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Bernard Ojeifor Longe V First Bank Nig. Plc. (2010)

LAWGLOBAL HUB Lead Judgment Report

GEORGE ADESOLA OGUNTADE, JSC

The appellant was the plaintiff before the Federal High Court Lagos where on 4-07-02, he issued a Writ of Summons against the respondent as the defendant claiming the following reliefs:

“(i) A declaration that the Defendant’s Board of Directors cannot lawfully hold any meeting of the said Board without giving notice thereof to the Plaintiff and accordingly all decisions taken at any such meeting is unlawful, invalid, null and void and incapable of having any legal consequence;

(ii) A declaration that in particular the decision of the Defendant’s Board of Directors held on the 13th June 2002 to revoke the Plaintiff’s appointment as Managing Director/Chief Executive is wrongful, unlawful, invalid null and void and incapable of having any legal consequence;

(iii) A declaration that any purported implementation of the said decision made by the Board on the 13th of June 2002 (including any appointment to the office held by the Plaintiff in the Defendant Company) is ineffective, unlawful and null and void;

(iv) An order of injunction restraining the said Defendants from giving effect or continuing to give effect to any of the decisions of the Board mentioned in claims (i) and (ii) hereof without first complying with the mandatory procedural requirements stipulated in Section 266(3) of C.A.M.A.;

(v) A declaration that the Plaintiff is entitled to remain in the premises allocated to him by the Defendant including the enjoyment of all associated services until the expiration of a reasonable time from the date of any lawful and valid termination of his contract of service with the Defendant;

(vi) In the alternative to the foregoing, the Plaintiff claims the sum of N136,614,584.00 being the amount due and owing to the Plaintiff as at 13th June 2002;

(vii) Interest the said sum of N136,614,584.00 at the rate of 21% per annum at such other rate of interest as the Court may adjudge to be fair and just.

(viii) In further alternative to claims (i) to (iii) the Plaintiff also claims, the sum of N804,685,117.00, US$207,360.00 and Stg 359,100.00(pounds) being special damages suffered by him as a result of the wrongful termination of appointment.”

The parties later filed and exchanged pleadings after which the suit was tried by Nwodo J. (as she then was). On 9-10-03, in the judgment, the appellant’s claims I to V were dismissed whilst claims VI to VIII which were withdrawn by plaintiff’s counsel were struck out. The plaintiff was dissatisfied with the judgment. He brought an appeal before the Court of Appeal, Lagos (hereinafter referred to as the ‘court below’). The court below in its judgment on 5-1-06 dismissed plaintiff’s appeal. Still dissatisfied, the plaintiff has come before this court on a final appeal. In the appellant’s brief filed on his behalf, the issues for determination in the appeal were identified as the following:

“3.2. Whether it is proper in law for the Court of Appeal to have jettisoned suo-motu in its judgment the entire Reply Brief of the Appellant in their judgment without giving the parties, in particular the Appellant, a hearing even though arguments have been proffered on all the Briefs including the Reply Brief without any objection or opposition by the Respondent and in circumstances which resulted in a deprivation of fair hearing

3.2. Whether it was proper for the Court of Appeal to have failed in its judgment to resolve the issue whether a finding by the trial Court that the appellant was suspended under the common law meets the requirement of the Companies and Allied Matters Act that a director must be given a notice of directors meeting unless the director is disqualified under the Act (C.A.M.A.) an issue which if it had been pronounced upon would probably resolve the appeal in favour of the Appellant and by not doing so occasioned a miscarriage of justice

3.4 Whether it was proper for the Court of Appeal to speculate on an issue which was not part of the grounds of appeal and which was also not an issue for determination before the Court

3.5. Whether the Court of Appeal was right in holding that although the Appellant was appointed pursuant to Articles 105 of the Articles of Association of the Respondent, the is not a director for that purpose of the Companies an Allied Matters Act (C.A.M.A.) therefore his working relation is not within the contemplation of Section 266(i) and moreover that the office of the executive director is not known to the C.A.M.A.”

The respondent’s counsel raised a preliminary objection to the appellant’s 1st issue. It was contended by the respondent that since the judgment of the court did not in the end turn on the issues whether or not the appellant’s Reply brief was properly filed before the court below, it was not proper for the appellant to raise an issue on the question whether or not the court below was right to have failed to consider the aforesaid appellant’s Reply brief.

I am with respect unable to agree with the Respondent’s counsel that the appellant was wrong to raise a ground of appeal and an issue for determination in the appeal on the question whether or not the court below was right to have refused to consider the contents of the appellant’s Reply brief filed in reaction to the Respondent’s brief. My firm view is that an appellant is entitled under Section 36 of the 1999 Constitution of Nigeria to have his appeal fully and fairly determined. The hearing of an appeal cannot be regarded as full and fair if the brief filed by one party to the appeal is not considered while the brief of his opponent is considered. Even if a brief contains no more than arguments on the applicable facts and the law, the failure to consider the brief filed by one of the parties is tantamount to a refusal to hear the appeal fully. I am therefore unable to agree with the respondent’s counsel that the appellant could not properly raise his issue 1.

I intend to consider issue 1 on its own and issues 2-4 together. Issue one is a complaint that the court below improperly failed to consider the appellant’s Reply brief before it when none of the parties had raised any issue before it as to whether or not the appellant’s said Reply brief should have been filed. None of the parties had, it was argued, raised any issue as to the contents of the Reply brief; and the appellant was therefore not enabled to say anything concerning the propriety or regularity of the contents of the Reply brief. Appellant’s counsel Prof. Adesanya S.A.N. forcefully argued that the court below by failing to consider the contents of the appellant’s Reply brief had denied the appellant is constitutional right to fair hearing. It was further submitted that a court could not properly raise issues suo motu- which none of the parties had raised before it. Counsel placed reliance on Hamble v. Hueze [2001] 4 NWLR (Pt. 703) 372 at 388; Abbas v. Solomon [2001] 15 N WL.R. (Pt.735) 144; Korede v. Adedokun [2001] 15 NWLR (pt.736) 483 at 497; Yesulu v. government of Edo State [2001] 13 NWLR (Pt. 731) 517; Achiakpa v. Nduka [2001] 14 NWLR (Part 734) 623 S.C. and The State v. Oladimeji [2003] 14 N WL.R. (Pt. 839) 57 at 69.

