Chief R. A. Okoya & Ors Vs S. Antilli & Ors (1990)
LawGlobal-Hub Lead Judgment Report
AGBAJE J.S.C.
The background material to this appeal is as follows. The plaintiffs, Chief R.A. Okoya, Mrs. K. Okoya and Albion Construction Ltd., sued the defendants, S. Santilli, A. Davanzo and Prince D.A. Ademiluyi in a Federal High Court Lagos Division, claiming against them the following reliefs:-
“(1) A declaration that the document, copies of which were lodged with the Registrar of Companies and the Federal Inland Revenue Department, to which the 1st and 2nd Plaintiffs were subscribers, is the only true memorandum and articles of association of the Albion Construction Co. Ltd.
(2) An injunction restraining the 1st, 2nd and 3rd defendants and/or any person acting with or on their direction or authority from conducting the affairs of the Albion Construction Co. Ltd. and in particular from operating the account of the said company in any Bank whatsoever on the basis of any memorandum and articles of association other than that mentioned in paragraph (3) hereof.
(3) A declaration that the 1st and 2nd Plaintiffs are the only lawful directors of the Albion Construction Co. Ltd. (4) A declaration that the purported appointment of the 1st and 2nd defendants as directors of the Albion Construction Co. Ltd. whether pursuant to the memorandum and articles of association of the said company or at the meeting of the Board of Directors of the Company held on 7.2.80 is illegal and null and void and of no effect.
(5) A declaration that the claim of the 1st and 2nd defendant to be owners of 40,000 shares each in the Albion Construction Co. Ltd. whether as subscribers to the memorandum and articles of association or pursuant to resolutions allegedly passed at a meeting of the Company’s Board of Directors held on 5/5/81 is unlawful and not maintainable in law or in fact. (6) A declaration that all shares held by the 3rd defendant in the Albion Construction Co. Ltd. were held by him in trust for the 1st Plaintiff and an order directing the said defendant to execute a transfer of the said shares to the 1st Plaintiff.
(7) An injunction restraining the 1st and 2nd defendants from holding themselves out as director of the 1st plaintiff company or from giving directions concerning the management and control of the said company unless and until duly appointed as directors of the said company.” After hearing the parties and their witnesses the learned trial Judge, Odunowo, J., gave his judgment in the case on 15th December, 1988 where he held as follows:-
“I am satisfied that the following decision must be made: (1) The document described as Memorandum and Articles of Association of Albion Construction Company Limited dated 16/9/76 and admitted in evidence in this action as Exhibit ‘A’ and to which the first and second plaintiffs were subscribers is the only true Memorandum and Articles of Association of the third plaintiff company.
(2) The nominal share capital of the third plaintiff company is N200,000.00 divided into 200,000 shares of N 1.00 each, and not as alleged by the defendants. (3) All the parties to this action are shareholders of the third plaintiff company: namely (1) Chief R.A. Okoya – 50% or 100,000 shares; (2) Mrs.K. Okoya – l % or 2,000 shares; (3) Mr. S. Santilli – 20% or 40,000 shares; (4) Mr. A. Davanzo – 20% or 40,000 shares; and (5) Prince D.A. Ademiluyi – 9% or 18,000 shares.
(4)The third defendant is hereby directed to execute an instrument of transfer in respect of 51% or 102,000 shares, which he holds on trust, of the first plaintiff. (5)The first, second and third defendants and/or any other person or persons acting with or on their direction or authority are hereby restrained from conducting the affairs of the third plaintiff company and in particular from operating the account of the said company in any bank whatsoever on the basis of any Memorandum and Articles of Association other than that mentioned in paragraph (1) above.”
By a notice of appeal dated 22/12/88, the defendants appealed against the whole of the decision of Odunowo, J., to the Court of Appeal, Lagos Division. For reasons hereinafter appearing in this judgment I will reproduce below the grounds of appeal in the notice of appeal without their particulars. They are as follows:- “(1) That the learned trial Judge erred in law and on the evaluation of the facts before the Court in awarding 51% percent of the adjudged 200,000 Authorised Share Capital to the 1st and 2nd Plaintiffs and in directing the 3rd Defendant to execute an instrument of transfer of the said 51 % shares to the 1st Plaintiff which the learned trial Judge adjudged the 3rd Defendant held in trust for the 1st Plaintiff.
(2) The learned trial Judge erred in law by adjudging that the 1st and 2nd Plaintiffs are Members of the 3rd Plaintiff Company. (3) The learned trial Judge erred in law in holding that the 3rd Defendant’s shareholding in the 3rd Plaintiff is 9% instead of the 21% which the Defendants had canvassed in their alternative position.
(4) The learned trial Judge erred in his evaluation of the facts and the application of law to those facts in holding and accepting the contention of the 1st and 2nd Plaintiffs that ‘the paid up share capital of the 3rd Plaintiff as at 31/5/81 stood at 200,000.” (5) That the learned trial Judge erred in law and in the evaluation of the facts placed before the court by failing to make a finding on the un-contradicted evidence that the Worker Trust held 10% of the authorised share capital of the 3rd Plaintiff. (6) The learned trial Judge erred in his evaluation of the facts before the court and in his application of law to those facts in holding that the presumption of regularity of the disputed Minutes in the minutes Book, Exhibit HH had not been displaced. (7) The learned trial Judge erred in accepting the authenticity of the Balance Sheets of the 3rd Plaintiff Company by which the paid up share Capital were supposedly made by the 1st Plaintiff, as at 31/5/81. (8) That the judgment is against the weight of evidence.”
