Chief R.A. Okoya Vs S. Santilli (1994)

LawGlobal-Hub Lead Judgment Report

BELGORE, JSC.

Despite the rambling seventy-three paragraph statement of defence in answer to the statement of claim, it is clear that the issues between the parties at the trial court through Court of Appeal can be summarised as follows:

(a) Which is the real Memorandum and Articles of Association between the two competing ones?

(b) What is the share capital of the company?

(c) Who are the shareholders (members) of the company, Albion Construction Company Limited?

The Federal High Court resolved questions (a) and (b) in favour of the plaintiffs: but question (c) was not resolved in their favour. The plaintiffs then appealed to the Court of Appeal just as the defendants also did on questions (a) and (b). The Court of Appeal, upholding the decision of Federal High Court on questions (a) and (b) set aside the decision on question (c) and proceeded to make ancillary orders in respect of its decision on this question.

To have a thorough grasp of this matter, it is pertinent to quote portions of the pleadings after summarising what the entire action is all about:

Albion Construction Limited, the third plaintiff in this case, was incorporated in 1976 under Companies Decree, 1968 and was given a certificate of incorporation No. RC 19475.

The subscribers to the Memorandum and Articles of Association were the 1st plaintiff and 2nd plaintiff who are husband and wife, each taking up a share.

The Memorandum and Articles of Association of the Third defendant company lodged with the Companies Registry could not be found in the file at Abuja and a copy had to be certified as true copy which later became Exhibit A in this case.

Then the Statement of Claim continued as follows:-

“20. The 1st and 2nd defendants are qualified as persons resident outside Nigeria” within the meaning of that expression in Section 10 of the Exchange Control Act, 1962. Accordingly, the permission of the Federal Minister of Finance is required whenever the said defendants, in their capacity as persons so qualified want –

(a) the 3rd plaintiff company to create any interest in its shares in favour of either of the said defendants or

(b) any of the existing shareholders to transfer any of his or her shares to either or both of the said defendants or

(c) the 3rd plaintiff company to issue any of its shares to either or both of the said defendants.

21. At no time was any application made to the Federal Minister of Finance by or on behalf of the 1st and 2nd defendants for the necessary permission to enable –

(a) the 3rd plaintiff Company to create any interest in its 200,000 shares of N1.00 each in favour of either of the said defendants or

(b) the 1st plaintiff to transfer any of his shares or the 2nd plaintiff to transfer her share to either or  both of the said defendants or

(c) the 3rd plaintiff to issue any of its shares to either or both of the said defendants.

22. The 1st and 2nd defendants, without the approval of the Federal Minister of Finance as required by Section 10 of the Exchange Control Act, 1962 have falsely and or unlawfully put forward the claim that each of them own N40,000.00 worth of shares in the 3rd plaintiff company and procured false documents to bolster up their claim.

Particulars

(i) The said defendants procured the printing of a false memorandum of association showing that each of them were subscribers to the said document of 40,000 shares each.

(ii) The said defendants, aided and abetted by the 3rd defendant procured the making of a false “Extract” of the Minutes of an alleged meeting of the Boards of Directors claimed to have been held at the registered office of the 3rd plaintiff company on 5th May, 1981 at 10 a.m. when in fact no such meeting was held.

(iii) The said defendants procured the Secretary of the Company to represent to the Federal Minister of Finance that as at 23/3/84 Nigerians held N120,000 worth of shares in the 3rd plaintiff company thereby making N80,000 worth of shares available for subscription by non-resident of foreign shareholders.

23. The plaintiffs will contend at the trial of this action that at all times material to this action the 3rd plaintiff Company having issued all its shares to the 1st and 2nd plaintiffs there are no shares available to be issued to the 1st and 2nd defendants

24. The plaintiffs will contend at the trial of this action that the claim of the 1st and 2nd defendants to be owners of 40,000 shares each in the 3rd plaintiff Company whether as subscribers to the Memorandum and Articles of Association or pursuant to resolutions allegedly passed at an alleged meeting of the said Company Board of Directors held on 5.5.81 or otherwise howsoever is unlawful and not true in fact or maintainable in law.

25. The plaintiffs will at the trial of this action rely on the following documents –

(i) all relevant documents relating to the 3rd plaintiff Company registered in the Company’s Registry;

(ii) all audited accounts of the 3rd plaintiff as at May, 1979 up to date;

(iii) all relevant correspondence between the 3rd plaintiff Company and the Federal Ministry of Finance or the Nigerian Enterprises Promotion Board;

(iv) all relevant minutes of meetings of the Board of Directors and of the Annual General Meetings and the Extra-ordinary General Meetings of the 3rd plaintiff Company;

(v) letter dated 24.8.76 addressed by Rasaki Okoya Trading & Sons to Messrs Adelusi Ojo & Co.

