AWOSEDO v. UAC PROPERTIES (DEV) CO. PLC & ORS (2022)

AWOSEDO v. UAC PROPERTIES (DEV) CO. PLC & ORS

(2022)LCN/16321(CA)

In the Court of Appeal

(LAGOS JUDICIAL DIVISION)

On Thursday, May 12, 2022

CA/L/24/2018(R)

Before Our Lordships:

Obande Festus Ogbuinya Justice of the Court of Appeal

Abdullahi Mahmud Bayero Justice of the Court of Appeal

Muhammad Ibrahim Sirajo Justice of the Court of Appeal

Between

OLAWUNMI OLAJIDE-AWOSEDO APPELANT(S)

And

1. UAC PROPERTIES DEVELOPMENT COMPANY PLC 2. GRANT PROPERTIES LIMITED 3. FIBIGBOYE ESTATES LIMITED 4. KNIGHT BROOK LIMITED RESPONDENT(S)

RATIO

THE POSITION OF LAW ON PRELIMINARY OBJECTIONS

THE POSITION OF LAW ON REVIVING THE RIGHTS TO DEAL WITH THE ASSETS INHERENT IN A RECEIVERSHIP

Under the AMCON Act, the Directors of the Debtor Company are rendered functus officio. The assets and the entire undertaking of the Debtor Company remain under the control of the Receiver/Manager and he alone has the right to deal with these assets as long as he remains the Receiver/Manager. The rights to deal with the assets inherent in the receivership can only be revived at the end and/or termination of the Receivership. The Receiver/Manager has statutory power to continue with the prosecution or defence of any ongoing action or legal proceeding or to institute fresh action on behalf of the company in receivership. Even where there is a challenge to the powers of the Receiver/Manager, unless and until the appointment is set aside, his powers over the assets and subject matter within his receivership remains sacrosanct and supersede the powers of the Directors of the company under his receivership. See European Soaps and Detergent Limited vs. MW Beer & Co. Ltd (supra); Akinwale-Oguntimehin & Ors vs. Trade Bank Plc (2016) LPELR-40581 (CA); Lawson & Ors vs. Polfa Nig. Plc & Ors (2019) LPELR-48931; Uthman vs. Canvass Farms Nig. Ltd & Ors (2021) LPELR-54653 (CA). PER SIRAJO, J.C.A

THE RIGHT OF APPEAL FROM THE DECISION OF A FEDERAL HIGH COURT OR HIGH COURT TO A COURT OF APPEAL

Section 243 of the Constitution of the Feral Republic of Nigeria, 1999 (as altered) provides:

“(1). Any right of appeal to the Court of Appeal from the decisions of the Federal High Court, or a High Court conferred by this Constitution shall be –
(a). Exercisable in the case of civil proceedings at the instance of a party thereto, or with the leave of the Federal High Court, or High Court or the Court of Appeal at the instance of any other person having an interest in the matter…”
This constitutional provision has extended the right of appeal from the decisions of the High Court to the Court of Appeal not only to the parties in the cause or matter but also to non-parties who have interest in the subject matter of the appeal. The non-party must however seek for and obtain leave before he can appeal to the Court of Appeal. He must also show that his interest is genuine and legally recognizable and similar to the interest of the party he seeks to join. He must show that the decision prejudicially affects his interest. In other words, to succeed in the application, the Applicant must show that he was aggrieved by the decision or that the decision wrongfully denied him something or wrongfully affected his title to something. See Societe Generale Bank Nig. Ltd vs Afekoro (1999) LPELR-3082 (SC); Abdullahi vs. Nigerian Army & Ors (2018) LPELR-45202; CPC vs. Nyako & Ors (2011) LPELR-23009 (SC); Onuegbu & Ors vs. Governor of Imo State & Ors (2019) LPELR-47535 (SC). It is stressed that an Applicant for leave to appeal as an interested party must show that the decision has caused him some grief, loss, disadvantage or affected his title, rights or position; Jikantoro vs Dantoro (2003) 4 NWLR (Pt.809) 42. PER SIRAJO, J.C.A.

