Alhaji Immam N. Abubakri & Ors v. Abudu Smith & Ors (1973)

LawGlobal-Hub Lead Judgment Report

O. ELIAS, C.J.N. 

This is an appeal from the judgment of Odesanya J., in Suit No. LD/485170 delivered in the High Court of Lagos State on 8th March, 1971, in which he dismissed the plaintiffs’ claims for:

(a) an order restraining the defendants from holding out themselves as members or officers of the Executive Committee of the Jamat-ul-Muslim of Lagos,

(b) a true and accurate statement of account of the monies and other collections made by the defendants and payment over to the plaintiffs or a duly elected treasurer of the religious body, and

(c) surrender of all documents, including files, letters, books and paraphernalia of office, and other properties of the body held by the defendants as such officers.

The defendants filed no statement of defence to the plaintiffs’ statement of claim but applied instead for the dismissal of the suit on the two alternative grounds (a) that even if the plaintiffs’ averments in their statement of claim were admitted or established, they could not obtain judgment against them either jointly or severally, or (b) that their statement of claim discloses no cause of action and is frivolous, vexatious and an abuse of the process of the court.

The plaintiffs’ case is that they sued, not in a representative capacity, but simply as members of the Jamat-ul-Muslim of Lagos, and that the first plaintiff was the General Secretary of the Jamat, the second plaintiff was the Treasurer, both of them having been duly elected under the constitution of the religious community. It was further averred that the defendants later abrogated the constitution and then elected officers of the Jamat under a new set of rules and regulations established by them, and that they wrongly retained in their possession all the records, books, monies and other properties of the Jamat, and appointed members of an executive committee who thereby usurped the offices and functions of the duly elected executive committee under the original constitution, and collected funds on behalf of the Jamat for which they had failed to account.

The learned trial judge, for the purpose of the application before him, accepted all these allegations in the statement of claim as established, but nevertheless ruled that the plaintiffs’ claim for an injunction failed because they had no locus standi to bring the suit, since they did not sue in a representative capacity nor join the Jamat either as the plaintiff or as the defendant in a suit in which the main claim concerns the rights of the community as a community, and no private or individual interests of the plaintiffs were involved: Edwards and Anor. v. Halliwell and Ors. [1950] 2 All E.R. 1064, at p. 1066, applying the rule in Foss v. Harbottle 67 E.R. 189. In respect of an order for account, the learned trial judge also ruled against the plaintiffs on the ground that the funds and other properties being asked to be accounted for and paid over to them or to some other person, really belong to the Jamat and to no one else. Only the Jamat is entitled to demand an account and payment over to it of whatever is its due, but the Jamat is not a party to the suit. With regard to the third claim for the surrender of the records, the books and other properties of the Jamat, it is equally clear that only the Jamat can sue and, if it refused to join as plaintiff, then it should be joined as a defendant.

The learned trial judge rejected the plaintiffs’ contention that the rule in Foss v. Harbottle is confined to limited liability companies and is inapplicable to unincorporated bodies or associations. He held that, in Alhaji Agbaje and Ors. v. Chief Salami Agboluaje and Ors., S.C. 236/1967 decided on 20th February, 1970, the Supreme Court stated and applied the rule in Foss v. Harbottle to parties who were members of an unincorporated society, called the Islamic Missionary Society.

It is against these rulings of the learned trial judge that the present appeal has been brought on the following ground:

“The learned trial judge misdirected himself in law in holding that the plaintiffs have no capacity to bring this action in that the relief claimed by them are wrongs to the Jamat and that they as individuals have no justifiable remedies for the wrongs alleged in the writ and in the statement of claim.

Particulars of Misdirection

The reliance on the rule in Foss v. Harbottle in the present case is misconceived. The statement of claim shows clearly that the acts of the defendants complained of were:

(a) Ultra vires of the constitution of the Jamat.

(b) Oppressive or and unfair to the plaintiffs and fraud on them.

(c) The decision of the Supreme Court of Nigeria in S.C. 236/67:

Alhaji Agbaje and Others v. Chief Salami Agboluaje and Others did not support the ruling of the learned trial judge but was clearly in conflict with it.”

