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In The Supreme Court of Nigeria On Friday, the 22nd day of September 2006
S.C. 147/2002
Before Their Lordships
Between
And
Judgement of the Court Delivered by Walter Samuel Nkanu Onnoghen. JS.C.
This is an appeal against the judgment of the Court of Appeal, Lagos Division in appeal No CA/L/222/2000 delivered on the 27th day of September, 2001 in which the Court dismissed the appeal and Cross-appeal for lack of merit.
The Respondents instituted an action in the Federal High Court, Lagos Division in suit No FHC/L/CS/1089/99 against the Appellants who were then the Defendants by way of originating summons in which the Plaintiffs sought the determination of the following questions:
1. Whether the statutory office of the Governor of Lagos State is vested with/seised of constitutional legislative, authority/vires to make subsidiary/delegated legislation which empowers the conduct of an inquiry into matters that pertain to the business - conduct of the sale of shares in a private limited liability Company deemed to have been incorporated under the Companies and Allied Matters Act (Cap 59), Laws of the Federation of Nigeria, 1990.
2. Whether the legislative appointment, constitution and empanelling of a Standing Tribunal of Inquiry into the Sale and Acquisition of shares in Eko Hotel in 1995 lately made by subsidiary/delegated legislation under the land of the Governor of Lagos State deserves to be adjudged invalid in this action on all or any of the following grounds:
(i) the subject matter content delegated to that quasi-judicial body/organ for inquiry;
(ii) the questioned jurisdiction/competence of the quasi-judicial body/organ empanelled to make the inquiry over its Terms of Reference subject -matter; and
(iii) the membership - composition of the quasi-judicial body/organ so empanelled to embark upon the inquiry.
The Plaintiff prayed the Court for the following reliefs: -
1. A declaration to the effect that in so far as Eko Hotels Limited is a private limited liability Company deemed to have been incorporated under the Companies and Allied Matters Act, (Cap. 59 Laws of the Federation of Nigeria 1990), only the National Assembly for The Federal Republic of Nigeria stands and remains vested with legally cognisable legislative powers, to the exclusion of the House of Assembly of Lagos State, to make, or to be deemed to have made, legislation (be this enabling legislation, or subsidiary legislation, or delegated legislation, or legislation of any other specie) that they may lawfully empower an inquiry into the establishment, the ascertainment, and the determination of all and any questions pertaining to the sale of shares in Eko Hotels Limited.
2. A consequential declaration to the effect that in so far as the Governor of Lagos State purports, by statutory instrument made under his land (on 20th August, 1999) to have passed subsidiary/delegated legislation (to wit, Lagos State Legal Notice No 10 of 1999) constituting, appointing, and empanelling a Standing Tribunal of Inquiry Into The Sale And Acquisition of shares of Eko Hotels in 1995 ostensibly/professedly in the exercise of powers thought to have been conferred upon his statutory office by the Tribunals of Inquiry Law/Cap. 190, Laws of the Lagos State of 1994), the said Lagos State Legal Notice No 10 of 1999 is null, void, and of no legal effect whatsoever; for inconsistency with adverse provisions of the Constitution of the Federal Republic of Nigeria, 1999 (Promulgated by the Constitution of the Federal Republic of Nigeria (Promulgation) Decree No 24 of 1999).
3. A declaration to the effect that in so far as the substantive subject-matter content of the Terms of Reference contained in Lagos State Legal Notice No 10 of 1999 (made on 20th August, 1999 under the hand of the Governor of Lagos State) purportedly constituting and empowering of quasi-judicial enquiry into all or any matters pertaining to the sale of shares in Eko Hotels Limited, a private limited liability Company, are matters-
“(2) arising from the operation of the Companies and Allied Matters Act ...... regulating the operation of ....... (a Company) ........ incorporated under the Companies and Allied Matters Act,”
Only the Federal High Court of Nigeria is vested with, and can exercise jurisdiction, to the exclusion of all other Courts and tribunals whatsoever including the Standing Tribunal of Inquiry Into The Sale And Acquisition of Shares of Eko Hotel in 1995 over the aforesaid subject-matter of the within-named statutory instrument Terms of Reference.
4. A declaration to the effect that in so far as the statutory instrument (to wit, Lagos State Legal Notice No 10 of 1999 dated 20th August, 1999) by which the Standing Tribunal of Inquiry Into The Sale And Acquisition of shares of Eko Hotel in 1995 purports to have been constituted (under the Chairmanship of a Serving Honourable Judge in the employment of the Judiciary in the public service of the Government of The Lagos State of Nigeria) was so constituted and made under the hand of the Governor of Lagos State, qua Chief Executive Officer of the Lagos State Government, in its continuing capacity as/of the minority share holding - owner of twenty-five (25) per centum of the paid-up capital in Eko Hotels Limited; the questioned Tribunal of Inquiry is aforesaid manner of constitution and empowerment into a quasi-judicial body and organ with vires, authority, and Terms of Reference that purport to enable it to enquire into, to deliberate upon, and to determine any questions pertaining to the Sale of Shares in Eko Hotels Limited, does not consummate an act of constitution of a Tribunal in a manner guaranteed to secure its independence and impartiality as against Oha Limited, the majority share holding - owner of seventy-five (75) per centum of the paid-up capital in Eko Hotels Limited, and/or against the said Eko Hotels Limited, the private limited liability Company the shares in whose capital from the subject-matter of the threatened inquiry.
5. Order(s) of Prohibition and Perpetual Injunction Prohibiting, restraining, and enjoining the Standing Tribunal of Inquiry Into The Sale And Acquisition of Shares of Eko Hotel in 1995 presently constituted and presided over by His Lordship, Justice Ayo Phillips, a serving Honourable Judge in the employment of/in the judiciary/the public service of the Government of Lagos State of Nigeria, and in addition/otherwise constituted with Messrs Dapo Durosinmi-Etti, Seyi Bickersteth, Fola Oyekan, and Eric Ekumankama as members, or by whomsoever else that Panel of Inquiry might hereafter be variously presided over and otherwise constituted, and whether holden at/sitting in its current Committee Room 2, Women Development Centre, Oba Ogunji Road, Ogba, Agege venue, or wherever else, from enquiry into and deliberating upon, or from continuing to enquire into and to deliberate upon, or from further enquiring into and deliberating upon, whether by compelling the attendance before it, under the potential penalty of corporal punishment for disobedience (by the issuance of witness summons(es) or Warrant(s) of Arrest, or howsoever otherwise) of functionaries of Eko Hotels Limited and Oha Limited to render assistance to it in its enquiries, deliberations, and determinations, or howsoever else, and/or from otherwise determining or from continuing to determine all and any questions concerning the procedural irregularity, the terms and conditions for the disposal, the fairness of the sale/purchase - price, the prior - approval for, the ownership structure of, the purchase of, and any and all other matters pertaining to the sale of shares in Eko Hotel Limited.
The facts of this case are not really in dispute. They include the following: -
Eko Hotels Limited was incorporated in 1972 as a private limited liability Company with the Appellant, the Lagos State Government owning the majority shareholding of 51% of the entire equity in the fully paid and issued capital while the 2nd Respondent, Oha Limited owned 49% thereof. This situation continued until the 30th day of January, 1997 when the Appellant, represented by the Military Governor of Lagos State and the Secretary to the Military Government by a Share Purchase Agreement disposed of 26% of the total number of shares owned by the Appellant in the 1st Respondent, Eko Hotels Ltd by sale to the 2nd Respondent - Oha Limited. By the said sale transaction, the Appellant became a minority shareholder while the 2nd Respondent replaced the Appellant as the majority shareholder in the 1st Respondent.
However on the 23rd day of August, 1999 the Appellant published a Lagos State Legal Notice No 10 of 1999 setting up a Standing Tribunal of Inquiry Into The Sale And Acquisition of Shares of Eko Hotel in 1995, which year (1995) was subsequently corrected to read 1997 - see Lagos State Legal Notice No 87. The aforesaid Legal Notice No 10 of 1999 was made pursuant to powers conferred on the Governor of Lagos State by section 12 of the Tribunals of Inquiry Law, Cap 190, Laws of Lagos State of Nigeria, 1994.
The terms of reference of the Tribunal are stated therein as follows: -
1. To determine the regularity or otherwise of the procedure of sale of the shares.
2. To establish the terms and conditions under which the sale and disposal of the shares took place.
3. To ascertain whether the price of the shares was fair.
4. To determine whether the appropriate approvals were received for the sale and acquisition of the shares.
5. To ascertain the identity and the ownership of the Company that acquired the shares.
6. To make necessary recommendations to the Lagos State Government based on the Panel’s findings.
7. To ascertain any other matter(s) that may be pertinent to this inquiry.
The panel was composed of five members with Hon. Justice Ayo Phillips (Mrs) as Chairman. The Panel, in the course of executing its duties issued summonses to four witnesses to appear before it; these were the Company Secretary, Eko Hotels Ltd, Mr Samuel Alabi, Mr. Olumide Adewunmi, Mr Richard Herb and Mr Mark Devroye, who were, apart from Mr Alabi, Director, Chairman and General Manager respectively of the 1st Respondent. The summonses warned the witnesses to attend the Tribunal proceedings, or “fail at their peril.” The receipt of the summonses resulted in Counsel for the 2nd Respondent writing a protest to the Tribunal against the summonses issued to its officials and functionaries.
When the four witnesses so summoned by the Tribunal failed to attend the proceedings of that body on 2nd September, 1999, the Tribunal issued warrants of arrest against them as a result of which Mr. Alabi, the Company Secretary of the 1st Respondent was arrested and put in police custody and later produced before the Tribunal. It was at this stage that the Respondents filed the action at the Federal High Court, Lagos claiming the reliefs earlier reproduced in this judgment. The Federal High Court decided the matter in favour of the Plaintiffs and granted the reliefs claimed which decision resulted in an appeal to the Court of Appeal, Lagos Division which dismissed same for lack of merit. The present appeal is therefore a further appeal by the Appellants.
The issues for determination as distilled by learned Counsel for the Appellant, Oluseye Opasanya Esq in the Appellant’s brief filed on 31/3/05 and adopted in argument of the appeal, are stated as follows:
1. Whether the terms of reference of the Tribunal of Inquiry complained about by the Respondents pertain to civil causes or matters arising from the operation of the Companies and Allied Matters Act.
2. Whether the Respondents had the necessary locus standi to maintain the action against the Appellant.
3. Whether the Tribunal of Inquiry Set up by the Appellant via Legal Notice No 10 of 1999 was a quasi-judicial body liable to an order of prohibition.
4. Whether the lower Court was right in holding that Legal Notice No 10 of 1999 was null and void having regard to its finding that terms of reference No 4 in said notice is within the internal affairs of Lagos State Government.
5. Whether the Lagos State Government can in 1999 validly set up a Tribunal of Inquiry pursuant to Tribunal of Inquiry Law, Cap 190 Laws of Lagos State to inquire into the conduct or affairs of persons who at all material times relevant to the enquiry were officers in the public service of the state.
On the other hand, learned Counsel for the Respondents, Babatunde Fagbohunlu Esq, in the Respondents’ brief filed on 11/5/05 and also adopted in argument of the appeal, formulated four issues, which were substantially the same with the issues formulated by learned Counsel for the Appellant and reproduced supra. The said issues are as follows: -
“1. Whether the Court of Appeal was right to have held that the Tribunal of Inquiry into the sale of shares set up by the Lagos State Legal Notice No 10 of 1999 was a quasi-judicial body liable to judicial orders of prohibition.
