Odutola Holdings Ltd & Ors V.mr. Kunle Ladejobi & Ors (2006)

LAWGLOBAL HUB Lead Judgment Report

EJIWUNMI, J.S.C.

This appeal is the culmination of the action commenced at the Federal High Court by the appellants when they instituted this action against the respondents for the following reliefs as depicted in paragraph 32 of their statement of claim dated 9th October, 2000 thus:

“32. Whereof the plaintiffs claim as follows:

i) A declaration that the purported meeting of shareholders of the 1st plaintiff company held on 12th September, 2000 is illegal, null and void having been convened contrary to the provisions of the Articles of Association of the 1st plaintiff company and the provisions of the Companies and Allied Matters Act, 1990 concerning the convening of general meetings.

ii) A declaration that the purported removal of the 2nd to 7th plaintiffs as directors of the 1st plaintiff company and the purported appointment of the 1st to 10th defendants as directors of the 1st plaintiff company by a resolution allegedly passed at the purported meeting of shareholders of the 1st plaintiff company held on 12th September, 2000 is illegal, null and void being contrary to the provisions of Article 36 of the Articles of Association of the 1st plaintiff company.

iii) A declaration that the purported removal of the 2nd to 7th plaintiffs as directors of the 1st plaintiff company and the purported appointment of the 1st to 10th defendants as directors of the 1st plaintiff company by a resolution allegedly passed at the purported meeting of shareholders of the 1st plaintiff company held on 12th September, 2000 is illegal, null and void being contrary to the provisions of section 262 of the Companies and Allied Matters Act, 1990.

iv) A declaration that the 4th defendant is not a shareholder of the 1st plaintiff company.

v) An order of Interlocutory Injunction to restrain the 1st to 10th defendants whether by themselves, their servants and agents or otherwise howsoever from acting as directors of the 1st plaintiff company and to restrain all the defendants whether by themselves, their servants and agents or otherwise howsoever from holding the 1st to 10th defendants out as directors of the 1st plaintiff company pending the final determination of this suit.

vi) An order of mandatory injunction directing the 16th defendant to remove or cancel from the 1st plaintiff company’s file held at the Corporate Affairs Commission in Abuja, all documents reflecting the purported removal of the 2nd to 7th plaintiff as directors of the 1st plaintiff company and the purported appointment of the 1st to 10th defendants as directors of the 1st plaintiff company.”

Following the service of the writ of summons and the statement of claim, the defendants, now respondents brought an application before the trial court wherein they sought for the orders framed in the alternative thus:

“(i) An order striking out the name of the 1st plaintiff herein as a party to the action.

Alternatively

(ii) An order staying proceedings in this action and ordering a meeting of the shareholders of the Odutola Holdings Ltd., with a view to determining whether their directions or instructions as to whether the 1st plaintiff company should continue as a party to this suit.”

In support of this application, Kunle Ladejobi, a Chartered Accountant as the 1st defendant swore to a 14 paragraphed affidavit on behalf of himself and for the 2nd- 6th, 8th -11th and 13th – 15th defendants which read thus:

“1. Kunle Ladejobi, Nigerian Chartered Accountant of 58 Ogunlana Drive, Surulere, Lagos, make oath and say as follows:

1. That I am the 1st defendant/applicant and I have the authority of the 2nd-6th, 8th-11th and 13th-15th defendants (hereinafter referred to as the applicants) to swear to this affidavit in support of the motion herein.
2. That I am the personal representative of Chief T. A. Odutola deceased the majority shareholder and the last chairman of the 1st plaintiff herein having been appointed as the administrator pendente lite of his estate by order of the High Court of Ogun State (Coram Delano, CJ) made in suit No. AB/130/96 on the 1st day of August, 1997, a certified true copy of the order of court aforesaid is now produced and shown to me marked exhibit ‘KL1’

2(a) That on two different occasions in Appeal No. CA/M. 150/99 the Ibadan Division of the Court of Appeal, approved my appointment as the administrator pending suit in respect of the Estate of Chief T. A. Odutolu deceased. Certified true copies of the order and the ruling of the Court of Appeal aforesaid are now produced and shown to me marked exhibits ‘KL2’ and ‘KL3’

3. That the 1st plaintiff is a Private Limited Liability Company No. RC 23492 incorporated on the 6th day of February, 1978 with an initial share capital of N1,000,000 divided into 1,000,000 ordinary shares of N1 each. A certified true copy of the Memorandum and Articles of Association of the 1st plaintiff issued at incorporation is now produced and shown to me marked exhibit ‘KL4’.
4. Sometime in April, 1987, the Memorandum and Articles of Association of the 1st plaintiff was amended and the share capital was increased to N5,000,00 divided into 5,000,000 ordinary shares of N1.00 each. A copy of the amended version signed jointly by Chief T. A. Odutola deceased and the 2nd plaintiff (for Mrs. T. A. Odele) was filed at the Corporate Affairs Commission.

