Adkins Scientific Limited V. Dr. Michael Aladetoyinbo & Anor (1995)

LAWGLOBAL HUB Lead Judgment Report

ONU, J.S.C. 

This interlocutory appeal which emanated from the Court of Appeal holden at Benin City had its beginnings in the High Court of Ondo State sitting at Ado-Ekiti where the plaintiff, herein appellant, took out a Writ of Summons dated 16th December, 1986 against the defendants, now respondents, claiming various amounts of money both in local and foreign currencies: return of certain properties including motor cars of the appellant in possession of the 1st respondent, an account of various sums of money entrusted solely to the 1st respondent and an injunction restraining the respondents from carrying out business similar in nature to the type in which the appellant was engaged within Ado-Ekiti (where the appellant was based) and Ondo State in general for the next two years.

It is noteworthy to point out as background facts that the suit was commenced following certain allegations of misfeasance made against 1st respondent, who was a member and Managing Director of the appellant company. He, in consequence withdrew his participation in, and resigned his appointment from the appellant in 1985 having before then set up his own company, the 2nd respondent, in competition with the appellant. Part of the allegations of misfeasance included the fact that 1st respondent used his position to transfer part of the business of the appellant to the 2nd respondent.

The claim having been denied, pleadings were ordered, filed and exchanged by the parties. The respondents in addition to their defence filed a counter-claim while the appellant delivered a Reply to the counter-claim.

The suit proceeded to hearing but soon thereafter, the respondents brought a motion on notice praying the court as follows:-

“1. An order striking out the plaintiff/respondent’s name from this action on the ground stated in the schedule herein. x x x x x x x x x

SCHEDULE

That the court lacks jurisdiction to entertain this action in that it is not properly constituted because there was no authorisation by the Company and/or its Board of Directors to institute this action in its name’”

The motion which invoked the placing before the learned trial Judge a conglomeration of other documentary evidence, was heard and sifted by the learned trial Judge, Akintan. J. (as he then was) who, in a reserved ruling, concluded in the following words:

“In conclusion therefore and for the reasons given hereon I am satisfied that the applicants have failed to make a sufficient case to warrant the granting of their prayers. I am also satisfied from the facts deposed to in the counter-affidavit and the documents exhibited along with it that the institution of the action was duly authorized by the directors of the company at their meeting held on 28/6/86 and the director’s action was later ratified by the members of the company at its general meeting which was held on 17/1/87. Even if the institution of the action was in fact not authorized, the nature of the claim falls within those which the court would not strike out but the hearing of which could be adjourned for the purpose of allowing the directors or members meet to carry out the necessary authorisation or ratification. (See Halsbury’s Laws of England. 4th Edition Vol. 7 para. 767 at p. 457. That situation does not however arise in the present case since the action was duly authorised.

The motion therefore lacks any merit and it is hereby dismissed”

Whereupon, the respondents appealed to the Court below. That court (per Omo, J.C.A. as he then was, Musdapher and Salami, J.J.C.A.) after hearing counsel for both sides in its judgment delivered on 2nd June. 1981), answered the sole question posed therein for determination in the negative: ruled that the decisions of the two main organs of the appellant were incompetent, allowed the appeal, and in consequence, set aside the ruling of Akintan. J. inclusive of the costs awarded therein.

Being dissatisfied with the judgment of the court below, the appellant has appealed to this Court upon a Notice of Appeal containing ten grounds dated 26th November, 1990 and filed on 27th November. 1990.

Parties later exchanged briefs in accordance with the rules of court with the appellant filing a Reply brief. While the appellant submitted six issues (the first of which was resolved at the hearing of this appeal) as arising for determination, the respondents adopted all but issue 3, which they contended, bears close affinity to and is a repetition of Issue 2.