THE POSITION OF LAW ON THE PURPOSE OF GRANTING LEAVE FOR A PARTY TO BE JOINED AS AN INTERESTED PARTY ON APPEAL

MUHAMMAD IBRAHIM SIRAJO, J.C.A. (Delivering the Leading Judgment): This ruling is in respect of an application by Olawunmi Olajide-Awosedo filed on 24/10/2019, seeking to be joined as a Co-Respondent in this appeal. The grounds for the application as stated on the face of the motion paper are-
1. The Applicant is one of the Directors of the 1st and 2nd Respondent (sic), who initiated and instructed Solicitors to represent them in this matter at the High Court of Lagos State.
2. Subsequent to the judgment, the Asset Management Corporation of Nigeria has proceeded despite pending applications for injunction to appoint Mr. Lanre Olaoluwa of Matrix Solicitors as a Receiver over the assets of the Respondents
3. Mr. Lanre Olaoluwa of Matrix Solicitors has directed Solicitors to take over representation for the 1st and 2nd Respondent (sic) in this matter as well as the 3rd Respondent without serving the Solicitors on record with a formal application or notice of change of counsel.
4. The Solicitors appointed by the Receiver have no intention of defending this appeal and the Receiver is proceeding to compromise and sanction the illegal acquisition of 10 hectares of the land pledged as security which the trial Court found the Appellants acquired a part of wrongfully and declared as trespassers.
5. The party seeking to be joined as Co-Respondent is an interested party who has a duty to preserve the assets of the company despite the Receivership and will be prejudiced if the appeal is not defended robustly as the Asset Management Corporation is holding the Directors personally liable for the debt of the 1st and 2nd Respondent (sic).
6. None of the parties will be prejudiced if this application is granted.
7. It will be in the interest of justice to grant the application.

In support of the application is an affidavit of 28 paragraphs with paragraph 6 having several sub-paragraphs, sworn to by the Applicant, Olawunmi Olajide-Awosedo. Annexed to the affidavit are five exhibits marked 1–5. There is also a written address settled by J.A. Badejo, SAN, with Laolu Owolabi, Wale Irokosu, F.D. Oloruntoba and Agba Eimunjeze, but endorsed by Laolu Owolabi as the Author. In response to the application, the Appellant filed two processes, to wit: Notice of preliminary objection and a counter-affidavit. The preliminary objection was predicated on the following grounds:
1. This appeal is against the judgment delivered on the 2nd June 2017 by Hon. Justice A.J. Bashua of the High Court of Lagos State in favour of the 1st and 2nd Respondents.
2. The case of the 1st and 2nd Respondents at the lower Court is that they are owners of land measuring 50.349 hectares situate at Igboshuku Village, behind Femi Okunu Housing Estate, Lekki Peninsula Scheme II, Eti Osa LGA of Lagos State.
3. The claim of the 1st and 2nd Respondents at the lower Court is in respect of the land mentioned above and not the ownership of the 1st and 2nd Respondents being a (sic) duly registered company (sic).
4. The Applicant herein was not named party at the lower Court. The instant appeal relates to interest in a parcel of land and not ownership interest in the 1st and 2nd Respondents.
5. The issue of directorship of a company is not the matter in the instant appeal and this Court lacks the jurisdiction to determine same.
6. This application will prejudice the Appellant and delay the timely determination of this appeal as same lacks merit.
7. It will be in the interest of justice to dismiss this application.

Both the Appellant’s counter-affidavit and the affidavit in support of the Appellant’s preliminary objection were sworn to by one Oluwatosin Kolawole, Title and Documentation Manager of the Appellant. There are written addresses in support of both the preliminary objection and the counter-affidavit of the Appellant settled by Chief Olalekan Yusuf, SAN, with Lawal Alebiosu, Abbas Oyeyemi and Victor Ozoudeh, signed by Lawal Alebiosu. The 1st and 2nd Respondents also filed a counter-affidavit of 24 paragraphs deposed to by one James Akpan, a Litigation Officer in the law firm of Messrs A. Mouka & Co., counsel to the 1st and 2nd Respondents, annexed to which are exhibits 1 and 2. The written address was settled by Alex Mouka and Olusola Jolayemi, but signed by Olusola Jolayemi.

The Applicant filed reply affidavits to the counter-affidavits of the two set of Respondents, both of which were accompanied by written address. The 3rd Respondent in the substantive appeal, Knight Brook Limited, did not file any process in this application.

