Corporate Affairs Commission V. Mr. Taiwo Ayedun (2005)
LawGlobal-Hub Lead Judgment Report
MARY PETER-ODILI, J.C.A.
This is an appeal against the Ruling of the Hon. Justice Stephen Jonah Adah of the Federal High Court, Abuja, delivered on May 22nd, 2003, granting an order of mandamus at the plaintiff’s/respondent’s instance against the appellant, directing the appellant to apply to court for directions on the issue of refusal to register the name Credit Registry Limited, which the plaintiff/respondent had presented for incorporation.
Briefly, the Facts
The plaintiff/respondent together with two other persons came to incorporate a company with the name Credit Registry Limited. The appellant Corporate Affairs Commission declined to register the name on the ground, that it will mislead the public into thinking that it is a public institution, such as Marriage Registry, Companies Registry, Deeds Registry, etc. This was purportedly communicated to the respondent in a letter dated 25th February, 2002, since respondent said they did not get the letter. The appellant was prepared to register and incorporate the objects of the memorandum of association of the company if the name chosen was changed to another acceptable name such as Credit Data Limited which the respondent had even suggested as an alternative name. The respondent insisted on using the rejected name, Credit Registry Limited and issued a notice to the Registrar General of the Corporate Affairs Commission purportedly under section 36(2) of the Companies and Allied Matters Act, 1990, requiring the Registrar General of the Corporate Affairs Commission to apply to the court within 21 days for directions in respect of the refusal to register the name. The refusal of the appellant to apply to court for directions as requested prompted the application for mandamus by the respondent which the lower court granted and which is the subject matter of this appeal.
The refusal of the appellant to apply to court for directions was based on the argument that section 36(2) of the Companies and Allied Matters Act is only applicable to registration of objects of a company in the memorandum of association and not to acceptance or rejection of names of companies for registration which is governed by section 30 of the said Companies and Allied Matters Act, 1990.
The appellant had in their notice and two grounds of appeal shown the foundation upon which this appeal is hinged. On the basis of those two grounds the appellant formulated two questions for determination which are:
- Whether the provisions of section 36(2) of the Companies and Allied Matters Act, 1990, impose an obligation on the Corporate Affairs Commission (appellant) to apply to court for directions in respect of the appellant’s refusal to register the name Credit Registry Limited.
- Whether the order of mandamus issued by the lower Court against the appellant requiring the appellant to apply to court for directions under section 36(2) of the Companies and Allied Matters Act was justifiable in law.
The respondent raised two issues for determination which are:
- Whether or not, the learned trial Judge was right to have held as he did that section 36(1) to (6) of CAMA 1990 was the peak point of registration of companies and by virtue of section 36(1)( a) included matters under consideration relating to names in section 30(1) of the CAMA 1990 so as to enable the respondent come under the operation of section 36(2) of CAMA 1990.
- Whether or not, the order of mandamus granted by the learned trial Judge was only to the effect that the respondent complies with the provisions of section 36(2) of the CAMA 1990 and did not compel the appellant to register the name Credit Registry Limited
Issue 1:
Learned Counsel for the appellant in arguing this point said section 30(1), (2) of the Companies and Allied Matters Act dealt with the registration or not of the name of a company while section 36 of the CAMA makes provisions on the registration of the memorandum and articles of association of a company seeking incorporation as a legal entity. He referred to and quoted the provisions of section 30(1), (2) of CAMA and section 36(1)(a) to (e), (2) of the same CAMA.
Learned Counsel said no provision requiring the commission to apply to court for directions exists in section 30, which deals with names of companies to be registered such as Credit Registry Limited. That since no dispute existed between the parties in respect of the registration of the memorandum and Articles of Association of the company proposed for incorporation, it is submitted that the lower court was in error to have invoked section 36(2) against the appellant. Learned Counsel further stated, that although there is no previous decision of the Court of Appeal or Supreme Court on the correct interpretation of section 36(2) of the Companies and Allied Matters Act, 1990, on the question of whether or not, section 36(2) also applies where the commission rejects a name for registration, it is submitted that the correct interpretation is that the same section 36(2) of CAMA applies to registration of memorandum and articles of association only and not to acceptance or refusal of names for a company proposed to be incorporated. He said this is because it is the registration of the memorandum and articles of association of a company that gives it the status of a legal personality and not the acceptance or rejection of its names. He referred to S. 36(5) of CAMA. That all a promoter seeking to incorporate a company needs to do if the name is rejected by the commission is choose another name. That where such a promoter insists on invoking the court’s jurisdictional power to force the commission to accept a particular name, nothing stops such a promoter from applying to court for a declaration that the name chosen passes the tests prescribed in section 30 of CAMA but not to invoke section 36(2) which relates to registration of the memorandum and articles of associations of a company proposed for incorporation.