Whereupon the plaintiffs claim –

(1) A declaration that the document described as Memorandum and Articles of Association of Albion Construction Limited dated 16/09/76 to which the 1st and 2nd plaintiffs were subscribers is the only true Memorandum and Articles of Association of the 3rd plaintiff Company.

(2) In the alternative to claim (1), a declaration that the aforesaid document is a true and authentic copy of the only document submitted for registration to the Registrar of Companies by the promoters of the 3rd plaintiff Company, and admitted in evidence in this action as Ex. A and

(3) An injunction restraining the 1st, 2nd and 3rd defendants and/or any other person acting with or on their direction or authority from conducting the affairs of the 3rd plaintiff and in particular from operating the account of the 3rd plaintiff in any bank whatsoever on the basis of any Memorandum and Articles of Association other than that mentioned in paragraph (1) of this hereof.

(4) In the alternative to (3) an injunction restraining the 1st, 2nd and 3rd defendants and/or any other person acting with or on their direction or authority from conducting the affairs of the 3rd plaintiff company in any Bank whatsoever on the basis of the document purporting to be the Memorandum and Articles of Association of the 3rd plaintiff Company and carrying the signatures of the 1st and 2nd plaintiffs as well as the three defendants as subscribers.

(5) A declaration that the nominal share capital of the 3rd plaintiff company is N200,000.00 divided into 200,000 shares of N1.00 each.

(6) A declaration that the 1st and 2nd defendants are not shareholders of the 3rd plaintiff company.

(7) A declaration that all shares held by the 3rd defendant in the 3rd plaintiff company are held by him in trust for the 1st plaintiff and an order directing the 3rd defendant to execute an instrument of transfer in respect of the said shares in favour of the 1st plaintiff”.

The defendants on their part first raised objection, albeit lamely, that the first and second plaintiffs had no locus to sue as they were no longer members of the company and at any rate should not have joined the third plaintiff, the company, as plaintiff. These preliminary skirmishes were quickly dealt with by Odunowo, J. the trial Judge who overruled the objection. Nothing more is heard of this. But it must be stated that the plaintiffs had earlier pleaded Clause 15 of Articles of 3rd plaintiff that the “subscribers to the Memorandum of Association shall constitute the Original Boards of Directors”. At its first Annual General Meeting on 7th February, 1980, it was resolved that “1st and 2nd plaintiffs as well as 1st and 2nd defendants shall be Directors of the Company. The nominal capital of the third plaintiff would be N200,000 and without the knowledge of 1st and 2nd plaintiffs a purported Extra-ordinary General Meeting was held on 16th January, 1987 at which only the defendants were present whereby a resolution was passed to increase the nominal share capital of the Company to N500,000.00 of N1.00 each. The 1st and 2nd defendants who were not shareholders were invited to the meeting while the 1st and 2nd plaintiffs were not invited or intimated of the meeting, the third defendant, assuming he was lawfully a shareholder could not form a quorum for the meeting. Up to 31st May, 1980 when the audited account of the Company was approved only N2.00 worth of shares was fully paid up by 1st and 2nd plaintiffs. However, by 31st May, 1981 the 200,000 shares had been fully paid up by 1st plaintiff paying N199,998.00 for the remaining shares through Directors’ current account to the share capital of the Company. Thus, no more shares were available for allotment.

The defendants in their statement of defence particularly in paragraph 19 thereof, inter-alia averred.

“……….. 1st and 2nd defendants upon leaving Cappa and D’alberto Ltd sought to team up with Nigerian Partner to go into construction Industry whereupon the 1st and 2nd plaintiffs approached them with a proposal to set up business in partnership to be organised through Albion Construction Ltd”.

Albion Construction Ltd. was then legally incorporated but was dormant and the 1st and 2nd plaintiffs were the only shareholders and members. It was because of this that a partnership agreement was entered into between 1st and 2nd plaintiffs, of the one part and 1st and 2nd defendants of the other part.

