appellant was suspended under the common law meets the requirement of the Companies and Allied Matters Act that a director must be given a notice of directors meeting unless the director is disqualified under the Act [CAMA] an issue which if it had been pronounced upon would probably resolve the appeal in favour of the appellant and by not doing so occasioned a miscarriage of justice?
Issue Four
Whether the Court of Appeal was right in holding that although appellant was appointed pursuant to Article 105 of the Articles of Association of the Respondent he is not a director for the purpose of the Companies and Allied Matters Act therefore his working relationship is not within the contemplation of Section 266 (1) and that the office of the Executive Director is not known to CAMA.
The appellant submitted on issues two and four that the court erred in law in failing to decide the vital issue whether a suspension under the common law meets the requirement that a director must have been disqualified under the Companies and Allied Matters Act, and in circumstance in which failure to do so amount to a miscarriage of justice. The court erred in law in holding that a meeting of directors is not within the CAMA and in particular within Section 266 (1) and more importantly in the light of the definition of the word “director” in Section 650 of the CAMA which court failed to consider and/or examine and when the court made conflicting statements in the same judgment recognizing in one breath the existence of the office of executive director and denying in another breath the existence of the same office under the CAMA.
The respondent replied that the appellant’s claim of dual capacity failed which was the only ground on which the appellant’s case at the Court of Appeal rested, the failure of the appellant to challenge in this court that the Court of Appeal’s crucial decision against his claim of dual capacity is irredeemably fatal to the present appeal. The relationship between the appellant and the respondent was that of employee-employer or master and servant relationship and on the evidence before the two lower courts, the plaintiff/appellant was rightly dismissed for gross misconduct as the Trial Court and the Court of Appeal concurrently found and held, in reading between the lines of the foregoing submission of the parts, the issue before the court in the two issues is to my mind straight forward and within narrow limits. The germane question here is, whether the respondent complied with the proper procedure in revoking the appointment of the appellant. The respondent claimed that the revocation of his employment was done in accordance with his contract of employment – in a master and servant relationship. Whereas it is the stand of the appellant that as a director of the respondent as at the time of his dismissal, his appointment has transformed from that of master and servant as the Company and Allied Matters Act [CAMA] has clothed his employment with statutory flavour.

…………………….CC…………………….

I must chip in at this stage that every contract of employment contains the terms and condition that will regulate the employment relationship such as terms on determination, notice, wages, benefits are usually contained in the expressed contract of service or implied into it by common law and custom. The nature of employment generally affect the terms of the contract of employment. There are three categories of contracts of employment as follows: –
(a) Purely master and servant relationship.
(b) Servants who hold their office at the pleasure of the employer.
(c) Employments with statutory flavour.
In the master and servant relationship, the master has unfettered right to terminate the employment – but in doing so he must comply with the procedure stipulated in their contract. In a contract with statutory flavour – the employment is protected by statute. In the event of termination of employment with statutory flavour, strict adherence must be had to the statute creating the employment for statutory provisions cannot be waived.
The appellant in his new post as Managing Director and Chief Executive Officer of the respondent was appointed by the letter, Exhibit, with effect from 3rd of July 2000. The letter conveyed terms of the appointment like-
(1) Duration subject to satisfactory performance.
(2) Remuneration and other entitlements and allowances.
Vide page 440 of the Record
Exhibit B – Extraordinary Meeting of the Board of Directors where the appointment was made, the minutes of the meeting state as follows: –
“That pursuant to Article 105 of the Articles of Association of the Company, Mr. B.O. Longe be and is hereby appointed the Managing Director/Chief Executive Officer of First Bank of Nigeria PLC with effect from July 3, 2000”
Vide page 442 of the Record of Appeal.
The respondent had established before the court that the act of the appellant as Managing Director/Chief Executive Officer of the Bank without due regard to the Bank’s policy and by adopting a procedure fraught with lapses thereupon causing the bank to lose a colossal amount in Doherty as gross misconduct. The procedure adopted by the respondent in giving the appellant a summary dismissal is now being challenged.
As I have recounted earlier on in this judgment, the immediate reaction of the respondent on getting wind of the situation was to convene an extra-ordinary meeting of the Board. At the meeting held on the 22nd of April 2002, the Chairman informed the Board that the purpose of the meeting was to assess the situation on the NITEL’s acquisition by International Investors (London) Limited (IILL) and the facility granted to Investors Group Limited (IGL) by the bank. He called on the Managing Director/Chief Executive to brief the Board. The appellant briefed the Board about the position of the loan and the effort made by the Bank to recover the loan was discuss extensively. At the conclusion of the meeting, the appellant was issued the letter of suspension Exhibit G dated 22/4/2002 referred to earlier on in this judgment. The appellant was called upon for his comment after being served the letter. His reaction was to express surprise at the decision of the Board and believed that the action was unfair and unjust to him.

…………………….DD…………………….

The next stage was that the Board convened another extraordinary meeting on the 13th of June 2002. Where the issue of the revocation of his appointment was decided, and same was conveyed to him by a letter Exhibit dated 13/6/2002. The contents of this letter already form part of this judgment.
Article 105 of the Article of Association of the respondent Exhibit D stipulates that –
Article 105
‘The Directors may from time to time appoint one or more person or persons of proven relevant ability and experience to the offices of Managing Director who is to be Chief Executive of the Company and Executive Directors for such period and on such terms as they think fit, and subject to the terms of any agreement entered into any particular case and may revoke such appointment but without prejudice to any claim he may have for breach of contract.” –
Article 103 of the Article of Association deals with Removal of Directors which states that
“1.1 In addition to and without prejudice to the provisions of the Decree the company may by ordinary resolution remove any Director before the expiration of his period of office, and may in like manner appoint another in his place. Any person so appointed shall be subject to retirement at the same time as if he had become a Director on the day on which the Director in whose place he is appointed was last elected a Director, but shall without prejudice to any claim the Director may have for damages for any breach of contract of service between him and the company.”
In the Interpretation section of the Articles of Association vide page 698 – 699 of the Record Article 2 (1)(L). The Decree means the Companies and Allied Matters Decree or any statutory re-enactment or modification thereof for the time being in force.
It is therefore statutory that in the removal of any Director of the bank going by Article 103 of the Articles of Association, it must be done in accordance with the relevant provision of the Company and Allied Matters Act. The contention of the appellant is that in the revocation of his appointment the relevant provisions of CAMA were not complied with. First and foremost, he was not served with Notice of the meeting. The appellant hinged his contention on Section 265 (1) of CAMA.
Section 266 of CAMA stipulates inter alia that-
(1) Every director shall be entitled to receive notice of the directors meetings unless he is, disqualified by any reason under the Act from continuing with the office of director.
(2) There shall be given 14 days notice in writing to all directors entitled to receive notice unless otherwise provided in the articles.

…………………….FF…………………….

(3) Failure to give notice in accordance with Subsection 2 of this section shall invalidate the meeting.
As at the time the Board of the respondent convened the meeting of 13/6/2002 – when the decision to dismiss him was taken, the appellant was on suspension imposed on him by the Board as per the letter of suspension dated 22/4/02. The Decree (CAMA) is silent on the issue of suspension of a director serving as a disqualification to him to be served with notice to attend a meeting of the Board as a Director.
Suspension is usually a prelude to dismissal from an employment. It is a state of affairs which exists while there is a contract in force between the employer and the employee, but while there is neither work being done in pursuance of it nor remuneration being paid. Suspension is neither a termination of the contract of employment nor a dismissal of the employee. It operates to suspend the contract rather than terminate the contractual obligations of the parties to each other.
WallWork v. Fielding (1922) 2 KB pg. 46.
Bird v. British Celanese Ltd. (1945) 1 KB pg. 336.
University of Calabar v. Esienga (1999) 4 NWLR pt. 502 pg. 719.
It was however held in the case of Amadiume v. Ibok (2006) 6 NWL.R pt. 975 pg. 163 that the suspension of a servant or an employee when necessary cannot amount to a breach of the servant or employee’s fundamental or common law rights. There is equally no provision for it under the Article of Association of the respondent as it relates to its Directors. It appears that under the Common Law, a term entitling the employer to suspend the employment of an employee will not be implied into the contract of employment. It is usually a step taken in the interest of the employees business.
See M. R. Freedland in the book Contract of Employment, Clarendon Press 1976 at page 77
What then is the procedure for removal of a Director under CAMA which is relevant to the case in hand.
Section 262 of Companies and Allied Matters Act Cap Laws of the Federation 1990 reveals as follows:-
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 article or in any agreement
(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 forth with 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.
There is no power to remove a director under CAMA which shall be taken as derogating from any power to remove a director which may exist apart from this section.
The power to remove a Director under the Article of Association of the respondent is made subject to the provisions of CAMA. Obviously the foregoing procedure from printed Record was not complied with in revoking the employment of the appellant by the Board of Directors of the respondent. CAMA has removed the appellant though a full time employee of the respondent at the time of his dismissed from the sanction in the provision of the Employee Code summary dismissal from the service of the bank for misconduct. Vide page 562 at page 587 of the Record.
With fuller reasons given in the leading judgment of my learned brother, I also hold that the appeal succeeds. I abide by the consequential order including awarded as to costs.

Appearances

AND

Judgment

PETER OYINKENIMIEMI AFFEN, J.C.A. (Delivering the Leading Judgment) : Introduction The High Court of Lagos State (coram: Y. O.

Idowu, J.) (“the lower Court”) declared the Respondent herein, Qualitem Pharmacy Ltd (“Qualitem” or “Respondent”] “the rightful owner of all that property located and situate at No. 102A Island Way, Dolphin Estate, Ikoyi, Lagos” and restrained the Appellant, Nigeria Deposit Insurance Corporation (“NDIC” or “Appellant”) and/or its agents, privies or anyone claiming through or under it from foreclosing, selling or trespassing on the property in a considered judgment delivered on 16/9/11 in Suit No.

LD/507/2004: Qualitem Pharmacy Limited v Nigeria Deposit Insurance Corporation, which lies at Pp. 388 – 410 of the records. Dissatisfied with the judgment, NDIC lodged the present appeal. The Amended Notice of Appeal filed on 4/10/18 relates back to the original notice of appeal filed on 9/12/16 with the leave of this Court. Briefs of arguments were filed and duly exchanged. The Appellant’s Brief filed on 18/9/18 was deemed properly filed on 20/9/18; the Respondent’s Brief was filed on 9/10/18, and the Appellant’s Reply Brief was filed on 29/10/18. This appeal was heard on 7/2/22.

Factual background The facts undergirding this appeal are straightforward and by no means complex or convoluted. Sometime in 2001, the defunct Metropolitan Bank Limited (“the Bank”) granted Qualitem a loan facility of N7.5m to finance the acquisition of a developed property situate at No. 102A Island Way, Dolphin Estate, Ikoyi, Lagos. The understanding was that the bank would have a lien on the title deeds until the principal sum and accrued interest thereon were liquidated.

Qualitem alleged that it had fully repaid the loan but the Bank held on to the title deeds and sought to foreclose on the property.

It was further alleged that the Bank opened a letter of credit in the sum N22,174,730.84 on 19/7/02 at the instance of Qualitem in favour of a named beneficiary in France at the exchange rate of N117 per US $1 (as agreed) prior to the introduction of the Dutch Auction System Central Bank of Nigeria (CBN) on 22/7/02 and the attendant surge in exchange rate from N117/1$ to N137 per US $1, but the Bank mulcted Qualitem with “a quantum of unwarranted interest” in excess of N10m even though the Dutch Auction System was not retroactive and could not nullify a concluded transaction.

Qualitem consequently initiated the suit that generated this appeal by a writ of summons issued out of the Registry of the lower Court on 4/3/04 claiming declaratory, monetary and injunctive reliefs against the bank (as endorsed in the amended statement of claim dated 8/12/04 copied at Pp. 83 – 86 of the records) as follows: 1. A declaration that the Claimant is the rightful owner and is entitled to all the property located and situated at No. 102A Island way Dolphin Estate, Ikoyi, Lagos. 2.

A declaration that the Dutch auction system introduced by Central Bank of Nigeria on the 22nd of July, 2002 is not retroactive. 3. An order declaring null and void all sum, interest accrued to the account of the Claimant as a result of illegal, unjust and excessive charges by the Defendant. 4. An order mandating the Defendant to repay the Claimant the sum of N10,016,985.53 (Ten Million, Sixteen Thousand Nine Hundred and Eighty-Five Naira Fifty-Three Kobo) illegally deducted from the Claimant’s account. 5.

An order mandating the Defendant to pay to the Claimant penalty on the excess charges at the CBN MRR up to the dare of judgment. 6. An order of perpetual injunction restraining the Defendant, its agents, privies or anyone claiming through or under it from foreclosing, selling or trespassing on the property situated at 102A Island Way, Dolphin Estate Ikoyi, Lagos. 7. Damages for breach of trust. The parties joined issues on the merits.

The Bank conceded that the Dutch Auction System did not have retroactive effect, but denied that there was mutual agreement on all terms and conditions, particularly in relation to the exchange rate, and insisted that the transaction was not effected on 19/7/02 as alleged but on 22/7/02. The Bank equally denied that the loan was fully repaid as alleged or at all, and subjoined a counter-claim against Qualitem.

During the pendency of the action, the Bank’s licence was revoked by the Central Bank of Nigeria along with 13 other banks for inability to “re-capitalize to the minimum capital requirement of N25 Billion (Twenty Five Billion Naira) and had become insolvent with negative shareholders’ fund and have not been acquired by other banks adjudged healthy thereby failing to comply with the obligations imposed on by the Banks and Other Financial Institutions Act of 1991 and the Central Bank of Nigeria Act 1991, as amended”.

The revocation was published in Official Gazette No. 3 Vol. 93 of 16/1/06, whereupon Qualitem applied ex parte to substitute the Bank with NDIC, which application was granted by the lower Court on 24/4/07 (see p. 391 of the records). NDIC did not challenge the order of substitution or otherwise seek to set it aside.

Rather, it proceeded to file a further amended statement of defence and counter-claim dated 6/10/10 (which lies at pp. 356 – 359 of the Records) wherein it counter-claimed against Qualitem as follows: (a) The sum of N24,531,343.94 being the outstanding balance of the facilities granted to the Claimant as at September 30, 2005 (b) Interest on the sum at the rate of 21% per annum from the 1st day of October, 2005 till judgment and thereafter at the same rate till the debt is fully liquidated. (c) Cost of the action.

(d) An order authorizing the Defendant/Counter-claimant to proceed against and sell the property at No. 102A Island Way, Dolphin Estate, Ikoyi, Lagos. At the close of plenary trial (whereat two witnesses testified on behalf of Qualitem and NDIC fielded a sole witness), the lower Court delivered final judgment on 16/9/11 as aforesaid, granting the main claim in part and dismissing the counter-claim whole and entire.

At p. 410 of the records, the learned trial judge summed up thus: “I hereby declare that the Claimant is the rightful owner and is entitled to all that property located and situate at 102A Island Way, Dolphin Estate, Ikoyi, Lagos. I hereby make an order of perpetual injunction restraining the defendant its agent, privies or anyone claiming through or under it from foreclosing, selling or trespassing on the property situated at 102A Island Way, Dolphin Estate, lkoyi, Lagos. All other prayers fail and are hereby refused.

The Defendant’s counter-claim for lack of substantive and credible proof hereby fails.” Issues for determination From the five issues raised in the Amended Notice of Appeal, the Appellant distilled two issues for determination (which were adopted by the Respondent without modification) as follows: 1. Whether having regards (sic) to the circumstances of this case, it is safe to conclude that proper parties were before the Court below such as to clothe it with the garb of jurisdiction to warrant a hearing and determination of the case as it was presently constituted? 2.

Whether from the totality of the pleadings and evidence led, there is a cause of action against the Appellant such that it would be personally liable? Appellant’s submission The Appellant cited a litany of cases, including STATE v ONAGORUWA (1992) 23 NSCC (PT 1) 161 at 177, UMANAH v OBONG VICTOR ATTAH [2006] 17 NWLR (PT. 1009) 503 at 525, NWOSU v IMO STATE ENVIRONMENTAL SANITATION AUTHORITY [2004] 20 WRN 95 at 142 – 143, SOCIETE BICS A. COMPAGNIEMOULAGES & ANOR v CHARZIN IND.

LTD (2003-2007) 5 I.P.L.R 203 at 226, NASIR v KANO STATE CIVIL SERVICE COMMISSION [2010] 6 NWLR (PT 1190) 253 at 276 on the absolute priority and decisive effect of jurisdiction in judicial proceedings and noted that presence of necessary parties and existence of cause of action play a major role in the scheme of assumption of jurisdiction by a Court of law, citing MIL.

ADMIN., AKWA IBOM STATE v OBONG [2001] 1 NWLR (PT 694) 214 (CA) in support of the proposition that a plaintiff cannot sue a defendant against whom he has no cause of action, and that a Court is without jurisdiction to entertain a claim which discloses no reasonable cause of action vide ADETONA v EDET [2001] 3 NWLR (PT 699) 186 and ALALADE v MOROHUNDIYA [2002] 16 NWLR (PT 792) 81 (CA).

The Appellant called in aid the cases of GREEN v GREEN [1987] 3 NWLR (PT 61) 480, CHIEF OF ARMY STAFF v LAWAL [2012] 10 NWLR (PT 1307) 62 (CA) and LAGOS STATE BULK PURCHASE CORPORATION v PURIFICATION TECHNIQUE (NIG) LTD [2013] 7 NWLR (PT 1352) 82 at 109 (on the categorization of parties and its dynamics in a civil suit) and submitted that NDIC had no involvement whatsoever in the events leading to the cause of action and cannot be a necessary or proper party before the lower Court, insisting that the banking licence of the closed bank had neither been revoked nor had NDIC become the liquidator when the cause of action accrued, that the Appellant’s role as liquidator is akin to that of a trustee or umpire between debtors and creditors of the closed bank, which depicts a non-partisan role with no personal interest of its own to serve or protect and that interest resided in the closed bank at all material times and it must be the party in the suit, not otherwise.

Placing reliance on S. 425(1) (a) and (b) of the Companies and Allied Matters Act, 1990 (CAMA) (which was in force at all material times) and the cases of CO-OPERATIVE & COMMERCE BANK (NIG) PLC v O’SILVAWAX INTERNATIONAL LTD [1999] 7 NWLR (PT. 609) 97 and RE AMOLEGBE [2014] 8 NWLR (PT. 1408) 76, the Appellant further contended that revocation of banking license does not render a failed bank legally dead or non-existent, insisting that the bank remains a legal entity with power and capacity to sue and be sued; that as liquidator of a closed bank, NDIC may be sued as a nominal party, but in doing so, the mandatory requirement of S. 422 (7) CAMA is that the capacity in which NDIC is sued must be indicated on the face of the pleadings, which was not done in the instant case, citing AKPAN v GOVERNMENT OF AKWA IBOM STATE [2010] 2 NWLR (PT 1178) 338 on the Court’s duty to pronounce on the capacity in which a party sues or is sued before dealing with whether it has jurisdiction to entertain or hear a matter.

On issue no. 2, the Appellant referred to the definition of cause of action in Black’s Law Dictionary (9th ed.) and submitted that a right of action arises only when a cause of action exists, citing HUMBE v ATTORNEY GENERAL BENUE STATE [2000] 3 NWLR (PT 649) 419, DANTATA v MOHAMMED [2000] 7 NWLR (PT 664) SC 176 at 181 – 182;

that where NDIC is joined as a party in a matter involving a closed bank in liquidation, which arose out of banker-customer relationship as in the instant case, it is imperative for the Court to determine whether the claimant has established a cause of action against NDIC as distinct from the closed bank, insisting that a liquidator is separate and distinct from the legal entity being liquidated and their respective assets and liabilities are not to be co-mingled;

that under and by virtue S. 55 (1) of the NDIC Act of 2006, no direct cause of action is available against NDIC except where there is a clear allegation of negligence, fraud or other wrongdoing committed in the exercise of power conferred on it, and that the fact of being appointed as liquidator without more does not generate any cause of action against NDIC merely because the Respondent has a valid cause of action against the bank being liquidated.

The Court was urged to allow the appeal and set aside the judgment of the lower Court.

Respondent’s submission The Respondent, on its part, contended that the order dated 24/4/07 by which the lower Court substituted NDIC for the defunct Bank was not appealed against or otherwise set aside, and NDIC participated fully in the proceedings, citing AKERE v GOVERNOR OF OYO STATE [2012] 12 NWLR (PT. 1314) 340 at 269, 282 – 283 and ANYANWU v OGUNEWE [2014] 8 NWLR (PT. 1410) 437 at 470 on the proposition that a decision on any point of law or fact not appealed against is deemed to have been conceded by the party against whom it was decided and remains valid and binding on all the parties;

that this case is about the rights of the parties over mortgaged property situate at Plot 102A Island Way Dolphin Estate Ikoyi, Lagos which may be sold upon the mortgagor’s default to repay the facility, thus the Appellant is a proper and necessary party insofar as winding up proceedings at the Federal High Court had been carried out, calling in aid NDIC v UBN PLC [2015] 12 NWLR (PT. 1473) 246 at 293 – 294, that non-inclusion of the phrase “Liquidator of Metropolitan Bank Limited” in the designation of the Appellant as enjoined by S. 422(7) CAMA is a mere procedural irregularity that should not affect the competence or jurisdiction of the lower Court to entertain the matter before it as no injustice has been occasioned thereby;

that the Appellant acquiesced in the irregularity and misled the Respondent by not only referring to Metropolitan Bank Limited as “defunct” in its letter dated 26/11/08 (at p. 334 of the records) but also participated fully at the hearing only to wake up 7 years after final judgment was entered to peddle technicalities knowing full well that the Bank is now effectively defunct (having been dissolved on the petition of the Appellant) and can no longer sue or be sued in its own name.

The case of NDAYAKO v DANTORO [2004] 13 NWLR (PT. 889) 187 at 219 –per Edozie JSC was cited in support of the proposition that a defendant who actively participated in an action commenced by an irregular procedure cannot later be heard to complain and take advantage of the irregularity.

The Respondent insisted that by Order 13 Rule 16(1) of the High Court of Lagos State Civil Procedure Rules 2004, no proceedings shall be defeated by reason of misjoinder or non-joinder of parties and the Court may deal with the matter in controversy so far as regards the rights and interest of the parties actually before it, citing F.G.P. LTD v DURU [2017] 14 NWLR (PT. 1586) 483 at 517 – 518, CROSS RIVER STATE NEWSPAPER CORPORATION v ONI [1995] 1 NWLR (PT. 371) 270 at 291 – 292 and F.U.T., YOLA v A.S.U.U. [2013] 1 NWLR (PT. 1335) 249 at 283.

The Respondent maintained that the Appellant has not complained of any injustice or miscarriage of justice suffered by reason of failure to indicate that it was being sued as the Liquidator of Metropolitan Bank Limited to justify setting aside the judgment of the trial Court. On issue no. 2, the Respondent insisted that paragraphs 4, 5, 6, 7, 20 and 21 of the amended statement of claim dated 8/12/04 and the reliefs sought amply show a reasonable cause of action against the defunct Metropolitan Bank Limited in respect of the property situate at No. 102A Island Way, Dolphin Estate, Ikoyi, Lagos.

The cases of EGBE v ADEFARASIN (NO. 2) [1987] 1 NWLR (PT. 47) 1 and BELLO v A-G, OYO STATE [1986] 5 NWLR (PT. 45) 828 relied upon.

Qualitem pointed out that it is not in contention that NDIC was the liquidator of the defunct Metropolitan Bank Limited whose assets – including 102A Island Way, Dolphin Estate, Ikoyi, Lagos – are likely to be vested in the Appellant, by virtue of S. 424 CAMA and that S. 425(1)(a) CAMA and the decision of this Court in NDIC v UBN PLC supra clearly indicate that NDIC can bring or defend actions relating to property of a bank that has been wound up as in the instant case.

The Court was urged to hold that a combined reading of the amended statement of claim, Ss. 40 and 41 of NDIC Act 2006, and Ss. 424 and 425 CAMA point compellingly to a cause of action against the NDIC.

Appellant’s reply Replicando, the Appellant (NDIC) submitted that the issue of proper parties to an action is a jurisdictional issue that can be raised on appeal even for the first time at the Supreme Court, and not appealing the order of substitution is of no moment, that the instant appeal is not hinged on misjoinder or non-joinder of parties, but on the Appellant being wrongly subrogated as replacement for a distinct legal entity, which is wrong in law and adversely affects the jurisdiction of the lower Court, insisting that existence of proper parties (whether original or substituted) is a condition precedent to the competence of a Court, placing reliance on GOODWILL TRUST INVESTMENT LTD v WITT & BUSH LTD [2011] All FWLR (PT 576) 517 at 542 – 543 and OBIUWEUBI v CBN [2011] 7 NWLR (PT 1247) at page 465.

The Appellant maintained that it is not a proper party and the Court below lacked jurisdiction to entertain the suit as constituted, which is a fatal defect; and not appealing the order of substitution does not translate to waiver of jurisdiction, citing OYENIRAN & ORS v EGBETOLA & ANOR (1997) LPELR- 2876(SC) at 33-34, and NICOTES SERVICES LTD v OJI LEKWUWA (2011) All FWLR (PT 554) 163 at 176.

The Appellant argued that NDIC v UBN PLC supra supports its case rather than that of the Respondent as the panel of learned Justices of this Court in that case were on the same page in holding that NDIC is a separate and distinct entity from Fortune International Bank Plc (In Liquidation). The Appellant reiterated that save for actions founded on negligence or fraud, S. 55 (1) of the NDIC Act 2006 protects it against suits in its own name for direct causes of action against banks in liquidation.

Resolution of appeal The facts undergirding this appeal as well as the two issues nominated by the Appellant and adopted by the Respondent are set out hereinbefore. Issue no. 1 interrogates ‘whether proper parties were before the lower Court so as to clothe it with jurisdiction to warrant a hearing and determination of the case as constituted’, whilst issue no. 2 has to do with ‘whether any cause of action is disclosed against the Appellant (as liquidator)’. As these two issues are intertwined and implicate the jurisdiction of the lower Court, I propose to consider them together.

The lower Court granted an order substituting NDIC for the defunct Metropolitan Bank Limited on 24/4/07 upon the ex parte application of Qualitem, but there is no indication on the face of the proceedings that NDIC was substituted for the defunct bank in its capacity as liquidator. NDIC did not appeal the order of substitution or otherwise seek to have set it aside. Quite the contrary, NDIC participated actively in the proceedings. Not only did it defend the main claim, it also prosecuted a counter-claim against Qualitem, albeit unsuccessfully.

Citing the dictum of Edozie JSC in NDAYAKO v DANTORO supra, it is contended on behalf of Qualitem that having actively participated in the proceedings before the lower Court, NDIC cannot now be heard to complain that the action was commenced by an irregular procedure and take advantage of the irregularity. Without doubt, this is a formidable argument.

But the relevant enquiry in this appeal is whether the proceedings before the lower Court was plagued by a mere irregularity or something much more fundamental that goes to the roots of the competence of the action and ex ipso facto the jurisdiction of the lower to take cognisance of the matter upon the revocation of the bank’s licence. Now, the legal status of NDIC in relation to a failed or failing bank is that of a statutory liquidator.

The Nigeria Deposit Insurance Corporation Act 2006 (“NDIC Act”) provides in S. 40(1) thereof that: “Whenever the licence of an insured institution is revoked by CBN, the corporation shall act as liquidator of such failed insured institution with powers conferred on a liquidator under the Companies and Allied Matters Act and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for purposes of that Act.” What this implies is that NDIC is deemed by operation of law to have been automatically appointed as “provisional liquidator” by the Federal High Court upon the revocation of the licence of an insured institution, such as the defunct Metropolitan Bank Limited.

The averments in the amended statement of claim (as contained in the records) reveal that Qualitem’s cause/right of action against the defunct bank stemmed from the pre-existing banker-customer relationship between them, which accrued long before the Bank’s licence was revoked and NDIC assumed the role of a provisional liquidator. Thus, there is no direct cause of action against NDIC whose role in the scheme of liquidation of an insured institution is not at large but falls within well-defined parameters.

It is hardly necessary to state that “[a] statutory body or corporation created by or under a statute can only act within the four walls of the statute creating it or other enabling laws. It cannot do anything at all unless authorised expressly or impliedly by the statute or instrument defining its powers. It has no power or authority to act outside the statute. If it so acts, the act will be held to be ultra vires and declared null and void and of no legal effect”: OLANIYAN v UNIVERSITY OF LAGOS [1985] 2 NWLR (PT 9) 599 at 623.

Quite unlike a natural human person for whom all acts are permissible unless specifically prohibited, the converse is the case for a statutory body such as NDIC which is an artificial person or entity: all acts are prohibited unless specifically permitted. See MAJOR GENERAL KAYODE ONI & 4 ORS v GOVERNOR OF EKITI STATE & ANOR (2019) LPELR-46413(SC) 1 at 29 –per Augie, JSC.

The function of NDIC when adorning the garb of liquidator is three-fold: (i) realize the assets of the failed insured institution; (ii) enforce the individual liability of the shareholders and directors thereof; and (iii) wind up the affairs of such failed institution as herein otherwise provided [see S. 41(2) of the NDIC Act 2006], which is consistent with the broad duties and powers of a liquidator under insolvency law and practice as outlined in Palmers Company Law, 23rd ed (Vol. 1), save that only insured institutions whose licences are revoked by the CBN fall within remit of NDIC as liquidator.

The point to underscore is that the actions or steps that can validly be taken by or against NDIC in relation to an insured institution in liquidation are heavily regulated by law, and an impressive array of statutory provisions exert a controlling, if not overbearing, influence in especially legal proceedings.

In this regard, S. 41 of the Banks and Other Financial Institutions Act, Cap B3, Laws of the Federation 2004, (“BOFIA”) provides peremptorily that: “41(1) Notwithstanding anything to the contrary contained in any law or enactment, no suit shall be instituted against a bank whose control has been assumed by the Corporation. (2) If any such proceeding is instituted in any Court or Tribunal against the bank, it shall abate, cease or be discontinued without further assurance other than this Act”.

Similarly, S. 417 CAMA provides that: “If a winding-up order is made or a provisional liquidator is appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of Court given or imposed on such terms as the Court may impose”; whilst S. 425(1)(a) CAMA is to the effect that: “The liquidator in a winding-up by the Court shall have power, with the sanction either of the Court or of the Committee of Inspection, to bring or defend any action or other legal proceeding in the name and on behalf of the company”.

There is also S. 424 CAMA which provides that: “Where a company is being wound up by the Court, the Court may on the application of the liquidator by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator by his official name, and thereupon, but subject to the requirements or registration under any particular enactment, the property to which the order relates shall vest accordingly; and the liquidator may, after giving such indemnity if any, as the Court may direct, bring or defend in his official name any action or other legal proceeding which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding-up the company and recovering its property”.

The above statutory provisions are mandatory and their far-reaching, if not devastating, effect on the competence of the suit that generated the instant appeal and/or the jurisdiction of the lower Court in respect thereof is palpable. By S. 41 BOFIA, the suit initiated by Qualitem against the defunct Metropolitan Bank Limited ‘abated, ceased or was discontinued without further assurance’ the very moment the Bank’s licence was revoked on 16/1/06 and NDIC deemed to have been appointed by the Federal High Court as provisional liquidator under and by virtue of S. 40 of the NDIC Act 2006.

And even if it is assumed arguendo that the suit did not abate, cease or discontinue, the lower Court was still not at liberty to substitute NDIC for the defunct Bank in the manner it did. This is so because under and by virtue of S. 425 CAMA, the consent of the Federal High Court or Committee of Inspection was required to enable NDIC bring or defend any action or other legal proceedings in the name and on behalf of the Bank in liquidation, but not in its own name (as happened in the instant case).

The law is now well settled that until a company is formally wound up, it remains a legal entity with capacity to sue or be sued notwithstanding that it is under liquidation. See OREDOLA OKEYA TRADING CO. v BANK OF CREDIT AND COMMERCE INTERNATIONAL, IN RE AMOLEGBE (2014) LPELR-22011(SC), [2014] 8 NWLR (PT. 1408) 76, C. C. B. LTD v O’SILVAWAX INT’L LTD & ORS [1999] 7 NWLR (PT. 607) 97 and NDIC v BALONWU (2017) LPELR 41963(CA). In the instant case, NDIC was simply substituted as a successor or privy to the bank, which it is not.

Aside from the fact that there is nothing to show that the sanction of either the Federal High Court or the Committee of Inspection was sought and obtained before the order of substitution was made, there is no indication on the face of the proceedings that NDIC was substituted for the defunct bank in its capacity as liquidator. The point has already been made that under and by virtue of S. 425(1) CAMA, a liquidator can only “bring or defend any action or other legal proceeding in the name and on behalf of the company”.

