Senator (Chief) Olayinka Omilani & Anor. V. Chief Adetunji Omisore & Anor. (2006)

LawGlobal-Hub Lead Judgment Report

OGUNBIYI, J.C.A.

The plaintiffs/appellants’ claims giving rise to this appeal were taken out by a writ of summons dated 7th and filed 8th January 2002 against the two defendants/respondents for the following –

1. A declaration that the 1st plaintiff representing the interests of the 2nd plaintiff is a bona fide Director of the 2nd defendant.
2. A declaration that the 2nd plaintiff is a shareholder of the 2nd defendant.
3. A declaration that the 1st defendant, Chairman of the 2nd defendant acted ultra vires and without lawful authority in issuing the letter dated 19th November 2001 which effectively asked for the resignation of the 1st plaintiff from the Board of the 2nd defendant.
4. A declaration that it is ultra vires the 1st defendant to ask for the resignation of the 1st plaintiff.
5. A declaration that it is only the 2nd plaintiff, the interest of whom the 1st plaintiff represents that can withdraw the 1st plaintiff’s nomination to the Board of the 2nd defendant.
6. A declaration that the 1st plaintiff is entitled to continue to receive all relevant notices, circulars and other necessary information and documents as communicated to other Directors of the 2nd defendant company and to attend or nominate a proxy to represent him at any of the company.
7. A declaration that the 2nd plaintiff is entitled to continue to receive dividends, bonus or other benefits accruing to other members of the 2nd defendant company.
8. A declaration that the letter dated 19th November 2001 written or signed by the 1st defendant purportedly on behalf of the 2nd defendant is ultra vires.
9. An order of perpetual injunction restraining the defendants from acting or taking any steps capable of denying the plaintiffs of their rights and entitlements as Director/Shareholders of the 2nd defendant company.

The appellants by their writ of summons and statement of claim in a nutshell therefore claimed entitlement to the shares in the 2nd respondent and that they are Directors of the said 2nd respondent company.

The defendants/respondents, on their behalf and in response, filed a copious 24 paragraphs statement of defence and also a counter-claim of 30 paragraphs wherein they claimed against the two appellants and GN Bishop Insurance Broker Nig. Ltd, as 3rd defendant to the counter claim evidenced at pages 32 – 45 of the record. The reliefs which are stated at page 45 are as follows:

1. A declaration that the 1st and 2nd defendants are not bona fide shareholders of the 2nd plaintiff company.
2. A declaration that the 1st and 2nd defendants are not bona fide shareholders in or members of the 3rd defendant’s company or board.

3 A declaration that the 1st and 2nd defendants are not competent and lawful directors of the 2nd defendant company.

4. A declaration that the purported merger of the 2nd plaintiff with G.N. Bishop Insurance Broker (Nig.) Ltd. sometime in 1995 was invalid, wrongful, null void, illegal and non-existent.
5. An order restraining the 1st and 2nd defendants from parading themselves as shareholders and/or Directors of the 2nd plaintiff company pursuant to the purported shareholding in the 3rd defendant and or the purported merger of the 2nd plaintiff and 3rd defendant.

Briefly from the record before us, and to state the background facts of this case Glanvill Enthoven & Co. Nig. Ltd (the 2nd respondent herein) was incorporated in the year 1957 by the Government of Western Region and one Glanvill Enthoven (U.K.) Ltd. as the first indigenous Nigerian Insurance Brokering Company and has been carrying on its business of Insurance brokering from thence until this present date. Another Company known as British G.N. Bishop U.K. Ltd. (later Plc.) had a long standing business relationship with the 2nd respondent which relationship consists in GN Bishop UK introducing insurance brokering accounts as agent to 2nd respondent and taking a third of its commission accruing therefrom as its commission.

By the provisions of the Insurance Act of 1976, the payment of commission to insurance agents not registered in Nigeria was prohibited, and thus the aforesaid agency relationship became affected. At the risk of losing the accounts brought by G.N. Bishop UK and other prospective accounts, a solution had to be found to the statutory prohibition and retained not only the accounts being brought by GN Bishop UK to 2nd respondent but also enjoy other prospective accounts from the same source.

An agreement was therefore reached between GN Bishop UK and 2nd respondent to float a company whose business shall be insurance brokering and in which G.N. Bishop UK shall hold shares, which shall be proportionate to the 1/3 commission it was earning before the Insurance Act. These are all evidenced per exhibits A1, A17, and N at pages 428, 489 and 515 – 516 of the record. By exhibit A1 therefore, GN Bishop Nig. was incorporated in 1980 and 2nd respondent acted as its manager. Clause ‘B’ of the exhibit provided:

“The company will pay to the Manager by way of remuneration for its services pursuant to this agreement 60% of its net retained brokerage and other remuneration received by the Company in respect of agreed business.”

By the averments in the statement of claim the plaintiffs alleged a merger between the 2nd defendant and GNB Nigeria in which the plaintiffs were shareholders and thus 1st plaintiff acquired the status of a Director in the 2nd defendant as a result of the merger which was alleged having been approved by the Boards of the two companies. The defendants/respondents however denied the plaintiffs aforementioned claim in its totality. In otherwords, that there was no merger between G.N. Bishop Insurance Broker Nig. Ltd. 3rd defendant to the counter claim and Glanvill Enthoven Nig. Ltd. 2nd respondent, and that the purported transfer of GN Bishop UK shares to the shares of the appellant were therefore invalid.

The appellants therefore instituted this action against the defendants in reliance to the purported merger to found their entire claim at the lower court. The respondents contended that the appellants never had any valid interest in GN Bishop Insurance Broker Nig. Ltd. and by extension in the 2nd respondent company and that shares were not validly transferred to any of the appellants.

The appellants therefore claimed entitlement to the shares in the 2nd respondent and that they are Directors of the said 2nd respondent company.

While the appellants in proof of their claims called one witness, the respondents also called only one and following which counsel addressed the court. Consequently, the court in its judgment dated 27th February, 2003 dismissed the appellants’ case in its entirety and entered judgment in favour of the respondents as per the counter-claim. The appellants being dissatisfied with the said decision of the lower court has appealed to this court by filing a notice of appeal dated 19th March, 2003 but filed on the 6th May, 2003 and which contains six grounds of appeal.

In compliance with the rules of court, both parties filed briefs of arguments and on the 12th April, 2006 when the appeal was called up for hearing the learned appellants’ counsel Mr. O. G. Oyeleke relied on their brief of arguments dated 15th and filed on the 17th October, 2003. Counsel further relied on the reply brief dated 26th April, 2004 and filed on the 7th April, 2006 having been deemed filed by order of court made 12th April 2006. In totality he urged us to allow the appeal, and set aside the decision of the lower court. Mr. Rotimi Jacobs learned counsel for the respondents in response adopted their brief which was filed the 26th April, 2004 but deemed filed and served pursuant to an order of court made on the 18th May, 2004. Heavy reliance was made on the preliminary objection raised on the appellants’ brief, and counsel in consequence urged us to dismiss the appeal and affirm the decision of the lower court, therefore.