“Learned Senior Counsel has conceded, and thus it is common ground that the Appellant at all times, acted in his capacity as the managing director and alter ego of the 2nd Defendant, Brila Energy. It is also correct that the locus classicus on this is Salomon v Salomon & Company Ltd (1987) AC 22. Therein, the House of Lords, in reversing the decision of the Court of Appeal, held that a limited liability company is separate and apart from its members and officers. In addition, Section 65 of the Companies and Allied Matters Act, 1990 provides-
“Any act of the members in general meeting, the board of directors or of a managing director while carrying on in the usual way the business of the company, shall be treated as the act of the company itself and the company shall be criminally and civil liable therefore to the same extent as if it were a natural person. Provided that:
(a) The company shall not incur civil liability to any person if that person had actual knowledge at the time of the transaction in question that the general meeting, board of directors, as the case may be had no power to act in the matter or had acted in an irregular manner or if, having regard to relationship with the company, he ought to have known of the absence of such powers or the irregularity.
(b) If in fact a business is being carried out by the company, the company shall not escape liability for acts undertaken in connection with that business merely because the business in question was not among the business authorized by the company’s memorandum.”
It is evident from these provisions that a limited liability company or an incorporated company is a different legal entity from its management. It has a separate and distinct life and existence. In other words, the officers and members of an incorporated company are covered by the company’s veil of incorporation and that veil cannot be lifted for the purpose of attaching legal responsibility or liability to its officers who are carrying on the usual business of the company. See also Oriebosi v Andy Sam Investment Co. Ltd (2014) LPELR-23607(CA) 23-24; Fairline Pharmaceutical Industries Ltd v Trust Adjusters Nig. Ltd (2012) LPELR 20860(CA) 30; Chartered Brains Ltd v Intercity Bank Plc (2009) LPELR 8697(CA) 88-22; Ogbodo v Quality Finance Ltd (2003) 6 NWLR (pt. 815) 147: Erebor V Major & Co. (Nig) Ltd (2000) LPELR-9129(CA) 14.
Also, the Black’s Law Dictionary 8th Edition at page 89, defines ‘alter ego’ thus:
“A corporation used by an individual in conducting personal business, the result being that a Court may impose liability on the individual by piercing the corporate veil when fraud has been perpetrated in someone dealing with the corporation.”
Nonetheless, in-roads have long since been made into this absolute position of the law such that there are exceptions to the rule. For instance, a director or managing director of a company shall be held liable or responsible when it is alleged and proved that he is a surety or a guarantor to the trade debt of the company. See Cooperative Bank Ltd v Obokhare (1996) 8 NWLR (Pt. 468) 579; & Afribank Nig Ltd v Moslad Enterprises Ltd (2007) LPELR-5126(CA) 19-10, paras G-D, Akaahs, JCA (as he then was).
Another exception has also been created by Section 10(1) of the Advance Fee Fraud Act which provides –
“Where an offence under the Act has been committed on the instigation or with the connivance of or attributable to any neglect on the part of a director, manager, secretary or other similar officer of the body corporate, or any person purporting to act in such capacity, he, as well as the body corporate where practicable shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.”
This therefore constitutes an exception to the law that the act of an officer of a company such as a director, manager or the like, shall be treated as the act of the company itself and he shall be criminally or civilly liable for such acts. It is therefore no surprise that this Court, in the recent case of Nwude v FRN (2010) 5 NWLR (Pt.1505) 471 at 482, when faced with similar facts and circumstances, held thus:
“Under Section 10 of the Advance Fee Fraud and other Related Offences Act, 1995, where an offence under the Act which has been committed by a body corporate is proved to have been committed on the instigation or with the connivance of or attributable to any neglect on the part of a director, manager, secretary, or other similar officer of the body corporate, or any person purporting to act in any such capacity, he, as well as the body corporate, where practicable shall be deemed to have committed that offence and shall be liable to be proceeded against and punished accordingly.”
The Appellant herein was charged with, among other offences, for the offence of obtaining money by false pretences contrary to Section 1(3) of the Advance Fee Fraud and Other Related Offences Act No. 14 of 2006. He therefore falls squarely under this exception to the rule in Section 65 of the Companies and Allied Matters Act.
