Samuel Osigwe V. Pspls Management Consortium Ltd (2009)

LAWGLOBAL HUB Lead Judgment Report

MUSDAPHER, J.S.C

This is an appeal against the decision of the Court of Appeal, Abuja, delivered on the 19/4/2007 whereby the appellant’s appeal against the ruling of the INVESTMENT AND SECURITIES TRIBUNAL hereinafter referred to as “the Tribunal”, delivered on 4/2/2004, by which the Tribunal struck out the names of all the respondents, herein, from the proceedings before the tribunal on the grounds inter-alia that the respondents were merely agents of a disclosed principal. The matter started this way: By an Originating Application filed by the appellant in a class action, for himself and as representative of those who have registered to purchase shares in public companies under the Privatization Share Purchase Loan (PSPLS) Scheme against the respondents herein who are sued for themselves and as representatives of all the financial intermediaries engaged in the PSPLS Scheme. The claim of the appellant against the respondents herein and the 1st respondent before the Tribunal i.e, BUREAU OF PUBLIC ENTERPRISES – BPE was for the following Orders:-

“(i) Issuance of an order directing the respondents to suspend the share acquisition Scheme as presently structured until the 1st respondent [BPE] complies with the relevant provisions of the INVESTMENT AND SECURITIES ACT and the Rules/Regulations promulgated there under;

(ii) In the alternative, an Order directing the respondents to immediately comply with the provisions of the ISA and the underlying rules and regulations with respect to the PSPLS by ensuring that the relevant registration/statement/prospectuses are duly filed with and effectuated by the SEC;

(iii) Judgment against the respondents in an amount to be determined at trial as punitive damages;

(iv) Reasonable counsel fees

(v) Costs and expenses for these proceedings; and

(vi) Such other and further relief as the court deems appropriate.”

The appellant alleged that he and the members of the class he represents who registered to participate in the PSPL Scheme designed by the 1st respondent [BPE] have suffered damage because the BPE and the respondents offered and sold shares to him and members of his class in breach of certain provisions of ISA and the rules and regulations issued by Securities Exchange Commission [SEC] pursuant to ISA specifically by not filing the appropriate statements with SEC. The appellant further asserted that the respondents made untrue statements of material facts and omitted to state other material facts which misled the appellant and the members of his class.

By means of Notices of Preliminary Objections the respondents separately challenged among other things the competence of the action against them. In its Ruling delivered on the 12/2/2004 the Tribunal held in part:-

“3” the 2nd – 15th respondents/applicants are not necessary parties to the proceedings, they are agents of a disclosed principal and do not fall within the exceptions to the general rules; accordingly their names are hereby struck out.”

Immediately after the Ruling aforesaid, counsel to the first respondent herein PSPLS MANAGEMENT CONSORTIUM LTD drew the attention of the Tribunal that the first respondent was in the same category with the 2nd – 15th respondents. It was also an agent of a disclosed principal, the BPE, and it was an error not to have included the first respondent in the ruling striking out the other respondents. The Tribunal acceded to the request of counsel and also struck out the 1st respondent as a necessary party to the proceedings and that the omission is only as a result of a typographical error.

The appellant felt unhappy with the decision of the Tribunal and appealed to the Court of Appeal. Upon its consideration of all the issues submitted to it for the determination of the appeal, the Court of Appeal affirmed the decision of the Tribunal and dismissed the appeal of the appellant. The Court of Appeal held:-

“The appellant has failed to draw attention to the provisions of the Investment and Securities Act and the Public Enterprises [Privatization and Commercialization] Act 1999 to exclude the applicability of the general principle of law of principal and agent to the facts and circumstances of this case, or any part of the Investment and Securities Act making the 2nd – 15th respondents directly liable as agents. Moreover the appellant has not disclosed any reasonable cause of action against the 2nd – 15th respondents personally for which he is entitled to a relief which therefore make them a necessary party …”