Mr Sikuade, learned counsel for the appellants, in arguing the appeal submitted that the appellants have a locus standi to bring the suit, since the rule in Foss v. Harbottle does not apply to unincorporated associations such as the Jamat-ul-Muslim but is confined to limited liability companies. He further submitted that the learned trial judge’s reference to the rule in Foss v. Harbottle having been mentioned in Alhaji Agbaje and Ors. v. Chief Salami Agboluaje, S.C. 236/67 is incorrect, as no such reference was made in that judgment. It was also his contention that the authorities relied upon by the respondents in the lower court were in respect of limited liability companies only; and he cited Heyting v. Dupont and Anor. [1963] 3 All E.R. 97 in which the action was held to be not maintainable because the wrong complained of was one against a company itself. We observe, however, that the Alhaji Agbaje case (supra) deals with an action for a declaration that the constitution of the body in question was the 1949 edition and not the 1966 edition as well as an injunction to restrain the defendants, whereas the present appeal seeks only an injunction against the respondents as well as an account and a return of money and property. And, although Mr Sikuade is right in saying that there is no reference in that case to the rule in Foss v. Harbottle, we think that the real point to which it is important to refer, and which the learned trial judge might have stressed, is this statement in the Supreme Court judgment:

“It is trite law that a court cannot make an unenforceable order. In a case of this kind, in view of the undisputed averment that the amendments complained of were popular, if even the evidence of the appellants was accepted and the relief sought granted, there would have been nothing to prevent the respondents soon thereafter from summoning a meeting of the Society and passing a proper resolution ratifying the amendments, the subject-matter of the complaint. In a recent case the Court of Appeal in England in reversing Pennycuick, J. held that even in the absence of an express power to alter the rules governing a club, such power can be implied from a favourable response by a majority of members by their acquiescence in a change of constitution. See Abbatt and Others v. Treasury Solicitor and Others [1969] 1 W.L.R. 1575. “Learned counsel for the appellants finally submitted that the learned trial judge was wrong to have held that the appellants have no locus standi since, in his view, the appellants have some personal rights in the nature of a contractual entitlement to protect by bringing their action. In support of this assertion, he cited Bello Asani and Ors. v. Yesufu Adeosun (1966) N.M.L.R. 268, in which there was a claim by someone that he was Chief Imam at Ile-Ife and a counter-claim by another to the same office of the religious community. We would observe that this case is not as simple as this, because the question of the rule in Foss v. Harbottle was never raised either in counsel’s arguments or in the judgment, although, as the learned trial judge said, there was evidence on the face of the record that the plaintiffs in one of the two consolidated actions had sued in a representative capacity; we should also add that exhibit E was the of a resolution attached to the statement of claim which clearly purports to have been adopted by the entire Moslem community of Ife in support of the majority vote by which Yesufu Adeosun had been duly elected to the office of Chief Imam. Moreover, the Supreme Court decision in Bello Asani v. Yesufu Adeosun is not free from difficulties since it seems to say in effect that both the original action and the counter-claim were in order; that is to say, the judgment of the lower court in favour of Yesufu Adeosun was not set aside by the Supreme Court, while the action brought by Bello Asani was held by the same Court to have been wrongly dismissed by the lower court. The inconclusive nature of the decision in this somewhat unsatisfactory case is shown by the following observation of the Court itself: “We observe that the success of each group on its claims involves orders of injunction against the respective candidates from acting or holding themselves out as the Chief Imam. We do not think that we should exclude from consideration the possibility of either of the present candidates being properly and duly selected and installed as a Chief Imam at a future date and therefore the orders of injunction may have to be amended. Neither counsel has addressed us on this point and we propose, therefore, to hear argument on the form of order of injunction appropriate in the circumstances. We shall therefore set down this matter for argument at a future date to be agreed.”

