Arjandas Hiranand Melwani v. Five Star Industries Limited

I have had the privilege of a preview of the judgment just delivered by my learned brother Ogundare, J.S.C. and I agree with the reasoning and conclusions therein. I agree that the appeal be allowed and I hereby allow it.
On issue (2), the last paragraph of Exhibit “B” reads:
“I, the undersigned, Arjandas Hiranand Melwani residing in Hong Kong in my capacity of shareholder of Five Star Industries Ltd. Lagos hereby appoint Mr. Lateph Akingbade Adeniji of Lagos (Nigeria) to act as my attorney and as such to act for and on my behalf in all matters relating to my share holding in Five Star Industries Ltd. Lagos.” (Italics is for emphasis) It is inconceivable to argue that a donee, such as Mr. Adeniji, with power “to act in all matters relating to” the donor’s shares in the company is not clothed with power to take all necessary steps to protect the donor’s interest in those shares including the institution of legal proceedings in the name of the donor to protect the donor’s shares from being taken away otherwise than as provided in the Articles and Memorandum of Association of the Five Star Industries Ltd, Lagos. Had the court below construed Exhibit “B” properly, it would have come to the conclusion that its ambit is wide enough to accommodate the initiation of the action leading to this appeal. The court below was therefore in error to hold otherwise. The appeal is allowed by me with N10,000.00 costs to the appellant.

P.11

Having been privileged to read in draft the judgment of my learned brother Ogundare, JSC just delivered, I am in complete agreement therewith that the Court of Appeal was in error when it held that the action was incompetently constituted. The appeal therefore succeeds and it is hereby accordingly allowed by me.
I make similar consequential orders inclusive of costs as contained in the leading judgment, which I adopt as mine.

I was privileged to have read in advance the judgment just delivered by my learned brother, Ogundare, JSC. And I also agree with the reasons given in the said judgment for allowing the appeal. But I need to add a few words of my own. This appeal was apparently decided by the court below upon whether the power of Attorney Exhibit B, was a valid Power of Attorney. And having arrived at the conclusion that the Power of Attorney was invalid, the court declared that the action was incompetent. Hence the court below upheld the appeal of the respondent. For the purpose of this judgment, it is pertinent to state briefly that the Power of Attorney, Exhibit B, was granted by ARJANDAS HIRANAND MELWANI on the 18th day of April 1988 – Exhibit B, the power of attorney in controversy reads:
“Page 1
To All to whom these presents shall come
I, Charles Cho Chiu Sin, M.A. (Cantab),
Notary Public,
Duly Admitted, Authorised and Sworn, Practising at Victoria Hong Kong do hereby certify that to the best of my knowledge And belief, the signature “A. H. Melwani” subscribed to the Power of Attorney hereunto annexed is the signature of Mr. Arjandas H. Melwani which I have compared with his Specimen signature filed in my records …

P.12

In Testimony whereof have hereunto subscribed my Name and affixed my Seal of Office this 18th day of April in The year of our Lord One Thousand Nine Hundred and Eighty-Eight …
(Sgd.)
Charles C.C. Sin
Notary Public
Hong Kong
“PAGE 2
TO WHOM IT MAY CONCERN
I, the undersigned, Arjandas Hiranand Melwani residing in Hong Kong in my capacity of shareholder of Five Star Industries Ltd. Lagos hereby appoint Mr. Lateph Akingbade Adeniji of Lagos (Nigeria) to act as my attorney and as such to act for and on my behalf in all matters relating to my shareholding in Five Star Industries Ltd. Lagos.
Sgd.
(ARJANDAS H. MELWANI)”
The said Exhibit B, apparently became necessary following the illegal transfer of the shares held by Melwani in the Five Star Industries Ltd, the defendant/respondent, to a company known as Edict Limited. Pursuant to the grant of Exhibit B, the appellant commenced this action against the respondent claiming for the following reliefs:
“1. A declaration that the resolution of the Board of Directors of the defendant passed on the 21st day of February, 1986 transferring all the shares held by the plaintiff in the company to Edict Limited is irregular, illegal, null and void and of no effect.
2. An order for an account to be rendered by the defendant to the plaintiff in respect of all dividends, bonus shares and other rights and benefits due to the plaintiff in respect of shares held by him in the defendant company.”