There is no doubt that the court below was of the view that the appellant ought not have filed an appellant’s Reply brief because the respondent had not in its brief raised any issue or argument which warranted the filing of an appellant’s Reply brief. At pages 1225-1226 of the Record of Proceedings the court below per Salami J.C.A. (as he then was) reasoned thus:

“I wish respectfully to observe that the appellant’s reply brief went contrary to the principle governing writing of a reply brief. There is a demand for a reply brief when an issue of law or argument in the respondent’s brief deals with fresh point, it should therefore be restricted or devoted strictly to proffering answer to the new points raised in the respondent’s brief. It is not the intention of Order 6 rule 5 which provides for a reply brief, to allow the appellant to re-argue or re-open his appeal all over again under the pre of writing a reply brief by merely re-emphasizing argument already contained in the appellant’s brief. It is therefore clear that where there is no fresh point raised in the respondent’s brief, appellant’s reply brief would not only be unnecessary but also uncalled for and an unwholesome waster of the time of the respondent and the court. See Supreme Court’s observation in Olafisoye v. Federal Republic of Nigeria (2004) 4 NWLR (Pt.864) 584, 644 per Niki Tobi, JSC and Ikine v; Edierode (2001)18 NWLR (Pt. 745) 446,461 per Ejiwunmi JSC. This is not only a typical example of the benediction being longer than mass but also in fragrant disregard of respondent’s right to reply.”

It is to be said here that the respondent’s counsel had not at the hearing raised any objection to the appellant’s Reply brief filed by appellant’s counsel. No issue was raised before the court below as to the propriety of filing the said Reply brief. It is a correct statement of law that courts of law must refrain from raising suo motu issues upon which their decisions or judgment would turn. The rationale for that approach is not difficult to understand. It is an inseparable adjunct of the concept of fair hearing. This court has in several cases warned on the approach in such matters. The dictum of this Court in the case of The State v. Oladimeji (supra) is very apposite. This Court at page 69 said:

“The law in this regard is now settled. It is now trite law in the determination of disputes between the parties, the court should confine itself to issues raised by the parties. The Court is not competent, suo motu to make a case for either or both parties and then proceed to give judgment in the case so formulated contrary to the case of the parties before it.”

Having said the above, I must bear in mind that I am dealing here with the failure to consider’ an appellant’s Reply brief and not with the question of, the formulation of issue, suo motu for parties by the court in its judgment. Whether or not raising a question suo motu affects adversely any of the parties is in itself a distinct matter which the appellate, court must consider only in the light of the possible effect or impact which such an error may have had on the judgment of conclusion of the errant court. In this case, I am considering the argument in a brief; not evidence at the hearing or averments in a pleading.

The contents of a brief are no more than arguments on the law which point the way to the court the direction in which it should go. Arguments constitute a form of assistance to the court but briefs, notwithstanding, courts are bound to give judgments according to law.

Order 6 rule 5 of the Court of Appeal Rules provides:

The appellant may also, if necessary, within fourteen days of the service on him of the respondent’s brief, but not later than three clear days before the date set down for the hearing of the appeal file and serve or cause to be served on the respondent a reply brief which shall deal with all new points arising from the respondents brief,”

The point which the court below made in its judgment in the excerpt reproduced above is that the necessity to file an appellant’s Reply brief did not arise as there were no new points raised in the respondent’s brief. A careful perusal of the respondent’s brief before the court below shows that no new issues were raised therein which necessitated the filing of an appellant’s Reply brief. The said appellant’s Reply brief was no more than an effort at re-arguing or emphasizing matters which had been fully discussed by the appellant’s counsel in the appellant’s brief. The work of justices who have to read these briefs is needlessly made cumbersome if they have to read and digest briefs which are a repetition of submissions previously made. I am with respect unable to agree with appellant’s counsel that the court below was in error in its decision not to take into account the appellant’s Reply brief.

Appellant’s Issues 2, 3 and 4 will be considered together. I observed earlier in this judgment that the trial court struck out the appellant’s claims VI to VIII following the withdrawal of same. The claims (i) – (v) which were pursued by the appellant relate to the interpretation of the provisions of the Companies and Allied Matters Act as to the legal consequence of the Defendant’s/Respondent’s Board of Directors holding a meeting at which certain decisions were taken when notice of such meeting was not given to the Plaintiff/Appellant. The, relevant paragraphs of the averments in plaintiff/appellant’s Statement of Claim are 3,7,8,9 which read:

“3. On the 24th of February 2000, the Defendant at the meeting of its Board of Directors held at the Board room of the Head Office unanimously decided to appoint the Plaintiff as the Managing Director/Chief Executive of the Defendant Company for a period of 6 years but subject to an annual assessment of the Plaintiff’s performance, the Plaintiff will at the trial refer to the Board Resolution for its full terms and effect.

………………………………………………

At a meeting of the Defendant’s’ Board of Directors; held on the 13th of June 2002; the Board wrongfully and unlawfully resolved to revoke the Plaintiffs appointment with the Defendant.
Contrary to the Articles of Association of the Defendant Company and to section 266(3) of the Companies and Allied Matters Act 1990, the Plaintiff was not issued any notice of directors meeting of 13th June 2002 when the resolution to revoke his appointment was passed, accordingly the said meeting of the Board on 13th June 2002 is invalid, null and void and incapable of having any legal consequence.
By letter of 13th June 2002, the Defendant wrongfully and in repudiatory breach of the said agreement terminated the employment and wrongfully and unlawfully dismissed the plaintiff therefrom.”