2. Whether the Court of Appeal was right in holding that the Respondents had the necessary locus stand to maintain the action against the Appellant and to complain or institute the action regarding the summons to witness and warrants of arrest issued by the Tribunal of Inquiry.
3. Whether the Court of Appeal was right to affirm the decision of the trial Court by holding that the making of the legal Notice No 10 of 1999 as well as the composition and proceedings of the Tribunal of Inquiry are ultra vires, unconstitutional, null and void as the Lagos State Government has no legislative competence to prescribe the Terms of Reference prescribed for the Tribunal of Inquiry.
4. Whether the Court of Appeal was right in holding that the employees of the Respondents against whom the Tribunal issued and served summons(es) to witness and Warrant of Arrest are not officers in the public service of Lagos State who may lawfully be made subject to the Tribunal of Inquiry within the legislative intendment of the Tribunal of Inquiry Law, Cap. 190 Laws of Lagos State of Nigeria, 1999(1994).”
It is important to note that the Respondents did file a Cross-appeal against the said judgment of the Court of Appeal. In the Cross-Appellant brief also filed on 11/5/05, the following two issues have been formulated for determination:
“1. Whether the Court of Appeal was right to have held that the Lagos State Government is free to attempt to find out whether those who sold the shares had the required approval when the question whether required regulatory approvals were obtained is an item exclusively reserved for Federal Legislative competence under item 32 of the Exclusive Legislative List of the 1999 Constitution of the Federal Republic of Nigeria?
2. Whether the Court of Appeal was right to have held that the Tribunal of Inquiry was constituted in such a manner as secure its independence and impartiality?”
Looking at the issues as formulated in the main appeal, it is my considered view that Appellant’s issue No 2 ought to have come first while No 3 comes second to be followed by 1, 4 and 5. The above opinion is advised by the fact that since issue No 2 deals with locus standi of the Respondents to institute the action in the first place, it challenges the competence of the action so instituted and therefore it is a peripheral matter that ought to be discussed and determined first before proceeding to consider the substance or meat of the appeal. If at the conclusion of the discussion it is found that the Respondents have no locus standi, then the action is consequently incompetent and would be struck out thereby rendering any further consideration of the other issues unnecessary or an exercise in futility. On the other hand, if the determination of the issue is that the Respondents have locus standi, then the other issues would be considered and determined on merit. This approach is dictated by common sense. I will therefore treat the issues in the following order:
1. Whether the Respondents had the necessary locus standi to maintain the action against the Appellant.
2. Whether the Tribunal of Inquiry set up by the Appellant via Legal Notice No 10 of 1999 was a quasi-judicial body liable to an order of prohibition.
3. Whether the terms of reference of the Tribunal of Inquiry complained about by the Respondents pertain to civil causes or matters arising from the operation of the Companies and Allied Matters Act.
4. Whether the lower Court was right in holding that Legal Notice No 10 of 1999 was null and void having regard to its finding that terms of reference No 4 in the said Notice is within the internal affairs of Lagos State Government.
5. Whether the Lagos State Government can in 1999 validly set up a Tribunal of Inquiry, pursuant to Tribunal of Inquiry Law, Cap 190 Laws of Lagos State to inquire into the conduct or affairs of persons who at all material times relevant to the enquiry, were officers in the public service of the State.
In arguing the present issue No 1, learned Counsel for the Appellant referred to the decision of the Court of Appeal at page 506 of the record in respect of his submission on the locus stand of the Respondents and submitted that there is nothing in the findings of the Court below to support the finding that the Respondents have locus standi to institute the action particularly as the law is that a Company has distinct and separate personality from its shareholders and officers and that the lower Court was wrong in holding that “.... such separate interest can converge and become one inseparable as was the case here,” that in any event, there is no evidence of such convergence before the Court; that the law enjoins the decision of the Court to be based on facts, not intuition or conjecture etc relying on Sagay vs. Sajere (2000) 2 NWLR (pt. 661) 360 at 370.
Learned Counsel further submitted that for a person to invoke the jurisdiction of the Court to determine the constitutionality of legislative or executive action, he must show that either his personal interest is adversely affected that his interest or injury is over and above that of the general public, for which Counsel cited and relied on Owodunni vs Registered Trustees of CCC (2000) 10 NWLR (pt.657) 315 at 338; Adesanya vs President of the Federal Republic of Nigeria (1981) 2 SCNLR 358 or (1981) 1 All NLR 1; Gamioba vs. Ezezi II, (1961) 2 SCNLR 237 or (1961) All NLR 608.
Learned Counsel further submitted that the persons who have any justiciable interests are those summoned by the Tribunal and not the Respondents and that the Respondents have separate interests and personality from those persons summoned by reason of incorporation relying on section 37 of Companies and Allied Matters Act a.k.a CAMA and Solomon vs. Solomon & Co. Ltd (1897) A.C 22. Learned Counsel further submitted that there is no evidence before the Court that the persons summoned were summoned in their capacity as representatives, agents and/or officers of the Respondent and urged the Court to resolve the issue in favour of the Appellant.
On his part, learned Counsel for the Respondents concedes that a Company’s legal rights, obligations and interest are separate and distinct from that of its staff, officer and directors but submits that a Company being a corporate and artificial entity with no human personality is incapable of being summoned by a witness summons to appear before a Tribunal of Inquiry; that since a Company functions and operates through its staff, officers and Directors, these officials are by parity of reasoning answerable to any quarters for the Company’s commissions and omissions, that evidence of the Respondents’ locus standi to institute the action and the convergence of the separate interests abound in the record and that there is no other capacity in which the four witnesses would have been invited to appear before the Tribunal of Inquiry other than in their capacities as members of staff, officers, directors and directing minds of the Respondents, there being no evidence that the four witnesses had any dealings with the sale and acquisition of the shares of Eko Hotel in 1997 in their personal capacities, but that they are all officials of the Respondents, that there is evidence of the Respondents locus standi and convergence of the separate interests of the Respondents and those of the persons summoned by the Tribunal of Inquiry.