There is a cross-appeal by the plaintiffs. As far as the present appeal is concerned, I need not say anything more about the plaintiffs’ appeal. Pursuant to an application by the defendants, for leave to appeal against the Judgment of Odunowo, J., of 15/12/88 and for a stay of Execution of the judgment, parties by their counsel appeared before Odunowo, J., on 22/12/88. For reasons hereinafter appearing in this judgment, it is necessary to set down some of the record of proceedings of that day, which is: “Chief F.R.A. Williams: When we came here this morning, we felt that there were two major defects in this application.
But we felt we can nevertheless usefully spend this morning in resolving the anxieties of my learned friend If you look at the judgment, I submit that there is nothing to stay as such. It would have been more realistic to ask for an Order that pending the determination of the appeal, the 1st & 2nd Plaintiffs shall be restrained from exercising the right attached to the shares which the court has declared to be owned by them.
But your Lordship will have to balance any such application by a consideration of our own interest, having regard to the principle that a successful party should not be deprived from enjoying the fruits of judgment. Bearing those principles in mind and having regard to all the circumstances of this case, we respectfully submit that there are 2 alternatives open to this court. These alternatives are to last until the determination of the appeal.
In the alternative, if your Lordship feels you want to hear fuller arguments, then they should rest until the determination of this motion on Notice or until further Order: (1) That the 3rd plaintiff company be managed by a Board of receivers comprising: (i) Mr. Santilli who shall be responsible for the functions at present performed by the M.D. (ii) Mr. Davanzo who shall be responsible for the functions at present performed by the director technical.
(iii) Prince Ademiluyi who shall be an adviser, without executive responsibilities, to the Board of Receivers. (iv) Three (3) nominees of the 1 St & 2nd Plaintiffs one of whom shall have executive responsibilities for the finances of the company: (2) The second condition is as follows: The business of the 3rd plaintiff company should be run by a board of receivers and managers comprising six (6) Persons as in proposal one.
The Chairman of the Board shall be an independent person with experience in business or commercial accounting to be appointed by the court. Such Chairman not to have an original vote but shall have a casting vote. These suggestions, I assume (sic) the court from the bar, are my own suggestions and they have been made in a genuine effort to see that the subject matter of litigation is preserved without injustice to either side. We have won the case substantially in the sense that we have a majority vote. CHIEF BENSON: It will be very difficult for me to accept or refuse the offers.
My Lord, I was briefed only yesterday in this matter and I am yet to have full consultations with my clients. My learned friend has made a number of remarks about their having a majority as a result of the judgment. Which judgment is being challenge on appeal, One is bound to look at the offer, without commitment or prejudice to my clients, on the face of it CHIEF WILLIAMS: I will with respect withdraw my proposals because there is no reasonable response. CHIEF BENSON: ….. He makes his offer and if he withdraws it good luck.” The application was then adjourned till 2/2/89 for hearing. Giving his ruling on the application on 1/3/89 the learned trial Judge Odunowo J. held as follows:-
First: “Just before the motion was moved, Chief Williams, S.A.N., conceded that the order directing the 3rd defendant to execute an instrument of transfer in respect of 51% or 102,000 shares which he holds on trust for the plaintiff could be stayed without prejudice to the operation of all the remaining declarations granted by the court, including the declaration as to the number of shares owned by the 1st and 2nd defendants in the company.” Second: “Finally, as was pointed out by Eso, J.S.C., “….a stay of execution is never to be used as a substitute for obtaining the judgment which the trial court has denied a party…” (See Okafo V Nnaife (1987) 4 N.W.L.R. (Pt. 64) at page 138). The conclusion I have reached after deep reflection does not persuade me that there is any equitable basis for the present application which must be and is hereby dismissed accordingly, subject to the concession granted by the plaintiffs in respect of declaration (4) above. By an application dated 2nd March, 1989 the defendants applied to the Court of Appeal for the following reliefs:-
“(1) An order of this Honourable Court staying further proceedings on the declarations as contained in the judgment of Hon. Justice T.A. Odunowo of the Federal High Court, Lagos; (2) An order staying execution of the orders contained in the same judgment given on the 15th day of December 1988 pending the determination of the appeal lodged by the Defendants / Appellants / Applicants to this court; (3) And for such further order or other orders as this Honourable Court may deem fit to make in the circumstances.” There was an objection by the counsel for the plaintiffs by way of a Notice of Preliminary Objection dated 20/3/89 to this application in the following terms:-
“NOTICE OF PRELIMINARY OBJECTION TAKE NOTICE that at the hearing of the motion on Notice herein dated the 2nd day of March 1989, the above-named Plaintiffs intend to raise the following preliminary objections:- (i) The prayer for “staying further proceedings on the declarations as contained in the judgment” is not a relief known to the law. (ii) No such prayer was ever moved in the court below and so it cannot be moved in this court.
(iii) The prayer for “staying execution of the orders contained in the judgment” is incompetent and untenable as there is nothing left to stay. Dated this 20th day of March 1989.” Ruling on the preliminary objection on 27/4/89 the Court of Appeal, co ram Akpata, Babalakin and Kalgo JJ.C.A., as per the lead ruling of Akpata, J.C.A. in which the others concurred held as follows:- “I agree with Chief Williams that the application for an order staying further proceedings on the declarations as con
Other Citation: (1990) LCN/2441(SC)