That was on 30th of June, 1978. This partnership agreement is Exhibit SS. Exhibit SS is an interesting document. It is no more than what it says: an agreement for partnership for the running of third defendant and to share profits in a certain proportion. This has nothing to do with the shares in Albion Construction Ltd., it only relates to its running through the expertise of 1st and 2nd defendants. Having explained earlier the claim of the plaintiffs, the defendants’ stand is on the following pedestal in their Statement of Defence in paragraph 72 as follows:

“72. The defendants jointly and severally in response to the reliefs sought by the 1st and 2nd plaintiffs in their Statement of Claim shall seek the Court to find as follows:

(i) A declaration that the Memorandum and Articles of Association purportedly certified on the request of their solicitors by the office of the Registrar of Companies on 28th March, 1988 was procured irregularly and in breach of laid down procedures without satisfying the Registrar of Companies as to the authenticity of the document.

(ii) That the defendants are lawful directors and shareholders of Albion Construction Ltd and that from 1984 when the 1st and 2nd plaintiffs resigned their membership and directorship of Albion Construction Ltd. they automatically ceased to be members and directors of the Company and accordingly have no say in the affairs of the company.

(iii) That the authorised share capital of Albion Construction Ltd. is now N500,000.00.

(iv) That no shares are held in trust for 1st plaintiff by the 3rd defendant”.

They then sought the Court to dismiss the plaintiffs’ case in its entirety. The trial Court made some remarkable findings, to wit:-

1. That the company at formation had only two members, 1st and 2nd plaintiffs who then subscribed to one share each out of the authorised share capital of N200,000.00.
2. That Exhibit A1 a purported Memorandum and Articles of Association of the 3rd plaintiff (Company) was bogus, meaning it was not genuine and the Court was satisfied that the one tendered by the plaintiffs, Exhibit A was the genuine and authentic Memorandum and articles of Association.
3. That the share capital of the company remained at N200,000.00 and has never been increased to N500,000.00 as claimed by the defendants as of 31.5.81.
4. That the defendants, despite the fact that no more shares were available for allotment still had shares in the company even though 1st plaintiff had made up the 200,000 shares by payment from his current account of N199,998.

It is not contested that the 1st and 2nd plaintiffs were the founding members as well as directors of 3rd plaintiff company. They remained so from 1976 and were still so from around February, 1980 as it is borne out in paragraph 13 of Statement of Claim and paragraph 15 of Statement of Defence. The 3rd defendant claims that he became a director of the Company on 16th October, 1981 well after 31st May, 1981 when 1st plaintiff acquired more shares to make the N200,000.00 nominal capital. The 1st and 2nd defendants brought in money from foreign country “for the purpose of paying for shares” allegedly allotted to them well after 31st May, 1981 when all the shares in the 3rd Company had been fully allotted.

The Federal High Court identified, as I said earlier, Exhibit A as true and authentic Memorandum and Articles of Association of 3rd plaintiff Company and that Exhibit A1, tendered by the defendants is bogus and not genuine: the meaning of this is that Exhibit A1 was forged. The same Court held that as of 31st May, 1981 the share capital of the Company stood at N200,000.00. As for the identity of the shareholders, the trial Judge went into arithmetical exercise of apportioning shares despite earlier holding that all the shares had been taken up by 31st May, 1981. This led to the appeal by both parties to the Court of Appeal where resolution of who owned what shares was resolved against the plaintiffs’ contention and thus this appeal. The plaintiffs then formulated the following issues for determination in line with the grounds of appeal:

1. The Shares of 1st and 2nd plaintiff

Whether the 1st and 2nd defendants ever acquired shares by transfer from the 1st plaintiff.

1. Shares of the 1st and 2nd defendants:

Whether the court below was correct in failing to consider and uphold the contention of the plaintiffs that by 31.5.81, there were no shares available to be issued to the 1st and 2nd defendants at the time they claimed to have paid for shares allegedly allotted to them.

1. The shares of 3rd defendant

Whether the court below ought to have held that:

(i) the transfer (and accordingly the underlying contract) whereby in exchange for shares transferred to him by the 1st plaintiff, the 3rd defendant was obliged and required to participate in the management and running of Albion Construction Limited, was one which was impliedly prohibited by Section 2(b) of the Code of Conduct for Public Officers under the 1979 Constitution and is therefore illegal and void:

(ii) Whether the shares held by the 3rd defendant were held by him in trust or for his own benefit.

1. Court of Appeal’s Order on Injunction:

Whether the order of the Court of Appeal setting aside the order for injunction made by the Federal High Court was justified”.

