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In The Supreme Court of Nigeria

On Friday, the 29th day of June 1990

SC 198/1986

 

Before Their Lordships

 

 

Andrews Otutu Obaseki

......

Justice, Supreme Court

Muhammadu Lawal Uwais

......

Justice, Supreme Court

Adolphus Godwin Karibi-Whyte

......

Justice, Supreme Court

Philip Nnaemeka-Agu

......

Justice, Supreme Court

Abubakar Bashir Wali

......

Justice, Supreme Court

 

 

Between

 

Engineer Samuel Diden Yalaju-Amaye

.......

Applicant

 

And

 

Associate Registered Engineering Contractors Ltd

Chief Daniel M. Ejoor

 Mr. Robinson Odeji Enisuoh

Gabriel Menetie Okitikpi

 Eng., Philip Ebele-Chukwu Okoye

 Forcados O. Obodo

New Nigeria Bank Ltd

I.B.W.A. Ltd.

.......

Respondents

 

Judgement of the Court

Delivered by

Karibi-Whyte ,J.S.C.

 

The gravamen of the issues argued in this appeal are around contentions whether appellant was validly removed as the Managing Director and Director of the 1st respondent and surrendered his interests in the Company and whether he can institute this action in respect of the wrongs he claimed were done by the 2nd-6th respondents.

 

Appellant is an Engineer and until the 21st August, 1979 claimed to be and was accepted by all as the Managing Director of the 1st respondent Company. He was also together with the 3rd, 4th and 5th respondents, (Directors of the 1st respondent company) a promoter of the 1st respondent company. The 2nd and 6th respondents subsequently were appointed Directors of the 1st respondent Company. The 7th respondent was the original bankers of the 1st respondent Company. The Eighth respondent became its banker when dispute arose as to the control of the finances of the Company. The protracted litigation which emanated from the disagreement has come on appeal to this court, having arisen from the resolution to dismiss the 1st respondent as Managing Director of the 1st respondent Company, by the 2nd-6th respondents, and the purported disposal of his interests in the 1st respondent Company. Appellant is said to have 15,834 shares in the 1st respondent Company.

 

The main Issues this Court is called upon to determine in this appeal are (i) whether the resolution dated 20th August, 1979 by the 2nd-6th respondents to accept the resignation of the appellant as Managing Director of the 1st respondent Company. and for the purported disposal of the interests of appellant in the 1st respondent Company is valid. (ii) Again whether appellant is the proper plaintiff to bring action in respect of the wrong doings he has alleged against the 2nd-6th respondents.

 

The facts as stated by learned Counsel to the appellant in his brief of argument, are quite involved. They suffer from the inclusion of avoidable details. The salient facts of the case are as follows –

 

Appellant, as Engineer by profession, conceived the idea to incorporate the 1st respondent Company and invited the 3rd-5th respondents. The 5th respondent is also an Engineer. On formation of the Associated Registered Engineering Contractors Ltd. the articles of Association of the Company, named appellant as the Managing Director, and the 3rd-5th respondents as Directors. The provisions of articles 88 and 99, 22-32 Table A of the of the first Schedule to Companies Act, 1968 were expressly excluded. 3rd respondent was elected Chairman. Sometime later and about 1975 the 2nd and 6th respondents were appointed Directors and Shareholders of the 1st respondent. The share situation of the Company is that the 2nd-6th respondents held 83.3% of the shares in the 1st respondent Company, whilst appellant the balance of 16.6%.

 

Sometime in 1975 the 2nd respondent was elected chairman of the Board of Directors of 1st respondent Company; and became actively involved in the supervision of the execution of the contractual projects of the 1st respondent Company.

 

20th August, 1979 in a meeting of the Board of the 1st respondent was disagreement between the plaintiff, as Managing Director and the 2nd respondent, Chairman, supported by the Directors of the 1st respondent as to whether the plaintiff or the 2nd respondent should be in control of the supervision of a particular project. In the ensuing heated argument, the rest of the Directors claimed, but the plaintiff denied, that plaintiff had orally resigned his appointment as Managing Director and Director of the 1st respondent Company and to dispose of his entire interest in the Company.

 

On the 21st August, 1979. Plaintiff received a letter No.CMD/5/79 dated 21st August, 1979 (Exhibit 3) signed by the 2nd respondent informing him that pursuant to an extraordinary general meeting of the 1st respondent Company. held on that day, his oral resignation as a director and Managing Director of the 1st respondent Company, and also his decision stated orally to dispose of his entire interest in the Company was accepted. Plaintiff protested to the 2nd respondent denying that he ever made the representation as claimed in the letter at the meeting of the Board of Directors of the 20th August, 1979. Plaintiff claimed that he had since the 21st August, 1979 been prevented from participating in the affairs of the company, and had never been invited to any' meeting of the Company, in his capacity of director, Managing director or shareholder. He also claimed that he has received no remuneration in his office of Managing Director, and has not been paid any dividend in respect of shares held by him.

 

After the purported removal of the plaintiff as Managing Director. on the 21st August. 1979, the Board by resolution appointed 2nd respondent who was the Chairman. as the Managing Director of the Company. 2nd respondent therefore became Chairman and Managing Director of the company. Again. when as a result of the protest to the 7th respondent Bank, by the plaintiff. in June. 1950 the 2nd respondent opened an account for the 1st respondent Bank. 2nd and 6th respondents became the signatories to this account on the 2/8/79.

 

After the purported removal of the plaintiff tile 1st respondent Company was run by the 2nd to 6th respondents, on the 13th November, 1979, the plaintiff brought an action before the Federal High court, Benin City, claiming as follows –

 

1.    Against the 1st to the 6th defendants a declaration:

 

(a)    That he was and is still the Managing Director, Director and Shareholder of the 1st defendant company.

 

( b)    That the purported appointment of the 1st defendant as Chairman or Chairman/Managing Director of the 1st defendant company is illegal, void and ultra vires the Memorandum and Article of Association of the 1st defendant company.

 

2.    An order of Court setting aside the letter No. CMD/5/79 of 21st August, 1979 written by the 2nd defendant to plaintiff informing the plaintiff of the purported resolution of the 1st defendant Company removing the plaintiff as the Managing Director, Director and Shareholder of the 1st defendant company.

 

3.    A declaration that all acts done and duties performed by the 2nd and 6th defendants either as Managing I Director, Director or Shareholder of the 1st defendant company are void, illegal and of no effect.

 

4.    An order of court that the 2nd and 6th defendants should refund forthwith to the 1st defendant company all monies, remunerations, dividends and other benefits received by or for them as Managing Director, Directors or shareholders or in any other capacity whatsoever.

 

5.    A declaration that the plaintiff is entitled to be paid all his remunerations, dividends, benefits and allowances as from the 21st of August, 1979 up to the date of judgment of this suit.

 

6.    An order of injunction restraining the 2nd to the 6th defendants and their agents and servants from operating the accounts of the 1st defendant company in the 7th and 8th defendants' Banks without prior consent or approval by the plaintiff.

 

7.    An order of court that the 2nd to the 6th defendants should render full account of all their dealings in the name of the 1st defendant company from the 21st of August, 1979 up to the date of the judgment in this suit.

 

8.     IN THE ALTERNATIVE, the plaintiff claims from 1st to the 6th defendants jointly and severally the sum of N1,300,000.00 (one million, three hundred thousand Naira) being special and general damages for the wrongful removal of plaintiff as Managing Director, Director and shareholder of 1st defendant company by the 1st to the 6th defendants.

 

PARTICULARS OF SPECIAL DAMAGE

 

Loss of salary at N11.780 per annum for l0 years. 

 117,800.00

Loss of Director’s remuneration for 40 years at Nl0,000 per year.

   400,000.00

Loss of Driver’s allowance at Nl20 per month for 10 years.

     14,000.00

Loss of Night-watchman allowance at N120 per month for 10 years.

     14,000.00

Loss of Car basic allowance at N 60 per month for 10 years.

       7,200.00

Loss of Estimated dividend at 50k per share l5,834 shares of N 1 each for 40 years 

    316,680.00

Loss of Present market value of 15,834 shares as per valuation report.

    154,000.00

General Damage.

    275,520.00

Total 

 1,300,000.00

 

Parties filed and served their pleadings in the action. Oral evidence was given at trial and witnesses were examined, cross-examined and where necessary reexamined. The learned trial Judge after making specific findings of facts gave judgment to the Plaintiff on the alternative claim. He award for damages of N 275,000. In his judgment, the trial Judge made the following findings of fact-

 

(i)    That notice of an Extra-Ordinary General Meeting of the Company for 2118179 was given was not true.

 

(ii)    That the evidence of the 7th defence witness Sunday Igbineweka, the Secretary of the Company was not true.

 

(iii)    That the appointment of signatories to bank cheques decided in a meeting on 2118/79 at I p.m. was an after thought.

 

(iv)    The minutes of the meeting at 1 p.m. on 21/8179 was a forgery, created to cover the absence of any resolution to change the signatories.

 

(v)    That appellant did not give notice of his oral intention to resign as Managing Director, nor did he relinquish his shares.

 

(vi)    That 2nd respondent shouted at the appellant during the meeting of 20/8/79 to resign or if he did not he would be removed from his position as Managing Director.

 

(vii)    Account No.9394 opened with the New Nigeria Bank, Lagos, was with the knowledge and consent of the Directors.

 

(viii)    Appellant did not resign as Managing Director of 1st Defendant on the 21st August, 1979

 

(ix)    The explanation that money was withdrawn by the Directors to pay contractors was not satisfactory.

 

Though these findings related to the specific claims, the learned trial Judge made no declaration in respect of any of them. Thus the trial Judge rejected the defences of the defendants and accepted the claims of the plaintiff. He held that the claim succeeded against the lst-6th defendants. But he awarded damages only in respect of the alternative claim and gave his reason for the general damages, which was that

 

… the award be such as would atone for the assault on the plaintiff's right which was unjustified ably invaded and it must reflect the reaction of the law to the imprudent and illegal exercise in the course of which the invasion was unleashed.

 

The defendants appealed against liability and damages on four grounds. Plaintiff also cross-appealed. Plaintiff relying on four grounds of appeal complained about the inadequacy of the damages awarded, and the failure to grant the declaration and special damages claimed.

 

The Court of Appeal allowed the appeal and set aside the judgment of the trial Judge. Without interfering with the findings of fact made by the trial Judge the court below went on to allow the appeal on the grounds of (a) want of jurisdiction in the trial court, (b) awarding damages on principles not known to the law (c) lack of locus standi in the plaintiff. Plaintiff's cross-appeal was summarily dismissed.

 

The plaintiff who was cross-appellant in the Court below has further a~ pealed to this Court, relying on thirteen grounds of appeal. The grounds of appeal before this Court would seem to me to have taken into consideration the errors alleged by the appellant against the judgment of the High Court in the cross-appeal in the court below and the errors alleged against the judgment of the court below allowing the appeal of the defendants/respondents.