In addition, I agree with learned Counsel to the Respondent that the decision of the Supreme Court in Oyebanji v State (2015) LPELR-24751(SC) is firmly applicable to the facts in the instant Appeal. In that case, the managing director of the company sought to escape liability from an allegation of stealing levelled against him by hiding behind the veil of incorporation, contending that by receiving monies for the purchase of tyres, tubes and granulated sugar from the complainant to the Police and defaulting on the agreement, it acted for the Company Baminco Nig Ltd, and so could not be held liable for the acts of the company. In upholding the decisions of the trial Court as well as that of the Court of Appeal, the Supreme Court, per Galadima, JSC held thus at pages 19-21 of the E-Report as follows:
“The Courts below rightly disregarded the corporate entity of the Baminco (Nig) Ltd and paid regard to the entities behind the legal facade or “veil” of incorporation in the interest of justice… In my respectful view, the veil of incorporation ought to be lifted in the interest of justice and in the circumstances of this case. There can be no better instance when the corporate veil can be lifted as in this case. The Court will not allow a party to use its company as a cover to dupe, defraud or cheat innocent individual or a company who entered into a lawful contract with it only to be confronted with defence of the company’s legal entity as distinct from its directors. As it has been observed elsewhere, most companies in this country are owned and managed solely by an individual, while registering the members of his family as the shareholders. such companies are nothing but one-man business! Hence there is the tendency to enter into contract in such company’s name and later on turn around to claim that he was not a party to the agreement since the company is a legal entity. See Akinwumi Alade v Alice (Nigeria) Ltd & Anor (2010) 12 SC (Pt. II) 59.
This case at hand is a case in which the law should disregard the corporate entity and pay regard to the entities behind the corporate veil. Section 35 of the Criminal Code cap. 38 vol. II Laws of Oyo State 2000… the law applicable at the time of trial provides thus… By this provision. the allegation of crime lifts the veil of corporate or voluntary associations and unmasks the face of the suspected criminal to face prosecution. Where the veil is lifted, the law will go behind the corporate entity so as to reach out to the individual member of the company whose conduct or act is criminally reprehensible.”
(Emphasis supplied)
In his own contribution to the Judgment, Fabiyi, JSC also stated inter alia thus at pages 25-26 of the E-Report
“Let me start my remarks by pointing it out right away that the appellant qualifies as the ‘alter ego’ of Baminco Nigeria Ltd… ‘Alter ego’ is said to mean ‘second self’. Under the doctrine of alter ego, [the] Court merely disregards [the] corporate entity and holds [the] individual responsible for [the] act knowingly and intentionally done in the name of the corporation. Ivy v. Plyler 246 Cal. App. 2d 548. To establish the doctrine, it must be shown that the individual disregarded the entity of the corporation and made it a mere conduit for the transaction of his own private business. The doctrine simply fastens liability on the individual who uses the corporation merely as an instrumentality in conducting his own personal business. Liability springs from fraud perpetrated not on the corporation but on third persons dealing with the corporation… Perhaps I should further say that the appellant was the directing mind and/or arrow head of Baminco Nigeria Limited when the role carried out by him is properly considered. The appellant was the human personality behind the activity of the company…
There is no shred of doubt that the fraudulent acts of the appellant called for the lifting of the veil of his company which opened him up for prosecution before the trial Court… He was rightly found guilty of stealing by conversion of the stated money.” (Emphasis supplied)
From the facts of the instant case, it is true that it was the 2nd Defendant, Brila Energy Ltd, who was awarded the permit to import about 13,000 metric tons of Premium Motor Spirit (PMS) by the PPPRA from Napal Petroleum Inc. Panama page 1 of Exhibit P1. The Appellant himself submitted Exhibit 1 to PPPRA supposedly to show that the product, PMS was imported from Napal Petroleum Inc. Panama and shipped to Nigeria through MT Overseas Limar, as the mother vessel, from the port of loading in Sao Sebastio in Brazil.
