3PLR – APAMPA V. ABEOKUTA GOLF INTERNATIONAL LIMITED

POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS

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APAMPA

V.

ABEOKUTA GOLF INTERNATIONAL LIMITED

FEDERAL HIGH COURT OF NIGERIA

SUIT NO: FHC/AB/CS/40/2000

FEDERAL HIGH COURT OF NIGERIA, ABEOKUTA, JUDICIAL DIVISION,

DELIVERED ON TUESDAY, 28THDAY OF JANUARY, 2003

3PLR/2003/32  (CA)

 

BEFORE:

OLOMOJOBI, J.

 

BETWEEN

1. TAYO APAMPA – Plaintiff/Respondent

 

AND

1. ABEOKUTA GOLF INTERNATIONAL LIMITED
2. STEP OLUWOLE OLUMIDE – 1stand 2ndDefendants/Applicants
3. REGISTRAR GENERAL, CORPORATE AFFAIRS

COMMISSION, ABUJA – 3rdDefendant/Respondent

 

REPRESENTATION

T.A. Okunsokan ESQ. – For the 1stand 2ndDefendants/Applicants

1. Adenekan ESQ. – For the Plaintiff/Respondent

 

MAIN ISSUES

COMPANY LAW – Form C.O.7 – Falsification of – Who can complain

COMPANY LAW – Locus standi – Person no longer a member of a Company – Seeking to void resolution passed at Company’s extra ordinary general meeting – Whether possesses locus standi

COMPANY LAW – Sections 622 and 643 Companies and Allied Matters Act Cap. 59 Laws of the Federation of Nigeria, 1990 – Untrue Statement – Whether Federal High Court can enforce provisions of in a civil claim

PRACTICE AND PROCEDURE – Order 25 Rule 2 Federal High Court (Civil Procedure) Rules, 2000 – Locus standi or issue of jurisdiction – Whether must be raised in the pleading before Court can take cognisance of

 

ISSUES

1. Whether this is the proper forum for the Plaintiff to raise the issue of false declaration in forum C.O. 7 which the 2ndDefendant lodged with the Corporate Affairs Commission.

 

2. Inspite of the provision of Order 25 Rule 2 of the Federal High Court (Civil Procedure) Rules, 2000, whether the issue of locus sandi and the jurisdiction of this Court to entertain the Plaintiffs’ claim could be raised by the Applicants at this point in time.

 

3. Whether locus standi had been disclosed by the Plaintiff in the statement of claim in respect of the 1st, 3rdand 4threliefs in the Plaintiff’s Writ of Summons.

 

FACTS

 

The Plaintiff in his writ of summons and the statement of claim sought the following reliefs:-

 

“(a)    Declaration that the purported resolution of the 1stDefendant at its Extra Ordinary General Meeting of 8thSeptember, 2000 held in Abeokuta authorising the conversion of the 1stDefendant from a private Company to a public Company was illegal, null and void as the resolution was prejudicial and oppressive to the Plaintiff who as former member of the 1stDefendant had not been paid his shares value of N567,376.00 which the resolution was designed to wipe off.

 

(b)     Order for the payment of N567,376.00 by the 1stand 2ndDefendants to the Plaintiff being the value of shares held by the Plaintiff as a former member of 1stDefendant which had been demanded and not yet paid.

 

(c)     Order restraining the 3rdDefendant from receiving entertaining, acting
upon any purported resolution of conversion of 1stDefendant to a public
Company and or receiving, entertaining and acting upon the documents
listed in Section 50(2)(a) – (c); 3(a) – (d)(i) and (ii) and (e) of the
Companies and Allied Matters Act, 1990 that may be submitted by the 1^st Defendant.

 

(d)     Order that the 2ndDefendant’s statement on Form C.O.7 filed in the 3rd
Defendant’s office describing himself as an Architect was false statement
under Section 643 of the Companies and Allied Matters Act 1990 as the 2^nd Defendant did not qualify in any Nigerian or overseas University or
Polytechnic as an Architect nor was registered as an Architect by the
Nigeria Institute of Architects”.

 

The Defendants in their reaction filed a motion on notice objecting that the Plaintiff, being no longer a member of the Company had no locus standi to seek the 1st, 3rdand 4thReliefs in his Writ of Summons, and that he could not maintain an action against the 2ndDefendant, being a Director of the 1stDefendant/Applicant.