It is apparent from the above averments that the kernel or cornerstone of the plaintiff/appellant’s case was the failure of the defendant/respondent to serve him a notice to be present at the meeting whereas a decision was made to dismiss him from the service of the defendant/respondent. The defendant(respondent in paragraphs 9 to 15 and 18 to 42 of its Statement of Defence pleaded facts to the effect that the plaintiff/appellant had been negligent to reckless in the manner he granted an unauthorized loan to a company called Investors International (London) Ltd: for the acquisition of shares in NITEL.

A perusal of the Statement of Defence filed by the defendant respondent conveys that the defendant/respondent pleaded and relied on facts which were not directly necessary to defeat the claims made by the plaintiff/appellant. It is plaintiff who by his Statement of Claim primarily nominates the issues to be tried in a suit and on which he relies to have the judgment of the court for a defendant it is only necessary to resist the plaintiff’s claims on the facts pleaded. It is not for the defendant to set up facts which would convey that it is not just setting up a defence to plaintiff’s suit but setting up a new case of his own; He is only permitted to do this when he is setting up a counter-claim. The approach of the defendant/respondent in the manner it crafted its Statement of Defence needlessly made the matter complex and unwieldy. If the reason which the defendant/respondent intended to rely upon for not serving the notice of the meeting at which plaintiff/appellant’s employment was brought to an end was because he had given an authorized loans, the defendant would be entitled to plead as it did. But in its paragraph 17 of the Statement of Defence, the defendant/respondent pleaded:

“17. The plaintiff was not entitled to attend the Board meeting and (sic) where his appointment was determined and dismissed. The plaintiff was suspended effective from April 22, 2002 and he was dismissed as Managing Director/Chief Executive from June 13, 2002 at a meeting of the Board of the Defendant. The plaintiff knew that to be the correct procedure of the Board.”

What are the facts relevant to the claims made by the plaintiff/appellant It was undisputed that the plaintiff was appointed the Managing Director/Chief Executive of the defendant on 24-2-2000. Before that date, the plaintiff had been the defendant’s Executive Director. Following an improper grant of loan to a customer of the defendant, the plaintiff was on 22-04-02 suspended by the defendant’s Board of Directors, and on 13-06-02 his appointment was revoked. The plaintiff was not given the Notice of the meeting of the Board of Directors of the defendant at which the decision to terminate him was taken. It was plaintiff’s contention that under section 266 of Companies and Allied Matters Act (hereinafter abbreviated as C.A.M.A.), he was entitled to be given Notice of the meeting and that the failure to give him such notices would render his termination null and void.

Now the letter by which the plaintiff was placed on suspension written on 22-4-2002 and tendered as an exhibit reads:

“FIRST BANK OF NIG. PLC,

35, Marina,

P. O. Box 5216, Lagos.

22nd April 2002

Mr. Bernard Ojeifo Longe, OON.,

Managing Director/CEO,

First Bank of Nigeria Plc.,

35, Marina, Lagos.

Dear Mr. Longe,

LETTER OF SUSPENSION

I regret to convey to you the decision taken by the Board of Directors of the First Bank of Nigeria Plc, at its Extraordinary Board Meeting of 22nd April 2002 held at Coommasie House Abuja to suspend you from office with effect from today, 22nd April 2002. During the suspension period, you are expected to concentrate on the recovery of the Credit Facility granted to the Investors Group Nigeria Limited (I.G.N.L.).

The Board expects that you will do your utmost best to help in the collective efforts towards the recovery of the money.

Yours faithfully,

(Sgd.)

Alh. (Dr.) Mutallab, CON

(Chairman )”

The extract of the minutes of the meeting at which the appointment of plaintiff was terminated reads:

“FIRST BANK OF NIG. PLC,

Samuel Asabia house,

35 Marina, (11th Floor),

P. O. Box 5216, Lagos.

EXTRACT FROM MINUTES OF THE EXTRAORDINARY BOARD MEETING N0.2/2002 HELD ON JUNE 13, 2002 AT ABUJA

REVOCATION OF THE APPOINTMENTS OF MESSRS. BERNARD O. LONGE AND UZOMA NWANKWO FROM THE BOARD

The Board reflected and pursuant to article 105 of the Memorandum and Articles of Association of the Bank, resolved to revoke the appointment of Messrs. Bernard O; Longe and Uzoma Nwankwo from the Board as Managing Director/Chief Executive and Executive Director respectively, hence they ceased being members of the Board with effect from June 13, 2002.

This is a certified true copy of the minutes of the meeting referred to above.

(Sgd.)

Tijani M. Borodo,

COMPANY SERCRETARY”,

And the letter which conveyed the decision of the Board of Directors of the defendant to the plaintiff on 13-6-2002 reads:

“FIRST BANK OF NIG. PLC.,

35 Marina,

P.O. Box 5216, Lagos.

13th June, 2002.

Mr. Bernard O. Longe, OON.,

c/o 10 Murtala Mohammed Drive,

Ikoyi,

Lagos.

REVOCATION OF APPOINTMENT AS MANAGING DIRECTOR/CHIEF EXECUTIVIE OF FIRST BANK OF NIGERIA PLC.

I write to advice you that the Board of Directors at its meeting of 13th June, 2002 has resolved to revoke your appointment as Managing Director/Chief Executive. Consequently, your appointment is hereby revoked with effect from the date of this letter.

I wish you success in your future endeavours.

Yours faithfully,

(Sgd.)

ALHAJI (DR. V.A. Mutallab, CON

CHAIRMAN

cc: Mr. J. M. Ajekigbe ‘

Managing, Director/Chief Executive”

There is no dispute as to the fact that the plaintiff was placed on suspension on 22-04-02 and that his appointment was revoked on 13-06-02. Section 262 of C.A.M.A. provides:

“262.(1) A company may by ordinary resolution remove a director before the expiration of his period of office, notwithstanding anything in its articles or in any agreement between it and him

(2) A special notice shall be required of any resolution to remove a director under this section, or to appoint some other person instead of a director so removed, at the meeting at which he is removed, and on receipt of notice of an intended, resolution to remove a director under this section, the company shall forthwith send a copy of it to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meting.