 

The thirteen grounds of appeal filed cover the issues of jurisdiction, validity of the removal of the appellant and the considerations of the rule Foss v. Harbottle, one of the reasons which the court below founded the decision allowing the appeal. Learned Counsel has formulated nine issues for determination which could quite conveniently be grouped under the heads of the grounds of appeal.

 

I do not consider it necessary to set out the grounds of appeal and the issues for determination. I prefer to discuss the issues for determination in relation to the grounds of appeal covered by them instead of considering them  separately and in isolation. This will enable me to avoid the problems of prolixity and repetition which will result from adherence to the pattern adopted by counsel to the appellants. Learned Senior Counsel to the respondents Sogbesan, S.A.N. prefers a formulation of the issues for determination which challenges the judgment of the Court of Appeal for striking out the entire claim of the plaintiffs, and in dismissing their cross-appeal. He regards these as the only issues for determination.

 

Whilst I accept these two issues as crucial and sum up all the other issues relevant to the determination of this appeal, it is still better to spell out the other relevant issues for better elucidation of the issues involved.

 

I have pointed out the scope and content of the grounds of appeal. I am not satisfied with the prolixity of the issues as formulated by Counsel to the appellant. I am equally uncomfortable with the terseness of the formulation by learned Senior Counsel to the respondents. Either formulation obscures the real issues between the parties.

 

Analysing of the claim before the trial Judge discloses that the issues be-fore him were for a determination of the validity of the purported resolution to accept the oral resignation of the plaintiff and for a surrender of his interests in the Company; the validity of the resolution of the Board of Directors of the 1st respondent Company appointing 2nd respondent as its Managing Director; whether plaintiff can bring action against the 2nd-6th defendants to set aside all actions by them and for them to render account to him in respect of their dealings with the 1st defendant Company; Injunction restraining the 2nd-6th defendants from operating the accounts of the 1st defendant Company. In the alternative, plaintiff claimed special and general dam-for wrongful removal as Managing Director, Director and shareholder 1st defendant Company by the lst-6th defendants.

 

In my opinion, the issues for determination in this appeal can be formulated into the following questions –

 

1.     Whether the Court of Appeal was in error that the Federal High Court had no jurisdiction to hear and determine the claim by the plaintiff against the defendants in respect of his removal as Managing Director of the 1st defendant Company.

 

2.     Whether the resolutions by the 2nd-6th defendants purporting to accept an oral resignation of the plaintiff from his position of Managing Director, and Director of the 1st defendant Company, and his interests in the 1st defendant Company is valid.

 

3.     Whether the plaintiff can maintain action against the 2nd-6th defendants in respect of wrongs done by them against the 1st defendant Company.

 

4.     Whether the Court of Appeal was in error in setting aside the damages awarded to the plaintiff.

 

Appellant relying on Ojogbue & Anor. V. Nnubia & Ors. (1972)6 S.C.227 has complained that the Court of Appeal struck out the entire claim without considering each and every claim made in the statement of claim. It was submitted that the court has a duty to consider each of the claims and make specific findings on them separately before entering judgment. It was argued that failure to do this shows that both the appeal and the cross-appeal had not been properly heard and determined.

 

I have found it difficult to discern any merit in this complaint. I accept the submission of learned Counsel to the respondents that there is no set pat-tern or order in dealing with claims made before the Court. The duty of the Court is to deal with all the claims before it properly. Once this is done, it is no valid complaint that the separate claims were taken out of turn and decided. However, where a Judge in his judgment relies on a point of want of jurisdiction on the part of the Court, or lack of competence on the part of the plaintiff in bringing the action, the action can and ought to be determined, without the necessity of considering each of the claims before the court. See Amokomowo V. Andu (1985) 1 NWLR (Pt.3) 530; Bello v. Eweka (1981) 1 S.C.101. However, in the instant case the Court of Appeal could hardly be justifiably accused of not considering each of the head of claims before it. The record of the judgment of the Court of Appeal, shows that it actually considered each of the heads of claims before the learned trial Judge and determined them in the light of the arguments of counsel and the judgment of the learned trial Judge. It is convenient to deal at this early stage with the issue of jurisdiction which seems to me the hub on which decision of the court below revolves. It is also ground eight of the grounds of appeal, and inextricably bound up with the first issue formulated by me in this appeal, and issues Nos.5 and 7 by the appellant. It is settled law that where the issue of want of jurisdiction succeeds, there the case ends and the striking out of all the claims by the Court of Appeal will remain valid.

 

The Court of Appeal referred to section 7(1)(c)(i) of the Federal High Court Act, 1973, sections 230 and 231 of the Constitution 1979, and the Court of Appeal decision in Eka V. Onagoruwa & Anor., and accepted the submission of Counsel to Appellant and held that the claim in respect of the removal of the plaintiff as Managing Director, and Director of the 1st defendant Company, was not a claim within the provisions of S.7(1)(c)(i) of the Federal High Court Act, 1973 which relates to the operation of the Companies Act, 1968. It was held that a Managing Director is a servant of the Company, and his claim for damages is akin to a claim for wrongful dismissal and is not within the jurisdiction of the Federal High Court.

 

Learned Counsel to the appellant has contended in his brief of argument and orally before us that the issue of competency of plaintiff to institute the action or of the Federal High Court to adjudicate was not raised in that Court in the pleadings of the parties and was therefore not an issue between the parties. Relying on the cases Overseas Construction Co. (Nig.) v. Creek Enterprises (Nig.) Ltd. (1985) 3 NWLR (Pt.13) 407; Adeniji V. Adeniji (1972) 4 S.C. 10; Shitta-Bey V. Federal Public Service Commission (1981)1 S.C.40 it was submitted that the judgment should be set aside. Again the question whether the claims of the plaintiff were in respect of personal or corporate rights was never an issue. The crucial issue in the action was whether or not the plaintiff resigned as Managing Director, Director, or whether lie relinquished his shares to the other directors. Concisely stated, it is whether the claims of the Plaintiff are in respect of "matters arising from the operation of the Companies Decree or any other enactment regulating the operations of Companies incorporated under the Companies Decree 1968.

 

It is pertinent to refer to the provisions of section 7(1)(c)(i) of the Federal High Court Act, which relates to jurisdiction. It states as follows:-

 

The Federal High Court shall have and exercise jurisdiction in civil causes and matters arising from the operation of the Companies Decree, 1968 or any other enactment regulating the operations of Companies incorporated under the Companies Decree, 1968.

 

The appointment and removal of a Managing Director or Director of a Company is governed by the provisions of section 172, 175 of the Companies Decree 1968, and Table A schedule 1 (i.e. common form Articles of Association). Jurisdiction is determined by the claim of the plaintiff. The claim in instant action is with respect to the declaration that plaintiff is the Managing Director of the 1st defendant, and the validity of the purported acceptance of the alleged oral resignation of the plaintiff as the Managing Director of the 1st defendant Company.

 

The tenure of the office of Managing Director is governed entirely by the provisions of the Companies Decree. Hence the determination whether Managing Director was properly appointed, or has ceased to hold office is a matter arising from the operation of the Companies Decree - See Articles 75 and 80.

 

The Court of Appeal expressed the view that the remedies sought by which was a claim for wrongful dismissal was not one recognised Companies Decree and not within the jurisdiction of the Federal High court. The plaintiff's remedies as provided by the provisions of section 201 of the Decree are the only remedy available, it is claimed. I do not think this view is right.

 

I agree with learned Counsel to the appellant that the protection for minority shareholders provided under section 201 of the Companies Decree resulting in winding up the Company, though a remedy, is not the only remedy under the Companies Decree. Section 175(6), also enables a director wrongly removed under the Decree to claim and be awarded compensation or damages.

 

But the facts of the case before us are quite different. It is here clearly not a question of removal of the Director by the Board, under S.175 or resignation of the Director from Office. See Article 87(e). The plaintiff's claim is that he was and is still the Managing Director, director and shareholder of the 1st defendant Company. See claim 1(a). What is in issue is the validity of the appointment of the 2nd defendant and Chairman/Managing Director of the 1st defendant Company, See claim 1(b); See s.174(1). The validity of the resolution of the Board of Directors of 1st defendant Company accepting purported oral resignation of plaintiff as Managing Director/Director and shareholder of the 1st defendant Company, S. 175 and all the other claims are entirely based on the operation of provisions of the Companies Decree. It cannot therefore be disputed that each of these issues can only be decided by interpretation of the provisions of the Companies Act. It also cannot therefore be seriously suggested that the claims of the plaintiff are outside the provisions of the Companies Act, 1968, and therefore not within the jurisdiction of the Federal High Court. - See section 7(1 )(c)(i) Federal High Court Act 1973. In my opinion each of the claims of the plaintiff are matters within the provisions of the Companies Decree, 1968, and therefore within the jurisdiction of the trial court. The Court of Appeal was therefore In error when it held.

 

Whether the award was made to the respondent as a director, managing director or shareholder. it was completely incompetent as the matter was not properly before the Court in accordance with the companies Act as the remedies invited could not be properly dealt with by that court...

 

The trial court validly assumed jurisdiction. The Court of Appeal was wrong to strike out the action and set aside the judgment of the High Court on the ground of want of jurisdiction. ~he next issue concerns the purported removal of plaintiff as Managing Director, Director and Shareholder of the 1st D defendant Company. This is claim I. Plaintiff was in this seeking a declaration that he was still the Managing Director, director and shareholder of the Company, and that the purported appointment of the 2nd defendant 'is Chairman/Managing Director of the 1st defendant Company in his place was null and void. It is convenient to consider together claim 2 seeking to set aside the letter No.CMD/5/79 of 2lst August, 1979 written by the 2nd defendant informing plaintiff of the removal as Managing Director of the Company by virtue of a resolution of the 1st defendant Company.

 

The ground on which the lst-6th defendants purported to remove plaintiff was that plaintiff had resigned orally and that they had by their resolution of the 21st August, 1979 accepted the oral resignation. It is important to advert to the fact whether in fact there was oral resignation. which is a question F of fact. The trial Judge found as a fact that plaintiff did not give notice of intention of oral resignation, and did not relinquish his shares in the 1st defendant Company. The trial Judge also found that plaintiff (lid not resign. These findings have not been challenged on appeal and they stand uncontroverted. Hence the contention of counsel to the respondents that oral resignation may be accepted even where the enabling provision requires writing is not here applicable.

 

It seems to me therefore unarguable that since the resolution to remove the plaintiff was based on the erroneous supposition of an oral notice of resignation such resolution loses the only basis of its support with the finding that there was not such oral notice of resignation. Similarly devoid of any effect is the letter No.CMD/5/79 of 21st August, 1979 informing plaintiff of the purported resolution of the 1st defendant Company removing plaintiff office of Managing Director, Director and also taking over his shares in the 1st defendant Company. The letter No.CMD/5/79 of 21st August. 1979 is invalid and of no effect and is hereby set aside.

 

This leads me to the consideration of the validity of the appointment of the 2nd defendant as Chairman/Managing Director of the 1st defendant Company.

 

The appointment of Managing Directors is governed by Article 106 of Table A. A Managing Director ceases to be so if he ceases to be a Director. This is because he is a director who is appointed by the Directors, unless of course, he is appointed, as in the instant case, by the Articles of Association of the Company.

