LEGAL PRINCIPLE: CIVIL PROCEDURE — Agency — Principal and Agent — Action Instituted in Name of Principal — Competence
PRINCIPLE STATEMENT
Where an agent takes out an action in the name of his principal pursuant to a power of attorney authorising him to act in all matters relating to the principal's shareholding, the action is competently constituted.
RATIO DECIDENDI (SOURCE)
Per Ogwuogbu, JSC, in Melwani v. Five Star Industries Ltd (2002) NLC-151994(SC) at p. 11; Paras A–C.
"Where an agent takes out an action in the name of his principal pursuant to a power of attorney authorising him to act in all matters relating to the principal's shareholding, the action is competently constituted. It is inconceivable to argue that a donee 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."
EXPLANATION / SCOPE
An action instituted by an agent in the principal’s name under a valid power of attorney is competent. The agent has authority to take all necessary steps to protect the principal’s interest. The power of attorney need not expressly mention legal proceedings. The principle applies to all forms of agency with broad authority. The court will not strike out such actions for want of capacity. The third party is not prejudiced because the principal is the named party. The agent acts on behalf of the principal. The rule ensures that principals can effectively pursue claims through agents. The power of attorney must be valid and subsisting. The agent must act within the scope of authority.
