3PLR – ADEBISI JACOB OLAWEPO V. SECURITIES AND EXCHANGE COMMISSION

POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS

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ADEBISI JACOB OLAWEPO

V.

SECURITIES AND EXCHANGE COMMISSION

IN THE COURT OF APPEAL OF NIGERIA

ON FRIDAY, THE 25TH DAY OF FEBRUARY, 2011

CA/A/257/08

3PLR/2011/3 (CA)

 

OTHER CITATIONS

 

 

BEFORE THEIR LORDSHIPS

MOHAMMED LAWAL GARBA, JCA

JIMI OLUKAYODE BADA, JCA

REGINA OBIAGELI NWODO, JCA

 

BETWEEN

ADEBISI JACOB OLAWEPO – Appellant(s)

 

AND

SECURITIES AND EXCHANGE COMMISSION – Respondent(s)

 

REPRESENTATION

1. A. Oke with P. I. Nwoha, K. O. Lawal – For Appellant

AND

Ademola Adeniji with Olushola Atada – For Respondent

 

MAIN ISSUES

 

1. COMPANY LAW – COMPANY DIRECTOR: Duties and liablities of a Company Director

“A director owes a duty to the company to exercise diligence and care that would be exercised by a reasonable diligent person. Therefore, S305 affects two categories of persons, the director responsible to the company for the conduct of the business of the company and the company as a distinct entity. The director must be responsible for the conduct of the business, to be affected by the provision under S305 (1). In the instant appeal, the Investment and Security Tribunal poised the question whether the appellant as a director of the company when the fraud against five complainants occurred was jointly and severally liable and proceeded to hold that Section 305 (1) imposes strict liability. With the greatest respect to the court below that cannot be the legal position of S305 (1) of the ISA. It is not automatic under the provision under S305 (1) that once a person is a director he is liable, once the company is found to have committed the offence. The director must be shown to be responsible to the company for the conduct of the business of the company. The director must be involved in taking decisions in the company. By virtue of S63 (3) of Companies and Allied Matters Act, directors of a company are permitted to authorize or take action that would protect the business of the company except if the company’s articles contain otherwise. Generally the business of the company shall be managed by the Board of Directors through board meeting and general meeting. The managing director then will exercise such powers in the everyday running of the company. See: Odutola Holdines Ltd v. Ladejobi (2006) 12 NWLR (Pt 994) 321 SC”Per NWODO, J.C.A.(Pp. 24-25, paras. D-E)

 

2. COMPANY LAW – DUTY OF DIRECTOR: When the duty of the director is said to be discharged

“It is pertinent to emphasis the point that the question of the duty of director and whether it has been discharged must depend on the facts of each particular case, the Articles of Association and the director’s role in the management of the company.”Per NWODO, J.C.A.(P. 34, paras. E-F)

 

3. PRACTICE AND PROCEDURE – APPEAL – GROUND OF APPEAL: Effect of issue for determination not formulated from a ground of appeal

“Parties argue issues formulated for determination not grounds of appeal. Where there is no issue for determination, formulated from a particular ground of appeal that ground is deemed abandoned and will be stuck out. See: Bhojsons Plc v. Daniel – kalio (2006) 5 NWLR (Pt 973) 330 SC Bayero v. Mainasara & Sons Ltd. (2006) 8 NWLR (Pt 982) 391 CA.”NWODO, J.C.A.(Pp. 18-19, paras. G-B)

 

4. PRACTICE AND PROCEDURE – APPEAL – GROUND OF APPEAL: Whether a party can formulate more than one issue from a ground of appeal

“It is trite that not more than one issue can be formulated from one ground of Appeal. A party can distill one issue from several grounds of Appeal but cannot formulate more than one issue from one ground of Appeal. See: Ahu v. Ikewibe 1991 4 SC I Adelusola & 40 other v. Akinde & 3 other 2004 12 NWLR (Pt. 887) 295 at 311.”Per NWODO, J.C.A.(P. 29, paras. A-B)

 

5. PRACTICE AND PROCEDURE – APPEAL – GROUNDS OF APPEAL: The purpose of grounds of appeal

“I must note that it is the function of the appellant counsel to carefully and meticulously draft grounds of appeal. Grounds of Appeal should be drawn up with the greatest legal skill, accuracy and elegance. See Ekpan and another v. Uyo and another 1986 3 NWLR (Pt 26) 63 per Obaseki JSC at Pg 76. The purpose of grounds of appeal is to give notice to the other side as to what complaint they will react to and not to reproduce a portion of the Judgment. The ground of appeal must be succinctly couched to reflect the exact complaint against the Judgment. It must avoid narration or arguments. Order 6 rule 3 of the Court of Appeal Rules 2007 stipulates as follows: “The notice of appeal shall set forth concisely and under distinct heads the grounds upon which the appellant intends to rely at the hearing of the appeal without any argument or narrative and shall be numbered consecutively. Rule 3 of the same order further stipulates that any ground which is vague or general in terms shall not be permitted.”Per NWODO, J.C.A.(P. 16, paras. B-G)

 

6. PRACTICE AND PROCEDURE – APPEAL – INTERFERENCE WITH FINDING OF FACT: Whether Appellate Court can interfere with findings made in the Lower Court