P.13

Pleadings were subsequently filed and exchanged between the parties. At the trial, Lateph Akingbade Adeniji, the plaintiff’s attorney gave evidence for the plaintiff and was cross-examined by the learned counsel for the defence. Plaintiff also tendered documents, which were admitted as exhibits. The defence did not apparently lead evidence in defence of the action.
The learned trial judge later delivered a considered judgment in the course of which he made the following findings:
“1. As far as I can see the power of attorney must be presumed to have been given on 18 April 1988 which is the date of attestation by the Notary Public who clearly describes it as ‘Power of Attorney’ even though the effective power itself bearing the donor’s signature is headed “To whom it may concern”. The style adopted may be unfamiliar to us but it does not make it inadmissible since the intent is quite manifest on the attestation.”
2. ” … The register of members (Ex.A) was tendered without objection. The plaintiff’s name is entered therein as the holder of I,129 shares, at any rate up to 21st February 1986. By virtue of section 26(2) of the Companies Act 1968 he is deemed to be a member of the defendant company to the extent of his shareholding.”
3. “The defendant company did not really deny that the selfsame shares were recorded in favour of the company known as Edict Limited at page 159 of Ex. A.”
4. “Once it has been established that the plaintiff was deprived of his shares in a manner contrary to section 75 of the Companies Act 1968 it follows that such a transfer must be illegal.”
5. “Even though the defendant alleged in their statement of defence that some oral and written separation agreements were reached between the parties no evidence of this was placed before me.”

P.14

As a result, the learned trial Judge upheld the claims of the plaintiff and entered judgment for him. As the respondent was dissatisfied with the said judgment, the company appealed to the Court of Appeal. That court upheld the appeal and the judgment of the High Court was set aside and the trial was declared incompetent. It seems clear from that judgment that the Court of Appeal focused mainly its attention to whether Exhibit B, the Power of Attorney was validly executed in favour of the plaintiffs attorney. In arriving at the conclusion that Exhibit ‘B’, did not confer on Lateph Akingbade Adeniji the requisite power to prosecute the claim, the court below in the judgment delivered by Sulu-Gambari, JCA (and with which Kalgo JCA, as he then was, and Tobi, JCA agreed), stated as follows:
“I am at one with the submission of the learned counsel for the appellant that a fair construction of the whole of Exhibit B reveals that the donee has not had it couched in sufficient terms the authority to institute any action on behalf the donor. I, therefore, come to the conclusion that had the learned trial Judge examined the true ambit of the powers conferred by Exhibit B, he would have discovered that the donee of the power of attorney had no such authority to institute this action on behalf of the donor.
” … On the whole, I come to the inevitable conclusion that the donee – Lateph Akingbade Adeniji was not sufficiently armed or has not established proper authority with which to pursue or institute the action he has filed. The action, therefore, is incompetent.”
Therefore, the plaintiff has appealed to this court against the said judgment of the Court of Appeal. Three issues were raised in the brief of argument filed by the plaintiff for the determination of this appeal. They read thus:
“(1) Was the Court of Appeal right in holding that Exhibit B is not a valid power of attorney as it was neither executed before nor authenticated before a Notary Public pursuant to the provisions of section 117 of the Evidence Act?

P.15

(2) Was the Court of Appeal also right when it held that Exhibit B as drafted does not give the donee the right to sue?
(3) Assuming that the Court of Appeal was right on issues 1 and 2 above, was the court right in holding that the action is incompetent and/or that there was no capacity to sue?”
For the respondent, only one issue was set out for the determination of this appeal in the respondent’s brief of argument.
It reads thus:
“Whether the Court of Appeal was right in setting aside the proceedings at the trial court for reason of being incompetent. ”
In respect of that sole issue raised by the respondent, it is contended for the appellant that the court below apparently failed to consider the submission made before it with regard to the interpretation of section 117 (now section 118) of the Evidence Act which reads thus:
“The court shall presume that every document purporting to be a power of attorney, and to have been executed before and authenticated by a notary public or any court, judge, magistrate, consul or representative of Nigeria, or, as the case may be, of president, was so executed and authenticated.”
With due respect to the learned justices of the court below, it is my humble view that the court erred in this regard. That error apparently arose from the consideration of the question of the validity of Exhibit B by placing reliance on section 118 of the Evidence Act (formerly section 117). It is however common ground that as Exhibit B was created in Hong Kong, its validity ought to have been considered in accordance with the provisions of section 117 of the Evidence Act.

