ADO IBRAHIM & COY. LTD. VS BENDEL CEMENT COY. LTD

CORAM

ONU JUSTICE, SUPREME COURT

PARTIES

ADO IBRAHIM & COY. LTD

APPELLANTS

BENDEL CEMENT COY. LTD.

RESPONDENTS

AREA(S) OF LAW

COMPANY LAW – WINDING UP PETITION -GROUND ON WHICH PETITION SHOULD BE BROUGHT- POWER OF TO REHEAR A SUIT

SUMMARY OF FACTS

The appellant, a shareholder of the respondent company sought the winding up of the company on the grounds that it was irredeemably insolvent.

HELD

The petition is incompetent.

ISSUES

Was the court below right to have allowed the appeal on ground that the petition was not competent under the “just and equitable” ground of section 408(e) of CAMA 1990.

RATIONES DECIDENDI

REMEDY SUITABLE FOR CONTRIBUTORIES

‘A just and equitable ground for winding up a Company is a remedy most suitable for contributories. Where a contributory brings a petition under this head as was found by the trial court and where the trial court is of the opinion that the Petitioner is entitled to the order of winding up, it must make the order unless it appears to the court that some other remedy is available to the Petitioner and that he is acting unreasonably in seeking a winding up order instead of pursuing that other remedy (S.411 (2) of CAMA). Per Muhammad JSC

WHEN A CONTRIBUTORY CAN BRING AN ACTION FOR WINDING UP ON A JUST AND EQUITABLE GROUND

Other contingents to the making of such order include, inter alia, the following:-

The contributory must allege and prove that there will be assets for distribution.

That the petition is opposed by a majority of contributories. In this case the court will refuse to make that order unless the main objects of the Company have failed or became impracticable or that the substratum of the company was gone, e.g. where the Company is making a loss or is deeply indebted.

an order will be made where it is shown that the conduct of the majority is such as to constitute an oppression to the petitioning minority Per Muhammad JSC

DEFINITION OF A CONTRIBUTORY

‘A contributory has been defined to be every person liable to contribute to the assets of a company in the event of its being wound up and for the purposes of all proceedings for determining and all proceedings prior to the final determination of the persons who are to be deemed contributories.’ Per Muhammad JSC

WHEN THE COURT OF APPEAL CAN ASSUME JURISDICTION OF A TRIAL COURT

‘The practice whereby an Appeal Court assumes the complete jurisdiction of a trial court is never an innovation nor in doubt. It is a practice legally backed up by law and by judicial precedence. It is resorted to by the Appeal Courts in order to avoid unnecessary delays in the final settlement of disputes. ‘ Per Muhammad JSC