“It is settled that Appellant Courts are reluctant to interfere in findings made by the court below except where decisions arrived at is not in line with evidence lead or perverse. “Per NWODO, J.C.A.(P. 27, paras. F-G)

 

7. PRACTICE AND PROCEDURE – APPEAL – ISSUES FOR DETERMINATION: Whether issues for determination must arise from and relate to the ground of Appeal

“It is trite that an issue for determination must arise from and relate to the ground of Appeal, the complaint in the decision must be tied to the issue. The issue must be based on the grounds of appeal filed by the Appellant. See: Madumere v. Okafor 1996 4 NWLR (Pt 445) 637 SC Momodu v. Momoh (1991) NWLR (Pt 169) 608. If the issues are not related to any ground of appeal, then, they are irrelevant and any argument in the brief in support of such issue will be discountenanced by the Court. See: Ibator v. Barakur O. 2007 9 NWLR (Pt 1040) 475 SC Ndiwe v. Okocha 1992 7 NWLR (Pt 252) 129 Amadi v. NWPC 2000 6 SC (Pt 1) 66 at 72.”Per NWODO, J.C.A.(P. 17, paras. C-F)

 

8. INTERPRETATION OF STATUTE – SECTION 30 (1), (2) AND (3) OF INVESTMENT AND SECURITY ACT 2007: The provision of Section 305 (1), (2) and (3) of the Investment Security Act 2007 with respect to who would be held liable when a company is said to have committed an offence

“What then is the purport of S. 305 (1) of the Investment Security Act 2007 S. 305 (1) of the Act stipulates as follows:- “Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against.” For ease of reference I will also reproduce the provision under S. 305 (2) which read as follows: – “Notwithstanding anything contained in subsection 305 (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any Director, Manager, Secretary or other officer of the company, such director, manager, secretary or officer shall also be deemed to be guilty of the offence and shall be liable to be proceeded against.” Looking at the components of S. 305 (1) it falls into three (3) segments first is that the company complained against must have been found liable to have committed an offence under the Act. Secondly, every person who was in charge of, and responsible to the company for the conduct of the business of the company at the time the offence was committed shall be liable to be proceeded against. Thirdly, every person who at the time of the offence was responsible for the conduct of the company shall be deemed to be guilty of the offence and liable to be proceeded against. The Investment and Securities Tribunal held: “Following from above provision, imposition of strict liability on the Appellant by the APC of SEC was proper” I pose the question, does S 305 impose strict liability on a director of a company that has been accused of committing an offence under the Investment and Securities Act under S. 305 (1) of the ISA. The “Act” used the phrase “every person’. That phrase is limited to persons who are responsible to the company for the conduct of the business of the company and the company as a distinct person. The directors and the managing director are in the eyes of the law, the directing mind and will of the company. Notwithstanding that a company in law is a person distinct from directors, a director is a person appointed or elected according to law and authorised to direct and manage the affairs of the company. See: Iwuchukwu v. Nwizu (1994) 7 NWLR (Pt 357) 379 SC 1994 CLR 10(f) SC Iwuchukwu v. Nwizu (1994) CLR 10 F SC . He acts as one of the members of a board with power to bind the company.”Per NWODO, J.C.A.(Pp. 22-24, paras. F-D)

 

9. INTERPRETATION OF STATUTE – SPECIFIC PROVISION OF LAW: Whether where there is specific provision to cover certain specified circumstances there will be no need to import another legislation

“Nevertheless, S. 305 (1) of the Act is clear on when the section should be invoked. It is trite that where there is specific provision to cover certain specified circumstances there will be no need to import another legislation to support that statute. S. 305 (1) does not impose strict liability. S. 305 (2) provides that once the offence is committed by the company, it must be proved that the offence was committed with the consent or connivance or neglect of any director or manager and until this is proved, the director shall not be deemed to be guilty. Therefore; S. 305 (1) and (2) does not impose strict liability.”Per NWODO, J.C.A.(Pp. 26-27, paras. F-A)

 

10. PRACTICE AND PROCEDURE – APPEAL – UNAPPPEALED JUDGMENT OF COURT: Effect of a judgment not appealed against by a party

“A party who fails to appeal against a Judgment of a competent Court given against him is bound by the Judgment. See: F.I.B Plc v. Pegasus Trading Office 2004 4 NWLR Pt 863 369 SC.”Per NWODO, J.C.A.(P. 22, paras. C-D)

 

11. PRACTICE AND PROCEDURE – JUDGMENT AND ORDER – UNSIGNED AND UNDATED JUDGMENT: The effect of unsigned and undated judgment

“However, I note that it is trite law that an unsigned and undated Judgment is null and void and of no effect whatsoever. See: Awoniyi v. Alestinloye 1998 9 NWLR Pt 564 71”.Per NWODO, J.C.A.(P. 22, paras. D-E)

 

MAIN JUDGMENT

REGINA OBIAGELI NWODO, J.C.A. (Delivering the Leading Judgment): The Security Exchange Commission on receipt of twenty two (22) allegations of fraud against Asset Plus Securities Limited and 12 others invited all the directors of the company and some principal officers of the company to appear before the Administrative Proceedings Committee (APC) of the Commission.

