➥ CASE SUMMARY OF:
Lasisi v. Registrar of Companies (1976) – SC
by PipAr Chima
➥ COURT:
Supreme Court – SC.301/1975
➥ JUDGEMENT DELIVERED ON:
Friday, the 2nd day of July, 1976.
➥ AREA(S) OF LAW
Registration of company;
Alien;
Share capital.
➥ NOTABLE DICTA
⦿ WHETHER THE WRIT OF MANDAMUS IS DISCRETIONARY OR NOT
As a general rule the making of the order of mandamus is a matter of the discretion of the court. In Commissioner for Local Government Lands and Settlement v. Kadarbhai (1931) A.C. 652 at 660, Lord Atkin aptly stated the general rule thus: The writ of Mandamus, which is a high prerogative writ, is of the greatest value in maintaining the law, but it is discretionary. It has, however, been held in the King v. Bishop of Sarum (1916) 1 K.B. 466 that where the right the application seeks to enforce is the performance of public duties, which cannot be secured at all if a mandamus is refused, and the duties are only ministerial, the issue of the writ is not discretionary. – M. Bello, JSC.
➥ PARTIES
Sikiru Agboola Lasisi
v.
Registrar Of Companies
➥ LEAD JUDGEMENT DELIVERED BY:
M. Bello, J.S.C.
➥ APPEARANCES
⦿ FOR THE APPELLANT
Mr. Odofin.
⦿ FOR THE RESPONDENT
Mr. Oladapo.
➥ CASE HISTORY
The Registrar of Companies, who is the Respondent, had refused to register under the Companies Decree No. 51 of 1968 the Memorandum and Articles of Association of a proposed company, to wit British Leyland International (Nigeria) Limited (hereinafter referred to as the company), when the papers were delivered to him for registration.
Upon the application of the Appellant, who is one of the two subscribers to the Memorandum, to the Federal Revenue Court, Belgore J. ordered the Respondent to show cause why an order of Mandamus should not issue commanding him to register the company. Return was duly made by the Respondent to justify his refusal. After having heard the arguments of counsel for the parties, Belgore J., in his judgment delivered on 11th September, 1973, refused to make an order for Mandamus and dismissed the Appellants application.
The Appellant has now appealed against that judgment.
The Appellants case was that the promoters had done every thing required for the formation of the company whose objects were lawful; that they had complied with the requirements of the Companies Decree; that the reasons relied upon by the Respondent for his refusal to register were invalid and the Court should compel him to register the company.
The Respondents case was as follows: (1) that G.C. Vallancy or J.B. Reardon who have been stated in the business permit as being (2) that the objects in the Memorandum empowering the company to go into manufacturing and trading business were: (a) ultra vires the business permit; and (b) offensive to the provisions of the Nigerian Enterprises Promotion Decree, 1972; (3)that having regard to the foregoing reasons some of the purposes for which the company was being formed were unlawful and the Respondent was therefore not obliged to register the company.
➥ ISSUE(S) & RESOLUTION
[APPEAL: ALLOWED]
I. Whether the company is a Nigerian or an alien association within the meaning of the Nigerian Enterprises Promotion Decree, 1972?
RULING:
I.A. It is clear from the definition under Section 16(1)(c) of the Decree that the correct test for determining whether a company is a Nigerian association or not is to discover the owners of its capital ad other financial interest. If its capital and other financial interest are wholly and exclusively owned by Nigerian citizens, then it is a Nigerian association. If, however, a portion of its capital or other financial interest is owned by an alien then, except as otherwise prescribed by or under the Decree, it is an alien association.
The Memorandum shows that the company has a share capital of N2,000 divided into 1,000 ordinary shares of N2 each and that the two subscribers to the Memorandum, namely the Appellant and one Michael Ihenakaram, took one share each. It is conceded that the two subscribers are Nigerian citizens. It follows therefore that there remains 998 shares of the company for allotment. There is no evidence that any of these remaining shares has been allotted to either of the two British gentlemen or to the British company.
The question whether an alien has an interest or own shares in the proposed company can only be answered after its remaining or part of the 998 shares have been allotted and the shareholders have been published. It appears to us that the objection of the Respondent to the registration of the company on the ground that some of its objects have offended the provisions of the Nigerian Enterprises Promotion Decree is premature.
For the reasons we have stated, we are of the view that the learned judge erred in law in holding that the company is not a Nigerian association within the meaning of the Nigerian Enterprises Promotion Decree. The evidence before him does not show that any alien, corporate or incorporate, owns any of its shares or other financial or proprietary interest. The evidence, however, shows that two Nigerian citizens own its two shares. The question as to who will own the remaining shares is a matter of speculation and is therefore a question that a court of law should not indulge in. We are of the view that the learned trial judge ought to have held from the evidence before him that the company is a Nigerian association, and we so hold accordingly.
I.B. Having held that the company is a Nigerian association whose subscribers are Nigerian citizens, we are of the view that the learned judge erred in law in holding that the objects contained in its Memorandum are ultra vires the business permit granted under the Immigration Act and the Regulations made there under.
.
.
II. Whether the trial judge was in error or not in refusing to make an order for mandamus in view of the suspicious relationship between the subscribers to the Memorandum of the company and the two British gentlemen and the British Leyland International Limited.
RULING:
II.A. We are of the view that the Registrar of Companies has a duty, which is a ministerial one to register the company in accordance with the directive of Section 14 of the Decree which reads: 14. The memorandum and the articles, if any, shall be delivered to the Registrar and he shall retain and register them.
II.B. We have earlier on held that the objects of the company, which the Respondent thought were offensive to the business permit granted under the Immigration Act and to the provisions of the Nigerian Enterprises Promotion Decree and thereby refused to register, do not in any way offend the Act or the Decree. It seems to us that these objects are lawful. We have also earlier pointed out that the promoters had complied with the requirements of the Companies Decree and had delivered the declaration of compliance together with the Memorandum and Articles of Association to the Respondent.
Furthermore, except by mandamus, the Appellant has no other remedy to enforce the right to form the company accorded to him by Section 1(1) of the Companies Decree. For the foregoing reasons, we think that the learned judge erred in refusing to issue an order of mandamus.
Instead, we order that an order of mandamus shall issue commanding the Respondent to register the Memorandum and Articles of Association of British Leyland International (Nigeria) Limited under the Companies Decree, 1968. This shall be the judgment of the court.
The Appellants are entitled to the costs in this Court assessed at N112 and in the court below assessed at N20.
➥ MISCELLANEOUS POINTS
➥ REFERENCED (STATUTE)
Section 16 Nigerian Enterprises Promotion Decree, 1972;
Section 8 sub-section 1, of the Companies (Consolidation) Act, 1980;
Section 8(1), 19 of our Company Decree, 1966.
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)
