George Hutchful V. Hamilton Kweku Riney W. Riney And Company (Nigeria) Ltd (1971)

LawGlobal-Hub Lead Judgment Report

LEWIS, J.S.C.

In suit LD/88/68 in the Lagos High Court the plaintiff’s amended claim read:

“Amended claim

The plaintiff’s claim against the defendants jointly and severally:

(i) A declaration that the purported removal of the plaintiff by the first defendant from his offices as a director and general manager of the second defendant company is ultra vires the first defendant and illegal;

(ii) 5,000Pounds damages for wrongful removal of the plaintiff as such director; and

(iii) 5,250Pounds damages for wrongful removal of the plaintiff as such general manager.”,

And paragraphs 12, 13 and 19 of his amended statement of claim read:

“12. By a letter dated 30th October, 1967 and addressed to the plaintiff the 1st defendant informed the plaintiff he (the 1st defendant) has decided as from the date of the letter:

(a) To remove the plaintiff as a director, and

(b) To terminate the plaintiff’s appointment as general manager.

13. The plaintiff will contend at the trial of this action that the purported removal of the plaintiff as a director and the purported termination of the plaintiff’s appointment as general manager as pleaded in paragraph 12 hereof is ultra vires the first defendant and illegal.
14. By reason of the matters hereinbefore mentioned the plaintiff has suffered damages and claim as per the writ of summons and the particulars of damage hereunder:

Particulars of Damage

(a) Damages for wrongful

dismissal as general

manager being loss

of wages to retiring age 15,000Pounds

(b) Loss of pension 15,000Pounds

(c) House rent allowance

for 4 years as

general manager 1,200 per annum 4,800Pounds

(d) Short payment of 75 Pounds

per month during

6 months earned leave 450

(e) Damages for wrongful

removal of director 5,000

Total 40,250Pounds

If the first defendant’s action is ultra vires plaintiff’s claim under item (a) will be 33,000 only.”

On the 1st December, 1969, Dosunmu J. gave judgment for the plaintiff concluding his judgment in the following terms:

“On the matter of damages, I should first state that the plaintiff abandoned the claims under items (c), (d) and (e) leaving (a) and (b). As to the claim for loss of pension, I am not satisfied on the evidence that the plaintiff is entitled to it.

It is true to say that the 1st defendant has not exercised his power as the governing director of the company. He did so as the general manager. It is to be observed, however, that since the death of his father in 1963, the 1st defendant has born different designations as regards the company. This is shown in the letter headings of the company. In Exhibit D dated 15th September, 1967, he signed as chairman. In Exhibit B dated 30th October, 1967 he signed as general manager. It seems to me that he was the governing director during his father’s lifetime who was then the chairman and he does not attach such significance to nomenclature so long as the government and control of the company is vested in him. Having regard to all the circumstance therefore I will not make the declaration sought only because the 1st defendant chose not to describe himself in the capacity of governing director of the company.

I prefer to rest my judgment in this case on my finding that the plaintiff was wrongfully removed without reasonable notice. It remains the other submission as to whether the 1st defendant is a proper party in this case. It is obvious that at all stages the 1st defendant was acting on behalf of the company and in particular when he wrote Exhibit B dismissing the plaintiff he did so as general manager of the 2nd defendant/company. I accept the defendant’s counsel submission that he is not a proper party to those proceedings since it is clear that he acted as the agent of the defendant company. In the result I award, 1,500Pounds as damages to the plaintiff being six month salary in lieu of notice. There being no claim for general damages, I cannot make any award on this head.”

The plaintiff did not appeal against the award of damages but appealed only against the refusal of the declaration sought.

Before us, however, having regard to the award of 1,500Pounds damages which the learned trial judge awarded in respect of the wrongful removal of the plaintiff from his appointment as general manager of the 2nd defendants, Mr. Ajayi for the plaintiff did not pursue the claim for a declaration in respect of the office of general manager that the plaintiff held.

The appeal was accordingly argued within a narrow compass that is to say whether the plaintiff’s removal as managing director of the 2nd defendants was ultra vires. Counsel for both parties agreed that in fact the learned trial judge never dealt with this particular issue at all and having considered his judgment we are in agreement with them on this point.

The plaintiff’s case was that he held two offices in the 2nd defendants’ company, those of managing director and general manager, and that so far as his appointment as managing director was concerned, the subject matter of this appeal, he received a letter (Exhibit B) dated the 30th October, 1967, from the 1st defendant, whom the learned trial judge found was acting on behalf of the 2nd defendants as their agent and against which finding there has been no appeal. Exhibit B reads:

“W. BINEY & Co., (NIGERIA) LTD

STEVEDORES & GENERAL CONTRACTORS

Cables & Tele:

P.O. Box 423

BINEY”

LAGOS

TELEPHONE:

LAGOS

Code BENTLEY’S A.RC. 5th & 6th Edition

HEAD OFFICE:

Nos. 1 & 3, Bamgbose St., Lagos, Nigeria W.C.A. & at No. 1, Biney Road, Surulere, Yaba, Lagos.

HEAD OFFICE: 21103

RESIDENCE MANAGING DIRECTOR: 44154

APAPA

GENERAL MANAGER: 55448

GENERAL OFFICE: 55173

30th October, 1967

MANAGING DIRECTOR: HAMILTON KWEKU BINEY,

LL.B, F.R.E.S., RL.

