➥ CASE SUMMARY OF:
International Agricultural Ltd & Anor. V. Chika Brothers Ltd (SC.42/1988, 12 January 1990)
by Branham Chima.
➥ ISSUES RAISED
Minute book;
Objection.
➥ CASE FACT/HISTORY
The appellants were defendants at the Federal High Court, Port Harcourt, to a suit by the respondent company, Chika Brothers Ltd., claiming as follows: (1) A declaration that the plaintiff is not and has never been a shareholder of the 1st defendant. (2) A declaration that the said sum of N58,200.00 was and still is a loan and is a debt owing from the defendants to the plaintiff. (3) The sum of N49,600.00 due and payable by the defendants to the plaintiff being the balance still outstanding and owing from the defendants to the plaintiffs to the 1st defendant at the request of the 1st defendant and the 2nd defendant. (4) Interest on the said N49,600.00 at the rate of 4% per annum until the judgment debt is paid.
The respondent’s counsel, Mr. Umezuruike, was recorded by learned trial Judge as follows: “The defence has an objection. He (sic) says it does not comply with the provision (sic) of section 382 of the Companies Act, 1968 in that it does not conform with precautions laid down in the section. In making this submission I would rely on the case of Oruwari and Ors. v. Okunna and Ors. The counsel had not with him the reference of the case he cited and nothing more about it. But to this submission, Mr. Njoku of counsel, for the defendants (now appellants) urged the court to hold that the minute book complied with S.382 of Companies Act, 1968 and that the minutes were pasted on it in the regular way with no indication of any tampering with the book. Learned trial Judge in a ruling held that the minute book did not comply with S.382 of Companies Act and therefore for that non-compliance was not a minute book.
The Court of Appeal upheld decision of the trial court that the minute book tendered offended section 382 and S.138 of Companies Act.
➥ ISSUE(S) & RESOLUTION(S)
[APPEAL ALLOWED]
↪️ I. Whether the minute book held inadmissible and marked “rejected” by the learned trial Judge because it did not comply with section 382 of the Companies Act, 1968 is admissible or not?
RESOLUTION: IN APPELLANT’S FAVOUR.
[NO SPECIFIC OBJECTION WAS RAISED TO THE MINUTE BOOK SOUGHT TO BE TENDERED, AND SUCH WAS REJECTED PREMATURELY
‘Before a book is rejected as minute book, there must be raised an objection as to its admissibility, challenging its authenticity either as to falsification, or tampering, or not being in the proper form or that the book totally fails to answer the requirements of S.382(2) Companies Act, 1968. To simply assert that it did not answer the requirements of the section without more, is not enough; specific acts of non-conformity with the subsection must be pointed out. What transpired before the trial court as quoted earlier on certainly fell short of the requirements needed before the rejection of the book. The respondent’s counsel acted prematurely. However, the book now in court and marked as “rejected exhibit” is a bound volume titled “MINUTE BOOK.” The pleading of the appellant quoted earlier on, clearly stated in paragraph 3 that reliance would be placed on pages 49 and 51 of the minute book. The book is a bound volume with ledger index and it contains 480 pages. All the minutes are typed on foolscap paper and pasted to odd pages i.e. every other odd number page from page 1. In the minutes relevant to the instant appeal, pages 49 and 51, contain the pasting. Page 50 does not contain anything just as every other even number page from page 2 to page 48 contains no pasting of minutes. In the respondent’s counsel’s submission, there is no allegation of falsification or tampering; bald allegation of offending section 382 or 138 of the act is not enough. In Hearts of Oak’s case (supra), the documents were in loose form for appreciable period before they were held together in two volumes (not bound). Whereas in cases after 1948, the courts in England and Australia have looked the other way from decisions like Hearts of Oak (supra) and Re A Solicitor ex parte “The Prothonotary” (1939) 56 N.S.W.W.N. 53 and have held that it will be sufficient for minutes to be recorded in a rough scrapbook as in the old case of Legal and General Life Ass. Co. v. Gill (1878) 4 O. V.R. 204; or minutes pasted into a book were sufficient and that any person challenging them was to call for evidence as to when they were entered in order to show that they were not made within the proper period Donohue v. Joynton Smith (1948) 22 A.L.J. 62. This is because of the Companies Act, 1948 (11 and 12, 6 C. 36) whose provisions in S.145 and S.436 are the same as our S.138 and 382 respectively of Companies Act, 1968. Similar provisions exist in Australia.’