The Respondent has invited this Court to treat the failure to indicate the capacity in which NDIC was substituted as a mere irregularity but S. 425(1) CAMA constrain me to decline the invitation. Thus, even if NDIC (as liquidator) could validly defend the action as constituted (and I have already held to the contrary), that could only have been done, not in its own name, but in the name of the defunct bank which, notwithstanding the revocation of its banking licence, was not dead in the eyes of the law.

The Supreme grappled with an analogous scenario in OREDOLA OKEYA TRADING CO v BANK OF CREDIT AND COMMERCE INTERNATIONAL, IN RE AMOLEGBE supra. His Lordship, I. T.

Muhammad JSC (now CJN) held thus at pp. 96 -97: “… Another thorny issue in the Application is the attempt by the Applicant to enrope the NDIC to subrogate the BCCI … Section 40 of the NDIC Act makes provision for the powers of NDIC to act as liquidator to failed insured institutions … Section 425 of the CAMA provides inter alia for the following – Section 425 (1) The liquidator in a winding up by the Court shall have power with the sanction either of the Court or of the committee of inspection, to – (a) Bring or defend any action or other legal proceeding in the name and on behalf of the company.” By looking soberly at the provision of Section 425(1) (a)set out above, one may ask: whether the NDIC as provisional liquidator of the 1st Respondent can bring or defend any action or other legal proceeding in the name and on behalf of the 1st Respondent.

It is clear from the same provision that a liquidator in a winding up by the Court (which the NDIC is by law deemed to have been so appointed) can bring or defend any action or other legal proceedings in the name and on behalf of the Respondent (to subrogate AIB) subject only to the condition i.e. sanction of the Court or committee of inspection to conduct such legal proceedings. In other words, where no sanction of either of the Court or of the committee of inspection is sought and obtained by the liquidator, no legal action or proceedings can be brought or defended by the liquidator.

The Applicant herein did not produce any evidence to show that the provisional liquidator has obtained such sanction of the Court or of the committee of inspection to bring or defend any action or other legal proceedings in the name and on behalf of the 1st Respondent.

There is therefore no way the Applicant can enrope NDIC as provisional liquidator to conduct any legal proceedings whether for or against the 1st Respondent.” Not dissimilarly, it was held in NDIC v UNION BANK OF NIGERIA PLC & ANOR (2015) LPELR-24316(CA), [2015] All FWLR (PT 783) 1790 at 1831 that NDIC as provisional liquidator of a bank whose licence is revoked is answerable to the Federal High Court and cannot step into its shoes without authorisation: NDIC does not derive its power to institute or defend proceedings in the name or on behalf of a failed or failing bank from the bank directly but only through the Court and to cloak it with the mantle of a privy (whose actions/activities would be deemed to be that of the bank) would be to inordinately stretch the relevant statutory provisions beyond elastic limit.

See also NDIC v MOHAMMED (2018) LPELR-44744 (CA) where this Court (per Adefope-Okojie, JCA) held that the trial Court had no jurisdiction to substitute the name of NDIC for a bank in liquidation without any evidence that leave was sought and obtained from the Federal High Court [or Committee of Inspection] to defend the matter as enjoined by S. 425 CAMA, and that the suit ought not to have been maintained in the name of NDIC as defendant to the action, but in the name of the closed bank. I have already set out the functions of NDIC as liquidator as provided in S. 41(2) of the NDIC Act.

There is no gainsaying that NDIC was not validly substituted for the defunct Metropolitan Bank Limited at the instance of the Respondent in the case at hand. The jurisdiction of the lower Court so to do was gravely impaired when it continued with the proceedings and substituted NDIC for the defunct Bank in respect of a dispute arising from banker-customer relationship as though NDIC were the privy or successor of the bank, which it is not.

Upon the order of substitution, the necessary or proper party was no longer before the lower Court, even as no veritable cause of action was disclosed against NDIC which is not an extension of the defunct bank. The lower Court had no jurisdiction to substitute NDIC in place of the defunct Bank, and the fact that NDIC participated in the proceedings makes no difference whatsoever. It is a notorious proposition for which citation of authorities is unnecessary that jurisdiction cannot be donated by consent or compromise or acquiescence where it is lacking as in the instant case.

Contrary to the Respondent’s submission, this is not an instance of misjoinder or non-joinder of parties, but one in which the Appellant was wrongly subrogated for a distinct legal entity. As held in OREDOLA OKEYA TRADING CO v BANK OF CREDIT AND COMMERCE INTERNATIONAL, IN RE AMOLEGBE supra, NDIC cannot be ‘enroped’ as provisional liquidator to conduct any legal proceedings.

This being so, a fundamental vice that impaired the jurisdiction of the lower Court to proceed with the matter and enter final judgment as it did reared its ugly head in the proceedings [see MADUKOLU v NKEMDILIM (1962) 2 SCNLR 341], and I entertain no reluctance whatsoever in resolving the two issues for determination in favour of the Appellant against the Respondent. This appeal ought to be allowed. I allow it. The proceedings before the lower Court in their entirety, inclusive of the judgment delivered on 16/9/11, constitute a nullity liable to be set aside. I so order. Suit No.

LD/507/2004 is struck out for being incompetent. There shall be no order as to costs.

OBIETONBARA OWUPELE DANIEL-KALIO, J.C.A.: I have read the judgment of my learned, BROTHER PETER OYINKENIMIEMI AFFEN, JCA and I agree with his reasoning and conclusion. The importance of jurisdiction of a Court to entertain any matter before it, cannot be over-emphasized, for as Kayode Eso, JSC once stated, without jurisdiction, the “laborers” that is, the litigants, counsel in the matter and the Court itself, labor in vain. I too find merit in the appeal and allow it.

MUHAMMAD IBRAHIM SIRAJO, J.C.A.: I agree with the lead judgment prepared by my learned brother, PETER OYINKENIMIEMI AFFEN, JCA, with nothing useful to add. I also allow the appeal and set aside the proceedings and judgment of the lower Court in Suit No. LD/507/2004 for being a nullity. I abide by the order striking out the suit for incompetence as well as the order as to costs.

Judgment

BATURE ISAH GAFAI, J.C.A.(Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of the Federal Capital Territory Abuja delivered on the 13th of September, 2019 in Suit No. FCT/HC/CV/1854/2019 in which an order for recovery of the sum of N285,053,354 from the Appellants was entered by the Court in favour of the Respondent.

As gleaned from the Record of Appeal, the Respondent had approached the lower Court by a suit under the Undefended List disclosing altogether but stated in brief here that sometime in December 2016 he placed the sum of N200,600,000.00 (Two Hundred Million, Six Hundred Thousand Naira) in a fixed deposit account with the 1st Appellant a microfinance bank for a period of 180 days at an agreed interest rate of 20% which however the 1st Appellant reneged entirely by refusing to pay the Respondent both the deposit and interest sum from the maturity date, despite several failed assurances by the 1st Appellant till date.

The Appellants responded to the suit by causing to be filed a Notice of Conditional Appearance, a Notice of Preliminary Objection and a Notice of Intention to Defend the suit.

In its judgment, the lower Court considered the arguments of the parties on the Appellants’ Preliminary Objection which was premised on the ground that the 2nd to 8th Appellants being Directors of the 1st Appellant cannot in law be personally liable for the 1st Appellant’s contract with the Respondent which therefore renders the suit as one with no cognizable cause of action against them, the effect of which is that the lower Court lacked jurisdiction to entertain the suit against them. The lower Court found no merit in the Preliminary Objection and thus discountenanced same.

Proceeding into main suit, it further found the Appellants’ facts in the affidavit in support of their Notice of Intention to Defend the suit as, in its words, “…incoherent, evasive, scandalous and thoroughly unconscionable…”.

In consequence, the lower Court discountenanced the Appellants’ Notice of Intention to Defend the suit, considered the Respondent’s suit on its merit and entered judgment in part only against the Appellants in the sum of N285,053,345.00 (Two Hundred and Eighty-Five Million, Fifty-Three Thousand, Three Hundred and Forty-Five Naira) and a consequential order on the Respondent to prepare to prove his claim for interest for the period covering February 2018 to April 30, 2019 which the Respondent claimed to have accrued in the sum of N66,572,447.00 (Sixty Six Million, Five Hundred and Seventy-Two Thousand, Four Hundred and Forty-Seven Naira).

Dissatisfied with the judgment, the Appellants lodged this Appeal vide a Notice of Appeal filed on the 25th of October, 2019 which was however by leave of this Court granted on the 20th of October, 2021 amended by substituting the name of the Respondent Mr. Idongesit Okon Nkanga (who passed away in the course of this appeal) with the name of the deceased’s wife “MRS MOSUNSOLA OLUWAFUNMILOLA IDONGESIT OKON NKANGA” as the Respondent.

The Amended Notice of Appeal was filed on the 8th of November, 2021 in which the Appellant complained against the Judgment on four grounds as follows: “GROUND 1 The Learned trial Judge erred in law when he lifted the Veil of Incorporation of the 1st Respondent on the grounds that its Directors had been fraudulent, and thereby occasioned a grave miscarriage of justice.

GROUND 2 The learned trial Judge erred in law when he dismissed the Preliminary Objection dated 11th June, 2019 brought by the Appellants as Defendants/Applicants which objection was premised on the ground that the 2nd – 8th Appellants were not necessary parties to the action, which occasioned a grave miscarriage of justice. GROUND 3 The learned trial Judge erred in law when it entered judgment for the Respondent in the sum of N285,053,345.00 against the Appellants jointly and severally.

GROUND 4 The judgment entered by the trial Court was given against the weight of evidence.” The respective particulars enumerated under these grounds are noted. See pages 79 – 83 of the Additional Record of Appeal. It is from these grounds that the Appellants’ learned counsel Ikem G. Ogugua Esq. formulated two issues for determination as shown in their Brief of Argument filed on the 14th of January 2022 on: “a. Whether there was allegation of fraud submitted before the trial Court by the Respondent. [Distilled from Ground 1 of the Notice and Grounds of Appeal] b.

Whether the 2nd – 8th Appellants who are agents of the 1st Appellant are necessary party to the suit and Jointly liable to the Respondent. [Distilled from Grounds 2 and 3 of the Grounds and Notice of Appeal]” For the Respondent, her learned counsel Isaac Okpanachi Esq., did not find a need to formulate any other in the Respondent’s brief and thus adopted and argued on the Appellants’ issues too in line with the Respondent’s case.

Traversing the Appellants’ arguments under their first issue as canvassed at pages 3 to 11 of their brief, it is, to say the least, surprising that their learned counsel did not deem it necessary or even desirable to refer to any particular page or portion of the lower Court’s judgment containing specific finding or decision which the Appellants seek to challenge. It is even more disturbing as the Judgment is fairly lengthy containing many related findings and holdings on or in relation to the Appellants’ first issue for determination (supra).

It is thus difficult to discern precisely or differentiate which among those findings or holdings the Appellants are challenging. Neither the Grounds of Appeal nor their particulars have been helpful too. In appellate practice, it is trite that issues for determination must be clearly related to and be founded on the specific findings or ratio decidendi in the judgment on appeal. In other words, the issues for determination must be distilled from the Grounds of Appeal which in turn must also be predicated upon the ratio(s) decidendi of the particular decision complained against.

See Archinga vs. Attorney General of Akwa Ibom State (2015) 6 NWLR (Pt. 1454) 1, Shipcare Nig. Ltd Owners of the M/T African Hyathinth vs. The Owner or the M/V Fortuno (2011) 7 NWLR (Pt. 1246) 205, Shettima & Anor vs. Goni & Ors (2011) LPELR – 417 (SC); Musaconi Ltd vs. Aspinall (2013) LPELR – 20745 (SC); Nze vs. Aribe (2016) LPELR – 40617 (CA). Ordinarily, the observed apparent defect in the Appellants’ first issue would have ended it all at that point.

However, in order to attain substantial justice on the Appellants’ complaints in the appeal, I have strived to identify from the judgment some particular portions(s) which seem to fit into the Appellants’ arguments without jeopardizing the Respondent’s position who in any case also adopted the Appellants’ blunder as well because their learned counsel too never referred to or mentioned any specific finding or holding of the lower Court that the Respondent is seeking to support by the arguments under the issue.

It should not be forgotten that the Appellants’ first issue essentially challenges the lower Court’s finding(s) that as Directors of the 1st Appellant, the 2nd to 8th Appellants had been fraudulent in the dealings between the 1st Appellant and the Respondent which the Court found as sufficient reason to lift the 1st Appellant’s veil of incorporation and held them liable in that capacity.

It is argued for the Appellants that neither was the allegation of fraud submitted to the lower Court to warrant its findings on the fraudulent dealings it ascribed to the 2nd to 8th Appellants nor could they in any case be validly held liable for the acts of the 1st Appellant particularly in its contract with the Respondent. That is the substrum of the Appellants’ arguments under this issue. I note yet another line of disjointed argument under this issue in relation to the joinder of the 2nd to 8th Appellants as proper parties in the trial.

Let me say straight away that this argument is one that is neither hinted in the Appellants’ first Ground of Appeal (supra) from which the Issue is distilled nor deducible from the Particulars clumsily listed thereunder as numbers “(d), (b), (c), (d)”. Having not been rooted in or linked to the Ground(s), it is said to have been distilled from, that line of argument is discountenanced.

The same fate also befalls the other line of argument under the same Issue by which the Appellants introduced and canvassed arguments questioning the lower Court’s decision on their Notice of Preliminary Objection being one that is completely unconnected to their said first Ground of Appeal. See Thompson vs. Akingbehin (2021) 16 NWLR (Pt. 1803), 285 at 312 to 313 paras H – E.

What I can only add from the Appellants’ arguments on this issue, even if for emphasis only, is the Appellants’ insistence that the lower Court wrongly found the 2nd to 8th Appellants fraudulent in the circumstances and without affording them an opportunity to be heard on it. Reliance is placed on the decisions of this Court in FDB Financial Services Ltd vs. Adesola (2000) 8 NWLR (Pt. 668), 170, Alarapon & Ors vs. PRP & Ors (2019) LPELR – 47052 (CA) among others in support of the argument under this issue.

For the Respondent, it is argued that by virtue of Sections 308, 309 and 316 of the Companies and Allied/Matters Act 2020, if a company, the 1st Appellant in this case, with intent to defraud fails to apply the money or other property for the purpose it was received, every director of the company who is in default is personally liable, without diminishing the liability of the company itself; placing reliance on the decisions by this Court in Public Securities Ltd vs. JEFIA (supra), Eboni Finance & Securities Ltd vs. Wole-Ojo Tech.

Services Ltd (1996) 7 NWLR (Pt. 46£), 464 at 478 para A – D and the Apex Court’s decision in Trenco Nig Ltd vs. ACB & Anor (1978) NSCC 220 at 250. Learned counsel submitted that it is unjust for a party such as the Appellants to rely on the doctrine of corporate liability in the facts and circumstances as in the Respondent’s case.

It is further argued that the Appellants who in their own affidavit presented contradictory, dishonest facts cannot now turn around to claim denial of hearing, more particularly as the fraud by the Appellants is so manifest for example by inter alia issuing postdated checques on two different occasions to the Respondent knowing that they had no money in their bank account which in itself is easily an offence under the provisions of Section 1 of the Dishonoured Cheques Offences Act 1977 and Section 311 of the Penal Code. ​ As can be seen, the entire arguments for the parties on this Issue revolve around the real or imagined protection or liability of the 2nd to 8th Appellants for the acts of the 1st Appellant, the former being the latter’s Directors.

Undeniably, the 1st Appellant is a corporate entity, a juristic person in law, different from its members, subscribers or shareholders. For good reasons, the law has conferred upon it enormous immunity and privilege owing to its basic gullible feature of living a life without a mind or brain, without hands or legs, without a body or physical form.

It is by the undaunting force of the law at the bottom of its creation, and protected through its growth or promotion to a functional juristic personality that it exists differently from, though not in isolation of its human components which reside mainly in its directors. That is the postulate in the doctrine of corporate personality which appears to have originated and gained persistent legitimacy for one hundred and twenty-five years now from the English decision in Salomon vs Salomon (1897) 2 AC 22. It applies in Nigeria as well. See Section 42 of the Companies and Allied Matters Act 2020.

In Adamu Muhammad Gbedu & Ors vs. Joseph I. Itie (Liquidator) (2020) 3 NWLR (Pt. 1710), 104 at 124 para C – D, the Supreme Court held that: “Company law derives from Common Law and that includes the Companies and Allied Matters Act, CAMA, applicable in Nigeria.” Its application in Nigeria has been consistently upheld by both the Apex Court and this Court. See Marina Nominees Ltd vs. FBIR (1986) LPELR – 1839 (SC), Ramanchandani vs. Ekpenyong Trenco (Nig) Ltd vs. African Real Estate & Investment Co. Ltd & Anor (1978) LPELR 33264 (SC), United Cement Co.

Ltd vs Libend Group Ltd & Anor (S016) LPELR – 42038 (SC).

As in every rule however, there are recognized exceptions, premised on the legal reality that a company though an artificial person in the eyes of the law is however composed of and piloted by its human component, i.e. its Directors and Managers who act as the directing mind of the company by their action and inaction for the company. When there occurs infractions against the company, it is the Directors who rise to the occasion in its defence, in the same way that they bear the responsibility and liability in defence of the excesses or infractions by the company.

Such is the inextricable, generally harmonious relationship between a company and its Directors. By the very nature of this relationship, there developed necessary legal mechanisms as recognized exceptions to the doctrine of the separate legal personality of a company particularly in ostensible acts of the company but which in reality are acts of its Directors to lift the veil of the company’s incorporation in order to see those behind the excesses or inactions of the company that are put to question. The exceptions are enshrined in law and in equity and applied in our Courts.

As referred by the learned counsel for the Respondent, Section 316 of CAMA 2020 provides that: “Where a company – (a) receives money by way of loan for specific purpose; (b) receives money or other property by way of advance payment for the execution of a contract or project; or (c) with intent to defraud, fails to apply the money or other property for the purpose for which it was received, every director or other officer of the company who is in default is personally liable to the party from whom the money or property was received for a refund of the money or property so received and not applied for the purpose for which it was received and nothing in this section affects the liability of the company itself.” The Appellants’ complaint here is that the lower Court was wrong when it lifted the 1st Appellant’s veil of incorporation on the ground that its Directors i.e. the 2nd to 8th Appellants had been fraudulent. ​ To begin with, as clearly enshrined in these provisions, fraud is certainly a ground on which the 1st Appellant’s veil may be lawfully lifted in order to hold its Directors personally liable to the party from whom the money was received.

In my humble view, it is not only good law but good sense to treat a company and its Directors in line with the provisions of Section 316 of CAMA (supra) firstly because they are the actors in the company’s dealings and secondly to protect the company from the excesses of its unscrupulous, fraudulent Directors. It is in this premise that the lower Court lifted the veil of the 1st Appellant’s incorporation in accordance with the provisions of Section 316 of CAMA 2020.

More importantly, I have been unable to find any misapplication of the law and the facts considered by the lower Court in arriving at the finding that the 2nd to 8th Appellants were indeed fraudulent in their dealing with the Respondent from day one. This view can be better appreciated through the findings in the Judgment of the lower Court as follows: “The Claimant’s case is that up till the time of presenting the 1st Defendant was yet to pay him a dime despite the above assurances.

However, in a curious and evasive twist the Defendants at paragraph 10 of the affidavit in support of notice of intention to defendant stated as follows: ’’That paragraph 3 (o) of the affidavit in support of the Writ of summons is admitted only to the extent that the sum of N285, 053, 345.00 (Two Hundred and Eighty-Five Million, Fifty-Three Thousand and Forty-Five Naira) only together with the accrued interest since 15th March, 2018 till date only being claimed as the 1st defendant’s indebtedness to the claim is arbitrary and does not represent the actual state of the 1st Defendant’s indebtedness as same cannot be claimed under the agreement between the parties same being outside the tenor of the agreement.” This line of defence is to my mind incoherent, evasive, scandalous and thoroughly unconscionable especially when the 1st Defendant had earlier written to admit liability in the sum of N285,053,345.00 (Two Hundred and Eighty-Five Million, Fifty-Three Thousand, Three Hundred and Forty-Five Naira).

I need to remind the Defendants that it was not the Claimant that carne up with the figure. It was indeed the 1st Defendant that put the figure forward as the total sum due to the Claimant as at 28th February, 2018. It is therefore unacceptable for the said Defendants to now attempt to discredit what it authored in the first place. No Court or Tribunal will welcome such line of defence. What I am saying in essence is that the Defendant, cannot approbate and reprobate at the same time. They are bound by Exhibits ON5 which is their i.e. the Defendants’ own document.

It is worthy of note that cheques were presented to the Claimant at different times but he got no value for any of them. Interestingly the Defendants did not put anything forward by way of their bank statements to show that funds moved from any of their accounts to the Claimant. From the correspondence with the Claimant the Defendants’ line of defence is that they have invested the Claimant’s fund and waiting to be paid by the Federal Government of Nigeria. Paragraph 12 of their affidavit speaks to this point.

It is hereby reproduced: “That further to the above paragraph 12 (sic), the 1st Defendant maintains that she in her discretion invested several sums of money in a business venture which yielded so much profit but which stun owed the 1st Defendant by the Federal Government of Nigeria has remained unpaid up till this day which fact was duly disclosed to the Claimant’s counsel and which has necessitated the institution of SUIT NO FCT/HC/ZOO1/ZO19 BETWEEN: KOLAWOLE OLOWOOKERE VS ATTORNEY GENERAL OF THE FEDERATION AND MINISTER OF JUSTICE B ANOR by the 1st Defendant’s counsel.

A certified true copy of the said writ of summons and other processes duly filed are hereby attached and marked Exhibit NCMF X.” It is however curious that the Defendants who chimed that the Federal Government of Nigeria is indebted to them exhibited a very strange document christened as Exhibit NCMF 1 to prove that point. I have carefully perused the exhibit and it is clear to me that it has nothing to do with the relationship between the Claimant and the Defendants. In fact, the Exhibit is 3 suit for recovery of professional fee instituted by Mr.

Kayode Olowookere Esq or counsel for the Defendants. What that means is that the Defendants are simply playing pranks with the Court as it has no defence to this action.

Whichever way Exhibit NCMF 1 is viewed it is not relevant to the proceedings and cannot Be used by the Defendants to justify their failure to repay the Claimant’s investment with the accrued interest.” See pages 74 to 76 of the Additional Record. ​ Furthermore, it seems to me that the vehement insistence of the 2nd to 8th Appellants on pushing the entire liability on the 1st Appellant is clearly because the 1st Appellant, as contended by the Respondent’s counsel, has since become moribund; a contention the Appellants have found impossible to deny.

With respects to the Appellants’ learned counsel, that line of defence only reinforces the lower Court’s finding that the Appellants have been fraudulent because its ultimate effect is to evade the repayment of the debt permanently as the 1st Appellant on whom they seek to push the debt liability is to their full knowledge no longer functional; in effect crushing the Respondent to Ground Zero under the cover of Salomon vs. Salomon (supra), as it were, contrary to the provisions of Section 316 of CAMA (supra) and the demands of equity.

The findings and decision of the lower Court in lifting the veil of the 1st Appellant in the circumstances are unassailable. With respects, I wish the learned counsel for the Appellants has had time to read the decisions in the three cases referred by his learned friend for the Respondent; namely Public Finance Securities Ltd vs. JEFIA (supra), Eboni Finance GT Securities Ltd vs. Wole-Ojo Tech. Service Ltd (supra) and Trenco Nig. Ltd vs.

ACE (supra) as that would have saved him the stress of attempting to distinguish them from this appeal as he sought to do in the Appellants’ Reply Brief because they are in all fours with the cases of the parties herein.

To drive this point home, I will reproduce the portion referred by the Respondent’s counsel from the JEFIA case (supra) here thus: “It is patently clear that Section 290 of the Companies and Allied Matters Act 1990 is wide enough to cover the situation herein whereas borne by the record, the 2nd appellant, as the Chairman and Managing Director of the 1st appellant Company had recklessly refused to attend Court to explain or defend the failed investment of the respondent, but instead fabricated a sham defence “that the 1st defendant in common with other Ranks and Investment Companies, suffered a decline in Business fortunes due to political crises and orchestrated blackmail by some fraudulent staffers.

The learned trial Judge, at page 39 lines 2 to 11 of the record said:- “The money invested by the plaintiff represents a loan to the 1st defendant for the sole purpose of yielding interest. The Company is not willing to pay and says that it is in some distress and has resorted to all sorts of subterfuge in order to avoid payment of the sum appearing on the Bond Certificates. I have already shown that this is only but a sham and fraudulent defence that is put forward. The question is what did they do with the money?

It is fraud in my view to establish a Financial Institution that collects money from the general public by way of investments and turn around to disappoint their legitimate expectation under the guise of having a general decline in business.” The above quoted passage from the judgment of the trial Court cannot be faulted as it is supported by both the affidavit and oral evidence contained in the record of proceedings, I agree with him.

I also agree with him that this is a proper case to invoke the provisions of Section 290 of the Companies and Allied Matters Decree 1990 to protect the respondent and hold the 1990 appellant liable jointly and severally with the 1st appellant for debt owed the respondent.” I had earlier hinted that the Appellants are in equity also bound to repay the 1st Appellant’s debt.

This is what preoccupied the mind of this Court also in the Eboni case (supra) referred by the Respondent’s learned counsel, where this Court reasoned and held thus: “Another point in this case is this: as the 1st and 2nd respondents have received the money, might equity not come to the rescue for unjust enrichment.

I think the principle of unjust enrichment which unfortunately is not well developed in English law as both in U.S., and Scotland should, of necessity be nurtured to growth in a new and complex society like ours where people can easily at a whiff of breath resort to law to ward off debt or other enrichments they have had, at the expense of the other. This is a specie of constructive trust which is an instrument which the Court of equity may employ to prevent undue enrichment.

I believe that when a person is holding tight that which is subject of equity he should not be allowed to hold it firmly. Therefore, where a party unjustly enriches himself at the expense of the plaintiff he must be made to disgorge it. Our legal system should at this instance lean more to U.S. law on this principle than in England where the principle is yet to assume a wider dimension. Thus Lord Porter in Reading v. A.G. (1951) A.C 5014 said My Lords – the exact status of the law of unjust enrichment is not yet assured.

It holds a predominant place in the law of Scotland and I think of the United States”. The premise behind the doctrine of restituting an unjust enrichment is that justice be done. That being the case, it seems to me that we ought to lean overly to U.S. legal practice to effectuate justice. Therefore, in consonance with the principles enshrined in the restitution a remedy shall be available whenever the defendant is unjustly enriched at the expense of the plaintiff.

In this case, the respondents must be made to vomit out what they have taken (unjustly).” In addition, the Apex Court’s decision in the Trenco case (supra) referred also by the Respondent’s counsel is no less relevant and binding on this Court as it is similarly in all fours with the present Appeal; more particularly on the line of failed exculpatory argument of the 2nd to 8th Appellants that the lower Court wrongly held them liable for the 1st Appellant’s debt. In my humble view, this Issue can only be and is resolved against the Appellants.

In their second issue, the Appellants have argued strenuously that the lower Court was wrong to have maintained the suit with the 2nd to 8th Appellants as parties although they were agents of a disclosed principal namely the 1st Appellant. It is argued further that the Respondent did not make any case against the 2nd to 8th Appellants to warrant their joinder as parties in the suit. Learned counsel referred to the decision of this Court in Global Soap & Detergent Industries Ltd & Ors vs.

Bello & Anor (2011) LPELR – 9029 (CA) and Ramon vs Adeleke & Ors (2019) LPELR – 50175 (CA) where this Court held that where an agent acted on behalf of a disclosed principal, he cannot be personally liable, unless it can be proved otherwise. Those are the main arguments under the Issue.

For the Respondent however, it is argued that although it is the correct position of the law that an agent of a disclosed principal cannot generally be sued or held personally liable, there have been long settled exceptions to that rule which include situations where statutory provisions make such agent liable e.g. under Sections 308, 309 and 316 of CAMA and Section 1 of the Dishonoured Cheques Act and secondly where the Court from the circumstances of a case makes the agent liable though the principal is named.

Learned counsel referred to the decisions of the Supreme Court in National Film Video Censor Board & Or Vs. Adegboyega & 2 Ors (2019) 4 NWLR (Pt. £662), 285 at 507 and COTECNA International Ltd vs. Church Gate Nig. Ltd (2010) 18 NWLR (Pt. 1225), 546 where the Supreme Court upheld the joinder of an employee and of an agent respectively although of named principals; to buttress his submission on recognized exceptions to the rule that an agent of a disclosed principal can neither be sued nor held liable.

Learned counsel further argued that the 2nd to 8th Appellants are necessary parties without who the suit cannot be judiciously decided placing reliance on the Supreme Court’s decisions in Azubuike vs PDP (2014) 7 NWLR (Pt. 1406), 292 a 313 and Mbanefo vs. Molokwu (2014) 6 NWLR (Pt. 1406) 377 at 410 – 411.

In his Reply Brief, the Appellants’ counsel sought to distinguish the Supreme Court’s decision in the Censors Board case (supra) for the reason that the party joined in that appeal was wrongfully collecting money from people whereas the Appellants in this Appeal were merely acting within the instructions of the 1st Appellant. Needless to say but for emphasis, this reasoning is unacceptable in view of the earlier resolution of that argument in the contrary under the first Issue.

Strangely, the learned counsel avoided any argument or – even comment on the Respondent’s reliance on the provisions of Section 316 of CAMA which the Respondent argued made the Appellant’s parties on the facts in the suit. Firstly, the Appellants are parties in the suit by operation of law under Section 316 of CAMA (supra). Secondly, the two previous decisions of this Court referred by the learned counsel for the Appellants were not based on the provisions of Section 316 of CAMA. Thirdly, the Appellants are on the facts necessary parties without who the entire suit would be meaningless.

As laid down in several decisions by this Court and the Apex Court, from which I referred to the Apex Court’s decision in Azubuike vs.

PDP (supra) the questions to be answered before arriving at whether a party is a necessary party in a suit are: (a) Is the cause or matter liable to be defeated by the non-joinder? (b) Is it possible to adjudicate on the cause or matter unless the 3rd party is added as a defendant? (c) Is the 3rd party a person who should have been joined in the first instance? (d) Is the 3rd party a person whose presence before the Court as a defendant will be necessary in order to enable the Court to effectually and completely adjudicate or settle all the questions involved in the cause or matter?

From the facts detailed in the Respondent’s affidavit and its annexures in support of the Originating Summons found at pages 3 to 18 of the Additional Record which the Appellants’ evasive facts in their Notice of Intention to defend the suit found at pages 32 to 35 failed to controvert effectively, more particularly on their roles as directors of the 1st Appellant, the lower Court was right in refusing to strike out their names from the Suit as they sought by their Notice of Preliminary Objection, because all the above questions are, upon the credible evidence before the lower Court, easily answerable in the affirmative against the Appellants.

See also Biyu vs. Ibrahim (2006) 8 NWLR (Pt. 981), 1 at 35, Adefarasin vs. Dayekh ​(2007) 11 NWLR (Pt. 1044), 89 at 116 – 117, Jadesimi vs. Okotie-Eboh (1989) 4 NWLR (Pt. 113), 113 at 126. This issue is also resolved against the Appellants. In consequence, the Appellants’ two issues for determination as adopted and argued also by the Respondent, having been resolved against the Appellants, the appeal ends as one lacking in any merit and is accordingly dismissed. The judgment of the lower Court is affirmed. I award cost of Two Hundred Thousand Naira against the 2nd to 8th Appellants jointly.

STEPHEN JONAH ADAH, J.C.A.: I have had the privilege of reading in draft, the judgment just delivered by my learned brother, Isa Bature Gafai, JCA. I am in agreement with the reasoning and conclusion which I adopt as mine. I therefore, agree that the appeal lacks merit and I hereby dismiss it. I abide by the consequential orders inclusive of the order as to costs as made in the lead judgment.

BIOBELE ABRAHAM GEORGEWILL, J.C.A.: I was privileged to read in advance a draft copy of the leading judgment just delivered by my noble lord, Isah Bature Gafai, JCA, and I am in complete agreement with the impeccable reasoning as marshalled out therein as well as the inescapable conclusion reached to the effect that the appeal lacks merit and is liable to be dismissed.

My Lords, proceedings under the undefended list procedure, as was commenced by the Respondent against the Appellants in the instant appeal before the lower Court to recover the total sum of N285, 053, 345. 00 by reason of the refusal of the 1st Appellant, of which the 2nd – 8th Appellants are the Directors, to pay over to the Respondent the sum of N200, 600, 000. 00 placed in a fixed deposit with the 1st Appellant for a period of 180 days at an agreed interest rate of 20%, is a strict one geared towards the expeditious dispensation of justice, devoid of unnecessary delays and undue technicalities, in cases where the Defendant really has no defence to the claim of the Claimant.

