(2017) LPELR-43156(CA)

Transcription

1 OLORUNLEKE & ORS v. AFROWORKS (NIG) LTD & ANOR CITATION: CHIDI NWAOMA UWA HAMMA AKAWU BARKA In the Court of Appeal In the Ilorin Judicial Division Holden at Ilorin BOLOUKUROMO MOSES UGO 1. MR. D. A. OLORUNLEKE 2. MR. LESLIE DANIELS 3. DR. IDOWU KOLEDADE 4. MRS. FUNMILAYO BALOGUN 5. MRS. RONKE ADEYEMI ON THURSDAY, 25TH MAY, 2017 Suit No: CA/IL/3/2014 Before Their Lordships: Between Justice, Court of Appeal Justice, Court of Appeal Justice, Court of Appeal And 1. AFROWORKS NIG. LTD 2. CORPORATE AFFAIRS COMMISSION RATIO DECIDENDI - Appellant(s) - Respondent(s)

2 1. ACTION - DEFENCE TO AN ACTION: Options available to a defendant who conceives that he has a good defence to an action against him "...See Tigris v. Ege (1999) S.C. 79 where the Apex Court per Ogundare J.S.C. had this to say on it: "Surely where a defendant is disputing an averment of fact made in a statement of claim, the proper way to do so is not by filing an application to have the plaintiff's action dismissed in limine but to file a defence traversing that averment of fact and establishing evidence at the trial on which the trial Court will make a finding for or against the plaintiff on such averment."per UGO, J.C.A. (P. 27, Paras. B-E) - read in context 2. ACTION - LOCUS STANDI: What the Court considers in determining whether a plaintiff has locus standi "Incidentally, it is settled law that in determining an application challenging in limine a plaintiffs' locus standi not only is the only relevant process the statement of claim, the averments contained therein must also be deemed admitted for that limited purpose: See Bakare v. Ajose-Adeogun (2014) LPELR p. 37, per Ariwoola J.S.C.; Labode v. Otubu (2001) FWLR (Pt. 43) 207 at 229 and p The lower Court was therefore entitled at that stage to quote or paraphrase the averments in the statement of claim and take them as admitted for the purpose of the objection." Per UGO, J.C.A. (P. 29, Paras. B-E) - read in context

3 3. PRACTICE AND PROCEDURE - INTERLOCUTORY APPLICATIONS/MATTERS: Whether Court can pronounce on substantive matters or issues in the course of interlocutory proceedings "Such hearing of the merits of a substantive case at interlocutory stage is not permitted in our legal system. Incidentally that point is even eloquently attested to by the arguments and cases cited by the appellants themselves on their issue 3 where they alleged bias and prejudging of main issues in the case by the trial judge in the course of ruling on their interlocutory application. It is that accusation the trial judge was trying to avoid and clearly said so in his ruling yet he is being assailed by appellants for refusing to do that. They seem to speaking from both sides of their mouth. In Agip (Nig) Ltd. v. Agip Petrol International (supra), the Apex Court, per Adekeye J.S.C., sighting a long line of cases, had this to say on this issue at p : "The lower Court obviously and rightly did not make any pronouncement on same because it would at that stage of the proceedings be clearly premature. It will amount to the Court pronouncing or deciding at interlocutory stage on the matter it is supposed to determine in the substantive suit of the case. It is a long-standing principle of Court pronounced in numerous decided cases that a Court must be cautious in its judgment at an interlocutory stage not to make pronouncement or observations on the facts which might appear to predetermine the main issue or issues in the proceedings yet to be concluded by the Court." Ejembi Eko J.C.A (as he then was) took an interesting metaphorical approach in expressing this same point when His Lordship said in Zenith Bank Plc. v. John (2013) ALL FWLR (Pt. 672) 1742 at 1763 paras B- D that: "One cardinal principle guides my decision on this application. And that is; a substantive issue is never, and should never be determined at the interlocutory stage. This has been the posture of superior Courts of record in this country as can be seen, for instance, from the decision in University Press Ltd. v. I. K. Martins (Nig) Ltd. (2000) (pt. 654) 584; Woherem v. Emereuwa (2004) ALL FWLR (Pt. 221) 1570, (2004) 13 NWLR (Pt. 890) 398 at 418. The King, as our adage says, must not stretch his neck across the hedge to have a glance at the dance troupe coming to perform in his palace."per UGO, J.C.A. (Pp , Paras. B-B) - read in context

