Alhaji L.A. Gbadamosi & Ors V. Chief Stephen I. Alete & Anor (1992)

LawGlobal-Hub Lead Judgment Report

NDOMA-EGBA, J.C.A.

The consequential order complained of by the appellants herein arose from an application on Notice filed by the defendants in a pending and related suit in the Federal High Court, Port Harcourt. The 1st plaintiff/respondent on record sought in the suit aforementioned a declaration that he (1st plaintiff/respondent) is still the chairman of the 5th defendant company and chairman of its Board of Directors. He added in the said suit a prayer for nullification of a number of resolutions and decisions of the 5th defendant company on the grounds that these were taken ultra vires. A number of other reliefs mentioned in the printed record were also claimed. In course of hearing the suit aforesaid, the appellants herein brought a motion which, apparently, is interlocutory but in effect, mandatory. They solemnly asked for a stay of proceedings in the main suit and an order prohibiting the respondents from implementing the resolution and orders purportedly taken by the 5th appellant company, Ace Toys and Plastics (Nigeria) Limited. The latter was subsequently struck out from the actual suit. Its Managing Director Edet U. Okokon, was however joined to the suit, as it appears, in his personal capacity:

As a result of the joinder and elimination of the parties as aforesaid, the appellants amended their particulars of claim. This amendment was reflected in a fresh application for an interlocutory injunction granted by the court on the 18th of February, 1991.

Dissatisfied by the decision aforementioned, the applicants appealed to this Court (Appeal Court) which appeal is entered and pending for determination.

The Writ of summons upon which the three injunctions were claimed was filed by the respondents. Chief Stephen Ikpoku Alete and others on the 17th of September, 1990.

In reaction to the foregoing, the defendants/respondents on record brought an application on Notice to restrain plaintiffs/appellants from giving effect to a number of resolutions passed by them on the 16th of August, 1990 on behalf of the Board of Directors of the 5th appellant company, Ace Toys and Plastic (Nigeria) Limited.

By a reserved ruling dated 27th day of May. 1991 the learned trial Judge presiding at the Federal High Court,Port Harcourt allowed a stay of further proceedings in the substantive suit awaiting the determination of the appeal filed against the ruling of the court delivered on the 18th of February, 1991. The prayer seeking a stay of the implementation/execution of the Order contained in the ruling dated 18th February 1991 pending the decision of the appeal filed against it was refused.

The learned trial Judge on his own volition decreed:

“The Executive Chairman (the 1st respondent) and the General Manager (the 4th applicant) shall be and are hereby appointed to jointly take charge of the management of the financial affairs of the 5th applicant company with immediate effect and for this purpose, one shall not spend any of the money or moneys of the company without the concurrence of the other pending the determination of the appeal mentioned in (1) and (2) above; so however that none of them shall unreasonably withhold his assent or concurrence to any expenditure.”

He commented during the ruling:

“ln essence the Chairman and the Managing Director or where there is no Managing Director, the General Manager, are the two principal officers that run a company. In other words, they are the officers responsible for the day to-day management of the affairs of the company. In the peculiar circumstances of this case and to resolve the impasse created by the present situation in the 5th applicant company. I think an order that the Executive Chairman (the 1st respondent) and the General Manager (the 4th applicant) shall be jointly responsible for the management of the financial affairs of the 5th applicant company will solve the impasse. To this end, I will order that one shall not spend the funds of the company without the concurrence of the other pending the final determination of the substantive suit. The two of them and indeed all the directors and shareholders should learn to work together.”

Aggrieved by the order/decision aforesaid and with leave granted on the 18th October, 1991, appellants appealed upon the grounds set out verbatim hereunder:

“3. Ground of Appeal

The learned trial Judge erred in law and acted without jurisdiction when he made a ‘consequential order’ in the terms set out below after refusing the defendants/applicants application for a stay of execution of the learned trial Judge’s order dated 18th February, 1991; “The Executive Chairman (the 1st respondent) and the General Manager (the 4th applicant) shall be and are hereby appointed to jointly take charge of the management of the financial affairs of the 5th applicant company with immediate effect and for this purpose, one shall not spend any of the money or moneys of the company without the concurrence of the other pending the determination of the appeal mentioned in (1) and (2) above, so however that none of them shall unreasonably withhold his assent or concurrence to any expenditure’,