P.16

Had the court below considered the question raised with regard to Exhibit B under and by virtue of section 117 of the Evidence Act, the court might have reached a different conclusion 117 provides:
“117. When any document is produced before any court, purporting to be a document which by the law in force for the time being in any part of the Commonwealth would be admissible in proof of any particular in any court of justice in any part of the Commonwealth, without proof of the seal or stamp or signature authenticating it, or of the judicial or official character claimed by the person by whom it purports to be signed, the court shall presume –
(a) that such seal, stamp or signature, is genuine; and
(b) that the person signing it held, at the time when he signed it, the judicial or official character which he claims, and the document shall be admissible for the same purpose for which it would be admissible in the United Kingdom.”
I therefore would hold that Exhibit B was wrongly rejected by the court below. Being of the clear view that Exhibit B to all intents and purposes was made out as power of attorney in favour of Lateph Akingbade Adeniji by the plaintiff, Arjandas Hiranand Melwani, it is my view that the Court of Appeal failed to advert to the above provisions of the law in its determination of the validity of the power of attorney, Exhibit B. It follows that as the court below wrongly rejected Exhibit B, to allow the appeal, this appeal deserves to be allowed. See Ayeni v Dada (1978) 3 S.C. 35. The other point which I wish to address in this appeal is the contention made for the respondent that in the event that the court should rule against it with regard to the validity of Exhibit B, the matter should be remitted to the court below for the consideration of the other issues that were not raised by that court. I do not think that that request ought to be granted.

P.17

It is apparent that the court below took the view that the power of attorney raised a pedestal or threshold issue of the competence of the action and therefore took the view that the only issue that fell for consideration among the issue raised in the appeal is whether Exhibit ‘B’ Power of Attorney was a valid Power of Attorney.
In support of the position taken by the court below, I refer to page 181 of the record where the court said: “Based on the case presented by the parties at the trial court and the grounds of appeal filed, I think that the proper and only issue arising and which will adequately dispose of this appeal is whether Lateph Akingbade Adeniji Esq. through whom the plaintiff was said to have instituted the action, was validly donated the Power of Attorney entitling him or endowing him the capacity to sue in this case. The answer to this postulate would determine the entire case once and for all, rendering any other exercise or effort in the posing or determining of all other issues worthless as an exercise in futility. If the donee has no valid Power of Attorney, the whole action is misconceived and incompetent. Whatever decision is arrived at, based on an incompetent action, is altogether a nullity – nihil nil fit.” It is obvious that the respondent has not appealed against the failure of the court below to consider other issues raised before it. The inference that can rightly be made from that position is that they took a chance that the judgment of the court below would be affirmed by this court. Having regard to what I have said above on the only issue considered by the court below, it is manifest that the risk taken by the respondent has not enured in its favour. On the other hand, as already observed, the trial court had found for the plaintiff/appellant in respect of all his claims against the respondent.

P.18

As those findings remained undisturbed, it would not in my humble view, be right in the circumstances to now deny the appellant of the fruits of his success by remitting the case to the court below for the consideration of the issues that the court deliberately left unconsidered in its judgment. The justice of the case demands that the appellant should be granted all his claims as found by the trial court. And it is hereby granted accordingly. From all I have said above, this appeal must succeed and it is further observed for the above reasons and the fuller reasons given in the lead judgment of my brother, Ogundare JSC. I also abide with the order as to costs made in the said judgment.

I have had the privilege of reading in advance the judgment delivered by my learned brother, Ogundare, JSC. I agree with him that this appeal should be allowed.
The issues fall within a narrow compass. The appellant was plaintiff in the Federal High Court where he sued in respect of shares in the defendant company, now respondent, which he alleged were transferred by the respondent to one Edict Ltd. by a resolution of the Board of the respondent dated 21st February 1986. The appellant’s case was that the shares included his shares and that the resolution was irregular, illegal, null and void because he never gave any instructions or mandate to the respondent or any person to transfer his shares in the respondent company to Edict Ltd or to any other person. Apart from an evasive denial of the averment in the statement of claim in regard to the resolution of 21st February 1986, the respondent tried to justify the transfer of shares by averring an agreement whereby, it was alleged, the shares in question were transferred to Edict Ltd. The only witness at the trial was Lateph Akingbade Adeniji, a legal practitioner, who said that he sued as the plaintiff’s attorney.