In Arcadia Petroleum Nig. Ltd & Anor V. Northside Apartment Ltd & Anor (2022) LPELR – 57506(CA), this Court per Sir Biobele Abraham Georgewill JCA had stated inter alia thus: “Under the Undefended List Procedure, going by the several judicial authorities on the essence of this procedure geared towards the attainment of speedy but substantial justice in cases in which a Defendant really has no defense to the claim of the Claimant against him and for judgment to be entered if there be nothing worth being further investigated by the Court on the affidavit evidence of the parties.

It is to be noted here, and very pertinently too, that once the Claimant’s Suit is filed and or placed under the Undefended Cause List, the very straightforward, and if I dare say very simple uncomplicated procedure on the date fixed for hearing of the Suit filed or placed under the Undefended List, is that the Court would after hearing the parties or their counsel ascertain if on the facts as placed before it the Defendant had made out any triable issue or defense on the merit.

In arriving at such a finding, the Court would critically securitize and examine the affidavits and documentary Exhibits, if any, of the parties to determine at that stage if the Defendant has disclosed any defense on the merit or raised at least triable issue that would need to be further investigated into by the Court by way of a full hearing. However, where the Court finds that the Defendant has not disclose any defense on the merit or raised any triable issue, it is under a duty to proceed to enter judgment in favor of the Claimant against the Defendant, no more no less.

But, where the affidavit of the Defendant in support of the Notice of Intention to Defend discloses either a defense on the merit or triable issues or if there are substantial conflicts as to the facts of the case on the affidavits of the parties, it would be sufficient for the Court to hold that the Defendant has raised a triable issue as would require further enquiry and thus a transfer of the matter to the General Cause List should be the appropriate.

The Claimant’s claim would then be heard at plenary trial in which the contending rights of the parties would be enquired into and settled on the merit on the evidence as would be put forward by them at the trial.” See also United Bank for Africa Plc V. E. I. Natama International Complex Ltd (2020) LPELR-51981(CA) per Sir Biobele Abraham Georgewill. JCA.

In the leading judgment, the numerous legal questions raised by the parties under the cover of just two, seemingly simple but apparently, overloaded, issues have been considered admirably and resolved against the Appellants in favour of the Respondent. I shall only, by way of my humble contribution, say a word or two on some of these very crucial issues as canvassed by the parties in their respective appellate briefs in this appeal.

I have no doubts in my mind based on the affidavit evidence of the parties as in the Record of Appeal that the 2nd – 8th Appellants, who are Directors of the 1st Appellant, are the directing minds and alter ego of the 1st Appellant. In law, they therefore, come within the context of agents of the 1st Appellant.

This is so because agency can be created in about four to five ways, namely: (1) By express appointment, whether orally or by letter of appointment or, indeed by Power of Attorney; (2) By Ratification of the Agent’s acts by the Principal; (3) By virtue of the Doctrine of Estoppel; (4) By implication of law in the case of agency of necessity, and (5) By presumption of law in the ease of cohabitation. See Salbodi Group Ltd & Anor V. Doyin Investment Nigeria Limited & Ors (2022) LPELR – 57458 (CA) per Sir Biobele Abraham Gcorgewill JCA. See also Vulcan Gases Ltd. V. GF.IND.

AG. (2001) 9 NWLR (Pt. 719) 610 AT Pp. 637 – 638, per Iguh JSC. Indeed, agency relation can in law even be implied as is referred to as the implied authority or apparent or ostensible authority of an agent acting within the scope of the authority vested on him by the principal. In law, implied authority is also referred to as apparent or ostensible authority. It is the authority of an agent as it appears to other.

Under the doctrine of apparent authority, the principal may be bound to third parties because the agent appeared to have authority, though as between principal and agent there was in fact no such authority granted and normal circumstances of such authority did not arise. See Salbodi Group Ltd & Anor V. Doyin Investment Nigeria Limited & Ors (2022) LPELR – 57458 (CA) per Sir Biobele Abraham Georgewill JCA. See also UBN (Nig) Plc V. Otagbe Farms Ltd (2002) 14 NWLR (Pt. 787) 242 AT pp. 249 – 250, per Akaahs JCA, (as he then was but later JSC).

Thus, in law, a principal cannot generally be liable for the fraud of his agent unless it is proved that the agents, as in the instant appeal, the 2nd – 8th Appellants, had a guilty mind in respect of the fraudulent acts of the 1st Appellant in its dealings and relationship with the Respondent, had indeed participated in it. See Sections 308, 309 and 316 of the Company and Allied Matters Act 2020. See also Salbodi Group Ltd & Anor V. Doyin Investment Nigeria Limited & Ors (2022) LPELR – 57458 (CA) per Sir Biobele Abraham Gcorgewill JCA, Nirchandani V.

Pinherio (2001) FWLR (Pt. 48) 1323, Fitton V. IGP (1958) 3 FSC 20.

The question then simply is this: Did the Respondent, by the copious affidavit evidence, which were left generally unchallenged and therefore, uncontroverted, show that the 2nd – 8th Appellants as Directors, and therefore, the directing mind and alter ego of the 1st Appellant, acted in the relationship between the Respondent and the 1st Appellant, being the agents of the 1st Appellant, within or outside the scope of their authorities for which either the 1st Appellant alone, being a corporate legal entity, should bear responsibility to the Respondent or for which the corporation veil can be lifted and the 2nd – 8th Respondents also held accountable and liable for the acts of the 1st Appellant carried out under their supervision and direction as the directing minds of the 1st Appellant?

My Lord, it must be pointed out at once that in law the mere fact a person, such as the 2nd – 8th Appellants, is an Agent of a Principal, such as the 1st Appellant, and known to be so does not of itself necessarily prevent his incurring personal liability, and whether he does so or not is to be determined by the nature and terms of the contract and the surrounding circumstances. See Salbodi Group Ltd & Anor V. Doyin Investment Nigeria Limited & Ors (2022) LPELR – 57458 (CA) per Sir Biobele Abraham Georgewill JCA. See also FCDA V. Ezinkwo (2007) All FWLR (Pt. 393) 115, Asafa Foods Factory V.

Alaine Nig Ltd (2002) FWLR (Pt. 125) 756. Now, I had earlier posed the question, whether the facts of this ease as in the Record of Appeal would or could justify and or warrant the lifting of the corporate veil of the 1st Appellant as was apparently done by the lower Court? I certainly think it does!

The lower Court was, in my finding, perfectly in order to have lifted the corporate veil of the 1st Appellant, to see the 2nd – 8th Appellants, as the main actors and directing minds of the activities, acts and actions of the 1st Appellant, in its relationship with the Respondent in the proved facts and circumstances of this case. My Lords, it is true that a limited liability Company, such as the 1st Appellant, company upon its incorporation acquires a legal personality of its own that makes it distinct from its Shareholders ad or Directors.

Yet, in law there are some exceptional but very limited circumstances in which a Court may lift the veil of incorporation so as hold the Shareholders and or Directors personally liable for the debts and or liabilities of the company. This would include eases of grave and proved allegations of fraud, as in the instant appeal or illegality or sham that would in fairness and in justice warrant the lifting of the veil of the corporate entity of a company duly incorporated in law. See Willbros West Africa, Inc. & Ors V.

Mcdonnel Contract Mining Limited (2021) LPELR – 54544 (CA) per Sir Biobele Abraham Georgewill JCA. See also Prof Ajibayo Akinkugbe V. Ewulum Holdings Nigeria Ltd & Anor (2008)12 NWLR (Pt. 375) 1, Okoli V. Morecab Finance (Nig.) Ltd (2007) 14 NWLR (PT. 1053) 37 AT p. 57, Vibelko (Nig.) Ltd V. NDIC (2006) 12 NWLR (Pt. 994) 280 AT pp. 293 – 294, Alhaji Mohammed Abacha V. AG. Federation (2013) LPELR – 21749. It is for the above few words of mine, by way of contribution to the fuller reasoning marshalled out in the leading judgment, that I too dismiss this appeal for lacking in merit.

I shall abide by the consequential orders made in the leading judgment, including the order as to cost.

Judgment

PETER OYINKENIMIEMI AFFEN, J.C.A. (Delivering the Leading Judgment) : Introduction The High Court of Lagos State (coram: Y. O.

Idowu, J.) (“the lower Court”) declared the Respondent herein, Qualitem Pharmacy Ltd (“Qualitem” or “Respondent”] “the rightful owner of all that property located and situate at No. 102A Island Way, Dolphin Estate, Ikoyi, Lagos” and restrained the Appellant, Nigeria Deposit Insurance Corporation (“NDIC” or “Appellant”) and/or its agents, privies or anyone claiming through or under it from foreclosing, selling or trespassing on the property in a considered judgment delivered on 16/9/11 in Suit No.

LD/507/2004: Qualitem Pharmacy Limited v Nigeria Deposit Insurance Corporation, which lies at Pp. 388 – 410 of the records. Dissatisfied with the judgment, NDIC lodged the present appeal. The Amended Notice of Appeal filed on 4/10/18 relates back to the original notice of appeal filed on 9/12/16 with the leave of this Court. Briefs of arguments were filed and duly exchanged. The Appellant’s Brief filed on 18/9/18 was deemed properly filed on 20/9/18; the Respondent’s Brief was filed on 9/10/18, and the Appellant’s Reply Brief was filed on 29/10/18. This appeal was heard on 7/2/22.

Factual background The facts undergirding this appeal are straightforward and by no means complex or convoluted. Sometime in 2001, the defunct Metropolitan Bank Limited (“the Bank”) granted Qualitem a loan facility of N7.5m to finance the acquisition of a developed property situate at No. 102A Island Way, Dolphin Estate, Ikoyi, Lagos. The understanding was that the bank would have a lien on the title deeds until the principal sum and accrued interest thereon were liquidated.

Qualitem alleged that it had fully repaid the loan but the Bank held on to the title deeds and sought to foreclose on the property.

It was further alleged that the Bank opened a letter of credit in the sum N22,174,730.84 on 19/7/02 at the instance of Qualitem in favour of a named beneficiary in France at the exchange rate of N117 per US $1 (as agreed) prior to the introduction of the Dutch Auction System Central Bank of Nigeria (CBN) on 22/7/02 and the attendant surge in exchange rate from N117/1$ to N137 per US $1, but the Bank mulcted Qualitem with “a quantum of unwarranted interest” in excess of N10m even though the Dutch Auction System was not retroactive and could not nullify a concluded transaction.

Qualitem consequently initiated the suit that generated this appeal by a writ of summons issued out of the Registry of the lower Court on 4/3/04 claiming declaratory, monetary and injunctive reliefs against the bank (as endorsed in the amended statement of claim dated 8/12/04 copied at Pp. 83 – 86 of the records) as follows: 1. A declaration that the Claimant is the rightful owner and is entitled to all the property located and situated at No. 102A Island way Dolphin Estate, Ikoyi, Lagos. 2.

A declaration that the Dutch auction system introduced by Central Bank of Nigeria on the 22nd of July, 2002 is not retroactive. 3. An order declaring null and void all sum, interest accrued to the account of the Claimant as a result of illegal, unjust and excessive charges by the Defendant. 4. An order mandating the Defendant to repay the Claimant the sum of N10,016,985.53 (Ten Million, Sixteen Thousand Nine Hundred and Eighty-Five Naira Fifty-Three Kobo) illegally deducted from the Claimant’s account. 5.

An order mandating the Defendant to pay to the Claimant penalty on the excess charges at the CBN MRR up to the dare of judgment. 6. An order of perpetual injunction restraining the Defendant, its agents, privies or anyone claiming through or under it from foreclosing, selling or trespassing on the property situated at 102A Island Way, Dolphin Estate Ikoyi, Lagos. 7. Damages for breach of trust. The parties joined issues on the merits.

The Bank conceded that the Dutch Auction System did not have retroactive effect, but denied that there was mutual agreement on all terms and conditions, particularly in relation to the exchange rate, and insisted that the transaction was not effected on 19/7/02 as alleged but on 22/7/02. The Bank equally denied that the loan was fully repaid as alleged or at all, and subjoined a counter-claim against Qualitem.

During the pendency of the action, the Bank’s licence was revoked by the Central Bank of Nigeria along with 13 other banks for inability to “re-capitalize to the minimum capital requirement of N25 Billion (Twenty Five Billion Naira) and had become insolvent with negative shareholders’ fund and have not been acquired by other banks adjudged healthy thereby failing to comply with the obligations imposed on by the Banks and Other Financial Institutions Act of 1991 and the Central Bank of Nigeria Act 1991, as amended”.

The revocation was published in Official Gazette No. 3 Vol. 93 of 16/1/06, whereupon Qualitem applied ex parte to substitute the Bank with NDIC, which application was granted by the lower Court on 24/4/07 (see p. 391 of the records). NDIC did not challenge the order of substitution or otherwise seek to set it aside.

Rather, it proceeded to file a further amended statement of defence and counter-claim dated 6/10/10 (which lies at pp. 356 – 359 of the Records) wherein it counter-claimed against Qualitem as follows: (a) The sum of N24,531,343.94 being the outstanding balance of the facilities granted to the Claimant as at September 30, 2005 (b) Interest on the sum at the rate of 21% per annum from the 1st day of October, 2005 till judgment and thereafter at the same rate till the debt is fully liquidated. (c) Cost of the action.

(d) An order authorizing the Defendant/Counter-claimant to proceed against and sell the property at No. 102A Island Way, Dolphin Estate, Ikoyi, Lagos. At the close of plenary trial (whereat two witnesses testified on behalf of Qualitem and NDIC fielded a sole witness), the lower Court delivered final judgment on 16/9/11 as aforesaid, granting the main claim in part and dismissing the counter-claim whole and entire.

At p. 410 of the records, the learned trial judge summed up thus: “I hereby declare that the Claimant is the rightful owner and is entitled to all that property located and situate at 102A Island Way, Dolphin Estate, Ikoyi, Lagos. I hereby make an order of perpetual injunction restraining the defendant its agent, privies or anyone claiming through or under it from foreclosing, selling or trespassing on the property situated at 102A Island Way, Dolphin Estate, lkoyi, Lagos. All other prayers fail and are hereby refused.

The Defendant’s counter-claim for lack of substantive and credible proof hereby fails.” Issues for determination From the five issues raised in the Amended Notice of Appeal, the Appellant distilled two issues for determination (which were adopted by the Respondent without modification) as follows: 1. Whether having regards (sic) to the circumstances of this case, it is safe to conclude that proper parties were before the Court below such as to clothe it with the garb of jurisdiction to warrant a hearing and determination of the case as it was presently constituted? 2.

Whether from the totality of the pleadings and evidence led, there is a cause of action against the Appellant such that it would be personally liable? Appellant’s submission The Appellant cited a litany of cases, including STATE v ONAGORUWA (1992) 23 NSCC (PT 1) 161 at 177, UMANAH v OBONG VICTOR ATTAH [2006] 17 NWLR (PT. 1009) 503 at 525, NWOSU v IMO STATE ENVIRONMENTAL SANITATION AUTHORITY [2004] 20 WRN 95 at 142 – 143, SOCIETE BICS A. COMPAGNIEMOULAGES & ANOR v CHARZIN IND.

LTD (2003-2007) 5 I.P.L.R 203 at 226, NASIR v KANO STATE CIVIL SERVICE COMMISSION [2010] 6 NWLR (PT 1190) 253 at 276 on the absolute priority and decisive effect of jurisdiction in judicial proceedings and noted that presence of necessary parties and existence of cause of action play a major role in the scheme of assumption of jurisdiction by a Court of law, citing MIL.

ADMIN., AKWA IBOM STATE v OBONG [2001] 1 NWLR (PT 694) 214 (CA) in support of the proposition that a plaintiff cannot sue a defendant against whom he has no cause of action, and that a Court is without jurisdiction to entertain a claim which discloses no reasonable cause of action vide ADETONA v EDET [2001] 3 NWLR (PT 699) 186 and ALALADE v MOROHUNDIYA [2002] 16 NWLR (PT 792) 81 (CA).

The Appellant called in aid the cases of GREEN v GREEN [1987] 3 NWLR (PT 61) 480, CHIEF OF ARMY STAFF v LAWAL [2012] 10 NWLR (PT 1307) 62 (CA) and LAGOS STATE BULK PURCHASE CORPORATION v PURIFICATION TECHNIQUE (NIG) LTD [2013] 7 NWLR (PT 1352) 82 at 109 (on the categorization of parties and its dynamics in a civil suit) and submitted that NDIC had no involvement whatsoever in the events leading to the cause of action and cannot be a necessary or proper party before the lower Court, insisting that the banking licence of the closed bank had neither been revoked nor had NDIC become the liquidator when the cause of action accrued, that the Appellant’s role as liquidator is akin to that of a trustee or umpire between debtors and creditors of the closed bank, which depicts a non-partisan role with no personal interest of its own to serve or protect and that interest resided in the closed bank at all material times and it must be the party in the suit, not otherwise.

Placing reliance on S. 425(1) (a) and (b) of the Companies and Allied Matters Act, 1990 (CAMA) (which was in force at all material times) and the cases of CO-OPERATIVE & COMMERCE BANK (NIG) PLC v O’SILVAWAX INTERNATIONAL LTD [1999] 7 NWLR (PT. 609) 97 and RE AMOLEGBE [2014] 8 NWLR (PT. 1408) 76, the Appellant further contended that revocation of banking license does not render a failed bank legally dead or non-existent, insisting that the bank remains a legal entity with power and capacity to sue and be sued; that as liquidator of a closed bank, NDIC may be sued as a nominal party, but in doing so, the mandatory requirement of S. 422 (7) CAMA is that the capacity in which NDIC is sued must be indicated on the face of the pleadings, which was not done in the instant case, citing AKPAN v GOVERNMENT OF AKWA IBOM STATE [2010] 2 NWLR (PT 1178) 338 on the Court’s duty to pronounce on the capacity in which a party sues or is sued before dealing with whether it has jurisdiction to entertain or hear a matter.

On issue no. 2, the Appellant referred to the definition of cause of action in Black’s Law Dictionary (9th ed.) and submitted that a right of action arises only when a cause of action exists, citing HUMBE v ATTORNEY GENERAL BENUE STATE [2000] 3 NWLR (PT 649) 419, DANTATA v MOHAMMED [2000] 7 NWLR (PT 664) SC 176 at 181 – 182;

that where NDIC is joined as a party in a matter involving a closed bank in liquidation, which arose out of banker-customer relationship as in the instant case, it is imperative for the Court to determine whether the claimant has established a cause of action against NDIC as distinct from the closed bank, insisting that a liquidator is separate and distinct from the legal entity being liquidated and their respective assets and liabilities are not to be co-mingled;

that under and by virtue S. 55 (1) of the NDIC Act of 2006, no direct cause of action is available against NDIC except where there is a clear allegation of negligence, fraud or other wrongdoing committed in the exercise of power conferred on it, and that the fact of being appointed as liquidator without more does not generate any cause of action against NDIC merely because the Respondent has a valid cause of action against the bank being liquidated.

The Court was urged to allow the appeal and set aside the judgment of the lower Court.

Respondent’s submission The Respondent, on its part, contended that the order dated 24/4/07 by which the lower Court substituted NDIC for the defunct Bank was not appealed against or otherwise set aside, and NDIC participated fully in the proceedings, citing AKERE v GOVERNOR OF OYO STATE [2012] 12 NWLR (PT. 1314) 340 at 269, 282 – 283 and ANYANWU v OGUNEWE [2014] 8 NWLR (PT. 1410) 437 at 470 on the proposition that a decision on any point of law or fact not appealed against is deemed to have been conceded by the party against whom it was decided and remains valid and binding on all the parties;

that this case is about the rights of the parties over mortgaged property situate at Plot 102A Island Way Dolphin Estate Ikoyi, Lagos which may be sold upon the mortgagor’s default to repay the facility, thus the Appellant is a proper and necessary party insofar as winding up proceedings at the Federal High Court had been carried out, calling in aid NDIC v UBN PLC [2015] 12 NWLR (PT. 1473) 246 at 293 – 294, that non-inclusion of the phrase “Liquidator of Metropolitan Bank Limited” in the designation of the Appellant as enjoined by S. 422(7) CAMA is a mere procedural irregularity that should not affect the competence or jurisdiction of the lower Court to entertain the matter before it as no injustice has been occasioned thereby;

that the Appellant acquiesced in the irregularity and misled the Respondent by not only referring to Metropolitan Bank Limited as “defunct” in its letter dated 26/11/08 (at p. 334 of the records) but also participated fully at the hearing only to wake up 7 years after final judgment was entered to peddle technicalities knowing full well that the Bank is now effectively defunct (having been dissolved on the petition of the Appellant) and can no longer sue or be sued in its own name.

The case of NDAYAKO v DANTORO [2004] 13 NWLR (PT. 889) 187 at 219 –per Edozie JSC was cited in support of the proposition that a defendant who actively participated in an action commenced by an irregular procedure cannot later be heard to complain and take advantage of the irregularity.

The Respondent insisted that by Order 13 Rule 16(1) of the High Court of Lagos State Civil Procedure Rules 2004, no proceedings shall be defeated by reason of misjoinder or non-joinder of parties and the Court may deal with the matter in controversy so far as regards the rights and interest of the parties actually before it, citing F.G.P. LTD v DURU [2017] 14 NWLR (PT. 1586) 483 at 517 – 518, CROSS RIVER STATE NEWSPAPER CORPORATION v ONI [1995] 1 NWLR (PT. 371) 270 at 291 – 292 and F.U.T., YOLA v A.S.U.U. [2013] 1 NWLR (PT. 1335) 249 at 283.

The Respondent maintained that the Appellant has not complained of any injustice or miscarriage of justice suffered by reason of failure to indicate that it was being sued as the Liquidator of Metropolitan Bank Limited to justify setting aside the judgment of the trial Court. On issue no. 2, the Respondent insisted that paragraphs 4, 5, 6, 7, 20 and 21 of the amended statement of claim dated 8/12/04 and the reliefs sought amply show a reasonable cause of action against the defunct Metropolitan Bank Limited in respect of the property situate at No. 102A Island Way, Dolphin Estate, Ikoyi, Lagos.

The cases of EGBE v ADEFARASIN (NO. 2) [1987] 1 NWLR (PT. 47) 1 and BELLO v A-G, OYO STATE [1986] 5 NWLR (PT. 45) 828 relied upon.

Qualitem pointed out that it is not in contention that NDIC was the liquidator of the defunct Metropolitan Bank Limited whose assets – including 102A Island Way, Dolphin Estate, Ikoyi, Lagos – are likely to be vested in the Appellant, by virtue of S. 424 CAMA and that S. 425(1)(a) CAMA and the decision of this Court in NDIC v UBN PLC supra clearly indicate that NDIC can bring or defend actions relating to property of a bank that has been wound up as in the instant case.

The Court was urged to hold that a combined reading of the amended statement of claim, Ss. 40 and 41 of NDIC Act 2006, and Ss. 424 and 425 CAMA point compellingly to a cause of action against the NDIC.

Appellant’s reply Replicando, the Appellant (NDIC) submitted that the issue of proper parties to an action is a jurisdictional issue that can be raised on appeal even for the first time at the Supreme Court, and not appealing the order of substitution is of no moment, that the instant appeal is not hinged on misjoinder or non-joinder of parties, but on the Appellant being wrongly subrogated as replacement for a distinct legal entity, which is wrong in law and adversely affects the jurisdiction of the lower Court, insisting that existence of proper parties (whether original or substituted) is a condition precedent to the competence of a Court, placing reliance on GOODWILL TRUST INVESTMENT LTD v WITT & BUSH LTD [2011] All FWLR (PT 576) 517 at 542 – 543 and OBIUWEUBI v CBN [2011] 7 NWLR (PT 1247) at page 465.

The Appellant maintained that it is not a proper party and the Court below lacked jurisdiction to entertain the suit as constituted, which is a fatal defect; and not appealing the order of substitution does not translate to waiver of jurisdiction, citing OYENIRAN & ORS v EGBETOLA & ANOR (1997) LPELR- 2876(SC) at 33-34, and NICOTES SERVICES LTD v OJI LEKWUWA (2011) All FWLR (PT 554) 163 at 176.

The Appellant argued that NDIC v UBN PLC supra supports its case rather than that of the Respondent as the panel of learned Justices of this Court in that case were on the same page in holding that NDIC is a separate and distinct entity from Fortune International Bank Plc (In Liquidation). The Appellant reiterated that save for actions founded on negligence or fraud, S. 55 (1) of the NDIC Act 2006 protects it against suits in its own name for direct causes of action against banks in liquidation.

Resolution of appeal The facts undergirding this appeal as well as the two issues nominated by the Appellant and adopted by the Respondent are set out hereinbefore. Issue no. 1 interrogates ‘whether proper parties were before the lower Court so as to clothe it with jurisdiction to warrant a hearing and determination of the case as constituted’, whilst issue no. 2 has to do with ‘whether any cause of action is disclosed against the Appellant (as liquidator)’. As these two issues are intertwined and implicate the jurisdiction of the lower Court, I propose to consider them together.

The lower Court granted an order substituting NDIC for the defunct Metropolitan Bank Limited on 24/4/07 upon the ex parte application of Qualitem, but there is no indication on the face of the proceedings that NDIC was substituted for the defunct bank in its capacity as liquidator. NDIC did not appeal the order of substitution or otherwise seek to have set it aside. Quite the contrary, NDIC participated actively in the proceedings. Not only did it defend the main claim, it also prosecuted a counter-claim against Qualitem, albeit unsuccessfully.

Citing the dictum of Edozie JSC in NDAYAKO v DANTORO supra, it is contended on behalf of Qualitem that having actively participated in the proceedings before the lower Court, NDIC cannot now be heard to complain that the action was commenced by an irregular procedure and take advantage of the irregularity. Without doubt, this is a formidable argument.

But the relevant enquiry in this appeal is whether the proceedings before the lower Court was plagued by a mere irregularity or something much more fundamental that goes to the roots of the competence of the action and ex ipso facto the jurisdiction of the lower to take cognisance of the matter upon the revocation of the bank’s licence. Now, the legal status of NDIC in relation to a failed or failing bank is that of a statutory liquidator.

The Nigeria Deposit Insurance Corporation Act 2006 (“NDIC Act”) provides in S. 40(1) thereof that: “Whenever the licence of an insured institution is revoked by CBN, the corporation shall act as liquidator of such failed insured institution with powers conferred on a liquidator under the Companies and Allied Matters Act and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for purposes of that Act.” What this implies is that NDIC is deemed by operation of law to have been automatically appointed as “provisional liquidator” by the Federal High Court upon the revocation of the licence of an insured institution, such as the defunct Metropolitan Bank Limited.

The averments in the amended statement of claim (as contained in the records) reveal that Qualitem’s cause/right of action against the defunct bank stemmed from the pre-existing banker-customer relationship between them, which accrued long before the Bank’s licence was revoked and NDIC assumed the role of a provisional liquidator. Thus, there is no direct cause of action against NDIC whose role in the scheme of liquidation of an insured institution is not at large but falls within well-defined parameters.

It is hardly necessary to state that “[a] statutory body or corporation created by or under a statute can only act within the four walls of the statute creating it or other enabling laws. It cannot do anything at all unless authorised expressly or impliedly by the statute or instrument defining its powers. It has no power or authority to act outside the statute. If it so acts, the act will be held to be ultra vires and declared null and void and of no legal effect”: OLANIYAN v UNIVERSITY OF LAGOS [1985] 2 NWLR (PT 9) 599 at 623.

Quite unlike a natural human person for whom all acts are permissible unless specifically prohibited, the converse is the case for a statutory body such as NDIC which is an artificial person or entity: all acts are prohibited unless specifically permitted. See MAJOR GENERAL KAYODE ONI & 4 ORS v GOVERNOR OF EKITI STATE & ANOR (2019) LPELR-46413(SC) 1 at 29 –per Augie, JSC.

The function of NDIC when adorning the garb of liquidator is three-fold: (i) realize the assets of the failed insured institution; (ii) enforce the individual liability of the shareholders and directors thereof; and (iii) wind up the affairs of such failed institution as herein otherwise provided [see S. 41(2) of the NDIC Act 2006], which is consistent with the broad duties and powers of a liquidator under insolvency law and practice as outlined in Palmers Company Law, 23rd ed (Vol. 1), save that only insured institutions whose licences are revoked by the CBN fall within remit of NDIC as liquidator.

The point to underscore is that the actions or steps that can validly be taken by or against NDIC in relation to an insured institution in liquidation are heavily regulated by law, and an impressive array of statutory provisions exert a controlling, if not overbearing, influence in especially legal proceedings.

In this regard, S. 41 of the Banks and Other Financial Institutions Act, Cap B3, Laws of the Federation 2004, (“BOFIA”) provides peremptorily that: “41(1) Notwithstanding anything to the contrary contained in any law or enactment, no suit shall be instituted against a bank whose control has been assumed by the Corporation. (2) If any such proceeding is instituted in any Court or Tribunal against the bank, it shall abate, cease or be discontinued without further assurance other than this Act”.

Similarly, S. 417 CAMA provides that: “If a winding-up order is made or a provisional liquidator is appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of Court given or imposed on such terms as the Court may impose”; whilst S. 425(1)(a) CAMA is to the effect that: “The liquidator in a winding-up by the Court shall have power, with the sanction either of the Court or of the Committee of Inspection, to bring or defend any action or other legal proceeding in the name and on behalf of the company”.

There is also S. 424 CAMA which provides that: “Where a company is being wound up by the Court, the Court may on the application of the liquidator by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator by his official name, and thereupon, but subject to the requirements or registration under any particular enactment, the property to which the order relates shall vest accordingly; and the liquidator may, after giving such indemnity if any, as the Court may direct, bring or defend in his official name any action or other legal proceeding which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding-up the company and recovering its property”.

The above statutory provisions are mandatory and their far-reaching, if not devastating, effect on the competence of the suit that generated the instant appeal and/or the jurisdiction of the lower Court in respect thereof is palpable. By S. 41 BOFIA, the suit initiated by Qualitem against the defunct Metropolitan Bank Limited ‘abated, ceased or was discontinued without further assurance’ the very moment the Bank’s licence was revoked on 16/1/06 and NDIC deemed to have been appointed by the Federal High Court as provisional liquidator under and by virtue of S. 40 of the NDIC Act 2006.

And even if it is assumed arguendo that the suit did not abate, cease or discontinue, the lower Court was still not at liberty to substitute NDIC for the defunct Bank in the manner it did. This is so because under and by virtue of S. 425 CAMA, the consent of the Federal High Court or Committee of Inspection was required to enable NDIC bring or defend any action or other legal proceedings in the name and on behalf of the Bank in liquidation, but not in its own name (as happened in the instant case).

The law is now well settled that until a company is formally wound up, it remains a legal entity with capacity to sue or be sued notwithstanding that it is under liquidation. See OREDOLA OKEYA TRADING CO. v BANK OF CREDIT AND COMMERCE INTERNATIONAL, IN RE AMOLEGBE (2014) LPELR-22011(SC), [2014] 8 NWLR (PT. 1408) 76, C. C. B. LTD v O’SILVAWAX INT’L LTD & ORS [1999] 7 NWLR (PT. 607) 97 and NDIC v BALONWU (2017) LPELR 41963(CA). In the instant case, NDIC was simply substituted as a successor or privy to the bank, which it is not.

Aside from the fact that there is nothing to show that the sanction of either the Federal High Court or the Committee of Inspection was sought and obtained before the order of substitution was made, there is no indication on the face of the proceedings that NDIC was substituted for the defunct bank in its capacity as liquidator. The point has already been made that under and by virtue of S. 425(1) CAMA, a liquidator can only “bring or defend any action or other legal proceeding in the name and on behalf of the company”.

The Respondent has invited this Court to treat the failure to indicate the capacity in which NDIC was substituted as a mere irregularity but S. 425(1) CAMA constrain me to decline the invitation. Thus, even if NDIC (as liquidator) could validly defend the action as constituted (and I have already held to the contrary), that could only have been done, not in its own name, but in the name of the defunct bank which, notwithstanding the revocation of its banking licence, was not dead in the eyes of the law.

The Supreme grappled with an analogous scenario in OREDOLA OKEYA TRADING CO v BANK OF CREDIT AND COMMERCE INTERNATIONAL, IN RE AMOLEGBE supra. His Lordship, I. T.

Muhammad JSC (now CJN) held thus at pp. 96 -97: “… Another thorny issue in the Application is the attempt by the Applicant to enrope the NDIC to subrogate the BCCI … Section 40 of the NDIC Act makes provision for the powers of NDIC to act as liquidator to failed insured institutions … Section 425 of the CAMA provides inter alia for the following – Section 425 (1) The liquidator in a winding up by the Court shall have power with the sanction either of the Court or of the committee of inspection, to – (a) Bring or defend any action or other legal proceeding in the name and on behalf of the company.” By looking soberly at the provision of Section 425(1) (a)set out above, one may ask: whether the NDIC as provisional liquidator of the 1st Respondent can bring or defend any action or other legal proceeding in the name and on behalf of the 1st Respondent.