(3) Where notice is given of an intended resolution to remove a director under this section and the director concerned makes with respect to it representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so-

(a) in any notice of the resolution given to members of the company, state the fact of the representations having been made; and

(b) send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company), and if a copy of the representations is not sent as required in this section because it is received too late or because of the company’s default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting:

Provided that copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter and the court may order the company’s costs on an application under this section to be paid in whole or in part by the director, notwithstanding that he is not a party to the application.

(4) A vacancy created by the removal of a director under this section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy.

(5) A person appointed director in place of a person removed under this section shall be treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last appointed a director.

(6) Nothing in this section shall be taken as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as a director or of any appointment terminating with that as director, or as derogating from any power to remove a director which may exist apart from this section.

The provision of section 262 above clearly show not only that a company may remove a director, it also sets out how that may be done. The case of the plaintiff is founded on Section 266 of C.A.M.A. which provides:

“266(1) Every director shall be entitled, to receive notice of the directors

meetings, unless he is disqualified by any reason under the Act from

continuing with the office of director.

(2) There shall be given fourteen days notice in writing to all directors entitled to receive notice unless otherwise provided in the articles.

(3) Failure to give notice in accordance with subsection (2) of this section shall invalidate the meeting

(4) Unless the articles otherwise provide, it shall not be necessary to give notice of a meeting of directors to any director for the time being absent from Nigeria; provided that if he has given an address in Nigeria, the notice shall be sent to such an address.”

(Underlining mine)

The only persons disqualified from being given notice of directors meetings are those setout under section 257 of C.A.M.A. The section reads:

“257. The following persons shall be disqualified from being directors –

(a) an infant, that is, a person under the age of

eighteen years;

(b) a lunatic or person of unsound mind;

of this Act;

(d) a corporation other than its representative appointed to

the board for a given term.

It was never part of the case of the plaintiff that he did not commit any offence justifying the revocation of his appointment. His case was simple and straightforward; it was that whereas Section 266(1) states that he shall be entitled to receive notice of the meeting at which the revocation of his appointment was to be discussed, no such notice was given to him. The combined requirement of Sections 266(1) and 262 is that a director to be removed must be given a notice of the meeting. It is not the requirement of the law that such director about to be removed must be present at the meeting. He may receive the notice and refuse to show up at the meeting. What Section 266(3) above punishes is the failure to give such notice. For emphasis I repeat Section 266(3) of C.A.M.A.:

“(3) Failure to give notice in accordance with subsection (2) of this section shall invalidate the meeting.”

Subsection 3 of Section 266 above is in mandatory terms and the court has no discretion to exercise in the matter where a director to be removed was not given a notice of the meeting at which his removal was to be discussed. There are three possible defences to Section 266 of C.A.M.A. namely:

That the director removed was given the notice of the meeting.
That the person involved has ceased to be a director of the company.
That the person involved is disqualified under Section 257 of C.A.M.A. from getting the notice.

Now what was the defence put forward by the defendant in its pleadings I bear in mind that it is only on the pleadings of parties that issues to be tried at the trial are joined. See Egonu v. Egonu [1978] 12 S.C 111; Sagay v. M N. I. [1977] 5 S.C. 143; African Continental Seaways v. Nigerian Roads & General Works Ltd. [1977] 5 S.C. 110.

The only relevant facts pleaded by the defendant are to be found in paragraphs 4, 9, 11, 16 and 17 of its statement of defence and they read:

“4. The Defendant avers that the contract of the Plaintiff with the Defendant was brought to an end lawfully.

……………………………………….

The Defendant avers that the Plaintiff was in breach of the following implied terms of his contract of employment as Managing Director/Chief Executive which were that the Plaintiff would:

(a) perform his duties with reasonable care and skill, and/or;

(b) perform his duties with reasonable competence and/or;

(d) the relationship of mutual trust and confidence between himself and the Defendant and/or;

(e) the relationship of mutual trust and confidence between himself and the Defendant and/or

(f) discharge his fiduciary duty to the Defendant in his capacity as the Managing Director/Chief Executive and/or;

(g) not negligently or knowingly mislead the Chairman of the Board of the Defendant and/or the Defendant and/or;

(h) not suppressing facts or information from the Chairman of the Board or from the Board itself which might affect adversely the Defendant’s finances or result in financial loss to the Defendant or its shareholders.

The plaintiff was guilty of incompetence and/or contracts incompatible with or prejudicial to the Defendant’s business.

…………………………………………..

The Defendant avers that it was entitled, as it has done in the circumstances, to dismiss the Plaintiff, for any reason or for no reason at all without notice and without any financial benefits to the Plaintiff or at all.
The plaintiff was not entitled to, attend the Board meeting, and (sic) where his appointment was determined and dismissed. The plaintiff was suspended effective from April 22, 2002 and he was dismissed as Managing Director/Chief Executive from June 13, 2002 at a meeting of the Board of the Defendant. The plaintiff knew that to be the correct procedure of the Defendant..

It is easy to see that only paragraph 17 above is relevant to the case brought by the plaintiff. The defendant there under contends that the plaintiff was suspended effective from April 22, 2002 and dismissed on June 13, 2002.

The court below correctly in my view did not permit itself to be drawn into a consideration of the issue whether or not the plaintiff had committed in the course of his employment offences justifying his removal. The trial court fell into that error. The court below however fell into a very serious error by accepting that the fact that the plaintiff was first suspended on 22-4-02 deprived him of the entitlement to be given notice of his removal as conferred by section 266(2) of, C.A.M.A.