4 BOLOUKUROMO MOSES UGO, J.C.A. (Delivering the Leading Judgment): By a writ of summons issued on 17/05/2011, the 1st respondent and one Abdulrasheed Musa (now deceased), as claimants, commenced this action against the appellants and the 3rd respondent as defendants in the Federal High Court, Ilorin Division, claiming against them jointly and severally the following twelve relief: 1. A Declaration that the 1st, 2nd, 3rd and 4th defendants are neither members nor Directors of the 1st plaintiff company. 2. A Declaration that the 1st, 2nd, 3rd and 4th defendants are not entitled to deal in the assets or interfere with the management and affairs of the 1st plaintiff company. 3. A Declaration that the 1st, 2nd, 3rd and 4th defendants act of dealing in the assets and interference with the management and affairs of the 1st plaintiff is and constitute trespass. 4. A Declaration that the 1st plaintiff cannot be voluntarily wound up other than by a special resolution at a general meeting of the members duly convened. 5. A Declaration that the purported resolution voluntarily winding up the 1st plaintiff by the 1

5 1st, 2nd, 3rd and 4th defendants in their meeting of 17th March, 2011 is illegal, null, void and of no effect whatsoever. 6. A Declaration that the purported appointment of the 5th defendant by the 1st, 2nd, 3rd and 4th defendants as the liquidator of the 1st plaintiff company is illegal, null, void and of no effect whatsoever. 7. AN order of perpetual injunction restraining the 1st, 2nd, 3rd and 4th defendants from parading themselves or acting in any manner whatsoever as directors or members of the 1st plaintiff company. 8. An order of perpetual injunction restraining the 1st, 2nd, 3rd, 4th and 5th defendants from selling, transferring, leasing, mortgaging, pledging or assigning or in any other manner whatsoever dealing in the assets and properties of the 1st plaintiff company or interfering in the management and affairs of the 1st plaintiff. 9. An order of perpetual injunction restraining the 6th defendant from recognizing or dealing with the 1st, 2nd, 3rd, 4th and 5th defendants as Directors, members, liquidator or officers of the 1st plaintiff s company. 10. An order of perpetual injunction restraining the 5th defendant, 2

6 her agent, privies, or anybody acting through her or on her instruction from acting as or performing or assuming the roles of a liquidator of the 1st plaintiff, or otherwise perform any role in connection with the 1st plaintiff company. 11. An order allowing the 2nd plaintiff as the personal representative of the deceased shareholder and managing director of the 1st plaintiffs company (Alhaji Salami Musa) to call and convene a general meeting of the personal representatives of the shareholders to redirect and reposition the 1st plaintiff company pursuant to Section 248 (2) of the Companies and Allied Matters Act ,000,000 general damages against the 1st, 2nd, 3rd and 4th defendants trespass. In compliance with the rules of that Court, first respondent and its now deceased co-claimant frontloaded their statement of claim together with documents referred to therein which they intended to use to prove their case. 2nd plaintiff also filed a sworn witness statement in support of the claim. The aim of their action as disclosed in their statement of claim and as also shown in the reliefs shown above was to repel what they described 3

7 as the unlawful interference and trespass of the defendants/appellants in the affairs of the 1st defendant/respondent company. Their grouse, as can also be gleaned from their claims earlier produced, is that the 1st 4th appellants who they say are neither directors nor members of the 1st respondent company but mere friends of 2nd claimant s late father (Alhaji Salami O. Musa), its promoter and founding managing Director, have, under the guise of assisting their late friend s young children to look after the affairs of 1st respondent company following his death in 1987, continuously interfered and tampered with the assets of 1st respondent Company and have consumed a significant portion of its assets. In pursuance of their scheme, 1st respondent and its deceased co-plaintiff also alleged in their statement of claim, 1st to 4th appellants not only fraudulently and illegally procured, in the year 1988, a Form CO7 indicating the inclusion of their names as directors of 1st respondent, which they (plaintiffs) alleged they only succeeded in reversing in 2000 when they got wind of it. They further averred that the 1st 4th 4