The Appellant was the seventh Respondent before the committee. He appeared before the committee and was represented by a Counsel. In the affidavit of the Appellant, he stated that he was appointed a director in Asset Plus Security Ltd. on the 19th of April, 1999 by Board Resolution and same was filed at the Corporate Affairs Commission. The Appellant averred that the Asset Plus Securities Ltd sold his shares in Wise Investment without his knowledge or consent and the shares of others friends he recommended to the company without their consent. Appellant resigned as a director in Asset Plus Securities Ltd on the 9th of May, 2001. At the hearing of the 22 complaints before the Administrative Proceedings Committee (hereinafter referred to as APC) affidavit evidence was admitted and after deliberation, findings were made and decision taken. The Appellant contention is that when the APC pronounced their decision orally on the 11th of August he was not indicted.

However, sometimes in 2007, the Appellant was informed by the Registrars of certain quoted companies where he has shares that there is a ban placed on him as a result of his indictment by the same body Administrative Proceedings Committee in five (5) of the twenty two (22) complaints against Asset Plus Securities Ltd. contrary to the pronouncement made by the Administrative Proceedings Committee on 11th of August, 2005.

The Appellant then applied for a certified true copy of the Proceedings and Decisions of the Administrative Proceedings Committee of Security Exchange Commission in respect of the five (5) complaints. The Appellant discovered on receipt of the certified copy of the proceedings that they did not indict him in any of the named five cases. The record of proceedings obtained from the commission that is the Respondent was filed with the Notice of Appeal in the Investment and Securities Tribunal. The Respondent before the hearing of the appeal swore to an affidavit deposing to the facts of the indictment of the Appellant in the proceedings before the Administrative Proceedings Committee of the Security Exchange Commission and annexed copies of proceedings in which the Appellant was indicted before the same Administrative Proceedings Committee. Two Records of Proceedings were presented in respect of the Notice of Appeal one indicting the Appellant and the other not indicting him. Both were certified and issued by the same Respondent in respect of the Appeal before the tribunal. The Respondent in their 21 paragraph affidavit averred to reasons for the discrepancy in the two certified true copies of the Record of Proceedings of the Administrative Proceedings Committee stating the correct record is the later one where Appellant was indicted.

The Appellant aggrieved with the decision of the Administrative Proceedings Committee as reflected in the second record of proceedings filed a Notice of Appeal on 21/09/07 against the decision to the Investment and Securities Tribunal. The Investments and Securities Tribunal heard the appeal and delivered its Judgment on 28 May, 2008 wherein they held:

7. “That Appellant is jointly and severally liable in accordance with Section 305(1) of ISA 2007 for the five cases of his indictment namely Suits Nos APC/1/2005, APC/2/2005, APC/7/2005, APC/8/2005 and APC/2 2/2005.

2a)    The caution placed on the Appellants stocks is consequentially retained until the fall discharge of the liability arising from Suit No’s. APC/1/2005, APC/2/2005, APC/7/2005, APC/8/2005, and APC/22/2005

2b)    The SEC is hereby ordered to determine and apportion the appropriate monetary liability of the appellant arising from I above within 6 weeks from the date of this judgment and inform the Appellant and IST accordingly.

3. The indefinite suspension placed on the Appellant from participating in the Nigerian capital market activities and or holding directorship position in Nigerian public companies is hereby lifted from the date of this judgment.”

The Appellant aggrieved by this decision of the Investment and Securities Tribunal filed a Notice of Appeal on 23/06/08 containing three grounds of appeal.
The Respondent not satisfied with some part of the Judgment also filed a Notice of Cross Appeal containing two grounds of appeal on 11/07/08 against the same decision of the Investment and Securities Tribunal delivered on 28 May, 2008.
In compliance to the Rules of this court, the learned counsels filed and exchanged briefs of argument. At the hearing of the Appeal on 11/2/2010 the learned counsel for the Appellant Mr. S.A Oke adopted the Appellants brief of argument filed on the 04/02/09 but deemed properly filed and served on 19/10/2009 with leave of court. He urged the Court to allow the appeal.
The learned Counsel for the Respondent/Cross Appellant Mr. Ademola Adeniji adopted the Respondent/Cross Appellant Brief of Argument settled by him and filed on 23/09/09 and the Cross Appellant reply Brief filed on 25/2/2010. Mr. Oke also adopted the cross Respondent’s Brief of Argument deemed properly filed on 8/03/10. Mr. Adeniji urged the court to dismiss the appeal.
The learned Counsel for the Appellant Mr. Oke in the Appellants brief distilled two issues for determination which reads as follows:-

1. “Whether the Investment Tribunal was not in error in relying on the affidavit of the respondent to resolve the conflict or differences in the two judgments written by SEC.
2. Whether the Appeal Tribunal was not in error when they found the appellant jointly and severally liable (with others who participated in the fraud and accepted liabilities accordingly) in accordance with Section 305 (1) ISA 2007 having found earlier that there was no direct established evidence that the appellant connived, consented to or in any way participated in the fraud.”