Finally learned Counsel submitted that the Respondents have shown sufficient interest and locus standi in the terms of reference of the Tribunal of Inquiry particularly as any of the determinations or recommendations which the Tribunal may make might one way or another have effect on their civil rights and therefore urged the Court to resolve the issue against the Appellant.
To resolve the issue under consideration, it is important to remind ourselves of the fact that the relevant facts of this case are not in dispute at all. From the terms of reference of the Tribunal of Inquiry earlier reproduced in this judgment, it is very clear that the subject matter of the inquiry is the sale and acquisition of some of the shares belonging to the Appellant in the 1st Respondent private limited liability Company by the 2nd Respondent yet learned Counsel for the Appellant contends that the Respondents have no locus standi to institute the action claiming the reliefs earlier reproduced in this judgment. The shares of the Appellant in the 1st Respondent which were sold to and purchased by the 2nd Respondent resulting in the constitution of the Tribunal of Inquiry with the terms of reference earlier reproduced is said not to constitute sufficient interest of the Respondents in instituting the action or in other words in challenging the constitutionality of the constitution and jurisdiction of the Tribunal of Inquiry with the said terms of reference.
That apart, both parties agree that in law, the interests of a Company and its staff or officers etc are distinct and separate. However whereas learned Counsel for the Appellant contends that the lower Court erred in holding that in the instant case the interest of the staff or officials of the Respondents converge with those of the Respondents thereby conferring on the Respondents the locus standi to institute the action because, according to learned Counsel there is no evidence of such convergence thereby rendering the finding/holding speculative or a mere conjecture, learned Counsel for the Respondents has contended the contrary. It is not disputed that the immediate cause of instituting the action was the issuance of a warrant of arrests on Mr Alabi, the Company Secretary of the 1st Respondent and one of the four persons who are officers of the 1st Respondent summoned to appear before the Tribunal of Inquiry, and the actual arrest and detention of Mr. Alabi in police custody coupled with the fact that the said arrest and detention was in fulfilment of a warning or threat contained in the summons to the effect that failure to attend the Tribunal of Inquiry would be so visited. There is evidence that the four witnesses summoned by the Tribunal of Inquiry are officers of the 1st Respondent and that the 2nd Respondent is the person who purchased the shares resulting in the constitution of the Tribunal of Inquiry with the terms of reference. Also not disputed is the fact that a Company being an artificial entity with no human personality is incapable of being summoned by a witness summons; to appear and testify to any fact in issue or otherwise and that its operations are carried out by staff, officers, directors etc, such as the four persons summoned by the Tribunal of Inquiry who are in effect the directing minds of the Company and are therefore answerable for the companies acts of omissions and/or commissions. Yet learned Counsel for the Appellant argued that those persons served with the witness summons were not summoned as representatives of the Respondents. The question then is in what capacity were they then summoned and for what there being no evidence of what role they played as individuals and in their personal capacities in the sale and acquisition of the shares in issue neither are they alleged to be the purchasers thereof. I hold the view that it is in realization of these hard facts that the Tribunal of Inquiry issued and served the summons on the four officers of the 1st Respondent instead of directly on the Respondents. I hold the further view that the actualisation of the threat of punishment for failure to attend the Tribunal of Inquiry by arrest and detention of one of the witnesses so summoned is a direct pointer to the convergence of the interests of those so summoned and the Respondents. All are agreed that the 1st Respondent is the Company whose shares are the subject-matter of the Inquiry to be conducted by the Tribunal of Inquiry established by the Lagos State Government vide Legal Notice No 10 of 1999 while the 2nd Respondent is the majority shareholder of the shares of the 1st Respondent having acquired 26% of the shares of the Appellant and that the terms of reference of the Tribunal of Inquiry are concerned with the shares of the 1st Respondent particularly those purchased by 2nd Respondent from the Appellant. It is therefore very clear that the Respondents interests are squarely within the terms of reference of the Tribunal of Inquiry and that the determination or recommendation of the Tribunal of Inquiry on any of the terms of reference may one way or the other have effect on the civil rights and obligations of the Respondents and therefore I hold the view that the Court below is right in holding that the Respondents have locus standi to institute the action particularly as the interests of the staff or officials of the Respondents converge, in the instant case, with the interest of the Respondents. In consequence, I agree with the submission of learned Counsel for the Respondents on this issue and resolve the same against the Appellant.
On issue No 2 learned Counsel for the Appellant submitted that it is only a judicial and/or quasi-judicial body that is liable to an order of prohibition relying on LDPC vs. Fawehinmi (1985) 2 NWLR (pt. 7) 300 at 363 & 370 and Clifford v. O'Sullivan (1921) AC 370 at 582; Electricity Commissioners (1924) 1 K.B 171 at 204-205; R v Legislative Committee of the Church Assembly (1928) 1 KB 411 at 416 and that the lower Court was in error in holding that the Tribunal of Inquiry is a quasi-judicial body particularly as the said finding was predicated on irrelevant considerations; that rather than the nature of the complaint against the Tribunal as held by the Court below determining the issue as to whether a body is judicial or quasi-judicial, it is the nature of the function of the statutory body that determines the issue relying on LPDC vs Fawehinmi supra at 332, 347, and 363 and that the function of the Tribunal of Inquiry in this case is merely investigatory and inquisitorial, particularly as section 14 of cap 190, Laws of Lagos State of Nigeria 1994 makes the findings of Tribunal subject to the decision of the Governor.
