LSP143: Burden of Proving the Existence of a Certificate of Incorporated

Good Afternoon, Readers. It’s a new week and we are here to discuss the burden of proof of the Certificate of Incorporation and the alleged negligence of the Corporate Affairs Commission (CAC) using the 2024 case of A. Dikko & Sons v CAC [2004] 8 NWLR (Pt 1939).

Evidence that a company has been registered is its certificate of incorporation. Just as every individual in Nigeria has a certificate of origin to show their state of origin, companies have a certificate of incorporation to verify their registration status. The Corporate Affairs Commission (CAC) is the body responsible for registering companies and issuing these certificates. According to the Companies and Allied Matters Act 2020 (CAMA), which is the principal legislation guiding companies affairs in Nigeria, the CAC has the authority to regulate and oversee company registrations.

The facts of the case under review was that the appellant, A. Dikko and Sons Ltd, was registered by the CAC as a private limited liability company on September 4, 2008, with Registration No. 771050. However, the CAC negligently registered another company with a similar name, A. Dikko and Sons Nigeria Limited, on December 17, 2008, with Registration No. 791987. This was a breach of Section 30 of CAMA, which prohibits the registration of a company by a name identical to an existing one or so similar that it could deceive.

Consequently, cheques meant for A. Dikko and Sons Ltd were deposited into the account of A. Dikko and Sons Nigeria Limited, and the promoter of the latter company withdrew and made off with the money. The appellant argued that the CAC’s negligence in registering a company with a nearly identical name caused their financial losses.

Both the Federal High Court and Court of Appeal needed the appellant to provide evidence of the existence of the second company to support their claim. While A. Dikko and Sons Ltd produced its certificate of incorporation, it failed to present the certificate of incorporation for A. Dikko and Sons Nigeria Limited. The Court stressed that the certificate of incorporation is essential as prima facie evidence of a company’s registration under Section 36(6) of CAMA. Without this certificate, the appellant could not prove that the second company existed. 

On appeal to the Supreme Court, the court ruled that, under the law of evidence, the appellant must prove its case based on its strength, not the weakness of the respondent’s case. The appellant’s inability to produce the certificate of incorporation for A. Dikko and Sons Nigeria Limited meant it could not establish the necessary facts to support its claim of negligence against the CAC.

The judgment is consistent with legal principles and statutory requirements. Section 30(1) of CAMA 2020 clearly states that no company shall be registered with a name identical to an existing company’s name or so similar that it could deceive. However, to prove such negligence, the existence of the allegedly negligent registration must be established through the production of the certificate of incorporation.

In legal precedents such as Odinaka & Anor v Moghalu (1992) 4 NWLR (Pt. 233) 1 and Heaven v Pender (1883) 11 QBD 503 at 507, negligence is defined as the failure to exercise the care which the circumstances demand. Similarly, Reptico S. A Geneva v. Afribank Plc (2013) 14 NWLR (Pt. 1373) 172 confirms that the certificate of incorporation serves as prima facie evidence of a company’s registration. Moreover, in NNPC v. Lutin Inv. Ltd. & Anor (2006) LPELR-2024(SC), the court also held that the conclusive proof of a company’s incorporation is through its certificate of incorporation.

On personal stuff yeah? I feel that had there indeed been an identical company and the appellant truly lost their money, the appellant should have sued that second company alongside the CAC. Additionally, the appellant could have requested the court, in the interest of substantive justice, to compel the production of the second company’s certificate of incorporation. While this approach might seem like a stretch, as it essentially shifts the burden of proof, introducing this additional step could have made the appeal more robust and intriguing. It might have even led to a new position in company law, thereby advancing our jurisprudence.

However, since this was not done, the position of the law is clear. Given the appellant’s failure to provide the second company’s certificate of incorporation, it did not meet the burden of proof required by law. Therefore, the court’s decision to dismiss the appeal is justified, as the appellant could not substantiate its claims of negligence against the CAC.

Thank you for reading❤️. See you next week🙏. And Happy Eid al-Adha Mubarak in advance to our amazing muslim readers. Send meat👍