At pages 1240 and 1242 the court below reasoned thus:

“See Lewis v. Heffer & Sons (1978)1 All ER 254. At page 364 Lord Denning exposed the legal situation thus-

‘Very often irregularities are disclosed in a government department or in a business house; and a man may be

suspended on full pay pending, inquiries. Suspicion may rest on him; and so he is suspended until he is cleared of it. No one, so far as I know, has ever questioned such a suspension on the ground that it could not be done unless he is given notice of the charge and an opportunity of defending himself, and so forth. The suspension in such case is merely done by way of good administration. A situation has arisen in which something may be done at once. The work of the department or the office is being affected by rumours and suspicions. The others will not trust the man. In order to get back to proper work, the man is suspended. At that stage the rules of natural justice do not apply.’

Also in the case The Shell Petroleum Development Company Ltd. vs. Lawson Jack (1998) 4 NWLR (Pt. 545) 249 this court observed as follows at pg. 270:

‘What it has done from the facts available was to set up an investigating panel to look into certain complaints

bordering on alleged impropriety committed by one Mr. Nuk Ntuk, a member of staff of the appellant company. In the process the respondent was suspended from duty on full pay pending the investigation. He was the head of the department directly concealed with the allegation against Mr. Ntuk Ntuk.

A suspension of an employee is not an unusual procedure taken in order to facilitate such an investigation. The person affected can hardly complain, in the process, of not having been given a hearing;; nor can he demand that

the rules of natural justice should apply. The interest of the business of the defendant becomes paramount and the

plaintiff is made to keep of the premises thereof until later.

In the process the respondent was suspended from duty on full pay pending the investigation. He was the head of the department directly concerned with the allegation against Mr. Ntuk Ntuk.

The case of Mallock v. Aberden Corporation (1971) 2 All ER 1278 at 1294 (1971) 1 WLR 1578, 1595 cited in the respondent’s brief of argument is being referred to in connection with exclusion of requirement of natural justice and the nature of remedy available to a plaintiff. A plaintiff can only ask for, in pure master and servant cases, at the most damages, Lord Wilberforce states as follows at the relevant pages of the reports –

“The argument that, once it is shown that the relevant relationship is that of master and servant, this is sufficient to exclude the requirements of natural justice is often found, in one form or another, in reported cases. These are two reasons behind it.

The first is that, in master and servant cases, one is normally in the field of common law of contract inter partes so that principles of administrative law, including those of natural justice, have no part to play.

The second relates to the remedy; it is that in pure master and servant cases, the most that can be obtained is damages, if the dismissal is wrongful; no order for reinstatement can be made, so no room exists for such remedies as administrative law may grant, such as a declaration that the dismissal is void.

I think there is validity in both of these arguments.”

And at page 1245 the court below said:

“The suspension of the appellant is not an issue in this appeal. The appellant’s grouse is predicated on the appellant being a director. There could not be a valid decision removing him as the managing director at a meeting he was not served a notice inviting him to attend. Since the appellant is comfortable with the suspension of his appointment as managing director/chief executive the plank on which his claim rests collapsed. Having accepted the suspension of his only subsisting appointment with the respondent he was not entitled to the notice of the meeting. On suspension of the appellant’s appointment of managing director/chief executive all his rights, privileges and powers consequential or attached to the employment, including attending boards meetings, ceased.

The notice of the board meeting is not given for the fun of it. It is given for serious business of the company. It is,

therefore, not issued informally to a person who is otherwise entitled to attend but barred by reason of his suspension.

All authorities show that he was not entitled to the notice of the meeting except to enable him to be there to disrupt the meeting or cover up his tracks. Assuming he was entitled to the notice, without so deciding the practice is that the person being discussed would step out to enable other members of the board freely take their decision concerning him.”

(underlining mine)

With respect to their Lordships of the court below, I find the proposition made in their reasoning above very unacceptable. It is in my respectful view a clear encouragement to bodies governed by C.A.M.A. to circumvent the applicability of Section 266 of C.A.M.A. by first suspending a director without notice before removing him again without notice so that they could claim in a later litigation in court that the earlier suspension robs the director concerned of the right to notice as given by section 266 of C.A.M.A.

Let me say with all the necessary force and emphasis that when the law vests a right on a citizen, a court of law will resolutely resist any attempt and by whatever method to deny the citizen the enjoyment of the right conferred by law. The plaintiff’s case was not founded on the principles of administrative law including those of natural justice. It is simply on whether or not an extant provision of law was obeyed.

In University of Calabar v. Esiogu [1997] 4 NWLR (Part 502) 719 at 723, the Court of Appeal discussing the nature of the consequences of suspension of an employee reasoned:

“The word ‘suspension’ means a temporary privation or deprivation, cessation or stoppage of or from, the privileges and rights of a person. The word carries or conveys a temporary or transient disciplinary procedure which keeps away the victims or person disciplined from his regular occupation or calling either for a fixed or terminal period or indefinitely. The disciplinary procedure gives the initiation of the discipline a period to make up his mind as to what should be done to the person facing the discipline. Although in most cases, suspension, results in a disciplinary action, it is not invariably so. There are instances when the authority decides not to continue with the matter. This could be because the investigations did not result in any disciplinary conduct.”

Also in Boston Sea Fishing Co. v. Ansell [1886 – 90] All ER 65 the court said:

‘Mr. Ansell was dismissed and I think his dismissal must be taken to date from that meeting on October

19 and not from the day in September when he was suspended by the board because suspension is very different from dismissal. When a man is suspended from the office he holds, it merely amounts to saying “so long as you hold the office and until you are legally dismissed, you must not do anything in the discharge of the duties which under your office you ought to do towards your employer.” (underlining mine)

I think, with respect, that the court below completely misunderstood, the import of suspension. Admittedly, an employer suspending his employee may impose terms of the suspension but in a general sense suspension of an employee from work only means the suspension of the employee from performance of the ordinary duties assigned to him by virtue of his office. Suspension is not a demotion and does not entail a diminution of rank, office or position. Certainly it cannot import a diminution of the rights of the employee given to him under the law. To accept as the court below did, that suspension of the plaintiff would deny him the protection afforded him under Section 266 is to confer the right on the defendant to vary the status of the plaintiff without complying with the procedure laid down for doing so. The defendant cannot first suspend the plaintiff without notice to him of the meeting at which the suspension was discussed and agreed and then turn round to say that that suspension had removed the necessity to give him the notice as mandatorily required under Section 266(1) of C.A.M.A. The court cannot grant to a litigant the right to disobey the law under any artifice or guise.