8 appellants have since March 2011 fraudulently and illegally constituted themselves into a Board of Directors, passed a resolution aimed at winding up 1st respondent and have appointed 5th appellant as its liquidator to accomplish that hence this suit. Upon receipt of the plaintiffs originating processes, the appellants, claiming that 1st 4th appellants are the authentic directors of 1st respondent and 2nd plaintiff was not even a director or one of its members but just the first son and personal representative of its deceased managing director late Alhaji Salami Musa, filed a Notice of Preliminary Objection supported by an affidavit seeking the dismissal of the action. Their ground for the objection was that both plaintiffs (1st respondent and late Abdulrasheed Musa) lack standing to institute and maintain the suit and they have failed to disclose any reasonable cause of action. Particulars of those grounds were given as follows: Particulars 1. There is no resolution of the 1st plaintiff either of the Board or General Meeting known to law and in accordance with the 1st plaintiff s Memorandum and Articles of 5

9 Association entitling her to institute and maintain this action that existed or has been disclosed in the originating process. 2. The 2nd plaintiff is neither a member nor a Director of the 1st plaintiff known to law, the Regulatory body and or in accordance with the plaintiff s Memorandum and Articles of Association. 3. The 2nd plaintiff is not a sole Administrator to the estate of the deceased member of 1st plaintiff and does not have the authority of other Administrators to institute and maintain this action. 4. Notwithstanding 3 above the 2nd plaintiff has not been admitted as a member of the 1st plaintiff in accordance with the due process of law. 5. The plaintiffs claims are hinged on allegations of fraud and they are defective of (sic) necessary and material particulars. It is noteworthy that before moving their objection, appellants had also filed a 20-paragraph statement of defence on 07/05/12 where they not only claimed they were the authentic directors of the 1st respondent company, they in turn branded the 2nd plaintiff an impostor and also made their own allegations of fraud against him saying it 6

10 was rather he who in 2000 fraudulently and illegally caused Form CO7 (Particulars of Directors of 1st plaintiff) to be issued and filed with the Corporate Affairs Commission without their knowledge as its Directors. Like the plaintiffs, they also alleged that when they became aware of the fraud, they alerted 2nd respondent who invited and heard from all the parties and resolved the issue in their favour saying it would only recognize the list of directors filed with it in They ended up describing the 2000 list of Directors relied on by 2nd plaintiff as illegal directors who have not performed any act in respect of 1st respondent and have never been recognized as such. In effect, there were before the trial Court allegations and counter allegations in the fraudulent acts, with both 2nd plaintiff and 1st to 4th appellants variously claiming to be director(s) of the 1st plaintiff company and branding the other as impostor(s), albeit with the appellants admitting, at least, that the now deceased 2nd plaintiff s father was the Managing Director of the 1st respondent company and 2nd plaintiff was one of his personal 7

11 representatives. It was during the pendency of these conflicting averments of the parties as to who were the authentic directors of 1st plaintiff company and who fraudulently altered its list of directors that the preliminary objection of the appellants was heard on 29/10/2013 and dismissed by the lower Court (per A. O. Faji J.) on 29/11/2013, the Court being of the view that the issues canvassed in it by appellants went to the merits of the substantive suit and so the matter should go through formal trial where their conflicting assertions could be tested in cross-examination. That is clearly shown by the following excerpts of his ruling: It is instructive to note however that the preliminary objection is grounded on paragraphs 5, 6, 18, 15 and 16 of the affidavit in support which raise issues which in my view are not only on the merits but should go through the crucible of cross-examination. These paragraphs are to the affect that there is no resolution authorizing the filing of the action and that 2nd plaintiff is not a member or Director of 1st plaintiff. They also seek to show the fraudulent activities engaged in by 2nd plaintiff 8

12 and other persons. They also posit that the board of 1st plaintiff did not pass a resolution authorizing the filing of the instant suit. Objectors counsel contends that the resolution attached to the statement of claim is fraudulent as 2nd plaintiff fraudulently put his siblings on the board of 1st plaintiff. To my mind the fraudulent nature of the resolution ought not only to have been controverted by statement of defence also the truth or otherwise of the statement of claim must be determined at the trial after cross-examination. That is not a preliminary point. My summation so far shows that even without a reply from plaintiffs the objectors have not made out the prayers sought in the preliminary objection which must be so dismissed. I so order. His Lordship nevertheless thought that he should consider, out of abundance of caution and just for completeness, to use his own words, appellants arguments. He then considered some of the provisions the Corporate and Allied Matters Act (CAMA, for short) 2004 relied upon by the appellants in their objection, disagreed with their applicability and still arrived 9