 

It is necessary to advert to the legal position that the power to appoint a director is exercised by directors by virtue of enabling provisions in the Articles of Association. The Articles of Association of the 1st defendant Company has omitted the provisions of articles 94 and 95 of Table A of the First Schedule thus depriving the Board of Directors of the power to appoint directors. Hence the appointment of 2nd defendant as a Managing Director is ultra vires the Board and therefore void.

 

The Court of Appeal took the view that plaintiff as Managing Director was an employee of the 1st defendant Company, and that there was a con-tract of service between him and the 1st defendant Company. The Court relied on the cases of Lee V. Lee's Air Farming Ltd. (1961) AC. 12. Lincoln Mill Australia Ltd. V. Gough (1964) V.R.193 were cited and relied upon. Learned Counsel to the respondents has supported this reasoning. Learned Counsel to the appellant had submitted correctly that issues were not joined on the question whether the relationship of master and servant existed between plaintiff and the 1st defendant Company.

 

The issue before the court was whether plaintiff resigned as Managing Director of the 1st defendant Company and whether the resolution of the Board of Directors of the 1st defendant Company accepting his oral resignation was valid. Learned Counsel to the appellant has rightly referred to the finding of the trial Judge that plaintiff did not give any oral notice to resign and therefore had not offered to resign his appointment as Managing Director, and that no issue was joined and no finding was made in respect of breach of con I act of service. There is no appeal against the findings.

 

There is no doubt that parties are bound by the issues raised in their pleadings. It is not subject-matter for argument that at the trial Court the issue was whether plaintiff was validly removed by the lst-6th defendants as "Managing Director of the 1st defendant Company. The claim was not for damages for wrongful dismissal, but a declaration that plaintiff was still the Managing Director of the 1st defendant Company. The claims for general damages was made in the alternative. The learned trial Judge having found that the resolution to accept the oral resignation of the plaintiff was invalid ought to have made the declaration asked for - See Shell B. P. Ltd. v. Pere Cole & Ors. (1978) 3 S.C. 183. I do not think and I know of no rule of law or practice which precludes a plaintiff from preferring any of the alternatives causes of action available to him as a remedy for injury done to him. Indeed plaintiff has brought this action and pleaded in the alternative. The trial Judge has awarded general damages in respect of the infringement of the legal right of the status of Managing Director.

 

Counsel to the appellant had conceded in his argument in the Court below that the issue related to the termination of appellant's contract of service, thereby giving rise to a Master and Servant relationship. Counsel now abandon the point in this Court and sought and was granted leave to argue the new point based on the infringement of the legal right of the status of the appellant. That is the issue joined between the parties. It is clear from the pleadings that no contract of service was pleaded, and no breach of same was alleged. It would be making a case for the parties to decide the claim on a matter in respect of which issue was not joined.

 

There is no doubt that the claim was based on the invalidity of the resolution by the 1st defendant Company to remove the appellant on a purported oral resignation of his office of Managing Director, Director and an express desire, orally to dispose of his shares in the 1st defendant Company. The letter No.CMD/5/79 dated 21/8/79 did not state that appellant’s appointment as Managing Director was being terminated. It stated that his resignation orally from the position of Managing Director, etc. was being accepted by the Company. This is not in my opinion an interference with the terms of an existing contract of service if any to constitute a breach of contract of service giving rise to an action for wrongful dismissal. It is merely an attempt to enforce what the defendants claimed was the wish of the plaintiff. The issue between the parties therefore does not involve the relationship of Master and p Servant. The Court below was wrong to so regard it.

 

The Court of Appeal stated the general rule and the usual position that there is generally the relationship of master and servant between the Managing director and his company. As an employee there is usually a contract of service between him and the Company. The Managing Director relies on his tenure on the articles of association of the Company and any other contract F of service supplemental thereto. Thus a valid determination of his contract of service will depend on the terms of such contract of service. No such contract of service was proved.

 

Learned Counsel to the appellant submitted that appellant has no contract of service outside the Articles of Association of the 1st respondent Company. It was submitted that appellant was named Managing Director by the Articles of Association of the 1st respondent Company, and by the non-adopt ion of articles 88-96 of Table A of the First Schedule to the Companies Decree 1968, the provisions of articles 94 and 95 enabling the exercise of the power to remove a Director under section 175 was not available to the 1st respondent Company.

 

I have already pointed out in this judgment, that the issue here is not one for the removal of the plaintiff by the 1st defendant, in which case the omission of articles 94 and 95 of Table A of the first Schedule would not have affected the power vested in the 1st defendant by Section 175 of the Companies Decree; which also prescribes the procedure for removing directors. The general power as provided in section 175(1) states as follows –

 

A Company may by ordinary resolution remove a director be-fore the expiration of his period of office, notwithstanding anything in its articles or in any agreement between it and him. Provided that this subsection shall not, in the case of a private Company authorise the removal of a director holding office for life OP the commencement of this Decree, whether or not subject to retirement under an age limit by virtue of the articles or otherwise.

 

The Memorandum and Articles of Association of the 1st defendant/respondent Company bind the company and the plaintiff/appellant. The document constitute a contract between them. - See S.16. But the articles of association of the Company are alterable by the Company by special resolution subject to the conditions contained in its Memorandum of association – See S.12(1). Accordingly the 1st defendant has power to alter its articles of association even if this results in a breach of contract See Shindler v. Northern Raincoat Co. Ltd. (1960) 2 All E.R. 239.

 

The 1st defendant has not altered any provision of the articles under which plaintiff/appellant relies; rather it has appeared to maintain it.

 

In that difficult case of Southern Foundaries Ltd. (1926) v. Shirlaw (1940) 2 All F.R. 445, on the removal of directors, all their five Lordships were agreed on the principle of law as laid down in Stirling v. Maitland (1864) 5 B &S. at p.852 where Cockburn, C.J. said,

 

…if a party enters into an arrangement which can only take effect by the continuance of a certain existing state of circumstances, there is an implied engagement on his part that he shall do nothing of his own motion to put an end to that state of circumstances, under which alone the arrangement can be operative.

 

There is nothing in the instant case for one to conclude that either plaintiff or 1st defendant/respondent had done anything to put an end to the appointment of plaintiff/appellant as Managing Director. 1st defendant/respondent company has not removed plaintiff/appellant and plaintiff/appellant had it caused his office of Managing Director to be vacated. He is therefore entitled to the declaration sought that he is still the Managing Director of the defendant/respondent Company. The question of damages for wrongful dismissal in my opinion does not arise plaintiff/appellant having not been dismissed by the 1st defendant/respondent. I now turn to the criticism of the Court of Appeal reliance on the principle in Foss v. Harbottle (1843) 2 Hare 461.

 

The Court of Appeal held that the claims made by appellant being those company itself should make the Company ought to be the proper plaintiff. However, where the claim is one made under the Companies Act for up of the Company on the ground of the oppression of the minority the individual can bring the action. Tika-Tore Press Ltd. v. Abina & Ors. (1973) 4 S.C.63 was relied upon as authority.

 

Learned Counsel to the plaintiff/appellant submitted orally before us brief of argument that claims 1(a), 2, 5, 7 and 8 are all in respect of the personal rights of the plaintiff/appellant and do not fall within the rule in Foss v. Harbottle (supra). It was submitted that plaintiff/appellant could n in his own name in respect of the claims in 1(b), 3,4,6 and 7; as within the exceptions allowed by the rule in Foss V. Harbottle (supra). It was submitted that the conduct of the 2nd-6th defendants/respondents was not only oppressive and fraudulent, but also ultra vires the Memorandum and Articles of Association of the 1st defendant/respondent Company.

 

The rule in Foss V. Harbottle (supra) as formulated was very clearly  explained in Edwards V. Halliwell (1950)2 All E.R. 1064 at 1066 where Jenkins, L.J. stated it as follows –

 

The rule in Foss v. Harbottle, as I understand it, comes to mean no more than this. First, the proper plaintiff in an action in respect of a wrong alleged to be done to a company or association of persons is prima facie the company or the association of persons itself. Secondly, where the alleged wrong is a transaction which might be made binding on the company or association and on all its members by a simple majority of the members, no individual member of the company is allowed t6 maintain an action in respect of that matter for the simple reason that, if a mere majority of the company or association is in favour of what has been done, then cadit quaestio.

 

Thus the company or association is the proper plaintiff in all actions in respect of injuries done to it. No individual will be allowed to bring actions in respect of acts done to the company which could be ratified by a simple majority of its members. Hence the rule does not apply where the act complained of was ultra vires the company or illegal - See Parke V. Daily News D Ltd. (1962) Ch. 927 or constituted a fraud on the minority and the wrongdoers are in the majority and in control of the Company, See Birch v. Sullivan (1957)1 W.L.R. 1247. And finally where a resolution requiring a qualified majority has been passed by a simple majority - See Edwards v. Halliwell (supra). These last mentioned circumstances are the generally recognised exceptions to the application of the rule in Foss v. Harbottle (supra).

 

Analysis of the claims of the Plaintiff discloses that they are in two categories. There are the claims relating to personal injuries done to him by the Company through its organs. These are the claims in 1(a), 2,5. There are also the claims in respect of injuries done to the Company itself. These are reflected in claims 1(b), 3,4,6,7. The personal claims do not offer any difficulty, and I have already discussed them. The claims in respect of injuries done to the Company are what now concerns us.

 

Since the 1st defendant/respondent Company is the proper plaintiff in respect of injuries done to it, actions in respect of such injuries can be brought only in the name of the Company or by representative action. Plain-tiff can only maintain the action in his own name where he brings himself within any of the exceptions. Counsel to the appellant has alleged in claim 1(b) that the appointment of the 2nd defendant as Chairman/Managing Director is illegal, void and ultra vires the Memorandum and Articles of Association. I have already stated that the power to appoint directors can only be exercised where there are enabling provisions in the Articles of Association. The provisions of article 94 and 95 of Table A has been omitted from the articles of association of the 1st defendant/respondent Company. Thus the meeting of the Board of Directors which met on 21/8/79 and appointed 2nd defendant/respondent as the Managing Director acted ultra vires the Articles of Association and exercised powers which they do not have.

 

This same reason supports the claim in 3, where plaintiff is seeking a declaration challenging the validity of the acts and duties performed by the 2nd and 6th defendants/respondents as Managing Director, Director or shareholders of the 1st defendant/respondent company, on the ground of their illegality. There is no doubt that in the absence of an enabling provision in the Articles of Association of the 1st defendant/respondent company, Directors, including the 2nd and 6th defendants have no powers to do what they did.

 

I have already pointed out the deliberate omission in the articles of the 1st defendant/respondent Company of the provisions of articles 94 and 95, by virtue of which the power to appoint directors could be exercised. The 1st defendant/respondent Company has no similar articles enabling the exercise of the power to appoint directors. Accordingly the appointment of the 2nd and 6th defendant/respondents as directors of the 1st defendant/respondent Company is ultra vires therefore void.

 

However, this does not apply to the allotment of shares. The shares allotted to the 2nd and 6th defendants/respondents by virtue of their powers as directors remain valid and not affected by the absence of powers to appoint directors.

