Paul Iro Vs Robert Park & Ors (1972)

LawGlobal-Hub Lead Judgment Report

COKER, J.S.C. 

The arguments on this appeal have been rather elaborate but the matters to be decided fall within a very narrow compass. The short question is whether an order made by Lambo, J., (High Court, Lagos) pursuant to the provisions of Section 128 of the Companies Decree, 1968 was justified by the powers conferred on the court by that section.

The 1st respondent before us was the applicant before the High Court, Lagos, and the Registrar of Companies was the original and only respondent to an application which was by way of an originating summons stated to have been taken out pursuant to the provisions of Order 120 Rules 2-3 of the English Rules of the Supreme Court. We shall advert later in this judgment to the implications of that procedure.

The application concerns the affairs of a company registered in Nigeria and known as Tarstone and Company Limited, and the amended originating summons was headed “In the matter of the Tarstone & Co. Ltd. and in the matter of Sections 31 and 128 of the Companies Decree, 1968”. The originating summons is endorsed in part as follows:-

“Let all parties concerned attend the Judge sitting in the High Court, Lagos, Tafawa Balewa Square, Lagos, on Monday, the 28th day of October, 1968 at 9 o’clock in the forenoon on the hearing of an application on the part of Robert Park, the applicant for an Order empowering the applicant to call, hold and conduct a meeting of the Company within the next one week in Lagos and for ancillary and consequential and directions as follows:-

(a) That the applicant be empowered generally to direct, manage and run fully the affairs of the company in accordance with the provisions of its Memorandum and Articles and the Companies Decree, 1968.

(b) That the applicant be empowered to appoint additional directors in place of Paul Iro, the only other member who had absconded since July, 1967.

(c) That the said applicant be empowered to appoint a reputable firm of auditors to value the shares of the company and pay to the credit of the said Paul Iro  his full entitlements up to the end of 6 months after his abscondment.”

The summons is supported by an affidavit sworn to by the applicant, that is Robert Park. That affidavit deposed to facts showing that the applicant and the present appellant, i.e. Paul Iro, were the founders and only two shareholders and directors of Tarstone & Co. Ltd., that each of them held shares of 7 pounds,500 each in a paid-up capital set-up of 15 pounds,000 and that the present appellant was as well a creditor of the Company to the extent of the balance shown in the Account of the Company which he had invested in the Company. The affidavit further shows that during the absence of the applicant to Europe, the appellant, Paul Iro, “absconded from Lagos and made away with the Company’s money amounting to 1 pounds,400 without any authority by the Company”; that it had been impossible to get in touch with him; that debts were being incurred by the Company and those had to be paid; that a number of substantial contracts were due to be executed by the Company and in particular paragraph 10 of the accompanying affidavit states:-

“10.  Since the disappearance of my only partner in the company I have been faced with immense difficulties as follows:-

(a) No valid statutory meetings of the company or its directors could be held;

(b) No valid appointment of the company’s auditors could be made;

(c) The company’s balance sheets, annual returns and other necessary statutory requirements by the Registrar of Companies could not be properly and legally authenticated;

(d) The company’s programme of expansion has been completely stultified;