13 at the same conclusion, saying: The facts before me at this stage is that the defendants are trespassers and probably interlopers who have no nexus with 1st plaintiff. It would therefore in my view, be unjust not to allow plaintiffs to show why there is no nexus between the 1st plaintiff and the defendants and why they are trespassers to be shown by credible evidence. His Lordship finally ended his ruling by admonishing thus: The objectors cannot and should not be allowed to tempt the Court to determine the merits of this case and in particular the issue of fraud at this interlocutory stage. Attractive as the temptation, like other temptations, is, I will not allow the objectors to lead me into temptation. Even if they try to, it is my solemn duty to resist such. I so do. The only way I can show that I have resisted the objectors tempting apple is to dismiss the preliminary objection. The preliminary object (sic) is hereby dismissed. The appellants are dissatisfied with that ruling. They hold the view that the Federal High Court was wrong and their competing contentious with the 1st respondent and the 10

14 erstwhile 2nd plaintiff of which of them is/are the authentic director(s) of 1st respondent and or committed fraud in doctoring its directors list should have been resolved, so to speak, by way of their preliminary objection and affidavit evidence alone hence this appeal. That is even as they also admit in their last ground of appeal and issue 5 culled from it that a Court cannot at an interlocutory stage or ruling say anything that is capable of or being perceived as having prejudiced the issues in the substantive suit. Appellants anchored their appeal on eight grounds wherein they sought orders allowing their appeal and setting aside the ruling of the learned trial judge and for this Court to uphold their objection an order the dismissal of the suit or in the alternative remit the case back to the trial Federal High Court for trial by another Judge. They have since filed a brief of argument on 26/10/2016 where they originally framed five issues for determination, but withdrew and abandoned issues 1 and 4 at the hearing on 14/03/2017 and adopted only issues 2, 3 and 5 which read as follows: 1. Whether the trial Court was right when it 11

15 held that prior leave of Court to commence and maintain this action by the deceased respondent (then 2nd plaintiff) is a representative capacity is of no consequence. 2. Whether the trial Court rightly applied, considered and failed to consider the provisions of Section 248(2) of the Companies and Allied Matters Act and the Supreme Court case of National Bank (Nig.) Ltd v. Shoyoye & Anor (1977) 5 S.C. 181 respectively to the disclosed facts and evidence placed before him with respect to the standing or otherwise of 1st respondent and the deceased respondent in this case. 3. Whether the learned trial judge has not at the preliminary stage prejudge the merit of the substantive case when in his ruling he concluded and adjudged the appellants in the lower Court as trespassers and interlopers. Arguing their issue 1 (original issue 2), appellants contended that the learned trial Judge did not apply correctly the provisions of Sections 303 of CAMA providing for leave of Court to be obtained before commencing a derivative action in the name of or on behalf of a company as according to them, the nature of the action brought by the deceased 12

16 2nd plaintiff Abdulrasheed Musa required. They argued that under Section 303 (2) (b) of CAMA the erstwhile 2nd plaintiff Late Abdulrasheed Musa ought to have first obtained the leave of Court to bring a derivative action and in the process give them as directors of 1st respondent reasonable notice of his intention to do so, but failed in that regard. Instead of considering that complaint in their objection, they complained, the learned trial judge rather erroneously concerned himself with Section 248(2) of CAMA providing for death of all directors which is inapplicable to this case. It is appellants argument that the deceased 2nd plaintiff s failure to obtain the necessary leave of Court required by Section 303 of CAMA is fatal to his action and rendered his processes and the suit incompetent and the learned trial judge was wrong to countenance it. They urged us to resolve this issue in their favour. On their issue 2 (original issue 3) which is closely related to issue 1 above, appellants again argued that the learned trial judge misapplied both Section 248(2) of CAMA and the Supreme Court s decision in National Bank of Nigeria Ltd v. 13