Learned Counsel further submitted that the combined effects of section 1 of cap 190 under which the Tribunal of Inquiry was set up and the terms of reference of the said Tribunal show that the function of the Tribunal of Inquiry is investigatory, advisory and inquisitorial in nature, and urged the Court to resolve the issue in favour of the Appellant.
On his part, learned Counsel for the Respondents stated that the Courts below have concurrently found that the Tribunal of Inquiry set up by the Lagos State Government is a quasi-judicial body liable to order of prohibition. Learned Counsel then submitted that there are several tests for ascertaining whether statutory functions of a body are of a judicial nature, which tests learned Counsel stated relying on De Smith’s Judicial Review of Administrative Actions 4th Edition at page 80 to be (a) Conclusiveness (b) Trappings and Procedure and (c) Interpretation and Declaration and submitted that the Tribunal of Inquiry Law itself envisages the empanelling of a quasi-judicial body every time a Tribunal of Inquiry is constituted under the said law, that the act of ordering the arrest of a person who refuses to respond to witness is judicial in nature.
Learned Counsel further submitted that a proceeding may be subject to prohibition even though it is subject to confirmation or approval and the approval has to be that of the Houses of Parliament relying on Halsburry’s Laws of England 4th edition vol. 1 paragraph 146; R v. Kent Police Authority (1971) 2 QBD 662. Finally learned Counsel submitted that from the facts of the case, the Tribunal of Inquiry was a quasi-judicial body liable to judicial orders of prohibition.
Learned Counsel further submitted that the Supreme Court will not normally interfere with the concurrent findings of facts of the lower Court except the Appellant has shown that the findings are perverse or were made erroneously or were arrived at through a wrongful evaluation of the facts or the applicable laws relying on Texaco Overseas (Nig) Petroleum Co. Unlimited vs. Pedmar Nigeria Ltd (2002) 13 NWLR (pt. 785) 526 at 546, that the Federal High Court found as a fact that the Tribunal of Inquiry was a quasi-judicial body based on affidavit evidence before it and that the said finding was confirmed by the Court of Appeal; that the question whether or not the Tribunal of Inquiry is a quasi-judicial body is a question of fact which the lower Courts had to inquire into and determine but Appellant has not put before this Court any facts or evidence to show that the concurrent findings of the lower Courts were perverse or were made erroneously and urged the Court to refrain from determining whether the Tribunal of Inquiry was a quasi-judicial body, the question having been concurrently determined by the lower Courts, and urged the Court to resolve the issue against the Appellant.
In the reply brief filed by learned Counsel for the Appellant on 20/5/05, learned Counsel reiterated the test for conclusiveness of the performance of the function of the statutory body by stating that the proper test is whether the performance of the function terminates in an order that has conclusive effect and that the terms of reference of the Tribunal of Inquiry does not contemplate issuance of an order by the Tribunal let alone an order with finality; that the decision in R. v Kent Police Authority supra, does not support the case of the Respondents; that the issue of the quasi-judicial character of the Tribunal of Inquiry is that of law not facts and that even though the lower Courts had reached concurrent decisions on the matter, it does not prevent this Court form exercising its own independent judgment in order to reach a correct decision; that in any event Appellant has shown sufficient cause why this Court should depart from the concurrent findings of the lower Courts.
I will commence the resolution of this issue by taking the sub-issue as to whether the concurrent findings by the lower Courts as to the quasi-judicial nature of the functions of the Tribunal of Inquiry is a finding of fact or law as contended by both Counsel before proceeding to determine the main issue as to whether the said Tribunal of Inquiry is a quasi judicial body, if need be.
It is not in dispute that the matter was instituted by way of an originating summons supported by affidavits filed by both parties in support of their contending positions. It is also not disputed that before the trial Court arrived at the decision that the Tribunal of Inquiry was a quasi-judicial body, it evaluated the affidavit evidence produced by both parties on the issue before making the finding that the said Tribunal of Inquiry is a quasi-judicial body. Having regard to the facts of this case I agree with learned Counsel for the Respondents that the question as to whether or not the Tribunal of Inquiry is a quasi-judicial body is a question of fact which the trial Court and the Court of Appeal had to enquire into and duly determined, based on the facts as contained in the affidavit evidence on record. I hold the further view that the findings qualify in law to what we term concurrent findings of facts which the law has further settled that this Court will not normally interfere with unless the Appellant satisfies this Court that the findings so made by the lower Courts are perverse or were made erroneously or were arrived at through a wrongful evaluation of the facts or the applicable law. Learned Counsel for the Appellant has submitted that this Court has held that it is at liberty to exercise its independent judgment to construe the true meaning of a document and that the grounds of appeal pertaining to this involve a question of law, inspite of the concurrent conclusions of the High Court and the Court of Appeal on the same meaning relying on the case of Nwadike vs. Ibekwe (1987) 4 NWLR 718 at 744 and Ogbonna vs. A-G Imo State (1992) 1 NWLR 647 at 677. I must hasten to state that though what learned Counsel has stated supra represents the correct statement of the law, it is my considered opinion that the principles of law so stated relate to construction or interpretation of the true meaning of a document and does not extend to a determination of the status of a statutory body as to whether it is an administrative, executive or judicial or quasi judicial body for the purposes of the exercise of the High Court’s supervisory jurisdiction of judicial review of the actions and decisions of such bodies, which is one of the primary issues in the instant case.
