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CaseLaw

Kotoye Vs. Saraki (1994) CLR 7(g) (SC)

Judgement delivered on July 29th 1994

Brief

  • Dividend
  • Register of company
  • Shareholding
  • Trustee of shares
  • Fair hearing
  • Constructive trust

Facts

The 1st and 2nd respondents together, as plaintiffs, commenced an action in the High Court of Lagos bearing Suit No. LD/845/87. The 2nd respondent alone also commenced another action in the same court bearing Suit No. LD/938/87. The person sued as defendant in each of the suits was the Appellant. In Suit. No. LD/845/87 the respondents together claimed the fllowing reliefs:

  • 1.
    A declaration that the 2,400,000 shares and the Bonus. Scripts and other shares attached thereto standing in the of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in trust for the plaintiffs (or alternatively) for the 2nd plaintiff;
  • 2.
    An order directing an Inquiry into the amount of any dividends which may have been received by the defendant as holder of the aforementioned shares up to the date of the judgment herein;
  • 3.
    An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff.
  • 4.
    An order for rectification of the Register of Shares to give effect to any judgment delivered herein."

In Suit No. LD/938/87 the 2nd respondent alone claimed against the appellant as follows:-

  • 1.
    A declaration that the 4.579,460 shares standing in the name of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in trust for the plaintiff.
  • 2.
    An order directing an inquiry into the amount of any dividends which may have been received by the defendant as holder of the aforementioned shares up to the date of the judgment herein.
  • 3.
    An order of injunction restraining the defendant from holdin or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities.
  • 4.
    An order for rectification of the Register of Shares to give effect to any judgment delivered herein.
  • 5.
    An order for the refund of the sum of N70.000.00 being balance of the N800,000.00 held by the defendant on the plaintiff’s behalf."

In both suits the appellant also counter-claimed. At the close of pleadings, the two suits were consolidated and then they proceeded to hearing. In the course of the hearing the Federal Military Government promulgated a decree relevant to the subject-matter of the suits. This was the Banks and other Financial Institutions Decree No. 25 of 1991. The commencement date was 20th June. 1991. A few months thereafter, the appellant, relying on section 11 of the said Decree filed an application praying for an order of the trial High Court in the following terms:-

"Striking out the consolidated suits herein on the ground that this Honourable Court has no jurisdiction to continue to entertain same and or allow the proceeding to be maintained against the Defendant/Applicant."

After hearing arguments on the application the learned trial Judge in his considered ruling was of the view that although section 11 of the Decree admitted of two possible constructions he preferred the construction which did not bar the jurisdiction of the court to hear and determine the suit. Being dissatisfied with this decision the appellant appealed to the Court of Appeal which dismissed the appeal, holding that the High Court had jurisdiction to continue hearing the consolidated suits as it was of the view that section 11 did not bar the class of respondents' claims against the appellant.

Being further dissatisfied with the decision of the Court of Appeal, the appellant appealed to the Supreme Court.

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