The background facts in support and relevant to this application, as gathered from the affidavit of the Applicant can be summarized as follows: The Applicant is the Managing Director of the 1st and 2nd Respondents. The 3rd Respondent, Knight Brook Limited, owned by the 1st and 2nd Respondents became seized of a large parcel of land situate and lying at Igboshuku Village, behind Femi Okunu Housing Estate, Lekki Peninsula Scheme II known as Victory Park Estate. The 1st Respondent, Grant Properties Limited obtained facilities from consortium of Banks to sand fill and develop the property. As security for the facility, the 1st and 2nd Respondents transferred their shares in the 3rd Respondent to the four Banks that made up the consortium and all the Directors of the 3rd Respondent resigned. The Banks and the 1st Respondent put in place a Project Implementation Committee. The Banks failed to make additional funds available for the project and proceeded to transfer the loan and the security to Assets Management Corporation of Nigeria. Shortly after that, the Applicant and his late father, Reverend Olajide Awosedo discovered certain persons carrying out construction on the land and upon inquiry they were told that the persons were employed by the Appellant. The 1st and 2nd Respondents instituted suit No. LD/576/2012 against the Appellant. During trial, it became clear that Sterling Bank, one of the lending Banks, transferred 10 hectares of the land to one Real Estate Development Company Limited, who in turn transferred 2.4231 hectares to the Appellant. The lower Court entered judgment against the Appellant and in favour of the 1st and 2nd Respondents, hence this appeal.

The 1st and 2nd Respondents filed suit No. FHC/L/CS/1742/2015 against AMCON and the Banks together with an application for injunction but was struck out on the basis of preliminary objection by AMCON. They appealed against the order striking out the suit. While their application for mandatory order on AMCON to maintain status quo was pending, AMCON appointed Mr. Lanre Olaoluwa, Managing Partner in Matrix Solicitors, a firm that had earlier represented AMCON in the suit before the Federal High Court, as the Receiver/Manager over the Assets of the Respondents. The appointment of Mr. Lanre Olaoluwa as Receiver/Manager of the 1st and 2nd Respondents, according to the Applicant, was meant to undermine the pending application before the Federal High Court and also to overreach the rights and interest of the Respondents/Applicants over the subject matter of this pending appeal. Despite the fact that the 1st and 2nd Respondents had earlier appointed Bonajo Badejo & Co. to represent them in this appeal, Mr. Lanre Olaoluwa appointed the firm of Alex Mouka & Co. to represent the 1st, 2nd and 3rd Respondents in this appeal without serving their Solicitor on record. He accused Mr. Lanre Olaoluwa of compromising the judgment of the Lagos High Court entered in favour of the Respondents without the consent of the Directors who are now personally liable for the debt. That the value of the parcel of land adjudged to be trespassed upon by the Appellant and others is sufficient to discharge the Directors of any personal liability. He stated that in another suit filed by AMCON against the Respondents, Suit No. FHC/L/CS/744/2017, Mr. Lanre Olaoluwa did not appoint counsel to represent the 1st and 2nd Respondents, even though he appointed counsel for the 3rd Respondent. In the process, default judgment was obtained against the Respondents. That it has become necessary for him to join this appeal as a Co-Respondent in order to protect the interest of the 1st and 2nd Respondents as well as his personal interest in the property, subject matter of this appeal.

In the Appellant’s affidavit in support of the preliminary objection and the counter-affidavit against the application for joinder, the deponent stated that the claim of the 1st and 2nd Respondents at the lower Court was in respect of their ownership of land in which the Applicant has no existing right, and not the ownership of the 1st and 2nd Respondents. That Directorship of the Respondents is not an issue in the instant appeal just as the issues raised by the Applicant herein are different from the issues in the instant appeal. The deponent stated that all the contentions of the Applicant in his affidavit were subject of litigation in other appeals, such as CA/L/146/2018 and CA/L/698/2018, which were all determined against the Applicant. That the Applicant was aware of the suit at the lower Court and willfully opted to be a witness instead of joining as a party. That the Applicant is not a necessary party in this appeal and he does not have existing legal right in the land which is the subject matter of this appeal. That this application will prejudice the Appellant and delay the timely determination of this appeal.