 

Claim 4 seeks an order for the 2nd and 6th defendants/respondents to account to the 1st defendant Company all monies, remunerations, dividends and other benefits received by them as Managing Director, Director or shareholder of the 1st defendant Company. We have already shown the invalidity of the appointment of 2nd and 6th defendants as directors and illegality of same. Accordingly the wrong, though against the 1st defendant/respondent is one which comes within the exceptions to the rule in Foss V. Harbottle (supra) which precludes actions in respect of wrongs done to the Company.

 

The 6th and 7th claims follow as a matter of course to the 4th claim, being a wrong done to the 1st defendant/respondent Company. These are all wrongs done to the 1st defendant/respondent Company by the remaining persons who are in the majority and undoubtedly in control of the 1st defendant Company. In the circumstance, appellant can bring an action against them for the wrongs done to the Company.

 

It is important to point out that the learned trial Judge found as a fact that after the plaintiff had been removed, the defendants went on a withdrawal spree. The trial Judge rejected the explanation that the money withdrawal by the Directors was to pay contractors. This is a finding of fraud against them and oppression on the part of the defendants who are in the majority. The defendants have not appealed against the findings. The trial Judge also found that the minutes of the meeting at 1 p.m. on 21/8/79 was a forgery created to cover the absence of any resolution to change the signatories to cheques. It was held that the appointment of signatories to bank cheques decided in a meeting on 21/8/79 at 1 p.m. was an after thought. These findings against the defendants therefore stand uncontroverted. The facts of this case are not similar and are distinguishable from those of Uzor & v. Nigenan Stores Workers Union & Ors. (1973)1 All N.L.R. (Pt.11) 38 relied upon by the Court below. In the Uzor case, the plaintiffs had no locus standi. It is not so here. It seems to me that the Court of Appeal did not make an indepth and critical analysis of the facts of the instant case in the light of the rule in Foss v. Harbottle (supra). The plaintiff/appellant is entitled to bring the claims in 1(b), 3, 4, 6, 7.1 have shown in this judgment that the claims before the trial Judge are matters arising from the operations of the Companies Act 1968. They are therefore within the express provision of section 7(1)(c)(i) of the Federal High Court Act, 1973. The trial Judge has jurisdiction in respect of the claims.

 

I have also shown that the subject-matter of the claims are either personal actions in respect of which plaintiff/appellant has a right of action, or B wrongs done to the 1st defendant company in respect of which in the circumstances of the acts alleged being ultra vires the 1st defendant company, tainted with fraud, or oppressive of the plaintiff, he can bring an action to seek a remedy; the Court of Appeal cannot be right and was obviously wrong when it held at p.396 that

 

Whether the award was made to the respondent as a Director, Managing Director or Shareholder, it was completely incompetent as the matter was not properly before the court in accordance with Companies Act as the remedies (invited); could not be properly dealt with by that court, and continued "What were formulated in respondent's statement of claim are in respect of corporate rights of the Company i.e. 1st appellant and give no right to respondent to sue as he did and for the Court to assume jurisdiction.

 

The Court accordingly struck out the entire claim of the plaintiff which it held the High Court ought to have done. This is wrong. The Federal High Court without any doubt, has jurisdiction to hear and determine the claims, and the plaintiff is competent to bring the action - See Madukolu & Ors. V. Nkemdilim & Ors. (1962) 1 All NLR. 587.

 

I now turn to the issue of the general damages awarded to the plaintiff in the trial Court which appeared to have attracted considerable attention in the Court below. It is also pertinent to consider the plaintiff cross-appealed against the failure of the trial Judge to find for the plaintiff that he is still the Managing Director, Director and Shareholder of the 1st defendant Cornpany, to award the special damages claimed, and to set aside the letter No.CMD/5/79 of the 21st August, 1979 relied upon by the defendants. In not declaring the acts of the 2nd and 6th defendants as Managing Director and Director null and void. For not granting the injunction sought against the 2nd-6th defendants, and for not considering each and every item claimed by the plaintiff. Not much attention was paid to the cross-appeal. This was probably prompted by the consideration that the action was incompetent on the part of the plaintiff and that the Court had no jurisdiction to hear and determine it.

 

I have indicated above that since the formulation of the issues for determination must take into consideration and be circumscribed within the grounds of appeal filed, the issues raised by the failure to deal with the cross-appeal must of necessity be included. I have already dealt with the declaration that appellant is still the Managing Director, Director of the 1st respondent Company and holder of the shares standing in his name, setting aside letter No.CMD/5/79 dated 21/8/79; declaring the acts of the 2nd and 6th respondents as Managing Director and Director respectively as null and void.

 

I have not dealt with the order for injunction which inevitably ought to follow on the grant of the declaration that the appellant is still the Managing Director. I have already considered the issue that every item claimed by plaintiff was not considered. I intend to deal with them after considering the issue whether the Court of Appeal was right in its consideration of the appeal on the question of damages awarded plaintiff by the learned trial Judge.

 

The issue is probably the easiest to determine but for the approach adopted by tile Court of Appeal. It is true the learned trial Judge awarded general damages after making specific findings of facts on the heads of claims before him without making any determination on each of those claims. It is also difficult to comprehend what led him to the award of the general damages.

 

It is clear from the judgment that what prompted the award is likely to be as stated in his own words.

 

The plaintiff succeeds in the alternative claim only with regards to general damages for wrongful removal. The award must be such as would atone for the assault on the plaintiffs right which was unjustifiably invaded and it must reflect the reaction of the law to the imprudent and illegal exercise in the course of which the invasion was unleashed.

 

It is hardly necessary to point out that the amount awarded was based on the able invasion of the right of the plaintiff, which seems to me on the establishment of the specific claims of the plaintiff. The learned trial Judge then awarded a lump sum of N275,000.

 

The Court of Appeal in its judgment pointed out correctly that the ….learned trial Judge reviewed all the evidence but only with reference to specific claims, not for the alternative claim and not for general damages." It was pointed out that the learned trial Judge made the award without evaluating the evidence and making findings leading to the award. That it was an award based on no principles known to the law.

 

The Court held that no general damages could be awarded as alternative for the failure to prove special damages claimed for alleged removal as Director, Managing Director and Shareholder. The Court of Appeal held that general damages is not a remedy available to a Director under the Companies Act for his removal. This is clearly wrong. It was also held that an award of general damages against all the lst-6th defendants/respondents jointly and severally was wrong, since only the 1st defendant/respondent is the employer of the plaintiff/appellant and ought to be liable, if any. The Court of Appeal regarded the position as one of the relationship between Master and Servant, and outside the jurisdiction of the Federal High Court. It was this view that dominated the reasoning of the Court of Appeal. Even where it was conceded that damages could be awarded to a Servant for wrongful dismissal, it was held that exemplary damages could not be awarded.

 

I have already held in this judgment that this is not a case for wrongful dismissal the Plaintiff as Managing Director, or Director. It is simply a case of an invalid exercise of an ultra vires power by the 2nd-6th respondents/defendants purporting to accept the oral resignation of the plaintiff as Managing Director. They never claimed to be removing the plaintiff from his appointment of Managing Director or Director, and appellant was not removed. The finding of the trial Judge that there was no oral resignation is conclusive of the fact that plaintiff was not removed by the purported resolution. I agree with the submission of Counsel to the appellant that the Court of Appeal was wrong to have regarded the claim as one for wrongful dismissal of a servant by a Master and for holding that the companies Decree did not provide for damages in actions for wrongful dismissal of Directors or Managing Directors. That damages could be awarded is clear from the provisions of section 175(6) of the Companies Decree which states as follows –

 

Nothing in this section shall be taken as depriving a person removed thereunder of compensation or damages payable to him in respect of the termination of his appointment as Director or of any appointment terminating with that as director, or as derogating from any power to remove a director which may exist apart from this section.

 

This provision enables the award of monetary damages in actions founded on the removal of Director, or Managing Director. Decided cases abound in support of the proposition that pecuniary damages may be claimed and if proved awarded in actions for wrongful dismissal of Director or Managing Director - See Nelson v. James Nelson & Sons Ltd. (1914)2 KB.770; Southern Foundries (1926) Ltd. v. Shirlaw (1940) AC.701; Shindler v. Northern Raincoat Co. Ltd. (1960)1 WLR. 1038.

 

Learned Counsel to appellant/plaintiff has submitted that the Court below was wrong to have set aside the award of general damages claimed. He argued that the strong language used by the trial Judge in his condemnation of the conduct of the defendants did not alter the character of the damage awarded. The learned trial Judge awarded the general damages claimed and no more. Learned counsel to the respondents/defendants supports the reasons given by the Court of Appeal for setting aside the award of general damages. The view of the Court of Appeal was that the language used by the learned trial Judge was expressive of a punishment for the conduct of the 2nd-6th respondents/defendants, and indicative of an award of exemplary damages. It was held that there was no claim for exemplary damages before the Court and there was no evidence in support of the award.

 

The Court of Appeal then went on a detailed discussion of the law relating to the award of exemplary damages. I do not consider this voyage relevant or necessary in the determination of the issue before the Court. I agree with learned counsel to the appellant that the language used by the Judge to deprecate the conduct of the defendants cannot be the nature of the damages awarded by him. In the instant case the Court of Appeal assumed, of course erroneously, that the learned trial Judge awarded exemplary and punitive damages, which was not claimed. This it was also assumed, he did because he was unable to make any awards in respect of the special damages claimed. It is pertinent to observe that appellant claimed for special damages, and in the alternative, general damages.

 

It is well settled law that general damages is the kind of damage which the law presumes to flow from the wrong complained of. They are such as the Court will award in the circumstances of a case, in the absence of any yardstick with which to assess the award except by presuming the ordinary expectations of a reasonable man. - See Lar v. Stirling Astaldi Ltd. (1977)11/12 S.C.53; Omonuwa v. Wahabi (1976)4 S.C. 37. General damages maybe awarded to assuage such a loss which flows naturally from the defendant's act. It need not be specifically pleaded. It arises from inference of law and need not be proved by evidence. It suffices if it is generally averred - See Incar v. Benson (1975)3 S.C. 117. They are presumed by the law to be the direct and probable consequence of the act complained of. Unlike special damages it is generally incapable of substantially exact calculation. - See Odulaja v. Haddad (1973)11 S.C.357.

 

The measure of general damages in terms of money is a matter for the Judge See Omonuwa v. Wahabi (supra). It is always necessary for the Judge to make his own assessment of the quantum of such damage - See Dumez v. Ogboli (1972) 3 S.C.205. It has been held in W.A.S.A. v. Kalla (1978) 3 S.C.21 that it is wrong to take into consideration in the award of general damages, matters which should be considered in the award of special damages.

 

Applying the above principles to the decision of the learned trial Judge, it seems to me a correct criticism of the award that he did not make any assessment of the quantum of the damages. Rather he had taken into consideration matters, such as the infringement of plaintiff's right, which should be considered in the award of special damages claimed by the plaintiff.