It is clear from the same provision that a liquidator in a winding up by the Court (which the NDIC is by law deemed to have been so appointed) can bring or defend any action or other legal proceedings in the name and on behalf of the Respondent (to subrogate AIB) subject only to the condition i.e. sanction of the Court or committee of inspection to conduct such legal proceedings. In other words, where no sanction of either of the Court or of the committee of inspection is sought and obtained by the liquidator, no legal action or proceedings can be brought or defended by the liquidator.

The Applicant herein did not produce any evidence to show that the provisional liquidator has obtained such sanction of the Court or of the committee of inspection to bring or defend any action or other legal proceedings in the name and on behalf of the 1st Respondent.

There is therefore no way the Applicant can enrope NDIC as provisional liquidator to conduct any legal proceedings whether for or against the 1st Respondent.” Not dissimilarly, it was held in NDIC v UNION BANK OF NIGERIA PLC & ANOR (2015) LPELR-24316(CA), [2015] All FWLR (PT 783) 1790 at 1831 that NDIC as provisional liquidator of a bank whose licence is revoked is answerable to the Federal High Court and cannot step into its shoes without authorisation: NDIC does not derive its power to institute or defend proceedings in the name or on behalf of a failed or failing bank from the bank directly but only through the Court and to cloak it with the mantle of a privy (whose actions/activities would be deemed to be that of the bank) would be to inordinately stretch the relevant statutory provisions beyond elastic limit.

See also NDIC v MOHAMMED (2018) LPELR-44744 (CA) where this Court (per Adefope-Okojie, JCA) held that the trial Court had no jurisdiction to substitute the name of NDIC for a bank in liquidation without any evidence that leave was sought and obtained from the Federal High Court [or Committee of Inspection] to defend the matter as enjoined by S. 425 CAMA, and that the suit ought not to have been maintained in the name of NDIC as defendant to the action, but in the name of the closed bank. I have already set out the functions of NDIC as liquidator as provided in S. 41(2) of the NDIC Act.

There is no gainsaying that NDIC was not validly substituted for the defunct Metropolitan Bank Limited at the instance of the Respondent in the case at hand. The jurisdiction of the lower Court so to do was gravely impaired when it continued with the proceedings and substituted NDIC for the defunct Bank in respect of a dispute arising from banker-customer relationship as though NDIC were the privy or successor of the bank, which it is not.

Upon the order of substitution, the necessary or proper party was no longer before the lower Court, even as no veritable cause of action was disclosed against NDIC which is not an extension of the defunct bank. The lower Court had no jurisdiction to substitute NDIC in place of the defunct Bank, and the fact that NDIC participated in the proceedings makes no difference whatsoever. It is a notorious proposition for which citation of authorities is unnecessary that jurisdiction cannot be donated by consent or compromise or acquiescence where it is lacking as in the instant case.

Contrary to the Respondent’s submission, this is not an instance of misjoinder or non-joinder of parties, but one in which the Appellant was wrongly subrogated for a distinct legal entity. As held in OREDOLA OKEYA TRADING CO v BANK OF CREDIT AND COMMERCE INTERNATIONAL, IN RE AMOLEGBE supra, NDIC cannot be ‘enroped’ as provisional liquidator to conduct any legal proceedings.

This being so, a fundamental vice that impaired the jurisdiction of the lower Court to proceed with the matter and enter final judgment as it did reared its ugly head in the proceedings [see MADUKOLU v NKEMDILIM (1962) 2 SCNLR 341], and I entertain no reluctance whatsoever in resolving the two issues for determination in favour of the Appellant against the Respondent. This appeal ought to be allowed. I allow it. The proceedings before the lower Court in their entirety, inclusive of the judgment delivered on 16/9/11, constitute a nullity liable to be set aside. I so order. Suit No.

LD/507/2004 is struck out for being incompetent. There shall be no order as to costs.

OBIETONBARA OWUPELE DANIEL-KALIO, J.C.A.: I have read the judgment of my learned, BROTHER PETER OYINKENIMIEMI AFFEN, JCA and I agree with his reasoning and conclusion. The importance of jurisdiction of a Court to entertain any matter before it, cannot be over-emphasized, for as Kayode Eso, JSC once stated, without jurisdiction, the “laborers” that is, the litigants, counsel in the matter and the Court itself, labor in vain. I too find merit in the appeal and allow it.

MUHAMMAD IBRAHIM SIRAJO, J.C.A.: I agree with the lead judgment prepared by my learned brother, PETER OYINKENIMIEMI AFFEN, JCA, with nothing useful to add. I also allow the appeal and set aside the proceedings and judgment of the lower Court in Suit No. LD/507/2004 for being a nullity. I abide by the order striking out the suit for incompetence as well as the order as to costs.

Judgment

BATURE ISAH GAFAI, J.C.A.(Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of the Federal Capital Territory Abuja delivered on the 13th of September, 2019 in Suit No. FCT/HC/CV/1854/2019 in which an order for recovery of the sum of N285,053,354 from the Appellants was entered by the Court in favour of the Respondent.

As gleaned from the Record of Appeal, the Respondent had approached the lower Court by a suit under the Undefended List disclosing altogether but stated in brief here that sometime in December 2016 he placed the sum of N200,600,000.00 (Two Hundred Million, Six Hundred Thousand Naira) in a fixed deposit account with the 1st Appellant a microfinance bank for a period of 180 days at an agreed interest rate of 20% which however the 1st Appellant reneged entirely by refusing to pay the Respondent both the deposit and interest sum from the maturity date, despite several failed assurances by the 1st Appellant till date.

The Appellants responded to the suit by causing to be filed a Notice of Conditional Appearance, a Notice of Preliminary Objection and a Notice of Intention to Defend the suit.

In its judgment, the lower Court considered the arguments of the parties on the Appellants’ Preliminary Objection which was premised on the ground that the 2nd to 8th Appellants being Directors of the 1st Appellant cannot in law be personally liable for the 1st Appellant’s contract with the Respondent which therefore renders the suit as one with no cognizable cause of action against them, the effect of which is that the lower Court lacked jurisdiction to entertain the suit against them. The lower Court found no merit in the Preliminary Objection and thus discountenanced same.

Proceeding into main suit, it further found the Appellants’ facts in the affidavit in support of their Notice of Intention to Defend the suit as, in its words, “…incoherent, evasive, scandalous and thoroughly unconscionable…”.

In consequence, the lower Court discountenanced the Appellants’ Notice of Intention to Defend the suit, considered the Respondent’s suit on its merit and entered judgment in part only against the Appellants in the sum of N285,053,345.00 (Two Hundred and Eighty-Five Million, Fifty-Three Thousand, Three Hundred and Forty-Five Naira) and a consequential order on the Respondent to prepare to prove his claim for interest for the period covering February 2018 to April 30, 2019 which the Respondent claimed to have accrued in the sum of N66,572,447.00 (Sixty Six Million, Five Hundred and Seventy-Two Thousand, Four Hundred and Forty-Seven Naira).

Dissatisfied with the judgment, the Appellants lodged this Appeal vide a Notice of Appeal filed on the 25th of October, 2019 which was however by leave of this Court granted on the 20th of October, 2021 amended by substituting the name of the Respondent Mr. Idongesit Okon Nkanga (who passed away in the course of this appeal) with the name of the deceased’s wife “MRS MOSUNSOLA OLUWAFUNMILOLA IDONGESIT OKON NKANGA” as the Respondent.

The Amended Notice of Appeal was filed on the 8th of November, 2021 in which the Appellant complained against the Judgment on four grounds as follows: “GROUND 1 The Learned trial Judge erred in law when he lifted the Veil of Incorporation of the 1st Respondent on the grounds that its Directors had been fraudulent, and thereby occasioned a grave miscarriage of justice.

GROUND 2 The learned trial Judge erred in law when he dismissed the Preliminary Objection dated 11th June, 2019 brought by the Appellants as Defendants/Applicants which objection was premised on the ground that the 2nd – 8th Appellants were not necessary parties to the action, which occasioned a grave miscarriage of justice. GROUND 3 The learned trial Judge erred in law when it entered judgment for the Respondent in the sum of N285,053,345.00 against the Appellants jointly and severally.

GROUND 4 The judgment entered by the trial Court was given against the weight of evidence.” The respective particulars enumerated under these grounds are noted. See pages 79 – 83 of the Additional Record of Appeal. It is from these grounds that the Appellants’ learned counsel Ikem G. Ogugua Esq. formulated two issues for determination as shown in their Brief of Argument filed on the 14th of January 2022 on: “a. Whether there was allegation of fraud submitted before the trial Court by the Respondent. [Distilled from Ground 1 of the Notice and Grounds of Appeal] b.

Whether the 2nd – 8th Appellants who are agents of the 1st Appellant are necessary party to the suit and Jointly liable to the Respondent. [Distilled from Grounds 2 and 3 of the Grounds and Notice of Appeal]” For the Respondent, her learned counsel Isaac Okpanachi Esq., did not find a need to formulate any other in the Respondent’s brief and thus adopted and argued on the Appellants’ issues too in line with the Respondent’s case.

Traversing the Appellants’ arguments under their first issue as canvassed at pages 3 to 11 of their brief, it is, to say the least, surprising that their learned counsel did not deem it necessary or even desirable to refer to any particular page or portion of the lower Court’s judgment containing specific finding or decision which the Appellants seek to challenge. It is even more disturbing as the Judgment is fairly lengthy containing many related findings and holdings on or in relation to the Appellants’ first issue for determination (supra).

It is thus difficult to discern precisely or differentiate which among those findings or holdings the Appellants are challenging. Neither the Grounds of Appeal nor their particulars have been helpful too. In appellate practice, it is trite that issues for determination must be clearly related to and be founded on the specific findings or ratio decidendi in the judgment on appeal. In other words, the issues for determination must be distilled from the Grounds of Appeal which in turn must also be predicated upon the ratio(s) decidendi of the particular decision complained against.

See Archinga vs. Attorney General of Akwa Ibom State (2015) 6 NWLR (Pt. 1454) 1, Shipcare Nig. Ltd Owners of the M/T African Hyathinth vs. The Owner or the M/V Fortuno (2011) 7 NWLR (Pt. 1246) 205, Shettima & Anor vs. Goni & Ors (2011) LPELR – 417 (SC); Musaconi Ltd vs. Aspinall (2013) LPELR – 20745 (SC); Nze vs. Aribe (2016) LPELR – 40617 (CA). Ordinarily, the observed apparent defect in the Appellants’ first issue would have ended it all at that point.

However, in order to attain substantial justice on the Appellants’ complaints in the appeal, I have strived to identify from the judgment some particular portions(s) which seem to fit into the Appellants’ arguments without jeopardizing the Respondent’s position who in any case also adopted the Appellants’ blunder as well because their learned counsel too never referred to or mentioned any specific finding or holding of the lower Court that the Respondent is seeking to support by the arguments under the issue.

It should not be forgotten that the Appellants’ first issue essentially challenges the lower Court’s finding(s) that as Directors of the 1st Appellant, the 2nd to 8th Appellants had been fraudulent in the dealings between the 1st Appellant and the Respondent which the Court found as sufficient reason to lift the 1st Appellant’s veil of incorporation and held them liable in that capacity.

It is argued for the Appellants that neither was the allegation of fraud submitted to the lower Court to warrant its findings on the fraudulent dealings it ascribed to the 2nd to 8th Appellants nor could they in any case be validly held liable for the acts of the 1st Appellant particularly in its contract with the Respondent. That is the substrum of the Appellants’ arguments under this issue. I note yet another line of disjointed argument under this issue in relation to the joinder of the 2nd to 8th Appellants as proper parties in the trial.

Let me say straight away that this argument is one that is neither hinted in the Appellants’ first Ground of Appeal (supra) from which the Issue is distilled nor deducible from the Particulars clumsily listed thereunder as numbers “(d), (b), (c), (d)”. Having not been rooted in or linked to the Ground(s), it is said to have been distilled from, that line of argument is discountenanced.

The same fate also befalls the other line of argument under the same Issue by which the Appellants introduced and canvassed arguments questioning the lower Court’s decision on their Notice of Preliminary Objection being one that is completely unconnected to their said first Ground of Appeal. See Thompson vs. Akingbehin (2021) 16 NWLR (Pt. 1803), 285 at 312 to 313 paras H – E.

What I can only add from the Appellants’ arguments on this issue, even if for emphasis only, is the Appellants’ insistence that the lower Court wrongly found the 2nd to 8th Appellants fraudulent in the circumstances and without affording them an opportunity to be heard on it. Reliance is placed on the decisions of this Court in FDB Financial Services Ltd vs. Adesola (2000) 8 NWLR (Pt. 668), 170, Alarapon & Ors vs. PRP & Ors (2019) LPELR – 47052 (CA) among others in support of the argument under this issue.

For the Respondent, it is argued that by virtue of Sections 308, 309 and 316 of the Companies and Allied/Matters Act 2020, if a company, the 1st Appellant in this case, with intent to defraud fails to apply the money or other property for the purpose it was received, every director of the company who is in default is personally liable, without diminishing the liability of the company itself; placing reliance on the decisions by this Court in Public Securities Ltd vs. JEFIA (supra), Eboni Finance & Securities Ltd vs. Wole-Ojo Tech.

Services Ltd (1996) 7 NWLR (Pt. 46£), 464 at 478 para A – D and the Apex Court’s decision in Trenco Nig Ltd vs. ACB & Anor (1978) NSCC 220 at 250. Learned counsel submitted that it is unjust for a party such as the Appellants to rely on the doctrine of corporate liability in the facts and circumstances as in the Respondent’s case.

It is further argued that the Appellants who in their own affidavit presented contradictory, dishonest facts cannot now turn around to claim denial of hearing, more particularly as the fraud by the Appellants is so manifest for example by inter alia issuing postdated checques on two different occasions to the Respondent knowing that they had no money in their bank account which in itself is easily an offence under the provisions of Section 1 of the Dishonoured Cheques Offences Act 1977 and Section 311 of the Penal Code. ​ As can be seen, the entire arguments for the parties on this Issue revolve around the real or imagined protection or liability of the 2nd to 8th Appellants for the acts of the 1st Appellant, the former being the latter’s Directors.

Undeniably, the 1st Appellant is a corporate entity, a juristic person in law, different from its members, subscribers or shareholders. For good reasons, the law has conferred upon it enormous immunity and privilege owing to its basic gullible feature of living a life without a mind or brain, without hands or legs, without a body or physical form.

It is by the undaunting force of the law at the bottom of its creation, and protected through its growth or promotion to a functional juristic personality that it exists differently from, though not in isolation of its human components which reside mainly in its directors. That is the postulate in the doctrine of corporate personality which appears to have originated and gained persistent legitimacy for one hundred and twenty-five years now from the English decision in Salomon vs Salomon (1897) 2 AC 22. It applies in Nigeria as well. See Section 42 of the Companies and Allied Matters Act 2020.

In Adamu Muhammad Gbedu & Ors vs. Joseph I. Itie (Liquidator) (2020) 3 NWLR (Pt. 1710), 104 at 124 para C – D, the Supreme Court held that: “Company law derives from Common Law and that includes the Companies and Allied Matters Act, CAMA, applicable in Nigeria.” Its application in Nigeria has been consistently upheld by both the Apex Court and this Court. See Marina Nominees Ltd vs. FBIR (1986) LPELR – 1839 (SC), Ramanchandani vs. Ekpenyong Trenco (Nig) Ltd vs. African Real Estate & Investment Co. Ltd & Anor (1978) LPELR 33264 (SC), United Cement Co.

Ltd vs Libend Group Ltd & Anor (S016) LPELR – 42038 (SC).

As in every rule however, there are recognized exceptions, premised on the legal reality that a company though an artificial person in the eyes of the law is however composed of and piloted by its human component, i.e. its Directors and Managers who act as the directing mind of the company by their action and inaction for the company. When there occurs infractions against the company, it is the Directors who rise to the occasion in its defence, in the same way that they bear the responsibility and liability in defence of the excesses or infractions by the company.

Such is the inextricable, generally harmonious relationship between a company and its Directors. By the very nature of this relationship, there developed necessary legal mechanisms as recognized exceptions to the doctrine of the separate legal personality of a company particularly in ostensible acts of the company but which in reality are acts of its Directors to lift the veil of the company’s incorporation in order to see those behind the excesses or inactions of the company that are put to question. The exceptions are enshrined in law and in equity and applied in our Courts.

As referred by the learned counsel for the Respondent, Section 316 of CAMA 2020 provides that: “Where a company – (a) receives money by way of loan for specific purpose; (b) receives money or other property by way of advance payment for the execution of a contract or project; or (c) with intent to defraud, fails to apply the money or other property for the purpose for which it was received, every director or other officer of the company who is in default is personally liable to the party from whom the money or property was received for a refund of the money or property so received and not applied for the purpose for which it was received and nothing in this section affects the liability of the company itself.” The Appellants’ complaint here is that the lower Court was wrong when it lifted the 1st Appellant’s veil of incorporation on the ground that its Directors i.e. the 2nd to 8th Appellants had been fraudulent. ​ To begin with, as clearly enshrined in these provisions, fraud is certainly a ground on which the 1st Appellant’s veil may be lawfully lifted in order to hold its Directors personally liable to the party from whom the money was received.

In my humble view, it is not only good law but good sense to treat a company and its Directors in line with the provisions of Section 316 of CAMA (supra) firstly because they are the actors in the company’s dealings and secondly to protect the company from the excesses of its unscrupulous, fraudulent Directors. It is in this premise that the lower Court lifted the veil of the 1st Appellant’s incorporation in accordance with the provisions of Section 316 of CAMA 2020.

More importantly, I have been unable to find any misapplication of the law and the facts considered by the lower Court in arriving at the finding that the 2nd to 8th Appellants were indeed fraudulent in their dealing with the Respondent from day one. This view can be better appreciated through the findings in the Judgment of the lower Court as follows: “The Claimant’s case is that up till the time of presenting the 1st Defendant was yet to pay him a dime despite the above assurances.

However, in a curious and evasive twist the Defendants at paragraph 10 of the affidavit in support of notice of intention to defendant stated as follows: ’’That paragraph 3 (o) of the affidavit in support of the Writ of summons is admitted only to the extent that the sum of N285, 053, 345.00 (Two Hundred and Eighty-Five Million, Fifty-Three Thousand and Forty-Five Naira) only together with the accrued interest since 15th March, 2018 till date only being claimed as the 1st defendant’s indebtedness to the claim is arbitrary and does not represent the actual state of the 1st Defendant’s indebtedness as same cannot be claimed under the agreement between the parties same being outside the tenor of the agreement.” This line of defence is to my mind incoherent, evasive, scandalous and thoroughly unconscionable especially when the 1st Defendant had earlier written to admit liability in the sum of N285,053,345.00 (Two Hundred and Eighty-Five Million, Fifty-Three Thousand, Three Hundred and Forty-Five Naira).

I need to remind the Defendants that it was not the Claimant that carne up with the figure. It was indeed the 1st Defendant that put the figure forward as the total sum due to the Claimant as at 28th February, 2018. It is therefore unacceptable for the said Defendants to now attempt to discredit what it authored in the first place. No Court or Tribunal will welcome such line of defence. What I am saying in essence is that the Defendant, cannot approbate and reprobate at the same time. They are bound by Exhibits ON5 which is their i.e. the Defendants’ own document.

It is worthy of note that cheques were presented to the Claimant at different times but he got no value for any of them. Interestingly the Defendants did not put anything forward by way of their bank statements to show that funds moved from any of their accounts to the Claimant. From the correspondence with the Claimant the Defendants’ line of defence is that they have invested the Claimant’s fund and waiting to be paid by the Federal Government of Nigeria. Paragraph 12 of their affidavit speaks to this point.

It is hereby reproduced: “That further to the above paragraph 12 (sic), the 1st Defendant maintains that she in her discretion invested several sums of money in a business venture which yielded so much profit but which stun owed the 1st Defendant by the Federal Government of Nigeria has remained unpaid up till this day which fact was duly disclosed to the Claimant’s counsel and which has necessitated the institution of SUIT NO FCT/HC/ZOO1/ZO19 BETWEEN: KOLAWOLE OLOWOOKERE VS ATTORNEY GENERAL OF THE FEDERATION AND MINISTER OF JUSTICE B ANOR by the 1st Defendant’s counsel.

A certified true copy of the said writ of summons and other processes duly filed are hereby attached and marked Exhibit NCMF X.” It is however curious that the Defendants who chimed that the Federal Government of Nigeria is indebted to them exhibited a very strange document christened as Exhibit NCMF 1 to prove that point. I have carefully perused the exhibit and it is clear to me that it has nothing to do with the relationship between the Claimant and the Defendants. In fact, the Exhibit is 3 suit for recovery of professional fee instituted by Mr.

Kayode Olowookere Esq or counsel for the Defendants. What that means is that the Defendants are simply playing pranks with the Court as it has no defence to this action.

Whichever way Exhibit NCMF 1 is viewed it is not relevant to the proceedings and cannot Be used by the Defendants to justify their failure to repay the Claimant’s investment with the accrued interest.” See pages 74 to 76 of the Additional Record. ​ Furthermore, it seems to me that the vehement insistence of the 2nd to 8th Appellants on pushing the entire liability on the 1st Appellant is clearly because the 1st Appellant, as contended by the Respondent’s counsel, has since become moribund; a contention the Appellants have found impossible to deny.

With respects to the Appellants’ learned counsel, that line of defence only reinforces the lower Court’s finding that the Appellants have been fraudulent because its ultimate effect is to evade the repayment of the debt permanently as the 1st Appellant on whom they seek to push the debt liability is to their full knowledge no longer functional; in effect crushing the Respondent to Ground Zero under the cover of Salomon vs. Salomon (supra), as it were, contrary to the provisions of Section 316 of CAMA (supra) and the demands of equity.

The findings and decision of the lower Court in lifting the veil of the 1st Appellant in the circumstances are unassailable. With respects, I wish the learned counsel for the Appellants has had time to read the decisions in the three cases referred by his learned friend for the Respondent; namely Public Finance Securities Ltd vs. JEFIA (supra), Eboni Finance GT Securities Ltd vs. Wole-Ojo Tech. Service Ltd (supra) and Trenco Nig. Ltd vs.

ACE (supra) as that would have saved him the stress of attempting to distinguish them from this appeal as he sought to do in the Appellants’ Reply Brief because they are in all fours with the cases of the parties herein.

To drive this point home, I will reproduce the portion referred by the Respondent’s counsel from the JEFIA case (supra) here thus: “It is patently clear that Section 290 of the Companies and Allied Matters Act 1990 is wide enough to cover the situation herein whereas borne by the record, the 2nd appellant, as the Chairman and Managing Director of the 1st appellant Company had recklessly refused to attend Court to explain or defend the failed investment of the respondent, but instead fabricated a sham defence “that the 1st defendant in common with other Ranks and Investment Companies, suffered a decline in Business fortunes due to political crises and orchestrated blackmail by some fraudulent staffers.

The learned trial Judge, at page 39 lines 2 to 11 of the record said:- “The money invested by the plaintiff represents a loan to the 1st defendant for the sole purpose of yielding interest. The Company is not willing to pay and says that it is in some distress and has resorted to all sorts of subterfuge in order to avoid payment of the sum appearing on the Bond Certificates. I have already shown that this is only but a sham and fraudulent defence that is put forward. The question is what did they do with the money?

It is fraud in my view to establish a Financial Institution that collects money from the general public by way of investments and turn around to disappoint their legitimate expectation under the guise of having a general decline in business.” The above quoted passage from the judgment of the trial Court cannot be faulted as it is supported by both the affidavit and oral evidence contained in the record of proceedings, I agree with him.

I also agree with him that this is a proper case to invoke the provisions of Section 290 of the Companies and Allied Matters Decree 1990 to protect the respondent and hold the 1990 appellant liable jointly and severally with the 1st appellant for debt owed the respondent.” I had earlier hinted that the Appellants are in equity also bound to repay the 1st Appellant’s debt.

This is what preoccupied the mind of this Court also in the Eboni case (supra) referred by the Respondent’s learned counsel, where this Court reasoned and held thus: “Another point in this case is this: as the 1st and 2nd respondents have received the money, might equity not come to the rescue for unjust enrichment.

I think the principle of unjust enrichment which unfortunately is not well developed in English law as both in U.S., and Scotland should, of necessity be nurtured to growth in a new and complex society like ours where people can easily at a whiff of breath resort to law to ward off debt or other enrichments they have had, at the expense of the other. This is a specie of constructive trust which is an instrument which the Court of equity may employ to prevent undue enrichment.

I believe that when a person is holding tight that which is subject of equity he should not be allowed to hold it firmly. Therefore, where a party unjustly enriches himself at the expense of the plaintiff he must be made to disgorge it. Our legal system should at this instance lean more to U.S. law on this principle than in England where the principle is yet to assume a wider dimension. Thus Lord Porter in Reading v. A.G. (1951) A.C 5014 said My Lords – the exact status of the law of unjust enrichment is not yet assured.

It holds a predominant place in the law of Scotland and I think of the United States”. The premise behind the doctrine of restituting an unjust enrichment is that justice be done. That being the case, it seems to me that we ought to lean overly to U.S. legal practice to effectuate justice. Therefore, in consonance with the principles enshrined in the restitution a remedy shall be available whenever the defendant is unjustly enriched at the expense of the plaintiff.

In this case, the respondents must be made to vomit out what they have taken (unjustly).” In addition, the Apex Court’s decision in the Trenco case (supra) referred also by the Respondent’s counsel is no less relevant and binding on this Court as it is similarly in all fours with the present Appeal; more particularly on the line of failed exculpatory argument of the 2nd to 8th Appellants that the lower Court wrongly held them liable for the 1st Appellant’s debt. In my humble view, this Issue can only be and is resolved against the Appellants.

In their second issue, the Appellants have argued strenuously that the lower Court was wrong to have maintained the suit with the 2nd to 8th Appellants as parties although they were agents of a disclosed principal namely the 1st Appellant. It is argued further that the Respondent did not make any case against the 2nd to 8th Appellants to warrant their joinder as parties in the suit. Learned counsel referred to the decision of this Court in Global Soap & Detergent Industries Ltd & Ors vs.

Bello & Anor (2011) LPELR – 9029 (CA) and Ramon vs Adeleke & Ors (2019) LPELR – 50175 (CA) where this Court held that where an agent acted on behalf of a disclosed principal, he cannot be personally liable, unless it can be proved otherwise. Those are the main arguments under the Issue.

For the Respondent however, it is argued that although it is the correct position of the law that an agent of a disclosed principal cannot generally be sued or held personally liable, there have been long settled exceptions to that rule which include situations where statutory provisions make such agent liable e.g. under Sections 308, 309 and 316 of CAMA and Section 1 of the Dishonoured Cheques Act and secondly where the Court from the circumstances of a case makes the agent liable though the principal is named.

Learned counsel referred to the decisions of the Supreme Court in National Film Video Censor Board & Or Vs. Adegboyega & 2 Ors (2019) 4 NWLR (Pt. £662), 285 at 507 and COTECNA International Ltd vs. Church Gate Nig. Ltd (2010) 18 NWLR (Pt. 1225), 546 where the Supreme Court upheld the joinder of an employee and of an agent respectively although of named principals; to buttress his submission on recognized exceptions to the rule that an agent of a disclosed principal can neither be sued nor held liable.

Learned counsel further argued that the 2nd to 8th Appellants are necessary parties without who the suit cannot be judiciously decided placing reliance on the Supreme Court’s decisions in Azubuike vs PDP (2014) 7 NWLR (Pt. 1406), 292 a 313 and Mbanefo vs. Molokwu (2014) 6 NWLR (Pt. 1406) 377 at 410 – 411.

In his Reply Brief, the Appellants’ counsel sought to distinguish the Supreme Court’s decision in the Censors Board case (supra) for the reason that the party joined in that appeal was wrongfully collecting money from people whereas the Appellants in this Appeal were merely acting within the instructions of the 1st Appellant. Needless to say but for emphasis, this reasoning is unacceptable in view of the earlier resolution of that argument in the contrary under the first Issue.

Strangely, the learned counsel avoided any argument or – even comment on the Respondent’s reliance on the provisions of Section 316 of CAMA which the Respondent argued made the Appellant’s parties on the facts in the suit. Firstly, the Appellants are parties in the suit by operation of law under Section 316 of CAMA (supra). Secondly, the two previous decisions of this Court referred by the learned counsel for the Appellants were not based on the provisions of Section 316 of CAMA. Thirdly, the Appellants are on the facts necessary parties without who the entire suit would be meaningless.

As laid down in several decisions by this Court and the Apex Court, from which I referred to the Apex Court’s decision in Azubuike vs.

PDP (supra) the questions to be answered before arriving at whether a party is a necessary party in a suit are: (a) Is the cause or matter liable to be defeated by the non-joinder? (b) Is it possible to adjudicate on the cause or matter unless the 3rd party is added as a defendant? (c) Is the 3rd party a person who should have been joined in the first instance? (d) Is the 3rd party a person whose presence before the Court as a defendant will be necessary in order to enable the Court to effectually and completely adjudicate or settle all the questions involved in the cause or matter?

From the facts detailed in the Respondent’s affidavit and its annexures in support of the Originating Summons found at pages 3 to 18 of the Additional Record which the Appellants’ evasive facts in their Notice of Intention to defend the suit found at pages 32 to 35 failed to controvert effectively, more particularly on their roles as directors of the 1st Appellant, the lower Court was right in refusing to strike out their names from the Suit as they sought by their Notice of Preliminary Objection, because all the above questions are, upon the credible evidence before the lower Court, easily answerable in the affirmative against the Appellants.

See also Biyu vs. Ibrahim (2006) 8 NWLR (Pt. 981), 1 at 35, Adefarasin vs. Dayekh ​(2007) 11 NWLR (Pt. 1044), 89 at 116 – 117, Jadesimi vs. Okotie-Eboh (1989) 4 NWLR (Pt. 113), 113 at 126. This issue is also resolved against the Appellants. In consequence, the Appellants’ two issues for determination as adopted and argued also by the Respondent, having been resolved against the Appellants, the appeal ends as one lacking in any merit and is accordingly dismissed. The judgment of the lower Court is affirmed. I award cost of Two Hundred Thousand Naira against the 2nd to 8th Appellants jointly.

STEPHEN JONAH ADAH, J.C.A.: I have had the privilege of reading in draft, the judgment just delivered by my learned brother, Isa Bature Gafai, JCA. I am in agreement with the reasoning and conclusion which I adopt as mine. I therefore, agree that the appeal lacks merit and I hereby dismiss it. I abide by the consequential orders inclusive of the order as to costs as made in the lead judgment.

BIOBELE ABRAHAM GEORGEWILL, J.C.A.: I was privileged to read in advance a draft copy of the leading judgment just delivered by my noble lord, Isah Bature Gafai, JCA, and I am in complete agreement with the impeccable reasoning as marshalled out therein as well as the inescapable conclusion reached to the effect that the appeal lacks merit and is liable to be dismissed.

My Lords, proceedings under the undefended list procedure, as was commenced by the Respondent against the Appellants in the instant appeal before the lower Court to recover the total sum of N285, 053, 345. 00 by reason of the refusal of the 1st Appellant, of which the 2nd – 8th Appellants are the Directors, to pay over to the Respondent the sum of N200, 600, 000. 00 placed in a fixed deposit with the 1st Appellant for a period of 180 days at an agreed interest rate of 20%, is a strict one geared towards the expeditious dispensation of justice, devoid of unnecessary delays and undue technicalities, in cases where the Defendant really has no defence to the claim of the Claimant.

In Arcadia Petroleum Nig. Ltd & Anor V. Northside Apartment Ltd & Anor (2022) LPELR – 57506(CA), this Court per Sir Biobele Abraham Georgewill JCA had stated inter alia thus: “Under the Undefended List Procedure, going by the several judicial authorities on the essence of this procedure geared towards the attainment of speedy but substantial justice in cases in which a Defendant really has no defense to the claim of the Claimant against him and for judgment to be entered if there be nothing worth being further investigated by the Court on the affidavit evidence of the parties.

It is to be noted here, and very pertinently too, that once the Claimant’s Suit is filed and or placed under the Undefended Cause List, the very straightforward, and if I dare say very simple uncomplicated procedure on the date fixed for hearing of the Suit filed or placed under the Undefended List, is that the Court would after hearing the parties or their counsel ascertain if on the facts as placed before it the Defendant had made out any triable issue or defense on the merit.

In arriving at such a finding, the Court would critically securitize and examine the affidavits and documentary Exhibits, if any, of the parties to determine at that stage if the Defendant has disclosed any defense on the merit or raised at least triable issue that would need to be further investigated into by the Court by way of a full hearing. However, where the Court finds that the Defendant has not disclose any defense on the merit or raised any triable issue, it is under a duty to proceed to enter judgment in favor of the Claimant against the Defendant, no more no less.