Going by the issues raised. I ask, what are the shares held by the first and second plaintiffs? These two persons were the only subscribers to the Memorandum and Articles of Association in 1976, each holding a share, and that was about two years before they met the 1st and 2nd defendants. The first plaintiff claimed he paid for additional N199,998 worth of shares to make his total shareholding 199,999. This, the 1st and 2nd defendant denied claiming instead that they held 20% each of the share capital of the 3rd plaintiff Company: with the 3rd defendant claiming 2l% for himself and 10% for “Workers Trust”. The 1st plaintiff also alleged that out of his shares he transferred 10% to L.S. Balogun and 9% to L.A. Balogun. But first, it must be made clear that the pleadings of the plaintiffs averred in para. 16 that it must be made clear that the pleadings of the plaintiff averred in para. 16 that:

“Up to the time when the audited account of the Company as at 31/5/80 were approved, only N2.00 worth of shares were fully paid for by 1st and 2nd plaintiffs who then held one share each”.

This was not disputed by the defendants especially in their paragraphs 5 and 38 of Statement of Defence. However, the Defendants put a rider into their paragraph 38 (supra) that the two shares were never paid for. This is amazing, when considered in the light of the simple fact that the three of them had not even come near the Company in 1976 when the 3rd plaintiff Company was incorporated and was dormant up to when 1st and 2nd defendants came into its life in 1978 vide a partnership agreement, Exhibit 4 SS. But a look at Exhibits H and H2 the 3rd plaintiff’s Balance Sheets for 1978, 1979 and 1980 was each signed by one or the other of the defendants and reflect that the N2 was fully paid. A lot of documents were tendered in this case at trial and it certainly caused some confusion for some witnesses whose memories later got refreshed when in cross-examination they were confronted with relevant documents. An example is Ayinla Okuboye, D.W.6 who testified in evidence in chief inter-alia as follows:

“I am the one who keeps the ledger and books of Albion (3rd plaintiff). All transactions of the Company are recorded in these books. If I see the 1980/1981 (ledger). I can recognise it. This is the ledger being kept by me”

The ledger was tendered and admitted as Exhibit U. The witness then continued.

“I also keep the cash books. These are the Cash Books from 1978 to May, 1981 (the Cash Books were also admitted as Exhibit U1 and U2) …………………………..

The Albion Company has external auditors. From time to time I joined in 1988, the external auditors are Adelusi Ojo & Co”.

He testified further that after preparing all his balances he would submit annually his books to the external auditors. These books include ledgers cash books and all other books kept by him. Also included among the ledger books are Debtors Ledger Book, admitted as Exhibit V. Then he continued.

“I have seen Exhibit V. The earnings for completed work in 1980/81 is N12,815,823.28k. I have seen Exhibit H9, it shows the earnings for the same period as N2,015,824. That was not the figure I gave the External Auditors for preparation of Exhibits H9. We have provisions for Directors Account in Exhibit U. It is on page 169 of Exhibit U. As at 31st May, 1981 the account standing to the credit of the Director Current Account is N195,701.73k. the amount stated in Exhibit H9 as Directors Current Account is N2,316,659 exactly: I don’t know who gave these figures to the auditors. The amount I gave to the auditors was N195,701.73k”.

“I have seen page 168 of Exhibit V, the paid up capital. What I have in my books as at 31st May, 1981 as paid up capital is N2. The corresponding column in Exhibit HH9 shows N200,000 as paid up (capital): I did not give these figures to the auditors. I provided the auditors with N2 as paid up. I have seen the column for purchases at p. 452 of Exhibit U it shows N3,656,607.47k as the amount for purchases. I have seen Exhibit H9, for that period, the figures put by the auditors for purchases is N694,635; that was not the figure I gave the auditors. I gave the auditors N3,656,607.47k”.

This witness then became more emphatic when he said:

“Apart from the books of the Company, I cannot say the other sources the auditors have in preparing their Balance Sheet. I provided information to the auditors since 1978. Apart from N2, I did not receive any other money for the payment of share capital. The money could not have been paid without my knowledge. I know Chief R.A. Okoya. He is sitting there ………………………………….. I can’t say if Chief Okoya loaned any money to the 3rd plaintiff Company in 1980/91 financial year. During 1980/81 financial year, I did not receive any money as loan from the 1st plaintiff. I received all official financial transaction (sic) of the third plaintiff”.

In cross-examination however, this witness, on being taken through the very Exhibits he tendered for defence and became wiser. Exhibit W. Ledger for 1981/82 was then tendered through him after he identified it. Then he was led through Exhibit W and stated as follows:

“I have seen P.139 (of Exhibit). It shows the opening entry of N200,000.00 as from June 1st, 1981. It represents paid up capital. The next line is N39,457.44k as at October, 1982. The entry for October, 1982 does not fit into the entry for 1981/82”.

