CAC Lawyers Cannot Depose To Statutory Declaration Of Compliance: Recent FHC Decision In Nkwocha V. Min Of Industry {DOWNLOAD THE JUDGEMENT}

Click Here To Download The Judgement INTRODUCTION On the 5^th of April 2017, the Federal Minister of Industry, Trade and Investment amended the Companies Regulations 2012 to amongst others, widen the scope of persons who can file company incorporation documents, and permit the Corporate Affairs Commission (CAC) through its lawyers to depose statutory declaration of compliance required under Section 35 of CAMA in some instances. These amendments were published by the CAC on its website and circulated through various media. The Recent decision of the Federal High Court sitting in Kano delivered on the 19^th of November 2018 in Suit No: FHC/KN/CS/86/2018-Nkwocha Ernest v. Minister of Industry, Trade and Investment & 2 Ors seeks to tests the exact scope of the regulation and limits to which it may be applied by the CAC. FACTS Following the amendments, the Applicant in the suit, a legal practitioner practicing in Kano State, commenced an action in the Federal High Court sitting in Kano via an Originating Motion on Notice dated the 10th day of May 2018 seeking the following reliefs;

1. A declaration that Regulation 11 (b) of the Companies Regulations, 2012 as amended on the 5th day of April, 2017 by the 1^st  Respondent without any legal backing threatens his right to life, is discriminatory towards him, violates his fundamental right to freedom to exercise  his profession without illegal restriction and constitutes an infringement of his right to dignity of human person and freedom from discrimination, and therefore unconstitutional, null and void.
2. A declaration that the actions of the 2^nd Respondent in causing to be lavishly published on both print and electronic media, the information suggesting irresistibly to no other rational hypothesis that his professional service vis-a-vis registration of companies in Nigeria are no longer mandatorily required by law vide Regulation 11 (b) is unlawful, illegal and unconstitutional.
3. A declaration that the joint actions and inactions of the 1^st and 2^nd Respondents with regards to the said Regulation threatens his right to life, violates his fundamental right to freedom from discrimination, violates his right to freedom to exercise his profession without restriction and constitutes an infringement of his right to the dignity of human person.
4. A declaration that the psychological torture meted out to the Applicant by the 1^st and 2^nd Respondent by wrongly representing to the general public that his services as a lawyer is no longer mandatorily required by law violates his right to human dignity.
5. An order of perpetual injunction restraining the Respondents from further violating his fundamental human rights by the publishing of the said information to the general public.
6. An injunction restraining the servants and employees of the 2^nd Respondent (i.e. the CAC) who are legal practitioners from further deposing to or signing the statutory declaration of compliance with section 35(3) of the CAMA.

The Lawyer also sought an order mandating the removal of the publication from CAC website as well as Three Hundred Million Naira (N300,000,000) in exemplary damages. NOTICE OF PRELIMINARY OBJECTION Upon Service of the Originating Motion on Parties, the 3^rd Respondent (Attorney General of the Federation) filed a preliminary objection seeking that the matter be struck out for lack of jurisdiction or in the alternative that it be struck out since the suit disclosed no cause of action against the 3^rd Respondent and he was not a proper party to be sued. According to the 3^rd Respondent Counsel, the complaint of the Applicant arose from acts which occurred in Abuja. The FHC in Kano was therefore not ceased of jurisdiction to determine a Fundamental Rights action which occurred in Abuja. According to him, it is only the High Court or the Federal High Court in the State where the infringement occurred that has jurisdiction to entertain the suit. DECISION ON PRELIMINARY OBJECTION In resolving this preliminary point in favour of the Applicant, the Court held: “The Applicant stated that his practice is in Kano and his fundamental right was breached in Kano. In any case the jurisdiction of the Federal High Court is territorial (i.e. it covers the entire country) by virtue of section 19 (1) of the Federal High Court Act, divisions of the court are for administrative conveniences. See the case of Akeredolu v. Abraham (2018) 10 NWLR Pt. 1628 p: 592. I therefore resolve this issue against the 3rd Respondent” On the second ground of objection as to proper parties to sue, the Court held that: Parties in an action have been classified into three namely (a) proper parties, (b) desirable parties and (c) necessary parties…I have critically examined the nature of this case and I am of the view that the 3^rd Respondent though may not be a necessary party, is a proper or desirable party in this suit and I so hold. The 3^rd Respondent may not be interested in this case, but she is made a party for some good reason and that is because as the Attorney General of the Federation, she is the custodian of the Constitution, Acts of the National Assembly and other subsidiary legislations made by agents of the Federal Government which the 1^st and 2^nd Respondents are. Having dismissed the Court Proceeded to determine the main suit. ISSUES The Applicant in his Originating Motion on Notice formulated five (5) issues for determination, summarized inter alia as follows:

1. Whether the Applicant is entitled to the Fundamental right to freedom to exercise his profession without illegal restriction, freedom from discrimination and respect for dignity of human person.
2. Whether Sections 585 and 609 of CAMA which the 1^st Respondent relied on in making Regulation 11 (b) is still a valid law in Nigeria, and if it is, whether it empowers the 1^st Respondent to make such regulation.
3. Whether Regulation 11(b) and the joint actions and inactions of the 1^st and 2^nd Respondents violates the Applicant’s Fundamental rights as stated.
4. Whether Regulation 11(b) is a permissible derogation from his Fundamental rights constitutionally ensconced.
5. Whether he is entitled to Exemplary damages against the Respondents in addition to General Damages.

ARGUMENTS OF COUNSEL The Applicant argued inter alia that XVII, including sections 585 and 609 of CAMA, have since been repealed by section 263(1)(d) of the Investment And Securities Act (1999 No. 45) LFN 1990 and have remained repealed in the extant Investment And Securities Act Cap. 124 LFN 2004. Therefore the 1^st Respondent could not validly draw any power from the repealed provisions of a law to make Regulation 11 (b). Hence same regulation is invalid in law. Counsel stated that the Respondents violated his fundamental right to freedom to exercise his profession, his fundamental right to freedom from discrimination and his right with respect for the dignity of human person and even threatens his right to life. According to him, employees/servants of the CAC (i.e. the 2^nd Respondents) who are legal practitioners should not be deposing to the statutory declaration of compliance requirement of section 35(3) of CAMA on the grounds that doing so is contrary to Rule 8(2) of the Rules of Professional Conduct for Legal Practitioners 2007. It was also the Applicant’s argument that Regulation 11 (b) is a direct amendment of section 35(3) of CAMA and it cannot stand because the Minister (1^st Respondent) cannot amend an Act of the National Assembly. Finally, the Applicant contended that the Respondents acted out of malice, cruelty, insolence and flagrant disregard of law and he was therefore entitled to exemplary damages in addition to general damages. RESPONDENT’S ARGUMENT In response, the 2^nd Respondent  argued that the clear provision of Section 16 of CAMA permits the 1^st  Respondent to “make regulation generally for the purpose of this Act”, hence the Minister has power to make regulations to cover the entire sections of CAMA. He contended that the position of the Applicant that sections 585 and 609 of CAMA have been repealed is preposterous as the above sections are extant provisions of CAMA that empowers the Respondent to make the still operative Companies Regulation under Part B and C of CAMA. Counsel submitted that section 263(1)(d) of the Investment and Securities Act is not relevant to the issue of regulation making and the law has not divested the power of the 1^st Respondent. Further, the 2^nd Respondent contended that legal practitioners in the employment of the 2^nd Respondent have powers to practice as legal practitioners which includes signing pleadings, appearance in court and making declaration of compliance. Furthermore, the 2^nd Respondent submitted that the regulation does not foreclose the directors or subscribers from engaging the services of legal practitioners in private practice to make such statutory declaration of compliance and that it is only where the directors or subscribers are not able to engage or afford the services of a legal practitioner that Regulation 11 (b) can be activated-for ease of doing business in Nigeria. Counsel submitted that it will amount to a negative construction if officers in the service of the 2nd Respondent (CAC) are authorized by law to appear in court and can carry out all functions of legal practitioners but are precluded from making a mere statutory declaration of compliance. 2^nd Respondent noted that the main issue in the suit was Regulation 11 (b), and the suit had nothing to do with the fundamental rights of the Applicant. Counsel said the main question to be asked was whether there was any fundamental human right in the statutory declaration of compliance which the Applicant averred deprived him of his means of living via legal practice? And assuming without conceding that the regulation was illegally made the Applicant ought to challenge the power of the Respondent by way of originating summons or by writ of summons rather than a fundamental right action. Counsel also submitted that there was no material before the court to warrant any damages. The 3^rd Respondent in its own argument averred that the Applicant failed to establish any case or infringement by the 3^rd Respondent. JUDGEMENT On the issue whether Sections 585 and 609 of CAMA still exist in law, and if they do, whether  they empower the 1^st Respondent to make Regulation 11 (b), the Court held: “Section 263(1) (d) of the Investment and Securities Act Cap. 124 L.F.N. 2004 (In force on the 31^st  day of December, 2002)…provides as follows;