But, where the affidavit of the Defendant in support of the Notice of Intention to Defend discloses either a defense on the merit or triable issues or if there are substantial conflicts as to the facts of the case on the affidavits of the parties, it would be sufficient for the Court to hold that the Defendant has raised a triable issue as would require further enquiry and thus a transfer of the matter to the General Cause List should be the appropriate.

The Claimant’s claim would then be heard at plenary trial in which the contending rights of the parties would be enquired into and settled on the merit on the evidence as would be put forward by them at the trial.” See also United Bank for Africa Plc V. E. I. Natama International Complex Ltd (2020) LPELR-51981(CA) per Sir Biobele Abraham Georgewill. JCA.

In the leading judgment, the numerous legal questions raised by the parties under the cover of just two, seemingly simple but apparently, overloaded, issues have been considered admirably and resolved against the Appellants in favour of the Respondent. I shall only, by way of my humble contribution, say a word or two on some of these very crucial issues as canvassed by the parties in their respective appellate briefs in this appeal.

I have no doubts in my mind based on the affidavit evidence of the parties as in the Record of Appeal that the 2nd – 8th Appellants, who are Directors of the 1st Appellant, are the directing minds and alter ego of the 1st Appellant. In law, they therefore, come within the context of agents of the 1st Appellant.

This is so because agency can be created in about four to five ways, namely: (1) By express appointment, whether orally or by letter of appointment or, indeed by Power of Attorney; (2) By Ratification of the Agent’s acts by the Principal; (3) By virtue of the Doctrine of Estoppel; (4) By implication of law in the case of agency of necessity, and (5) By presumption of law in the ease of cohabitation. See Salbodi Group Ltd & Anor V. Doyin Investment Nigeria Limited & Ors (2022) LPELR – 57458 (CA) per Sir Biobele Abraham Gcorgewill JCA. See also Vulcan Gases Ltd. V. GF.IND.

AG. (2001) 9 NWLR (Pt. 719) 610 AT Pp. 637 – 638, per Iguh JSC. Indeed, agency relation can in law even be implied as is referred to as the implied authority or apparent or ostensible authority of an agent acting within the scope of the authority vested on him by the principal. In law, implied authority is also referred to as apparent or ostensible authority. It is the authority of an agent as it appears to other.

Under the doctrine of apparent authority, the principal may be bound to third parties because the agent appeared to have authority, though as between principal and agent there was in fact no such authority granted and normal circumstances of such authority did not arise. See Salbodi Group Ltd & Anor V. Doyin Investment Nigeria Limited & Ors (2022) LPELR – 57458 (CA) per Sir Biobele Abraham Georgewill JCA. See also UBN (Nig) Plc V. Otagbe Farms Ltd (2002) 14 NWLR (Pt. 787) 242 AT pp. 249 – 250, per Akaahs JCA, (as he then was but later JSC).

Thus, in law, a principal cannot generally be liable for the fraud of his agent unless it is proved that the agents, as in the instant appeal, the 2nd – 8th Appellants, had a guilty mind in respect of the fraudulent acts of the 1st Appellant in its dealings and relationship with the Respondent, had indeed participated in it. See Sections 308, 309 and 316 of the Company and Allied Matters Act 2020. See also Salbodi Group Ltd & Anor V. Doyin Investment Nigeria Limited & Ors (2022) LPELR – 57458 (CA) per Sir Biobele Abraham Gcorgewill JCA, Nirchandani V.

Pinherio (2001) FWLR (Pt. 48) 1323, Fitton V. IGP (1958) 3 FSC 20.

The question then simply is this: Did the Respondent, by the copious affidavit evidence, which were left generally unchallenged and therefore, uncontroverted, show that the 2nd – 8th Appellants as Directors, and therefore, the directing mind and alter ego of the 1st Appellant, acted in the relationship between the Respondent and the 1st Appellant, being the agents of the 1st Appellant, within or outside the scope of their authorities for which either the 1st Appellant alone, being a corporate legal entity, should bear responsibility to the Respondent or for which the corporation veil can be lifted and the 2nd – 8th Respondents also held accountable and liable for the acts of the 1st Appellant carried out under their supervision and direction as the directing minds of the 1st Appellant?

My Lord, it must be pointed out at once that in law the mere fact a person, such as the 2nd – 8th Appellants, is an Agent of a Principal, such as the 1st Appellant, and known to be so does not of itself necessarily prevent his incurring personal liability, and whether he does so or not is to be determined by the nature and terms of the contract and the surrounding circumstances. See Salbodi Group Ltd & Anor V. Doyin Investment Nigeria Limited & Ors (2022) LPELR – 57458 (CA) per Sir Biobele Abraham Georgewill JCA. See also FCDA V. Ezinkwo (2007) All FWLR (Pt. 393) 115, Asafa Foods Factory V.

Alaine Nig Ltd (2002) FWLR (Pt. 125) 756. Now, I had earlier posed the question, whether the facts of this ease as in the Record of Appeal would or could justify and or warrant the lifting of the corporate veil of the 1st Appellant as was apparently done by the lower Court? I certainly think it does!

The lower Court was, in my finding, perfectly in order to have lifted the corporate veil of the 1st Appellant, to see the 2nd – 8th Appellants, as the main actors and directing minds of the activities, acts and actions of the 1st Appellant, in its relationship with the Respondent in the proved facts and circumstances of this case. My Lords, it is true that a limited liability Company, such as the 1st Appellant, company upon its incorporation acquires a legal personality of its own that makes it distinct from its Shareholders ad or Directors.

Yet, in law there are some exceptional but very limited circumstances in which a Court may lift the veil of incorporation so as hold the Shareholders and or Directors personally liable for the debts and or liabilities of the company. This would include eases of grave and proved allegations of fraud, as in the instant appeal or illegality or sham that would in fairness and in justice warrant the lifting of the veil of the corporate entity of a company duly incorporated in law. See Willbros West Africa, Inc. & Ors V.

Mcdonnel Contract Mining Limited (2021) LPELR – 54544 (CA) per Sir Biobele Abraham Georgewill JCA. See also Prof Ajibayo Akinkugbe V. Ewulum Holdings Nigeria Ltd & Anor (2008)12 NWLR (Pt. 375) 1, Okoli V. Morecab Finance (Nig.) Ltd (2007) 14 NWLR (PT. 1053) 37 AT p. 57, Vibelko (Nig.) Ltd V. NDIC (2006) 12 NWLR (Pt. 994) 280 AT pp. 293 – 294, Alhaji Mohammed Abacha V. AG. Federation (2013) LPELR – 21749. It is for the above few words of mine, by way of contribution to the fuller reasoning marshalled out in the leading judgment, that I too dismiss this appeal for lacking in merit.

I shall abide by the consequential orders made in the leading judgment, including the order as to cost.

Judgment

ITA GEORGE MBABA, J.C.A. (Delivering the Leading Judgment): Appellant filed this appeal against the judgment of Kano State High Court in Suit No. K/81/2015, delivered on 18th, May 2015, by Hon. Justice Aisha Ibrahim Mahmud, whereof she gave judgment to the plaintiff in the sum of One Million and Eighty Thousand Naira (₦1,080,000.00) only, being a debt owed.

At the trial Court, the Respondent (as Plaintiff) had sought the following reliefs: 1) The sum of ₦1,080,000 (One Million Eighty Thousand Naira Only) being the amount due to the plaintiff from the defendant. 2) 10% Court interest on the judgment sum from the date of judgment till the judgment sum is liquidated. 3) Cost of this action. By motion, filed on 7/4/2015, the matter was slated for 18/4/2015, for hearing under the Summary Judgment Procedure (Order 11 Kano State High Court (Civil Procedure) Rules, 2014).

The Defendant/Appellant was served with the processes but did not consider it prudent to file any document to challenge the case, because, according to Appellant, the Exhibits A&B as well as the other documents placed before the Court clearly showed that the Plaintiff/Respondent did not supply any electrical materials/goods to the Defendant/Appellant, in his personal name and capacity. On the 18/5/2015, the plaintiff’s Counsel moved the application for the Summary Judgment, which was not opposed and the application was granted.

Appellant later brought this appeal, saying that there was no contractual relationship between the parties. See the Notice of Appeal on Pages 65 to 69 of the Records of Appeal. Appellant filed brief on 17/6/2016 and distilled 6 issues for the determination of the appeal, as follows: 1) Whether in the circumstance, the learned trial judge and or the lower Court had jurisdiction to entertain this action, commenced by the plaintiff/respondent for electrical goods supplied by Messrs. El-Liman Investment Nig.

Ltd to the Appellant and consequently give judgment in favour of the plaintiff/respondent, when the proper plaintiff to institute the same was not before the Court and the plaintiff/respondent has no locus standi (grounds 3 & 4). 2) Whether in the circumstances, it was proper for the plaintiff/respondent, being a DIRECTOR in EL-Liman Investment Nig Ltd and ipso facto, an agent of a disclosed principal, to commence this action for the debt owed to the said El-Liman Investment Nig Ltd in his capacity (Ground 16). 3) Whether having regard to all documents including the writ of summons and statement of claim placed before the lower Court, it can be said that the proper parties to the transactions were before the Court. (Ground 7). 4) Whether in the circumstances, the cause of action for the debt in the sum of ₦1,080,000, being the amount for the electrical parts/goods supplied to the defendant/Appellant by Messrs El-Liman Investment Nig Ltd had accrued so as to commence an action to recover the same. (Ground 5) 5) Whether, having regard to the provision of Order 11 Kano State High Court (Civil Procedure) Rules, 2014, and in the face of documents placed before the Court, the learned trial judge was right to give judgment in favour of the plaintiff/respondent for the said sum of ₦1,080,000 (Ground 2). 6) Whether the learned trial judge was right to give judgment to the Plaintiff/Respondent for the sum of ₦1,080,000, without weighing, evaluating and assessing the evidence placed before the Court. (Ground 1).

The Respondent filed his brief on 25/7/2016 and also filed a preliminary objection on the same date seeking the striking out of the appeal on the ground that the appeal did not relate to the decision of the trial Court and that the grounds of the Appeal were incompetent.

The Respondent’s Counsel argued the preliminary objection in the Respondent’s Brief, and also formulated a lone issue for the determination of the Appeal, in the alternative, as follows: “Whether the learned trial Judge was right in entering judgment in favour of the Respondent.” PRELIMINARY OBJECTION The Respondent’s preliminary objection quarreled with grounds 2, 3, 4, 5 and 6 of the Appeal, saying the same contravened Order 6 Rule 2(3) of the Court of Appeal Rules, 2016, and that the particulars of the said grounds are narratives, argumentative and irrelevant.

He also said that the particulars in support of the Grounds did not relate to the Grounds of the Notice of Appeal. He relied on the case of Adah Vs Adah (2001) FWLR (Pt 41) 1815 at 1923 and other cases. Appellant did not file any reply brief, but I noticed that the Respondent did not specify which particular ground of the Notice of Appeal offended the rules, apart from generally referring to grounds 2, 3, 4, 5 and 6 and did not state how the particulars of such grounds contravened the Order 6 Rule 2(3).

I have had a close look at the said grounds 2, 3, 4, 5 and 6 of the grounds of appeal and cannot see how to fault the said grounds of appeal, apart from noting that they are verbose and repetitive. But the complaints are clear and understood, and I do not think can mislead the Respondent.

I should also add that picking quarrel with a ground or grounds of appeal does not call for raising a preliminary objection to the appeal, under Order 10 Rule 1 of the Court of Appeal Rules, 2016 (now 2021 Rules), as the remaining grounds, not complained against, can still sustain the Appeal, even if the complaint is upheld. We have stated, several times, that objection to an irregular or incompetent ground of appeal is done by way of a motion on notice, calling the attention of the Court and of the appellant to such defect and urging the Court to strike out the ground(s).

See Esogwa & Ors Vs Nwosu (2020) LPELR-50610 (CA) and the case of Opeyemi Vs State (2019) LPELR-48764(SC), where it was held: This Preliminary Objection is against certain grounds of the appeal, specifically grounds 2, 3 and 4 in a way that smacks of an academic journey into intellectual discourse and nothing more apart from taking umbrage on some grounds and not on the appeal itself.

The Supreme Court had in the case of Oladokun v Olawoyin (2017) All FWLR (Pt.872) 1441 deprecated this mode of raising of objection thus:- “A preliminary objection can only be taken against the hearing of an appeal and not against one or more grounds of appeal which are capable of disturbing the hearing of the appeal. A Preliminary Objection should be capable, if successfully taken of putting an end to the hearing of the appeal.

An objection to qualify as preliminary objection should require serious argument and preliminary objection consideration on a point of law which if decided, one way or the other, is going to be decisive of litigation. In other words, the purpose of preliminary objection to an appeal is to contend that the appeal is incompetent or fundamentally defective which if it succeeds would put an end to the appeal. In the instant case, where the preliminary objection filed by the 1st respondent was filed against some grounds of appeal, the Court of Appeal struck same out”.

This preliminary objection is really a waste of the Court’s precious time which cannot terminate the appeal, the other ground would sustain the appeal assuming the grounds 2, 3 and 4 were invalid and they are not.” Per PETER-ODILI, JSC See also the case of Alaribe Vs Okwuonu (2015) LPELR – 24297 CA, where we held: Whereas in the former, the Notice of preliminary objection ought to be filed, separately, at least, 3 clear days to the hearing of the appeal, to give the opponent due notice before arguing it, either in the Respondent’s brief or separately, in the latter situation, the Respondent only needs to file a motion to highlight the defects in the ground(s), and the same can be properly raised in the Respondent’s brief and argued therein See the case of Innocent Okereke & Anor vs.

Innocent Adiele: CA/PH/421/2008, a recent decision of this Court, delivered on 20/11/14, where we said: “The position of this Court, as per the authorities of the Apex Court, has always been that, where an objection is against one or more grounds of appeal, then the objector need not file a “preliminary objection”, but a motion, notifying the Appellant of the Respondent’s intention to contest the competence of those grounds of appeal or issue(s). Of course, such objection can be raised and argued in the Respondent’s brief, without the need to file a separate process to that effect.

See also Onuegbu & Ors Vs Gov. Imo State & Ors (2015) LPELR – 25968 CA: We have also held several times, relying on the Apex Court’s decisions, that a preliminary objection, pursuant to Order 10 Rule 1 of this Court’s Rules, 2011, is not the option, where a party is merely objecting to the competence of a ground(s) of appeal or issue distilled therefrom.

A preliminary objection can only apply, where there is objection to the competence of the Appeal as a whole, like where notice of appeal is defective, or is not there and/or where the Records of Appeal is challenged, or all the grounds are defective. See the case of Alaribe Vs Okwuonu (2015) LPELR – 24297 CA, where it was held:- “I think, it is necessary to state, again, that there is a difference between raising a preliminary objection against an appeal, under Order 10 Rule 1 of the Court of Appeal Rules, 2011, and raising an objection against a ground(s) of appeal, for being defective.

Whereas, in the former, Notice of Preliminary objection ought to be filed, separately, at least 3 clear days to the hearing of the appeal, to give the opponent due notice, before arguing it, either in the Respondent’s brief or separately, in the latter situation, the Respondent only needs to file a motion to highlight the defects in the ground(s), and the same can be properly raised in the Respondent’s brief and argued therein.

See the case of Innocent Okereke & Anor Vs Innocent Adiele CA/PH.421/2008, a recent decision of this Court, delivered on 20/11/14, where we said: “The position of this Court, as per the authorities of the Apex Court, has always been that, where an objection is against one or more grounds of appeal, then the objector need not file a “preliminary objection”, but a motion, notifying the Appellant of the Respondent’s intention to contest the competence of those grounds of appeal or issue(s).

Of course, such objection can be raised and argued in the Respondent’s brief, without the need to file a separate process to that effect. See the case of General Electric Co.

Vs Harry Akande (2011)4 NSCQR 611… See also Adejumo Vs Olawaiye (2014)12 NWLR (Pt 1421) 252 at 265) where the Supreme Court said; “A preliminary objection should only be filed against the hearing of an appeal and not against one or more grounds of appeal… Where a preliminary objection would not be the appropriate process to object or show to the Court defects in the processes filed before it, a motion on notice filed complaining about the grounds or defect would suffice…” I strike out the said so-called, preliminary objection, for incompetence.

I should also say that Appellant’s grounds of appeal and issues for determination of the appeal are rather a repetition of one and the same complaint, in different ways, amounting to proliferation of issues, as all of them appear to contest the competence of the trial Court to entertain the suit, where the respondent (Plaintiff) was said not to have been a party to the contract for the supply of the electrical materials/goods.

I think the relevant issue for the determination of the appeal is as stated by the Respondent (and modified by me), as follows: “Whether the learned trial judge was right in entering judgment in favour of the Respondent, in the circumstances of the case that Respondent was not a party to the supply contract to Appellant?” Appellant’s Counsel, Chike Onyeacho, Esq., had argued that the pleading and evidence showed that the Respondent was only a director of El-Liman Investment Nig.

Ltd, a limited liability company, dealing in electronics appliances and general goods; that that company had supply contract with Appellant to the tune of the amount claimed by the Respondent – ₦1,080,000.00; that the documents evidencing the transaction were issued by the company, El-Liman Investment Nig. Ltd, to the Appellant and nothing was done with the Respondent, as a person, to warrant the taking out of the suit in his personal name; thus, he said there was no privity of contract between the respondent and the Appellant.

He argued that proper parties were not before the Court in the Suit, as the respondent lacked the locus standi to initiate the action, and the trial Court therefore had no jurisdiction to hear the case. He relied on the case of Bakare Vs Ajose-Adeogun (2014) 6 NWLR (Pt 1403) 320 at 359. He further argued that, as artificial person, El-Liman Investment Nig. Ltd had a separate existence, different from the Respondent. He relied on K.S.O. & Allied Prod. Ltd Vs KOFA & Trad. Vo.

Ltd (1996) 3 NWLR (Pt. 435) 244, Kate Enterprises Ltd Vs Daewoo (1985) 2 NWLR (Pt 5) 116; Yesufu Vs Kupper International N.V. (1996) 5 NWLR (Pt 446) 17 and on Section 7 (2) of CAMA (Company and Allied Matters Act). Counsel further said that it was for the company El-Liman Investment Nig. Ltd to bring the action, or an authorized person by the company, that in this case, there was nothing to suggest that Respondent had the authority of the company to take the action, as a derivative action, as all the documents showed that the Respondent brought the suit in his personal name and capacity.

He relied on the case of Georgewill Vs Ekine (1998) 8 NWLR (Pt 562) 454 at 470 to say that: “A director or shareholder of a company cannot sue in his name in respect of a company’s property.

In the instant case, the respondent lacked the locus standi to prosecute a suit at the High Court in respect of the property in dispute as if she were Sotonye Nigeria Limited.” Counsel argued that, though the Exhibit B (postdated cheques) were issued in the name of Respondent (as a person), that did not make him the owner of the property, since the money was to satisfy the goods supplied by the company, as per the Exhibit A. He urged us to resolve the issue for Appellant and to allow the appeal.

Responding, Segun Olabode, Esq., who settled the brief for Respondent, submitted that Appellant issued two postdated cheuqes to Respondent to cover the sum of ₦1,080,000 claimed in the suit (Page 21 of the record); that having issued the two cheques in the personal name of respondent, not in the name of El-Liman Investment Nig. Ltd., the Respondent was entitled to sue to recover the money, being the holder of the said post-dated cheques, and as the said cheques were dishonoured by the bank and returned to Respondent.

Counsel said that Appellant had admitted issuing the cheques to the Respondent, and the fact that the cheques were dishonoured and returned to Respondent, unpaid. He said that the trial Court was right to enter judgment for Respondent. RESOLUTION OF THE ISSUE I think this is a most unnecessary appeal, and one founded on dubious legal sophistry, to deny a debt owed and duly admitted by Appellant, who is now seeking to escape payment by resort to technicalities of law, dishonestly.

Counsel, in my view, has only succeeded to blackmail the Appellant, and his (Counsel’s) practice of the law, by bringing this frivolous appeal, after he had raised no objection to the suit at the lower Court, and had entered no defence or opposition to the application for summary judgment, heard on 18/5/2015.

On page 1 of Appellant’s brief, Appellant submitted as follows: “On the 7th April, 2015, the Plaintiff/Respondent caused a writ of summons to be issued against the Defendant/Appellant for the sum of ₦1,080,000.00 being the amount for electrical/good supplied to the defendant/appellant by one Messrs. El-Liman Investment Nig.

Ltd… Equally the Plaintiff/Respondent filed at the same time on the said 7th April, 2015, an application or motion on notice, supported by eleven paragraphed affidavit, with two exhibits as well as written address, under Order 11 Kano State High Court (Civil Procedure) Rules 2014. The matter was slated for 18th May, 2015 for hearing under the summary judgment procedure.

The defendant/Appellant was served but the same, did not consider it prudent to file any document in challenge of the same.” (Underline mine) If Appellant’s Counsel did not consider it prudent to challenge the claims of Respondent at the trial, in the face of all the documents and evidence that Appellant had issued two post-dated cheques (Exhibit B) to the Respondent, in his personal name, to pay for the goods it (Appellant) collected from Respondent’s company, how come the same Appellant’s Counsel turned round to file this provocative Appeal, alleging incapacity of Respondent to sue, to recover the money!

Was the Appellant’s Counsel an advocate for El-Liman Investment Nig. Ltd, to advance the interest of the company against its director (Respondent)? Of course, he was not and could not have been! ​ The law is, however, trite that a limited liability company is a separate personality, different from its directors and promoters, and so should sue or be sued in its own name as regards its property or interest.

I recently considered in depth and determined such issue in the case of Sadiq & Ors Vs Yunusa (2022) LPELR-56568 CA, where we held: “…This calls to question the capacity of the Respondent to institute the action, having not been done jointly with the said company, Sani Brothers Ltd. And if Respondent, in fact, had the authority of the company to initiate the action, failure to produce such authority, was fatal as it would appear the Respondent was a busybody over a claim, which only the company had a duty to originate!

The law is trite that a limited liability company is completely a different legal entity, separate from the persons who formed and/or promoted or run it. See the case of Abacha & Anor Vs A.G. Fed. & Ors (2013) LPELR – 21479 CA, where it was held: “The companies listed for investigation are severally a legal entity each with its individual personality. In the instant case, though the companies listed for investigation may be owned by the Abacha family, the companies are at law different persons altogether from the subscribers to the memorandum of their association.

The companies are not in law the agents of the subscribers or trustees for them. The subscribers as members are not liable in any shape or form, except to the extent and in the manner provided by the Companies and Allied Matters Act, 1990. See Also Motel Kaduna Ltd v. Deyemo (2006) 7 NWLR (pt. 978) page 93. In Ashibuogwu v. Attorney – General (Bendel) (1988), NWLR (pt.69) page 138. It was held that a government owned limited liability company posses a legal personality of its own. It can sue and be sued by its name.

Its shareholders, even if the major or sole shareholder is the Federal Government, it cannot be sued for debt incurred by the Company. See Macaura v. Northern Assurance Co. Ltd. (1975) AC 619. A. L. Underwood Ltd v. Bank of Liverpool and Motors Ltd (1924) 1 KB 775. An incorporated company is a creation of law, clothed with independent legal personality from the moment of its incorporation. It has a distinct and separate personality from those that laboured to give birth to it. See Salomon v. Salomon & Co. Ltd (1897) AC 22 at 51, Trenco Nigeria Ltd v.

African Real Estate Ltd (1978) 1 LRN 146 at 153, Marina Nominees Ltd v. Federal Board of Inland Revenue (1986) 2 NWLR (pt.20) page 48 at 61. A company registered is a separate and distinct entity from any one of its shareholders, no matter how many shares he may hold. See Section 37 of the Company and Allied Matters Act 1990, CBDI v. COBEC (Nig) Ltd (2004) 13 NWLR (pt. 890) page 376, K. S. O and Allied Products Ltd v. Kafa Trading Co. Ltd (1996) 3 NWLR (pt.436) Page 244.” Per ABOKI, JCA.

See also New Resources Int’l Ltd and Anor Vs Oranusi (2010) LPELR – 4592 (CA), where my Lord, Okoro JCA (as he then was) stated: “Since the decision of the House of Lords in 1897 in the much celebrated case of Salomon v. Salomon and Company Ltd (1897) AC 22, it established firmly the concept of corporate personality which means that once a company is incorporated under the relevant laws, it becomes a separate person from the individuals who are its members. It has capacity to enjoy legal rights and is subjected to legal duties which do not coincide with that of its members.

Such a company is said to have legal personality and is always referred to as an “artificial person”. This being the case, it can sue and be sued in its own name.” Of course, the above case is different, completely, from the situation in this case at hand, which was clearly not instituted by a company, and did not require a company (El-Liman Investment Nig.

Ltd) to originate, as it was a simple case of debt, accruing to Respondent, as per the Exhibit B (the postdated 2 cheques) issued by Appellant to the Respondent, in his personal name, which cheques were dishonoured by the bank and returned to Respondent. At the time of issuing the two cheques, Appellant had recognized the Respondent as its agent, to collect and pay the money to the beneficiary of the money (to collect the money and settle the debt). And the Company, El-Liman Investment Nig. Ltd had the right to hold the Respondent to account for the value of the cheques!

The Respondent therefore had every right and duty to take out the action (even without being instructed by the company), to recover the debt/amount from the Appellant, as it was his responsibility to cash the cheques and/or account for the value of the cheques, issued to him, for the company. In his affidavit in support of the application for the summary judgment, the Respondent had averred:

2) … I am a director of El-Liman Investment Nig. Ltd. 3) Sometimes in August, 2013, the Defendant approached me through Mrs. Azika for the supply of electronic goods worth One Million Eighty Thousand Naira on credit in respect of which I issued a cash/credit invoice of El-Liman Investment Nig. Ltd with No. 8169 dated 07-08-2013 to the defendant.

The said invoice is attached and marked as Exhibit A. 4) The defendant informed me that she will pay the said amount in a week’s time, which I obliged her. 5) However, after a week when I approached the defendant for the payment of the debt, instead of paying the money, she issued two postdated cheques dated 27/11/2013 and 16/12/2013 respectively in my name. the said cheques are attached and marked as Exhibit B. 6) On the 26/11/2013… when the cheques was presented, same was returned unpaid and I communicated this development to the defendant. 7) When it was due for presentation of the 2nd cheque, I informed the defendant who prevailed on me not to present it and that I should hold on to those cheques that she will pay the money… None of the above averments was denied by Appellant.

And despite the obvious criminal implication of Appellant’s acts (fraudulent tendencies of issuing the dud cheques), Appellant still had the audacity to resort to the games of seeking to use technicality of law to deny the Respondent payment of the debt, which clearly accrued to the Respondent, in his personal name/capacity. Such conduct of Appellant is reprehensible, and, I think, the Counsel who advised the Appellant to do this, should be ashamed!

I see no merit in this appeal and so dismiss it with cost, assessed at Two Hundred Thousand Naira (₦200,000.00) to Respondent, payable by Appellant. The judgment of the lower Court is affirmed.

ABUBAKAR MUAZU LAMIDO, J.C.A.: I have had the privilege of reading in draft the judgment delivered by my learned brother ITA G. MBABA, JCA, and I am in complete agreement with the reasoning and conclusion reached therein that this appeal is unmeritorious and be dismissed. I too dismiss the appeal and abide by all the consequential orders as contained in the lead judgment.

USMAN ALHAJI MUSALE, J.C.A.: I have had the privilege of reading before now the lead judgment delivered by my learned brother, Ita G. Mbaba, JCA. His Lordship has considered and resolved the issues in contention in the appeal. I agree with the reasoning and abide by the conclusion and the final orders made therein.

Judgment

MUSA DATTIJO MUHAMMAD, J.S.C. (Delivering the Leading Judgment): At the trial Federal High Court the appellant, as plaintiff in suit number FHC/L/CS/922/2002, by its amended statement of claim filed on the 8th of October 2003, claimed against the defendants, the respondents herein, jointly and severally for the damage to its vessel “M.P. OSTANKINO” and the attendant loss and expenses by reason of the collIsion with the respondents’ ship M.T, “BATA I” which occurred off-shore Lagos on the 3rd and 4th of August 2002 as a result of the negligence of the defendants, their servants or agents.

In paragraph 1 of its amended statement of claim, the appellant avers the status that entitles it to the grant of the claim by the trial Court thus:- “1. The plaintiffs at all times material to this action are the owners of the M.T. “OSTANKINO” and are a LIMITED LIABILITY company registered in Cyprus”. (Underlining mine for emphasis).

In responding to the foregoing paragraph of the appellant’s amended statement of claim the respondents, in paragraphs 1 and 2 of their amended-statement of defence/counter-claim filed on the 17 th December 2003, aver thus:- “1. SAVE AND EXCEPT as hereinafter specifically admitted the Defendants deny each and every allegation of fact contained in the plaintiffs statement of claim as if each were herein set out and traversed seriatim. 2.

The Defendants are not in a position to either accept or deny paragraph 1 of the statement of claim, the Plaintiff is therefore under a duty to the proof of same strictly.” (Underlining mine for emphasis).

Appellant’s amended reply to respondents’ amended statement of defence/counter-claim dated and filed on 7th October 2007 is silent on the challenge contained specifically in paragraph 2 of the respondents’ amended statement of defence/counter-claim on its legal personality. ]The appellant called a single witness to prove its case through whom eleven Exhibits, DI - DII, none of which is its certificate of incorporation, were tendered.

At the end of trial, Omolojobi J upheld respondents contention, proffered in final addresses of counsel, challenging the juristic personality of the appellant and struck out the suit. ​ Following the dismissal of his appeal at the Court of Appeal, the appellant has appealed to this Court against the concurrent findings of the two lower Courts vide his notice filed on the 17th day of January 2011 containing three grounds.

Parties have filed and exchanged briefs which at the hearing of the appeal, were adopted and relied upon as their respective arguments.

The two issues distilled at paragraph 5.01 of the appellant’s brief of argument as arising for and which will inform the determination of the appeal read:- (1) Whether the Court of Appeal was right in holding that without the production of the certificate of incorporation of the Appellant that the appellant had no legal capacity or locus standi to institute the action against the respondents, when the legal capacity or locus standi of the Appellant to institute the action was not a fact in issue between the parties. (2) Whether the Court of Appeal was right in law in refusing and/or failing to consider the other two issues (1 & 3) submitted for determination by the Appellant which arose from the grounds raised in the Appellant’s Notice dated the 9th day of March 2007 and which said issues were argued in the Appellant’s Brief of Argument dated the 6th day of March 2009.

On the 1st issue, learned appellants counsel submits that the lower Court is wrong in its finding that appellant’s failure to produce its certificate of incorporation at the trial Court has robbed it the legal capacity to institute the action ab initio. At no time, it is argued, did parties join issue in their pleadings on the legal capacity of the appellant to institute the action. The lower Court, submits learned appellant’s counsel, wrongly applied the principle enunciated in NDUKA V. EZENWAKU (2001) 6 NWLR (PT 709) 517 and HOUSE OF REPRESENTATIVES V.

SPDC (2010) 11 NWLR (PT 1205) 213 at 251 since the legal capacity of the appellant had not been put in issue by the parties. Were it otherwise, the respondents, it is further submitted; would not have counter-claimed against the very appellant they contend lacks the legal capacity to defend the counter-claim. Relying on CALABAR CENTRAL COOPERATIVE THRIFT & CREDIT SOCIETY LTD & 2 ORS V. EKPO (2008) 6 NWLR (PT 1083) 362 at 392, HOUSE OF REPRESENTATIVES V. SPDC (supra) and G & T INVESTMENT LTD V.

WITT & BUSH LTD (2011) 8 NWLR (PT 1250) 500 at 540,learned appellant’s counsel contends that in the absence of a proper traverse by the respondents to paragraph I of appellant’s amended statement of claim, the issue of appellant’s juristic personality cannot be said to have been put in issue purely on the basis of respondents counsel’s belated submission in their final address at the trial Court. Further relying on ASAFA FOODS FACTORY V.

ALRAINE (NIG) LTD (2002) 12 NWLR (PT 781) 353, learned counsel concludes that respondents general traverse being the only basis of their challenge to the competence of appellant’s suit is unavailing. He urges that it be so-held and the issue resolved against the respondents. ​ On their first issue, which is similar to appellant’s first, learned respondents’ counsel submits that appellant’s silence in its amended reply, given paragraphs 1 and 2 of the respondents response to paragraph 1 of the appellant’s amended statement of claim, is fatal.

The respondents in the two paragraphs of their amended statement of defence and counter-claim, it is asserted, unequivocally put the legal personality of the appellant in issue.

While by the first paragraph in their amended statementof defence/counter-claim the respondents may be said to have made a general traverse to the averment in paragraph 1 of the appellant’s statement of claim, by the further averment in paragraph 2 of their amended statement of defence/counter-claim, it is contended, the traverse ceases to be a general one the latter paragraph having made it very specific whether or not a traverse is general or specific, it is argued, depends on the totality of a party’s pleadings.