Against the last sentence above, the learned trial Judge made the following observation:

“Note: this question was answered after considerable hesitation and apparent uncertainty”.

This witness, DW6, Mr. Okuboye then proceeded under cross- examination as follows:

“It is correct that as a rule the opening figure for all accounting year (in this case 1st June of a Year to 31st May of next year) should rhyme with the closing figure of the previous year. I am sorry. It is not correct that the two should agree. I have some explanation for the answer. If the opening figure is N200,000 during accounting year, if there is any transaction the closing figure will be increased. I got the N200,000 from the audited Balance Sheet. I made the entry of N20,000 in October 1992. The entry for N39,457.44k was not made the same day. I am not aware that the audit for 1982 was not complete I made it in October, 1982. I made the opening entry of N200,000 from the audited account for 1981/1982. Exhibit H4 is where I got the figure from”.

This Exhibit H4, the audited account, is a copy and the original was tendered in cross-examination by DW6 as Exhibit X (i.e the Audited Account for 1981/82).

The entry for audited account for subsequent years including 1985 continued to recur with the figure of N200,000 as paid up capital. This witness finally agreed that paid up capital by 1980/81 or simply by 31/5/81 was N200,000.

So the main dispute between the parties has coalesced at Trial Federal High Court, it was not that N2 was not paid as original nominal capital, but what was the position of N199.998 paid by the plaintiff, Chief Okoya. Did he pay?

As for allotment of shares, the plaintiffs’ brief is succinctly put as follows:

“It will be possible to argue in “the strictest rules” that in the absence of proof of a Board Meeting or a resolution of the General Meeting to sanction the allotment of shares to the 1st and 2nd plaintiffs, it must be concluded that there was no proper allotment of shares to them. One would of course be bound to use the same measure in respect of the shares claimed by the defendants”.

For the above reasoning. Chief Williams, SAN for the plaintiff, quoted Lindley, L.J. in Browne v. La. Trinidad (1888) 37 Ch.D. 1 at 17 to wit:

“I think it is most important that the Court should hold fast to the rule upon which it had always acted, not to interfere for the purpose of forcing companies to conduct their business according to the strictest rules, where the irregularity complained of can be set right at any moment”.

It must be pointed out that the trial court outrightly rejected the defendant’s contention that Exhibit A1 a Memorandum and Articles of Association, was the genuine one, he called it bogus Memorandum and Articles of Association. I find that he meant by this that Exhibit A1 was a forgery which the defendants wanted to influence that Court with so as to achieve victory. The trial Judge also rejected the forged document purporting to show that share capital of the Company had been raised to N500,000 was also not correct, it was certainly a forgery of an alleged Board Meeting of 5/5/81.

Learned trial Judge finally held that he was convinced by the contention of the plaintiffs, on the balance –

“that the paid up share capital (of the 3rd plaintiff Company) as at 31/5/81 stood at N200,000.00”.

These were findings the Court of Appeal never disturbed. Then if as of 31/5/81 the paid up share capital stood at N200,000 only the plaintiffs could have paid for the allotment by paying an additional sum of N199,998. The reason is not far fetched because by that day there were no more shares available for allotment and the defendants 1 and 2 could not have by that date acquired any shares by allotment. They brought in their money over one year later! At that time no shares were available for allotment. So the only person who could have paid for the remaining N199,998 for the shares could be no other person than the 1st plaintiff and this is what all the entry of N200,000 in Exhibit U is for. The evidence of Okuboye, quoted in extenso hereinbefore, is amply corroborated by that of Michael Ojo Adelusi, the principal partner in the Company’s External Auditor. He identified Exhibit U, the Ledger Book, and identified the first entry carried forward from May 31st, 1981 to June 1st , 1981 as N200,000 as share capital of the 3rd plaintiff Company making it fully paid. There was no other entry for 1981 on the capital side, except the following year 1982 where there were no more shares to take up by allotment. By June 1st, 1982 the entry in Exhibit U still remained N200,000.00 as share capital. None of the defendants protested on this entry at the time they were made and they signed as Directors. DW9, Chief Adelusi from the external auditors thus confirmed the plea in paragraph 17 of Statement of Claim that shares worth N199,998 were paid for from the amount standing to the credit of 1st plaintiff in the Director’s Current Account of 3rd plaintiff Company. All these evidence from DW 6 and DW 9 could not be assailed as being favourable to the plaintiffs. Such evidence is perfectly admissible and in the absence of any contrary evidence from persons of equal status in relation to the affairs of 3rd plaintiff, it must be accepted as the truth. Falaju v. Amosu (1983) NSCC 456, 460 – 461; (1983) 2 SCNLR 209; Adebambo v. Olowosago (1985) 3 NWLR (Pt. 11) 207, 215. See also Onubogu v. State (1974) 9 S.C. 1. Odunowo, J. trial Judge completely believed DW. 9 was a witness of truth.

