Olumuyiwa Sotuminu V. Ocean Steamship (Nigeria) Ltd & Ors. (1992)

LawGlobal-Hub Lead Judgment Report

L. UWAIS, J.S.C.

The appellant instituted a suit in the High Court of Lagos State against the respondents claiming, as appropriate, as follows:-

1. As against the 1st respondent, a declaration that the appellant is entitled to 5% of the gross earnings of the 1st respondent as per the agreement between the appellant and the 1st respondent and the minutes of the meeting of the board of the 1st respondent which was held on 18th February, 1983.
2. An order directing the 1st respondent to pay to the appellant the sum of N1,052,603.61 being 5% of the gross earnings of the 1st respondent.
3. As against the 1st respondent, an order for the payment to the appellant of the sum of N1,160,000.00 being the salaries and house rents for the period of 4 years (1983-1986) being owed by the 1st respondent.
4. An order for inquiry into all payments of money made by the 1st respondent to the 4th and 5th respondents as Legal Adviser and Secretary respectively to the 1st respondent and for such payments to be refunded to the 1st respondent.
5. As against the 1st and 7th respondents, an order for inquiry into all withdrawals of money from the fixed deposit account of the 1st respondent kept with the 7th respondent otherwise than in accordance with the mandate subsisting as at the 23rd day of January, 1987 and for the payment of the said withdrawals back into the said account.

The appellant’s case in the High Court before Agoro J, (as he then was) was that on 18th February, 1983, the 1st respondent entered into a parol agreement with the appellant whereby the appellant would guarantee overdraft facilities to be made available to the 1st respondent by Owena Bank Limited (6th respondent) in consideration of which the appellant would be paid by the Ist respondent 5% of the latter’s gross earnings. In furtherance of the parol agreement, the appellant, who is a legal practitioner, pledged his certificate of occupancy with the 6th respondent as security for the overdraft facilities to be granted to the 1st respondent. The total earnings made by the 1st respondent from sailings was N21,052,072,24. By another agreement reached at the meeting of the Board of Directors of the 1st respondent, which was held on 31st March, 1987, the appellant, as Director of the 1st respondent, was to be paid salary and house rent for the period 1983 to 1986. That the 4th and 5th respondents were appointed as special legal adviser and Secretary respectively at a meeting of the Board of Directors held on 1st April, 1987, while no notice of the meeting was served on the appellant. That since the Boards meeting of 31st March, 1987, the Directors of the 1st respondent, excluding the appellant, had colluded to withdraw monies from the accounts of the 1st respondent with the 6th and 7th respondents for their (i.e. Directors) personal use.

The case for the 1st, 2nd and 3rd respondents was that no meeting of the 1st respondent’s Board of Directors was held on 31st March, 1987 and that neither the 2nd nor the 3rd respondent or any director of the 1st respondent attended such a meeting. But that there was a meeting of a Board of Directors held on 1st April, 1987 which was attended by the appellant. The 4th and 5th respondents were invited to the meeting to advise the Board on issues of law that might arise. There was an Extraordinary General Meeting of the 1st respondent on 23rd April, 1987. Notice of the meeting was previously delivered to the office of the appellant on 9th April, 1987. It was decided at the extraordinary General Meeting to remove the appellant as a director of the 1st respondent and as a signatory to any of the bank accounts of the 1st respondent. The appointment of the 4th respondent as Company Secretary to the 1st respondent was approved and confirmed.

The case for the 4th and 5th respondents was that they were invited to the meeting of the Board of Directors of the 1st respondent held on 31st March, 1987 which they attended in their professional capacities. That there was an Extraordinary General Meeting of the 1st respondent on the 23rd April, 1987 which was attended by all its shareholders and that the appointment of the 4th respondent as Company Secretary was approved and confirmed by the Extraordinary General Meeting.

The learned trial Judge made the following findings in his considered judgment:-

“It was not in dispute that the plaintiff (appellant) financed the incorporation and the initial take-off of the 1st defendant company (1st respondent). He was appointed one of the first set of Directors. He was also allotted 50,000 ordinary shares of the Company. But, as regards the claims which proceeded to trial at the hearing of this action most of the Defendants (respondents) challenged the claims of the Plaintiff …. In the light of the foregoing observations, it seems to me that no reasonable Court or Tribunal would place any reliance on the contents of Exhibit “P 18”, (being minutes of the meeting of the Board of Directors of the 1st respondent held in Germany) in support of the plaintiff’s claims. And with due respect to the plaintiff, this Court must prefer and accept the oral testimony of Mr. Mutert, Captain Hayes and Captain Bormann as against the evidence of the plaintiff and Mr. Bolarinwa which I reject.

As regards the minutes marked Exhibit “P21”, there was evidence by Mr. Mutert (D.W.l) and Captain Bormann (D.W.3) which I accept, that no meeting of the Board of Directors was ever held or attended by both witnesses as stated in Exhibit “P.21” on 31st March, 1987. And as it happened in this action, Mr. Mutert was in transit by air to Nigeria while he was alleged by Exhibit “P.21” to have attended a Board Meeting at 10.00 a.m. at 14/16 Abibu Oki Street, Lagos. I am, therefore, inclined to agree with the learned Senior Advocate that Exhibit “P.21” is a bogus and fictitious document which is unworthy of any reliance or belief’ (Parenthesis mine).

The learned trial Judge concluded the judgment by dismissing all the claims of the appellant in the following terms:-

“Finally, in view of the decision which I have reached in this action and for the reasons stated herein, the claims … under paragraph 39 of the Amended Statement of Claim, fail and are hereby dismissed. But having regard to the special circumstances of the parties to this action, I think that the justice of the matter demands that the parties should bear their costs of the action.

There will be consequential order discharging all injunctions imposed on the 6th and 7th Defendants (respondents) in respect of the Current Account and Fixed Deposit (Account) of the 1st Defendant company (1st respondent)” (Parenthesis mine)

Dissatisfied with the judgment, the appellant appealed against it to the Court of Appeal and then applied to the learned trial Judge for a stay of the execution of the judgment pending the determination of the appeal and for an injunction to restrain the 6th and 7th respondents from releasing any funds from the accounts of the 1st respondent. The application was refused and dismissed by the learned trial Judge.

The appellant then made the same application to the Court of Appeal urging thus:-

“1. An order staying the execution of the judgment of this Honourable Court (sic) dated the 1st day of September, 1989 pending the determination of the appeal already filed against the said judgment.