It is never the practice to isolate a particular paragraph in a party’s pleading and adjudge, by its token alone, that, the party’s pleading has been generally rather than specifically traversed.

​Paragraph 1 in the respondents’ amended statement of defence/counter-claim must be viewed in the light of the other paragraphs in their pleading in correctly deciphering to be made as the issue/issues the parties had gone to trial upon. In any event, it is further contended, the appellant who claims to be an unnatural legal person is required by law to establish that fact and having failed to, both Courts are right to have struck out the claim. The two Courts, learned respondents’ counsel submits, rightly relied inter-alia on NDUKA V. EZENWAKU (supra), HOUSE OF REPRESENTATIVES V.

SPDC (supra) and MAGBAGBEOLA V. SANNI (supra) in affirming the trial Court’s finding that the appellant having failed to establish its legal personality by proffering the certificate of its incorporation, lacks the locus standi to sustain its claim against the respondents. Further referring to ASAFA FOODS FACTORY V. ALRAINE (supra), OSOLU V. OSOLU (2003) 11 NWLR (PT.832) 609 and REGISTERED TRUSTEES OF THE APOSTOLIC CHURCH ILESHA AREA V.

ATTORNEY GENERAL OF MID-WESTERN NIGERIA (1972) 4 SC 150 at 158 at 159, learned respondents’ counsel urges that the issue be resolved against the appellant. ​ Now, in striking out appellant’s suit, the trial Court at page 204 of the record held as follow:- “To my mind, the aforestated averment contained in paragraph 2 of the statement of defence is enough to put the plaintiff’s counsel on notice that the Corporate existence of the Plaintiff which he described as a limited liability company registered in Cyprus has been called to question by the defendant’s counsel.

He could not have averred more than he did because, the fact that thePlaintiff is a limited liability company is solely within the knowledge of the Plaintiff and probably, its counsel as far as this action is concerned. Therefore, the burden of proving same rests on them.”

The trial judge concluded at page 206 of the record of appeal thus:- “In the instant case, when the Plaintiff is described as a limited liability company and there is nothing before this Court to support that averment in the Plaintiff’s Statement of Claim, the Plaintiff cannot be regarded as a juristic person with legal personality who can sue or be sued in a Court of competent jurisdiction. And such, the Plaintiff is not competent to institute this action. I so hold.”

In dismissing appellant’s appeal and affirming the trial Court’s foregoing findings, the lower Court held firstly as follows:- “The above pleading showed that Respondents joined issue with the Appellant on its legal capacity to maintain an action. The respondents denied the fact that the appellant is a limited liability company. The burden therefore shifts on the appellant to prove it is a limited liability so as to show its legal capacity to sue………” The Court further surmised as follows:- “In the instant case appellant is a foreign company.

Despite adding the word limited to Ostankino Shipping Co. it would not satisfy the requirement of evidence of incorporation. In absence of evidence of incorporation l hold that appellant is incompetent to institute any action at the lower Court. It is only proper juristic person who can sue or be sued. Defect in competence is very fatal to a suit.” (Underlining mine for emphasis).

The Court concluded at page 308 of the record as follows: “In view of the fact that the Court was not properly clothed with jurisdiction to entertain the action abinitio on ground of lack of locus standi, I will invoke S. 15 of the Court of Appeal, Act and order that the suit No. FAC/CS/922/2002 filed by the appellant before the lower Court be and is hereby struck out.” (Underlining mine for emphasis).

This appeal questions the correctness of the foregoing concurrent findings of the two Courts below striking out the suit following the appellant/plaintiff’s failure to prove its right to sue in the first place. It has not been the practice of this Court to interfere with such findings except where the appellant succeeds in establishing that they neither evolved from the evidence on record nor consequent upon correct application of principles. See SERBER V. KARIKARI (1939) 5 WACA 34 and OKAFOR V. ABUMOFUANI (20160 LPELR – 40299 (SC).

It is not being contested by the appellant that for an action to be properly constituted so as to vest jurisdiction in the Court to adjudicate on it there must be a competent plaintiff and a competent defendant. As a general rule only a natural person, a human being, or an artificial person, a body corporate, which the appellant avers to be in paragraph one of its amended statement of claim, are competent to sue or be sued. The law further confers on some non-legal entities the personality to sue or defend an action.

Thus, where either the plaintiff or the defendant is not a legal person, the action is liable to be struck out. See ATAGUBA & CO. V. GURA NIGERIA LIMITED (2005) LPELR-584 (SC), MAERSK LUNE & ANOR V. ADDIDE INVESTMENTS LTD & ANOR (2002) LPELR – 1811 (SC). In THE ADMIN & EXEC OF ESTATE OF ABACHA V. EKE-SPIFF & ORS (2009) LPELR – 3152(SC) this Court restated the principle thus:- “The law is also trite that a non-existing person, natural or legal personality, cannot institute an action. Nor will an action be allowed to be maintained against a Defendant who as sued, is not a legal person.”

It is also trite that the juristic personality of a body corporate is evidenced only by tendering the certificate of incorporation of the company. See BANK OF BARODA V. IYALABANI COMPANY LTD (2002) LPELR – 743 (SC), AFOLABI & ORS V. WESTERN STEEL WORKS LTD & ORS (2012) LPELR-9340 (SC), REPTICO S. A. GENEVA V. AFRIBANK NIG PLC. In J.K. RANDLE V. KWARA BREWERIES LTD (1986) 456 SC 1. Uwais JSC (as he then was later CJN) in his concurring contribution appositely stated thus:- “The appellant sued the respondent as a company incorporated under the Company Act 1968.

He failed to prove the incorporation by the production of the certificate of incorporation. As the averment in the statement of claim that the defendant was so incorporated was categorically denied by the respondent in its statement of defence, the failure to prove the incorporation was fatal to the appellant’s case.” (Underlining mine for emphasis).

In the case at hand the appellant in paragraph one of its amended statement of claim avers being a “LIMITED LIABILITY Company in Cyprus”. The respondents denied the averment and further assert in their amended statement of defence/counter-claim that being “not in position to either accept or deny paragraph 1 of the statement of claim, the plaintiff is therefore under duty to be proof of same strictly”.

It is strenuously argued by learned appellant’s counsel that appellant’s incorporation not having been categorically denied by the respondents its juristic personality has not been put in issue by parties to warrant its proof. Learned respondents’ counsel contends to the contrary.

I entirely agree with learned counsel to the respondents that learned appellant counsel’s insistence that the averment in paragraph two of the respondents amended statement of a defence/counter-claim is a general denial stems from his reading of the paragraph in isolation rather than by reference to the other averments in the party’s pleading. It is an age old rule of practice that to determine a party’s case resort must be made tothe entire averments in-the party’s pleadings. Considering a few paragraphs of the pleading in isolation militates against a complete flow of the party’s story.

See AGI V. P.D.P. & ORS (2016) LPELR 42578 (SC) and ATTORNEY GENERAL OF ANAMBRA STATE V. C. N. ONUSELOGU ENTERPRISES (1987) LPELR – 614 (SC).

A comprehensive examination of the respondents’ amended statement of defence/counter-claim reveals very clearly that parties herein have joined issue on the juristic personality of the appellant thereby making proof of same by the appellant necessary.

It is reasonably settled that a defendants resort to a general traverse in the statement of defence in a manner that casts the burden of proving a denied averment on the plaintiff is a convenient and permissible procedure in defining the case on the defendants which parties are to proceed to trial. Doing so constitute specific traverse of the facts averred to by the plaintiff.

By asking the appellant to prove the fact of its incorporation, the respondents who are in no position of knowing the fact of appellants incorporation have effectively traversed appellants assertion of being a corporate body. See UMESIE V. ONUAGULUCHI (1995)LPELR – 3368 (SC), MANDILAS & KARABERIS LTD V. LAMIDI APENA (1969) LPELR 25559 (SC), AKINTOLA & ANOR V. SOLANO (1986) LPELR – 360 (SC) and DAIRO & ORS V. REGISTERED TRUSTEES OF THE ANGLICAN DIOCESE (2017) LPELR -42573 (SC)

Learned appellant’s counsel seems to suggest that having failed to join issue in their amended statement defence/counter-claim with the appellant on the latter’s juristic personality, the respondents have completely compromised their right to challenge the trial Court’s jurisdiction. Learned counsel appears oblivious of the dichotomy in the Court’s procedural and substantive jurisdiction. Simply put, the one is circumscribed by Court rules while the other is as statutorily delineated.

While it is settled that the right to challenge a Court’s procedural jurisdiction may be waived by a party, it is trite that neither the Court nor the parties before it can confer on the Court a jurisdiction it statutorily lacks. See DR. MUSA NAGOGO V. C.P.C. & ORS (2012) LPELR – 15521 (SC), AG KWARA STATE V. ADEYEMO & ORS (2016) LPELR – 41147 (SC) and IKECHUKWU V. F.R.N. & ORS (2015) LPELR – 2445 (SC). In MOBIL PRODUCING (NIG) UNLIMITED V.

LASEPA & ORS(2002) LPELR -1887(SC) this Court in dwelling on the two types of the Court’s jurisdiction inter-alia enthused as follows:- “Notwithstanding that, sometimes, the distinction between substance and procedure is blurred, it is generally accepted that matters (including facts) which define the rights and obligations of the parties in controversy are matters of substance defined by substantive law, whereas matters which are mere vehicles which assist the Court or tribunal in going into matters in controversy or litigated before it are matters of procedure regulated by procedural Law.

Facts which constitute a cause of action are matters of substance and should be pleaded, whereas facts which relate to how a party is to invoke the jurisdiction of the Court a remedy pursuant to his cause of action is a matter of procedure outside the realm of pleadings……….. ‘generally speaking, it may be said that substantive rules give or define the right which it is sought to enforce and procedural rules govern the mode or machinery by which the right is enforced'” See also HUSSAIN ISA ZAKIRAI V. SALISU DAN’AZUMI MUHAMMAD & ORS (2017) LPELR – 42349 (SC).

In applying the foregoing principles to the facts of the instant case, it is evident that beyond respondents’ objection to the trial Court’s jurisdiction as raised in parties’ pleadings, which is procedural, the further objection raised in learned respondents counsel’s address at the close of the case pertains the Court’s substantive jurisdiction as statutorily circumscribed. By Section 6 (1) and (6)(b), the trial Court is only competent to adjudicate between juristic persons.

In the instant case, appellant’s juristic personality as raised challenges both the Court’s procedural and substantive jurisdictions. It is therefore manifestly unwise for learned appellant’s counsel to insist that the overriding issue can be discountenanced by the Court as the challenge to its jurisdiction only rests on non joinder of issue.

Furthermore, by Sections 131 – 137 of the Evidence Act, the appellant must bear the burden of that which it asserts. See PATRICK ZIIDEEH V. RIVERS STATE CIVIL SERVICE COMMISSION (2007) LPELR – 3544 (SC) and CHIEF EYO EDEM NSEFIK & ORS V. ROSEMARY MUNA & ORS (2013) LPELR – 21862 (SC).

Thus whether respondents objection to the trial Court’s competence is on account of either the state of pleadings of parties, the burden of proving those facts it asserts or, still, pursuant to Section 6(1) and (6) (b) of the 1999 Constitution (as amended) which provides for parties to any dispute the trial Court is competent to enquire into and determine, appellant’s failure to tender its certificate of incorporation in proof of its juristic personality, as rightly held by both Courts below, is fatal.

Appellant’s first issue is resultantly resolved in favour of the respondents.

It is academic to consider appellant’s second issue for the lower Court’s non consideration of appellant’s issue would only have become relevant if the trial Court which decision was to review, had the jurisdiction to determine appellant’s suit in the first place. It did not. The lower Court also lacked the jurisdiction to consider and determine any issue arising from the trial Court’s judgment arrived at without jurisdiction. I so hold.

​As a whole, the concurrent judgments of the two Courts below are hereby further affirmed. Parties are to bear their respective costs.

CHIMA CENTUS NWEZE, J.S.C.: My Lord, Musa Dattijo Muhammad, JSC, obliged me with the draft of the leading judgement just delivered. I agree with His Lordship that this appeal is devoid of merit. It, therefore, deserves to be dismissed.

It is, indeed, surprising how counsel for the appellant underrated the formidable submission of the respondents’ counsel on the question of the legal capacity of his client. I had always, believed that, following the outcome of a long line of cases, our Courts should not no longer be burdened with this question.

Such cases include Olu of Warri v Chief Sam Warri Esi (1958) 3 FSC 94; Agbonmagbe Bank Ltd v. G. B. Ollivant Ltd and Anor (1961) ANLR 125; Ataguba and Co v. Gura Nigeria Ltd(2005) LPELR – 584 SC); Maersk Line and Anor v. Addide Investments Ltd and Anor (2002) LPELR – 1811 (SC); The Administrator and Executor of the Estate of Abacha v. Eke – Spiff and Ors (2009) LPELR – 3152 (SC) and so on.

True, indeed, I, always, entertained the view that every lawyer should know that our law attributes juristic personality, that is, the capacity to maintain and defend actions in Court to natural persons and artificial persons or institutions, Reptico S. A. Geneva v. AfriBank Nig Plc (2013) LPELR – 20662 (SC); Attorney General of Federation v. All Nigeria Peoples Party and Ors [2003] 12 SCM 1, 12; [2003] 18 NWLR (pt. 851) 182; [2003] 12 SC (pt. 11) 146.

They are, therefore, known to law as legal persons, Alhaji Afia Trading and Transport Company Ltd v Veritas Insurance Company Ltd 4 NWLR (pt. 38) 802. The consequence of the above formulation is that only natural persons or a body of persons whom statutes have, either expressly or by implication, clothed with the garment of legal personality can prosecute or defend law suits by that name, Knight and Searle v. Dove (1964) 2 All ER 307; Admin Estate of Gen. SanniAbachav Eke-Spiff and Ors (2009) 3 SCM 1; [2009] NWLR (pt. 1139) 92; Bank of Baroda v. lyaiabani Coy Ltd [2002] 12 SCM 7; J. K.

Randle v. Kwara Breweries Ltd [1986] 6 SC 1.

​From a conspectus of a host of Supreme Court decisions, we are emboldened in our view that the only permissible mode of proving the legal personality of Incorporated Trustees under Part C of CAMA, or Registered Trustees under the old Land (Perpetual Succession) Act, when the adversary has not admitted that status to the plaintiffs, is by the production in evidence of the certificate of incorporation issued by the Corporate Affairs Commission [CAC], Reptico S. A. Geneva v. AfriBank Nig Plc (supra); ACB Nig Plc and Anor v. Emostrade Ltd {2002) LPELR – 207 (SC).

Thus, where a group of persons claim to have been registered as Incorporated Trustees under Part C of CAMA, they have to produce their certificate of incorporation, as nothing else would suffice, ACB Nig PLC v. Emostrade Ltd (supra). In effect, for Incorporated Trustees to establish their juristic personality, except if it is admitted by the opposing party, they must tender their certificate of incorporation under Part C of CAMA.

It is, thus, not enough to describe themselves as Incorporated Trustees, Bank of Baroda v. lyalabani Company Limited, [2002] 12 SCM 7. ​Indeed, there is even a binding authority which favours the view that the status of Incorporated or Registered Trustees can only be established as a matter of law by the production in evidence of the certificate of incorporation under Part C of CAMA, whatever may be the admission of the defendants, Registered Trustees of Apostolic Church v. AG Mid-West (supra); Geneva v. AfriBank (supra); J. K. Randle v. Kwara Breweries Ltd [1986] 6 SC 1.

The provisions of Section 2 Subsections (1) and (3) of the Land (Perpetual Succession) Act [now defunct], in parimateria with Section 673 (1); (2) and Section 679 (1) of the Companies and Allied Matters Act, 1990 [CAMA, for short], fell for construction in Registered Trustees, Apostolic Church v. Attorney General, Mid-Western State and Ors [1972] ANLR (Reprint) 359. Sowemimo JSC (as he then was), reading the judgement of the apex Court, held that: Although evidence was led as to named persons being made trustees, the certificate of incorporation was never produced.

It is therefore clear that unless the plaintiffs could comply with Section 6 of the Act [see, now Section 679 (3) of CAMA], they have no power to sue or be liable to being sued… In view of the above provisions of the Act, the plaintiff having failed to prove their incorporation by the production of their certificate of incorporation, have no power to sue…In the circumstances, the plaintiffs/appellants’ claim must fail… [Italics for emphasis]

​In all, the burden of proving their status as Incorporated Trustees, therefore, lies on the persons who made such positive assertion about their incorporated status, Section 135 of the Evidence Act [then applicable to the proceedings]; Elias v Omo Bare [1982] 5 SC 2; Elias v. Disu (1962) 1 All NLR 214; Woluchem v. Gudi [1981] 5 SC 291; Agala and Ors v. Egwere and Ors [2010] 5 SCM 22, 37.

It is for these, and the more elaborate, reasons in the leading judgement that I, too, shall enter an order dismissing this appeal. I abide by the consequential orders in the said leading judgement. Appeal dismissed.

HELEN MORONKEJI OGUNWUMIJU, J.S.C.: I have had the privilege of reading before now, a draft of the erudite judgment of the majority of the full Court just delivered by my learned Brother HON. JUSTICE MUSA DATTIJO MUHAMMAD JSC. I agree with the reasoning and conclusions contained therein.

This appeal is based on the concurrent findings of facts by the High Court and the Court of Appeal that the Appellant is not a juristic person and therefore lacks the capacity to institute this suit. ​ The issues raised by both sides to this appeal are settled, and I am persuaded after reading the record and the Briefs of Counsel that these issues distilled are clear and sufficient to be used to determine the Appeal, they are: – ISSUE 1 Whether the Court of Appeal was right in holding that the Appellant had no legal capacity or locus standi to institute the action against the Respondents.

ISSUE 2 Whether the Court of Appeal is bound to consider all issued in controversy before it before giving its Judgment.

OPINION ISSUE 1 The crux of the first issue is whether the Appellant has legal capacity, that is, whether it has a juristic personality separate from its owners. A perusal of all pleadings filed from the origin of this suit would show that the Appellant was at all times material to this action was referred to as “The Owners of M. T. OSATANKINO” a limited liability company registered in Cyprus. The Appellant in paragraph 1 of its amended statement of claim stated:- “The plaintiffs at all times material to this action are the owners of the “M.

T OSTANKINO” and are a limited company registered in Cyprus”

The Respondents in their amended statement of defense responded thus: “The defendants are not in a position to either acceptor deny Paragraph 1 of the statement of claim, the plaintiff is therefore under a duty to proof (sic) same strictly”

Therefore, the Respondents joined issue with the Appellant by the pleadings, thus, shifting the burden to the Appellant to prove that it is a limited liability company capable of being sued and to sue in its own name. The Appellant erroneously contended that the relevant issue was its claim against the Respondent and not its legal personality. The trial Court held that the onus had shifted to the Appellant to prove its corporate existence.

The Companies and Allied Matters Act, 2019 in Section 78. (1) provide thus: Subject to Sections 80 – 83 of this Act, every foreign company which before or after the commencement of this Act was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria, shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents, as matters preliminary to incorporation under this Act.

Therefore, the ascertainment of the corporate identity of the Appellant is indeed relevant to the success of its claim.

In Nduka v. Ezenwaku (2001) 6 NWLR Pt. 709 Pg. 494 at Pg. 517 the Court of Appeal held that the only way to prove the existence of a company when such is challenged, is the production of the Certificate of Incorporation of the company.

Similarly, Section 41(6) of The Companies and Allied Matters Act, 2019 reads: – 41(6) Certificate of incorporation shall be prima facie evidence that all the requirements of this Act in respect of registration and matters precedent and incidental to it have been complied with and that the association is a company authorized to be registered and duly registered under this Act.

The irrefutable position of the law is that upon incorporation, a company becomes a body corporate i.e. it acquires a separate legal personality with autonomous identity, it can sue and be sued in its own name, own and dispose of property and enter into contracts etc. See Marina Nominees v. F.B.I.R. (1986) 2 NWLR Pt. 20 Pg. 48; Afolabi v. Western Steel (2012) 7 SCNJ 48 at Pg.68. The age-long general rule of corporate legal personality was laid down in the locus classicus case of Salomon v. Salomon (1897) AC 22.

See also The Registered Trustees of Master’s Vessel Ministries Nigeria Incorporated v. Rev. Francis Emenike & Ors (2017) LPELR-42836(CA).

A lawsuit is in essence, the determination of legal rights and obligations of the parties in any given situation. Therefore, only such natural and juristic persons in whom the rights and obligations can be vested are capable of being proper parties to the suit before the Courts of law. Following this general rule, where either of the parties is not a legal person capable of exercising legal rights and obligations under the law, the other party may raise these facts as a preliminary objection.

In other words, no action can be brought by or against any party other than a natural person or persons unless such party has been given by statute, expressly or impliedly or by common law, either a legal personality under the name by which it sues or is sued or a right to sue or be sued by that name. See EMCO & Partners Ltd & Ors v. Dorbeen (Nig) Ltd & Anor (2017) LPELR-43453(CA)

By the pleadings of the parties, it is glaring that the issue of the legal personality of the Appellant was an issue for determination between the parties as it goes to the foundation of the suit and the jurisdiction of the Court to determine same. The Appellant had enough time from when the litigation started up till the appeal to have settled this issue by substituting another party but it failed and refused to do so.

Therefore, based on the pleadings of both parties and the evidence led at the trial as well as the concurrent findings of the lower Court, I hold that the Appellant had no legal capacity to institute the action against the Respondents thereby making the suit and any subsequent appeal incompetent.

ISSUE 2 On the second issue for determination, the Court of Appeal was wrong in its refusal to determine all the issues in controversy. The lower Court in its judgment dismissed the case of the Appellant in its entirety and held as follows at Pg. 242 of the Record of this appeal: “…bearing the aforesaid in mind, I am to state that it is a condition precedent to the exercise of jurisdiction that a competent party is before the Court.

In this instant case, where the Plaintiffs Statement of Claim, the Plaintiff cannot be regarded as a juristic person with legal personality who can sue or be sued in a Court of competent jurisdiction to institute this action and I so hold. In conclusion therefore I found as follows: – 1. That the 4th defendant M.T Bata 1 was not negligent in the manner in which she was brought out of the side of the Plaintiffs vessel M. T Ostankino on the 3rd and 4th of August 2003 2. That the defendants are not liable for the various claims put by the Plaintiff 3.

There is no evidence before this Court to prove that the plaintiff who is described as a limited Liability company in the Statement of Claim is in fact a limited liability company. And as such it cannot be regarded as a juristic person capable of instituting this action”

​A penultimate Court should determine all issues in controversy before it, as it does not enjoy the luxury of a final Court which may not go further after the issue of jurisdiction is resolved. Section 22 of the Supreme Court Act 2011 Cap 424 provides that the Apex Court has very wide powers in respect of matters brought before it.

It may make an interim order or grant an injunction which the Court below is authorized to make or grant and may direct any necessary enquires or account to be made or taken and generally shall have full jurisdiction over the whole proceeding as if the proceeding had been instituted and prosecuted in the Supreme Court as a Court of first instance and rehear the case in whole or in part. Hence, by this Section, this Court may make an order for determining the real question in controversy in the appeal. See also, Section 137(1) of the Evidence Act. Similarly, in Vincent Egharevba v.

Osagie (2009) 12 SCNJ Pg. 166 at Pg. 188 SC this Court held thus; “This Court has said it over and over again that any issue properly raised and canvassed before a trial Court or an appellate Court must be given a fair-hearing and considered. This is so in order to avoid a miscarriage of justice, See Ugbodume v. Abiegbe (1991) 8 NWLR (pt.209) 274… The Respondent’s claim could not be left hanging in the air. The Court of Appeal ought to have madeconsequential orders granting him any reliefs which it considered were supported by the evidence before the trial Court.

It would appear that the Court of Appeal did not give enough consideration to the issues before it in its rather hasty and sketchy judgment.”

Therefore, issue two is resolved in favour of the Appellant. However, in the circumstances of the facts of the case where there has been no miscarriage of justice occasioned against the Appellant, I hold that the decision of the Lower Court should not be reversed. It is not every error in the judgment of a Court that leads to the setting aside of the judgment. The error must be so perverse and has caused gross miscarriage of justice. See P. C Mike Eze v. Spring Bank Plc(2011) 12 SCNJ Pg. III; Abiodun v. F.R.N (2018) 11 NWLR Pt. 1629 Pg. 86 SC; Mohammed v.

State (2018) 13 NWLR Pt. 1635 Pg. 60 SC.

Even though it was wrong of the Lower Court to consider the case on the merit, in view of the resolution of issue 1, no miscarriage of justice has been occasioned.

​I am of the humble view that this appeal has no merit and thus the reliefs urging the Court to nullify the orders of the lower Court is hereby denied and the appeal is dismissed. Appeal Dismissed. I abide by the order as to cost.

ABDU ABOKI, J.S.C.: I had the privilege of reading before now, a draft of the lead judgment just delivered by My Learned Brother MUSA DATTIJO MUHAMMAD, JSC. I agree with his reasoning and conclusions contained therein.

This is an appeal against the judgment of the Court of Appeal, holden at Lagos (hereafter called the Court below), delivered on the 12th of January, 2011.

The Appellant, as Plaintiff at the Federal High Court, sitting in Lagos, instituted an admiralty action in rem, against the Respondents, claiming damages for loss suffered as a result of “collision” with the 4th Respondent’s ship which occurred at Offshore Lagos Nigeria, on 3rd and 4th August 2002. The Trial Court in its judgment held that the Appellant failed to prove that it was a juristic person, thereby lacking the locus standi to institute the action. The Appellant’s suit was dismissed. ​ Being aggrieved by the decision of the Trial Court, the Appellant appealed to the Court below.

The Court below in its judgment, affirmed the decision of the Trial Court and held that the Trial Court lacked the jurisdiction to adjudicate over the suit, due to the Appellant’s lack of locus standi.

Still aggrieved by the judgment of the Court below, the Appellant appealed to this Court. Its Notice of Appeal filed on the 17th of January, 2011 is upon two grounds, wherein it formulated two issues for this Court’s consideration. They are: 1.

Whether the Court of Appeal was right in holding that without the production of the certificate of incorporation of the Appellant, the Appellant had no legal capacity or locus standi to institute the action against the Respondents, when the legal capacity or locus standi of the Appellant to institute the action was not a fact in issue between the parties? 2.

Whether the Court of Appeal was right in refusing and/or failing to consider the other two issues (1 and 3) submitted for determination by the Appellant, which arose from the grounds raised in the Appellant’s Notice of Appeal dated the 9th day of March 2007 and which said issues were argued in the Appellant’s Brief of Argument dated the 6th day of March 2009.

​The Respondents also distilled two issues for determination, namely: 1. Whether or not the Court of Appeal was right in holding that the failure of the Appellant to prove its legal personality amounts to lack of locus standi to institute the action thereby denying the trial Court the jurisdiction to entertain the suit? 2. Whether or not a Court which lacks jurisdiction to entertain a suit due to a party’s lack of locus standi can determine the merits of the suit?

My Learned Brother has brilliantly dealt with the issues raised in this appeal and I adopt his judgment as mine. However, and just for the purpose of emphasis, I will put in one or two words of mine in answer to the question of whether or not the Appellant is a juristic personality capable of suing and being sued. In other words, does the Appellant possess the requisite locus standi to sue the Respondents?

The Appellant herein has argued that the legal capacity or locus standi of the Appellant to institute the action was not a fact in issue between the parties. With respect to learned Senior Counsel for the Appellant, this is not a true representation of the record before this Court.

At Paragraph 1 of its Amended Statement of Claim, the Appellantaverred as follows: “The Plaintiffs at all times material to this action are the owners of the “M.T. OSTANKINO ” and are a limited company registered in Cyprus”

The Respondents denied the averment and asserted at Paragraph 2 of their Amended Statement of Defence/Counter Claim that: “The Defendants are not in a position to either accept or deny Paragraph 1 of the Statement of Claim, the Plaintiff is therefore under a duty to prove same strictly.”

To my mind, by asking the Appellant to prove strictly the fact of its incorporation, the Respondents who are in no position of knowing whether or not the Appellant is incorporated, have effectively traversed the Appellant’s assertion of being a corporate body and issues having been thus joined on the legal personality of the Appellant, it was incumbent upon the Appellant to prove its legal personality, by producing a Certificate of Incorporation. In Dairo & Ors v.

The Registered Trustees of the Anglican Diocese of Lagos (2017) LPELR 42573 (SC), this Court held that: “The law is trite that the plaintiff who takes out on action must be competent to institute such on action. Whenever hiscompetency to institute the action is challenged the onus is on him to prove that he has legal capacity to institute the action. The competency to institute an action also determines the competency of the action itself …… Once the juristic capacity is challenged, the fact of incorporation becomes a fact in issue.

The onus of proving that fact lies on the party claiming to be incorporated in the name it has taken out the action as the plaintiff. The burden of proof is discharged upon the production of the Certificate of Incorporation. This is a matter of fact.” In the extant appeal, the Appellant’s failure to tender its Certificate of Incorporation in proof of its juristic personality is fatal to its case.

The consequence is that the juristic personality of the Appellant to sue and be sued is not established and the two Courts below were right to hold that the Appellant had no legal capacity or locus standi to institute the action against the Respondents. ​ It is on account of this, and the more elaborate reasons contained in the lead Judgment of My Learned Brother, MUSA DATTIJO MUHAMMAD, JSC that I hold that this appeal is devoid of merit and

I accordingly dismiss it.

I also abide by the consequential orders in the Lead Judgment.

TIJJANI ABUBAKAR, J.S.C.: My Lord and learned brother MUSA DATTIJO MUHAMMAD, JSC granted me the privilege of reading in draft the comprehensive leading Judgment prepared and rendered in this appeal. My lord fully and sufficiently dealt the issue in contention, I am therefore in full agreement with the reasoning and conclusion and adopt the Judgment as mine. I have nothing extra to add. I abide by all consequential orders including the order on costs.

Judgment

KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.S.C. (Delivering the Leading Judgment): This appeal is against the judgment of the Court of Appeal, Abuja Division delivered on 7th July 2017, wherein the Court allowed the appeal filed by the present 1st – 4th respondents and set aside the decision of the trial Federal High Court, Abuja Division.

The facts are relatively simple and straight forward. The 1st appellant, CITEC International Estates Ltd. was duly incorporated on 16th February, 2001 as a limited liability company under the provisions of the Companies and Allied Matters Act (CAMA), with a share capital of 2 million ordinary shares. The 1st – 4th respondents owned 95% of the share capital while the 2nd Appellant, Bello Saka Oludare, owned the balance of 5%. The 1st, 2nd and 4th Respondents as well as the 2nd Appellant were the original directors of the company.

By an ordinary resolution passed on 1st April 2002, the share capital of the company was increased to 10 million.

​It was alleged that the company held board meetings on the 9th and 10th of March 2006 whereby the 1st respondent was removed as chairman and his

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official residence and vehicle withdrawn. It was contended that due process was not followed in his removal. Another board meeting took place on 4th April 2006.

It was alleged that notwithstanding the fact that the 1st – 4th respondents were not given notice of the meeting and the members present were unable to form a quorum, the following decisions were taken by the 2nd appellant: (i) The allotment of the 8 million unallotted shares to members and non-members of the 1st Appellant without regard to the 1st – 4th Respondents’ right of first refusal. (ii) A call for payment on shares allotted to the 1st – 4th Respondents, to be paid within 28 days; and (iii) A resolution to the effect that the 2nd Appellant (Bello Saka Oludare) and the 5th Respondent (his wife) had paid N2million out of their called up capital on the basis that the 2nd Appellant incurred N2million as pre-incorporation expenses, whereas it was contended that it was the 1st Respondent who bore all the pre-incorporation expenses.

​At another board meeting held on 6th October 2006, the names of the 1st – 4th respondents were removed as signatories to the company’s accounts.

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The houses allocated to the 1st and 4th respondents were put up for sale. The 1st – 4th respondents were suspended and their salaries stopped. It was alleged that the 1st – 4th respondents, have by all the actions complained of, been deprived of their rights as shareholders, directors and management staff of the company without notice to them and without being given the opportunity of being heard.

As a result, they instituted an action before the Federal High Court, Abuja seeking the declaratory and injunctive reliefs reproduced below, aimed at restoring them to their original positions within the company and restoring their rights and entitlements.

The Plaintiffs’ claim against the Defendants Is for: i. A declaration that once the 1st defendant has fully allotted its authorised shares, the shareholders to whom the same were allotted can only transfer the same to another person through a proper instrument of transfer and not by a resolution of the company. II. A declaration that the Plaintiffs and the 2nd Defendant are the only members of the 1st Defendant. iii. A declaration that the Plaintiffs own 95% of the total shares of the 1st

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Defendant. iv. A declaration that the 3rd, 4th, 5th, 6th and 7th defendants are not shareholders in the 1st defendant. v. A declaration that the 4th, 5th, 6th and 7th defendants have no locus to vote on resolutions allotting shares of the 1st defendant to themselves or to any other person whosoever. vi. A declaration that the 2nd Defendant cannot single handedly pass resolution to allot the shares of the 1st Defendant. vii.