A certified true copy of the amended Memorandum and Articles of Association of the 1st plaintiff aforesaid is now produced and shown to me marked exhibit ‘KL5′.

5. That I have been served with the plaintiffs’ motion on notice dated 9th October, 2000 for an interlocutory injunctive relief against me and the other 4 defendants herein, wherein exhibit 002 attached to the motion aforesaid is alleged by the 2nd plaintiff to be the Memorandum and Articles of Association of the 1st plaintiff.
6. That on many occasions since my appointment as the administrator pendente lite of the estate of Chief T. A. Odutola deceased, by the Ogun State High Court, I have conducted searches at the Corporate Affairs Commission, Abuja so as to determine the quantum of shares held by the deceased in different companies including the 1st plaintiff.
7. That during my searches aforesaid I have come to know that exhibit 002 attached to the motion of interlocutory relief filed by the plaintiffs does not exist at the Corporate Affairs Commission and it is therefore not an authentic Memorandum and Articles of Association of the 1st plaintiff.
8. That the 2nd-5th plaintiffs and the 2nd-15th defendants are children of the late Chief T. A. Odutola and are also shareholders of the 1st plaintiff while the 6th and 7th plaintiffs are wives of the late Chief T. A. Odutola, but not shareholders of the 1st plaintiff.
9. That since my appointment on the 1st day of August, 1997 as the administrator pendente lite of the estate of Chief T. A. Odutola, deceased whose estate is alleged by the 2nd plaintiff to hold 39.5% of the shares of the 1st plaintiff, have not received any notice of any meetings of the 1st plaintiff from any of the 2nd-7th plaintiffs.
10. That I have consulted the 2nd-15th defendants herein except the 7th and the 12th defendants and they told me and I verily believe them that the 2nd plaintiff and or the other plaintiffs do not have authority to sue in the name of the 1st plaintiff in this action and Chief B. A. Aiku, SAN has no authority of the shareholders to commence the action herein in the name of the 1st plaintiff.
11. That I verily believe that the action of the plaintiffs herein could be determined one way or the other if this Honourable Court could adjourn this suit and with an order that a meeting of the 1st plaintiff be held to decide on the authority of the plaintiffs in commencing this suit.
12. That the present action is a further attempt by the 2nd – 7th plaintiffs to waste the assets of the 1st plaintiff in unnecessary litigation.
13. That at a meeting of the shareholders of the 1st plaintiff held on the 12th day of September, 2000, the 2nd – 7th plaintiffs were removed as directors of the 1st plaintiff.
14. That from the records available to me, and from information given to me by the 2nd – 6th, 8th-11th and 13th – 15th defendants which I verily belief (sic) I am aware that the 2nd plaintiff was never appointed as the Chairman of the 1st plaintiff and could not have been so appointed in view of Article 36 of exhibits KL4 and KL5.”

The plaintiffs upon being served also filed a 21 paragraphed counter-affidavit. As the depositions reveal graphically the plaintiffs’ version of the continuing conflict between the parties, it is desirable to set them down in this judgment. They read thus:

“I, Professor (Mrs.) Oyinade Odutola-Olurin, female, Christian, Nigerian, retired University Professor now Consultant Ophthalmologist of Vision House, Mokola, Ibadan do hereby make oath and say as follows:

1. That I am the Chairman of the 1st plaintiff company and a shareholder thereof.
2. That I am familiar with the facts of this case by virtue of my position.
3. That the 2nd-7th plaintiffs are directors of the 1st plaintiff company.
4. That I have the authority of the Board of Directors of the 1st plaintiff company to swear to this counter affidavit.
5. That I have read the affidavit in support of the defendants’ motion dated 27/10/2000 deposed to by the 1st defendant.
6. That paragraphs 2, 2(a), 4, 6, 7, 9, 10, 11, 12, 13 and 14 of the affidavit are not true.
7. That there is now pending before the Ogun State High Court, Suit No. A/148/99: Mabogunje & Ors. v. Adewunmi Odutola & Ors. seeking inter alia, an order to set aside the appointment of the 1st defendant as administrator pendente lite of the estate of late Chief T. A. Odutola together with an application for an order of injunction to restrain him from performing in the office of such administrator. A copy of the statement of claim and motion are attached herewith marked exhibits A and B.
8. That there is also now pending in suit No. FHC/L/CS/697/2000 before this Honourable Court a motion seeking to restrain the 1st defendant from holding himself out as being entitled to hold 55% of the shares in the capital of the 1st plaintiff company.
9. That the 1st defendant has not obtained any grant of Letters of Administration of the estate of late Chief T. A. Odutola since his purported appointment as administrator pendente lite.
10. That the 1st defendant has no lawful authority to deal with the estate of late Chief T. A. Odutola or to perform the notice of administrator pendelite lite in respect thereof and is not entitled to any office of any meetings of the 1st plaintiff company.
11. That exhibit KL5 attached to the 1st defendant’s affidavit is not the current memorandum and articles of association of the 1st plaintiff.
12. That contrary to paragraph 4 of the affidavit, the capital of the 1st plaintiff was increased from N1,000,000 to N2,000,000 in 1980 and from N2,000,000 to N5,000,000 in 1982. A copy each of the resolutions effecting the alterations in capital are attached hereto marked exhibits C and D
13. That in April 1987, the Articles of Association of the 1st plaintiff company was altered by a resolution dated 3rd April, 1987 which was duly filed together with the then existing Memorandum and Articles of Association at the Companies Registry, Federal Ministry of Commerce on April, 1987. It is the certified copy of the said existing Memorandum and Articles of Association that is attached to the 1st defendant’s affidavit as exhibit KL5. A copy each of the resolution and the receipt issued for filing are attached hereto marked exhibits E and F.
14. That subsequently, the said Memorandum and Articles of Association were reprinted to incorporate the amendments made by the said resolution dated 3rd April, 1987 duly filed on 6 April, 1987, an uncertified copy of which was attached to the plaintiffs’ notice dated 9th October, 2000. A certified true copy thereof reflecting all the foregoing alteration, obtain from the Corporate Affairs Commission is attached here to marked exhibit G.
15. The 2nd- 5th plaintiffs and 2nd-15th defendants referred to in paragraph 8 of the affidavit are some of the children of late chief T.A Odutola and shareholders of the 1st plaintiff company.
16. That the Board of directors of the 1st plaintitiff company duly authorized the commencement of this action in the name of the company by the company solicitors. A copy of the resolution in respect thereof is attached hereto marked exhibit H.
17. That Chief Bandele A. Aiku, SAN of Bandele A. Aiku & Co is one of the solicitors to the 1st plaintiff company and he was duly authorized by the Board of Directors to commence this action in the name of the company.
18. That I did not receive notice of the purported meeting allegedly held on 12 September, 2000 and I am informed by the 3rd to 7th plaintiffs and I verily believe them that they did not receive any notice of any meeting either.
19. That the late Chief T.A. Odutola by his will expressed the wish that I should always be the chairman of the 1st plaintiff. A copy of the 1987 will is attached herewith marked exhibit I.
20. That I was at a meeting of the Board of Directors of the 1st plaintiff held on 6 July, 1995 regularly and duly appointed chairman of the company as successor to late Chief T.A. Odutola in accordance with the company’s Article of Association and the expressed wishes of the deceased. A copy of the minutes of the meeting is attached hereto marked exhibit J.
21. That I swear to this counter affidavit in good faith believing the facts stated therein to be true and in accordance with the Oaths Act.”

Learned counsel for the parties, then addressed the trial court upon the meaning and legal effect of the various depositions made in the affidavit and counter-affidavit which have been set out above. The learned trial Judge who delivered a well considered ruling decided that the questions raised in the application could be resolved by the consideration of the following two issues:

“(1) Whether the present action can be maintained in the name of the 1st plaintiff herein a limited liability company without the authority of the company.

(2) Whether the 1st – 16th defendants/applicants herein are competent to challenge the authority of the 1st plaintiff to institute this action.”

The learned trial Judge considered the 2nd issue first and that is whether the 1st – 16th defendants/applicants are competent to challenge the authority of the 1st plaintiff to institute this action. That question was resolved in two parts. First, the learned trial Judge determined that the onus lies on the defendants to establish lack of authority in the 1st plaintiff to institute the action. And having so held, he held that as no evidence either documentary or affidavit was led by the 2nd-16th defendants to prove their capacity or status to challenge the authority of the 1st plaintiff to institute the action, the learned trial Judge therefore resolved that question against them. However, with regard to the 1st defendant/applicant, the learned trial Judge formed the view that he has the competence to challenge the institution of the action by the 1st plaintiff by virtue of his appointment as administrator pendente lite of the estate of Chief T. A. Odutola. However, the trial court further observed that as the alleged wrong complained of is against a company, the 1st defendant/applicant can only bring an action in the name of the company and not as an individual. The 2nd issue was therefore also resolved against the 1st defendant/applicant. With regard to the first issue raised by the learned trial Judge as to whether the plaintiffs had any authority to commence the action in the name of the 1st plaintiff/company to resolve this question, the learned trial Judge felt that its determination depends on the meaning and effect of the provisions of section 63 of the Companies and Allied Matters Act, 1990 which vests in the directors of a company the power to exercise such powers of the company and not by the Act or its Articles of Association required to be exercised by the members at a general meeting. The learned trial Judge therefore formed the view that there is authority in the form of a Board Resolution (ex. H) in the present proceeding for the institution of this action by the 1st plaintiff. The learned trial Judge therefore resolved this 2nd issue in favour of the plaintiffs. It is patent from the above views held by the learned trial Judge that the trial court determined the application solely on the basis that the action was properly commenced by the 1st plaintiff and the other plaintiffs. In effect the learned trial Judge did not make any pronouncement and did not consider the alternative prayer of the defendants/applicants.