 

The Plaintiff however countered that the objections of the Defendants should not be entertained not having been raised in the pleadings in accordance with the provisions of Order 25 Rule 2 Federal High Court (Civil Procedure) Rules, 2000.

 

The following provisions of the Law and Rules of Court pronounced upon are hereby reproduced:-

 

Sections 622 and 643 of Companies and Allied Matters Act provide:-

 

“622. Any person who willfully contravenes any other Provisions of this part of this Decree or any regulation made there under, or any person who willfully or recklessly in any registration, statement, application, report, account, record, or other document filed, sent or delivered pursuant to this Part of this Decree, makes or causes to be made any untrue statement of a material fact or omits to state any material fact, shall be guilty of an offence and shall upon conviction if no other punishment is prescribed, be liable to a fine of N50,000.00 in the
case of corporate body or to imprisonment for 5 years or to a fine of N5,000.00 or to both such fine and imprisonment in the case of an
individual”.

 

“643. (1) Where a penalty is not elsewhere prescribed in this Decree and subject to the provisions of subsection (2) of this section, if any person in any return, report, certificate, balance sheet, or other document required by or for the purpose of any of the provisions in any material particular
knowing it to be false, he shall be guilty of an offence and liable:

 

(a)     on conviction in the High Court to imprisonment for a term of two years: or

 

(b)     On conviction in a lower Court, to a fine of N1,000 or to imprisonment for a term of four months, or to both such fine and imprisonment.

 

(2)     Nothing in the this Section shall affect the provision of any enactment imposing penalties in respect of perjury in force in Nigeria”.

 

Order 25 Rule 2 Federal High Court (Civil Procedure) Rules, 2000 provides:-

 

“2. (1) A party shall be entitled to raise by his pleading any point of law, and any point so raised shall be disposed of by the Judge who tries the
cause at or after the trial.

 

(2)     A point of law so raised may, by consent of the parties, or by order of the Court or a Judge in Chambers on the application of either party, be set down for hearing and disposed off at any time before the trial”.

 

MAIN JUDGEMENT

 

HELD: (Upholding the Objection)

 

1. Sections 622 and 643 Companies and Allied Matters Act

 

From the provisions of Sections 622 and 643 of Companies and Allied Matters Act, it is glaring that the purported act committed by the 2ndDefendant, i.e. falsification of form C.O.7., that is assuming the allegations were correct, is a criminal offence and since he is not being prosecuted for any criminal offence before the Court, the Plaintiff has no locus standi to institute this action as presently constituted in relation to his 4^th relief against the 2ndDefendant. This is so, because there is no where in the Act where  an individual is made a private prosecutor of an offender under the provisions of  Companies and Allied Matters Act, 1990. (Page 83 Para. B)

 

2. Sections 622 and 643 Companies and Allied Matters Act

 

It is the Company or the Corporate Affairs Commission that can complain about the alleged act of falsification of form C.O.7 and not Plaintiff who is no longer a member of the Company. (Page 83 Para. C)

 

3. Voiding of resolution

 

Since the Plaintiff is no longer a member of the Company, he has no locus standi to ask the Court to declare the resolution passed at the Company’s Extra Ordinary General Meeting illegal, null and void; as it could not be regarded as prejudicial and oppressive to the Plaintiff. This is because the newly converted public company would have automatically inherited all the assets and liabilities of the private company. (Page 86  Para. D)

 

4. Order 25 Rule 2 FHC (Civil Procedure) Rules

 

The Federal High Court (Civil Procedure) Rules provide for the rules to be followed in the Federal High Court to regulate the procedure and to hasten trials in cases before the Court. This is with particular reference to the rule in question. That is, Order 25 Rule 2 of Federal High Court (Civil Procedure) Rules, 2000. But where the issue of jurisdiction of the Court is raised at any time before judgment is delivered in any case, the Court  should hear such application. Failure to do so will tantamount to prolonging the matter,  and thus defeat the purpose for which the Rules were made. It is settled that the issue of
jurisdiction of a Court is so fundamental to a case, that it can be raised at anytime  before judgment is delivered even before the Supreme Court. If a Court hears a case in  which it has no jurisdiction to entertain, the entire proceedings will be a nullity. (General  Electric Company v. Akande (1999) 1 N.W.L.R. (Pt. 588) 532; Barclays Bank of  Nigeria Ltd. v. Central Bank of Nigeria (1976) 1 ALL N.L.R. 409; Oredoyin v.  Arowolo (1989) 4 N.W.L.R. (Pt. 144) 172 referred to) (Page 83 Para. G – Page 84 Para. B)

