Citec Intl Estates Ltd & Ors V. Francis & Ors (2021)

LAWGLOBAL HUB Lead Judgment Report

KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.S.C. 

This appeal is against the judgment of the Court of Appeal, Abuja Division delivered on 7th July 2017, wherein the Court allowed the appeal filed by the present 1st – 4th respondents and set aside the decision of the trial Federal High Court, Abuja Division.

The facts are relatively simple and straight forward. The 1st appellant, CITEC International Estates Ltd. was duly incorporated on 16th February, 2001 as a limited liability company under the provisions of the Companies and Allied Matters Act (CAMA), with a share capital of 2 million ordinary shares. The 1st – 4th respondents owned 95% of the share capital while the 2nd Appellant, Bello Saka Oludare, owned the balance of 5%. The 1st, 2nd and 4th Respondents as well as the 2nd Appellant were the original directors of the company. By an ordinary resolution passed on 1st April 2002, the share capital of the company was increased to 10 million.

​It was alleged that the company held board meetings on the 9th and 10th of March 2006 whereby the 1st respondent was removed as chairman and his

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official residence and vehicle withdrawn. It was contended that due process was not followed in his removal. Another board meeting took place on 4th April 2006. It was alleged that notwithstanding the fact that the 1st – 4th respondents were not given notice of the meeting and the members present were unable to form a quorum, the following decisions were taken by the 2nd appellant:

(i) The allotment of the 8 million unallotted shares to members and non-members of the 1st Appellant without regard to the 1st – 4th Respondents’ right of first refusal.

(ii) A call for payment on shares allotted to the 1st – 4th Respondents, to be paid within 28 days; and

(iii) A resolution to the effect that the 2nd Appellant (Bello Saka Oludare) and the 5th Respondent (his wife) had paid N2million out of their called up capital on the basis that the 2nd Appellant incurred N2million as pre-incorporation expenses, whereas it was contended that it was the 1st Respondent who bore all the pre-incorporation expenses.

​At another board meeting held on 6th October 2006, the names of the 1st – 4th respondents were removed as signatories to the company’s accounts.

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The houses allocated to the 1st and 4th respondents were put up for sale. The 1st – 4th respondents were suspended and their salaries stopped. It was alleged that the 1st – 4th respondents, have by all the actions complained of, been deprived of their rights as shareholders, directors and management staff of the company without notice to them and without being given the opportunity of being heard.

As a result, they instituted an action before the Federal High Court, Abuja seeking the declaratory and injunctive reliefs reproduced below, aimed at restoring them to their original positions within the company and restoring their rights and entitlements.

The Plaintiffs’ claim against the Defendants Is for: