Gresham Life Assurance Society (Nig) Ltd v. The Registrar of companies Colonel A. A. Ochefu (1973)
LawGlobal-Hub Lead Judgment Report
O. ELIAS, C.J.N.
This is an appeal from the judgment of George, J., Suit No. M/97/1969 delivered in the Lagos High Court on 10th August, 1970 and in which he dismissed the petition of the petitioners, herein appellants, for a winding-up order under the supervision of the court in accordance with the provision of the Companies Decree No. 51 of 1968. The petitioners’ prayers read as follows:
“(i) That the Gresham Life Assurance Society (Nigeria) Limited be wound up under the supervision of the court in accordance with the provision of the Companies Decree No. 51 of 1968.
(ii) That Babatunde Olusola Benson be appointed liquidator.
(iii) That the policy holders under the existing Nigerian policies who wish to continue paying premiums to keep their contracts in force until maturity be allowed to do so, which is the procedure usually permitted in these circumstances.
(iv) That the said liquidator so appointed be empowered to receive premiums on the policy and pay the sums assured by such policies as and when they come due.
(v) That the court may make such further order as shall be just.”
In their petition the petitioners, so far as is material in these proceedings, aver as follows:
“1. The Gresham Life Assurance Society (Nigeria) Limited (hereinafter called “the company”) was on the 18th day of November, 1968 by virtue of sections 393 and 369 of the Companies Decree, No. 51 of 1968 deemed to be incorporated in Nigeria.
- That before the said 18th day of November, 1968 the company was a foreign company originally registered pursuant to the English Joint Stock Companies Act, 1844 with a deed of settlement dated the 3rd day of July, 1848 and later incorporated in England under the English Companies Act, 1862-1890 and registered in Nigeria under section 239 of the Companies Act, Cap. 37 of the Laws of the Federation of Nigeria.
- That the capital of the said company is 100,000 pounds fully subscribed and is divided into 20,000 shares of 5 pounds each numbered 1,972,000 inclusive.
- That the object of the company consists in the assurance of human life for its whole term or any less period . . .
- That in pursuance of its said object, the said company had and operated a branch office at 5 -7 Balogun Street, Lagos, Nigeria, and the company was duly registered in Nigeria under section 239 of the Companies Act, Cap. 37 of the Laws of the Federation of Nigeria.
- That by a letter dated 15th day of January, 1969 and in accordance with section 369 of the Companies Decree the principal officer of the company gave notice to the Registrar of Companies that the company does not intend to carry on business in Nigeria.
- That as a result of the aforesaid notice given to the Registrar of Companies, it is now obligatory by virtue of sec. 396 (2) of the Companies Decree No. 51 of 1968 that the company be wound up under the supervision of the court.”
The petitioners, in pursuance of their business, appointed Mr Alfred Thomas Cain, General Manager of Guinea Insurance Company Limited (which is registered with an established place of business at 5 – 7 Balogun Street, Lagos) as their principal resident agent in Nigeria by virtue of a general power of attorney dated 4th June, 1969 (ex. ATC). Included in the power of attorney is the power to sue and defend suits in court, to instruct solicitors in connection therewith and to take proceedings for winding up the petitioners’ business in Nigeria. Mr. Cain duly appointed Messrs. S.O. Shobowale-Benson and Company as the petitioners’ solicitors and the latter thereupon caused notices of the petition for the winding-up to be advertised in the Official Gazette of the Federal Republic of Nigeria of 10th July, 1969 (ex. SAJ. 1) and in the Daily Times of Nigeria of 21st July, 1969 (ex. SAJ. 2).
On seeing the advertisement in the Daily Times of Nigeria, Colonel A. A. Ochefu, a Nigerian Army Officer and one of the creditors/policy holders of the petitioners, applied to the court for leave to oppose the petition. The petitioners were duly put on notice. After hearing the parties, the court ordered as follows:
“It is ordered that the applicant be granted leave to file an affidavit in opposition to the winding-up petition within 7 days.
It is further ordered that the respondents be granted within which to file counter-affidavit.”
Those referred to as the “respondents” in the above order are the petitioners. In pursuance of the above order, Colonel Ochefu filed an affidavit opposing the motion wherein he deposed, inter alia, as follows:
“That to the best of my knowledge and belief the company never had or operated a branch office at 5 -7 Balogun Street, Lagos, Nigeria as claimed in the petition.
“That the Offices at 5 -7 Balogun Street, Lagos are occupied and used by the Guinea Insurance Company Limited which does business for the company as Agents only.”