 

OLOMOJOBI, J.: Through the Writ of Summons and the Statement of Claim, both dated and filed on the 29thday of January, 2000 the Plaintiff is seeking for the following reliefs:-

 

“(a)    Declaration that the purported resolution of the 1stDefendant at its Extra
Ordinary General Meeting of 8thSeptember, 2000 held in Abeokuta
authorising the conversion of the 1stDefendant from a private Company to
a public Company was illegal, null and void as the resolution was prejudicial and oppressive to the Plaintiff who as former member of the 1stDefendant had not been paid his shares value of N567,376.00 which the resolution  was designed to wipe off.

 

(b)     Order for the payment of N567,376.00 by the 1stand 2ndDefendants to the Plaintiff being the value of shares held by the Plaintiff as a former member of 1stDefendant which had been demanded and not yet paid.

 

(c)     Order restraining the 3rdDefendant from receiving entertaining, acting
upon any purported resolution of conversion of 1stDefendant to a public
Company and or receiving, entertaining and acting upon the documents
listed in Section 50(2)(a) – (c); 3(a) – (d)(i) and (ii) and (e) of the
Companies and Allied Matters Act, 1990 that may be submitted by the 1^st Defendant.

 

(d)     Order that the 2ndDefendant’s statement on Form C.O.7 filed in the 3rd
Defendant’s office describing himself as an Architect was false statement
under Section 643 of the Companies and Allied Matters Act 1990 as the 2^nd Defendant did not qualify in any Nigerian or overseas University or
Polytechnic as an Architect nor was registered as an Architect by the
Nigeria Institute of Architects”.

 

Based on the aforestated claims, a Motion on Notice was filed at the Registry of this Honourable Court on behalf of the 1stand 2ndDefendants seeking for the following orders:-

 

“1.     An Order striking out the 1st, 3rd and 4thReliefs on the Plaintiff/Respondent’s Writ of Summons dated and filed on the 29thday of September, 2000.

 

2. An Order striking out 2ndDefendant/Applicant in this matter.

 

The application is based on the following grounds:-

 

1. (i) That the Plaintiff/Respondent has no locus to seek the 1st, 3rd
   and 4thReliefs on the Writ of Summon and as such, this
   Honourable Court lacks the jurisdiction to entertain same.

 

(ii)     That the 2ndDefendant/Applicant is a Director of the 1st
Defendant/Applicant.

 

1. That the 1stand 2ndDefendants/Applicants shall at the hearing of this
   Application refer to and/or rely on the Writ of Summons and Statement
   of Claim both dated and filed on the 29thday of September, 2000 in
   this action”.

 

In moving the application the learned counsel for the 1^st and 2ndDefendants/Applicants (to be hereafter simply referred to as the Applicants) relied on Order 12 Rule 16 of the Federal High Court (Civil Procedure) Rules, 2000 and the Inherent Jurisdiction of this Honourable Court. There is an affidavit of 7 paragraphs in support of the application.

 

On the 1st prayer that the Plaintiff/Respondent has no locus standi to seek the 1st, 3rd and 4thReliefs on the Writ of Summons, learned counsel referred to paragraphs 3 and 4 of the affidavit in support; and the 1stground on the motion paper. I will reproduce the 3rd and 4th paragraphs hereunder:-

 

“3      That I reasonably believe that the Plaintiff/Applicant has no locus to seek
the 1st, 3rd and 4th reliefs on the Writ of Summons dated and filed on the
29th of September, 2000.

 

4. That further to paragraph 3 above, I also reasonably believe that this
   Honourable Court lacks the jurisdiction to entertain the lst, 3rd and 4th
   Reliefs on the aforestated Writ of Summons”.