Learned Counsel for the respondent submitted that by virtue of section 27(1) of CAMA, every memorandum of association submitted for registration shall state by provisions of section 27(1)(a); the name of the company, and by the provision of section 27(1)(c) the nature of the business or businesses which company is authorized to carry on, amongst other provisions. He referred to section 27(1)(6). He said that therefore no memorandum of association submitted for registration will therefore be considered if as a first step it does not bear a name.
Learned Counsel contended that by virtue of section 30 of CAMA, certain names are either prohibited or restricted, and that in consideration of the registration of the memorandum of association, names submitted on memorandum of association would have to pass the standard for acceptance of names prescribed under the provisions of that section.
Learned Counsel for respondent stated further that the test for the acceptability of names is stated clearly and succinctly under section 30(1) (a) – (d) and no further discretion outside what is prescribed therein is conferred on the appellant, such as an omnibus provision. That the difficulty faced by the appellant is in justifying by facts, the decision to refuse the name under any of these provisions. That to justify a decision under section 30(1)(c) of CAMA, there must have been a conflict between the stated objects of the proposed company as embedded in its memorandum of association and the proposed name submitted.
Learned Counsel said that the power to exercise the discretion under section 30 of CAMA is contained in section 36(1) (a) – (e) and it is stated clearly in section 36(1)(a) that the commission shall register the memorandum and article unless in its opinion they do not comply with the provisions of the Act, part of which provision is the requirement to scale prohibited or restricted names in section 30(1)(c), which the appellant has cited as reason for refusal. That having declined to register the memorandum of association under section 36(1)(a) as a result of their not complying with the provisions of section 30(1)(c) of the Act, the respondent was now within its right to exercise the right conferred by section 36(2) of the CAMA 1990, giving notice to the appellant to apply within 21 days to a court of competent jurisdiction asking for its directions.
Section 30(1) of the CAMA provides:-
“No company shall be registered under this Act by a name which;
(c) “In the opinion of the commission is capable of misleading as to the nature or extent of its activities or is undesirable, offensive or otherwise contrary to public policy.”
Section 30(2) of the same Act provides:
“Except with the consent of the commission, no company shall be registered by a name which;
(a) Includes the word “Federal”, “National”, “Regional”, “State”, Government”, or any other word which in the opinion of the commission suggests or is calculated to suggest that it enjoys the patronage of the Government of the Federation or the Government of a State in Nigeria as the case may be or any Ministry or Department of Government.”
On the other hand, section 36(1) provides that the commission shall register the memorandum and articles of association of a company unless any of the reasons listed in section 36(1)(a) – (e) applies.
Section 36(2) provides that any person aggrieved by the decision of the Commission in respect of the registration of the memorandum and articles of association may give notice to the Commission requiring it to apply to court for directions within 21 days of the receipt of such notice.
It is noted that no such provision requiring the Commission to apply to court for directions exist in section 30 which deals with names of companies to be registered such as Credit Registry Limited.
Those are the relevant provisions of the Companies and Allied Matters Act, 1990 for utilisation in decision making in this appeal.
It is a fundamental and cardinal principle of interpretation of statutes that where in its ordinary meaning a provision is clear and unambiguous, effect should be given to it without resorting to external aid. See A.-G., Federation v. A.-G., Abia State & Ors. (No.2) (2002) 6 NWLR (Pt. 764) 542 at 794 paras. B – C per Uwais CJN; A-G., Bendel State v. A.-G., Federation (1983) 1 SCNLR 239.
It is not difficult to find that the said provisions of CAMA that is S. 36 and its subsections are clear and state quite clearly and without a cloud what was intended in those provisions that is, that the matter of appellant asking for directions are within matters concerning the memorandum and articles of association which are different from the propriety or otherwise of the registrability of a name for incorporation.