 

I agree with the Court of Appeal, but for quite different reasons, that award of the general damages of N275,000 was made on wrong principles and ought to be set aside and which I hereby set aside.

 

Appellant in claim 6 sought for an order for injunction restraining the I to 6th defendants/respondents and their agents and servants from operating the accounts of the 1st defendant/respondent Company in the 7th and 8th defendants/respondent's bank without prior consent or approval by the plaintiff/appellant. I think this is the most ambitious of all the claims in the of summons. In arguing this head of claim counsel to the appellant must have taken into consideration the fact that he is only holder of 16.6% of the shares of the 1st defendant company. The 2nd-6th defendants hold of the shares. Thus at any time, the management of the affairs of the Company is vested in the majority of its shareholders. It is only the majority that can determine the nature and content of the articles of association, and they consider it inconvenient to alter its provisions of the articles suitable the exercise of powers vested in the majority.

 

The question of the operation of the accounts of the 1st defendant/respondent Company is a matter to be determined by the Board of Directors aging Director, in who is vested the Management of the Company See Art. 80 Table A. It seems to me well settled that a minority shareholders which plaintiff/appellant is in the instant case has no legal right to interfere with the management of the company, except where fraud has against the majority.

 

It is fundamental rule that the Court will grant an injunction only to support a legal right - See Montgomery v. Montgomery (1965) P.46. Where an applicant for injunction has no legal rights cognisable in the courts injunction will be refused. Gouriet v. Union of Post Office Workers (1977) 3 All E.R.70. Applicant has not in this case shown that he has a legal right which will be infringed. Indeed the 2nd-6th defendants who are the majority Shareholders can exercise their right validly to control the 1st defendant/respondent Company. The grant of an injunction in this case will interfere with the exercise by the 2nd-6th defendants of their legal right to control the 1st defendant Company. I do not consider it consistent with principle that the majority shareholders of the company should be held to ransom by the plaintiff whose rights is legally subordinate to their own. The claim for injunction having not been made out hereby fails.

 

I now advert to the claim for dividends on the shares held by plaintiff/ appellant. It is relevant to refer to uncontradicted findings of fact, against which respondents have not appealed. These are that plaintiff/appellant Is still the Managing Director of and holder of 15,834 shares in the 1st defendant Company. That he has not transferred these shares to anyone. There was also the finding that 1st defendant has never paid dividend on shares allotted to shareholders. It follows therefore that appellant is still the holder of the shares standing in his name. The 15,834 shares does not constitute an item of loss to the plaintiff. Since dividends have not been declared on the shares, he is not entitled to the dividends claimed. The claim for the value of the 15,834 shares and the dividend on them therefore fail. The finding in respect of dividends applies to claim 4.

 

I have already referred in this judgment, to the specific findings of fact made by the learned trial Judge. These findings which relate to specific heads of claim have not been challenged in the Court below. They remain uncontradicted. The trial Judge should have granted on the strength of the findings, the related declarations or orders which they establish.

 

The Court of Appeal in exercise of its powers under section 16 of the Court of Appeal Act, 1976 ought to have granted the reliefs claimed. Since the Court of Appeal failed to exercise its powers this Court will in the exercise of its powers under section 22 of the Supreme Court Act, 1960, grant the reliefs claimed.

 

Plaintiff/appellant therefore succeeds in his claims 1(a)(b) 2,3,4, (as established) 5, (as established) 7, of his further amended statement of claim.

 

The appeal of the appellant is therefore allowed. The judgment of the Court of Appeal, dismissing the counter-claim of the appellant, is set aside. The judgment of the trial Judge is set aside on the grounds stated in this judgment.

 

Appellant is entitled to the costs of this appeal, assessed at N300 in the Court below, and N500 in this court.

 

 

Judgment delivered by

Obaseki, J.S.C.

 

I have had the advantage of reading in advance draft of the judgment just delivered by my learned brother, Karibi-Whyte J.S.C. and I agree with his opinions on all the issues for determination in this appeal. I hereby adopt his opinions as my own. Accordingly, I agree with him that the appeal be allowed and that the judgments of the Court of Appeal and the learned trial Judge be set aside. I hereby allow the appeal and set aside the judgment of the Court of Appeal and the judgment of the trial Judge.

 

The main issue in this appeal is whether the appellant was validly removed as Managing Director and as Director of the 1st respondent - whether he surrendered his interests in the company. There is the preliminary issue whether he can institute this action in respect of the wrongs committed, according to him, by the 2nd to the 6th respondents. I therefore agree with my learned brother, Karibi-Whyte, J.S.C. that the questions for determination in this appeal are:

 

2.    whether the resolutions by the 2nd to 6th defendants purporting to accept an oral resignation of the plaintiff from his position of Managing Director and Director of the 1st defendant company and his interests in the 1st defendant company is valid;

 

3.    whether the plaintiff can maintain action against the 2nd to 6th defendants in respect of wrongs done by them against the 1st defendant company;

 

4.    whether the Court of Appeal was in error in setting aside the general damages awarded to the plaintiff.

 

The claims filed by the plaintiff/appellant and the facts of the case have been set out in admirable detail in the judgment of my learned brother, Kanbi-Whyte, J.S.C. and I need not repeat them here unless absolutely necessary for the purpose of this judgment. The plaintiff/appellant in the Federal High Court claimed inter alia:

 

1.    against the 1st to 6th defendants

 

(a)    that he was and still is the Managing Director, Director and shareholder of the 1st defendant company;

 

(b)    that the purported appointment of 2nd defendant as Chairman or Chairman/Managing Director of the 1st defendant company is illegal, void and ultra vires the Memorandum and Articles of Association of the 1st defendant company.

 

2.    An order of court setting aside the letter No.CMD/5/79 of 21st August, 1979 written by the 2nd defendant plaintiff informing the plaintiff of the purported resolution of the 1st defendant company removing the plaintiff as the Managing Director, Director and share-holder of the 1st defendant company.

 

3.    A declaration that all acts done and duties performed by the 2nd and 6th defendants either as Managing Director, Director or shareholder of the 1st defendant company are void, illegal and of no effect.

 

4.    An order of court that the 2nd and 6th defendants should refund forthwith to the 1st defendant company all monies, remunerations, dividends and other benefits received by or for them as Managing Director, Director, or shareholder or in any other capacity whatsoever.

 

5.    declaration that the plaintiff is entitled to be paid all his remunerations, dividends, benefits and allowances as from 21st August, 1979 up to the date of judgment of this suit.

 

6.    An order of injunction restraining the 2nd to the 6th defendants, and their agents and servants from operating the accounts of the 1st defendant company in the 7th and 8th defendants' banks without prior consent or approval by the plaintiff.

 

7.    An order of court that the 2nd to the 6th defendants should render full account of all their dealing in the name of the 1st defendant company from 21st of August, 1979 up to the date of the judgment in this suit.

 

8.    In the alternative the plaintiff claims from 1st to 6th defendants jointly and severally the sum of N1300,00 (one million three hundred thousand NAIRA) being special and general damages for the wrongful removal of plaintiff as Managing Director, Director and shareholder of 1st defendant company by the 1st to the 6th defendants.

 

 

PARTICULARS OF SPECIAL DAMAGE

 

Loss of salary at N11.780 per annum for l0 years. 

 117,800.00

Loss of Director’s remuneration for 40 years at Nl0,000 per year.

   400,000.00

Loss of Driver’s allowance at Nl20 per month for 10 years.

     14,000.00

Loss of Night-watchman allowance at N120 per month for 10 years.

     14,000.00

Loss of Car basic allowance at N 60 per month for 10 years.

       7,200.00

Loss of Estimated dividend at 50k per share l5,834 shares of N 1 each for 40 years 

    316,680.00

Loss of Present market value of 15,834 shares as per valuation report.

    154,000.00

General Damage.

    275,520.00

Total 

 1,300,000.00

 

 

After hearing evidence and addresses of counsel. the learned trial Judge entered judgment for the plaintiff for N275,000.00 damages after making the following specific findings on the alternative claim;

 

1.    That notice of an extra-ordinary, general meeting of the company for 21/8/79 was given was not true.

 

2.    That the evidence of the 7th defence witness, Sunday Igbineweka, the Secretary of the company was not true.

 

3.    That the appointment of signatories to bank cheques decided in a meeting on 21/8/79 at 1.00 p.m was an .after thought.

 

4.    The minutes of the meeting at 1.00p.m. on 28/8/79 was a forgery, created to cover the absence of any resolution to change the signatories.

 

5.    That the appellant did not give notice of his oral intention to resign as Managing Director nor did he relinquish his shares.

 

6.    That 2nd respondent shouted at the appellant during the meeting of 20/8/70 to resign or if he did not, he would be removed from his position as Managing Director.

 

7.    Account 9394 opened with the New Nigeria Bank, Lagos, was with the knowledge and consent of the Directors.

 

8.    Appellant did not resign as Managing Director of 1st defendant on the 21st August, 1979.

 

9.    The explanation that money was withdrawn by the Directors to pay contractors was not satisfactory.

 

The learned trial Judge awarded N275,000.00 damages and in his own words:

 

…the award be such as would atone for the assault on the plaintiff's right which was unjustifiably invaded and it must reflect the reaction of the law to the imprudent and illegal exercise in the course of which the invasion was unleashed.

 

The defendants appealed against liability and damages.

 

The plaintiff appealed against the decision for failure to grant the declarations prayed for and the special damages claimed.

 

The defendant/respondent raised:

 

1.    the issue of jurisdiction of the trial court to entertain the claim of the plaintiff/appellant;

 

2.    lack of locus standi of the plaintiff; and

 

3.    awarding damages on principles not known to law.

 

The plaintiff's cross-appeal was summarily dismissed. The defendants appeal was allowed on the ground that the trial court lacked jurisdiction as the claim did not come within section 7(1)(c)(1) of the Federal High Court Act, 1973 and sections 230 and 231 of the Constitution of the Federal Republic of Nigeria, 1979. The Court of Appeal also relied on its decision in Eka v. Onagoruwa & Anor.

It then struck out the claims of the plaintiff. The plaintiff has now further appealed to this court.

 

I agree with my learned brother, Karibi-Whyte, J.S.C., that each of the claims of the plaintiff are matters within the provisions of the Companies Decree, 1968 and therefore within the jurisdiction of the trial court. The facts of the case has been set out in detail by my learned brother, Karibi-Whyte, J.S.C., and he has also dealt with the issues raised in this appeal.

 

The appeal succeeds and the decision of the Court of Appeal and the Court are hereby set aside. I agree with my learned brother that the plaintiff/appellant succeeds in his claims 1(a) and (b), 2.3,4(as established) 5(established) and 7. Claim 6 and the alternative claim 8 fail. Accordingly,

 

1.     I hereby grant the declaration that

 

(a)    the plaintiff/appellant was and is still the Managing Director, Director and shareholder of the 1st defendant company;

 

(b)    that the purported appointment (b,c) of the 2nd defendant as Chairman or Chairman/Managing Director of the 1st defendant company is illegal, void and ultra vires.