 

Counsel submitted that in determining whether the Plaintiff has locus standi only the Statement of Claim should be scrutinised – Owodunni v. Trustees of Celestial Church of Christ (2000) F.W.L.R. (Pt. 9) 1455 at 1495. And to determine whether the Plaintiff has locus standi will depend on the injury he will suffer as manifested in the Statement of Claim:- First Bank of Nigeria Plc. v. Nireko Enterprises Ltd. (2002) F.W.L.R. (Pt.95) 335 at 348. He said that the Plaintiff did not state in his statement of claim the injury he will suffer by the resolution passed at the meeting. And that the Plaintiff was no more a member of the Company when the resolution to change the status of the Company to PLC was passed. He said that the new status of the Company will not prevent him from collecting his money. And that he has nothing to suffer because he is no longer a member of the company. He argued that the Plaintiff can proceed with the 2ndrelief through which he is claiming his money, but not on the 3rdrelief. And that since he is no longer a member of the Company, at best he becomes a creditor who can sue for his money. He submitted that the Plaintiff has no locus to seek for or to ask the Corporate Affairs Commission the 4threlief being sought by him. It reads:-

 

“Order that the 2ndDefendant’s statement on form C.O.7 filed in the 3rdDefendant’s office describing himself as an Architect was a false statement under Section 643 of the Companies and Allied Matters Act as the 2ndDefendant did not qualify in any Nigerian or Overseas University or Polytechnic as an Architect nor was he registered as an Architect by the Nigerian Institute of Architecture”.

 

On the aforestated relief, counsel submitted that since the Plaintiff is no more a member of the 1stDefendant company and he had failed to state in his statement of claim what he will suffer were the allegations he made were correct, his interest is no more than that of an ordinary member of the society. He said that in such a case, the Plaintiff has no locus standi:- Hon. S.O. Ilori v. Chief T.O.S. Benson (2000) F.W.L.R. (Pt. 26) 1846 at 1847. Referring to the case of Oyewunmi v. Oshunbade (2001) F.W.L.R. (Pt. 82) 1919 at 1954. counsel said that either the Company or the Corporate Affairs Commission can complain, assuming the facts in the statement of claim were correct. Counsel referred to Section 643 of the Companies and Allied Matters Act. He said that it deals with criminal trials and not civil matters. And if the Plaintiff has any interest, he should lodge his complaint to the Police. He submitted that where the Plaintiff has no locus standi the Court lacks jurisdiction to entertain that action, and the proper order to make is that of striking out the suit. Yusuf v. Kode (2002) F.W.L.R. (Pt. 86) 464 at 478. He urged this Court to grant the prayer sought.

 

On the 2nd leg of his motion paper – that the 2ndDefendant’s name be struck out in this matter, learned counsel submitted that if the 4threlief was struck out from this action, then, the only relief against the Defendant will be the 2nd relief. He said that there is no averment in the statement of claim showing that the money being claimed is in the personal purse of the 2ndDefendant. He further said that the 2nd Defendant is the chairman of the 1stDefendant. He submitted that director of a company is an agent of that company – Bamigboye vs. Unilorin (1991) 8 NWLR ( Pt. 207) 1 at 7. And by virtue of Section 63(3) of the Companies and Allied Matters Act 1990, everyday business of a company should be carried out by the Board of Directors. And as such, the 2ndDefendant was carrying out his business as one of directors of the company. Being an agent he is acting for a disclosed principal i.e. of the 1stDefendant. The contract submitted the learned counsel, is that of the principal and not that of the agent:- Union Bank Nig. Ltd. v. Edet (1993) 4 N.W.L.R. (Pt. 287) 288 at 303. He referred to Section 65 of the Companies and Allied Matters Act 1990. He submitted that the lst Defendant can only be held responsible for the Act of the 2ndDefendant because there is no averment in the statement of claim that the 2ndDefendant had acted fraudulently or had tampered with the shares. He said that an agent of the disclosed principal incurs no liabilities – Union Bank Nig. Ltd. vs. Edet (supra). He submitted that where there is a disclosed principal, the correct party to be sued for anything done or omitted to be done is the principal. Leventist Tech. vs. Petrogesical Enterprises Ltd. (1992) 2 NWLR (Pt. 224) 459 at 468. He urged this Court to strike out the name of the 2ndDefendant from this action.

 

Learned counsel referred to paragraph 2 of the counter-affidavit where it is averred that the preliminary objection raised by the 1stand 2ndDefendants is improper as they have not been raised in the Defendant’s pleadings. Learned counsel submitted that locus standi is an issue which goes to jurisdiction and it can be raised at any time during the proceedings – Oredoyin vs. Arowolo (1989) 4 NWLR (Pt. 114) 172 at 187. He urged this Court to discountenance the counter affidavit in its entirety and grant the Applicant’s prayer.