Therefore, the learned trial Judge had no business importing into section 30 and its subsections the requirements asked for in section 36 which covered memorandum and articles of association.
I would here refer to the case of: Fawehinmi v. IGP & Ors. (2002) 7 NWLR (Pt. 767) 606 at 678 paras. B-D per Uwaifo, JSC.
The proper approach to the interpretation of clear words of a statute is to follow them in their simple, grammatical and ordinary meaning, rather than look further because that is what prima facie gives them their most reliable meaning. This is also generally true in the construction of statutory provisions if they are clear and unambiguous even when it is necessary to give them a liberal or broad interpretation (African Newspapers (Nig.) Ltd. v. Federal Republic of Nigeria (1985) 2 NWLR (Pt. 6) 137; Salami v. Chairman LEDB (1989) 5 NWLR (Pt. 123) 539; Ogbonna v. A.-G., Imo State (1992) 1 NWLR (Pt. 220) 647 referred to).
From the foregoing, I have no difficulty in answering issue No.1 in the negative as I am satisfied that the provisions of sections 36(2) of the Companies and Allied Matters Act, 1990 did not impose an obligation on the Corporate Affairs Commission (appellant) to apply to court for directions in respect of the appellant’s refusal to register the name Credit Registry Limited.
Issue 2:
Learned Counsel for the appellant said the boundaries of the law on mandamus were restated and beaconed by the Supreme Court of Nigeria in the well known case of Fawehinmi v. IGP (2002) 7 NWLR (Pt.767) page 606. Where the Supreme Court made it clear that the prerogative order of mandamus cannot lie where other reliefs or legal remedies are available to the applicant. He referred to the Court of Appeal decision in Wemabod Estates Limited v. Joyland Ltd. (2001) 18 NWLR (Pt. 744) 22.
Learned Counsel for the appellant said from the case above cited that all the respondent needed to do was to choose another name and the appellant would have registered the company as an incorporated entity under the Companies and Allied Matters Act (CAMA) 1990. That it was therefore inappropriate in the circumstances for the lower Court to have issued an order of mandamus against the appellant. That the question that arises as to why the respondent insisted on the registration of the name Credit Registry Limited as a private limited liability company when the Commission (appellant herein) had pointed out that the name is capable of misleading the public into thinking that it is a public institution such as Marriage Registry, Companies Registry, Deeds Registry, etc.
Learned Counsel said the Supreme Court at page 653 of Fawehinmi v. IGP (supra) held that an order of mandamus will not be granted unless it is in the public interest to grant it. Learned Counsel submitted that it is not in the public interest for the lower Court to have granted an order of mandamus directing the appellant to apply for directions in respect of the appellant’s refusal to register a name that would definitely have led members of the Nigeria Public into believing that the company is a public institution. That the appeal ought to succeed and the order of mandamus granted by the lower court ought to be set aside.
The respondent through learned Counsel contended that once an applicant for registration under section 36 of CAMA 1990, gives notice of being aggrieved to the appellant, the appellant is bound to apply to court for direction within 21 days, a matter in which it can exercise no discretion whatsoever, and if it fails to do so, the proper remedy to seek for is an order of mandamus compelling it to do so, and the act envisaged under the law is to apply for directions.
Learned Counsel pointed out that the learned Judge did not in any way touch upon the propriety of the refusal to register the name Credit Registry Limited and the order was never to the effect that the name Credit Registry Limited should be registered. That the order of Court was that the appellant comply with section 36(2) of CAMA 1990.
That the argument that there existed an alternative remedy is untenable since what gives rise to the respondent’s right is his being aggrieved by refusal to register, and the offer of an alternative name is not an alternative remedy, since it does not offer an opportunity to test whether or not the respondent being aggrieved is justified. That there will be no reason for the respondent to come to court by way of declaration when the statute being considered contains specific provision dealing with the situation. That mandamus, as unpleasant as it is, has not been applied as a first line action. That it is the appellant’s own refusal to go by way of law that has exposed it to such an order.