In the counter-affidavit of the 1st and 2nd Respondents, the deponent stated that on the application of counsel to the Claimants at the lower Court, the name of the 3rd Claimant, Knight Brook Limited, was struck out and joined as the 2nd Defendant. That upon his appointment as Receiver/Manager over the assets of the Respondents and some other companies owned by the Applicant and his father, Rev. Olajide Awosedo, Mr. Lanre Olaoluwa took over the affairs and management of the Respondents, including appointment of counsel for them in all pending cases. He wrote to Mr. Bonajo Badejo, SAN, informing him of the appointment and withdrawing his legal representation for the Respondents in all proceedings. The acknowledged copy of the letter dated 28/03/2018 is exhibit 1 annexed to the counter-affidavit. Mr. Lanre Olaoluwa thereafter appointed Messrs A. Mouka & Co. as counsel to the 1st and 2nd Respondents in this appeal and several other matters.

The deponent stated that the issue of the power of a Receiver/Manager to appoint legal representation for a Company in Receivership was determined and upheld in the judgment of this Court in appeal No. CA/L/146/2018 between Reverend Olajide Awosedo vs. AMCON & Others. That the ownership of the 1st and 2nd Respondents was not in issue at the lower Court and in this appeal, and that the 1st and 2nd Respondents are companies in receivership with separate existence from their Directors. Finally, that the Applicant is not a necessary party in this appeal.

The Applicant filed Replies to the counter-affidavits filed on behalf of the Appellant and the 1st and 2nd Respondents, denying the depositions in the counter-affidavits and reiterating the contents of his affidavit in support of the application.

The sole issue formulated by the Applicant in his written address is this:
“Whether the Applicant has disclosed sufficient interest and is likely to (sic: be) prejudiced if not joined as a Co-Respondent to this appeal.”

In the written address in support of the preliminary objection, and the one in support of the counter-affidavit against the Applicant’s motion, the Appellant formulated a lone issue for determination thus:
“Whether the Applicant has disclosed sufficient grounds before the Honourable Court to be joined as a party in the instant appeal.”

On the part of the 1st and 2nd Respondents, the issue formulated in their written address was couched as follows:
“Whether in the circumstances of this case, the Applicant has disclosed sufficient interest to be joined as a Co-Respondent to this appeal.”

The issues formulated by all the parties are one and the same thing, as all the issues centered on whether the Applicant disclosed sufficient interest to warrant the grant of the application.

Preliminary Objection.
I shall start with the preliminary objection of the Appellant since it has to be determined first before anything else. By its preliminary objection, the Appellant sought for an order dismissing the application of the Applicant herein for lacking in merit and for being incompetent. I have reproduced the grounds upon which the preliminary objection was predicated at the beginning of this ruling. I have carefully perused the argument of counsel as contained in the written address filed along with the preliminary objection. Learned counsel’s argument was centered on the non-disclosure of sufficient interest or grounds by the Applicant to warrant his joinder as a Co-Respondent in the appeal. The arguments proffered by counsel in support of the Appellant’s preliminary objection are actually arguments against the substantive application for joinder.

It will not be out of place to reiterate that a preliminary objection is a procedure normally resorted to by a Defendant to a suit, a Respondent to an application or a Respondent to an appeal in opposition to the hearing of a suit, an appeal or an application on the ground that the suit, appeal or application is incompetent, thereby robbing the Court of the jurisdiction to hear it. The incompetence of the process impacts negatively on the jurisdiction of the Court. The purpose of preliminary objection is to contend that the suit, appeal or application is fundamentally defective or incompetent, and for that reason, to terminate the hearing in limine. See Sani vs. Okene Local Government Traditional Council (2008) LPELR-3003 (SC); Okereke vs. Yar’adua & Ors (2008) LPELR-2446 (SC); Obasi vs. Mikson Establishment Industries Ltd (2016) LPELR-40704 (SC); Garba vs. Mohammed & Ors (2016) LPELR-40612 (SC); Igbeke vs. Okadigbo & Ors (2013) LPELR-20654 (SC); Kente vs. Ishaku (2017) LPELR-42077 (SC). In this preliminary objection, the Appellant advanced two reasons in his prayers before the Court why the application should be dismissed – (1) for lacking in merit and; (2) for being incompetent. Preliminary objection is usually raised against the regularity or competence of a Court process. It is not raised to attack the merit of a suit, an appeal or an application. The merit of an application, such as the instant one, can only be attacked or challenged by way of a counter-affidavit and can only be fully determined after hearing of the application that is objected to. In this wise, the first arm/reason for the Appellant’s prayer in this application is in itself incompetent. A Court cannot be asked via preliminary objection to dismiss an application for lacking in merit, as done by the Appellant in this preliminary objection. That reason, being alien to preliminary objection, is discountenanced. I shall now revert to the second reason. Incompetence or defect in Court process is one of the reasons for raising a preliminary objection. Another reason is the want of jurisdiction on the part of the Court before whom a process was filed. In both cases, the defect/incompetence or the want of jurisdiction must be expressly and concisely stated as the ground(s) for the preliminary objection. In the same vein, the issue for determination must be tailored to reflect the ground(s) for the objection. Upon going through the grounds for the preliminary objection, I discovered that none of the grounds challenges the competence of the application or points to any defect in the application. Ground 5 appears on the surface to be a challenge to the jurisdiction of the Court to hear the application. For emphasis, I reproduce the said ground 5 here. It says:
“The issue of directorship of a company is not the matter in the instant appeal and this Court lacks the jurisdiction to determine.”
This application is not about the directorship of a company, it is about whether the Applicant has disclosed sufficient interest that will enable this Court to grant his application for joinder. The issue of directorship of a company is yet to be raised in the appeal as the Applicant is not yet a party in the appeal. What the Appellant tries to do here is to attack the Application on an anticipatory/speculatory action. The law does not work that way. It is only when the Applicant is joined as a party and he introduces the issue of directorship of a company that the Appellant can object to the jurisdiction of the Court to entertain that issue as same was not raised at the trial Court. As it stands now, that objection to the Court’s jurisdiction has no basis in law as it is anticipatory and amounts to putting the cart before the horse.