A declaration that the allotment of the 8,000,000 unallotted ordinary shares of the 1st defendant by the 2nd to the 7th defendants on the 4th of April, 2006 is wrongful, illegal, unlawful, and accordingly null and void. viii. A declaration that neither the provisions of CAMA nor the Articles of Association of the 1st Defendant empower the Board of Directors of the 1st Defendant to remove the 1st Plaintiff. ix. A declaration that the suspension of the 4th Plaintiff who is a shareholder and a director is unknown to either CAMA or the Articles of Association of the 1st Defendant. x.

A declaration that a minority shareholder cannot retrieve, withdraw, sell or alienate properties allocated to the majority

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shareholders by the 1st Defendant in their official capacities and/or remove them from their positions. xi. A declaration that the resolution changing the signatories to the accounts of the 1st defendant is wrongful, unlawful and void. xii. An order reversing to the former positions in respect of signatories to the account of the 1st defendant before the resolution of 6th of October 2005. xiii. An order nullifying the resolution dated 24th day of April 2001 wherein the shares of the Plaintiffs were redistributed/re-allotted. xiv.

An order nullifying and or avoiding all the decisions contained in the Resolution dated 4h day of April, 2006 and likewise, all further Resolutions passed from the 4/4/06 by the 1st to the 7th Defendants and registered with the 8th Defendant be reversed and vacated forthwith. xv. An order nullifying and/or voiding the resolution dated 10th day of March 2006 wherein the 1st Plaintiff was removed as the Chairman of the 1st Defendant and reinstating him forthwith. xvi.

An order nullifying and/or voiding the decision contained in the letter of the 1st Defendant dated 3rd of April, 2006 wherein the 4th Plaintiff

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was suspended as Director of the 1st Defendant and reinstating him forthwith. xvii. An order mandating the 1st Defendant to pay all outstanding salaries, allowances and emoluments due to the Plaintiffs forthwith. xviii. An order of perpetual injunction restraining the 1st to the 7th Defendants, their agents, privies and representatives from selling and/or alienating the official quarters of the 1st and 4th Plaintiffs and/or dealing with the properties of the 1st Defendant allocated to the 1st and 4th Plaintiffs in their official capacities. xix.

An order of mandatory injunction directing the 8th defendant to remove or cancel from the 1st defendant’s company’s file held at the Corporate Affairs Commission in Abuja all documents reflecting the purported redistribution and re-allotment of the plaintiffs shares by resolution dated 24th of April, 2001. xx.

An order of mandatory injunction directing the 8th defendant to remove or cancel from the 1st defendant company’s file held at the Corporate Affairs Commission in Abuja all documents reflecting the purported allotment of the 1st defendant’s unallotted 8,000,000 ordinary shares by resolution

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dated 4th of April, 2006. xxi. An order that a proper and regular meeting of the bona fide members of the 1st defendant be summoned within twenty one days (21 days) of final judgment in this matter wherein all issues relating to the management and administration of the 1st defendant will be settled.

The appellants, upon being served with the Writ of Summons, filed a motion on notice challenging the jurisdiction of the Court to entertain the suit. The grounds for the application were as follows: 1. The plaintiffs lack the locus standi to initiate, maintain and sustain the action as constituted. 2. The action is incompetent by reason of noncompliance with mandatory statutory provisions of the Companies and Allied Matters Act, Cap C20, LFN, 2004, as well as the Companies Proceedings Rules S.I.14 of 1992. 3.

The suit is a derivative one and no leave of Court was sought or obtained from this Honourable Court before the action was commenced. 4. Mandatory conditions precedent necessary to be fulfilled before instituting the suit were not fulfilled or complied with. 5. The Writ of Summons and Statement of Claim are void as the

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statutorily mandatory procedure for commencing the action was not fulfilled. 6. The suit does not disclose any cause of action [or] a reasonable cause, and the suit as constituted is an abuse of the process of this Honourable Court. 7. All the reliefs sought in the Statement of Claim are derivative in nature for the benefit of the 1st Defendant only.

The 1st – 4th respondents filed a counter affidavit to the motion, to which the appellants filed a reply. Written addresses were filed, exchanged and adopted in open Court. In his judgment delivered on 1st December, 2006, his Lordship A.I. Chikere, J. granted the application and held, inter alia: a) The complaint in the suit relates to the affairs of the company allegedly being conducted in an illegal or oppressive manner.

That under the Companies Proceedings Rules, 1992, the suit ought to have been commenced by way of Petition, not by way of a Writ of Summons; b) On the issue of locus standi – that part of the claim relates to the allotment of shares. He held that since the shares belong to the company, it is only the company that can be aggrieved by the improper exercise of power by the

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1st appellant. His Lordship held that a complaint could only be brought in the company’s name and therefore the plaintiffs had no locus standi. c) That the suit is a derivative action for which leave ought to have been sought and obtained. That in the absence of leave, the suit was incompetent. It was accordingly dismissed.

On appeal to the lower Court, the decision of Chikere, J. was set aside. The Court held that the Plaintiffs/Appellants had the locus standi to sue the Defendants/Respondents for the infringement of their legal rights. The Court also rejected the finding that the suit was a derivative action requiring prior leave. The Court held that the essence of the suit was to protect the plaintiffs’ individual interests.

The respondents in that appeal are now the appellants before us. They were not surprisingly, aggrieved by the judgment. By their Notice of Appeal filed on 2/8/2017, they raised six grounds of appeal.

​At the hearing of the appeal on 19/10/2020, A.M. Kayode Esq. adopted and relied on the appellant’s brief filed on 9/11/18 and deemed filed on 4/2/18, Appellant’s reply brief to 1st – 4th respondents’ brief deemed filed

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on 19/10/20 and the Appellant’s Reply Brief to 6th Respondent’s brief also deemed filed on 19/10/20, in urging the Court to allow the appeal.

Kehinde Ogunwumiju, SAN adopted and relied on 1st – 4th Respondents’ brief filed on 24/2/20, while O.O. Olowolafe Esq. adopted the 6th Respondent’s brief filed on 3/3/20 respectively, in urging the Court to dismiss the appeal. Olayinka Adedeji Esq. for the 5th Respondent, had nothing to urge, as he did not file any process on his client’s behalf.

​Also, at the hearing of the appeal, learned senior counsel for 1st – 4th Respondents moved a motion filed on 24/2/20 challenging Ground 6 of the Notice of Appeal. In support of the application he filed a written address. A further affidavit was deposed to on 16/10/20. He adopted and relied on all the processes in urging the Court to grant the application. In opposing the application, learned counsel for the appellants relied on their counter affidavit deemed filed on 19/10/20 and their written address filed therewith in urging the Court to dismiss the application.

Learned counsel for the 5th and 6th respondents did not oppose the application.

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In respect of the appeal, the appellant distilled 2 issues from the notice and grounds of appeal as follows: (i) Was the Court below right in holding that the 1st – 5th respondents have the required locus to initiate the suit? (ii) Was the Court below right in its decision that the respondents’ action was based on alleged breach of their rights and obligations under Section 300 of CAMA and as such, the requirement prior to leave of Court to institute the suit or the use of Originating Summons or Petition to commence the suit was inapplicable to the suit. (Grounds 2, 4 and 5).

For the 1st – 4th respondents, two similar issues were formulated thus: (i) Whether or not the lower Court was right when it held that the 1st – 4th respondents possess the locus standi to institute this action? (ii) Whether or not the Court below was right when it held that it was not necessary for the 1st – 4th respondents to seek and obtain leave of Court to institute the action, as same was not a derivative action? (Grounds 2, 4 and 5).

The issues formulated by the 6th respondent are substantially similar to the issues formulated by the appellants and 1st – 4th respondents

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respectively. There is no need to reproduce them here. I find the issues formulated by the 1st – 4th respondents to be clear and concise. I shall adopt them in the resolution of this appeal.

MOTION ON NOTICE As the 1st- 4th respondents have challenged Ground 6 of the Notice of Appeal, which along with Grounds 1 and 3, form the basis of issue 1, it is necessary to deal with the application first. This is because, in the event that Ground 6 is incompetent, the effect would be that issue 1 is incompetent because it is not the duty of the Court to sift the arguments in respect of the competent grounds from those in respect of the incompetent grounds. See: Jev Vs Iyortyom (2014) 14 NWLR (Pt. 1428) 575; Ogundipe Vs Adenuga (2008) ALL FWLR (Pt 330) 206.

The grounds for the application are that Ground 6 of the Notice of Appeal is an appeal against an obiter dictum of the lower Court and not the ratio decidendi of the decision. It is contended that the said ground and issue 1 formulated therefrom are consequently incompetent and should be struck out. Relying on the authority of K.R.K. Holdings (Nig) Ltd Vs FRN (2017) 3 NWLR (PL 1552) 342 D - E;

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Omisore Vs Aregbesola (2015) 15 NWLR (Pt.1482) 263 – 264 G – B; and Ohakim Vs Agbaso (2010) 6 – 7 SC 86 @ 168 Line 20, learned senior counsel for the applicants submitted that the law is settled that a ground of appeal must arise from the ratio of the decision appealed against. He submitted that the ratio of the Court’s decision was not based on Section 36 of the Constitution, which was a remark made in passing but rather that the appellants were entitled to notice of meetings which was not given to them. He argued that Ground 6 is a misrepresentation of the Court’s decision.

​In opposition, learned counsel for the appellants, in his written address referred to some inconsistences in the averments in the affidavit in support in relation to the date the deponent received the information he deposed to. It was observed that the affidavit was deposed to on 24th February, 2020, while in paragraph 5, it was averred that the information was received on 24th of March 2020. I must observe here that in the further affidavit filed by the appellants, it is averred that there was a typographical error and the correct date is 24th February 2020. That takes care

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of the complaint.

On the substance of the application, it is conceded that grounds of appeal must be derived from the ratio of the decision complained of. Learned counsel submitted that a decision can have more than one ratio. See: Adetoun Oladeji (Nig.) Ltd. V. N.B. Plc (2007) 5 NWLR (Pt 1027) 415 @ 438 H – B. He submitted further that the Court below found the issue of fair hearing to be a fundamental issue in the appeal.

He referred to pages 874 – 875 of the record, where the lower Court held thus: “The meetings held without the mandatory notice to the appellants and the resolutions taken against them without given (sic) them a fair hearing is their complaint in this case. Issue of denial of fair hearing is fundamental, as it goes to the jurisdiction of the Court.”

Referring to paragraphs 4.16 and 4.16.04 of the appellants’ claim at pages 323 – 325 of the record, he asserted that Ground 6 properly arises from the ratio of the decision and not from an obiter dictum. He submitted that the said ground and issue 1 are therefore competent. Both learned counsel are correct in their submission that a ground of appeal must find its anchor in

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the ratio decidendi of the decision appealed against. It is also settled law that an issue for determination can only be distilled from a competent ground or competent grounds of appeal. As observed earlier, in a situation where an issue for determination is derived from both competent and incompetent grounds, the issue is liable to be struck out for incompetence. See:Jev Vs lyortyom (supra). An obiter dictum is an expression of opinion made by a Judge in passing in the course of delivering judgment, but which does not decide the live issues in the matter.

See: Oshodi Vs Eyifunmi (2000) 7 SC (Pt. II) 145; Babarinde Vs The State (2014) 3 NWLR (Pt. 1395) 568; N.D.P. V. INEC (2013) 6 NWLR (Pt. 1350) 392. The ratio decidendi on the other hand, is the principle of law upon which a particular case is decided. It has the binding force of precedent. All lower Courts are bound by the ratio decidendi of the decision of a higher Court. The ratio decidendi has also been defined as “the reason for deciding.” See: Amobi v. Nzegwu (2013) 12 SC (Pt. 1) 142; UTC (Nig.) Ltd v. Pamotei (1989) 2 NWLR (Pt. 103) 244. ​One of the issues argued before the lower

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Court was whether the appellants possess the locus standi to institute the suit. The 1st – 4th respondents argued before that Court that the trial Court was wrong when it held that they lacked locus standi. They argued that they had the necessary locus because their claims and the reliefs sought were to enforce their rights or assuage injuries done to them personally and not to the company.

The appellants, on the other hand, contended that the substance of the complaints was the alleged violation of the Memorandum and Articles of Association of the company and oppressive and discriminatory management of the 1st appellant’s affairs by the 2nd – 5th appellants. The finding of the lower Court was: “The appellants are free to protect their rights and obligations which were being infringed. The meetings held without the mandatory notice to the appellants and the resolutions taken against them without giving them a fair hearing is their complaint in this case.

Issue of denial of fair hearing is fundamental as it goes to the jurisdiction of the Court. A party’s right to fair hearing is provided under Section 36 of the Constitution of the Federal Republic of Nigeria 1999 (as amended)

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is inviolable and as such cannot be denied on the grounds of technicalities.” The appellants specifically challenged this finding in Ground 6 of the Notice of Appeal. I do not entertain any doubt whatsoever that this finding constitutes part of the ratio decidendi of the judgment appealed against. It is not an obiter dictum. I therefore hold that Ground 6 of the Notice of Appeal and Issue 1 formulated partly from this issue are competent. The 1st – 4th respondents’ motion on notice filed on 24/2/2020 is without merit. It is hereby dismissed.

The ruling just delivered paves the way for the determination of the appeal.

Issue 1 Learned counsel for the appellants reiterated the settled position of the law regarding locus standi. He submitted that a claimant would only have locus standi where the reliefs sought would confer some benefit on him. That it is the statement of claim alone that determines whether he has the locus to institute the action. He also submitted that the locus standi of a claimant is fundamental and touches on the Court’s competence to adjudicate. See: Bakare Vs Ajose-Adeogun (2014) 6 NWLR

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(Pt. 1403) 320 @ 350 – 351 H – B; Pam Vs Mohammed (2008) 16 NWLR (Pt. 1112) 1 @ 66 F. He referred to paragraphs 16, 17, 18, 19, 20 and 34 of the Statement of Claim and contended that the 1st – 4th respondents’ cause of action centres on irregularity in the allocation of unallotted shares of the 1st appellant, the change of signatories to the 1st appellant’s bank account and illegal conduct of the 1st appellant’s affairs by the 2nd – 5th appellants. He asserted that the complaints in the above-mentioned paragraphs reflect the wrong done to the 1st appellant by the 2nd – 5th Appellants.

He contended that the wrongs do not reflect a violation of 1st – 4th respondents’ personal rights. He described them as corporate rather than individual wrongs. He submitted that the complaints relate to the internal management of the company and that it is not the practice of the Court to interfere with the internal management of companies.

In support of the contention that the proper plaintiff is the company itself, he referred to A.G. Lagos State Vs Eko Hotels Ltd. (2006) 18 NWLR (Pt. 1011) 378 @ 455 – 456 H – B; Section 299 of CAMA. He submitted further that

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the fair hearing provisions of Section 36 (1) of the 1999 Constitution, as amended, do not apply to the Board Meetings and Annual General Meetings of the 1st Appellant, which is a company limited by shares. He argued that the said provisions are restricted to the proceedings before Courts and Tribunals established for the determination of the civil rights and obligations of litigants.

Learned counsel submitted that there are neither express nor implied provisions in the 1st Appellant’s Memorandum and Articles of Association, which guarantee fair hearing in the allotment/redistribution of shares, removal and appointment of Directors or charges in the signatories to the 1st appellant’s accounts. He posited that even if there were such provisions, they would only qualify as civil rights or a Director’s right, which is outside the scope of Section 36 of the 1999 Constitution, as amended.

Learned counsel submitted that the holding by the Court below, at page 885 of the record, that the failure of the appellants to respond to the allegation that they failed to notify the 1st – 4th respondents Board Meetings amounted to an admission, violates the principle

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that Courts must not delve into substantive issues at the interlocutory stage, particularly as the 1st-4th respondents’ reliefs are declaratory reliefs, which cannot be granted on admission. He referred to Helzger Vs Dept. of Health & Social Welfare (1977) 3 ALL ER 444 @ 451; A.G. Cross Rivers State VS A.G. Federation (2012) 16 NWLR (PL 1327) 425 @ 479 B-C; Dumez Nig. Ltd. v. Nwakhoba (2008) 18 NWLR (Pt. 1119) 361 @ 386 B -C.

Countering the above submissions, Learned senior counsel for the 1st-4th respondents submitted that there are three provisions which govern locus standi, to wit: (a) Section 6 (6) (b) of the 1999 Constitution, as amended; (b) The Rule in Foss Vs Harbottle (1842) 2 KB 461, as codified in Section 299 of CAMA; and (c) The exceptions to the rule in Foss VS Harbottle as codified in Section 300 of CAMA.

With regard to Section 6 (6) (b) of the Constitution, he submitted that the settled position of the law is that the jurisdiction of a Court can only be invoked where the suit relates to the determination of any question as to the rights and obligations of the plaintiff, whether that plaintiff be a human being or an

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artificial person.

He argued that while the general rule laid down in Foss Vs Harbottle (supra), as codified in Section 299 of CAMA, is that where there is an irregularity, which occurs in the course of a company’s affairs, only the company is competent to sue, there are exceptions to the rule, which have evolved through case law and eventually codified in Section 300 of CAMA, which protect the rights of members of a company who are personally aggrieved by the conduct of its affairs. He referred to: Pender Vs. Lushington (1877) 6 C.H.P 70; Northwest Transportation Co.

Vs Beatty (1887) 12 A.C. 589; Edward Vs Halliwell (1950) 2 ALL EIR 1064. He submitted that in any of the circumstances set out in subparagraphs (a)-(f) of Section 300, an individual member of the company has the locus to approach the Court.

He submitted that the originating processes of the 1st-4th respondents disclose the necessary locus standi. He argued further that an incorporated company is a separate entity from its shareholders and therefore the rights and interests of the company are different from the personal rights and interest of its shareholders. He referred to:

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Elufioye Vs  Halilu (1993) 6 NWLR (Pt. 301) 570 @ 599 E. He submitted that the Memorandum and Articles of Association of a company represent the contract between the individual shareholders and the company and it is that document that spells out the rights and interests of the individual shareholders. He referred to Yalaju-Amaye V. A.R.E.C. Ltd (Supra) @ 445 A-D. He referred to the pleadings in paragraphs 1-3, 23, 25, 26, 31, 35, 36 and 38 of the Statement of Claim.

He also referred to page 34 of the record, which details the shareholding of the 1st-4th respondents as contained in the Memorandum & Articles of Association of the company and clause 4 thereof relating to pre-emptive rights of shareholders at page 35. He argued further that reliefs (ii), (iii), (viii), (ix), (x), (xii), (xiii), (xv), (xvi), (xvii) and (xviii) were sought to enforce their personal shareholder rights.

Learned senior counsel referred to C.B.N. Vs Kotoye (1994) 3 NWLR (Pt 330) 66 @ 75-76 H-B and 77D, where it was held that the rule in Foss Vs Harbottle, which was derived from decisions of the Courts over the years, cannot override clear statutory provisions to the contrary or affect the

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rights and obligations conferred by the Constitution. Furthermore, that it will not apply to an action instituted to protect the invasion of personal rights of an individual member qua member of a company, as in such cases the wrong ceases to be a wrong to the company and goes beyond the authority of the company, union or association or its majority members to rectify or seek redress in Court. He referred toYalaju Amaye Vs A.R.E.C. (supra) @ 459 A- B.

It was further argued that the contention of the appellants that several of the complaints in the suit relate to the shares of the company and therefore only the company was competent to sue in relation thereto, had been raised in a previous case, A.G. Lagos State Vs Eko Hotels Ltd. (2006) 18 NWLR (Pt 1011) 378. And rejected by this Court. He referred to pages 419 D-G and 445 A-H of the report.

He submitted that in that case it was held that the company to whom the shares belong as well as the shareholders, who are beneficial holders of the shares, can initiate an action in respect of the company’s shares.

​Learned senior counsel submitted, that contrary to the appellants’ contention that the cause of

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action centers on the alleged violation of the corporate rights of the company, the suit falls not only within Section 300 (c) of CAMA, it also falls under Section 300 (a) and (d), which relate to ultra vires/illegal and fraudulent acts. He referred to paragraphs 16, 23, 25, 26 and 38 of the Statement of Claim. He also referred to reliefs (i), (v), (vii), (xi) and (xiii). He noted that the reliefs in paragraphs (xii) to (xxi) were sought to facilitate the enforcement of the declarations sought in paragraphs (i) to (xi).

​Relying on Yalaju Amaye Vs A.R.E.C. (supra) @ 448 C, he submitted that the acts complained of are not mere irregularities but illegalities, which cannot be ratified by the company under Section 299 of CAMA and therefore the rule in Foss Vs Harbottle (supra) is inapplicable. He proceeded to advance arguments on why the decision of the trial Court should not be restored, basing his submission on the fact that the trial Court misconstrued and wrongly applied the decision of this Court in Edokpolor Vs. Sem-Edo Wire Ltd. (1984) NSCC Vol. 15 553.

It is pertinent to remind learned senior counsel that the judgment of the trial Court is not on

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appeal before us.

On the complaint that the lower Court delved into substantive issues at the interlocutory stage, he noted that the appellants, at the time they raised their preliminary objection, had not filed their defence, He submitted that in the circumstances, and for the purpose of determining the preliminary objection, they are deemed to have admitted all the averments in the statement of claim. See: C.B.N. Vs Interstella Communications Ltd (2017) 12 sc (Pt. iv) 87 @ 189 lines 30-5; Omnia (Nig) Ltd Vs. Dyktrade Ltd (2007) 15 NWLR (Pt. 1058) 576 @ 628 E-F; Sehindemi Vs. Gov.

Lagos State (2006) 10 NWLR (Pt. 987) @ 29 G-H. He urged us to discountenance the appellants’ submissions on this issue.

On the contention that the fair hearing provisions of Section 36 (1) of the 1999 Constitution, as amended, are not applicable to company’s proceedings, he submitted that fair hearing at administrative proceedings, such as company meetings, is also guaranteed under the rules of natural justice. See: Adeniyi Vs Governing Council of Yabatech (1993) LPELR – 120 (SC) @ 30 B-P, Oyeyemi Vs Comm. for Local Govt. Kwara State (1992) 2 NWLR (Pt. 226) 661 @ 681-682

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H-A. He submitted that the right to fair hearing at company meetings is expressly guaranteed by CAMA as well as the Company’s Articles of Association. He referred to Sections 262 (2) and 266 (1), (2) and (3) of CAMA; Longe VS F.B.N. Plc (2010) 6 NWLR (Pt.1189) 1 @ 30 F-G, 46-47 G-B; Re: GlaxoSmitKline Consumer Nig. Plc (2019) LPELR – 47498 (CA) @ 55-57 C-B.

Relying on the authority of Witt & Busch Ltd Vs Dale Power Systems Plc. (2007) 17 NWLR (Pt 1062) 1 @26 G – H and Adonike Vs The State (2015) & NWLR (Pt.1458) 237 @ 258 E – F, he submitted that assuming, without conceding that the appellants are correct in stating that Section 36 of the 1999 Constitution, as amended, is not applicable to the conduct of company meetings, the provisions of CAMA and the relevant clauses in the Articles of Association relating to notices of meetings, guarantee the 1st – 4th respondents’ right to fair hearing and the decision of the lower Court should not be set aside on this ground.

Finally, he submitted that the alleged errors of the lower Court have not occasioned a miscarriage of justice.

​The submissions of learned counsel for the 6th respondent are in

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alignment with those made on behalf of the 1st – 4th respondents. I shall only make reference to those submissions not covered by the learned senior counsel for the 1st – 4th respondents. Learned counsel submitted that in order to ascertain the actual nature of the plaintiffs’ claim, the entire statement of claim must be considered as a whole and not selectively, as done by the appellants. He submitted that a holistic appraisal of the Statement of Claim reveals that the cause of action was the protection of the 1st – 4th respondents’ personal rights.

He submitted that the pleadings are replete with instances of denial of fair hearing.

In the Appellants’ reply to 1st – 4th respondents’ brief, it was submitted that Section 300 of CAMA is restricted to suits designed to restrain a company from taking steps which are illegal or ultra vires. Learned counsel submitted that the provision is inapplicable to completed acts. He urged the Court to give the words in the statute their natural and ordinary meaning. He contended that most of the reliefs the 1st – 4th respondents are seeking are aimed at reversing completed acts.

​He submitted that the authority of

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A.G. Lagos State Vs Eko Hotels Ltd (supra) is inapplicable to the facts of this case because the plaintiffs in that case instituted the action vide an Originating Summons and not by Writ of Summons, as in this case. He maintained that the complaints of the 1st – 4th respondents relate to irregularities and not illegalities. I have discountenanced those submissions which are a rehash of the arguments in the main brief.

RESOLUTION OF ISSUE 1 Locus standi connotes the legal capacity to institute an action in a Court of law. It is a threshold issue that affects the jurisdiction of the Court to look into the complaint. Where the claimant lacks the legal capacity to institute the action, the Court, in turn will lack the capacity to adjudicate. See: Daniel Vs INEC (2015) LPELR – 24566 (SC) @ 47 A – D; Thomas Vs. Olufosoye (1986) 1 NWLR (Pt. 18) 669; Opobiyi & Anor. Vs. Muniru (2011) 18 NWLR (Pt. 1278) 387 @ 403 D – F; Nyesom Vs. Peterside (2016) LPELR – 40036 (SC) @ 39 – 40 C – A.

In order to have locus standi, the claimant must have sufficient interest in the suit. For instance, it must be evident that the claimant

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would suffer some injury or hardship or would gain some personal benefit from the litigation. See:Inakoju Vs Adeleke (2007) 4 NWLR (Pt. 1025) 423 @ 601 – 602 H – B; Thomas Vs Olufosoye (supra); B.B. Apugo & Sons Ltd. Vs O.H.M.B. (2016) 13 MWLR (Pt 1529) 206. In determining whether the claimant has the necessary locus standi to institute the action, it is his pleadings that would be considered by the Court. Standing to sue does not depend on the merit of the claim but on the interest of the claimant in the subject matter of the suit. See: Basinco Motors Ltd.

Vs Woermann – Lines & Anor (2009) 13 NWLR (Pt. 1157) 149; Fawehinmi Vs Akilu (1987) 12 SC 36; Musical Copyright Society of Nig. Ltd/Gte Vs Compact Disc Technology Ltd & Ors (2018) LPELR – 46353 (SC) @ 27 – 28 F – F.

The following paragraphs of the Statement of Claim give a glimpse into the complaints of the 1st – 4th respondents, which gave rise to their suit at the trial Court. “1. The 1st Plaintiff is the Chairman, Chief Executive Officer, majority shareholder, the alter ego and the directing mind and will of the 1st Defendant hiding 70% of the

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shares. 2. The 2nd and 3rd Plaintiffs are shareholders and directors of the 1st Defendant; they are also wife and child respectively of the 1st Plaintiff, they hold 10% of the shares each in the 1st Defendant. 3. The 4th Plaintiff is a shareholder and the Director of Administration of the 1st Defendant, he holds 5% of the share. 17. The Plaintiffs aver that in the course of their business, the shareholders of the 1st Defendant/company decided to increase the share capital of the 1st defendant from 2,000,000 ordinary shares to 10,000,000 ordinary shares.

Consequently, on the 1st day of April, 2002 the 1st Defendant/Company with an ordinary Resolution increased its share capital by an additional 8,000,000 ordinary shares which shares were unalloted. The Certificate of Increase in Share Capital dated 9th April, 2002 is pleaded and annexed as “Afe 5″. 18. During the general meeting of the 1st defendant held on the 4th of April, 2006, the 2nd defendant unilaterally and without the concurrence of the other shareholders of the 1st Defendant claimed that the 4th, 5th, 6th and 7th Defendants (who were neither shareholders of the 1st Defendant nor

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possess the right to attend or vote at the general meeting of the 1st Defendant) voted that the aforesaid 800,000,000 (sic: 8,000,000.00) unalloted ordinary shares of the 1st Defendant be allotted consequent upon which an ordinary Resolution was passed to distribute the unallotted shares in the following ways: i. Josiah Oluwole Francis 3, 400,000 Ord. Shares ii. Josiah Olusola Biodun (Mrs) – 400.000 ” ” iii. Josiah Michael 200.000 ” iv. Bello Saka Oludare 2, 880,000 ” v. Fasubaa Albert Ademola 400,000 ” vi. Bello Aderonke (Mrs), 400.000 ” vii. Akin Fayinminu 80,000 ” viii.

Nurudeen Jinadu 80,000 ” ix. Coke Odunlami 80,000 ” x. Biodun Daniels 80,000 ” The Form C02 and the Ordinary Resolution dated the 4th of April, 2006 and filed at the 8th Defendant are hereby pleaded and annexed as “Afe 6 (a) and (b). 23. Plaintiffs aver that the allotments of 4th April, 2006 unilaterally done by the 2nd Defendant are fraudulent, unlawful and illegal. 25. The Plaintiffs aver that the 2nd Defendant in his usual characteristics of acting contrary to the provisions of CAMA and the Article of Association of the 1st

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Defendant/Company on 6th day of October, 2005 held a Board Meeting where signatories to the Account of the 1st Defendant were changed without complying with [the] rules. 26. On another occasion, the 2nd to the 7th Defendants held another unlawful and illegal board Meeting on the 9th and 10h March, 2006 where they purportedly removed the 1st Plaintiff as the Chairman of the 1st Defendant’s Board of Directors contrary to the Articles of Association of the 1st Defendant, the Companies and Allied Matters Act, common law and equity.

The notice and the minutes of the said meeting of the 9th and 10th March 2006 and the resolution of 10th March 2006 removing the 1st Plaintiff as the Chairman of the 1st Defendant are hereby pleaded and annexed as “Afe 11, 12 and 13.” 31. The Plaintiffs aver that the 2nd to the 2th Defendants have completely taken over the management, control and administration of the 1st defendant and have thus excluded the plaintiffs despite their colossal investment in the 1st defendant. 35.

As part of the 1st Defendant’s welfare policy for its director and shareholders, the 1st Defendant allocated the following houses to the 1st and 4h

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Plaintiffs as follows: i) The 1st Plaintiff – Duplex at 27, Oka Akoko Close, Garki II, Abuja. ii) The 4h Plaintiff – House No. 3, 17 Road, Citec Villas, Gwarimpa, Team 5, Abuja, FCT 36. The 2nd to the 7th Defendants are making desperate bids to sell the official quarters of the 1st and 4th Plaintiffs described in paragraph 32 above and have in fact placed notice of sale in front of the said houses. 38.

On the 3rd April, 2006, the 2nd to 7th Defendants becoming more and more daring purported to have illegally suspended the 4th Plaintiff as a Director of the 1st Defendant and ordered that his salary which has hitherto been withheld since September, 2005 remains withheld. The letter of suspension is hereby pleaded and annexed as ‘Afe 19’. 39. The 2nd to the 7th defendants have ganged up against the plaintiffs and their family members to cheat them out their life investment and are even threatening the lives of the plaintiffs as a result.”

​It is evident that the pleadings, along with the reliefs sought are to the effect that the plaintiffs have suffered personal injury arising from the interference by the appellants with their rights as

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shareholders, directors and management staff of the 1st appellant, without recourse to them. Learned counsel for the appellants rejects this assertion and contends that the complaints relate simply to the internal management of the 1st appellant, for which only the 1st appellant has the capacity to sue. The 1st – 4th respondents contend that the Memorandum and Articles of Association of the 1st appellant have been breached in so far as the actions and inactions complained of affect their personal rights.

It is necessary at this stage to consider Section 41 of CAMA, which provides for the effect of the Memorandum and Articles of Association of a company as follows: “41(1) Subject to the provisions of this Act, the Memorandum and Articles of Association, 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. ​If this provision is juxtaposed with the

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paragraphs of the Statement of Claim reproduced above, it is clear that the suit is complaining about a breach of the obligations owed to the plaintiffs under the Memorandum and Articles of Association as individual members and officers of the company. This brings me to the rule in Foss Vs Harbottle. In the case of Yalaju-Amaye Vs A.R.E.C. Ltd & Ors (1990) 4 NWLR (Pt 145) 422 @ 446 A .

His Lordship Karibi Whyte, JSC reiterated the dictum of Jenkins, L.J. in Edwards Vs Halliwell (1950) 2 ALL ER 1084 @ 1066, where His Lordship held inter alia; “The rule in Foss Vs Harbottle, as I understand it, comes to no more than this. First, the proper plaintiff in an action in respect of a wrong alleged to be done to a company or association of persons is prima facie the company or the association of persons itself.