Learned counsel said the appeal should be dismissed as lacking in merit on the consideration of the issues for determination and the arguments thereon for the respondent for the following:
- The learned Judge was right to have held that section 36(5) and (6) of the CAMA 1990 was the peak point of company registration, and that by acting under section 30(1)(c) of the CAMA 1990, the appellant was exercising the powers by virtue of section 36(1)(a) of the CAMA 1990.
- That the learned trial Judge in granting the order of mandamus did not in anyway overreach himself, as he clearly ordered that the appellant comply with section 36(2) of the CAMA of which the only act envisaged therein to be done is to apply to court for directions within 21 days. That the learned trial Judge did not have to weigh the facts on the ground of public interest, because the statute prescribed a duty for which there was no discretion. He cited the case of Shitta-Bey v. Federal Public Service Commission (1981) 1 SC 40 which counsel said was cited with approval in Fawehinmi v. IGP (2002) 7 NWLR (Pt. 767) page 606 at 672 paras. F – G.
It is needed at this point to refer to the motion on notice of 15/10/2002 in the Court below for the order of mandamus. It reads:
“… an order of mandamus against the respondents compelling them to (1) to comply with the provisions of section 36(2) of the Companies and Allied Matters Act, 1990 as requested by the applicant or (2) alternatively an order of mandamus against the respondents compelling them to register the company, the Company Credit Registry Limited in the absence of any issue of compliance.”
That was the prayer of the respondent to which the learned trial Judge considered favourably by stating in his ruling:-
I find that the 1st respondent has a duty under 21 days after the notice was served to apply to the Court for directions. This duty he refused to carry out and it is subject to the review of court by order of mandamus, The law is so clear. There is no alternative remedy created by the law. This therefore is a case to issue mandamus to compel the commission to apply to the court for direction. This I therefore order. I accordingly enter judgment for the applicant and I order that the commission shall within 21 days from today apply to court for direction under section 36(2) of CAMA.
That was the decision of the lower court which seems to be a wrong impression of what the Supreme Court must have envisaged in Bello v. A.-G., Oyo State (1986) 5 NWLR (Pt. 45) 828 wherein that court held:-
“Whenever the court finds that a plaintiff has been wronged by a defendant especially where the defendant has breached a duty he owes to the plaintiff consequently causing a legal injury to the plaintiff, it is the duty of the court to provide a remedy for the plaintiff even if none had hitherto been prescribed in the statute books, for where there is a wrong, there must always be a remedy.”
That is definitely not the situation in the present case as the remedy provided in section 36 of CAMA are for specific situations while section 30 has given the appellant that is, Corporate Affairs the discretion in the registration or rejecting to register a name based upon certain criteria. It is only when those criteria are not adhered to or the discretion improperly exercised that a court can interfere. That certainly is not the case here as the appellant communicated to the respondent albeit orally by the admission of the respondent why the name was rejected. That situation falls squarely within the confines of section 30 of CAMA and I see nothing for which a departure from that section 30 would be encouraged. Furthermore, the lower Court had no business to expand the provisions of section 36 to include circumstances which were neither provided for within that section nor anticipated to be brought in by implication.
It is in keeping with the foregoing that I answer issue 2 in the negative. I hold therefore that the order of mandamus issued by the lower Court against the appellant requiring appellant to apply to Court for directives under section 36(2) of the Companies and Allied Matters Act was not justified in law.
I would like to add that in the exercise of judicial discretion the primary objective of the court must be to attain substantial justice. Acting judicially imports consideration of the interest of both parties and weighing them in order to arrive at a just and fair decision. See United Spinners Ltd. v. Chartered Bank Ltd. (2001) 14 NWLR (Pt. 732) 195 at 216.
An appellate Court in reviewing the exercise of a discretion by a lower Court should not substitute its own discretion for that of the lower Court, except where it is satisfied that the discretion was exercised arbitrarily or illegally or without due regard to all the necessary considerations having regard to the circumstances of the particular case. See United Spinners Ltd. v. Chattered Bank Ltd. (supra) at 219 – 220 paras. G-A; Nzeribe v. Dave Engr. Co. Ltd. (1994) 8 NWLR (Pt. 361) 124.
In conclusion, I do not hesitate in setting aside the decision and order of mandamus of the court below. I allow the appeal which is meritorious and I award N10,000.00 costs to the appellant to be paid by the respondent.
Other Citations: (2005)LCN/1779(CA)