In any case, the letter of suspension to the plaintiff did not say that he had ceased to be a director. If it had said so, the plaintiff would have founded his action on that letter. Rather what the letter said was “During the suspension you are expected to concentrate on the recovery of the credit facility granted to the Investors Group Nig. Limited. The Board expects that you will do your utmost best to help in the collective efforts towards the recovery of the money.”

It is apparent that the defendant wanted the plaintiff to use the period of his suspension primarily to pursue the recovery of the loan granted to Investors Group Nig. Ltd. (I.G.N.L.). That implies that he would do so only in his capacity as Managing Director/Chief Executive of the defendant. If he was no longer Managing Director/Chief Executive of the defendant, how could he go out to collect money for the defendant

It is my firm view that the court below was wrong to have held that the suspension of the defendant on 22-04-02 robbed him of his status as a director of the defendant.

The court below also in its judgment laboured strenuously to show that the plaintiff was not a director within the meaning of C.A.M.A. It needs be said here that the defendant never raised any such defence. The court below engaged in the dichotomy between an executive director and a non-executive director which the parties had not raised in their pleadings. It has been said repeatedly that a court must not decide a case on issues not raised by parties in their pleadings. In George v. UB.A. [1972] 8/9 S/C/264 this Court per Fatayi Williams J.S.C. (as he then was) said:

“The first point to be considered in this appeal is whether the plaintiffs/respondents pleaded the assignment by the British and French Bank to them of the debt which they had claimed from the defendant/appellant. -If the assignment is not pleaded, evidence regarding it goes to no issue and should not have been admitted; if admitted, it should have been ignored by the learned trial judge in his judgment. (See George v. Dominion Flour Mills Ltd. (1963) 1 All NLR. 71 at pp. 78-79). In this respect, we also wish to refer to our decision in Chief Sule Jimbo and Others v. Aminu Asani and Others, SC.373/67 delivered on 13th March, 1970, where we observed as follows:-

‘We are also concerned at the obvious departure from their pleadings of the two sets of plaintiffs. The object

of pleadings is to fix the issues for trial accurately and to apprise the other side of the case which it would meet

in court. To allow a party to give evidence in direct contradiction of his pleadings is to allow that party to make a different case at the trial and should not have been allowed. Such evidence must be regarded as not belonging

to the issues raised on the pleadings and should have been rejected. We think the learned judge was wrong to have allowed such evidence to be given.-See Erinle v. Adelaja SC.332/1966 delivered on the 6th June, 1969; also N.I.P.C v. Thompson Organization Ltd. and Others, SC.192/67 delivered on 11th April, 1969.

Again, we refer to our decision in Ogboda v. Adulugba delivered on 12th February, 1971, where we emphasized the same point as follows:-

‘We have pointed out numbers of times that the evidence in respect of matters not pleaded really goes to no issue at the trial and the court should not have allowed such evidence to be given. (See Chief Sule Jimbo and Others v. Aminu Asani and Others, SC.373/67 delivered on 13 March 1970). Even when such evidence had been wrongly allowed, the trial court should disregard it as irrelevant to the issues properly raised by the pleadings.’

And similarly in Okafor v. Okitiakpe [1973] 2 SC 49 at page 54 this Court per Coker JSC said:

“…….it is correct that facts not pleaded may not be given in evidence at a trial and if for any reason at all, any evidence was given of such facts the court of trial, and indeed the appeal court must disregard such evidence. This is trite law and if authority is needed for this we refer to the observation of this Court in Tomori v. Matanmi, SC.146/68 decided on the 1st July 1970; also Conway v. George Wimpey [1951]2 Q.B. 266 at p.274 et seqq”

Now at pages 1246-1247 of the record, the court below reasoned thus:

“The appellant made a mountain out of a mole hill on the strength of Yalaju-Amaye’s case (supra). That case on the facts and the law are not on all fours. Firstly article 106 of the First Schedule of Table A of Companies Act, 1968 and Article 105 of the Article of Association of First Bank of Nigeria Plc. Are not impari material as demonstrated earlier in this judgment. Article 106 along with the Companies Act 1968 which gave it live was repealed on the inception of the Companies and Allied Matters Act, Cap.59 of the Laws of the Federation, 1990. Yalaju-Amaye’s case recognizes the fact that a person, irrespective of his description who has a contract of service with the company is an employee and found that Yalaju-Amaye was a director and not an employee in the absence of contract of service between him and the first respondent. Yalaju-Amaye was a director in his own right who was so designated by the article of association of that respondent company. He was not only a director but also the founder and promoter of that first respondent company. Yalaju Amaye who was appointed a director as well as managing director in the article of association was allegedly removed as managing director of the strength of a purported oral resignation. Yalaju-Amaye can only be removed from these positions by alteration of the articles of association. It is clear on authorities, that a power exercisable under the article of association can only be changed or altered by a special resolution. But the appellant in the instant appeal was an employee who was appointed a managing director by the board of directors of respondent under article 105 of the respondent’s article of association. The appellant was made or appointed a managing director by the directors exercising their power under Article 105 of First Bank of Nigeria Plc; Article of Association. The same article empowers the directors to revoke any appointment made by them. It seems to me that the power of the board of directors of the respondent to remove anyone appointed by it is further strengthened by the provisions of section 41(3) of the Companies and Allied Matters Act which reiterates the right of the directors to enforce the power donated to them under the article to appoint or remove any director or other officer of the company. The section provide thus-

‘(3) where the memorandum or articles empower any person to appoint or remove any director or other

officer of the company, such power shall be enforceable by that person notwithstanding that he is not

a member or officer of the company.’