The objector, Colonel Ochefu, further averred that the petitioners arbitrarily determined the agreement relating to his life insurance policy by a letter date 17th February, 1969 that he instituted an action (Suit No.LD/159/69) against the petitioners in the High Court of Lagos, that pleadings were ordered and that his statement of claim was filed and served on 23rd April, 1969 that the petitioners presented their petition for winding up on 18th June, 1969 that they thereafter filed their statement of defence on 1st July, 1969 and that the filing of the petition was in bad faith and calculated to defeat or frustrate his claim in the same proceedings.
The learned trial judge, after reviewing the affidavit evidence before him, made the following finding:
“If this power of attorney is read together with the verifying affidavit of Thomas Cain, it becomes quite clear that although the Gresham Life Assurance Society was registered under the companies Act, it had no established place of business in Nigeria, although it was carrying on business by means of an agent in Nigeria.”
From this, the learned trial judge further found that only a foreign company that has an established place of business in Nigeria comes within the provision of section 368 (a) of the Companies Decree, 1968 and that winding-up is then compulsory when the principal officer of the company gives notice of his intention under section 369 (3) of the Companies Decree 1968 not to continue business in Nigeria. The petitioners had merely carried on business in Nigeria by an agent, the Guinea Insurance Company Limited, but it had no established place of business in Nigeria within the meaning of section 368 (a) of the Companies Decree. The learned trial judge also found that, under Part X of the Companies Decree, winding up is permissive, and that, as this is not a compulsory winding-up, the petitioners cannot petition under section 369 (3). Finally, as regards the prayer in the petition that Mr. B. O. Benson, a legal practitioner, be appointed the liquidator in the event of a winding-up, the learned trial judge held:
“Life Assurance is such an important policy that I do not consider it safe that it should be placed in the hands of an individual.”
On these three grounds, the learned trial judge dismissed the petition.
The present appeal has been brought against that decision on the following three grounds which were the only ones argued before us:
- That the learned trial judge erred in law when he held that
‘It is my view the petitioner had no established place of business in Nigeria within the meaning of section 368 (a) of the Companies Decree.’
when there is evidence accepted by the learned judge that the petitioner was a foreign company registered under section 239 of the Companies Act, Cap. 37 which required a foreign company to have an established place of business in Nigeria.
- The learned trial judge misdirected himself on the law and facts by construing the decision in Tovarishestvo Manufactur Liudvig Rabenek, in Re Rabenek erroneously to the facts of this case on page 42 lines 16 – 33 and held that ‘such being the facts of the case it is distinguishable from the instant case but the obiter dictum of Cohen is a valuable guide in determining the issue on this case . . . regarding the interpretation of ‘carrying on business’ and ‘establishing a place of business’ and yet came to a different decision.
- The learned trial judge erred on the facts when he held at page 40 lines 18 – 23 that the Appellant ‘had no established place of business in Nigeria although it was carrying on business by means of an agent in Nigeria when he, indeed, believed that the appellant/company was registered under section 239 of the Companies Act, Cap. 37 of the Law of the Federation of Nigeria and has been carrying on business at the address given therein.
Mr. Benson, learned counsel for the appellants, contended that the learned trial judge erred in holding that the appellants have no established place of business in Nigeria as required by sections 368 and 369 (1) of the Companies Decree 1968 when the appellants were duly registered (and held to be so by the learned trial judge) in accordance with section 239 of the Companies Act (Cap. 37 of the Laws of the Federation). The appellants, he further argued, had thus satisfied the requirements of section 369 (1) of the Companies Decree 1968 which deems a foreign company with an established place of business in Nigeria before or at the date of commencement of the Decree to be a Nigerian company entitled to bring a winding-up petition under section 369 (2) of the Companies Decree 1968, and that it therefore became mandatory for the court to grant the appellants’ petition since they did not wish to be deemed to be a Nigerian company.