17 Shoyoye (1977) 5 S.C. 181 (also reported in (1977) NSCC 301) which they cited to him in support of the course they took in objecting preliminarily to the standing of the deceased 2nd plaintiff in commencing this suit. They submitted that the procedure they adopted of applying to the Court by affidavit evidence for the dismissal of the suit has the support of Shoyoye s case contrary to the position of the learned trial judge. On this point they also cited NDIC v. C.B.N. (2002) 3 SCNJ 75 at 75 at 89. The plaintiffs having failed to controvert and or challenge the depositions in the affidavit in support of their preliminary objection, they posited, they are deemed to have accepted them and the objection should have been resolved in their favour. They repeated their argument about the irrelevance of Section 248(2) of CAMA. Section 248(2), they argued, relates to a situation where all the directors of a company are dead, in which case their personal representatives, they said, can convene a meeting. They argued that was not the case here as the plaintiffs even disclosed in their statement of claim that not all directors were dead after the demise of 2nd 14

18 plaintiff s father but only that the management of the 1st respondent could not be located. They asserted that the same statement of claim also revealed that at least two directors of the company, Messrs Abiodun Omodanisi and Omodele Moletoba, were alive. On their third issue (original issue 5) to the effect that the learned trial judge delved into and prejudged the substantive matter in the suit in the course of his ruling when he said the facts before him at that stage was that they were trespassers and probably interlopers who have no nexus with the 1st plaintiff, appellants argued that it was wrong of him to make that comment which according to them prejudiced the substantive issues in the case; that Courts are not allowed to delve into the substantive suit while dealing with interlocutory applications. They cited the cases of Brollo Nig Ltd v. Nkwocha (2001) FWLR (Pt. 47) 1100 at 1109; Mokwe v. G.E. Ezeuko (SAN) & Anor. (2001) FWLR (Pt. 38) 1275 at 1284; Ponson Enterprises Nig. Ltd & Ors. v. Njigha (2001) FWLR (Pt. 61) 1685 at 1706 and Olokun & Anor v. Aiyelabegan (2004) FWLR (Pt. 192) 153 at 161 on this issue in urging that should 15

19 we be minded to overrule them on their argument on the issue of locus standi, the action should be remitted for trial by another Judge of the Federal High Court besides Faji J. In its response (the 2nd Respondent having neglected to file brief and the appeal being argued on the appellants and 1st Respondents briefs of argument with leave of Court), the 1st Respondent set out the following two issues for determination in its brief of argument: 1. Whether the learned trial judge was not right in dismissing the preliminary objection of appellant when the statement of claim of the 1st and 2nd Respondents disclosed the locus standi of 1st and 2nd Respondents. 2. Whether in resolving the issues in the preliminary objection of the appellants the Court below in any way prejudged the merits of the case. On its first issue, 1st respondent s counsel pointed to its statement of claim where it is averred that following the death of Alhaji Salami Musa, the father of erstwhile 2nd plaintiff, the appellants who are not members of the 1st respondent company have been interfering with and depleting its resources hence 2nd plaintiff who 16

20 is the personal representative of Late Salami Musa, its deceased Managing director and promoter, intervened with this suit with 1st respondent company to ward off strangers like the appellants who are trying to hijack the affairs of the company. Counsel argued that nothing in Section 631 (1) of CAMA nor any other section of that statute forbids the institution of an action like the present one by 1st respondent. Counsel also supported the learned trial judge s ruling that the issues canvassed by the appellants in their objection are not matters for a preliminary application but rather matters for the substantive trial on which parties have joined issues. It is also counsel s contention that Section 303 of the CAMA relates to only suits brought against directors of a company, which he further argued does not include the appellants going by the averments in the statement of the claim to the effect that they are not even members of 1st respondent company let alone its directors, but are rather strangers who are fraudulently and illegally trying to hijack and commit trespass against it. Counsel submitted that the only relevant process for 17

21 determining the issue of the plaintiffs locus standi is their statement of claim which, he further argued, disclosed their standing. In response to the appellants argument on his clients failure to file a counter-affidavit to the affidavit in support of appellants preliminary objection, counsel argued that the issue raised by the objection is purely one of law so it was absolutely unnecessary to file a counter-affidavit more so when the depositions in the said affidavit of appellants were incapable of changing the status of the suit and the facts averred in the statement of claim. For his submission that irrelevant facts need not attract a counter-affidavit counsel referred us to the cases of Maidara v. Halilu (2000) FWLR (pt. 19) 433 at 448; Akaninwo v. Nsirim (1997) 9 NWLR (Pt. 520) 255; National Bank of Nigeria Alex v. Are Brothers (1977) 6 S. C. 97 at 100; Ekekeugbo v. Fiberesima (1994) 3 NWLR (pt. 335) 707 at 730; Consolidated Breweries Plc v. Aisowerien (2002) ALL FWLR (Pt. 116) 959 at 990. Counsel also pointed out that the statement of claim did not aver at all that Messrs Abiodun Omodaunsi and Omodele Moletoba were around as in 18