263. Repeals and savings

(1) The following enactments are hereby repealed (a)… (d) Part XVII of the Companies and Allied Matters Act.(cap. 59 L.F.N. 1990) In Volume 7 of the Laws of the Federation of Nigeria, updated to the 31st of December 2010, section 263 of Investment and Securities Act Cap. 124 L.F.N. 2010 does not have any provision similar to section 263 (1) (d) of the law reproduced above. Section 263 of the 2010 enactment provides as follows; It could be seen from the reproduced relevant sections of the Investment and Securities Act, that though the law updated up to December 2002 in section 263(1)(d) repealed Part XVII of the Companies and Allied Matters Act, the LFN revised up to the 31st of December 2010 in section 263 does not have such provisions. The Applicant did not refer this court to such a provision nor quoted it. It therefore follows that Part XVII of the Companies and Allied Matters Act Cap 124 LFN 2010 has not been repealed. Thus sections 585 and 609 of CAMA are extant laws and have not been repealed… I agree with the submissions of learned counsel for the 2nd Respondent that the above provisions (of Section 16, 585 and 609 of CAMA) are very clear and unambiguous that the Minister has the powers to make regulations under the CAMA. To ‘make regulation generally for the purpose of this Act’ used in section 16 of CAMA presupposes that the Minister has power to make regulations to cover the entire sections of CAMA…. It is therefore my findings that the provisions of Part XVII of the Companies and Allied Matters Act has not been repealed by the provisions of section 263 of the Investment and Securities Act Cap 124 LFN (The Revised Edition—Lawsof the Federation of Nigeria) Act 2004) updated up to the 31 st of December 2010. On whether legal practitioners in the employment of the CAC can depose the statutory declaration of compliance the Court held: “…The Statutory Declaration of Compliance is in the form of an opinion that all the requirement of CAMA for the registration of a company has been complied with. Legal practitioners in the employ of the 2^nd Respondent (CAC) are barred from giving such an opinion to the 2^nd Respondent. Section 35(3) of CAMA is very clear on whom to do such declaration-a legal practitioner. It is my view that the section does not anticipate that legal practitioners in the employ of the 2^nd Respondent will perform the act otherwise the section would not have provided that the statutory declaration ‘…shall be produced to the Commission’ and further provided ‘..that where the Commission refuses a declaration, it shall within 30 days of the date of receipt of the declaration send  to the declarant a notice of its refusal giving the grounds of such refusal.” On whether the Regulation 11 (b) amounts to an amendment of CAMA and whether the 1^st Respondent has the power to do so the Court held: “Again the word used in Regulation 11 (b) is ‘shall’ thus expressly excluding other legal practitioners. It is my view that this is an amendment to section 35(3) of CAMA. The 1^st Respondent has no such powers, and none was conferred to it by the provisions of sections 16, 585 and 609 of CAMA whether expressly or by implication. On whether the Regulation and the joint actions and inactions of the 1^st and 2^nd Respondents violate the Applicant’s Fundamental rights, the Court held: “Regulation 11(b) provides as follows: 11 (a) Where application for new registration under Part A is presented by any of the persons mentioned in Regulation 11 (a) (ii) above, the Statutory Declaration of Compliance shall be deposed to by a legal practitioner in the service of the Commission and the presenter shall pay the sum of N500 only to the Commission as cost of notarization.’ Regulation 11 (a) provided that ‘An application for new registration may be delivered to the Commission in hard copies in designated location or through electronic means by any of the following persons;