In any event, as the defendants were dissatisfied with the ruling of the learned trial Judge, they appealed to the court below. Now, in view of the decision of the court below in respect of the issues raised before that court that led to this appeal, I consider it desirable to reproduce the issues raised particularly by the defendants. They are:

(1) Whether the learned trial Judge in the light of the application and the evidence before him was right in formulating question 2 at page 234 of the records in respect of which he proffered an answer in the ruling appealed against.

(2) Whether the action before the court below was properly brought in the name of the 1st plaintiff/respondent in the sense that it was authorised on behalf of the 1st plaintiff.

(3) Whether in the circumstance of the dispute as to who are the authentic directors of the 1st plaintiff/respondent should the court below have refused to order a meeting of all the shareholders so as to decide whether the 1st plaintiff/respondent should continue as a party to the action”

The plaintiffs/respondents also filed a cross-appeal as they were not satisfied with that portion of the judgment where the trial court held that all the personal estate of Late Chief T.A. Odutola including his shares in the 1st plaintiff/company had become vested in the 1st defendant from the date of the order of the court below appointing him as an administrator pendente lite by the single act of that appointment and that, without the 1st defendant obtaining Letters of Administration. Consequently, the trial court held that the 1st defendant was competent to challenge the institution of this action in the name of the 1st plaintiff.

Pursuant thereto, the plaintiffs filed a four ground notice of cross-appeal and whereon they raised three issues for the determination of their cross-appeal. The issues raised are:-

“(1) Whether in view of the state of the law, the learned trial Judge was right in making a finding that all the personal estate of late Chief T. A. Odutola became vested in the 1st defendant from the date of his appointment as pendente lite by the single act of that appointment by the court without obtaining Letters of Administration.

(2) Whether it was proper in law for the learned trial Judge at the interlocutory stage to make pronouncements that touches (sic) on the merits of the substantive case.

(3) Whether on the unchallenged affidavit evidence before him, the learned trial Judge did not err in finding that the 1st defendant has the locus and competence to challenge the authority for the commencement of this action in the name of the 1st plaintiff.”

After the court below was addressed by the learned counsel for the parties, that court by its judgment held that the appeal has merit, and therefore set aside the decision of the trial court dismissing the application. Also the court below declined to strike out the name of the 1st defendant as to do that would pre-empt the outcome of the meeting of the shareholders. That court further ordered that a meeting of the shareholders of the 1st plaintiff/company be held to determine whether or not the 1st plaintiff should continue as a party in the suit. The trial court was also ordered to give necessary directives as to the conduct of the shareholders’ meeting. Apart from holding that there is merit in the contention of the cross-appellant that the trial court was wrong to have, in the interlocutory proceedings, made pronouncements that touch on the merits of the substantive case, the cross-appeal was dismissed as it found it unmeritorious. The plaintiffs who were dissatisfied appealed against the decision of the Court of Appeal to this court. From henceforth, I will refer to the plaintiffs as appellants and the defendants, respondents. In consonance with the rules of this Court, briefs were filed and exchanged. For the appellants, the following are the six issues for the determination of the appeal:

“(1) Whether the Court of Appeal did not err when it made pronouncements or decisions at an interlocutory stage on issues in the substantive case as to whether the 1st defendant has the competence to deal with the estate of late Chief T. A. Odutola without first obtaining the grant of Letters of Administration and when it placed reliance on the disputed Form C07 filed by the descendants at the Corporate Affairs Commission, Abuja as evidence of the competence or locus of the 2nd-13th defendants.

(2) Whether the institution of this action in the name of the 1st plaintiff company was authorised by the company.

(3) Whether the Court of Appeal did not mis-interprete and misapply the provisions of section 63 of the Companies and Allied Matters Act, 1990 when it decided that subsection 63(5)(5) gives the General Meeting exclusive control over the issue- whether to institute legal proceedings in the name of the company.

(4) Whether the Court of Appeal did not err when it found that the 1st to 13th defendants had the locus to challenge the commencement of this action in the name of the 1st plaintiff company.

(5) Whether the Court of Appeal did not err when it granted without qualification, the alterative relief sought by the respondents by ordering that a general meeting of the 1st plaintiff be held for the purpose of determining its directions or instructions as to whether the 1st plaintiff company should continue as a party to the suit.