The next sub-issue for determination is whether learned Counsel for the Appellant has shown sufficient cause why this Court should depart from the concurrent findings of the two lower Courts on the question of quasi-judicial status of the Tribunal of Inquiry. The answer to that is clearly in the negative particularly as in no where in the briefs of the Appellant has learned Counsel for the Appellant demonstrated that the findings of fact by the lower Courts is perverse or was made erroneously or was arrived at through a wrongful evaluation of the facts disclosed in the affidavits or the applicable laws thereto as laid down by this Court.
By the way, is it not now anachronistic for one to continue to propound the dichotomy between judicial/quasi-judicial and administrative or executive bodies for the purposes of judicial review particularly when all such bodies are now required to observe the rules of natural justice in the discharge of their duties? See the case of Ridge vs. Baldwin (1964) A.C. 40 and others, which decided that if a Tribunal of Inquiry in the exercise of its power to investigate and recommend, determines questions that affect the rights of individuals or I may add, corporate entities, it is under a duty to act judicially and is thereby subject to judicial review. For instance in the case of R. v. Electricity Commissioners, Ex parte London Electricity Joint Committee Co. (1924) 1 K.D. 171 where the Electricity Commissioners were empowered by statute to formulate schemes for the improvement of electricity supply, and to hold local inquiries for the purpose and any order made by the said commissioners could not take effect until confirmed by the Board of Trade and then approved by resolution of both Houses of Parliament, which make their determinations purely recommendatory and inconclusive in nature, the English Court of Appeal held that Prohibition would nevertheless lie against the body because it was bound to observe the rules of natural justice. At pages 206 to 207 of Lord Atkins had these to say.
“In the present case the Electricity Commissioners have to decide whether they .... Constitute a joint authority in the district in accordance with law, and with what powers they will invest that body ..... The Commissioners are proposing to create such a new body in violation of the Act of Parliament and are proposing to hold a possibly long and expensive inquiry into the expediency of such a scheme, in respect of which they have the power to compel representatives of the prosecutors to attend and produce papers. I think in deciding upon the scheme, and in holding the inquiry, they are acting judicially .......”
When one looks at the provisions of section 14 of Cap 190 of the Laws of Lagos State of Nigeria 1994 - the Tribunals of Inquiry Law which provides inter alia as follows: -
“14 (1) A Tribunal shall make and furnish to the Governor a full report in writing of its proceedings, findings and recommendations and record an opinion and reasons leading to its conclusion .......
(2) The Governor may, if he is of the opinion that it is necessary so to do, make any order in relation to any property or other matter dealt with in the report; and such order when made may be delivered to the Registrar of a High Court (which order the Registrar is empowered and required to receive and register without payment of fee) and when so delivered the order shall have effect as a judgment of that High Court and may be enforced accordingly but shall not be reviewed in any Court by prerogative order or otherwise howsoever and no appeal shall lie thereon.”
One becomes very sad indeed.
The law arrogates to the Governor of Lagos State judicial powers equivalent to the powers exercisable by a High Court in its judgment but unlike the High Court Judges’ decision which is constitutionally subject to appeal not only by the loser put also an interested party, the decision of his counterpart, the Governor of Lagos State, is not subject to appeal - it is as it were final, not even the Supreme Court of Nigeria can take a look at it! It is with this background knowledge that the submission of learned Counsel for the Appellant that the Tribunal of Inquiry set up under Legal Notice No 10 of 1999 and as empowered by Cap. 190 of the Laws of Lagos State of Nigeria 1994 is administrative and therefore not subject to judicial review by way of an order of prohibition becomes very worrisome indeed particularly as it is a sure way to enthrone dictatorship of the highest order in a democratic society governed by Constitution and the rule of law. Learned Counsel for the Appellant wants a stamp of approval for his submission, which I am sure, he can never have from any civilized and modern judiciary. To hold that the Tribunal of Inquiry is an administrative body not subject to judicial review will make the recommendations or decisions or whatever of that body if accepted or approved by the Governor not subject to judicial review or appeal, thereby leaving those who are dissatisfied with such decision, recommendations with no legal remedy but a recourse to possible self help which amounts to an open invitation to anarchy. I must state that section 14 (2) of Cap 190 of the Laws of Lagos State of Nigeria is glaringly unconstitutional.
So, in any way one looks at the issue under consideration, it must fail woefully and I hereby resolve same against the Appellant.
On issue No 3 learned Counsel for the Appellant submitted that though section 251(1) (e) of the 1999 Constitution vests exclusive jurisdiction in civil causes or matters arising from the operation of the Companies And Allied Matters Act on the Federal High Court, it does not imply that the Court has jurisdiction over every matter or cause relating to or connected with a limited liability Company contrary to the decision of the lower Court; that the jurisdiction so conferred does not extend to a dispute arising from ownership of shares in a limited liability Company. Learned Counsel then proceeded to define the phrase “arising from” as well as the word “operation” as used in section 251 (i) (e) of the 1999 Constitution and urged the Court to adopt the definitions and consequently hold that the sale of shares of the Appellant in the 1st Respondent is not a cause or matter arising from the operation of the Companies And Allied Matters Act a.k.a CAMA; that the questions for determination and the reliefs claimed clearly show that the action is not about the management of the 1st Respondent and or assets of 1st Respondent but the constitutionality of legal Notice No 10 of 1999 vis-a-vis item 32 of the Exclusive Legislative List; that whereas item 32 confers power on the National Assembly to legislate on “incorporation regulation and winding up of bodies corporate ......” the Legal Notice in issue does not directly or indirectly deal either with incorporation, regulation or winding up of the 1st Respondent. Learned Counsel then submitted that it is rather the State High Court that is clothed with jurisdiction in this case. Learned Counsel further submitted that the Respondents’ attack on the Legal Notice in issue was not predicated on whether or not the Notice as a subsidiary legislation is cognizable under the provision of section 1(i) of the Tribunals of Inquiry Law Cap. 190, Laws of Lagos State 1994 but on sale of shares of the Appellant in the 1st Respondent and therefore that the question as to whether the Tribunal of Inquiry was set up to inquire into any of the matters stated in section 1(i) of Cap 190 is academic and irrelevant; that assuming without conceding that the question is relevant, the existence of any of the factors contained in section 1(i) is sufficient to sustain and justify the validity of Legal Notice No 10 as a subsidiary legislation under Cap 190; that the view of the lower Court that each of the terms of reference except the 4th deal directly or indirectly with the incorporation and regulation of bodies corporate is not justified by the facts and evidence before the Court, and urged the Court to resolve the issue in favour of the Appellant.