 

In his reply, learned counsel for the Respondent submitted as follows:-

 

That a locus standi had been disclosed by the statement of claim. And that paragraphs 6, 7 and 10 have established the locus standi of the Plaintiff to sue the Defendant. He cited the case of The Attorney General of the Federation v. Attorney General of Abia State and 35 Ors. (2001) 7 S.C. (Pt. 1) 33 at 66. On paragraph 2 of the counter affidavit, learned counsel argued that Order 25 Rule 2 of the Federal High Court (Civil Procedure) Rules 2000 provides that preliminary objection on a point of law should be set out in the pleadings. And since the Applicant has failed to comply with this Rule, this Court should strike out the preliminary objection. Counsel referred to paragraphs 3 and 4 of the counter affidavit. The two paragraphs read thus:-

 

“3.     That the 2ndDefendant is the promoter of the 1stDefendant who filled false information on form C.O.7. lodged with the 3rdDefendant for the
incorporation of the lst Defendant and is answerable for the false information.

 

4. That the 2ndDefendant should remain as a party to make it easy to enforce the judgment of the Honourable Court that will be given at the end of the case particularly the aspect relating to refund of value of shares”.

 

He submitted that the issue of principal and agent has not arisen at the time Form C.O.7 was lodged with the Corporate Affairs Commission. He submitted further that it is the 2ndDefendant that should come and defend his case. And to say that he should not defend it is tantamount to say that he should not defend the false statement he made in Form C.O.7. Counsel referred to Section 622 of the Companies and Allied Matters Act 1990. He said that the 2ndDefendant submitted a false Form C.O.7 with the 3rdDefendant, and the 3rdDefendant acted on the Form. Referring to paragraph 4 of the counter affidavit counsel said that it will be difficulty to enforce the judgment of this Court if the 2nd Defendant’s name is struck out from this action. He submitted that a locus standi had been established in this suit and that the 2ndDefendant’s name should not be struck out because of the part he played in the registration of the Company.

 

In his final reply, learned counsel for the Applicants said that Section 622 of Companies and Allied Matters Act 1990 is not applicable to promoters; but to matters under Part 7 of the Act which deals with Company Securities. Before Sections 622 and 643 can be raised, argued the learned counsel, there must be a charge before this Court. He said that the learned counsel for the Respondent did not state what the Plaintiff will suffer on reliefs 1, 3 and 4 of the statement of claim. He submitted that Order 23 Rule 2 of the Federal High Court (Civil Procedure) Rules, 2000 is not applicable to the instant application which raised the issue of locus standi and jurisdiction. The following issues come for determination in this ruling:-

 

1. Whether this is the proper forum for the Plaintiff to raise the issue of false
   declaration in forum C.O.7 which the 2ndDefendant lodged with the
   Corporate Affairs Commission.

 

2. Inspite of the provision of Order 25 Rule 2 of the Federal High Court
   (Civil Procedure) Rules, 2000, whether the issue of locus sandi and the
   jurisdiction of this Court to entertain the Plaintiffs’ claim could be raised by the Applicants at this point in time.

 

3. Whether locus standi had been disclosed by the Plaintiff in the Statement of Claim in respect of the 1st, 3rdand 4threliefs in the Plaintiff’s Writ of
   Summons.

 

On the first issues, the Plaintiff, in his claim is asking this Court to:-

“Order that the 2ndDefendant’s Statement on Form C.O.7. filed in the 3rd
Defendant’s Office i.e. The Registrar General, Corporate Affairs Commission,
Abuja, describing himself as an Architect was a false statement under Section
643 of the Companies and Allied Matters Act, 1990 as the 2ndDefendant did not
qualify in any Nigeria or overseas University or Polytechnic as an Architect nor
was he registered as an Architect by the Nigerian Institute of Architects”.