The Respondent adopted the two issues formulated in the Appellants Brief.
The learned Counsel for the Appellant formulated two issues for determination from the three (3) grounds of Appeal. Issue one is tied to ground one. I have looked at ground one of the Notice of Appeal and the particulars, therein and I cannot find any nexus between the issue raised and ground one. It is pertinent to reproduce Ground one of the Notice of Appeal for the purpose of details:
Ground (1)

“The Honorable Chairman and members of the Tribunal erred in law holding that:

From a cursory look at both the records of proceedings filed by the Appellant and the Respondents, the Tribunal discovered that the records as filed by the Appellant were all signed by the Chairman and Secretary of the APC of SEC and dated January, 2007, while those filed by the Respondent were all signed by the Chairman Secretary of the APC of SEC, three of them were dated 4th January, 2007 and the remaining two were undated.

The Tribunal has carefully looked at both records of proceedings and found that the concluding parts of the proceedings differ. They are not just different, but they differ substantially. The conclusion in respect of the records of proceedings filed by the Appellant discharged the Appellant of all liabilities, while those ones filed by the Respondent indicted him.

We therefore find that there are two conflicting records of proceedings as filed by the parties. The two records emanated from the Respondent and they were certified by the Respondent.

The areas where the records differ were substantially in respect of the indictment of the Appellant.”

PARTICULARS:

1. The Chairman and Tribunal member relied and determine this case on the undated judgment filed by the respondent.
2. The Tribunal did not appreciate the effect of writing two conflicting judgments in one case.
3. Reliance on the undated judgment is erroneous.
4. The Tribunal did not appreciate that the concluding parts of the record of proceedings that substantially defer is the judgment/decision of SEC in that case thereby relying on same as if it was a statement of fact.
5. The Tribunal did not appreciate the difference between record of proceedings and of court.”

It is from the aforesaid ground and particulars that Issue one in the appellant’s brief was formulated.

I must note that it is the function of the appellant counsel to carefully and meticulously draft grounds of appeal. Grounds of Appeal should be drawn up with the greatest legal skill, accuracy and elegance. See Ekpan and another v. Uyo and another 1986 3 NWLR (Pt 26) 63 per Obaseki JSC at Pg 76.
The purpose of grounds of appeal is to give notice to the other side as to what complaint they will react to and not to reproduce a portion of the Judgment. The ground of appeal must be succinctly couched to reflect the exact complaint against the Judgment. It must avoid narration or arguments. Order 6 rule 3 of the Court of Appeal Rules 2007 stipulates as follows:

“The notice of appeal shall set forth concisely and under distinct heads the grounds upon which the appellant intends to rely at the hearing of the appeal without any argument or narrative and shall be numbered consecutively.
Rule 3 of the same order further stipulates that any ground which is vague or general in terms shall not be permitted. Ground one in the instant Notice of Appeal is a reproduction of a portion of the Judgment of the investment and securities commission. This ground one is badly phrased. A ground of Appeal must be drafted in a way to attack the Judgment of the court. The ground of Appeal shall consist of the error of law or fact alleged by an appellant as the defect in a Judgment appealed against and this defect error or misdirection should be isolated and stated as a ground for attacking the decision.
See: Saraki v. Kotoye 1992 9 NWLR Pt 264 156 SC
Bhojsons Plc v. Daniel-kalio 2006 5 NWLR (Pt 973) 330 SC.

It is trite that an issue for determination must arise from and relate to the ground of Appeal, the complaint in the decision must be tied to the issue. The issue must be based on the grounds of appeal filed by the Appellant. See: Madumere v. Okafor 1996 4 NWLR (Pt 445) 637 SC Momodu v. Momoh (1991) NWLR (Pt 169) 608. If the issues are not related to any ground of appeal, then, they are irrelevant and any argument in the brief in support of such issue will be discountenanced by the Court.
See: Ibator v. Barakur O. 2007 9 NWLR (Pt 1040) 475 SC
Ndiwe v. Okocha 1992 7 NWLR (Pt 252) 129
Amadi v. NWPC 2000 6 SC (Pt 1) 66 at 72

Reproduction of a portion of the Judgment is inappropriate. I have earlier reproduced issue one, it certainly did not arise from ground one.
Issue one raises the question whether the Investment and Securities Tribunal (referred to as SEC) was not in error in relying on the affidavit of the respondent to resolve the conflict in the two Judgments written by SEC. I have gone through the particulars, contents therein and there is no complaint raised on issue of the Investment Tribunal relying on the affidavit of the Respondent. First of all ground one is a reproduction of a portion of the decision of the court below. There is nothing in that ground on affidavit of the Respondent. Equally under particulars 2 of that ground and 3, the Appellant raised issue of the effect of writing two conflicting Judgment and reliance on undated Judgment. This is contrary to the contents of ground one where the Judgment reproduced as a ground is on findings of tribunal on the two records. There is no point raised in the entirety of ground one and its particulars on error in relying on the affidavit of the Respondent to arrive at the decision. There is no mention of reliance by the tribunal on the Respondent affidavit under ground one. This omission is fundamental to the Appellants issue one. Issue one distilled for determination and tied to ground one from its nature did not arise from ground one. The Appellant had no right to formulate the issue of reliance on affidavit which same was not raised in the ground of appeal. Consequently, Issue one is of no relevance and is hereby struck out and every argument in the brief in support of issue one is discountenanced by this Court. See: Amadi v. NNPC (supra); Ibator v. Barakuro (Supra). What then happens to ground one in the Notice of Appeal? There is no competent issue distilled from ground one. Parties argue issues formulated for determination not grounds of appeal. Where there is no issue for determination, formulated from a particular ground of appeal that ground is deemed abandoned and will be stuck out. See:
Bhojsons Plc v. Daniel – kalio (2006) 5 NWLR (Pt 973) 330 SC, Bayero v. Mainasara & Sons Ltd. (2006) 8 NWLR (Pt 982) 391 CA.
Relying on this trite law and the provision under order 6 rule 3 of the Rules of Court of Appeal 2007, ground one from which no issue has been distilled is deemed abandoned and is hereby struck out.