There is no record of what final order was eventually made or what further arguments were presented by counsel on both sides. We suspect that the “inarticulate major premise” on which both Oyemade, J., in the High Court at Ife, and the Supreme Court on appeal based their findings is the assumption that at least one of the two consolidated actions had been brought in a representative capacity: for example, Oyemade, J., said inter alia that Bello Asani, in order to obtain judgment in his favour “must be elected by a gathering of the whole community. The right to be led by an Imam in prayers is the right of the community as a whole’. (The italics are ours); similarly, the Supreme Court said: “We observe that the Ife Moslem community as such is an unincorporated association of persons. There is no evidence of any rules which govern the practice of the community in the appointment of a Chief Imam and as learned counsel for the appellants submits, the rules of the common law to the effect that in such cases the appointment should be made by the entire community as such would apply in the appointment of a Chief Imam unless the application of the common law was excluded by particular rules of Moslem law or of Native Law and Custom”. The Supreme Court decision would seem to amount to a ruling of nonsuit against each of the opposing factions thus leaving the way open either for the Moslem community itself to sue or be sued in respect of its right to be led by an Imam of its choice, or for the community to convene a meeting to choose its Imam in a definite manner. It would, therefore, appear that both courts decided to intervene in the dispute between the two factions of the Moslem community at Ife because the evidence adduced by both sides showed abundantly that the community was divided against itself. In the present appeal, on the other hand, the question of the court’s jurisdiction was raised as a preliminary objection, before evidence had been led on either side; there is also the fact that acquiescence on the part of the majority could be presumed from the appellants’ pleadings which are entirely silent on the claim or the position of the Jamat in the whole issue. Mr. Ajose-Adeogun, learned counsel for the respondents, replied to Mr. Sikuade’s first submission that the rule in Foss v. Harbottle is confined in its operation only to limited liability companies by pointing out that, although that was the original scope of the rule, it has nevertheless since been extended in its ambit to unincorporated bodies like trade unions and other entities of the kind in which there are some measures of attribution of legal personality: see, e.g. Amalgamated Society of England and ors v. Jones 29 T.L.R. 484, at p. 485; Cotter v. National Union of Seamen [1929] 2 Ch. 58; and Schweikert v. Burnell (1953) N.S.W. 821. Learned counsel then made two submissions. One is that the appellants have no locus standi in this case because their main complaint is that they have been kept out of their offices; they have not sued as members of the Jamat community or of its executive committee, on behalf of the community. There is no evidence of any breach of a contract or that their personal rights have been infringed in any way: McDougall v. Gardiner (1875) Ch. D. 13, at P. 21.

The second submission is that even if the appellants’ complaint were established, the court should not make an unenforceable order: see the passage cited above from the Alhaji Agbaje case and also Schweikert’s case per Lord Richardson. We consider that there is force in these submissions of learned counsel for the respondents.

Let us first take the question of the present scope of the rule in Foss v. Harbottle. In McDougall v. Gardiner (1875) Ch. D. 13, in which a shareholder brought an action for a declaration and an injunction against the directors of a company alleged to be carrying out certain proposed arrangements in the company’s affairs, Mellish, L. J. observed, at pp. 25-6, as follows:

“In my opinion, if the thing complained of is a thing which in substance the majority of the company are entitled to do, or if something has been done irregularly which the majority of the company are entitled to do regularly, or if something has been done illegally which the majority of the company are entitled to do legally, there can be no use in having a litigation about it, the ultimate end of which is only that a meeting has to be called, and then ultimately the majority gets its wishes. Is it not better that the rule should be adhered to that if it is a thing which the majority are the masters of, the majority in substance shall be entitled to have their will followed If it is a matter of that nature, it only comes to this, that the majority are the only persons who can complain that a thing which they are entitled to do has been done irregularly; and that, as I understand it, is what has been decided by the cases of Mozley v.Alston (1) and Foss v. Harbottle (2). In my opinion that is the rule that is to be maintained. Of course if the majority are abusing their powers, and are depriving the minority of their rights, that is an entirely different thing, and there the minority are entitled to come before this Court to maintain their rights; but if what is complained of is simply that something which the majority are entitled to do has been done or undone irregularly, then I think it is quite right that nobody should have a right to set that aside, or to institute a suit in Chancery about it, except the company itself.”