(6) Whether the Court of Appeal was right in failing to strike out the only issue identified by the defendants/cross respondents which does not arise from the grounds of appeal formulated by the plaintiffs/cross-appellants”

In the brief filed on behalf of the 1st to 13th respondents, two issues were identified for the determination of the appeal. They are:

“(i) Whether the lower court was right in holding that the substantive suit in the trial court was improperly commenced in the name of the 1st respondent company and therefore, a meeting of the shareholders of the 1st respondent company should be held to decide whether the 1st respondent company should continue as a party to the substantive suit. This issue relates to grounds 1, 2, 3, 4, 5, 6, 8 and 9.

(ii) Whether the lower court made any pronouncements which touch on the substantive issues before the trial court and therefore warrant a setting aside of the judgment of the Court of Appeal. This issue relates to grounds 7 and 10.”

Before considering any or all of the issues raised on behalf of the parties by their respective counsel, it is desirable to make the following observations. First, it is not in dispute that the appellants took out a writ of summons in the Federal High Court, Lagos, in suit No. FHC/L/CS/922/2000 against 16 respondents including the Corporate Affairs Commission wherein they sought for seven reliefs. As these reliefs and the statement of claim filed pursuant to the writ have been set out earlier in this judgment, I do not need to set them down here. However, rather than join issues with the appellants on the statement of claim filed against them, the 1st-6th, 8th- 11th and 13th-15th respondents by their learned counsel filed an application for two prayers which were clearly framed in the alternative. Though they have been quoted above, I think it is pertinent to restate them:

“(i) An order striking out the name of the 1st plaintiff herein as a party to this action.

Alternatively

(ii) An order staying proceedings in this action and ordering a meeting of shareholders of the Odutola Holdings Limited with a view to determining their directions or instructions as to whether the 1st plaintiff/company should continue as a party to this suit.

As aforesaid, the trial court refused to strike out the name of the 1st appellant for reasons given in the judgment of the court. The court below overturned that ruling of the trial court and went on to make an order in respect of the alternative prayers.

Against the reversal of this decision, the appellants have raised several issues which I have reiterated above already. But in my humble view, not all the issues raised are necessary for the determination of the appeal. This is because several of the issues raised by the appellants and which the court below made pronouncements upon did not flow from the ruling given by the trial court in respect of the application brought before it by the respondents.

After a careful perusal of the judgment of the court below, the grounds of appeal filed against that decision and the subject matter of the application that led to the ruling of the trial court, it is my respectful view that the only issues that are germane to this appeal are the 1st and 5th issues filed by the appellants. As the issues raised by the respondents are not dissimilar, they will be considered in the light of the arguments advanced in the consideration of the merits of the appeal.

I begin with issue 1. The question raised under this issue is, whether the court below did not err when it made pronouncements or decision at an interlocutory stage on issues in the substantive case as to whether the 1st defendant has the competence to deal with the estate of late Chief T. A. Odutola without first obtaining a grant of administration. Also, the court below as part of its decision placed reliance on the disputed Form C07 filed by the defendants at the Corporate Affairs Commission, Abuja as evidence of the competence or locus of the 2nd-13th defendants. Now, the contention made for the appellants is that the court below erred in making such pronouncements as they duly identified in their brief. And that the pronouncements so made are prejudicial to the just determination of the outstanding questions that are pending in the courts between the parties.

On the other hand, learned counsel for the respondents has argued to the contrary in the respondents’ brief. In other words, he wants this court to hold that the court below did not make any pronouncement capable of being prejudicial to the just determination of the substantive suit. In the circumstances, it would be helpful for the proper resolution of this question to refer to some of the pronouncements made by the court below in this regard. And in this con, it is desirable to refer to the 4th relief endorsed in the statement of claim which is for

“A declaration that the 1st defendant has no locus or authority to exercise any power as an administrator pendente lite over the shares which form part of the estate of late Chief T. A. Odutola without first obtaining a grant of administration from the Ogun State High Court pursuant to the order appointing him.”

It is clear from the relief quoted above that the appellants were raising a dispute between the parties with regard to the status of the 1st respondent and his right to administer the estate of the late Chief T. A. Odutola. I have already noted that the respondents filed an affidavit in support of the application before the High Court which is the subject of the ruling and that a counter-affidavit was also filed by the appellants. The respondents were still to file a defence to the claim of the appellants but the trial court went on to say in the course of its ruling as follows:

“Although these averments are denied by the 1st plaintiff company in the counter affidavit caused to be deposed to and filed on his behalf. Nevertheless, I believe this is an issue of law and in this regard this court is not in a position to query the appointment of the 1st defendant applicant as an administrator pendente lite of the estate of Chief T. A. Odutola (Dead) pursuant to the power conferred on the Ogun State High Court under the provision of section 27 of the Administration of Estate Law Cap. 1 Laws of Ogun State as the personal law of Chief T. A. Odutola (Dead). On the contrary this court is entitled to take judicial notice of same and to hold that as at today, the 1st defendant remains the personal representative of the deceased and that all the personal estate of Chief T. A. Odutola (Dead) including his shares in the 1st plaintiff company became vested in the 1st defendant From the date of the order of court appointing him as an administrator pendente lite, by the single act of that appointment by the court without obtaining Letters of Administration. He is therefore in my view competent to challenge the authority of the 1st plaintiff in instituting this action by virtue of his office as administrator pendente lite of the estate of Chief T. A. Odutola in whom all the personal estates of the deceased including the shares in the 1st plaintiff company became vested on appointment by the said order of Ogun State High Court.”

After a careful perusal of the above quoted passage from the ruling of the trial court, it seems to me that the learned counsel for the appellants was right in his submission. There can be no doubt that the pronouncement of the learned trial Judge went beyond what is required of him to rule on the application before him. The court below did not fare any better. At page 325 of the record Aderemi, JCA said:

“With due respect, I cannot conceive any other force of law which is higher than that given by the court in the course of the appointment. That order of appointment made by the Chief Judge of Ogun State on the 1st of August, 1997 was made pursuant to the exercise of his judicial powers under the law. And until it is revoked, judicial notice of its sanctity must always be taken by court of law. To demand that the administrator should still obtain letter of administration after the order of 1/8/97 is to engage in the verification of what is obvious to the court. Let it be said that the law does not require that which is apparent to the court to be verified. It must be realised that the appointment of Kunle Ladejobi as an administrator pendente lite, is just to last the period the litigation would take.”

And continues at p. 326 as follows”

“In the instant case there has been a pronouncement against the WILL. The order of appointment of an administrator pendente lite is a stop-gap to avoid wastage of the estate of the deceased. The order of the court dated 1/8/97 appointment (sic) Kunle Ladejobi is the totality of the force of law he would require to perform his duty under the law in relation to the estate. Flowing from all I have been saying, I proffer an answer in the affirmative to issue No. I on the cross-appellants’ brief. It is resolved against them (cross-appellants) I also answer issue No.3 in the negative. The learned trial Judge did not err in finding that the 1st defendant cross-respondent had the locus to challenge the authority for the commencement of this action in the name of the 1stplaintiff. And based on the judicial authorities that I have reviewed supra my answer to the only issue identified by the cross-respondents in their brief is that the duty of an administrator pendente lite commences from the date of the order of his appointment.”

It is manifest from the pronouncements of the courts below to which I have referred to that they touch and resolved questions that are matters which are in dispute between the parties. In this regard while the courts may consider that certain matters are not legally in dispute; yet it may not be proper to make definite statements thereon as if the parties have been heard fully on them. It is not in dispute that the application before the court is by its very nature an interlocutory one. Therefore it cannot be proper for the courts to have made pronouncements which would still have to be considered and decided in relation to the dispute between the parties in the main suit that is still pending. I therefore hold that the courts below erred in making pronouncements upon matters in dispute. This court has held in its various judgments that it is wrong so to do. The pronouncements are therefore set aside. See Orji v. Zaria Industries Ltd(1992) 1 NWLR (Pt. 216) 124 at 141; University Press Ltd. v. I. K. Martins (Nig.) Ltd. (2000) 4 NWLR (Pt. 654) 584 at 595; Biocon v. Kudu Holding Ltd. (2000) 15 NWLR (Pt. 691) 493 at 506 to 509. Issue 1 is therefore resolved in favour of the appellants.

Now, the question raised by the appellants by issue 2 is, whether the institution of this action in the name of the 1st plaintiff company was authorised by the company. On this, learned counsel for the appellants referred to the approval given to the reasoning of the learned trial Judge which reads thus:

“The learned trial Judge of the court below had correctly stated the principle of law when he said that an action cannot be maintained in the name of a company without the authority of that company relying on the decision in Sotiminu v. Ocean Steamship (Nig.) Ltd. (J 987) 4 NWLR (Pt. 66) 691.”

But rather than follow the observation properly made by the court below to the facts in the instant case that court fell into error when it held that:

“the action brought in the name of the 1st plaintiff/respondent was not authorised on behalf of the 1st plaintiff/respondent. It is therefore improper.”

In coming to that conclusion, ‘it is submitted for the appellants that the learned trial Judge was wrong to have placed reliance on exhibit H as the authentic proof of authority. However, it is argued for the appellants that if the court below had closely examined exhibit H that court would have discovered that exhibit H shows:

(a) that the authority contained therein was given because of some threats by the 1st defendant which was considered prejudicial to the interest of the 1st plaintiff, and

(b) that exhibit H gives the solicitors powers to bring actions generally against Mr. Kunle Ladejobi and any other persons to protect the interest of the 1st plaintiff.