 

2.    The letter No.CMD/5/79 of 21st August, 1979 written by the 2nd defendant/respondent to the plaintiff/appellant informing the plaintiff/appellant of the purported resolution removing the plaintiff/appellant as the Managing Director, Director and shareholder of the 1st defendant company is hereby set aside.

 

3.    1 hereby declare that all acts done and duties performed by the 2nd and 6th defendants/respondents either as Managing Director, Director or shareholder of the 1st defendant company are void, illegal and of no effect;

 

4.    1 hereby order the 2nd and the 6th defendants/respondents tore-fund forthwith to the 1st defendant company all monies, remunerations and other benefits received by or for them as Managing Director or in any other capacity acquired after 20/8/79.

 

5.    I hereby declare that the plaintiff is entitled to be paid all his remunerations, dividends, benefits and allowances as from the 21st of August, 1979 up to the date of this judgment.

 

6.    1 hereby order the 2nd and 6th defendants/respondents to render full account of all their dealings in the name of the 1st defendant company from the 21st of August. 1979 up to the date of this judgment.

 

The claim for injunction is hereby refused.

 

The appellant shall have costs in this appeal fixed at N500.00 in this court and N300.00 in the Court of Appeal.

 

 

Judgment delivered by

Uwais, J.S.C.

 

1 have had the opportunity of reading in draft the judgment read by my learned brother, Karibi-Whyte, J.S.C. I agree with the judgment and 1 too will allow the appeal.

 

Although the appellant, as plaintiff, brought action against eight defendants, now respondents, his claims were in fact against the 1st to the 6 respondents. The claims, the last of which was in the alternative read as follows –

 

l.       Against the 1st to the 6th defendants a declaration:

 

(a)    That he was and is still the Managing Director, Director and Shareholder of the 1st defendant Company.

 

(b)    That the purported appointment of the 2nd defendant as Chairman or Chairman/Managing Director of the 1st defendant company is illegal, void and ultra vires the Memorandum and Articles of Association of the 1st defendant company.

 

2.    An Order of Court setting aside the letter No.CMD/5/79 of 21st August, 1979 written by the 2nd defendant to plaintiff informing the plaintiff of the purported resolution of the 1st defendant company removing the plaintiff as the Managing Director, Director and Shareholder of the 1st defendant company.

 

3.    A declaration that all acts done and duties performed by the 2nd and 6th defendants either as Managing Director, Director or Shareholder of the 1st defendant company are void, illegal and of no effect.

 

4.An order of court that the 2nd and 6th defendants should refund forthwith to the 1st defendant company all monies, remunerations, dividends and other benefits received by or for them as Managing Director, Directors or shareholders or in any other capacity whatsoever.

 

5.    A declaration that the plaintiff is entitled to be paid all his remunerations dividends, benefits and allowances as from the 21st of August, 1979 up to the date of judgment of this suit.

 

6.    An order of injunction restraining the 2nd to the 6th defendants and their agents and servants from operating the accounts of the 1st defendant company in the 7th and 8th defendants' Banks without prior consent or approval by the plaintiff.

 

7.    An order of court that the 2nd to the 6th defendants should render full account of all their dealings in the name of the 1st defendant company from the 21st of August, 1979 up to the date of the judgment in this suit.

 

8.    IN THE ALTERNATIVE, the plaintiff claims from 1st to the 6th defendants jointly and severally the sum of N1,300,00 (one million, three hundred thousand Naira) being special and general damages for the wrongful removal of plaintiff as Managing Director, Director and shareholder of 1st defendant company by the 1st to the 6th defendants.

 

 

PARTICULARS OF SPECIAL DAMAGE

 

Loss of salary at N11.780 per annum for l0 years. 

 117,800.00

Loss of Director’s remuneration for 40 years at Nl0,000 per year.

   400,000.00

Loss of Driver’s allowance at Nl20 per month for 10 years.

     14,000.00

Loss of Night-watchman allowance at N120 per month for 10 years.

     14,000.00

Loss of Car basic allowance at N 60 per month for 10 years.

       7,200.00

Loss of Estimated dividend at 50k per share l5,834 shares of N 1 each for 40 years 

    316,680.00

Loss of Present market value of 15,834 shares as per valuation report.

    154,000.00

General Damage.

    275,520.00

Total 

 1,300,000.00

 

 

t the trial in the Federal High Court, Benin City, the facts as alleged appellant were found proved by the learned trial Judge who granted the claim made in the alternative, that is the eighth claim, which he found proved against the 1st to the 6th respondents. Both parties were not happy with the decision of the learned trial Judge. They therefore appealed against the Court of Appeal, which allowed the appeal by the 1st to 8th respondents and dismissed the cross-appeal by the appellant. In its judgment, the Court of Appeal held that the trial court lacked the jurisdiction to hear the action since the claims concerned the removal of the appellant as Managing Director, they did not come within the ambit of the jurisdiction of the Federal High Court under section 7 subsection (1)(c)(i) of the Federal Revenue Court Act, 1973, which applies to the provisions of the Companies Act. 1968. The Court of Appeal was of the view that his removal as Managing Director was the same as the dismissal of servant and if the dismissal was wrongful, his claim in that respect would be outside the jurisdiction of the Federal High Court. Next the Court of Appeal held that the award of damages made to the appellant was based on wrong principles and therefore set aside the award. Finally. the Court of Appeal held that the appellant had no locus standi to bring the action since the claims made by him were claims that should have been made by the 1st respondent as the company that was directly affected.

 

In my view the Court of Appeal misconceived the appellant's case and as a result fell into a serious error. On the issue of the jurisdiction of the Federal High Court, section 7 subsection l(c)(i) of the Federal Revenue Court Act, 1973, No.13 of 1973 provides as follows:

 

7.    (1)     The Federal Revenue Court shall have and exercise jurisdiction in civil causes and matters -

………………………………………………………………...............................................

(c)    arising from-

 

(i)    the operation of the Companies Decree, or any other enactment regulating the operation of Companies incorporated under the Companies Decree, 1968.

 

The appointment of the appellant as the Managing Director was specifically provided in the Articles of Association of the 1st respondent. Article 16 thereof reads as follows –

 

16.    The first Directors of the Company shall be

 

1.    ENGR. SAMUEL DIDEN YALAJU-AWAYF

 

2.    ENGR. ROBINSON ODEJI ENISUOH

 

3.    DAVID AKIRI IMILAR ESQ.

 

4.    GABRIEL MENETIE OKITIKPI ESO.

 

5.    ENGR. PHILIP EBELECHUKWU OKOYE.

 

There shall be Managing Director; and the Managing Director shall be Engr. Samuel Diden Yalaju-Amaye, and he shall also pursue further search on extensive programmes at the expense of the Company as and when the occasion arises.

 

The appellant was alleged to have given an oral notice of resignation from his appointment as Director and Managing Director of the 1st respondent and that a meeting of the other Directors was held to accept the resignation and to appoint the 2nd respondent in his place. There is no doubt that the manner of appointment and removal of the Director of a company is provided in sections 174 and 175 of the Companies Act, 1968. Anything there fore to do with the removal of a Director, as in the present case, is prima facie a matter concerning the operation of a company. and is within the jurisdiction of the Federal High Court as provided under section 7 subsection 1(c) of the 1973 Act. In the present case the appellant challenged his removal and the appointment of the 2nd respondent in his place. This is not the same as a claim by an employee of a company for wrongful dismissal, whose appointment and termination is principally subject to his contract of employment and not the Articles of Association of the company that employs him

 

On the issue of locus standi the appellant was not only a Managing Director of the 1st respondent. but was also a shareholder, and a member of its Board of Directors. The questions involved in his action concern his removal as Managing Director and the appointment, of the 2nd respondent as his successor. The appellant alleged that he was not invited to the meeting of the Board of Directors that allegedly accepted his resignation from office and appointed the 2nd respondent to succeed him. As a Director he was entitled to participate at the meeting and was entitled to be invited to the meeting just like any other Director. He therefore had a cause of action against the 1st to 6th respondents since his right was directly affected. Furthermore as a shareholder of the 1st respondent the appellant can bring actions that are either personal to him or on wrongs which affect the 1st respondent. However, in the latter case, the cause of action must come within the exceptions to the rule in Foss v. Harbttle (l843) 2 Hare 461 before the appellant can have locus standi. By the provisions of section 10 subsection (2) of the Companies Act, l968 the provisions of the Articles of Association contained in Table A to the Act are the regulations applicable to the 1st respondent unless the Articles of are excluded or modified by its Articles of Association. Paragraph 94 of Table A provides for the appointment of Directors. However this provision has been excluded by Article 2 of the Articles of Associations (Exhibit A) of the 1st respondent which in pat states as follows –

 

2.    The Regulations contained in Part I of Table A of the first Schedule to the Companies Decree, 1968 shall apply to this Company, with the exception of Regulations 22 to 32 and 88 to 99 (both inclusive) of the Decree….

 

Since no provision is contained in Exhibit A for the appointment of the 2nd respondent, his purported appointment to succeed the appellant was ultra vires the 1st appellant. As such the appellant as a minority shareholder can bring an action challenging the appointment. This is one of the exceptions to the rule in Foss V. Harbottle (supra). Hence the appellant had a locus standi even as a minority shareholder to bring the action on behalf of the 1St respondent.

 

Finally, on the award of the sum of N275,000.00 as general damages, learned trial Judge decision reads –

 

The plaintiff succeeds in the alternative claim only with regards to general damages for wrongful removal. The award must be such as would atone for the assault on the plaintiff’s right which was unjustifiably invaded and it must reflect the reaction of the law to the imprudent and illegal exercise in the cause of which the invasion was unleashed.

 

There will be general damages against the 1st - 6th defendants jointly and severally in the sum of N275,000 and costs assessed at N2,000.00.

 

The learned trial Judge based his decisions on the alternative claim of the appellant but as already shown, the appellant was entitled to judgment on some of the claims under heads 1 to 7. There was no reason for the learned trial Judge to give judgment on the alternative claim which was only applicable if the first part of the claims under heads 1 to 7 did not succeed or could not be awarded. The Court of Appeal held that the award of general damages by the learned trial Judge was not based on any of the principles of law for the award of damages. It further observed as follows -

 

….the learned trial Judge failed to give consideration to each B item claimed under special damages and that it was, incumbent upon him to consider each item. The result is that up to this very moment one is at a loss as to what the N275,000.00 was awarded for in the alternative claim…. 

 

The appeal therefore succeeds as there was no plea to justify the award of general damages which in the words employed by the learned trial Judge indicate punitive or exemplary damages.

 

I am in agreement with the Court of Appeal, but for a different reason, that the award of general damages by the learned trial Judge could not stand. As already shown the appellant's claims on some of heads I to 7 should have succeeded. The learned trial Judge was therefore wrong in awarding claim 8 and was also wrong in the award of general damages. if in fact he had awarded the claims under heads 1 to 7 of the claims, the award of general damages would not have arisen.

 

Now the evidence accepted by the learned trial Judge established the appellant's claims under heads i to 5 and 7. The claim under head 6 which asks for an order of injunction to restrain the 2nd to the 6th respondents from operating the accounts of the 1st respondent with the 7th and 8th respondents cannot be granted in view of the fact that the 3rd, 4th and 5th respondents were duly appointed Directors of the 1st respondent under article 16 of the Articles of Association of the 1st respondent. The 3rd, 4 and 5th respondents are by virtue of the appointment entitled to operate the accounts.