P.19

He gave evidence, inter alia, that the appellant had not signed any transfer for the transfer of his shares to Edict Ltd. He was cross-examined by counsel for the respondent extensively. As noted in the judgment of the trial court the respondent offered no evidence.
Odunowo, J, who heard the suit found that there was no evidence from the respondent to rebut the evidence that Edict Ltd acquired the shares by the resolution alleged. He held that the appellant was deprived of his shares in a manner contrary to section 75 of the Companies Act, 1968 and that the transfer was consequently illegal. In the result he granted the reliefs claimed by the appellant. On the respondent’s appeal to the Court of Appeal, there was no issue as to the merits of the case. The only issue was whether Mr. Adeniji through whom the appellant instituted the action “was validly donated the power of attorney entitling him or endowing him the capacity to sue in this case.” Sulu-Gambari, JCA, who delivered the leading judgment of the court below upheld the two grounds on which the respondent had tried to impugn the power of attorney. These were, that the donor of the power did not execute it before a notary public, nor had notary public authenticated it; and, secondly, that the power of attorney did not authorise Mr. Adeniji to institute an action on behalf of the donor. Having upheld both of these grounds he came to the conclusion that Mr. Adeniji was not “sufficiently armed or had not established proper authority with which to pursue or institute the action he has filed”, and that the action was therefore incompetent. In my opinion, it is expedient at the outset to note a few points which may have some bearing on the determination of this appeal. The action was instituted not in the name of Mr. Adeniji but in the name of Arjandas Hiranand Melwani (“Melwani”) who was and still is the recognised party to the proceedings either as plaintiff in the trial court or as appellant in this court and in the court below.

P.20

In paragraph 2 of the statement of claim the plaintiff (now appellant) averred that “he authorised Mr. Lateph Akingbade Adeniji to prosecute this action on his behalf and the plaintiff will rely on the power of attorney dated the 18th day of April, 1988.” In response to that averment the respondent averred in its statement of defence thus: “The defendant denies paragraph 2 of the statement of claim and puts the plaintiff to the strictest proof thereof.” It was when the document was to be tendered that objection was raised to its admissibility on the grounds that the power of attorney had not complied with section 117 of the Evidence Act because it was not executed before a notary public “as required by law”, and that the document was vague and imprecise as to what the attorney should do. The trial court rejected these contentions but the court below thought otherwise. That court reasoned that as the power of attorney (Exhibit B) did not contain on the face of it that it was signed or executed before and authenticated by any notary public, and it was  undated, it could not “by any stretch of imagination be construed to be adequate and create a power of attorney in favour of the donee.”
It also reasoned that the document did not disclose on the face of it that it authorised the donee to institute the action on behalf of the donor. I now turn to the main questions that arose from the reasoning of the court below. Was the power of attorney invalid because its execution before and authentication by a notary public cannot be presumed in terms of section 117 (as it then was, now 118) of the Evidence Act? That section provides that:
“The court shall presume that every document purporting to be a power of attorney, and to have been executed before and authenticated by a notary public, or any court, judge, magistrate, consul or representative of Nigeria, or as the case may be of her Majesty, was so executed and authenticated.”