Secondly, where the alleged wrong is a transaction which might be made binding on the company or association and or all its members by a simple majority of the members, no individual member of the company is allowed to maintain an action in respect of that matter for the simple reason that if a mere majority of the company or association is in

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favour of what has been done, then cadit quaestio. Thus, the company or association is the proper plaintiff in all actions in respect of injuries done to it. No individual will be allowed to bring actions in respect of acts done to the company which could be ratified by a simple majority of its members.

Hence the rule does not apply where the act complained of was ultra vires the company, or illegal or constituted a fraud on the minority and the wrongdoers are in the majority and in control of the company… And finally, where a resolution has been passed by a simple majority, see Edwards Vs Halliwell (supra). These last mentioned circumstances are the generally recognized exceptions to the rule in Foss Vs Harbottle (supra).” His Lordship Nnaemeka – Agu, JSC in the same case of Yalaju-Amaye Vs A.R.E.C.

Ltd (supra) @ 465 D – H, held inter alia, that, notwithstanding the rule in Foss Vs Harbottle, it is permissible for a shareholder to maintain an action when it is clear that to deny him relief would be tantamount to allowing the rule to be converted into an engine of fraud or oppression. His Lordship stated further:

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“…Apart from actions enforcing personal rights of an oppressed plaintiff shareholder, the Courts have always allowed actions, in spite of the rule, where the act in question is ultra vires the company or such that it cannot be sanctioned by a simple majority but by special resolution or is based on fraud.” At page 466 B – C (supra), His Lordship further held: “Although it is recognized that the word “fraud” is a term of so wide an import that it is idle to attempt to define it, it at least appears clear that any act which may amount to an infraction of fair dealing, or abuse of confidence, or unconscionable conduct or abuse of power as between a trustee and his shareholders in the management of a company is fraud, which may take the case out of the rule in Foss Vs Harbottle (supra).” I agree with learned senior counsel for the 1st – 4th respondents that the rule in Foss Vs Harbottle (supra) is inapplicable in the present circumstances.

The complaints are not complaints of wrongs done to the company. Their grievance is that they have been denied their rights to notice of meetings where decisions affecting their individual rights were taken. They also contend that

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the allotment of 8 million unallotted ordinary shares of the 1st Appellant by the 2nd Appellant to members and non-members of the 1st Appellant without regard to their right of first refusal is ultra vires, illegal, unlawful and accordingly null and void. Another complaint is in relation to the intended sale of their official quarters, their suspension and the stoppage of their salaries. See: A.G. Lagos State Vs. Eko Hotels Ltd. (2006) 18 NWLR (Pt. 1011) 378 @ 419 D – G. Section 300 (C) of CAMA provides: “300.

Without prejudice to the rights of members under Sections 303 to 308 and Sections 310 to 312 of this Act or any other provisions of this Act, the Court, on the application of any member, may by injunction or declaration, restrain the company from the following – (c) any act or omission affecting the applicant’s individual rights as a member.” The provisions are clear and unambiguous. Learned counsel for the appellant misconstrued the provision when he argued that it is only applicable to restrain a company from taking steps which are illegal or ultra vires and will not apply to completed acts.

With respect to learned counsel, the

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provisions relate not only to injunctive reliefs but also to declaratory reliefs relating to any act or omission affecting the applicant’s individual rights. I am of the considered view that the 1st – 4th respondents’ suit falls squarely within Section 300 of CAMA as well as the exceptions to the rule in Foss Vs Harbottle to confer them with the necessary locus to institute their action.

Learned counsel for the appellants has also argued that the fair hearing provisions under Section 36 (1) of the 1999 Constitution, as amended, do not apply to a company’s proceedings. The short answer is that in so far as the company’s Memorandum and Articles of Association make provision for the giving of notice for meetings to shareholders, it follows that those entitled to be given notice of such meetings are entitled to participate in and contribute at such meetings and to be part of whatever resolution might be reached thereat. See also Sections 262(2) and 266(1), (2) and (3) of CAMA.

It is settled law that even the proceedings of a non-judicial or administrative body must be conducted in accordance with the principles of natural justice. See:

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Adeniyi Vs Governing Council of Yabatech (1993) 6 NWLR (Pt. 300) 426; Denloye Vs Medical & Dental Practitioner Disciplinary Committee (1968) 1 ALL NWLR 306.

With regards to the contention that the lower Court delved into substantive issues at the interlocutory stage, I find myself unable to agree with that assertion. What the Court did was merely to observe that in circumstances where a defendant raises a preliminary objection without having filed his Statement of Defence, he is taken, for the purposes of the objection only, to have admitted the averments in the Statement of Claim. This is because, in order to determine the objection, the Court can only consider the averments in the Statement of Claim.

I am not persuaded that any miscarriage of justice has occurred thereby.

In conclusion on this issue, I hold that the lower Court was right when it held that the 1st – 4th respondents had the requisite locus standi to institute the action. The issue is accordingly resolved against the appellants.

Issue 2 Learned counsel for the appellants contended that the 1st – 4th respondents’ suit is a derivative action for which the prior leave of the Court ought to have

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been obtained before it was instituted. He argued that going by the various reliefs sought, they are not for the protection of the individual rights of the plaintiffs but are reliefs which are beneficial to the 1st appellant and seek to redress wrongs committed against the 1st appellant. He referred toAgip Nig. Ltd Vs Agip Petrol Int’l. (2008) 5 NWLR. (Pt 1187) 348 @ 393 G – H. He submitted that the action ought to have been commenced by Originating Summons and not by a Writ of Summons and Statement of Claim.

He submitted that where, by a rule of Court, the doing of an act or taking a procedural step is a condition precedent to the hearing of a case, the rule must be strictly complied with. He submitted that non-compliance is not a mere irregularity but a fundamental issue that goes to the root of the Court’s jurisdiction. He referred to Amaechi Vs INEC (2008) 5 NWLR (Pt 1080) 227 @ 437 H – A; Aladejobi Vs N.B.A. (2013) 15 NWLR (Pt. 13761) 66 @ 84B; Mainstreet Bank Capital Ltd. Vs Nigeria Reinsurance Corporation Plc (2018) 14 NWLR (Pt. 1640) 423 @ 455 B.

He also referred to Section 303 (1) and (2) of CAMA. He submitted that on this issue, the trial

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Court was right in holding that the suit was a derivative action and failure to commence the suit by Originating Summons rendered it incompetent. He urged the Court to set aside the decision of the lower Court, which held a contrary view, and to strike out the suit for incompetence.

In response, learned senior counsel for the 1st – 4th respondents submitted that a derivative action is an action brought to protect the interest of a company and that the reliefs in a derivative action are sought for the benefit of the company. He submitted that the resolution of Issue 1 against the appellant would lead to the inevitable conclusion that the suit is not a derivative action. He submitted that not only is the suit not a derivative action requiring prior leave, even if the suit was brought pursuant to a wrong mode of commencement, it was not sufficient to defeat the action.

Learned counsel for the 6th respondent is of similar persuasion.

In view of my finding and resolution of Issue 1 against the appellant, I do not deem it necessary to reproduce the remaining submissions of learned counsel on this issue.

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RESOLUTION OF ISSUE 2 Section 303 (1)  of CAMA provides: “303 (1) Subject to the provisions of subsection (2) of this Section, a applicant may apply to the Court for leave to an action in the name or on behalf of a company, or to intervene in an action to which company is a party, for the purpose of prosecuting or defending or discontinuing the action on behalf of the company. (2) No action may be brought and no intervention may be made under Subsection (1) of this Section unless the Court is satisfied that – (a) the wrongdoers are the directors who are in control and will not take necessary action; (b) the applicant has given reasonable notice to the director of the company of his intention to apply to the Court under subsection (1) of this section if the directors of the company do not bring, diligently prosecute or defend or discontinue the action. (c) it appears to be in the interest of the company that the action be brought, prosecuted, defended or discontinued.” In Unipetrol (Nig.) Plc Vs.

Agip (Nig) Plc (2002) 14 NWLR (Pt. 787) 312 @ G – N, the Court of Appeal per Aderemi, JCA (as he then was), in interpreting the above provisions, held, inter alia.<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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“It has now become accepted as settled in law that a derivative action is an action brought by a shareholder in the name of himself and all other shareholders to enforce the company’s rights. The company must be joined as a defendant to the action so that it becomes a patty to the action and judgment can be given in its favour so that it will be bound by the Court’s judgment.” This position was affirmed by this Court in Agip (Nig) Ltd Vs. Agip Petrol International (2010) All FWLR (Pt. 520) 1198 @ 1230 – 1231 D – F.

In the course of resolving Issue 1, I held that the suit of the 1st – 4th respondents does not seek to redress any wrong done to the 1st Appellant but to protect and enforce their individual rights. The suit cannot, by any stretch of the imagination, be considered to be a derivative action. It follows therefore that they did not require prior leave for their suit to be properly instituted. I also held that the said suit was properly commenced by Writ of Summons and Statement of Claim and was therefore competent. This issue is accordingly resolved against the appellants.

​On the whole, I find no merit in this appeal.

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I am not persuaded to interfere with the sound reasoning of the Court below. The appeal is hereby dismissed. The judgment of the Court of Appeal, Abuja Division delivered on 7th July, 2017 is affirmed. Costs of N2 Million are awarded in favour of the 1st – 4th respondents against the appellants. Appeal dismissed.

OLABODE RHODES-VIVOUR, J.S.C.: I have had the privilege of reading in draft the leading judgment of my learned brother Kekere Ekun JSC, and for the reasons given I, too find no merit in this appeal. The Appeal is dismissed with costs as proposed in the leading judgment.

CHIMA CENTUS NWEZE, J.S.C.: I had the advantage of reading, before now, the draft of the leading judgement which my Lord, Kekere-Ekun, JSC, just delivered. I agree with His Lordship that, being unmeritorious, this appeal should be dismissed.

Learned counsel for the appellant dwelt on the question of locus standi in dealing with issue One. My Lords, I had the opportunity of addressing this issue at length in Centre For Oil Pollution Watch v NNPC (2018) LPELR – 50830 (SC). I shall adopt my views in that

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case as part of my reasoning in this Contribution. For their bearing on the question in this appeal, I shall set out my views in extenso. On the position of the law on this question, I stated thus: … the expression locus standi, Latin expression used, interchangeably, for ‘a place to stand,’ or standing to sue ‘is a rule of ancient vintage and it arose during an era when private law dominated the legal scene and public law had not yet been born,’ per Bhagawati, J in Gupta v President of India and Ors, 1982 2 SCR 365 [italics supplied for emphasis].

Like most of English law of the time, the rules as to standing could not be found in any statute for they were made by Judges of the Realm, per Lord Diplock in Rev v I. R. C., Ex p. Fed. of Self-Employed [1982] A. C. [H. L. (E.)] 617, 641. Indeed, the said locus standi rules would appear to have been more, popularly, enunciated in Ex parte Sidebotham (1880) 14 Ch. D 458. ​According to James, L.J. a ‘person aggrieved’ must be a man ‘who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him

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something or wrongfully affected his title to something, Ex parte Sidebotham (supra). This Jamesonian definition was approvingly, adopted in In Re Reed Bowen and Co (1887) 19 QBD 174. The learned Master of the Rolls, Lord Esher, emphasized that ‘when James, L. J. said that a person aggrieved must be a man against whom a decision has been pronounced which has wrongfully refused him of something, he obviously meant that the person aggrieved must be a man who has been refused something which he had a right to demand, per Bhagawati, J in Gupta v President of India and Ors, (supra).

In simple terms, therefore, this narrow and rigid conception of locus standi means that it is only a person who has suffered a specific legal injury by reason of actual or threatened violation of his legal right or legally-protected interest who can bring an action for judicial redress. In effect, ‘this rule with regard to locus standi thus postulates a right-duty pattern which is commonly to be found in private law litigation, Gupta v President of India and Ors, (supra).

Subsequent English decisions clung to this ‘right-duty pattern:’ a common feature of private law.<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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Nigeria’s inheritance of the common law determinant of locus standi Nigerian Courts, as legatees of the English common law heritage, embraced this concept of Locus standi. In doing so, however, they would appear to have merged the narrow and restrictive concept of private law (cause of action test) with the requirements of public law.

Thus, although Olawoyin v AG, Federation [1961] 1 SCNLR 2, which would appear to be the first Nigerian case on the point, was ‘a case in the realm of public law, [Owodunni v Registered Trustees, CCC (supra) 340], yet the Court invoked the ‘interest’ and ‘injury’ test. Subsequent decisions towed that line, Gamioba and Ors v Esezi (1961) ANLR 608, 613; Attorney General Eastern Nigeria v Attorney General of the Federation (1964) ANLR 224; Odeneye v. Efunuga [1990] 7 NWLR (pt 164) 618; Thomas v. Olufosoye [1986] 1 NWLR (pt18) 669; Amusa Momoh v.

Jimoh Olotu (1970) 1 All NLR 117; (1970) ANLR 121; Moradesa v. The Military Governor of Oyo State and Ors [1986] 3 NWLR 125; Olawoyin v. Attorney-General of Northern Nigeria [1961] 2 SCNLR 5; [1961] 2 NSCC 165; Senator Adesanya v. President of the Fed. Republic of Nigeria and Anor.

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[1981] 12 NSCC 146; (1981) ANLR 1; [1981] SC 1112 and so on. Did Adesanya v President FRN (supra) extend locus standi. In Owodunni v Registered Trustees, CCC [2000] 10 NWLR (pt 675) 315, 331, Ogundare, JSC, introduced the leading judgement as follows this ‘…appeal raises once again the vexed question of locus standi which, in spite of a plethora of decided cases on it, still remains a Gordian Knot. A number of judicial pronouncements have been made and academic papers written. Rather than the problem being solved, it has become more intractable as the case now on hand demonstrates.

His Lordship continued in ‘Oloriode v. Oyebi [1984] 1 SCNLR 390, 400, Irikefe JSC … (as he then was) declared that ‘[a] party prosecuting an action would have locus standi where the reliefs claimed would confer some benefit on such a party.’ According to His Lordship: This is clearly the position in private law…. The position appears to be that in private law, the question of locus standi is merged in the issue of cause of action, for instance, a plaintiff who has no privity of contract with the defendant will fail to establish a cause of action for

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breach of the contract as he will simply not have a locus standi to sue the defendant on the contract. Our laws reports are replete with authorities that show that in chieftaincy cases, all a plaintiff is required to do is to show in his statement of claim his interest and his entitlement to the chieftaincy title. I may add that the same principle applies to similar cases such as the one presently on hand. The erudite jurist maintained that ‘Thomas v. Olufosoye (supra) falls into this category as well. Olawoyin v.

Attorney-General of Nigeria (supra) is a case in the realm of public law… The Court applied the ‘interest’ ‘injury’ test in denying [Olawoyin] of locus standi in the case. The same test was applied by the Court in Gamioba and Ors. v. Esezi II and Ors. (1961) ANLR 608, 613. Almost all counsel, including the amici curiae, would seem to entertain the view that the decision in Fawehinmi v Akilu [1987] 4 NWLR (pt 67) 707 expanded the scope of locus standi. With respect, this cannot be correct, see, T. E.

Ogowewo, Wrecking the Law: Now Article 111 of the Constitution of the United States led to the Discovery of a Law of Standing to Sue in Nigeria, 26 Brook. J. Inti L. (2017) 528, ​

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where the erudite scholar debunked such views. [per Nweze, JSC in Centre for Oil Pollution Watch v NNPC (supra) 39 – 44; C- C.] On the question whether Section 6 (6) (b) of the 1999 Constitution is the provenance of locus standi, I continued thus: In Owodunni v Registered Trustees, CCC (supra), Ogundare, JSC, answered this question thus: It appears that the general belief is that this Court laid it down in that case [that is, Adesanya v President, FRN that the law on locus standi is now derived from Section 6(6) (b) of the Constitution of the Federal Republic of Nigeria, 1979 (re-enacted in Section 6(6) (b) of the 1999 Constitution) which provided: 6 (6) The judicial powers vested in accordance with the foregoing provisions of the section (b) shall extend to all matters between persons, or between government or authority and any person in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person.

I am not sure that this general belief represents the correct position. Of the seven Justices

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that sat on that case [that is, Adesanya v President, FRN] only 2 (Bello and Nnamani JJ.SC) expressed views to that effect.

Bello JSC, (as he then was), put the law on locus standi or standing in the realm of public law in these words: Finally, I would like to make the following observations: A careful perusal of the problem would reveal that there is no jurisdiction within the common law countries where a general licence or a blank cheque – if I may use that expression without any string or restriction, is given to private individual to question the validity of legislative or executive action in a Court of law.

It is a common ground in all the jurisdictions of the common law countries that the claimant must have some justiciable interest which may be affected by the action or that he will suffer injury or damage as a result of the action. In most cases the area of dispute, and sometime, of conflicting decisions has been whether or not on particular facts and situation the claimant has sufficient interest or injury to accord him a hearing. In the final analysis, whether a claimant has sufficient justiciable interest or sufferance of injury or damage

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depends on the facts and circumstances of each case, Bengal Immunity Co. v. State of Bihar (1955) 2 S.C.R. 602; Forthingham v. Mellon (1925) 262 U.S. 447; for India and America, respectively. Even in the Canadian case of Torson v. Attorney-General of Canada (1974) 1 N.R. 2254, and the Australian case of Mckinlay v. Commonwealth (1975) 135 C.L.R … in which liberal views on standing were expressed, the issue of sufficiency of interest was the foundation upon which the decisions in both cases were reached. I think this passage correctly sums up the law and is in accord with Olawoyin v.

Attorney-General of Northern Nigeria (supra). Bello JSC did not however, stop there. He went on to consider the provision of our Constitution and after quoting Section 6(6)(b) of the Constitution (1979 Constitution) went on to observe: It may be observed that this sub-section expressed the scope and content of the judicial powers vested by the Constitution in the Courts within the purview of the subsection. Although the powers appear to be wide, they are limited in scope and content to only matters, actions and proceedings for the determination of any question as to

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the civil rights and obligations of that person’. It seems to me that upon the construction of the sub-section, it is only when the civil rights and obligations of the person, who invokes the jurisdiction of the Court, are in issue for determination that the judicial powers of the Courts may be invoked. In other words, standing will only be accorded to a plaintiff who shows that his civil rights and obligations have been or are in danger of being violated or adversely affected by the act complained of.

Idigbe, JSC, also quoted Section 6(6) (b) of the Constitution and went on to say: The expression ‘judicial power’ in the above quotation is the power of the Court to decide and pronounce a judgment and carry it into effect between persons and parties who bring a case before it for decision’ (see Justice Miller: The Constitution (p. 314). Judicial Power is therefore invested in the Court for the purpose of determining cases and controversies before it; the cases or controversies, however, must be ‘justiciable’.

That being so, it is necessary to know in what circumstances a Court can, in the exercise of its judicial power pronounce on the constitutional

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validity of an ‘Act’ (i.e. legislation) of the Legislature or, an ‘act’ (i.e. action) of the National Assembly. In attempting to answer this question, I would gratefully adopt the views of Marshall C.J. in Marbury v.

Madison (1803) 1 Cranch 137, which, in a summary, are that the right of the Court to declare unconstitutional an act of Congress can only be exercised by it when a proper case between opposing parties has been submitted to it for judicial determination… On what is a “proper case” that would justify the invocation of the judicial power of the Court, the learned Justice of the Supreme Court observed: The type of case or controversy which will justify the exercise by the Court of its judicial power must be justiciable and based on bona fide assertion of right by the litigants (or one of them) before it….

I take the view that the circumstances in which the judicial power under Section 6(6) (b) of the 1979 Constitution can be exercised by the Court for the purpose of pronouncing on the constitutional validity of an act for the National Assembly or, more particularly, any legislation must be limited to those occasions in which it has

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become necessary for it (i.e. the Court) in the determination of a justiciable controversy or case based on bona fide assertion of rights by the adverse litigants (or anyone of them) before it to make such a pronouncement. The Court does not, in my view possess a general veto power over legislation by, or acts of, the National Assembly; its powers properly construed, are supervisory, and the supervisory power, in circumstances to which I have referred above.

According to Ogundare, JSC: It will be observed that Idigbe JSC did not say that it was Section 6(6) (b) that gave locus standi but rather that it was this sub-section that prescribed the judicial power of the Court in the separation of powers scheme of the Constitution. Obaseki JSC was emphatic in his rejection of the notion that Section 6(6) (b) is concerned with locus standi.

The learned Justice of the Supreme Court after quoting the sub-section, said: This provision by itself, in my opinion and respectful view, does not create the need to disclose the locus standi or standing of the plaintiff in any action before the Court and imposes no restriction on access to the Courts. It is the

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cause of action that one has to examine to ascertain whether there is disclosed locus standi or standing to sue. Nnamani, JSC, appeared to share Bello JSC’s view when he said: Section 6 (6)(b), to my mind, encompasses the full extent of the judicial powers vested in the Courts have power to adjudicate on a justiciable issue touching on the rights and obligations of the person who brings the complaint to Court. The litigant must show that the act of which he complains affects rights and obligations peculiar or personal to him.

He must show that his private rights have been infringed or injured or that there is a threat of such infringement or injury. It seems to me that the Court must operate within the parameter of the judicial power vested in them by Section 6 (6) (b) of the Constitution and that they can only take cognisance of justiciable actions properly brought before them in which there is dispute, controversy, and above all, in which the parties have sufficient interest. The Courts cannot widen the extent of this power which has been so expressly defined by the Constitution.

Uwais, JSC also agreed with Bello JSC but only to some extent.

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For he said: It is for the foregoing reasons and those given by my learned brother, Bello, JSC (which I had the privilege of reading in draft) that I feel that the interpretation to be given to Section 6 subsection (6)(b) of the Constitution will depend on the facts or special circumstance of each case. So that no hard and fast rule can really be set-up. But the watchword should always be the ‘Civil rights’ and ‘obligations’ of the plaintiff concerned. I have highlighted above the views expressed by five of their Lordships that determined the Senator Adesanya’s case. I am only left with two.

Sowemimo, JSC, (as he then was), declined to express a view on Section 6 subsection (6) (b) of the Constitution. He said: ‘On interpretation placed on Section 6(6)(b) I prefer to reserve my comments until a direct issue really arises for a determination.’ Fatayi-Williams, CJN, who expressed his preference for what the Romans called actio popularis when he said: To my mind, it should be possible for any person who is convinced that there is an infraction of the provisions of Sections 1 and 4 of the Constitution which I have enumerated above to be able to go

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to Court and ask for the appropriate declaration and consequential relief if relief is required. In my view, any person, whether he is a citizen of Nigeria or not, who is resident in Nigeria or who is subject to the laws in force in Nigeria, has an obligation to see to it that he is governed by a law which is consistent with the provisions of the Nigeria Constitution. Indeed, it is his civil right to see that this is so.

This is because any law that is inconsistent with the provisions of that Constitution is, to the extent of that inconsistency, null and void by virtue of the provisions of Section 1 and 4 to which I have referred earlier, still found against the Senator on the ground that the latter: By coming to Court to ask for a declaration, the plaintiff/appellant, in these circumstances, has completely misconceived his role as a Senator. In short, Senator Adesanya has no locus standi in this particular case.

He participated in the debate leading to the confirmation of the appointment of the second defendant/respondent and lost. For him, that should have been the end of the matter. The position would probably have been otherwise if he was not a

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Senator. From the extracts for their Lordships’ judgments I have quoted above, one can clearly see that there was not majority of the Court in favour of Bello JSC’s interpretation of Section 6 subsection (6) (b) of the Constitution. It will therefore, not be correct to say that this Court decided in the Adesanya case that the subsection prescribes the locus standi of a person wanting to invoke the judicial powers of the Court. They all seem to agree, however, that the sub-section prescribes the extent of the judicial powers of the Courts….

In my respective view, I think Ayoola JCA, (as he then was), correctly set out the scope of Section 6 subsection (6) (b) of the Constitution when in N.N.P.C. v.

Fawehinmi and Ors. (1998) 7 NWLR (pt 559) 598, 612 he said: In most written constitutions, there is a delimitation of the power of the three independent organs of government, namely the executive, the legislature and the judiciary, Section 6 of the Constitution which vests judicial powers of the Federation and the States in the Courts and defines the nature and extent of such judicial powers does not directly deal with the right of access of the

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individual to the Court. The main objective of Section 6 is to leave no doubt as to the definition and delimitation of the boundaries of the separation of powers between the judiciary on the one hand and the other organs of government on the other, in order to obviate any claim of the other organs of government, or even attempt by them, to share judicial powers with the Courts. Section 6 (6) (b) of the Constitution is primarily and basically designed to describe the nature and extent of judicial powers vested in the Courts.

It is not intended to be a catch-all, all-purpose provision to be pressed into service for determination of questions ranging from locus standi to the most uncontroversial questions of jurisdiction. [pages 338 et seq; italics supplied for emphasis] My Lords, I have deliberately, embarked on this tour d’horizon to demonstrate how this Court, in Owodunni v Registered Trustees, CCC (supra), gallantly, endeavoured to state the correct position that “…it is obvious that the Supreme Court in Adesanya did not decide that Section 6 (6) (b) contains a requirement of standing…”

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[T. I. Ogowewo, Wrecking the Law: How Article 111 of the Constitution of the United States Led to the Discovery of a Law of Standing to Sue in Nigeria, 26 Brook. J. Int’l L (2017) 528, 559 [per Nweze, JSC in Centre for Oil Pollution Watch v NNPC (supra) 44- 55; C- D. On how English Courts expanded the frontiers of Locus standi, the Court in Centre for Oil Pollution Watch v NNPC (supra) noted that; … learned counsel for the respondent, Victor Ogude, contended that, as the law stands, there is no room for the adoption of the modern views on locus standi in England and Australia.

With respect, this submission overlooks the approach which this Court had always adopted in circumstances such as the present one. Only one or two instances will be cited here to debunk the submissions of counsel. Indeed, on this question of locus standi, this Court had occasion to refer to such jurisdictions like India; USA; Canada and Australia. Thus, in Adesanya (supra), Bello, JSC, opined thus: In the final analysis, whether a claimant has sufficient justiciable interest or sufferance of injury or damage depends on the facts and circumstances of each case, Bengal Immunity Co. v.

State of Bihar (1955) 2 S.C.R.

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602; Forthingham v. Mellon (1925) 262 U.S. 447; for India and America, respectively. Even in the Canadian case of Torson v. Attorney-General of Canada (1974) 1 N.R. 2254, and the Australian case of Mckinlay v. Commonwealth (1975) 135 C.L.R … in which liberal views on standing were expressed, the issue of sufficiency of interest was the foundation upon which the decisions in both cases were reached. The truth of the matter, as Diplock, LJ, held in Rev v I.R.C. Ex p. Fed. of Self-Employed [-mi] A. C. [H.

L. (E,)] 640 -641 is that the rules as to standing could not be found in any statute for they were made by Judges of the Realm; “by Judges they can be changed; and so they have been over the years to meet the need to preserve the integrity of the rule of law… Any judicial statements on matters of public law if made before 1950 are likely to be misleading guide to what the law is today…” True to that Diplockian prediction, English Courts have extended the meaning of locus standi and the aforementioned determinant principle in appropriate cases, Reg v Inland Revenue Commissioners, Ex Parte National Federation of Self-Employed and Small Business Ltd

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[1982] AC 617, 639; paragraph H; Reg v Foreign Secretary of State for Foreign and Common Wealth Affairs, Ex Parte World Development Movement Ltd (1995) 1 WLR 386; R v Inspectorate of Pollution and Anor, Ex Parte Greenpeace Ltd [No 2] (1994) All ER 329; R v. Sommerset County Counsel ARC Southern Ltd, Ex Parte Dixon (1998) Environment LR 111; R v Secretory of State for Foreign and Commonwealth Affairs, ex parte World Development Movement Ltd (1995) 1 All E. L. R. 611, 620 where an NGO was held to have locus standi. The English Courts are not alone on this development.

Other common law jurisdictions have followed that pattern. In India, the Supreme Court, without any statutory enactment, but rather for the overall need to do justice, generally, liberalized the traditional rule on locus standi with respect to environmental degradation, since, in the Court’s view, maintaining a clean environment is the responsibility of all persons in the country, Maharaj Signh v State U. P. AIR 1976 SC 2607; Raflam Municipal Council v Vardhchard, AIR 1980 SC 1622; S. P. Gupta V Union of India, AIR 1982 SC 149, 189. [per Nweze, JSC in Centre for Oil Pollution Watch v NNPC

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(supra) 55- 65; C- B.

As indicated above, I adopt the above views of mine as part of my reasoning in this Contribution. It is for these, and the more detailed reasons in the leading judgement that I hereby enter an order dismissing this appeal. I abide by the consequential orders in the leading judgement. Appeal dismissed.

AMINA ADAMU AUGIE, J.S.C.: My learned brother, Kekere-Ekun, JSC, dealt extensively with the Issues raised by the Parties in the lead Judgment just delivered by him, and I agree with his reasoning and conclusion, which represents my views. In the circumstances, I dismiss this Appeal and abide by the Order as to cost in the lead Judgment.

UWANI MUSA ABBA AJI, J.S.C.: I have read in advance the draft judgment of my learned brother, Kekere-Ekun, JSC, just delivered, and I agree that the appeal be dismissed.

​The 1st Appellant is a limited liability company with a share capital of 2 million ordinary shares. While the 1st – 4th Respondents owned 95% of the share capital, the 2nd Appellant owned the balance of 5%. The 1st, 2nd, 4th Respondents and the 2nd

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Appellant were the original directors of the company. By an ordinary resolution passed on 1/4/2002, the share capital was increased to 10 million.

It was the allegation that on 9th and 10th March, 2006, the company held board meetings whereby the 1st Respondent was removed as chairman and his official residence and vehicle withdrawn and no due process was followed to remove him. In another board meeting that was held on 4/4/2006, it was alleged that despite the absence of the 1st to 4th Respondents because they were not given notice of meeting and hence there was no quorum, some crucial resolutions were taken.

Furthermore, in a meeting held on 6/10/2006, the names of the 1st to 4th Respondents were removed as signatories to the company’s account, their houses put up for sale, they were suspended and their salaries stopped. Thus, the 1st to 4th Respondents were deprived of their rights as shareholders, directors and management staff of the company without notice to them and opportunity of being heard.

​They consequently sued at the Federal High Court, Abuja, seeking declaratory and injunctive reliefs in order to restore them to their original

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positions in the company and their rights and entitlements. The suit was challenged by the Appellants after being served, that the trial Court did not have the jurisdiction to entertain the suit. The trial Court granted the application and on appeal to the lower Court, it was set aside, hence the appeal to this Court by the Appellants. The Appellants’ issues for determination are as follows: 1. Was the Court below right in holding that the 1st – 5th Respondents have the required locus to initiate the suit? 2.

Was the Court below right in its decision that the Respondents’ action was based on alleged breach of their rights and obligations under Section 300 of CAMA and as such, the requirement prior to leave of Court to institute the suit or the use of Originating Summons or Petition to commence the suit was inapplicable to the suit.

​‘Locus standi’ (or standing) denotes the legal capacity to institute proceedings in a Court of law. Standing to sue is not dependent on the success or merits of a case; it is a condition precedent to a determination on the merits. It follows therefore, that if the plaintiff has no locus standi or

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standing to sue, it is not necessary to consider whether there is a genuine case on the merits; his case must be struck out as being incompetent. See Per MICHAEL EKUNDAYO OGUNDARE, JSC in JOSIAH KAYODE OWODUNNI v. REGISTERED TRUSTEES OF CELESTIAL CHURCH OF CHRIST & ORS (2000) LPELR-2852(SC)(P.18, PARAS. C-E). ​It cannot be disputed that the question whether or not a plaintiff has a locus standi in a suit is determinable from a totality of all the averments in his statement of claim.

In dealing with the locus standi of a plaintiff, it is his statement of claim alone that has to be carefully scrutinized with a view to ascertaining whether or not it has disclosed his interest and how such interest has arisen in the subject-matter of the action.

Where the averments in a plaintiffs statement of claim disclose the rights or interests of the plaintiff which have been or are in danger or being violated, invaded or adversely affected by the act of the defendant complained of, such a plaintiff would be deemed to have shown sufficient interest to give him the locus standi to litigate over the subject-matter in issue. See Per ANTHONY IKECHUKWU IGUH, JSC in

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JOSIAH  KAYODE OWODUNNI V. REGISTERED TRUSTEES OF CELESTIAL CHURCH OF CHRIST & ORS (SUPRA) (P. 53 PARE. B-F). By the statement of claim of the 1st to 4th Respondents at the trial Court, it sufficiently shows their interests been or in danger of being violated, invaded or adversely affected by the act of the Appellants. Thus, the Respondents have a locus standi to institute the action as they did.

On the 2nd issue, my tent is pitched with that of my learned brother that the suit of the 1st to 4th Respondents was meant principally to protect and enforce their individual rights. There is therefore no connotation of any derivative action as envisaged by Section 300 of CAMA.

On the whole, this appeal is dismissed. I abide with the terms as to costs awarded by my learned brother.

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