The Court is left with issue 2 for consideration. Under Issue 2, it is the contention of learned Counsel for the Appellant that the Investment and Securities Tribunal relied only on S.305 (1) of the Investment and Securities Act 2007 without considering S. 305 (2) of ISA 2007. He argued that during the proceedings before SEC, they lifted the veil of incorporation of wise Investment Ltd, to find out the perpetrators of the fraud, that the 1st and 3rd Respondent counsel accepted liability on behalf of their clients and promised to repay the shares, it is his submission that the admissions of or statement of counsel in course of trial not repudiated constitute evidence binding on the client. As an admission made do not require to be proved. He cited: – Abed Bros Ltd. V. Nigerian Insurance Co. Ltd. And Anor (1976) NWLR Pg 1 at 7.

It is his further submission that the tribunal relied on undated Judgment that indicted the appellant and sanctioned him without relying on S.305 (2) of ISA 2007. It is his submission that imposition of strict liability against the Appellant is not in compliance with S.305 (1) relied upon by the tribunal and that even if the Appellant did not resign which they do not concede too, he cannot be proceeded against in view of the provision under S.305 (2) of the said Act. He cited Chief Ogbodu v. Quality Finance Ltd. and Others (2006) 1 SLR 40 at 55.
Learned Counsel urged the Court to invoke S. 290 company and Allied Matters Act (CAMA), S. 305 (2) Investment and Securities Tribunal Act 2007 to discharge the Appellant of all liabilities.

Mr. Adeniyi in response submitted that the interpretation of the wordings of S. 305 (1) of the Act in its simple, ordinary and grammatical context shows that the tribunal rightly found the Appellant jointly liable with the other Respondents before the committee because the Appellant was still a director of the Asset Plus Securities Limited when the fraud against the account of the five complainants out of twenty two (22) customers of the company were committed. It is his contention that the Appellant as a director of their company when the fraud was committed by the provisions of S. 279 (3) of CAMA is supposed to act in the affairs of the company with due diligence, faithfulness, vigilance and care which he failed. He submitted that the Tribunal rightly found Appellant culpable. He cited: – Haston Nigeria Ltd. v. ACB Plc. (2002) FWLR (Pt 119) Pg 1476 .
It is his further contention that the Appellant was a director between 1999 to 2004 when the fraud was committed in respect of the five investors and that the invocation of S. 305 (1) of the Investments and Securities Act 2007 was in order.

It is his further submission that given the provisions of S. 305 (1), S. 13 (V), (bb) and (dd) of the Investment and Securities Act, 2007 and S. 279 (3) of the Company and Allied Matters Act, 1990, the holding of the Appellant liable with other directors of the Assets Plus Securities Limited and the placing of caution on his stocks is in order.

The crux of this issue is whether the Investment and Securities Tribunal was right to hold the Appellant liable when there was no direct established evidence that the Appellant connived or participated in the fraud. This issue also calls for the interpretation of S. 305 (1) Investment and Securities Act 2007 (ISA)
The learned Counsel for the appellant argued that the imposition of strict liability on the appellant by SEC, and affirmed or varied by the Investment Tribunal is erroneous and against the weight of evidence, and that he cannot be proceeded against in view of the provision under S. 305 (2) of the Act. He also raised the issue of the Respondents reliance on the undated Judgment which indicted the Appellant and sanctioned Appellant under S305 (1) of ISA 2007.

The Investment and Securities Tribunal relied on the record of proceedings presented by the Respondent to determine the appeal from the administrative proceedings committee. They were two conflicting certified record of proceedings transmitted by both appellant and the respondent to the tribunal. The tribunal made its choice between the two records because of the uncontradicted affidavit of the Respondent. This aspect of the decision of the tribunal was not appealed against, like I earlier stated in this Judgment the grounds of appeal did not contain any complaint on the fact that the appellant did not file a counter affidavit to contradict the affidavit. This Court is constrained to limit its jurisdiction to the complaints raised in the Notice of Appeal and then distilled for determination. A party who fails to appeal against a Judgment of a competent Court given against him is bound by the Judgment. See: F.I.B Plc v. Pegasus Trading Office 2004 4 NWLR Pt 863 369 SC.