In support of his submission that the court below wrongly appraised exhibit H, reference was made to the English ease of Daimler Co. Ltd. v. Continental Tyre & Rubber Co. Ltd. (1916) 2 A. C. 307 at 327; Macdougall v. Gardiner (1875) 1 Ch. D 13 at 23. And also Palmer’s Company Law, 21 Ed. at p.109. Concluding his submission, learned counsel for the appellants invited the court to note that if the Court of Appeal had appreciated that the relief’s claimed inure for the benefit of the 1st appellant and that the authority (exhibit H) given by the 2nd-7th appellants for the commencement of the action was given by them as directors in the control of the management of the 1st appellant and not as shareholders thereof, the court would not have described the action as a derivative action. In any event, argues learned counsel for the appellants, that complaint of the appellants as formulated in the writ of summons and the statement of claim remains live issues which affect the rights of the shareholders. Until the issue whether the respondents had a right to do what they allegedly did on 12 September 2000 is determined, the 2nd- 7th appellants remain the duly appointed and subsisting directors of the 1st appellant. And then submits that the decision of the Court of Appeal directing a meeting of shareholders amounts to a pre-determination of substantive questions before the federal High Court or otherwise prejudicial to the merits of the substantive matter.

For the respondents, the thrust of the contention made for them by their learned counsel is that the court below was right to have held that exhibit H relied upon by the appellants as the authority to institute the main action did not give them any such authority. In the view of learned counsel, the court below was right when it made the finding that exhibit H could not have been the authority to bring the substantive suit in the trial court in the name of the 1st appellant company. The main reason for this view appears to be that as exhibit H was made on the 7th September, 2000, it could not have been the authority to sue for an act which the respondents did not do until 12th September, 2000. Therefore argues learned counsel, exhibit cannot be the authority to use the name of the 1st appellant company to file an action against other shareholders of the 1st appellant company. It is manifest from the argument of counsel for the parties that in the resolution of this issue, it is necessary to consider exhibit and section 63 of the Companies and Allied Matters Act. I will however set out first the said provisions of the said Act. It reads:

“(1) A company shall act through its members in general meeting or its Board of Directors or through officers or agents, appointed by, or under authority derived from, the members in general meeting or the Board of Directors.

(2) Subject to the provisions of this Act, the respective powers of the members in general meeting and the Board of Directors shall be determined by the company’s articles.

(3) Except as otherwise provided in the company’s articles, the business of the company shall be managed by the Board of Directors who may exercise all such powers of the company as are not by this Act or the articles required to be exercised by the members in general meeting.

(4) Unless the articles shall otherwise provide, the Board of Directors, when acting within the powers conferred upon them by this Act or the articles, shall not be bound to obey the directions or instructions of the members in general meeting: Provided that the directors acted in good faith and with due diligence.

(5) Notwithstanding the provisions of subsection (3) of this section, the members in general meeting may –

a) act in any matter if the members of the Board of Directors are disqualified or are unable to act because of a deadlock on the board or otherwise:

b) institute legal proceedings in the name and on behalf of the company if the Board of Directors refuse or neglect to do so:

c) ratify or confirm any action taken by the Board of Directors;

d) make recommendations to the Board of Directors regarding action to be taken by the board.

(6) No alterations of the articles shall invalidate any prior act of the Board of Directors which would have been valid if that alteration had not been made.”

Now, learned counsel for the respondents has argued that if the provisions of section 63 of Companies and Allied Matters Act are read together, it would be clear that the said provisions enjoin the directors to obey the directions or instructions of the shareholders in general meeting in the situation where a board acts within the powers donated to it under Companies and Allied Matters Act or the Articles of Association. Therefore, argued learned counsel, in the absence of any contract to the contrary, the majority of the shareholders of a company have the ultimate control of its affairs and are entitled to decide whether or not an action in the name of the company shall proceed. In support of his submission, he cites Pender v. Lushington (1877) 6 Ch. D 70; Harben v. Phillips (1883) 23 Ch.D 14; Marshall’s Valve Gear Co. Ltd. v. Manning Wardle & Co. Ltd. (1909) 1 Ch.267.

