Adama Dipcharima & Anor V. Alhaji Umar Ali & Anor (1974)

LawGlobal-Hub Lead Judgment Report

G. S. SOWEMIMO, J.S.C.

This appeal is against the judgments of Hague Ag. J., in Suit No. NEM/15/71 delivered respectively on 11/6/73 and 20/11/73. On 10/12/73 the learned trial Judge also awarded cost of N1,420 to the respondents.

The claims of the plaintiffs, who are now the appellants before us, are set out in paragraph 10 of the Statement of Claim which reads:-

“10. It will be the Plaintiffs case that no meetings of Directors or shareholders of the 2nd Defendant Company have been summoned or held to their knowledge since the death of the late Zanna Bukar Dipcharima aforesaid.

In consequence of the foregoing the Plaintiffs have suffered loss and damage and claim from the defendants jointly and severally:-

(1) A declaration that the 1st Defendant has no proprietary in the second defendant company not being a shareholder in the said company.’

On this first claim the learned trial Judge held as follows:-

“Among other things the Plaintiffs ask for a declaration that the 1st defendant has no proprietary interest in the 2nd defendant company. Manifestly he has not as the documents filed in the action do not show him as the owner of any share.”

On this finding one would have expected the learned trial Judge to enter judgment for the plaintiffs. The learned trial Judge had in an earlier portion of the judgment rejected Exhibit O which purported to be the minutes of a meeting purporting to have been held in 1965 whereby the 1st defendant was appointed a Managing Director.

This was quite rightly rejected because an abortive attempt was made in 1969, six years later and after the death of Zanna Dipcharima and his mother, to file particulars to reflect the purported appointment of the 1st defendant as Managing Director. For some reasons, which did not appear on the record, the learned trial Judge contradicted himself by saying that 1st defendant could have been validly appointed a director, and by some further strange reasonings held that the plaintiffs had acquiesced in such appointment by not objecting to the company’s 2nd defendant’s headed note-paper in which the name of 1st defendant was shown.

If the learned trial Judge had realised that he was trying the case on issues joined by the parties in their pleadings, he might not have embarked on a fruitless endeavour of considering matters not raised in the pleadings. After all, trials based on pleadings filed by parties, are prosecuted on the lines of issues raised and joined by the parties. The judgment of such a court must, we wish to emphasise, turn on such issues as had been joined. The question of the law applicable must necessarily be based on the findings made.

It is very tempting for a trial Judge, in his endeavour to do justice “to wander into areas not pleaded by the parties” and thereby open himself to a charge of either unintentional miscarriage of justice or purported leaning to one side, thereby leaving himself open to an allegation of impartiality. Although we do not believe that the learned trial Judge did these alleged acts deliberately, we nevertheless will be shirking our duties if we fail to point out that departures from settled practice and procedure could leave a court open to such charges.

We are, therefore, of the view that the learned trial Judge was wrong, both in law and on the facts, to have held that claim for declaration was not made out. We hold that the claim was made out and that judgment should have been entered in accordance with the relief sought.

The second head of claim in paragraph 10 of the Statement of Claim reads:

“An order directing the 1st defendant to render a full account of all the affairs of the said 2nd defendant company from 1st April 1969 to the present time as managed by him under his assured role of Managing Director.”

On this item of claim the learned trial Judge in his judgment said:-

“Evidence has been led during the hearing which indicates that the second defendant company is a large, scale operator. The extent of its transport holdings and the large transactions disclosed in the bank statements put this beyond doubt. The averments in paragraphs 6(a) and (b) of the statement of claim were withdrawn during the hearing, but it has been established that no annual returns have been filed since the death of Z.B. Dipcharima and no accounts circulated to the members.

“Averments that qualified Accountants audited the accounts in the years 1967, 1968 and 1969 and that financial report “dated 3/9/1969 was circulated to the members were withdrawn during argument. In consequence it is absolutely essential for the just determination of this action that the 1st defendant do file accounts in this Court for the year, 1969 to the end of the 2nd Defendant Company’s last financial year, all inclusive and in addition shall file a copy of the report referred to in paragraph 11 of the Defence.