1. A Legal Practitioner, Chartered Accountant or a Chartered Secretary duly accredited by the Commission as an agent;
2. A first Director or Subscriber to the Memorandum of Association in respect of new registration under Part A of CAMA;

• A Proprietor or Partner in respect of application under Part B of CAMA;

1. A Trustee in respect of new registration under Part C of CAMA;
2. A duly appointed Secretary in respect of post-incorporation application under Parts A and C of CAMA’

The quarrel of the Applicant is that the provision allowing a first director or subscriber to a Memorandum of Association in respect of new registration under Part A of CAMA amounted to an infringement of his fundamental right of freedom to exercise his profession, right to freedom from discrimination and his right to respect of the dignity of human person and threatens the Applicant’s right to life. I cannot see how this is so. I my humble view, the provision have not prevented prospective clients from using the services of the Applicant and indeed private legal practitioners. Before complying with the declaration of the statutory form of compliance, all the incorporation forms under part A or Business Registration or Incorporated Trustees forms under Parts B and C would have been filled by any private legal practitioner engaged by the prospective Directors or Subscribers. And this presupposes that the legal practitioners would have been engaged and fees paid. In any case even if this is not so, a prospective client who decides not to engage a private legal practitioner or the other persons mentioned in the said Regulation i.e Chartered Accountant or a Chartered Secretary does so at his own risk. If I may add, a litigant can prosecute or defend himself in court   that does not amount to denying legal practitioners their fundamental rights in any guise. On the issue of damages the Court in refusing the grant held “From the evidence presented before this court by the Applicant, I cannot see the injury caused to the Applicant by the act of the 1^st Respondent in making Regulation 11(b)… I must therefore resolve this issue against the Applicant. I so hold.” In the Final Analysis the Court held the suit to succeed in part and accordingly granted relief (f) i.e that an injunction restraining the servants of the 2^nd Respondent who are legal practitioners from further deposing to or signing the Statutory Declaration of Compliance requirement of Section 35(3) of the Companies and Allied Matters Act CAP C20, Laws of the Federation of Nigeria 2004. IN CONCLUSION There are many grey areas left by the decision of the Federal High Court in the case of Nkwocha Ernest v. Minister of Industry, Trade and Investment & 2 Ors. For instance, what authority was the basis of the decision of the Court that a law or provision of law which had been expressly repealed in a statute, but which repeal provision is omitted or removed in a subsequent reprint of the Federal Gazette has no longer been repealed. Another question is how it was possible that the matter proceeded to be decided on the basis of the Fundamental Rights application, particularly since the orders granted did not relate to the fundamental rights claims. Further, the Court did not specifically establish whether or not the Applicant had a right to right to freedom to exercise his profession without illegal restriction and constitutes an infringement. Notwithstanding lingering questions, the case of Nkwocha Ernest v. Minister of Industry, Trade and Investment & 2 Ors is authority, until over turned on appeal, that:

1. A legal practitioner who is in the employment of the CAC cannot depose statutory declaration of compliance for CAC applications.
2. Regulation 11 is a valid and subsisting law in Nigeria.

Oliver Omoredia writes For TheNigerialawyer]]>