On his part, learned Counsel for the Respondents conceded that the making of the Legal Notice No 10 of 1999 in exercise of the powers conferred on the Governor of Lagos State by section 1(i) of Cap. 190 is not ultra vires, unconstitutional, null and void but submitted that to the extent that the Tribunal of Inquiry empanelled; by the said Legal Notice No 10 of 1999 purports to go outside the parameters of persons and functions prescribed in section 1 of the law to conduct an enquiry, the making of the Legal Notice in question is ultra vires the powers of the Governor, unconstitutional, null and void. Learned Counsel then proceeded to set out the terms of reference of the Tribunal of Inquiry and submitted that the central motive behind the empanelling of the Tribunal of Inquiry was the sale and Acquisition of the shares of Eko Hotels Ltd which were sold by the Lagos State Government to the 2nd Respondent in 1997.
Referring to the terms of reference No 1, learned Counsel submitted that since the Articles of Association of the 1st Respondent permits transfer of shares between shareholders and constitutes the contract governing the relationship between shareholders, any infraction of such articles may confer on the shareholder who is adversely affected, a right of action; that where any shareholder perceives that shares were transferred in an irregular manner, the Companies and Allied Matters Act is the legislation to which recourse must be had and that the forum for resolving such dispute is the Federal High Court as provided in section 251(1) (e) of the 1999 Constitution and section 50 of the Companies and Allied Matters Act.
As regards term of reference No 2, learned Counsel submitted that Appellant is deemed to be conversant with the terms and conditions under which the sale and disposal of the shares took place and that in any event, any query into the sale and disposal of shares in a private Company limited by shares is governed by the Companies and Allied Matters Act. On the third term of reference, learned Counsel submitted that the terms of reference which calls on the Tribunal of Inquiry to determine the adequacy of the consideration received by Appellant when it sold the shares smacks of inequity for Appellant who voluntarily sold its shares to revert, four years after the transaction to a Tribunal of Inquiry to determine the fairness or otherwise of the price.
On the fourth term of reference, learned Counsel submitted that the lower Court was right in holding that the proper place to find out whether approval of the Lagos State Executive Council was obtained prior to the sale is by looking at the relevant minutes of that council and not by constitution of a Tribunal of Inquiry but that the lower Court erred in not considering and deciding that another approval allegedly not obtained as canvassed by the Appellant is that of the Security and Exchange Commission since the 2nd Respondent who purchased the shares is a foreign Company and legally needed the approval, that if this aspect had been taken into consideration by the Court it would have seen that such an approval is not within the legislative competence of the Lagos State Government the matter being within the Exclusive Legislative List and thereby rendering nugatory the subsidiary legislation which concerned the regulation of a corporate body, an item under item 32 of the Exclusive Legislative List.
On term of reference No 5, learned Counsel submitted that the identity of the purchaser of the shares was known to the Appellant and that in any event such information can on request be obtained from the Corporate Affairs Commission, Abuja.
On the 6th and 7th terms of reference learned Counsel stated that since the terms are predicated on the outcome of the findings of the Tribunal of Inquiry on the 1st - 5th terms of reference and the Tribunal of Inquiry never made any findings in respect of those terms or at all before the action was instituted, they cannot be considered, but concluded that since three of the terms of reference come within the purview of the Companies and Allied Matters Act while the other two concern matters which were or should already be in the possession of the Appellant, the establishment of the Tribunal of Inquiry to enquire into such matters was unnecessary.
Turning to the legislative competence of the Governor of Lagos State to make subsidiary legislation, learned Counsel submitted that such competence is limited to the ambit of the powers vested in the Concurrent Legislative List of the 1999 Constitution which does not include powers to legislate on matters within item 32 of the Exclusive Legislative List and as such lacked the vires to make the subsidiary legislation which concerned the regulation of a corporate body and urged the Court to resolve the issue against the Appellant.
Now section 20 of the Tribunal of Inquiry Law, Cap 190 of tie Laws of Lagos State under which the Governor of Lagos State constituted the Tribunal of Inquiry in issue provides that:
“The powers conferred by this Law upon the Governor may be exercised by him in respect of any matter within the legislative competence of the Lagos State.”
Both Counsel agree that the Governor of Lagos State has the legislative competence to make a subsidiary legislation as empowered by section 1(i) of the Tribunals of Inquiry Law, Cap 190, Laws of Lagos State, 1994. The dispute however, is whether Legal Notice No 10 of 1999 made by Lagos State Governor under the Tribunals of Inquiry Law is an invasion of the exclusive legislative domain of the National Assembly as the Notice is alleged to have been made on a matter contained in item 32 of the Exclusive Legislative List of the 1999 Constitution.
Item 32 of the said List provides as follows: -
“Incorporation, regulation and winding up of bodies corporate, other than co-operative societies, local government councils and bodies corporate established directly by any law enacted by a House of Assembly of a State.”
The question is whether Legal Notice No 10 of 1999 can be said to be on incorporation, regulation and winding up of bodies corporate so as not to be within the legislative competence of the Lagos State Governor to make. The term regulation is defined in Black’s Law Dictionary 8th Edition page 1311 inter alia as:
“The act or process of controlling by rule of restriction.”