Exhibits H3 – H8, Balance Sheets shows that the N200,000.00 share capital had been paid up by 31/5/81. There is no support for the contention of any of the defendants in these Exhibits tendered and admitted without any objection. Viewed in line of Section 141 and Section 142 of Companies Act, 1968 (relevant to this case) and Schedule 8 to the same, it is clear, very clear, that the share capital of Third plaintiff company, standing at N200,000 as of 31/5/81 left no more shares for allotment any more. Exhibit H9 remarkably, was signed by 2nd and 3rd defendants and it confirmed the shares were fully taken up by the plaintiffs as of 31.5.81. According to DW 9, none of the defendants challenged Exhibit H9. Exhibits H7 and K are very clear and so is Exhibit YY that says:

“ALBION CONSTRUCTION LIMITED DIRECTORS REPORT” In accordance with Sections 120 and 150 of the Companies Decree, 1968, we the Directors of the above named Company hereby certify that the attached Balance Sheet as at 31/5/81 and the Profit and Loss Account for the same year together with Auditor’s Report to be true copies as laid before the Company in General Meeting.

We further certify that the Directors did not recommend the payment of any dividend.

(Sgd A. Davanzo)

(Sgd D. Ademiluyi) DIRECTORS”.

3rd defendant, as a lawyer, sui juris, made a statement that no court of law would accept as true when he claimed that he did not know what he signed when he and 2nd defendant signed Exhibit YY. Any person of full age and capacity and understanding who signs a document, being not illiterate is deemed or presumed to understand what he appended his signature upon. Whatever that document says and undertakes is binding upon him and plea of non est factum will not avail him Egbase v. Oriareghan (1985) 2 NWLR (Pt. 10) 884, 899 – 900.

Exhibit HH, Minutes of A General Meeting of 15/3/82 where by implication the paid up share capital was ratified. This is supported by Exhibit A in Article 14. It is thus patently clear from the records of the 3rd plaintiff that when Lauro Santilli, 1st defendant, and Albino Davanzo. 2nd defendant, brought in money into the country in the latter part of 1982, they paid into the Company’s current account, such money could not be payment for shares as there were no more unalloted shares since 1981, i.e. 31/5/81. I refer in this instance to DW.6 and DW.9 who unambiguously identified documents supporting absence of any more shares for allotment after 31/5/81 especially Exhibits U and W.

I therefore uphold that the decision of the Courts below that as of 31.5.81 the paid up capital of the 3rd plaintiff was fully paid for by plaintiffs and there could be no more shares to allot. The only mode of passing shares to the defendants could only be by way of transfer and no more. This is not the claim of 1st and 2nd defendants: rather than ask for specific performance if there was agreement to transfer shares to them they resorted to subterfuge of cooking up a Memorandum of Association, Exhibit A1, and a purported increase in share capital to N500,000 which the courts below rejected in to to.

The trial court, despite all the evidence overwhelmingly in support of the case for plaintiffs, went ahead to allot shares in an arithmetical exercise the parties never claimed or asked the court for, going by their Statement of Defence. The court held there were no shares to allot after 31/5/81 by virtue of Exhibits U and W. Did the defendants, Davanzo and Ademiluyi, not sign Exhibits H3, H9 and Exhibit YY? How does the Court view the evidence of D.W.6 and D.W.9 that were held to be witnesses of truth and the Court of Appeal never faulted?

The burden on the plaintiffs should not be higher than balance of probability and going by the concurrent findings of the Courts below on the aforementioned Exhibits, one wonders why the same Courts turned round and started allotting shares to the defendants. If assuming the defendants claimed that they were promised shares, their remedy, with respect, will be for damages for breach of contract.

They are not for this; they opted throughout the case for allotment of shares which were no more there. Unfortunately, the defendants resorted to serious misconduct of forging documents – Exhibit A1 and alleged minutes of 5/5/81 – to prove their case. This, if nothing else, is serious enough to show they were not honest to the Court. S

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Other Citation: (1994) LCN/2642(SC)