22 his view was erroneously stated by appellants in their brief. He labeled that assertion of appellants a distortion of facts and went on to submit that the trial Judge correctly interpreted S. 248 (2) of CAMA the applicability of which counsel added is also an issue for the substantive trial and not a point for decision by interlocutory application. On the complaint of bias and prejudging of issue at interlocutory stage which appellants leveled against the trial Judge, learned counsel to 1st respondent submitted that it is a baseless complaint. He argued that what the learned trial judge said in the course of resolution of the issues in the objection was a mere explanation of the obvious facts contained in the statement of claim of the plaintiff, which are that appellants are trespassers who have no nexus with the 1st Respondent. He argued that the learned trial judge was entitled and indeed bound to examine the facts as contained in the statement of claim, relying on Agbaisi v. Ebikorefe (1997) NWLR (pt. 502) 630. He also submitted, relying on Lawrence v. A. G. Federation (2008) ALL FWLR (Pt. 426) 190, that allegation of bias or its likelihood must be 19

23 supported and rooted in clear, direct positive, substantial, unequivocal, real and solid evidence, which he submitted is not the case with the appellants complaint and so it should be discountenanced. Counsel finally urged us to resolve all the issues in the appeal against the appellants and dismiss the appeal. The appellants filed a reply but simply used it to try to improve and reinforce arguments earlier made in their amended brief of argument. The purpose, use and ambit of a reply brief as provided by Order 19 Rule 5 of the Rules of this Court is limited and not designed to give an appellant a second chance to improve his arguments or supply omissions in his main brief: Husseni v. Mohammed (2015) 5 NWLR (Pt. 1445) 100 at 126 (S.C). I therefore decline to waste further time on that reply. And that is convenient point for me to address the merits of the issues canvassed by parties in the appeal. In doing that, I wish to adopt the three issues formulated the appellants in their brief of argument, after all they are the ones with a grouse against the ruling of the lower Court. But in doing that, I intend to consider their issues 1 and 2 20

24 together. Those issues, to refresh our memories, are: 1. Whether the trial Court was right when it held that prior leave of Court to commence and maintain this action by the deceased respondent in a representative capacity is of no consequence, and 2. Whether the trial Court rightly applied, considered and failed to consider the provisions of Section 248 (2) of the Companies and Allied Matters Act and the Supreme Court case of NBN Ltd v. Shoyoye (1977) S. C. 181 respectively to the disclosed and evidence placed before him with respect to the standing or otherwise of the 1st respondent and the deceased respondent in this case. Though I have adopted the issues as framed by the appellants, I shall not fail to express my discomfiture with the way appellant seems to have conveniently ignored the main basis on which the lower Court dismissed their ruling, which is in fact the ratio decidendi of the ruling, to concentrate on what seems to me only auxiliary reasons the learned trial judge rightly said he only considered out of abundance of caution and for completeness for dismissing the objection. The main reason the 21

25 trial Judge gave for dismissing the preliminary objection, which I reproduced in extenso earlier in this judgment, was that the issues raised by the appellants in their preliminary objection form main issues in the substantive suit so it would be unwise of him to decide them at an interlocutory stage. Appellants have left out that reason for the ruling of the lower Court or at best simply scratched it on the surface to concentrate their attack on proper interpretation of S.303 and 248 (2) and so forth of the Companies and Allied Matters Act which the lower Court only said it pronounced out of abundance of caution and completeness only. Without first showing that the lower Court was wrong in the view it took of not deciding by interlocutory application of what it considered, rightly I think, are issues for the substantive suit, I can hardly see how this appeal can succeed, regardless of the undoubtedly ordinarily interesting issue of the proper way of commencing a derivative action under Section 303 of the Companies and Allied Matters Act 2004, which issue was incidentally exhaustively dealt with by the Supreme Court in Agip (Nig.) Ltd v. Agip Petrol 22