 

Learned counsel for the Applicants submitted that the Plaintiff has no locus standi to seek for or to ask the Corporate Affairs Commission the 4threlief being sought in his claim. Assuming the facts in the statement of claim were correct argued the learned counsel, either the Company or the Corporate Affairs Commission can complain. Referring to Section 643 of the Companies and Allied Matter Act, 1990, he said that it deals with criminal trials and not civil matters. On the other hand, learned counsel for the Plaintiff submitted that it is the 2ndDefendant that should defend this action. He referred to Section 622 of the Companies and Allied Matters Act 1990. He said that if he is prevented from defending this action it will be tantamount to preventing him from defending the false statement he made in Form C.O.7. Learned counsel for the Plaintiff relied heavily on the provisions of Sections 622 and 643 of Companies and Allied Matters Act, 1990 in support of his argument that the Plaintiff has locus standi to maintain leg 4 of his claim against the 2nd Defendant.

 

I will reproduce the provisions hereunder:-

 

“622.           Any person who willfully contravenes any other provisions of this part of this Decree or any regulation made there under, or any person who willfully or recklessly in any registration, statement, application, report, account, record, or other document filed, sent or delivered pursuant to this Part of this Decree, makes or causes to be made any untrue statement of a material fact or omits to state any material fact, shall be guilty of an offence and shall upon conviction if no other punishment is prescribed, be liable to a fine of N50,000.00 in the case of corporate body or to imprisonment for 5 years or to a fine of N5,000.00 or to both such fine and imprisonment in the case of an individual”.

 

“643. (1) Where a penalty is not elsewhere prescribed in this Decree and subject to the provisions of subsection (2) of this section, if any person in any return, report, certificate, balance sheet, or other document required by or for the purpose of any of the provisions in any material particular knowing it to be false, he shall be guilty of an offence and liable:

 

(a)     on conviction in the High Court to imprisonment for a term of two years: or

 

(b)     On conviction in a lower Court, to a fine of N1,000 or to imprisonment for a term of four months, or to both such fine and imprisonment.

 

(2)     Nothing in the this Section shall affect the provision of any enactment imposing penalties in respect of perjury in force in Nigeria”.

 

From the aforestated provisions, it is glaringly clear that the purported act committed by the 2nd Defendant i.e. falsification of Form C.O.7, that is, assuming the allegation were correct, the alleged act is a criminal offence under the provision of Sections 622 and 643 reproduced above. And since, he i.e. the 2ndDefendant is not being prosecuted for any criminal offence before me, the Plaintiff has no locus standi to institute this action as presently constituted in relation to his 4threlief against the 2nd Defendant. And as such, this Court has no jurisdiction to entertain same, and I so hold.

 

The reason why I so held is that, there is no where in the Act where an individual is made a private prosecutor of an offender under the provision of the Act i.e. Companies and Allied Matters Act, 1990. As argued by the learned counsel for the Applicants, I am of the firm view that it is the company or the Commission that can complain about the alleged act of falsification of Form C.O.7. and not the Plaintiff who is no longer a member of the company. In effect therefore, I hold that the Plaintiff has no locus standi to sue the 2ndDefendant in respect of the act complained of in leg 4 of his claim and as such, this Court has no jurisdiction to entertain the claim.

 

The second issue borders on the provision of Order 25 Rule 2 of the Federal High Court (Civil Procedure) Rules, 2000. And it is whether the issue of locus standi could be raised at this point in time despite the provision of the aforestated Rules. The Rule provides as follows:- Order 25:-

 

“2. (1) A party shall be entitled to raise by his pleading any point of law, and any point so raised shall be disposed of by the Judge who tries the
cause at or after the trial.

 

(2)     A point of law so raised may, by consent of the parties, or by order of the Court or a Judge in Chambers on the application of either party, be set down for hearing and disposed off at any time before
the trial”.

 

On the aforestated provision the learned Counsel for the Plaintiff argued that the rule provides that preliminary objection on a point of law should be set out in the pleadings. And since the Applicant has failed to comply with this rule, the preliminary objection should be struck out by this Court. But the Applicant’s Counsel submitted that the rule is not applicable to the instant application which raised the issue of locus standi and jurisdiction.