However, I note that it is trite law that an unsigned and undated Judgment is null and void and of no effect whatsoever. See: Awoniyi v. Alestinloye 1998 9 NWLR Pt 564 71.

What then is the purport of S. 305 (1) of the Investment Security Act 2007 S. 305 (1) of the Act stipulates as follows:-

“Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against.”

For ease of reference I will also reproduce the provision under S. 305 (2) which read as follows: –

“Notwithstanding anything contained in subsection 305 (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any Director, Manager, Secretary or other officer of the company, such director, manager, secretary or officer shall also be deemed to be guilty of the offence and shall be liable to be proceeded against.”

Looking at the components of S. 305 (1) it falls into three (3) segments first is that the company complained against must have been found liable to have committed an offence under the Act. Secondly, every person who was in charge of, and responsible to the company for the conduct of the business of the company at the time the offence was committed shall be liable to be proceeded against. Thirdly, every person who at the time of the offence was responsible for the conduct of the company shall be deemed to be guilty of the offence and liable to be proceeded against. The Investment and Securities Tribunal held:

“Following from above provision, imposition of strict liability on the Appellant by the APC of SEC was proper”

I pose the question, does S. 305 impose strict liability on a director of a company that has been accused of committing an offence under the Investment and Securities Act under S. 305 (1) of the ISA. The “Act” used the phrase “every person’. That phrase is limited to persons who are responsible to the company for the conduct of the business of the company and the company as a distinct person. The directors and the managing director are in the eyes of the law, the directing mind and will of the company. Notwithstanding that a company in law is a person distinct from directors, a director is a person appointed or elected according to law and authorised to direct and manage the affairs of the company.
See: Iwuchukwu v. Nwizu (1994) 7 NWLR (Pt 357) 379 SC 1994 CLR 10(f) SC Iwuchukwu v. Nwizu (1994) CLR 10 F SC . He acts as one of the members of a board with power to bind the company.

A director owes a duty to the company to exercise diligence and care that would be exercised by a reasonable diligent person. Therefore, S305 affects two categories of persons, the director responsible to the company for the conduct of the business of the company and the company as a distinct entity.
The director must be responsible for the conduct of the business, to be affected by the provision under S305 (1). In the instant appeal, the Investment and Security Tribunal poised the question whether the appellant as a director of the company when the fraud against five complainants occurred was jointly and severally liable and proceeded to hold that Section 305 (1) imposes strict liability. With the greatest respect to the court below that cannot be the legal position of S305 (1) of the ISA. It is not automatic under the provision under S305 (1) that once a person is a director he is liable, once the company is found to have committed the offence. The director must be shown to be responsible to the company for the conduct of the business of the company. The director must be involved in taking decisions in the company. By virtue of S63 (3) of Companies and Allied Matters Act, directors of a company are permitted to authorize or take action that would protect the business of the company except if the company’s articles contain otherwise. Generally the business of the company shall be managed by the Board of Directors through board meeting and general meeting. The managing director then will exercise such powers in the everyday running of the company. See: Odutola Holdines Ltd v. Ladejobi (2006) 12 NWLR (Pt 994) 321 SC.

The Appellant in the affidavit evidence on his behalf before the Administrative Proceedings Committee averred that there was no annual general meeting and no board of directors meeting held by the directors at the time of the fraud. In the same proceedings at pages 410 to 416 of the Record Volume III, the submission of Mr. Taiwo Ajayi is that they purchased the shares in respect of the 21 cases excluding case 4 which the deponent stated was purchased by a staff Mr. Ogugua without their knowledge. All the averments by him support the appellants case that he was not involved in the management of the company and the sale of the shares. A director that is not a managing director gets involved in running the company through board meeting or general meetings. There is no evidence before the tribunal to show that the Appellant was part of a board meeting where decisions were taken and the board affirmed the decision to warrant the decision passed on the appellant on joint liability by the Administrative Proceedings Committee. S. 305 (1) of the Act can be invoked if appellant was in charge of and responsible to the company for the conduct of the company business. The issues of responsibility to the company arise under the duty to the company to exercise reasonable care, skill and diligence. In my firm view this duty is tied to actions or decisions made by a director in a general meeting, board meeting or day to day running of the company. In the instance circumstance, there was no meeting of the board or general meeting. The Appellant in the deposition states he raised the issue of holding a meeting but same was not adhered too. This no doubt is not good excuse in view of the provisions under the company and Allied Matter Act. Nevertheless, S. 305 (1) of the Act is clear on when the section should be invoked. It is trite that where there is specific provision to cover certain specified circumstances there will be no need to import another legislation to support that statute. S. 305 (1) does not impose strict liability. S. 305 (2) provides that once the offence is committed by the company, it must be proved that the offence was committed with the consent or connivance or neglect of any director or manager and until this is proved, the director shall not be deemed to be guilty. Therefore; S. 305 (1) and (2) does not impose strict liability. There is no evidence relied on by the Tribunal to show the appellant connived or exhibited negligence in respect of the shares sold that generated the five (5) complaints he was found liable. The Tribunal found that no Board meeting was held as this fact was not controverted by the respondent. The appellant averred he introduced five clients to the company that were defrauded and he reported same to the managing director before he decided to resign, this also was not challenged. The Investment and Securities Tribunal found there was no evidence that Appellant connived and should not have proceeded to affirm the decision of the administrative proceedings committee that Appellant was jointly and severally liable.