26 International (2010) ALL FWLR (Pt. 520) That decision would have very easily settled the application here had everything being equal in the sense that the appellants status as directors of 1st respondent is free of controversy, which unfortunately is not the case here as their status as Directors of 1st Respondent company is the main issue in the suit with the 1st and late 2nd plaintiff labeling them as strangers to 1st respondent who are fraudulently and illegally interfering with its affairs. In those circumstances where their own locus standi as Directors of 1st Respondent is the main issue in the suit, so to speak, I can hardly fathom how it would have been proper and possible for the trial judge to uphold their preliminary objection and strike out the suit of the plaintiffs on the grounds of the 2nd Plaintiff s failure to put them on notice as Directors of 1st Respondent company. The course taken by the learned trial Judge even becomes more imperative in this case where appellants themselves also raised similar allegations of fraud and questioned the now deceased 2nd plaintiff s claim of directorship. For the Court 23

27 to uphold their preliminary objection to the locus standi of the 2nd Plaintiff in the circumstances would have been tantamount to upholding their claim of directorship of 1st respondent and deciding the entire case including their accusations and counter accusations allegations of fraud and illegality on mere affidavits without putting them to test by cross-examination. Such hearing of the merits of a substantive case at interlocutory stage is not permitted in our legal system. Incidentally that point is even eloquently attested to by the arguments and cases cited by the appellants themselves on their issue 3 where they alleged bias and prejudging of main issues in the case by the trial judge in the course of ruling on their interlocutory application. It is that accusation the trial judge was trying to avoid and clearly said so in his ruling yet he is being assailed by appellants for refusing to do that. They seem to speaking from both sides of their mouth. In Agip (Nig) Ltd. v. Agip Petrol International (supra), the Apex Court, per Adekeye J.S.C., sighting a long line of cases, had this to say on this issue at p : The lower 24

28 Court obviously and rightly did not make any pronouncement on same because it would at that stage of the proceedings be clearly premature. It will amount to the Court pronouncing or deciding at interlocutory stage on the matter it is supposed to determine in the substantive suit of the case. It is a long-standing principle of Court pronounced in numerous decided cases that a Court must be cautious in its judgment at an interlocutory stage not to make pronouncement or observations on the facts which might appear to predetermine the main issue or issues in the proceedings yet to be concluded by the Court. Ejembi Eko J.C.A (as he then was) took an interesting metaphorical approach in expressing this same point when His Lordship said in Zenith Bank Plc. v. John (2013) ALL FWLR (Pt. 672) 1742 at 1763 paras B- D that: One cardinal principle guides my decision on this application. And that is; a substantive issue is never, and should never be determined at the interlocutory stage. This has been the posture of superior Courts of record in this country as can be seen, for instance, from the decision in University Press Ltd. v. I. K. Martins 25

29 (Nig) Ltd. (2000) (pt. 654) 584; Woherem v. Emereuwa (2004) ALL FWLR (Pt. 221) 1570, (2004) 13 NWLR (Pt. 890) 398 at 418. The King, as our adage says, must not stretch his neck across the hedge to have a glance at the dance troupe coming to perform in his palace. The king, in this case the learned trial Judge, Faji J., decided, correctly, to turn down the appellants invitation to take the unnecessary step of straining his neck over the hedge to pass judgment of who is the best dancer in the dance troupe, when he knows that the troupe was actually coming to his palace to perform and so he would have a better opportunity of seeing a full version of the dance to enable him arrive at a more informed judgment. His Lordship should be commended for taking that course rather than condemned. The appellants who are already accusing him of premature judgment of issues in their issue three in his appeal should have seen the wisdom in the course he took in the matter. The cases of N.B.N. v. Shoyoye (1977) 5 S.C. 181 and NDIC v. C.B.N. (2002) 3 SCNJ 75 at 75 at 89, in which the issues respectively were the proper forum to commence an action for debt, and 26

30 whether the Court s jurisdiction was ousted by the Banks and Other Financial Institutions Act (BOFID, Now BOFIA), have no application here. Parties having joined issues in their pleadings on their status as directors and who among them acted fraudulently in entering his name as director, those issues cannot be resolved by way of application on affidavits but must go through a full trial. See Tigris v. Ege (1991) S.C. 79 where the Apex Court per Ogundare J.S.C. had this to say on it: Surely where a defendant is disputing an averment of fact made in a statement of claim, the proper way to do so is not by filing an application to have the plaintiff s action dismissed in limine but to file a defence traversing that averment of fact and establishing evidence at the trial on which the trial Court will make a finding for or against the plaintiff on such averment. That is the proper approach. Interestingly, the stage was set for the trial with the filing of appellants 20-paragraph joint statement of defence and sworn witness statements. Having done that, appellants should have rather proceeded with the trial and 27