 

The Federal High Court (Civil Procedure) Rules provide for the rules to be followed in the Federal High Court to regulate the procedure and to hasten trials in cases before the Court. This is with particular reference to the rule in question. That is, Order 25 Rule 2 of Federal High Court (Civil Procedure) Rules, 2000. But where the issue of jurisdiction of the Court is raised at any time before judgment is delivered in any case, I am of the firm belief that the Court should hear such application. Failure to do so will to my mind tantamount to prolonging the matter, and thus defeat the purpose for which the Rules were made. It is settled that the issue of jurisdiction of a Court is so fundamental to a case, that it can be raised at anytime before judgment is delivered even before the Supreme Court. If a Court hears a case in which it has no jurisdiction to entertain, the entire proceedings will be a nullity. See the cases of General Electric Company v. Akande (1999) 1 NWLR (Pt. 588) 532; Barclays Bank of Nigeria Ltd. v. Central Bank of Nigeria (1976) 1 ALL NLR 409 and Oredoyin v. Arowolo (1989) 4 NWLR (Pt. 144) 172. In effect therefore, I hold that the issue of locus standi and jurisdiction raised by the Applicant’s Counsel in his Motion on Notice can be entertained by this Court inspite of the provision of Order 25 Rule 2 of the Federal High Court (Civil Procedure) Rules, 2000.

 

The last issue which I will consider is, whether locus standi had been disclosed by the Plaintiff in the Statement of Claim in respect of the 1st, 3rdand 4th reliefs.

 

The first relief being sought by the Plaintiff is stated at page one of this ruling which I need not reproduce here again. The gist of the relief is that the Plaintiff was a former member of the 1stDefendant Company. He had not been paid his shares value of N567,376.00 There was an extra ordinary General Meeting of the 1stDefendant Company held on 8th September, 2000, where the conversion of the 1stDefendant company from a private company to a public company was authorised. The Plaintiff is praying this Court to declare the purported resolution illegal, null and void. As the resolution was prejudicial and oppressive to the Plaintiff who had not been paid his shares value of N567,376.00 which the resolution was designed to wipe off.

 

The first issue to consider is the issue of locus standi. The question whether or not a Plaintiff has a locus standi in a suit is determined from the totality of all the averments in his statement of claim:- Bolaji vs. Rev. Bamgboye (1986) 4 NWLR (Pt. 37) 632; Momodu vs. Olotu (1970) 1 ALL NLR 117 at 123. Both cases were cited with approval by the Supreme Court in the case of Owodunni vs. Registered Trustees Celestial Church of Christ (supra); where Iguh, JSC stated at Page 1495 of the Report as follows:-

 

“In dealing with the locus standi of a Plaintiff, it is the statement of claim alone that has to be carefully scrutinised 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 Plaintiff’s statement of claim disclose the rights or interests of the Plaintiff which have been or are in danger of being violated or 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”.

 

I have carefully gone through the Plaintiff’s statement of claim, and I found that there are 2 issues at stake. The issue as averred at paragraphs 1 to 9 of the statement of claim relates to 567,376 shares purportedly held by the Plaintiff in the 1stDefendant company. The shares according to paragraph 4 of the claim are worth N567,376. The Plaintiff, having given notice of cessation as a member of the 1stDefendant company to its chairman vide letter dated 18th July, 2000, demanded for the payment of the aforestated sum to him. The demand notice is contained in the letter dated 9thAugust, 2000 written, by his solicitor. But on 8th September, 2000, he got notice of an Extra Ordinary General Meeting planned for 8th September, 2000 to pass a resolution to convert the 1stDefendant company to a public company. Despite the fact that his solicitor wrote to the chairman of the company the 2ndDefendant, not to hold the meeting until the Plaintiff had been paid his shares value, he was reliably informed that the Extra Ordinary General Meeting was held. From the averment in the statement of claim, there is no where it is averred that the Plaintiff is going to suffer any damage because of the resolution passed at the Extra Ordinary General Meeting of the 1st Defendant company. This is because the Plaintiff is no longer a member of the company. He can pursue his claim against the company notwithstanding that it had been converted to a public company. The 2^nd Defendant, who according to the Plaintiff’s statement of claim is the chairman of the 1stDefendant/Company represents the directing mind and will of the company, and controls what it does. Also, in the Case of Trenco (Nig). Ltd. vs. African Real Estate Ltd. (1978) 11 NSCC 220. Aniogolu, JSC (as he then was) quoted with approval Viscount Haldane’s passage in Lennard’s Carrying Co. vs. Asiatic Petroleum Co. Ltd (1915) A.C. 705 713 – 714. As follows:-

 

“…. a corporation is an abstraction. It has no mind of its own any more that it  has a body of its own; its active and directing will must consequently be sought in  the person of somebody who for some suppose may be called an agent but who  is really the directing mind and will of the corporation, the very ego and centre of the personality of the Corporation …….”.

