General & Aviation Services Ltd. V. Captain Paul M. Thahal (2004)

LAWGLOBAL HUB Lead Judgment Report

UWAIFO, J.S.C.

This is a company matter in which a petition has been brought by a party who claims to be a shareholder and contributory, praying the court to wind-up the company, namely, the appellant. The ground for seeking a winding-up, as I understand it, is stated in the petition to be “oppression”. The following paragraphs of the petition seem to be the mainstay of the alleged oppression upon which it is claimed that it would be just and equitable to wind-up the company:

“10. Since 1988, the said Mr. Sunday Olubadewo has been running the company in a manner that has completely marginalized and excluded the interests of your petitioner in the company and has continued to do so till date.

  1. The said Mr. Sunday Olubadewo has abused his position as Chairman and Managing Director and has managed and administered the company as if it were his own private property.
  2. The said Mr. Sunday Olubadewo has been running the company as his family business with the members of his family, particularly Captain E. Olubadewo and Mrs. G. B. Olubadewo, who have been illegally occupying top positions in the company to the exclusion of our petitioner.
  3. The said Mr. Sunday Olubadewo has been dealing adversely with the company and has purportedly changed the company’s name from General & Aviation Services Limited to GEN AIR, while still operating from the premises of the company with the staff and assets of the company.
  4. Your petitioner has been deliberately excluded from the affairs of the company by the said Mr. Sunday Olubadewo who has refused to give account of the operations of the company since 1988 in spite of repeated requests.
  5. The said Mr. Sunday Olubadewo being the sole signatory to the bank accounts of the company since 1985, has been depleting the financial resources of the company without accounting for the same.
  6. In view of the petitioner’s insistence that proper account should be rendered as to the operation of the company, the said Mr. Sunday Olubadewo has now embarked upon a course designed to strip the company of all its valuable assets and leave only a mere shell.
  7. The said Mr. Sunday Olubadewo abused his position as the Chairman and Managing Director of the company by using his said position to frustrate every attempt made by the petitioner to reorganise and stabilize the operation of the company.
  8. In addition to the facts stated herein, the said Mr. Sunday Olubadewo has begun to perpetrate certain machinations in pursuit of his own manifest aim of excluding the petitioner from participating in the running of the company and reaping from the fruits thereof.
  9. As a result of the wrongful acts and adverse conducts complained of herein, the underlying trust which was the basis of the joint venture which was at the onset (sic) commenced by your petitioner and the said Mr. Sunday Olubadewo has been destroyed in the climate of continuous deceit, dishonesty, hostility and greed.
  10. In these circumstances, your petitioner contends that the affairs of the company are being conducted in a manner oppressive to him and that it would be just and (equitable to wind-up the company.”
See also  Chief Omoniyi Fayehun & Ors Vs Chief R.a. Fadoju & Ors (2000) LLJR-SC

Pursuant to the petition, the petitioner filed a motion on notice seeking from the court the appointment of a provisional liquidator and the following orders:

“Pending the hearing and determination of the petition filed herein:

(1) that the official receiver or some other fit and proper person be appointed as provisional liquidator (or alternatively as receiver/manager) of the above-named company;

(2) that the Managing Director of the company, Mr. Sunday Olubadewo, should surrender all properties, cheque books, vouchers, account books and other banking documents relating to the company’s bank accounts to the liquidator or receiver/manager;

(3) granting an interim injunction to restrain the said Mr. Sunday Olubadewo, whether by himself, agents, servants, privies or howsoever otherwise from disposing, transferring, charging, operating, dissipitating, disbursing or in any way howsoever dealing with any and all sums now or hereafter standing to (the) credit in the company’s bank accounts;

(4) granting an interim injunction restraining the said Mr. Sunday Olubadewo from further dealing, tampering, transferring, charging, disposing or in any way dissipitating the assets and properties of the company.”

The depositions in the affidavit in support of the motion are almost in the same tone as the allegations made in the petition which I have reproduced above. The said depositions read as follows:

“4. The business and assets of the company will be in jeopardy and the petitioner’s interest will be adversely affected unless this Honourable Court appoints a provisional liquidator or receiver/manager to protect the business and assets of the company pending the hearing and determination of the petition.

  1. Mr. Sunday Olubadewo has taken undue advantage of his position as the chairman and Managing Director of The petitioner’s allegation that I run the respondent as ‘family business’ to the exclusion of the petitioner is the company to run the company as his family business and in a manner that has completely marginalized and excluded my interests in the company.
  2. The said Mr. Sunday Olubadewo being the sole signatory to the bank accounts of the company without accounting for the same and has used his position as chairman to frustrate my efforts to become a joint signatory to the said accounts.
  3. The said Mr. Sunday Olubadewo has purportedly changed the company’s name from General &Aviation Services Limited to GEN AIR, while still operating from the premises of the company with the staff and assets of the company and has embarked upon a course designed to strip the company of all its valuable assets and leave only a mere shell.
  4. The said Mr. Sunday Olubadewo has all along been illegally disposing off (sic) the properties and assets of the company to his own use.
  5. I verily believe that the actions taken by the said Mr. Sunday Olubadewo are intended to pre-empt any proceedings which the petitioner may be advised to take by making it difficult for the petitioner or the court to obtain information relevant to these proceedings and also rendering nugatory anything which the petitioner may obtain by pursuing his remedy in this Honourable Court.
  6. I fear that unless the orders in support of which I swear to in this affidavit are made, the said Mr. Sunday Olubadewo may seize the books of account and other relevant documents or cart away goods of the company the moment this petition is served on him.”
See also  Chief Adebayo Bashorun Olufosoye & Ors. V. Johnson O. Olorunfemi (1989) LLJR-SC

The Chairman/Managing Director of the company, Sunday Kayode Solomon Olubadewo, swore an affidavit denying the allegations made in support of the motion. He made efforts to offer some explanations, where desirable, as to how the company was being managed. For example, in the affidavit sworn on 10 February, 1997, he said in paragraphs 10, 13, 14, 16, 17, 18, 19, 20 and 25 as follows:

“10. The petitioner’s allegation that I run the respondent as ‘family business’ to the exclusion of the petitioner is untrue. On the contrary extra-ordinary general meetings (‘EGM’) have been convened at my instance for the purpose of appointing the petitioner a director of the respondent so that he may participate in its running. However, due to the failure of the petitioner to attend the said meetings the appointment has not been made.

Now produced and shown to me and marked as:-

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