Universal Trust Bank & Ors. V. Chief Oludotun Olajide Koleoso (2006)

LawGlobal-Hub Lead Judgment Report

AGBO, J.C.A.

The respondent in this appeal filed suit No. FHC/L/CS/772/2002 at the Federal High Court Lagos division against the appellant as defendants for themselves and on behalf of all shareholders of Universal Trust Bank except the plaintiff. The respondent in paragraph 16 of his statement of claim claimed of the appellants as follows:

“1. A declaration that the 5% of the issued share capital of the 1st defendant held in various proportions by the 2nd and 3rd defendants is held in constructive trust for the plaintiff.

2. An Order mandatory injunction compelling the 1st defendant to immediately transfer 5% of its issued share capital from the 2nd and 3rd defendants to the plaintiff by obtaining a contribution of shares on a pro rata basis from each of its shareholders in the proportion of the number of shares held by each shareholder vis-‘a -vis the entire issued share capital of the 1st defendant.

3. An order directing the 1st defendant to immediately amend its register of members to reflect the plaintiff as proprietor of 5% of the issued share capital of the 1st defendant.

4. An order directing the 1st defendant to immediately pay to the plaintiff 5% of all declared dividends of the 1st defendant from the inception of the 1st defendant till the date of Judgment and all subsequent dividends which may be declared by the 1st defendant in future.

5. An order of perpetual mandatory injunction directing the 1st defendant to accord to the plaintiff all rights of membership in the 1st defendant including rights to receive notices of and to attend Annual General and Extraordinary General Meetings of the 1st defendant, rights to offer of or issuance of bonus and other shares proportionate to the share holding of the plaintiff in the 1st defendant and all other rights of membership of the 1st defendant”

By a notice of preliminary objection dated 12th November 2002 and filed on the same date the appellants prayed the court as follows.:-

Notice of Preliminary Objection

“Take notice that this Honourable Court will be moved at the resumed hearing of this action or so soon thereafter as counsel may be heard on behalf of the defendants when a preliminary objection will be raised to the suit herein as against the 2nd and 3rd defendants as follows:-

“That this suit be struck out against the 2nd and 3rd defendants/applicants in their representative capacity”.

The respondent had on 2/10/2002 filed a motion paper seeking (a) an order granting leave to the plaintiff to sue 2nd and 3rd defendants in a representative capacity and (b) an order of substituted service of the court processes on 2nd and 3rd defendants. The court below granted these prayers on 13/12/02.

On 22/1/2003 the parties argued the preliminary objection at the court below. In arguing the application the appellant withdraw the 1st ground supporting the prayer sought as the order to sue in a representative capacity had already been granted by the court. After hearing both parties, the court below, on 24/2/03 in a considered ruling adjudged as follows:-

“I therefore hold that no (sic) compliance with the provisions of order 9 rule 11 renders this application incompetent For the reasons given and the authorities cited above, this application is incompetent and is hereby dismissed for lack of merit”.