 

In the result the appeal succeeds for the foregoing reasons and the fuller reasons contained in the judgment of my learned brother, Karibi-Whyte, J.S.C. I set aside the decisions of the Federal High Court and the Court of Appeal and in their place I enter judgment for the appellant in terms of his claims 1(a) and (b), 2, 3, 4, 5 and 7 as stated above, with N500.00 costs against the 1st to 6th respondents only.

 

 

Judgment delivered by

Nnaemeka-Agu, J.S.C.

 

This is a further appeal by the plaintiff against the judgment of the Court of Appeal, Benin Division. That court had allowed the appeal by the defendants against the judgment of Akpamgbo, J. sitting in the Federal High Court, Benin Division and struck out the plaintiff's claims.

 

The plaintiff had instituted this action in the Federal High Court claiming various reliefs which have been set out in the lead judgment of learned brother. Karibi-Whyte, J.S.C. The plaintiff and the 2nd-6th defendants were the directors and shareholders of the 1st defendant/company. The plaintiff incorporated the company and invited the 2nd - 6th defendants to join him. The plaintiff was appointed both Director and Managing Director by the Articles of Association. Trouble started in 1979 when the company won a contract of N2, 775,385.36 from the Ministry of Defence for the construction of reinforced concrete drain at the military barracks Agenebode. At the Board Meeting of the 1st defendant/company held on the 28th of August, 1979, the Directors disagreed as to who should supervise the execution of the contract, the plaintiff or the 2nd defendant. As found by the learned trial Judge, tempers ran so high that the plaintiff had to walkout of the Board Meeting. The 2nd - 6th defendants, however, claimed that, by an oral notice of that date, the plaintiff had resigned his post as Managing Director as well as Directorship of the company and had relinquished his shareholding in the company. The 2nd - 6th defendants after taking legal advice, re-assembled the following day in what they called an Extraordinary General Meeting. They purported to show that all the shareholders had agreed to waive the length of notice necessary for such a meeting. However. the plaintiff never signed the resolution to that effect. At the meeting, they resolved to accept what they termed the plaintiff's oral notice of resignation of his offices of Director and Managing Director and to take over his shareholding interests in the company. They communicated these decisions to the plaintiff. The plaintiff went to court and claimed as I have stated.

 

After hearing, the learned trial Judge made a number of important findings of fact including:

 

1.    That the plaintiff was named as Director and Managing Director in the Articles of Association;

 

2.     That no notice of the Extraordinary General Meeting of 21st of August, 1979 was given to the plaintiff as a shareholder;

 

3.     That the minutes of the Directors' Meeting of the 20th of August, 1979 did not show that an Extraordinary General Meeting was to be called for the 21st and did not specify the special business of the meetings as required by law;

 

4.     That although there was a resolution for a further notice purported to have been signed by all the shareholders, it was in fact not signed by the plaintiff and that such a resolution was never reflected in the Directors' Meeting of the 20th of August, 1979;

 

5.    That it was not true that the plaintiff gave oral notice of his intention to resign as a Director and Managing Director or to relinquish his shareholding interests in the company.

 

After the above findings, one would have expected that the learned trial e would have proceeded to consider the items of claim by the plaintiff on the basis of those findings. But he did not do so. Apparently, although he did not say so in terms, he appeared to have accepted the submission on behalf of the defendants that the reliefs claimed in paragraphs 1-7 could not be d because they were caught by the rule in Foss v. Harbottle (1843) 2 461;67 E.R. 189. He however, had no doubt in his mind that the plaintiff had suffered a grave wrong. He therefore awarded to him the sum of N275,000.00 as general damages for wrongful removal.

 

The defendants appealed to the Court of Appeal against the award of the general damages while the plaintiff cross-appealed against the failure of the learned trial Judge to grant him the other reliefs he claimed. In the lead judgment of Belgore J.C.A. (as he then was) to which Musdapher and Ajose-Adeogun JJ.C.A.. concurred he said:

 

To all intent and purposes a Managing Director is another director only with added responsibilities. A director can be removed at any time if that is the wish of the Companies Act e.g. 5.21)1 thereof, and what the respondent went to Court for may in the true sense be a grievance but the remedy being sought is not the one recognised by Companies Act. Therefore, his claim for damages for what looks like wrongful dismissal is not within the jurisdiction of the Federal High Court Law (sic). As I said earlier in this judgment the damages of N275,000.00 cannot be attached with any degree of certainty to any head of claim other than what it said. i.e.. general damages. So it cannot be said to cover his claim of salaries, dividends, sale of shares etc.. . claimed.

 

On the award of general damages to the plaintiff. the learned Justice of the Court of Appeal held:

 

Punitive and exemplary damages are rare but that is no reason that they cannot be awarded. But in the face of our courts being creatures of statutes, our pleadings must leave nothing to chance. A party claiming punitive and exemplary damages must say so clearly and unambiguously. The circumstances giving rise to the damages and the extent of the damages must be specifically pleaded. Going back to English Rules is not falling back on Common Law; quite the contrary. It is Simply applying our statutes and to us it is a statutory provision that drives us back to English Rules. Punitive or exemplary damages are not simple matters to be left at the discretion of the court. They must be specifically pleaded.

 

Then he dismissed the cross-appeal of the plaintiff and allowed the appeal the defendants.

 

The plaintiff (hereinafter called the appellant) has appealed further this court. The defendants shall hereinafter be called the respondents, parties filed their massive briefs of arguments. The issues for determination, have been summarized and dealt with in the lead judgment. I only wish to add my own comments on some of them. Counsel on behalf of the parties not only adopted these briefs but also addressed us orally. I only wish to add that I do not agree with the learned Senior Advocate for the respondents that the only issue properly before this court is to whether or not the Court of Appeal was right to have disallowed the award of general damages to the appellant. The appellant in his cross-appeal to the Court of Appeal raised the question of the failure of the learned trial Judge to considered the other heads of claim, apart from the question of general damages. The Court of Appeal having dismissed the appeal, the appellant is entitled to raise it as an issue in this court. This is what he has done.

 

The first issue I wish to comment on is that of jurisdiction. Learned Senior Advocate for the respondents submitted that the Federal High Court had no jurisdiction it entertain the suit. It was his submission that the question of removal of the appellant from his position as Managing Director of the 1st respondent raises an issue of master and servant and then this was a matter cognizable by the High Court of a State and not the Federal High Court; that the question of his removal as a Director was a matter that could be sanctioned by the majority, and, so, this was caught by the rule in Foss v. Harbottle (1843) 67 E.R.189, and that, as the 2nd to 6th respondents were holding over 83% of the shares, it was not a matter for adjudication by the courts; and that as the courts below recognized the fact that the appellant still held his shares in the company, there was no issue on that.

 

I must emphasize that the jurisdiction of the Federal High Court vis-avis the High Court of States has been a most controversial question in many cases decided by this Court. Mention may be made ofjust a few. See: Jammal Steel Structures Ltd. v. African Continental Bank Ltd. (1973)1 All NLR 208; Bronik Motors Ltd. V. Wema Bank Ltd. (1983)1 SCNLR 296; and Omisade V. Akande (1987) 2 NWLR (Pt.55) 158. In the instant case it appears to me that the relevant matter for consideration is the provision in section 7(1)(c)(i) of the Federal High Court Act (No.13) of 1973. It is therein provided that the court shall have and exercise jurisdiction in civil causes and matters

 

(c)    arising from -

 

(i)    the operation of the Companies Act, 1968 or any other enactment regulating the operation of companies incorporated under the Companies Act, 1968.

 

In my view, the operative provision under section 7(1)(c)(i) is "arising from the……operation of companies. " It appears to me that the gist of the appellant's complaint in this suit relates to matters arising from the manner the 2nd to 6th respondents operate the 1st respondent/company. I cannot imagine what cause or matter raises a better issue about the operation of a company than one which complains about the manner of appointment or removal of those men or women who, because of their unique position in the company, are usually referred to as its alter ego: that is to say, those men and women who, because a company is an abstraction and so cannot do anything of its own, constitute the head and thinking brain of the company. Among them are the directors and Managing Director. Although there are decisions in other jurisdictions arising from different legislations to the effect that the Managing Director of a company is an employee of the company: see – Lee v. Lee Air Farming Ltd. (1961) A.C. 12; Lincoln Mills Australia Ltd. v. Gough (1964) V.R. 193; and this was the view of the Court of Appeal in this case, yet, to my mind it would be wrong to hold that because the relationship of a Managing Director and the company was based on contract, it was ipso facto a matter of master and servant for which the Federal High Court had no jurisdiction. A Managing Director does not cease to be a director simply because he is managing the company. And the better view is perhaps, that directors of a company are trustees, agents and fiduciaries of the company: see –Northern Counties Securities Ltd. V. Jackson & Steeple Ltd. (1974)1 WLR at p.1144; Gelangor United Rubber Estates Ltd. v. Cradock (No.3) 1WLR 1555; Hogg v. Cramphorn Ltd. (1967) Ch.254. It is therefore a drastic over-simplification to simply equate the position of the appellant, as a Managing Director, to that of a servant; and his suit as that of master and - servant for which reason the Federal High Court would have no jurisdiction. I am satisfied that the Federal High Court had jurisdiction to entertain the suit.

 

As for whether the claims, as formulated, fell foul of the rule in Foss V. Harbottle (1843) 2 Hare 461, 67 E.R. 189, 1 must note that after the point was raised in the High Court, the learned trial Judge, after the numerous B findings by him, some of which could have sustained some of the reliefs claimed by the appellant in claims numbered 1-7, made no pronouncements on those reliefs, rather he proceeded under the alternative claim and awarded N275,000.00 to the appellant as general damages for wrongful removal. This has been regarded as a tacit approval of the fact that the appellant could not claim those reliefs.

 

The Court of Appeal held the appellant's claims have been rendered incompetent by the rule in Foss V. Harbottle (supra) and that he tried to bring the other aspects of his claim under the general law whereas the Companies Act specifically spells out the remedies open to him. In his submission, the learned Senior Advocate for the respondents supported the reasoning and referred us to the remedies open to a minority shareholder under section 201 of the Act.