In addition, the Appellant submitted documents that showed that Saybolt was the company that conducted the inspection of the product on board the mother vessel MT Overseas Limar – pages 26 & 29 of Exhibit P1. He also submitted documents purported to emanate from Inspectorate Marine Services Nigeria Ltd as the inspectors who inspected the mother vessel to ensure that the consignment met the specifications – pages 71, 19, 22 and 27 of Exhibit P1. Also submitted were documents from Port Cargo Experts Ltd to show that it superintended the discharge of products from MT Overseas Limar to MT Delphina and MT Delphina to MT Dani 1 at Cotonou – pages 22, 27, 19 and 37 of Exhibit P1.
It is therefore these representations made in the bundle of documents attached to the letter submitted to the PPPRA under the hand of the Appellant as the alter ego of Brila Energy Ltd and admitted in evidence as Exhibit P1, that were held by the trial Court to be false representations which tended to show that the company had imported the petroleum product (PMS) from Napal Petroleum Panama in Brazil and shipped it through the mother vessel MT Overseas Limar. The forwarding letter of Exhibit P1 titled “Payment claim for import of 13,243.447 MT of PMS under the PSF scheme for 4th Quarter 2010′ was signed by the Appellant as the Managing Director/CEO of the company.
In addition to the provision of Section 10(1) of the Advance Fee Fraud Act, this Court in the case of Tsalibawa V Habiba (1991) 2 NWLR (Pt. 174) 461, per Ogundere, JCA (as he then was) stated thus on the import, significance and consequence of a signature on a document-
“It is common knowledge that a person’s signature, written names or mark on a document, not under seal, signifies an authentication of that document that such a person holds out himself out as bound or responsible for the contents of such a document. R v. Kent Justices L.R. 8 Q.B. 305.”
These documents were submitted by the Appellant to the Federal Government through its agency, the PPPRA, to support his claim for the payment of fuel subsidy to the company where he was the alter ego, which was indeed subsequently paid as claimed in the sum of N963, 796, 199.85
Furthermore, it is a fact as disclosed by Exhibit 3, the letter from the CAC to the EFCC, that the Appellant was the controlling share-holder, the Managing Director, alter ego and also directing mind of Brila Energy Ltd. After the import licence to import 13, 000 metric tonnes of PMS was awarded to Brila Energy Ltd, the Appellant again approached Enterprise Bank (formerly Spring Bank Plc) for a facility to finance the purchase and importation of the PMS. Thereafter, he furnished the Bank with all the relevant information in respect of the importation of the PMS, such as the name of the mother vessel, which he gave as MT Heli, and the daughter vessel which he gave as MT Delphina. Sometime later, he changed the name of the mother vessel to MT Panther (also referred to as MT Panta).
Thereafter, the Appellant again collated documents and sent them to the Petroleum Product Pricing Regulatory Agency Zonal office, Lagos and submitted the Notice of arrival informing of the time when the vessel would arrive. The Appellant submitted these documents on behalf of the 2nd Defendant, which documents were checked and forwarded to the PPPRA Head office in Abuja, which subsequently recommended the payment of the sum of N963, 796, 199.85 to the 2nd Defendant, based on the Appellant’s claim submitted to PPPRA and admitted in evidence at the trial Court as Exhibit P1. After this, the Enterprise Bank again received payment into the customer’s account.
From these actions and more carried out by the Appellant on behalf of the 2nd Defendant, the Appellant no doubt held himself out as the alter ego of the company. Therefore, where his actions in purporting to import PMS in line with the import permit issued to the company by PPPRA, and in submitting documentation which he knew to be false representations of how and where the PMS was sourced and discharged, which directly led to the payment of fuel subsidy to the company, the Appellant left himself wide open to be held responsible for his actions which were found to have been illegal and/or fraudulent – Section 10(1) of the Advance Fee Fraud Act. The Appellant was therefore rightly prosecuted and along with the 2nd Defendant for the crimes alleged against the company. It is for these reasons that I resolve issue one in favour of the Respondent.”Per SANKEY, J.C.A. (Pp. 16-28, Paras. C-C); JUBRIL v. FRN (2018) LPELR-43993(CA)
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