Learned counsel further contended that the averment in the petition that the appellants carried on the business of life insurance at 5 -7 Balogun Street, Lagos, and the averment of the objector in his affidavit in opposition to the petition that he entered into the contract of policy insurance by appellants’ agent at that address show that the appellants had an established place of business there. He referred us to In re Tovarishestvo Manufactur Liudvig-Rabenak [1944] 2 All E.R. 556, in which an hotel in London at which certain Russian directors of the company carried on business during their several visits for nine years was held by Cohen, J., to be sufficiently an established place of business to give jurisdiction to an English court to entertain a winding-up petition in respect of the Russian company as respects its operations in England. We, however, draw attention to the latter part of the same judgment in which, at p. 561 ibid., the same judge referred with approval to the decision in Re Lloyd Generale Italiano (1885) 29 Ch. D. 219 where it was held that there is no jurisdiction under the Companies Act, 1862, to wind-up a foreign company which has carried on business in England by means of agents, but which has no branch of its own there. In dismissing the petition in that case, Pearson J. found at p. 220 as follows:
“In my opinion I have no jurisdiction to make a winding-up order, however convenient it might be that such an order should be made. I should be making an order for which there is no precedent and no authority. This company is established at Genoa, and it carries on business there. It has agents in England, and nothing but agents, and it has carried on business here through those agents, in the same way as foreign merchants often carry on business in this country by means of agents. The jurisdiction to wind up a company is purely a statutory one under the Companies Acts. If I were to adopt the argument of counsel for the petitioners, I must come to the conclusion that, in every case in which a foreign company has had any dealings in this country-whether the company is established in China, or Japan, or Australia- there is jurisdiction to order it to be wound up. I am decidedly of the opinion that the Act is confined to English companies, and foreign companies carrying on business in England with, so to speak, a residence of their own-a branch office-in this country. In the cases which have been cited of orders made to wind up foreign companies, the companies had an office in England, but that is not so in the present case.”
We think that this sufficiently disposes of Mr. Benson’s argument since a clear distinction is to be drawn between a foreign company transacting business by agents and such a company transacting business through agents in Nigeria. In the latter case a Nigerian court has no jurisdiction to entertain a winding-up petition by such a company. The present appeal is such a case. In Re Lalandia [1933] p. 56, Langton, J., held that a foreign company doing business in England through an English firm as agent and not by the firm, was not resident within the jurisdiction, since the agent had no concern with the management of the foreign company but received only the customary agent’s commission.
We also think that the appellants have failed to discharge the onus that lay on them to establish by positive evidence the truth of their averment that they had an established place of business at 5 -7 Balogun Street, Lagos, and that they should not rely on the fact that the objector signed the contract there with the appellants’ agent whose known business address is 5 – 7 Balogun Street. We also observe in passing that the appellants’ petition merely avers in paragraph 5 that “the said company had and operated a branch office at 5 -7 Balogun Street, Lagos, Nigeria”, not that the company “still have and operated a branch office” there; we note that the appellants must have an established place of business in Nigeria “at the commencement of ” the Companies Decree in order to come within the provisions of section 369 (1)-(3). For convenience we set out the provisions of section 368 (a) and 369 (1), (2) and (3) of the Companies Decree as follows:
“368. The provisions of this Part of this Decree shall apply to every ‘foreign company’ which, where the expression is used in this Part and elsewhere in this Decree unless the con otherwise requires means;
(a) a company before the commencement of this Decree incorporated outside Nigeria, and having on the commencement therefore an established place of business in Nigeria:”
“369. (1) Every foreign company within paragraph (a) of section 368 of this Decree shall, in respect of its operation in Nigeria, be deemed to have become incorporated under this Decree as a separate entity from the company incorporated outside Nigeria in whose name a place of business in Nigeria was established, and the company so deemed to have been incorporated in Nigeria shall have as part of its name (unless already therein) the word ‘(Nigeria)’, so however that until other provision is made in accordance with subsection (2) of this section (a) Part I of Table A in the case of a public company, and Part II thereof in the case of a private company shall apply with any necessary modifications as if the company affected were one limited by shares;
(b) The constitution (meaning thereby any instrument constituting or defining the foreign company) shall have effect as if Table B applied with all necessary modifications to bring it into conformity with that constitution’;
(c) The share capital shall be deemed to be fully subscribed to the extent of an amount represented by the excess of assets over liabilities as disclosed in the last balance sheet of the company delivered to the Registrar under any enactment repealed by this Decree in respect of its operation in Nigeria, increased by an amount of ten pounds; and;
(d) the register of shareholders shall remain unchanged, and the shares shall be deemed to be held in the relative proportions as disclosed by the foreign company:
and this subsection shall have effect anything in any enactment or rule of law to the contrary, and however and to any extent otherwise applicable, notwithstanding.
(2) The principal officer in Nigeria (by what name soever described) of the foreign company shall, within 3 months after the date on which it is deemed to be incorporated pursuant to subsection (1) of this section, inform the Registrar as to the future intentions of the foreign company in respect of its operation in Nigeria, and if the business is to continue to be carried on in Nigeria that officer shall forthwith thereafter take all necessary steps to incorporate the company in Nigeria pursuant to section 1 of this Decree; and when duly incorporated there under, subsection (1) of this section shall, so far as it imposes Tables A and B on the company cease to have effect, but nothing in this section shall be construed so as to authorise the issue of any prospectus inviting subscription without the approval of the Commissioner.