That this clear statement of the Foss v. Harbottle rule with regard to alleged irregularities in matters of the internal management of a company is applicable to the case of a registered trade union was expressly laid down in Cotter v. National Union of Seamen [1929] 2 Ch. 58 by Romer, J., when he said, at p. 71:

“It is said, however, by the plaintiffs in the present action that this principle has no application to a trade union, inasmuch as a trade union differs in material respects from an incorporated company. There are no doubt many and important differences between the two bodies, but in the case of a registered trade union are those differences material to the present question In my opinion they are not. The principle, as I understand it, does not depend upon the existence of a corporation. The reasoning of it surely applies to any legal entity which is capable of suing in its own name and which is composed of individuals bound together by rules which give the majority of them the power to bind the minority. There does not appear to be in the books any actual decision to the effect of showing that the principle applies to such a body as a registered trade union. There is, however, a dictum of Russell, J. to that effect in Bloxam v. Amalgamated Marine Workers’ Union.”

The action by two of the plaintiffs in the case failed because it was brought not merely in their capacity as members of the trade union but in their capacity as officials, suing on behalf of themselves and the other members of the union other than the individual defendants, against the directors in connection with two resolutions irregularly adopted at a meeting of the union. On appeal, the Court of Appeal unanimously affirmed Romer, J.’ s extension of the rule in Foss v. Harbottle to unincorporated associations.

We, therefore, hold that the rule in Foss v. Harbottle applies to an unincorporated association possessing a constitution or a set of rules and regulations entitling it to sue and be sued as a legal entity, and that the Jamat-ul-Muslim of Lagos is such a body. It follows that the rule in Foss v. Harbottle applies to this religious body in the same way and to the same extent as it does to a limited liability company or a trade union.

As for the appellants’ contention that their personal or contractual rights have been infringed, this does not seem to us to be borne out by their pleadings. Where is the breach of contract What personal rights of the appellants have been violated They claim that new officers have been elected in their places, that books and other articles of property of the Jamat are being wrongly withheld by the respondents, and that funds of which the Jamat is the beneficial owner should be paid over to them or to some other person appointed by the Jamat. But the Jamat is not a party to the action nor have they sued on its behalf. In Edwards and Anor. v. Halliwell and Ors. [1950] 2 All E.R. 1064, Jenkins, L.J. said as follows, at pp.1066-1067

“The rule in Foss v. Harbottle (1), as I understand it, comes to no more than this. First, the proper plaintiff in an action in respect of a wrong alleged to be done to a company or association of person is prima facie the company or the association of persons itself. Secondly, where the alleged wrong is a transaction which might be made binding on the company or association and on all its members by a simple majority of the members, no individual member of the company is allowed to maintain an action in respect of that matter for the simple reason that, if a mere majority of the members of the company or association is in favour of what has been done, then cadit quaestio. No wrong had been done to the company or association and there is nothing in respect of which anyone can sue. If, on the other hand, a simple majority of members of the company or association is against what has been done, then there is no valid reason why the company or association itself should not sue. In my judgment, it is implicit in the rule that the matter relied on as constituting the cause of action should be a cause of action properly belonging to the general body of corporators or members of the company or association as opposed to a cause of action which some individual member can assert in his own right.”

It is necessary to add that the rule would not apply to individual members who can establish that their personal rights, as distinct from those of the union (or the Jamat in the present case), have been invaded. Thus, in Heyting v. Dupon and Anor. [1963] 3 All E.R. 97, the court declined to entertain a suit brought by a plaintiff shareholder against a director and the company for payment of damages by the first defendant to the company for misfeasance as a director, it being held that the rule in Foss v. Harbottle precluded the exercise of jurisdiction by the court. The action, however, proceeded only in respect of the personal claims which both parties made against each other in respect of their respective shareholding properties.

We are also of the view that, even if the appellants’ allegations are taken as established, this court should not make an order which is unenforceable or of no avail, for there is nothing to prevent the Jamat, the acquiescence of the general members of which is presumed from their silence on the various complaints made by the appellants, from convening a meeting after our ruling and restoring the respondents to the status quo ante: Alhaji A. Agbaje and Ors. v. Chief Salami Agboluaje (cit. supra).

For the various reasons given above, this appeal fails and is dismissed, with costs assessed at #102 in favour of the respondents.

Appeal dismissed.

Other Citation: (1973) LCN/1684(SC)