THE MINUTES ARE IN A BOUND BOOK AS PRESCRIBED BY THE LAW
‘I have myself examined the book. It is a bound minute book and had the title “minute book” impressed on it. The minutes were typed and pasted on alternate pages of the minute book but the typed pages are numbered serially in respect of the meeting to which it relates. The relevant minutes are at pages 49 and 51 of the book but the typed sheets are numbered pages 1 and 2. Section 382(1) and (2) of the Companies Decree does not render the minute book inadmissible as interpreted by the lower court. That section only cautioned in subsection (2) that: “where any such register, index, minute book or book of account is not kept by making entries in a bound book but by some other means, adequate precaution must be taken for guarding against falsification and for facilitating its discovery and where default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a fine.” The subsection deals with situation where the book is not kept by making entries in a bound book. It is quite proper to observe that the rejected minute book is a bound book and although the entries contained therein were not made by hand, they were nevertheless entries but only in a type written form. It cannot therefore be contended that the entries were not entries in a bound book. The Court of Appeal was therefore in error to have affirmed the ruling of the learned trial Judge rejecting the minute book from admission as evidence in the proceedings. The book is relevant and it is admissible as original document.’
THE DECISION OF HEARTS OF OAK RELIED UPON BY THE LOWER COURTS HAS BEEN OVERRULED
‘With the greatest respect the decision of the Court of Appeal, based as it were on the authority of Hearts of Oak Assurance Co. Ltd. v. Flower and Sons (supra) missed the important point about section 382 of the Companies Act, 1968, which is this just as its counterpart in U.K. section 436 of the Companies Act, 1948 (U.K.) overruled the decision in Hearts of Oak Assurance Co. v. Flower and Sons, the local legislation, i.e. section 382 of the Companies Act, 1968 renders that decision no longer applicable here.’]
.
.
.
✓ DECISION:
‘It is for the foregoing reasons that I found merit in this appeal and allowed it by setting aside the decision of the Court of Appeal which upheld the trial court’s ruling.’
➥ FURTHER DICTA:
⦿ CONDITION BEFORE A BOOK IS REJECTED AS A MINUTE BOOK
Before a book is rejected as minute book, there must be raised an objection as to its admissibility, challenging its authenticity either as to falsification, or tampering, or not being in the proper form or that the book totally fails to answer the requirements of S.382(2) Companies Act, 1968. To simply assert that it did not answer the requirements of the section without more, is not enough; specific acts of non-conformity with the subsection must be pointed out. What transpired before the trial court as quoted earlier on certainly fell short of the requirements needed before the rejection of the book. The respondent’s counsel acted prematurely. — Belgore JSC.
⦿ WHERE LEARNED TRIAL JUDGE IS DEAD, TRIAL WILL COMMENCE DE NOVO
In the meantime, information has reached this court that the learned trial Judge conducting the trial is dead. That being the case, trial has to commence de novo before another Judge of the High Court of Imo State, Aba Judicial Division. — Obaseki JSC.
⦿ ISSUE NOT ARGUED IN BRIEF OF ARGUMENT IS TAKEN AS ABANDONED
With regard to the third issue for determination, the point was not argued by the appellants in their brief of argument. It should therefore be taken as abandoned. — Uwais JSC.
⦿ THE MEANING OF ‘TO ENTER IN A BOOK’ IN RELATION TO MINUTE BOOK OF A COMPANY
The expression “to enter in a book” means no more than to record something in that book. When a type written sheet of paper is so attached, affixed or fastened to a page of a book that the type written sheet can no longer be removed from the page without destroying it, that type written sheet has in my view become a part of the book. In the circumstances, the particulars or details on the type written sheet have been, in my view, entered in the book in question. The book sought to be tendered in this case is designated on the front cover as a minute book. So it is a book kept for the purpose of recording minutes of a company. So it is evidently admissible as a minute book of the company under section 138(1) of the Companies Act 1968. Whether the minutes are evidence of the proceedings of the meeting in question will depend upon whether the requirement of section 138(2) of the act have been satisfied or not. I have analysed the requirements above. — Agbaje JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
Belgore, J.S.C.
➥ APPEARANCES
⦿ FOR THE APPELLANT(S)
Mr. Njoku.
⦿ FOR THE RESPONDENT(S)
Mr. Umezuruike.
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)