The tribunal is constrained to act on evidence presented before her and appraise same properly. It is that decision of the administrative proceedings committee that went on appeal to the tribunal which is an administrative decision. The tribunal was under a duty to appraise the facts relied on by the committee to arrive at a just decision. It is settled that Appellant Courts are reluctant to interfere in findings made by the court below except where decisions arrived at is not in line with evidence lead or perverse. I am therefore, compelled to interfere with the decisions of the Investment and Security Tribunal. The tribunal was in error to have found Appellant jointly and severally liable in view of the evidence presented before them and their findings. Issue 2 is resolved in favour of the Appellant.

In the light of the forgoing I hold that there is merit in this appeal. The Appeal succeeds and I order that the decision of the Tribunal made on 28 may 2008 in respect of this appeal (under paragraph 1, (2a) and 2 (b) on pages 130 – 131 of the record of Appeal volume one) that the Appellant is jointly and severally liable for the five complaints stated therein and the caution placed on the Appellants stocks and the order to apportion liability are each respectively set aside. The Investment and Securities Tribunal decision lifting the indefinite suspension is affirmed. Each party to bear its own cost.

CROSS APPEAL

The Respondent in the main Appeal filed a Notice of Cross Appeal on 11/07/08. The Notice is on pages 53 – 56 of the Record containing two grounds of Appeal.
The learned Counsel for the Cross Respondent Mr. Adeniji distilled 3 issues for determination from the two grounds of Appeal. In paragraph 3.01 of the Cross Appellants Brief the learned Counsel stated that issue 1 and 2 are distilled from ground one of the Notice of Cross Appeal whilst issue No. 3 is distilled from ground 2 of the Notice of Cross Appeal. The learned Counsel then argued issues 1 and 2 together. The learned Counsel for the Cross Respondent responded to the submission.

It is trite that not more than one issue can be formulated from one ground of Appeal. A party can distill one issue from several grounds of Appeal but cannot formulate more than one issue from one ground of Appeal.
See: Ahu v. Ikewibe 1991 4 SC I Adelusola & 40 other v. Akinde & 3 other (2004) 12 NWLR (Pt. 887) 295 at 311. The Cross Appellant has distilled two issues from one ground of appeal. This is proliferation and is not allowed.
See: Nwankwo & 2 other v. Yaradua & 40 others (2010) 3 – 5 SC Consequently, issue 1 and 2 distilled from Ground I is incompetent.

Both issues were argued together, it is not the duty of the Court to decipher the arguments in support of any of the two issues distilled. Issues 1 and 2 are hereby struck out.

Arguments are proferred on the basis of issues for determination from the grounds of Appeal. Where there is no issue for determination formulated from a particular ground of appeal, that ground of appeal is deemed abandoned by the Appellant and would be struck out.
See: Bhojsons Plc v. Daniel Kalo 2006 5 NWLR (pt 973) 330 SC. Bayero v. Mainasera and Sons Ltd. (2006) 8 NWLR (Pt 982) 391 CA.
Ground one in the Notice of Cross Appeal cannot be argued until an issue is distilled. In the absence of any competent issue distilled from that ground, same is hereby struck out; the arguments of the Cross Appellant in his Brief and the Cross Respondents brief are discountenanced. The Cross Appellant issue 3 will now be considered.

“Whether given the facts and circumstances leading to the appeal to the Tribunal below and the provisions of the Investment and Securities Act, 2007 particularly S. 13(v) (bb), (dd) and S. 305 (3) (b) the lifting by the Tribunal below of the ban placed on the Cross Respondent was justifiable”

It is the contention of learned Counsel for the Cross Appellant that the fraud and abuse of investors investment in five of the twenty two complaints, occurred during the directorship of the Cross Respondent. It is his submission that the evidence contained in the affidavit of Amos A21 was never disputed nor denied. It is his contention that the Cross Respondent had the burden, as a diligent director to call for a meeting of the company to point out excesses he noticed. He contended that there is no evidence the Cross Respondent as a director did anything to salvage the rot perpetrated over investors shares.

“It is his further submission that Cross Appellant’s banning of the Cross respondent from holding directorship of any public quoted company in Nigeria, which decision the Tribunal below, wrongly, reversed was consequential upon the provisions of SS. 13 (v), (Bb) (dd) and 305 (3) (b) particularly 305 (3) (b) which empowers the Cross Appellant, as a regulatory commission of the capital market, to impose penalty of such nature as appropriate in the circumstance.
The strong contention of the learned Counsel for the Cross Appellant is that the commission as a regulatory body of the capital market banned the Cross Respondent in line with the provision of Section 513 (v) Bb, (dd) and 5305 (3) (b) of the Act and that the penalty is not excessive as held by the tribunal. The Investment and Securities Tribunal held as follows.

