S.H.O. Williams (Junior) & Anor V. J. Olabode Williams (1995)

LAWGLOBAL HUB Lead Judgment Report

IGUH, J.S.C

On the 19th of January, 1987, J. Olabode Williams (therein referred to as the petitioner) filed a petition at the Federal High Court, Ibadan against S.H.O. Williams (Junior)and Western Laundry and Co. Limited (therein referred to as the respondents) in which he averred as follows:-

“PETITION BY MINORITY SHAREHOLDERS

The humble petition of J. Olabode Williams of 18 Dejo Oyelese Road, Bodija, Ibadan, Oyo State of Nigeria a minority shareholder in Western Laundry & Co. Ltd. shows as follows:

1. That the Western Laundry & Co. Ltd. (hereinafter referred to as “the Company” was in the year 1965 incorporated under the Companies Ordinance, Cap. 37, 1958 (now Companies Decree 1968) as a private Company Limited by shares.
2. That the registered office and place of business of the Company is situate at 343, Ekotedo, Ibadan Oyo State of Nigeria.
3. That the nominal share capital of the Company is N20,000.00 divided into 10,000, ordinary shares of N2 each. The amount of the capital paid up to date is N 13,620.00 made up of 6,810 ordinary shares of N2 each.
4. The main object for which the Company was established is: “To carry on the business of launderers, cleaners, dyers, dry-cleaners and carpet beaters and to carry on the business of repairing all articles sent for cleaning and beating.”
5. That “the Company commenced business immediately after incorporation and has since been in operation.
6. That the first Respondent, Mr. S.M.O. Williams, is one of the 23 shareholders of the Company; while your humble petitioner is also one and holds 250 shares of N2 each covered by share Certificate No. Five issued on the 27th day of June, 1967.
7. That since the incorporation of the Company in -1965 the first Respondent, Mr. S.M.O. Williams (Junior) was appointed as the Managing Director of the Company and has since been in control of the management of the Company.
8. That since the incorporation of the Company in 1965 your humble petitioner has not been put in a position to know how the Company is being run as the first Respondent has refused/neglected to arrange for the Annual General Meetings of the shareholders of the Company.
9. That your humble petitioner persistently requests through the first Respondent for the holding of the Annual General Meetings of the Company to enable the shareholders to be properly and adequately briefed of the situation of things in the Company; to declare dividends where distributable profits have been made and so that the shareholders will from time to time be acquainted with the progress or otherwise being made by their Company.
10. That when your humble petitioner persistently complained about the irregularities in the management and conduct of the Company the first respondent attempted to buy over the shares held by your petitioner. Your petitioner shall rely on the various correspondence that passed between himself and the first respondent in 1981.
11. That since the incorporation of the Company your petitioner has not received any notice of the Annual General Meeting; any copy of the Accounts of the Company or any dividend on his shareholding when in fact the Company has continuously operated at full capacity.”

The petition was concluded with the following prayers –

“Your Petitioner therefore humbly prays for the following:

1. That this Honourable Court to appoint an independent investigator knowledgeable in Law and Accountancy to investigate the affairs and finances of the Company, and, in particular to:

(a) find out how the revenues accruing to the Company, and all other funds available to he Company, at various times since incorporation, were utilised.

(b) find out if, and how much of, the company’s funds have been misappropriated by the Managing Director and/or and of the persons engaged/employed by him.

(c) determine the role of the Managing Director and/or members of the Company in the general management of the Company.

2. That this Honourable Court do after such investigation direct:

(a) that the Managing Director or member of staff of the Company found to have mis-appropriated the funds of the Company shall repay to the Company, within a period that this Honourable Court shall think fit, any such money found to have been misappropriated by such Managing Director or member of staff with interest thereon at such rate and for such period as the Honourable Court shall think fit.

(b) that any such person so found to have misappropriated the funds of the Company shall not hold office either as the Managing Director or in any other capacity in the Company for such period as the honourable Court shall think fit.

3. That this honourable Court shall declare that the petitioner is a shareholder of the Company and is entitled to be acquainted with the progress, or otherwise, being made by the Company since its incorporation up to date.
4. An order that the petitioner be paid all dividends that have accrued on his shareholding since the incorporation of the Company up to date.
5. An order that the first and second respondents must strictly comply with the provisions of the Company’s Articles of Association, in particular, holding of annual general meetings, declaration and payments of dividends.
6. Or that such other order or orders may be made in the premises as shall be just.”

The petition was duly verified by an affidavit sworn to by one Leonard Okpara who described himself as a Law Clerk in the chambers of the petitioner’s solicitors.

Before further proceedings were gone into, the respondents by a motion on notice dated the 8th April, 1987 sought to dismiss the petition on the ground that it did not disclose any grounds for reliefs under the Companies Act, 1968. The court was addressed on this application at great length but the learned trial Judge, without doing justice to the various issues raised in learned counsel’s addresses, brevi manu struck out the motion and indicated his preparedness to go on with the proceedings. He ruled as follows:-

“If this petition had been brought appropriately, under Section 201 of the Companies, Decree seeking a winding up Order. I would have had no hesitation in dismissing it as requested by the learned counsel for the respondents but, as the petitioner has not sought, and is not seeking, a winding up Order. I find no substance in the application of learned counsel for the respondents and it is accordingly struck out.”