From the terms of reference as contained in the Legal Notice No 10 of 1999, the Tribunal of Inquiry is to carry out the duties in relation to the sale and acquisition of the shares of the Appellant in the 1st Respondent, a private limited liability Company incorporated under the Companies and Allied Matters Act Cap 59, Laws of the Federation, 1990. It is the contention of learned Counsel for the Appellant that the matter is simply a transaction of sale of shares which have nothing to do with the regulation of the Company neither is it within the term “arising from the operation” of the Companies and Allied Matters Act so as to confer exclusive jurisdiction on the Federal High Court - as provided under section 251 (i) (e) of the 1999 Constitution.
When one looks at the provisions of the Companies and Allied Matters Act particularly sections 151 to 157 thereof which deals with and makes provisions for transfer and transmission of shares of a Company and how such transfers can be entered in the register of transfers, it becomes very clear that Legal Notice No 10 of 1999 deals with matters “arising from the operation” of the Companies and Allied Matters Act and as such only the Federal High Court has exclusive jurisdiction to entertain the suit. The sections of the Act referred to supra provide for what is to be done for a transfer of shares of a Company to be effective “not withstanding anything in the Articles of a Company.” I hold the view that one of the ways a transfer of shares of a Company can be effected is by sale and since the Tribunal of Inquiry was constituted to investigate among others the sale of shares it falls within the operation of the Companies and Allied Matters Act, contrary to the submission of learned Counsel for the Appellant.
At this stage, let me reproduce section 151 of Cap 59, Laws the Federation 1990.
151. (1) The transfer of a Company’s share shall be by instrument of transfer and except as expressly provided in the articles, transfer of shares shall be without restrictions.
(2) Notwithstanding anything in the articles of a Company, it shall not be lawful for the Company to register a transfer of shares in the Company, unless a proper instrument of transfer has been delivered to the Company:
Provided that nothing in this section shall prejudice any power of the Company to register as shareholder, any person to whom the right to any shares in the Company has been transmitted by operation of law.
(3) The instrument of transfer of any share shall be executed by or on behalf of the transferor and transferee, and the transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect of the share.
(4) Subject to such of the restrictions of a Company’s articles as may be applicable, any member may transfer all or any of his shares by instrument in writing in any usual or common form or any other form which the directors may approve.
From the provisions of sub-section 1 of section 151, it is very clear that the question of the validity or otherwise of a transfer of shares by sale as in the instant case is within the operation of the Act. Also from the provisions of the sections of Cap 59 earlier referred to, it is obvious that Legal Notice No 10 of 1999 is a subsidiary legislation, which concerned the regulation of a corporate body contrary to item 32 of the Exclusive Legislative List and to that extent unconstitutional, null and void. I therefore resolve issue 3 against the Appellant.
On issue No 4 learned Counsel for the Appellant submitted that the lower Court erred in holding that the Legal Notice No 10 was invalid having regard to the fact that the same Court had held that the terms of reference No 4 “is an internal affairs of the LSG” and should have been sufficient to validate Legal Notice No 10 of 1999 particularly as the Lagos State has the competence to inquire into any cause arising from its internal affairs and that the said term of reference No 4 is severable from the other terms of reference and that the lower Court ought to have applied the blue pencil rule to strike out only the portions affected and pronounce the Legal Notice valid relying on A-G Ondo State vs. A-G Federation (2002) 9 NWLR (pt. 772) 310 at 344, 420, 474; A-G Abia State vs. A-G Federation (2002) 3 SC 106; that the power to compel attendance of witnesses is of no moment as to the competence of the Governor of a state to set up a Tribunal of Inquiry Law and urged the Court to set aside the finding by the lower Court and resolve the issue in favour of the Appellant.
As can be seen from this judgment particularly during the consideration of the third issue, learned Counsel for the Respondents argued that in addition to the approval of the Lagos State Executive Council, another approval which Appellants had in mind had to do with the Security and Exchange Commission and that since the question as to whether such an approval was obtained prior to the sale was within the Exclusive Legislative List, terms of reference No 4 is invalid. That apart, it has to be pointed out that this issue under consideration forms the basis of the Cross-Appellants’ issue No 1 which is therefore considered together with Appellant’s issue No 4.
In arguing the issue, learned Counsel for the Cross-Appellants referred to the holding of the lower Court on the 4th term of reference and submitted that on the evidence on record, the nature of requisite approvals into which the Tribunal of Inquiry was required by term of reference No 4 to conduct the inquiry was not limited to the approval of the State Executive Council but included that of regulatory approval such as that of the Security and Exchange Commission. Learned Counsel then referred to paragraph 14 of the Counter Affidavit Sworn to by Abiola Fatoye on 4th October, 1999 and Exhibits B - B2 referred to in paragraph 15 of the said Counter Affidavit the relevant portion of which exhibit was reproduced and submitted that the lower Court misdirected itself on the facts and the evidence on record to have confined its definition of requisite approval to State Executive Council approval as opposed to regulatory approvals such as the approval of the Security and Exchange Commission; that the legislative competence of the Governor of Lagos State to make subsidiary legislation is limited to the powers vested on the government of the state under the concurrent Legislative List and that the Governor has no powers to make subsidiary legislation on any subject in the Exclusive Legislative List particularly with regard to item 32. That the Governor has no power to make the term of reference No 4 since it offends item 32 of the Exclusive Legislative List.
Learned Counsel further submitted that the question of the Blue Pencil Rule was not at anytime raised as an issue before the Court of Appeal and that the question does not relate to any of the grounds of appeal filed in this Court and as such the issue as argued bears no relevance to the appeal and should be discountenanced, Counsel further submitted, relying on |