It seems to me that the power to appoint person or persons of proven ability as executive or managing director as well as the power to revoke such an appointment conferred by article 105 is now repeated in the Act. So the power given to directors to appoint and remove executive and managing directors transcends by virtue of section 41(3) of Companies and Allied Matters Act, article 105”

And at pages 1249-1250; the court below said:

“The appellant is not contesting his removal on the facts. He has conceded to the facts of this case. But he is challenging the legitimacy of the board meeting at which the decision to revoke his appointment was taken on account that as a director he was not given notice of the meeting, contrary to section 266 of Companies and Allied Matters Act. It is common ground that he was suspended at the material time, which he is not contesting. Moreover, it is clear that being a managing director who could be suspended and was on suspension he was not entitled to the; notice of the meeting. Further on this point, being a director appointed by the directors, under article 105 of the article of association, he was not a director appointed under the Companies and Allied Matters Act and that his working directorship was not within the contemplation of s.266(1) of the Companies and Allied Matters Act, therefore, was not entitled to the notice envisaged under section 266(1) of the Act which provides thus-

‘266(1) Every director shall be entitled to receive notice of the directors’ meeting, unless he is disqualified by any reason under the decree from continuing with the office of director.

(2) There shall be given 14 days notice in writing to all directors entitled to receive notice unless otherwise provided in the articles.

(3) Failure to give notice in accordance with subsection (2) of this section shall invalidate the meeting.’

The appellant as observed earlier is disqualified to attend the meeting and was consequently not entitled to the notice of the meeting. He was disqualified by reason of his suspension by the board of directors under article 105 read in conjunction with the provisions of section 41(3) of the Companies and Allied Matters Act.”

The sum total of the approach of the court below is that because, the plaintiff was a Managing Director/Chief Executive of the defendant appointed by the defendant on a contract of employment he was not a director within the meaning of section 266 of the C.A.M.A. The standpoint of the court below was a derivative of the earlier conclusion it had come to at pages 1235 – 1236 of the record where it said:

“The appellant’s misapprehension of the article stems from his reading article 105 of respondent’s Article of Association as if it were the repealed article 106 in the First Schedule in Table A of the repealed Companies Decree, 1968 which provides thus.;

‘The directors may from time to time’ appoint one or more of their body to the office of Managing Director for such period and on such terms as they think fit.’

‘This article allowed the board of directors to appoint one of their members as the managing director. It follows that, under article 106 of First Schedule in table A of Companies Decree, 1968, a person to be appointed a managing director must himself be a sitting director as he ought to come from amongst the directors. He was consequently permitted to retain his directorship along with his present status. The meaning of that article, which is, in any case, repealed, cannot be imported or read into article 105 of respondent’s Article of association, the qualification under article 105 for being a managing director or an executive director no longer includes being a director; all that is required for the two offices are ‘person or persons of proven relevant ability or experience.’ It follows that appellant was not a director appointed as a managing director; He was an executive director, a fact he admitted in evidence, immediately before he was appointed the managing director. He testified to this effect in his evidence-in-chief as well, as cross-examination. The submission of the appellant that he was, a director and managing director and there is no provision in the Companies and allied Matters Act to suspend the plaintiff as a director may be ingenious but not candid. It is not candid because there is no shred of evidence on the record supporting the claim that appellant was ever a director of respondent. There is no provision in the Companies and Allied Matters Act for appointment of executive director. It is therefore not surprising that the same Act has no provision for suspension or discipline of an executive director, a situation adequately covered by article 105 already recited earlier in this judgment.

The appellant was employed an executive director by way of promotion by virtue of exhibit V. He was subsequently promoted as Managing Director/Chief Executive by virtue of exhibit A. The two documents were made pursuance of the power of the Board of Directors under article 105 of the articles of association of the First Bank of Nigeria Plc. The two positions do not run concurrently but consecutively: the former appointment terminates on the elevation of its holder to the position of a managing director.”

I say with due respect to ‘their Lordships of the court below that the power to amend or vary the meaning of a director under C.A.M.A. has not been vested in a company concerned or the court. The reasoning that, after all, if the issue of a director to be removed is to be discussed, the director concerned will be asked to step out is with respect, untenable because that reasoning speculates on the intendment of the legislation. Section 262 reproduced earlier in this judgment gives the director whose removal is under consideration the priviledge to make written presentation in his own defence to the Board of Directors. The case of the plaintiff is that he was not given such a notice: How could a director who was not given a notice of the meeting of the Board make a written presentation at the meeting of the Board.’

Section 244(1) of C.A.M.A. defines a director thus:

“Meaning of directors. Directors of a company registered under this Act are persons duly appointed by the company to direct and manage the business of the company.” (underlining mine)

The statutory definition of directors above does not recognize the nomenclature raised by the court below as between executive and non-executive directors. Rather directors are those appointed by the company “to direct and manage the business of the company.” How does one conclude that a ‘managing director/chief executive’ of a company is not a director of the company The truth of course is that under any definition a, managing director is the directing mind and will and the alter ego of the company through which the company acts. It is indeed by virtue of his office that the plaintiff was able to give out some substantial amount as loan on behalf of the defendant. As I observed earlier, it is fair to say that the defendant on their pleadings did not plead that the plaintiff was not their director.

The emergence of directors in a company is governed by sections 247, 248 and 249 of C.A.M.A. which provide:

“247. Subject to section 246 of this Act, the number of directors and the names of the first directors shall be determined in writing by the subscribers of the memorandum of association or a majority of them or the directors maybe named in the article.

(1) The members at the annual general meeting shall have power to re-elect or reject directors and appoint new ones.

