Tika-tore Press Ltd. & Ors. V.ajibade Abina & Ors. (1973)

LawGlobal-Hub Lead Judgment Report

G. B. A. COKER, J.S.C.

The appellants are the defendants to an action instituted in the High Court of Lagos by the following and under the designation shown hereunder- .

“1. AJIBADE ABINA

2. MUIBI ABINA Plaintiffs
3. RAIMI ABINA
4. SIKIRU ABINA

As administrators of the estate of Monsuru Badaru Abina (deceased) for themselves and on behalf of other members of Tika-Tore Press Limited, excepting the individual defendants.”

The plaintiffs’ writ was endorsed thus-

“declaration that the allotment of 91 ordinary shares in the 1st defendant company made on the 18th day of January, 1968 by the 2nd, 3rd and 4th defendants as directors of the 1st defendant company and/or the acquisition by the individual defendants thereby resulting and the subsequent entry of their names in respect thereof in the register of members of the 1st defendant company is ultra vires void and of no effect and should be set aside.

“2. An injunction restraining the 2nd, 3rd, 4th, 5th and 6th defendants from enjoying or exercising any right in respect of the said shares. ”

The parties, pursuant to an order of court in that respect, filed their respective pleadings. The statement of claim filed by the plaintiffs describes them as “the administrators of the estate of one Monsuru Badaru Abina (deceased) late of 8 Moloney Street, Ebute Metta, Lagos State who died intestate on the 13th Day of March, 1967”. The statement of claim avers that the 1st defendant company was incorporated on the 10th April, 1948 with a share capital of 5,000(pounds) which was later increased to 10,000(pounds) divided into 400 shares of 25(pounds) each out of which 309 were allotted prior to the 10th January, 1968. The statement of claim further avers that of the allotted shares the late M.B. Abina held 120 “fully paid ordinary shares at the time of his death”, that on the 11th January, 1968 the plaintiffs as administrators of the estate of the late Mr Abina applied to be “entered in their names on the register of members of the 1st defendant company in respect of the said shares held by the deceased”, that the annual general meeting of the company was billed for the 20th January, 1968 for the purpose of deciding on the applications of the plaintiffs and other members who had applied for allocation of shares but that on the 18th January, 1968 before the proposed annual general meeting, the board of directors of the Tika-Tore Press Ltd., met and allotted 91 out of the remaining 93 shares among the 2nd, 3rd, 4th, 5th and 6th defendants. The statement of claim further avers that the annual general meeting was indeed held on the 27th January, 1968 that at that meeting the latest allotments were successfully challenged, that thereafter some of the defendants arranged for and held an extraordinary general meeting of the company at which the decisions of the 27th January, 1968 were set aside. The statement of claim finally states:

“33. The scheme of the individual defendants was to take over the control of and dominate the 1st defendant company by fraudulently and/or improperly allotting to themselves shares and by refusing to register persons entitled to be registered.

34 The scheme of the individual defendant was to take over the control of and dominate the 1st defendant “company in issuing and allotting the shares referred to in paragraph 19 above was not for the benefit of the company but merely for the benefit of the individual defendants themselves in order to secure for themselves unjust voting control in the general meeting and domination of the 1st defendant company’s affairs and in fraud of the other shareholders.

35. Unless restrained the individual defendants have threatened to hold general meetings of the 1st defendant company in order to achieve their fraudulent objectives.”

On the other hand, the statement of defence of the 1st defendant company,i.e. Tika-Tore Press Ltd., avers that the plaintiffs are not members of the company and cannot and do not represent any member of the company. Paragraph 5 of the statement of defence reads as follows:

“The defendant admits paragraphs 7, 8, 9, 10 and 11 of the statement of claim and avers that an irregularity was created at the meeting of the 27th January, 1968 when the plaintiffs, wrongly exercising the right of membership under the articles of association, voted and were voted for.”

The statement of defence of this defendant further states that the Company is governed by Table A as its Articles, that the board of directors “as the competent authority to do so made an allotment of shares on the 18th January, 1968” according to law and in the interest of the company. Paragraphs 14 and 15 of the statement of defence read:

“14. The defendant denies paragraph 33 of the statement of claim, particularly the allegation of fraud, and avers that all the acts done were done in the interest of the company and after due considerations. The defendant further avers that the directors have the same right under the Articles of Association to decline registration in the matters of transmission as in transfer of shares. But the directors have not yet exercised the right as the plaintiffs’ solicitor did not accompany his clients application with all the relevant share certificates.