“The tribunal having looked at the submissions of parties and the records before it finds that although the Respondent has statutory power of sanction, the decision of the APC of SEC in this case was excessive, in reaching this conclusion, we took into account the fact that the sanction imposed on the Appellant by the Respondent is the same as that imposed on the actual culprits who committed the offence under S. 305 (2) of the Act there being no direct evidence that he connived, consented or in any way participated in the fraud.”

The Administrative Proceedings Committee made findings against the company Asset Plus Securities Limited and the Appellant amongst other Directors. From the Record of proceedings titled volume III it is clear that the committee came up with the decision on the basis of the provision in the Investments and Securities Act, some rules and external philosophical reason. I reproduce one of the introductory paragraphs in the decision against the Cross Respondent under each of the five complaints against him. The introductory paragraph in all the five is similar. For emphasis I reproduce (pg 509 of volume 111).
“Pursuant to the powers conferred on the Commission by the Investments and Securities Act (ISA) No. 45 of 1999, the SEC Rules and Regulations made there under and for the maintenance of the integrity of the capital market, the Administrative proceedings Committee (APC).”

Clearly from the aforesaid paragraph the Administrative Proceeding Committee derived the authority to determine the complaints presented before them on the provisions under Investments and Securities Act (ISA) No 45 of 1999 and regulations made there under. Their duty to every party is to ensure that in exercising the powers conferred on them they observe the provisions in the Act. The Cross Respondents with others were banned from participating in all activities in the Nigerian Capital Market. The Investment and Securities Tribunal on appeal rightly found that the penalty was excessive in the light of the facts presented and the law. I have no reason to interfere with that decision. It is based on the facts and the law. The Tribunal rightly found there was no direct evidence that the Cross Respondents neither connived or consented nor participated in the fraud. This finding is in line with the evidence presented before the Administrative Committee as reflected in the Record of Proceedings. S. 305 (1) of the Act requires that the Cross Respondent must first be found to have acted in a way if not direct but by inference to connive in the unauthorized disposition of the shares and unauthorized trade. The Cross Respondent by his Counsel averred that no general meeting was called nor board of directors meeting. He complained about his own shares sold without authority and he complained about the way the company handled the shares of friends he introduced. These acts do not reflect connivance with the unacceptable acts of the company. His complaint was reasonable and responsible. The various unacceptable acts culminated in his resignation. These facts were not controverted before the committee. The Tribunal rightly made findings of there being no connivance attributable to the Cross Respondent before the lifting of the ban placed on him.

It is indisputable that from the provisions of the ISA, the Cross Appellant has the powers as a regulatory organisation for the Nigerian capital market to intervene in the management of the capital market operators. This power conferred under S. 13 (v), (bb) and (dd) of ISA 2007 must never be exercised arbitrary. The Cross Appellant can only exercise the right to disqualify, persons considered unfit from being employed in any arm of the security industry when there is credible evidence that the person is unfit. Disqualification of a director on the grounds of his not being fit must be based on conducts or acts of the director in the management of the company that is substantial to be considered as unfit.
The tribunal also held that the Cross Appellant had not persuaded them from its records that the Cross Respondent is unfit to hold office in the capital market. The word unfit in its ordinary dictionary meaning is described as doing something not of an acceptable standard. That word connotes a conduct or act not suitable. The test is whether the persons conduct as a director of the company in question makes him unfit to be concerned with the management of a company? This question has to be answered before a director is disqualified from the capital market. This provision on unfitness amplifies the director’s duties of care and skill. A director has a continuing duty to acquire and maintain a sufficient understanding of the company’s business to enable them discharge their duties as directors. The record of proceedings the basis of which the Court below lifted the disqualification does not contain evidence of any conduct or act of the Cross Respondent that can be described as not suitable and unacceptable.
It is my firm view that the Investment and Securities Tribunal were right in their decision that the records did not reflect the Cross Respondent as unfit to hold office. It is pertinent to emphasis the point that the question of the duty of director and whether it has been discharged must depend on the facts of each particular case, the Articles of Association and the director’s role in the management of the company.

The tribunal based on the facts rightly lifted the ban placed on the Cross Respondents. Issue 3 fails and is resolved against the Cross Appellant.
This Cross Appeal is devoid of merit and is dismissed. Each party to bear its own cost.

MOHAMMED LAWAL GARBA, J.C.A:

I have read a draft of the lead judgment written by my learned brother NWODO, JCA in this appeal. All the views and reasoning so very ably marshalled therein on the issues in both the appeal and cross appeal are the same with mine. I adopt them and join in allowing the appeal and in dismissing the cross appeal in the terms contained in the lead judgment.

JIMI OKLUKAYODE BADA, J.C.A:

I have had the opportunity of reading in draft the Lead Judgment of my Lord REGINA OBIAGELI NWODO, JCA, just delivered.

I agree with the reasons lucidly set out leading to the conclusion arrived at. I am also of the view that the Tribunal was in error to have found the Appellant liable.

Therefore there is merit in this appeal.

As for the Cross Appeal, a careful examination of the record of proceedings upon which the Investment and Securities Tribunal acted would reveal that the Tribunal was right when it held that the records did not reflect the Appellant as unfit to hold office. The Cross Appeal therefore fails and it is dismissed.
I abide by the consequential orders made in the said Lead Judgment.