P.21

Learned counsel for the appellant adopted the argument advanced by him in the court below thus:
“A power of attorney not executed before and authenticated by a notary public as provided for under S. 117 of the Evidence Act will not be presumed to have been made by the donor and the donor’s signature will then have to be proved if it is alleged that the document was not made by the donor.” There is considerable force in this submission which finds support in the case of Ayiwoh v. Hadji Akorede 20 NLR 4. In that case the respondent sued as attorney of the landlord for arrears of rent and recovery of possession. Objection was taken to the power of attorney which was attested by a solicitor’s clerk who was not a notary public, but the Magistrate ruled that it was admissible. On appeal, Robinson, J. said in regard to the presumption in section 117:
“The object of that presumption is to help persons in like circumstances to this case when the instrument is executed abroad. It means that the court can presume proper execution without further proof.”
He, however, held that there was no presumption of the particular power of attorney as its due execution had not been proved in any of the recognized ways and that it ought to have been rejected. Compliance with the provisions of section 117 (which as I have said is now section 118) is one of the ways of proving the execution and authentication of a power of attorney, but on no reading of that section can it be said that it is the only way. Presumption of due execution and authentication raised by section 117 dispenses with the need to prove these facts but it does not exclude other means of proof. The court below put the position too high and, I daresay, inaccurately when it held, per Sulu-Gambari, JCA., that by reason of non compliance with section 117, the document purporting to be a power of attorney, Exhibit B, “cannot by any stretch of imagination be construed to be adequate and create a power of attorney in favour of the donee.”

P.22

Section 117 deals with proof of facts of execution and authentication and not with the validity of the document. That execution and authentication of a document which purports to be a power of attorney cannot be presumed in terms of section 117 does not mean that the power of attorney is invalid. However, I do not think that the trial judge was right when he held that the presumption in section 117 applied in this case. The reasoning by which he came to that conclusion is one with which I do not feel entirely comfortable. He said: “The style adopted may be unfamiliar to us but it does not make it inadmissible since the intent is quite manifest on the attestation. It has not been suggested that the document is a forgery. The inclination of courts nowadays is to ensure that substantial justice is done. It is the antithesis of justice to insist on technicality of this nature.”
When the law presumes a fact on the satisfaction of certain conditions, a party who seeks to take advantage of such presumption must satisfy the conditions. It is by no means a technicality to insist that such conditions must first be satisfied. You cannot take the presumptions and ignore the conditions. Rather, the only way of giving effect to the provisions of the statute is to abide by their conditions. What may amount to technicality is to insist on a particular form of proof of the authenticity of a document when all the surrounding circumstances point to its authenticity as the act of the maker. That is the position in this case. I do not think it is necessary to resort to the presumption in section 117 to do justice in the matter.

P.23

The nature of the action, the authentication of the signature of the appellant on the document by the notary public and the absence of a specific denial of its due signature in the defence all, in my opinion, point to the authority granted by the document to be truly granted by the appellant. Besides, the action was in the name of the appellant who alone from the nature of the action could directly derive any benefit from the action, since if he succeeded in the action the shares in question would remain in his name. Where an action is brought in the name of a plaintiff without his authority and he subsequently repudiates the action, defendant in the action, may obtain an order for payment of their costs by the solicitors who issued the writ see Geilinger v. Gibbs (1897) 1 Ch 479. The interest of the respondent being thus well and adequately protected it seems to me to be a mere technicality and somewhat an injustice to permit the action to be defeated at the threshold by such point as was upheld by the court below. It is perhaps expedient to distinguish the case of Ayiwoh v. Hadji Akorede (supra) in that in that case the purported attorney sued in his name for recovery of possession of the property of a person claimed to be the principal. On the extent of the authority of Mr. Adeniji, I am unable to agree with the view of the court below that ,”a fair construction of the whole of Exhibit B reveals that the donee has not had it couched in sufficient terms the authority to institute any action on behalf of the donor.” To start with, the issue was not whether the donor had authority to institute “any action” but whether he had authority to institute an action in a matter pertaining to the donor’s shareholding in Five Star Industries Ltd Lagos. A court cannot properly discern the extent of authority in a power of attorney if it has initially misdirected itself on the fundamental purpose of the document. In this case the authority granted to Mr. Adeniji was for him to act as the donor’s attorney “in all matters relating to my shareholding in Five Star Industries Ltd Lagos.”

P.24

In my opinion the authority granted by the donor was wide enough to include authority to commence and prosecute legal proceedings on behalf of the donor so long as the action related to the donor’s shareholding in the company mentioned. I hold that the court below was in error to have held that the action was incompetent. As I have earlier said, I agree with my learned brother Ogundare, JSC, that this appeal should be allowed. I too would allow the appeal, set aside the judgment of the Court of Appeal and restore the judgment of the Federal High Court. I abide by the order for costs he makes.
Appeal allowed.

P.25