It is undoubtedly good law that in order to interprete an Act and/or a section of an Act, it is necessary to read the entire provisions together in order to discover the intention of the legislator in enacting the said provisions of the Act or a section of it. But with due respect to learned counsel for the respondents, the question that falls for consideration here is, whether there is any power in Companies and Allied Matters Act that permits directors of a company to protect the interest of the company. The main contention made for the appellants is that the business of the 1st appellant/company would be adversely affected if action was not taken to protect the business of the 1st appellant company. It is my humble view that given the circumstances, section 63(3) of the Companies and Allied Matters Act allows Directors of a company to authorise that action be taken to protect the business of the company. The plain reading of section 63(3) of the Companies and Allied Matters Act that except as otherwise provided in the company’s articles, the business of the company shall be managed by the Board of Directors who may exercise all such powers of the company as are not by this Decree or the Articles required to be exercised by the members in general meeting.It is patent that throughout the proceedings in this court and the courts below, the respondents have not presented any evidence to show that the 1st appellant/company’s articles had provisions which prevent the Board of Directors from acting to protect the business of the company. Nor was there any evidence also that the members in general meeting have deprived the directors of the power to act as was done in the instant case to protect the business of the 1st appellant company. It is also my view, that the burden lies on the respondents to present such evidence as would persuade the court that the appellants do not have the power they exercised under section 63(3) of the Companies and Allied Matters Act. And as there is no evidence to that effect from them, they cannot invite the court to hold that the appellants as directors of the 1st appellant company had no right to act to protect the business of the company.

The appellants on the other hand, rest their authority to take the action they took on exhibit H which reads thus:

“ODUTOLA HOLDINGS LIMITED

RC. 24392

Extract From the Minutes of the Board of Directors’ Meeting held at Onibudo House, ljebu-Ode Oil Thursday, 7th September, 2000 Authority to file further action as and when necessary.

Further to the resolution passed on 6th July, 2000 members were informed that an action has been filed at the Federal High Court, Lagos against Mr. Kunle Ladejobi, the administrator pendete lite appointed over the estate of Chief T. A. Odutola and that the solicitors have advised that a further resolution is necessary to authorise the filing of any further actions against Mr Kunle Ladejobi and any other persons as may be necessary in view of the threat contained in the letter dated 1st September 2000 addressed to the company’s secretaries by the solicitors to Mr. Kunle Ladejobi, in order to protect the interests of the company. IT WAS RESOLVED: THAT the company’s solicitors be and are hereby authorised to file any further actions as may be necessary against Mr.

Kunle Ladejobi and any other persons in order to protect the interest of the company.

For Genaseo Nominees Ltd.

Chairman”

I have earlier in this judgment reviewed the argument of learned counsel for the respondents on why exhibit H cannot be relied upon by the appellants to sustain their authority for instituting the action. With due respect to learned counsel for the respondents, it is my view that the argument proffered for the rejection of exhibit H is specious to say the least. Exhibit H in my view sufficiently authorized the appellants to institute the main action against the respondents and I so hold.

In my humble view, I do not think that the case of Sotiminu v. Ocean Steamship (Nig.) Ltd. (1987) 4 NWLR (Pt. 66) 691 is an authority for the proposition that an authority duly conveyed to a solicitor by directors of a company cannot be relied upon by the solicitor to institute proceedings as in this case. There is no doubt from the facts presented in this case and as evidenced by exhibit H that the 2nd-7th appellants duly were authorised to institute this action with themselves and the 1st appellant.

For the above reasons, I will therefore resolve issue 2 in favour of the appellants. The next issue that deserves to be considered in this appeal is appellants’ issue 5. Here the appellants are asking whether the Court of Appeal did not err when it granted the alternative relief sought by the respondents. Earlier in this judgment, I have referred to the alternative relief sought by the respondents by their application made to the trial court. That alternative relief for case of reference reads thus:

“An order staying proceedings in this action and ordering a meeting of the shareholders of the Odutola Holdings Ltd. with a view to determining whether their directions or instructions as to whether the Court plaintiff company should continue as a party to this suit.”

That relief which was not considered by the trial court was granted by the court below. The appellants have in this appeal argued that the pronouncement of the court below was made erroneously. This view of the decision of the court below rests on the principle that where the court below had considered and pronounced upon the 1st relief, the court is precluded from considering and making any pronouncement on the alternative relief. I think that submission has merit. Moreso, where in the instant case, the trial court did not even consider the alternative relief and therefore there was nothing before the court below to be considered as an appellate court. It must be remembered that appeals must stem from the failure of the trial court to properly consider an issue before it or had erroneously reached a decision upon an issue that was argued before it. See Help (Nig.) Ltd. v. Silver Anchor (Nig.) Ltd. (2006) 5 NWLR (Pt.972) 196; Agidigbi v. Agidigbi (1996) 6 NWLR (Pt.454) 300 at 313 G-H. It follows that the pronouncement made in the alternative relief in the circumstances was made in error. It is therefore set aside.

Having regard to what I have said above, issues 1, 2 and 5 are resolved in favour of the appellants, this appeal therefore succeeds and the judgment of the court below is hereby reversed and set aside.

The ruling of the trial court is upheld where the appellants were adjudged to have properly initiated this suit with the main action.

This appeal having succeeded, the appellants are entitled to costs of N5,000.00 in respect of costs awarded against them in the court 13 below and the sum of N10,000.00 in this court.

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SC.263/2001