DIRECTOR:

CHIEF WILLIAM HAMILTON BINEY O.RE.

JOHN LAWSON SMITH & CHIEF H.O. DAVIES Q.c.

Dear Kwesie,

1. It is my duty to protect the company at all times and, as such, my actions are only taken in the best interest of the company and all those who derive their daily bread there from.
2. I have decided with much regret to remove you from the list of directors of the company and to terminate your appointment as general manager as from today. I sincerely hope you will appreciate the reasons behind this decision.
3. Although no longer officially connected with the company, consideration might be given to some provision for you in appreciation of your past services after your leave.
4. On behalf of the directors of the company I wish you the best of luck.

Yours sincerely, (Sgd.) H.K. BINEY, GENERAL MANAGER

Mr. G.A. Hutchful, 5, Aloba Street, Ebute, Metta.”

It was Mr. Ajayi’s submission that that letter could not remove the plaintiff from his office of director, albeit, managing director, of the 2nd defendants as it was only the board of directors or the governing director under article 12(a) of the articles of association who could remove him, and neither of these as such removed the plaintiff here. Article 12(a) reads:

“12(a) William Hamilton Biney shall be a director of the company as long as he shall live. He is the chairman of the directors and of the company. Hamilton Kweku Biney shall be the governing director of the company, and he shall be entitled to hold that office so long as he shall live. The governing director may exercise all the powers, authorities and discretions vested in the directors and the government and control of the company shall be vested in him. The governing director may appoint any other person or persons to be directors of the company and may define, limit and restrict their powers and may fix and determine their remuneration and duties and may at any time remove any director however appointed except the said William Hamilton Biney, and may at any time convene a general meeting of the company.”

However, in Exhibit B the 1st defendant did not purport to act as governing director but as general manager, an office that incidentally there was no evidence in the case that he ever held. Be that as it may, as the 1st defendant purported to act as general manager it was Mr. Ajayi’s submission that only the powers of the general manager would apply and these did not embrace the power to remove a director.

Mrs. Ogbemi for the respondents conceded that the general manager of the 2nd defendants had no power to remove a director, but submitted that having regard to article 12(a) as the 1st defendant was in fact specifically named as governing director and as under that article as governing director the 1st defendant had the power to remove any director, he had the power to remove the plaintiff and did so by Exhibit B notwithstanding that he signed himself as general manager and not as governing director. The respondents’ counsel further submitted that the 1st defendant pleaded that. he acted under article 12(a) and that, therefore, the plaintiff failed to prove his case.

So far as the pleading point is concerned it is of course elementary that pleadings are not evidence and prima facie exhibit B on its face is written by the 1st defendant as general manager and not as governing director of the 2nd defendants.

Neither of the defendants saw fit to offer any evidence at the hearing of the action so exhibit B stands on its own unrebutted and in our view Mr. Ajayi is quite right that, notwithstanding article 12(a), as the 1st defendant in exhibit B purported to act as general manager he is confined to the powers of that office and it is not disputed that those powers did not embrace the right to remove a director. The fact that the 1st defendant pleaded he acted under article 12(a) did not prove he did so when the only unrebutted evidence was that he was acting as general manager and not as governing director.

In Vine v. National Dock Labour Board (1956) 3 All E.R. 939, the National Dock Labour Board purported to terminate the plaintiff’s employment there by virtue of powers under a particular clause, 16(2) of a Scheme embodied in the schedule to the Dock Workers (Regulation of Employment) Order 1947. The House of Lords held that the board had no power under that clause to act as it did and Viscount Kilmuir, L.C., at page 942 said:

“On these facts and provisions of the scheme, counsel for the National Board submitted that the National Board had an independent power, under clause 17 of the scheme, which they could, and did, exercise through the disciplinary committee, who acted on their behalf. I do not think that it is necessary to decide whether they could exercise a power independent of that of the local board under clause 16, because I am quite certain that they did no such thing. The happenings that I have set out above occurred as the result of the procedure laid down by clause 15(4) and clause 16(2) being put into operation by the disciplinary committee on behalf of the local board. Counsel’s first submission is as unreal as it is ingenious and, therefore, fails.”

We think that case is very much in pari materia to what happened here where the 1st defendant purported to act in exhibit B as general manager but seeks through his counsel, but not by his own evidence, to say that he acted under the powers of the governing director given to him by article 12(a); he never said so and never in any way rebutted the prima facie meaning of exhibit B. The 1st defendant moreover could not even have claimed that this was a layman’s error as it is clear from the heading in exhibit B that he is not only a legal practitioner but also holds a law degree. We are accordingly of the view that exhibit B did not properly remove the plaintiff from his office of director of the 2nd defendants.

We will therefore allow this appeal and grant the declaration sought, but confined to the office of director, in the following terms: -“it is hereby declared that the purported removal of the plaintiff by the 1st defendant from his office as a director of the 2nd defendant company is ultra vires and illegal.”

There has, as we have stated earlier, been no appeal against any other of the orders of the learned trial judge, that is to say as to the award of 1,500Pounds damages and as to costs so they of course stand. The appellant is entitled to his costs of this appeal which we assess at 59 guineas.

Appeal allowed. Declaration granted.

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SC.150/1970