(2) In the event of all the directors and shareholders dying, any of the personal representatives shall be able to apply to the court for an order to convene a meeting of all the personal representatives 6f the shareholders entitled to attend and vote at a general meeting to appoint new directors to manage the company, and if they fail to convene a meeting, the creditors if any, shall be able to do so.

(1) The board of directors shall have power to appoint new directors to fill any casual vacancy arising out of death; resignation, retirement or removal.

(2) Where a casual vacancy is filled by the directors, the person may be approved by the general meeting at the next annual general meeting, and if not so approved, he shall forthwith cease to be a director.

(3) The directors may increase the number of directors a long as it does not exceed the maximum allowed by the articles, but the general meeting shall have power to increase or reduce the number of directors generally and may determine in what rotation the directors shall retire:

Provided that such reduction shall not invalidate any prior act of the removed director.”

The plaintiff may have been a director appointed under section 248 or 249 as one appointed to fill a vacancy occasioned by death, resignation, retirement or removal of the previous holder of the position of managing director. The scheme under sections 247 to 249 recognises (1) directors appointed by the subscribers of the memorandum of association or majority of them or those named in the articles, (2) directors appointed in the annual general meeting, or (3) directors appointed to replace such directors as may have died, resigned, retired or be removed.

It is eye-opening that section 244(3) criminalizes the situation where a person who is not a director holds himself out at such: the subsection provides:

“(3). Where a person not duly appointed acts or holds himself out as a director, he shall be guilty of an offence and on conviction shall be liable to imprisonment for two years or to a fine of N100 for each day he so acts or holds out himself as a director or to both such imprisonment or fine and shall be restrained by the company.”

The unchallenged evidence was that the plaintiff was made a managing director in the year 2000. He acted as such till 2002 when he was removed. Why did the defendant not disclaim him as a director during the period

The two courts below were wrong in their conclusion that the suspension of the plaintiff from work had the effect of removing him as director. If the defendant believed that the plaintiff had ceased to be a director by his suspension on 22-04-02, why did they proceed to revoke his appointment on 13-06-02 In any case, the provision of section 266(1) is that a director may not be removed unless he is first given a notice to attend a meeting at which the removal will be discussed.

If the contention of the defendant is valid, that the plaintiff had ceased to be a director by his suspension on 22-04-02, it follows that if it was the suspension of 22-04-02, that removed plaintiff as such director, it would not be necessary to further revoke his appointment on 13-06-02 as was done by the defendant. The further reasoning of the court below that an executive director is not the same as a non-executive director is untenable. From other angles it may be correct but for the purpose of removal under section 266(1) of C.A.M.A., all directors, whether executive or non-executive are the same as long as they are all engaged to direct and manage the business of the company.

In the final conclusion, this appeal must be allowed. It is meritorious. The judgment of the court below is set aside. The removal of the plaintiff as Managing Director/Chief Executive of the defendant without a notice to him, to attend the meeting at which the decision was taken is a clear violation of Section 266(1) and (2) of the Companies and Allied Matters Act; and such violation must attract the penalty prescribed by law under Section 266(3). The said meeting is under the law invalid. I so pronounce it. I declare that the removal of the plaintiff is not in accordance with law. The plaintiff must be deemed to be still the Managing Director/Chief Executive of the defendant. I accordingly grant the reliefs 1-5 claimed by the plaintiff appellant. For clarity, I set out those reliefs hereunder:

(ii) A declaration that in particular the decision of the Defendant’s Board of Directors held on the 13th of June 2002 to revoke the Plaintiff s appointment as Managing Director/Chief Executive is wrongful, unlawful, invalid, null; and void and incapable of having any legal consequence;

(iii) A declaration that any purported implementation of the said decision made by the Board on the 13th of June 2002 (including any appointment to the office held by the Plaintiff in the Defandant Company) is ineffective, unlawful and null and void;

Let me observe here that the defendant has by its unwillingness to respect the provisions of Section 266 brought about this unfortunate situation on itself. The plaintiff’s suit was filed on 4-07-02 about a month after he was purportedly removed. All the defendant needed to do on being served with the summons was rescind the ill-advised action and follow thereafter the prescription under Section 266. Within a few weeks thereafter, the defendant would have been able to effectually remove the plaintiff. What could have been done validly within 3 months has been made to last eight years.

In this Court, I must uphold the law of the land. The appeal, succeeds. The plaintiff/appellant is awarded costs as follows:

(a) For appearance in the High Court N20,900.00.

(b) For appearance in the court below N30,000.00

DAHIRU MUSDAPHER, JSC: I have read before now the judgment of my Lord Oguntade, JSC with which I entirely agree. For the same reasons set out. I too, allow this appeal and set aside the decisions of the courts below and enter judgment in terms of the appellant’s claims which were not withdrawal also abide by the orders for costs proposed in the aforesaid lead judgment in the trial court of Appeal and this court.

FRANCIS FEDODE TABAI, JSC: I have had the privilege to read, in draft, the lead judgment of my learned brother OGUNTADE JSC and I agree with the reasoning and conclusion that the appeal be allowed.

This appeal turns on the construction to be placed on Section 266 of the Companies and Allied Matters Act (C.A.M.A) which provides for the service of notice of directors’ meeting. The Appellant being a director was entitled to be given 14 days notice of meeting of directors. Section 266(3) of the C.A.M.A. specifically provides that failure to give notice in accordance with subsection (2) of this section shall invalidate the meeting.

The Appellant was not given the notice as require by Section 266(3) of C.A.M.A. Although the Appellant was on suspension and retained the right to be given notice of the meeting particularly having regard to the fact that issues affecting his rights were to be discussed.

In conclusion, I also hold that the appeal has merit and same is accordingly allowed. I assess the costs of this appeal at N50,000.00 in favour of the Plaintiff/Appellant against the Defendant/Respondent.

SC.116/2007

Bernard Ojeifor Longe V First Bank Nig. Plc. (2010) LLJR-SC

Bernard Ojeifor Longe V First Bank Nig. Plc. (2010)

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