31 resolve the disputed issues once and for all. I am sure if they had taken that course rather than pursue their preliminary objection as they have done, the matter would have most likely ended by now and parties known their rights in this suit instituted since That is why this Court and our brothers upstairs have always discouraged the pursuit of interlocutory applications and appeals where such issues can be conveniently taken at the trial. I see nothing wrong with the rather commendable course adopted by the lower Court. In the event, I resolve issue 1 and 2 (original issues 2 and 3) of appellants against them. For this reason, I also decline to decide the issue of applicability of S. 248 (2) and so forth of the Companies Allied Matters Act, will rather fall into place and become more germane when the issue of who are the authentic directors of the 1st respondent is first tried and resolved. I am also unable to agree with appellants assertion that the learned trial Judge, A.O. Faji J., actually prejudged the issues in the substantive suit when he observed in his ruling that the facts before him at this (that) stage was that 28

32 the defendants are trespassers and probably inter-loppers who have no nexus with the 1st Plaintiff. In the first place the appellants cannot wish away the phrase the facts before me at this stage employed by the learned trial in that observation, which suggests that he was only referring to the facts he was bound to consider at the stage the objection was brought. Incidentally, it is settled law that in determining an application challenging in limine a plaintiffs locus standi not only is the only relevant process the statement of claim, the averments contained therein must also be deemed admitted for that limited purpose: See Bakare v. Ajose-Adeogun (2014) LPELR 2013 p. 37, per Ariwoola J.S.C.; Labode v. Otubu (2001) FWLR (Pt. 43) 207 at 229 and p The lower Court was therefore entitled at that stage to quote or paraphrase the averments in the statement of claim and take them as admitted for the purpose of the objection. In any event, appellants were not even fair to the learned trial Judge by deliberately skipping the very next statement of the trial Judge following the portion they quoted for their attack, which 29

33 part throws better light on the working of His Lordship s mind. I hereby reproduce the whole pronouncement of the learned Judge on the issue as contained at p. 245 of the records: The facts before me at this stage is that the defendants are trespassers and probably interlopers who have no nexus with 1st Plaintiff, it would therefore in my view be unjust not to allow Plaintiffs to show why there is no nexus between the 1st Plaintiff and the defendants and why they are trespassers. Also, it is imperative for the basis for saying that defendants are trespassers to be shown by credible evidence. Italics mine. This pronouncement belies the accusation of appellants of a mindset of bias that has adjudged them as interlopers and trespassers, for it is preposterous to suggest that the same person who has already made up his mind on the allegations of their opponents would in the same breath also refuse appellants application to terminate the case preliminarily because, as he clearly said, he wants their accusers to come and prove by credible evidence the allegations of trespass and so forth they made against them. An accusation 30

34 of bias should be made of sterner stuff than that; it should not be based on conjectures. This one of the appellants is in my humble view very hollow. Accordingly, I also resolve this issue against the appellants, even as I take judicial notice of the fact that Faji J. has been since transferred out of Ilorin Division of the Federal High Court and so is very unlikely to even have the privilege of trying the action on its merits. In conclusion, the appeal lacks merit; it ought to be and is hereby dismissed in its entirety. There shall be costs in favour of 1st Respondent which I asses at 100, only. CHIDI NWAOMA UWA, J.C.A.: I Agree HAMMA AKAWU BARKA, J.C.A.: Having been opportuned to have read before now the Judgment just delivered by my brother, BOLOUKUROMO MOSES UGO, JCA, I do agree with the reasoning and the conclusions reached to the inevitable conclusion that the Appeal lacks merit and it is hereby dismissed. I abide on Orders made as to costs. 31

35 Appearances: Akin Akintoye II with him, Miss O. A. Akintoye and Miss Fayokemi Oladele For Appellant(s) Wahab Ismail, Esq. with him, Miss Ganiyat Jimoh Cook and Mrs. Romoke Abdulkadir for 1st Respondent. 2nd Respondent is unrepresented. For Respondent(s)