“I order that the necessary documents be filed within 30 days and a decision on the other relief claimed by the plaintiffs will be deferred until the documents have been filed and considered.” (underlining ours)

The learned trial Judge having found as above, should have granted the order sought for by the plaintiffs and made a consequential order that the 1st defendant should file the accounts as requested and served same on the plaintiffs within a given period, and should also grant the plaintiffs time to falsify and surcharge the accounts as filed within a specified period. However, the court did not do this; instead it ordered that statements of accounts be filed both outside and within the period requested by the plaintiffs, and it made no consequential order for service on the plaintiffs for falsifying and surcharging the accounts. In the ensuing period granted and later extended by the Court, the accounts were never filed nor properly tendered in Court. The result was that when the plaintiffs were asked to address the court on the accounts he had not seen, they declined to do so. One wonders what the learned trial judge expected them to say on statements of accounts which were not filed in Court or served on them, but which were allegedly handed by counsel for the defendants to the trial Judge in chambers. It is wrong of the learned trial Judge not to order the 1st defendant, as claimed by the plaintiffs, to file the accounts and serve same on them for falsifying and surcharging. We are of the opinion that the learned trial Judge, having found that the complaints as averred were made out, was justified in refusing to make the order sought for in their second item of claim. We, therefore, hold that learned counsel for the plaintiffs was justified in his complaint against Claims three and four which read as follows-

“(iii) A perpetual injunction restraining the 1st Defendant, his agents, servants and other such representatives from intermeddling with the affairs of the said 2nd Defendant Company except in accordance with its Memorandum & Articles of Association and/or the Companies Decree, and

(iv) 100000 pounds, being Damages against the 1st Defendant for wrongfully intermeddling with the affairs of the 2nd Defendant Company as aforesaid.”

In view of the finding of fact of the learned trial Judge that Exhibit O was ineffectual to appoint the 1st defendant either as a Director or a Managing Director, the claims on these heads should have been granted.

The appeal succeeds and it is allowed. We therefore make the following orders:

“1. We hereby set aside the judgments of 11th June, 1973 and 20th November, 1973 by Hague Ag. J, including his award of costs assessed at 1,420 Naira in favour of the defendants.

2. We order that the claims of the plaintiffs on the four heads as per paragraph 10 of the statement of claim be hereby granted.
3. Consequent on (2) above, we order that 1st defendant should as from the date of this judgment cease to intermeddle with the 2nd defendant Company and cease to parade himself as Managing Director of 2nd defendant Company which we hold to be an invalid assumption of office.
4. We order that all audited statements of account from 1st April 1969 up till date should be filed with the Court below and served on the plaintiffs on or before 1st February 1975, and that the Plaintiffs should be served with such audited accounts, with liberty to falsify and surcharge the accounts duly filed, within 30 days of the service on them, and the lower Court should make the necessary order after the filing, falsifying, and surcharging of the accounts. It is further hereby ordered that the accounts when finally settled be filed with the Registrar of Companies.
5. For the avoidance of doubt, we hereby order a perpetual injunction against 1st defendant, from the date of this judgment, to cease all forms of management of the 2nd defendant Company and hand over the management to the plaintiffs. We also order that the 1st defendant should forthwith make out a handing-over note to the plaintiffs, and that such handing-over to the plaintiffs be effected on or before 1st February, 1975.
6. We hereby order the 1st defendant personally to pay damages of 200,000 Naira for intermeddling without any lawful authority from the date the late Zanna Bukar Dipcharima died in 1968 up till date.
7. In view of the foregoing orders, we hereby order the plaintiffs to summon a meeting of all share-holders to regularize the position of things by making appointments, if so advised and resolved at the meeting, of those who are to manage the 2nd defendant company; and that such meeting should take place after the accounts have been settled in the Court below.
8. The above orders for settling the account as filed and for falsification and surcharging should be carried out in the lower court before another Judge, and not by Hague Ag. Judge.
9. We hereby order that the 1st defendant do pay costs assessed at 2000 Naira in the High Court and at 104 Naira in this Court.
10. We further hereby order that a copy of this order restraining the 1st defendant from managing the 2nd defendant Company and operating its banking account, in all banks in which the accounts of 2nd defendant company is or are kept, be served on

(a) all relevant banks

(b)the Northern States Produce Marketing Board.

(c) the Registrar of Companies in the Federation Ministry of Trade.

These orders shall constitute the judgment of this Court.

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Other Citation: (1974) LCN/1847(SC)