(3) If the foreign company within the period of 3 months mentioned in subsection (2) of this section informs the Registrar that the company does not intend to carry on business in Nigeria, and the principal officer aforesaid fails within a reasonable time thereafter to apply to the court to have the company wound up under supervision of the court, the Registrar may so apply, and the court upon such application shall make a winding up order accordingly.”
It is sufficient at this stage merely to draw attention to section 369 (2) that only a principal officer of the foreign company, by which is meant a director, a manager or a secretary, can present a petition for a winding-up where the company does not want to be deemed a Nigerian company under section 369 (1) of the Companies Decree. Mr. Cain, the agent, is clearly not a principal officer of the appellant company; he is merely a principal representative, a quite different type of person.
It seems to us that the learned counsel for the appellants would appear to have made too much of the fact that the company was duly registered in Nigeria under section 239 of the Companies Act, Cap. 37 of the Laws of the Federation which, if true, he regarded as synonymous with having an established place of business. There is no doubt that there is a clear distinction to be drawn between “carrying on business” and “having an established place of business” in Nigeria, and that it is only in the latter case that the company comes within Part X of the Companies Decree, 1968. Now, let us see what section 239 of the Companies Act, Cap. 37, does in fact provide. It reads:
“239. (1) Every company incorporated outside Nigeria which establishes or has before the date of the coming into force of this Ordinance established, a place of business within Nigeria, shall, within six weeks from the establishment of the place of business or from the date of the coming into force of this Ordinance, file with the Registrar
(a) a certified copy of the charter, statutes, or memorandum and articles of the company, or other instrument constituting or defining the constitution of the company and, if the instrument is not written in the English language, a certified translation thereof;
(b) A list of the directors of the company;
(c) The names and addresses of some one or more persons resident in Nigeria authorised to accept on behalf of the company service of process and any notices required to be served on the company; and, in the event of any alteration being made in any such instrument or in the directors or in the names or addresses of any such persons as aforesaid, the company shall within the prescribed time file with the Registrar a notice of the alteration.
(2) Any process or notice required to be served on the company shall be sufficiently served if addressed to any person whose name has been so filed as aforesaid and left at or sent by post to the address which has been so filed.”
This section clearly requires that “every company incorporated outside Nigeria” must have “an established place of business in Nigeria” and that all documents required to be filed with the Registrar or with the court must be so done in the name of a person whose name has been duly notified beforehand to that effect. We therefore think that Mr Benson is in error when he argued that the appellants’ agent in Nigeria fulfils this role and that under section 239 of the Companies Act there was no further need to prove that the appellants have an established place of business in Nigeria. This, as we have already said, is still necessary, and we think that the appellants have failed to establish this essential basis of their appeal.
Mr Nwadialo, learned counsel for the Registrar of Companies, contended that the learned trial judge should have dismissed the petition merely on the ground that it was not brought by a principal officer of the company, although he agreed with Mr Benson that the appellants had an established place of business in Nigeria through their agent here.
Mr Obaro, learned counsel for the objector, submitted that the petition had been rightly dismissed by the learned trial judge, since the petitioners, apart from their mere averment that they had an established place of business in Nigeria, failed to file a reply to the objector’s denial in his opposing affidavit that the petitioners had none. We agree with this contention, and would like to add that the judge had at an early stage in the proceedings on 3rd November, 1969 granted seven days each to both the objector and the petitioners to file an affidavit and a counter-affidavit respectively. It does not appear to us that the appellants ever complied with this order.
We are of the view that it would be inequitable to grant the petition since the appellants would thus be enabled to obtain a stay of execution of the proceedings in respect of the objector’s claim for breach of contract which is still pending in court. There is also the possibility that a large number of Nigerian policy holders who, relying on the appellants’ goodwill, took out life insurance policies would be placed at the mercy of Mr Babatunde Olusola Benson, appellants’ learned counsel in this appeal, who was asked to be appointed liquidator to whom policy holders desiring to continue with their contract should pay their premiums after the winding-up. It is difficult to understand why the appellants, instead of petitioning for a winding-up order under the supervision of the court, did not transfer their existing policies to the Guinea Insurance Company or some other company dealing in life insurance for the purpose of administration of the policies in the public interest and for the good name of the appellants themselves.
For the foregoing reasons we see no reason to disturb the decision of George, J., in the High Court of Lagos State in Suit No. M/97/69 of 10th August, 1970. This appeal, therefore fails and is dismissed. We award costs assessed at N100 to each respondent in this appeal.
Appeal dismissed.
Other Citation: (1973) LCN/1705(SC)