 

I must state right away that not only have exceptions been established to the rule in Foss v. Harbottle (supra) but also that, in addition to those statutory remedies, such as derivative action, minority shareholders' action, and action under section 201 of the Act, an individual shareholder or group of shareholders can institute an action as a plaintiff and seek remedies against wrongs done to him. (See on this Gower: Principles of Modern Company Law, 4th Edn., p.644). Thus in Baillie v. Oriental Telephoneand Electric Co. Ltd. (1915)1 Ch. 503 where a company purported to pass a special resolution for purposes of approving a resolution oppressive to the minority and unjustly enriching the majority shareholders of the company, and it turned out that the necessary notice was defective in that it did not contain the necessary particulars, it was held that the plaintiff, a shareholder, could successfully bring an action to restrain the company from acting on it. See also Cotter v. National Union of Seamen (1929)2 Ch. 58. Indeed the case of M.A. Omisade & Ors. V. Harry Akande (1987) 2 NWLR (Pt.55) 158 in which this court, at p.169 approved the dicta of Lord Davey in Burland v. Earle (1902) A.C. 83, at p.93 is a case in point. There the learned Lord Justice re-affirmed the right of an oppressed minority to bring an action in his own name. So, quite apart from section 201 of the Companies Act, the appellant can bring personal action to enforce his personal rights. Or, notwithstanding the rule in Foss V. Harbottle (supra), he could sue in his name and those of all shareholders, except the misbehaving members: see Atwool v. Meryweather (1867) L.R. 5 Eq.464n. As it turns out in this case he is complaining against all the other members excepting himself, he can bring an action alone in his own name. I am satisfied that the action was competently brought and properly constituted. The Court of Appeal was in error to have held that he could not bring the action.

 

The Court of Appeal also held that he could not bring the action because he was caught by the rule in Foss v. Harbottle (supra). The court did not elaborate. Nor did it go into an analysis of the substance of the appellant's claims. However on a careful analysis of the eight heads of claim of the appellant, it is manifest that claims numbered I (a), 1(b), 5 and 8 were claims for personal rights and that claim number 2 is a consequential relief to claim number I. Claims for personal rights are a recognized exception to the rule in Foss v. Harbottle (supra). See on this: Salmon v. Quin & Axtons (1909) A.C.442, H.L.; British American Nickel Corporation v. O'Brien (1927) A.C. 369, P.C.; Pulbrook v. Richmond Consolidated Mining Co. (1978) 9 Ch.610. Also, it is of material significance that the respondents conceded it that the wrongs the appellant was complaining of in relation to his removal as a director and Managing Director were not those that could have been ratified by the company by a simple majority. It required a special resolution at an extra-ordinary general meeting. This is again another exception to the rule in Foss v. Harbottle (supra). See Cotter v. National Union of Seamen (1929) 2 Ch. 58, at p.70; Edwards V. Halliwell (1950) 2 All E.R.1064. The learned trial Judge found and the Court of Appeal did not disturb the finding, that the extra-ordinary general meeting wherein the appellant was purportedly removed was not properly called as no proper notice of the meeting was served on the appellant. See again Cotter v. National Union of Seamen (supra); also Baillie V. Oriental Telephone & Electric Co. Ltd. (supra). It follows that the decision taken at the meeting could not stand. Upon a view of all the cases, it appears clear to me that an oppressed minority shareholder in a company has, on grounds of equity, always been allowed to sue in his own name or on behalf of himself and other minority shareholders, as the case may be, as an alternative to his remedies under the Companies Act. Also, notwithstanding the rule in Foss v. Harbottle (supra) it is permissible for him to maintain such an action when it is clear that to deny him relief will be tantamount to allowing the rule to be converted into an engine of fraud or oppression. So, apart from actions enforcing personal rights of an oppressed plaintiff shareholder, the courts have always allowed actions, inspite of the rule, where the act in question is ultra vires the company, or such that it can-not be sanctioned by a simply majority but by a special resolution, or is based on fraud. For the above reasons, it was necessary for the courts below to have analysed the appellant's claims to find out which of them were maintainable on the above principles and to which of them he was entitled.

 

It appears to me that claims numbered 1(a), 1(b) and 5 are purely personal claims of the appellant and are therefore maintainable.

 

The claim numbered 2 flows naturally from the findings that the purported extra-ordinary general meeting of the 21st of August, 1979, was invalid for want of due notice. For a similar reason the claim, number 3, succeeds, as no valid appointment could have been made at an invalid meeting. Part of the claim, number 4, that is as it relates to sums purportedly earned the 2nd and 6th respondents as the Managing Director or Director also succeed, for the reason that their purported appointments as such were illegal and void. With respect to a claim for account in claim number 7, it must be noted that the learned trial Judge found as a fact that after the purported removal of the appellant as Director, Managing Director and Shareholder with effect from the 21st of August, 1979, the 2nd to 6th respondents went on a withdrawal spree of the funds of the company; that those withdrawals were not in the interest of the company but for reasons best known to 2nd-nth respondents; these findings 'were not faulted or reversed by the Court of Appeal. They stand. In my opinion, they amount to fraud. For, although it is recognized that the word "fraud" is a term Of St) wide an import that it is idle to attempt to define it, it at least appears clear that any act which may amount to an infraction of fair dealing, or abuse of confidence, unconscionable conduct, or abuse of power as between a trustee and his shareholders in the management of a company is fraud which may take the issue out-side the rule in Foss v. Harbottle (supra). As it is so, the appellant can, and on the facts is entitled to. maintain an action for account as claimed in claim number 7. As for claim number 6, 1 cannot grant it for the simple reasons that the claim as formulated is too wide and that its scope, if granted, is designed to dethrone the majority and instal the appellant as the omnipotent dictator of the affairs of the company. I do not grant it.

 

I am of the clear view that failure to grant to the appellant the reliefs claimed in numbers 1(a) and (b), 2,3,4,5 and 7 were in error. I grant them.

 

The same misapprehension characterized the attitude of the court P below to the award of general damages to the appellant. It reasoned that such an award is in the realm of general law, the remedy due to a person in the appellant's position being limited to the remedies specified in the Companies Act. So the court dismissed the award of N275,000.00 as general damages. Learned counsel to the appellant drew the court's attention to the provision of section 175(6) of the Companies Act. Learned Senior Advocate for the respondent’s submission is that that section is no authority for an award of general damages.

 

Now that section provides as follows-

 

5.175    (6)       Nothing in this section shall be taken as depriving a person removed thereunder of compensation or dam ages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director, or as derogating from any power to remove a director which may exist apart from this section.

 

To begin with, it is in pari materia with the provision in section 184(6) of the English Companies Act of 1948. English courts held that by virtue of that provision, a Managing Director who was under a contract of service with the company could sue for wrongful removal. See Tanpo Totaro Timber Co. v. Roew (1978) A.C. 537, P.C- See also Gower's Principles of Modern Company Law, 4th Edn., pp.150-151. Reading the section carefully, I believe it preserves the right of a person in the appellant's position who has been wrongly removed to sue for general damages. There are facts and abundant findings of fact by the learned trial Judge to sustain the award. Mention may be made of the fact that the appellant was named Managing Director in Article 16 of the Articles, Exhibit "A',; that the company of which he held over 16% shares was buoyant before his removal, but that there was an organized spree of fraudulent withdrawals of the funds of the company when he was removed. The damages done to him as a result of these cannot be easily quantified, but that fact justifies the award of general damages. For as Martin B pointed out in Prehn V. Royal Bank of Liverpool (1870) L.R.5 Ex.92:

 

General Damages .... are such as the jury may give when the Judge cannot point out any measure by which they are to be assessed, except the opinion and judgment of a reasonable man.

 

I agree. This is why general damages are usually awarded for non-pecuniary losses which are difficult to estimate as well as for pecuniary losses which are difficult to estimate accurately. In the court of trial, the appellant claimed the sum of N275,000.00. He did not claim punitive or exemplary damages. And a claim for general damages does not require the type of particularity which the court below appeared to have looked for. It was open to the learned trial Judge, as Judge and Jury, to have awarded to him what he believed to be a reasonable compensation for his injury. Having said so, I must note that the claim for general damages was in the alternative. Because of the view I hold of the other claims of the appellant, I say no more about the claim for general damages and do not award it.

 

From what I have stated above, it appears to me that the appellant is entitled to declarations that he is still a director as well as the managing director of the 1st respondent/company. He is also entitled to a declaration that he is a shareholder of the company - a fact which the two courts below acknowledged. He is also entitled to the declaration which he sought in his fifth head of claim. The consequential reliefs in claims Nos.2, 3 and 7 are hereby granted. Claim number 4 is granted to the extent specified above. Claim No.6 is dismissed. There is also enough uncontradicted evidence to sustain the awards which have been specified in the lead judgment, by way of financial compensation for the wrongful removal as both a director and the managing director of the 1st defendant/company. In short, appellant is also granted the following financial reliefs, namely:

 

(i)    Salary for 10 years at N1 1,780.00 p.a.

 

(ii)    Director's remuneration with effect from 21/8/79 at N10,000.00 p.a.

 

(iii)    Director's allowance for 10 years at N1,400.00 p.a.

 

(iv)     Night-watchman's allowance for 10 years at N1,440.00 p.a.

 

(v)    Car basic allowance for 10 years at N720.00 p.a.

 

I must also add a declaration that he still owns his shares in the company.

 

In the result, the appeal succeeds and is allowed. I hereby set aside the judgment of the Court of Appeal and enter judgment for the appellant. I subscribe to the consequential orders made by my learned brother, Karibi-Whyte,J.S.C., with whose judgment I agree.

 

 

Judgment delivered by

Wali, J.S.C.

 

I have had the privilege of reading before now, the judgment by my learned brother, Karibi-Whyte, J.S.C. I agree with his reason which I hereby adopt as mine. And for those same reasons I also will allow and do hereby allow this appeal, set aside the judgment of both the High court and the Court of Appeal and make the following orders:-

 

1.    Against the 1st to the 6th respondents a declaration:

 

(a)    That the appellant was and is still the Managing Director A and Shareholder of the 1st respondent company.

 

(b)    That the purported appointment of the 2nd respondent as Chairman or Chairman/Managing Director of the 1st respondent company is illegal, void and ultra vires the Memorandum and Articles of Association of the 1st respondent company.

 

2.    That the letter No.CMDl5/79 of 21st August, 1979 written by the 2nd respondent to the appellant informing him of the purported resolution of the 1st respondent company and removing him as the Managing Director, Director and Shareholder of the 1st respondent company is declared null and void and of no effect whatsoever.

 

3.    That all acts done and duties performed by the 2nd and 6th respondents either as Managing Director, Director or Shareholder of the 1st respondent company are void, illegal and of no effect.

 

4.    That the 2nd and 6th respondents should refund forthwith to the 1st respondent company all monies, remunerations, dividends and other benefits received by or for them as Managing Director, Directors or Shareholders or in any other capacity whatsoever.

 

5.    That the appellant is entitled to be paid all his remunerations, dividends benefits and allowances as from the 21st of August, 1979 up to the date of this judgment.

 

6.    That the 2nd to the 6th respondents should render full account of all their dealings in the name of the 1st respondent company from the 21st of September, 1979 up to the date of this judgment.

 

The prayer for an order of injunction restraining the 2nd to the 6th respondents and their agents or servants from operating the accounts of the 1st respondent in the 7th and 8th respondents' banks without prior consent of the appellant is hereby refused.

 

Appellant is awarded N500.00 costs in this appeal and N300.00 in the Court of Appeal.

 

 

Appeal allowed

 

Counsel

 

M.O. Kubeinje

With D.O. Anomougharam

  ........

For the Appellant

A.O. Sogbesan. S.A.N

With G.E. Akoro, Miss M. Bassey and A. Oyesanya

  ........

For the Respondent