 

For all intents and purposes therefore, a Director or Chairman of a Company is an agent of that Company, the directing mind and will of that company and the very ego and centre of the personality of that very company. That is what the 2ndDefendant is to the 1stDefendant. Since the 1stDefendant is a limited liability company, that means that it is an independent legal “person”. This affects its capability, rights and liabilities. Since the independent legal personality of a company is an artificial person or entity, all the operations and activities are carried out by its organs and agents, see Treno Nig. Ltd. vs. African Real Estates Ltd. (1978) 1 LRN 146 at 153. In the case of Bolton (Engineering) Co. Ltd. vs. Graham AND amp; Sons (1957) I QB 159. It was held as follow:-

 

“A Company may in many ways be likened to a human body. It has brain and nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with direction from the centre. Some of the people in the Company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will.

Others are Directors and Managers and control what it does”.

See also the case of Bamigboye vs. University of Ilorin (1991) 8 NWLR (Pt. 207) 1 at 7.

 

One of the consequences of incorporation of a company is the ability of the corporation to sue and be sued in its name. And that is what the Plaintiff has done in the instant case, Having sued the company as the lst Defendant, if judgment is entered in his favour in respect of his purported shares in the 1^st Defendant company, there is no doubt that he will be paid by the company. I do not share the view of the Plaintiff as deposed to at paragraph 5 of his counter affidavit that “it is the Managing Director of the 1stDefendant company that will be pounced upon in case of difficulty in enforcing the judgment on the 1st Defendant”. I do not also accept the argument of the Plaintiff’s counsel that the resolution to convert the private company to a public company was designed to wipe off the Plaintiff’s share in the company. This is because, the public company has in law taken over all the asset and liabilities of the private company before its conversion to public company. Therefore, since the Plaintiff is no longer a member of the Company he has no locus standi to ask this Court to declare the resolution passed at the Company’s Extra Ordinary General Meeting held on the 8thof September, 2000 illegal, null and void, as it could not be regarded as prejudicial and oppressive to the Plaintiff. This is because the newly converted public company would have automatically inherited all the assets and liabilities of the private company.

 

On the 3rdrelief being sought by the Plaintiff, wherein this Court is being asked to restrain the 3rdDefendant from receiving, entertaining or acting upon any purported resolution of converting, the 1stDefendant company to a public company, this Court is not in a position to make such order. This is because, I have refused to declare the resolution illegal, null and void. I have also considered the issue of falsification of form C.O.7 wherein I held that this is not the proper forum to bring the issue, as the provision of Sections 622 and 643 relate to criminal offences. Whereas, the instant matter is a civil one.

In effect therefore the 1st, 3rd and 4th reliefs will be and they are hereby struck out from this suit.

 

CASES CONSIDERED IN THE RULING

NIGERIAN CASES

Bamigboye v. University of Ilorin (1991) 8 N.W.L.R. (Pt. 207) 1 at 7 (referred to)

Barclays Bank of Nigeria Ltd v. Central Bank of Nigeria (1976) 1 ALL N.L. R. 409 (referred to)

Bolaji v. Bamgboye (1986) 4 N.W.L.R. (Pt. 37) 632 (referred to)

General Electric Company v. Akande (1999) 1 N.W.L.R. (Pt. 588) 532 (referred to)

Momodu v. Olotu (7970) 1 ALL N.L.R. 117 at 123 (referred to)

Oredoyin v. Arowolo (1989) 4 N.W.L.R. (Pt. 114) 172 (referred to)

Owodunni v. Registered Trustees Celestial Church of Christ (2000) FWLR (Pt. 9) 1455 at 1495 (referred to)

Trenco (Nig) Ltd v. African Real Estate Ltd (1978) 11 N.S.C.C. 220 (referred to)

 

Foreign Case

Bolton (Engineering) Co. Ltd v. Graham and Sons (1957) 1 Q. B. 159 (referred to)

 

NIGERIAN STATUTE CONSIDERED IN THE RULING

Companies and Allied Matters Act Cap. 59 Laws of the Federation of Nigeria, 1990

– Section 622

– Section 643

NIGERIAN RULES OF COURT CONSIDERED IN THE RULING

Federal High Court (Civil Procedure) Rules, 2000

– Order 25 Rule 2