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CITEC INTERNATIONAL ESTATES LTD & ORS v. JOSIAH OLUWOLE FRANCIS & ORS.
SUPREME COURT OF NIGERIA
(RHODES-VIVOUR; KEKERE-EKUN; NWEZE; AUGIE; ABBA-AJI, JJ.SC)
BACKGROUND FACTS
Citec Worldwide Estates Ltd. (The first Appellant) is a restricted legal responsibility firm with a share capital of two million strange shares. Whereas Josiah Oluwole Francis, Mrs Josiah Olusola Abiodun; Josiah Michael; Fasubaa Albert Ademola (The first – 4th Respondents) owned 95% of the share capital, Bello Saka Oludare (The 2nd Appellant) owned the stability of 5%. The first, 2nd, 4th Respondents and the 2nd Appellant have been the unique administrators of the corporate. By an strange decision handed, the share capital was elevated to 10 million. It was the allegation that the corporate held board conferences whereby the first Respondent was eliminated as chairman and his official residence and car withdrawn and no due course of was adopted to take away him. In one other board assembly, it was alleged that regardless of the absence of the first – 4th Respondents as a result of they weren’t given discover of assembly and therefore there was no quorum, some essential resolutions have been taken. Moreover, in one other assembly, the names of the first – 4th Respondents have been eliminated as signatories to the corporate’s account, their homes have been put up on the market, they have been suspended, and their salaries have been stopped. Thus, the first – 4th Respondents have been disadvantaged of their rights as shareholders, administrators and administration employees of the corporate with out discover to them and with out the chance of being heard. They consequently sued on the Federal Excessive Court docket, Abuja (trial courtroom), looking for declaratory and injunctive reliefs to be able to restore them to their unique positions within the firm and their rights and entitlements. The go well with was challenged by the Appellants after being served, that the trial courtroom didn’t have the jurisdiction to entertain the go well with. The trial courtroom granted the applying of the Appellants.
Aggrieved, the first – 4th Respondents appealed the choice of the trial courtroom, to the Court docket of Enchantment (decrease courtroom), and the trial courtroom’s choice was put aside. Additionally aggrieved by the choice of the decrease courtroom, the Appellants appealed to the Supreme Court docket. One of many points raised for dedication was: Whether or not or not the decrease courtroom was proper when it held that the first – 4th respondents possess the locus standi to institute this motion.
ARGUMENTS
Discovered counsel for the Appellants said the settled place of the regulation concerning locus standi – {that a} claimant would solely have locus standi the place the reliefs sought would confer some profit on him. He asserted that the complaints of the first – 4th Respondents mirror the incorrect accomplished to the first appellant by the 2nd – fifth Appellants, and that the wrongs don’t mirror a violation of the first – 4th Respondents’ private rights. He said that the complaints relate to the inner administration of the corporate and that it isn’t the follow of the courtroom to intrude with the inner administration of corporations. On this observe, counsel said additional that the truthful listening to provisions of part 36(1) of the 1999 Structure, as amended, don’t apply to the Board Conferences and Annual Common Conferences of the first appellant, which is an organization restricted by shares, and that the provisions are restricted to the proceedings earlier than courts and tribunals established for the dedication of the civil rights and obligations of litigants. In submission, counsel said that there are neither specific nor implied provisions within the 1st Appellant’s Memorandum and Articles of Affiliation, which assure truthful listening to within the allotment/redistribution of shares, removing and appointment of administrators or modifications within the signatories to the first Appellant’s accounts. He posited that even when there have been such provisions, they might solely qualify as civil rights or a Director’s proper, which is outdoors the scope of part 36 of the 1999 Structure as amended.
In competition, the first – 4th Respondents’ counsel said that truthful listening to at administrative proceedings, resembling firm conferences, can be assured underneath the principles of pure justice, and in addition that the precise to truthful listening to at firm conferences is expressly assured by CAMA in addition to the Firm’s Articles of Affiliation. Discovered counsel submitted that assuming with out conceding that the Appellants are appropriate in stating that part 36 of the 1999 Structure, as amended, isn’t relevant to the conduct of firm conferences, the provisions of CAMA and the related clauses within the Articles of Affiliation referring to notices of conferences, assure the first – 4th Respondents’ proper to truthful listening to and the choice of the decrease courtroom shouldn’t be put aside on this floor.
DECISION OF THE COURT
In resolving this challenge, the Supreme Court docket held that:
There isn’t a doubt that no dedication involving the civil rights and obligations might be correctly made, till the individual whose civil rights and obligations could also be instantly affected, has been notified of the matter and given the chance of answering the case in opposition to him. In as far as the corporate’s Memorandum and Articles of Affiliation make provision for the giving of discover for conferences to shareholders, it follows that these entitled to be given discover of such conferences are entitled to take part in and contribute at such conferences and to be a part of no matter decision may be reached thereat. It’s settled regulation that even the proceedings of a non-judicial or administrative physique have to be carried out in accordance with the rules of pure justice.
Challenge resolved in favour of the Respondents.
A. M. Kayode, Esq., C.I.A. Ofoegbunam, Esq., and A. F. Obiwumma, Esq., for the Appellants
Kehinde Ogunwumiju, SAN., Olumide Adekunle Esq., Saadu Lukman, Esq., and Funmilayo Longe Esq., for the first – 4th Respondents
Olayinka Adedeji, Esq., for the fifth Respondent
O. O. Olowolafe, Esq., O. O. Owonla, Esq., for the sixth Respondent
This abstract is absolutely reported at (2024) 4 CLRN in affiliation with ALP NG & Co.
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