To worsen the position of the Appellant in its preliminary objection, is the issue for determination as formulated by counsel in the written address in support of the preliminary objection as follows:
“Whether the Applicant has disclosed sufficient grounds before the Honourable Court to be joined as a party in the instant appeal.”

The issue thus formulated directly touches and deals with the merits of the application, it has no relationship with either the defect/incompetence of the application or the lack of jurisdiction of this Court to entertain the application. The Appellant’s issue for determination did not challenge the competence of the application for joinder or the jurisdiction of the Court to hear and determine the application. In effect, the issue for determination did not flow from the prayers of the Appellant in the preliminary objection. The net result of all my observations above is that the preliminary objection of the Appellant fails and is hereby dismissed.

Substantive application.
The facts for and against the application have already been reviewed by me. In the written address in support of the application, learned counsel for the Applicant reiterated the position of the law that in an application for joinder, such as this, the Applicant must disclose sufficient interest in the subject matter of the appeal and also show that he is likely to be prejudiced by the outcome of the appeal, citing Tunde Osunrinde vs. Ajamogun (1992) 6 NWLR (Pt.246) 156; Oduola vs. Coker (1981) 5 SC. 197; A.C.B. vs. Nwaigwe (2001) 1 NWLR (Pt.694) 304; EFCC vs. The A.G. of Rivers State & Ors (2011) LPELR-4072 (CA). Counsel submitted that the interest of the Applicant as shown in the affidavit is premised on two main planks. The first plank is the potential personal liability of the Applicant as a Director, if the Appellant is allowed to appropriate the property that was pledged as security. The second plank is on the interest of Directors to protect the assets of a company in receivership. The Court was referred to the definition of a debtor under Section 61 of the Assets Management Corporation Act, 2010 (as amended), which include the Director of a debtor company, together with exhibit 4 which extended the powers of the Receiver to cover the Applicant’s personal assets, moveable and immoveable. This further explains the Applicant’s interest in wanting to be joined to defend this appeal. Counsel submitted that the Applicant was the person who, as Director of the 1st and 2nd Respondents, instructed Solicitors to take out an action against the Appellant at the High Court of Lagos State which subsequently led to the nullification of the sale of the property pledged as security. Learned counsel argued that the Applicant did not join the appeal before now as interested party because he was already sustaining the appeal through their nominated Solicitors without challenge and the 1st and 2nd Respondents were not under Receivership. It was submitted that the Applicant, as Director of the 1st and 2nd Respondents with reversionary interest in the 3rd Respondent is an interested person who is affected by the judgment and therefore should be joined as a Co-Respondent to robustly defend the appeal as none of the parties will be prejudiced by the joinder. Relying on the cases of U.B.N. vs. Tropic Foods Ltd (1992)3 NWLR (Pt.228) 231; Intercontractors Nig. Ltd vs. National Provident Fund Management Board (1988) 2 NWLR (Pt.76) 280, counsel submitted that the appointment of a Receiver does not render the Directors of a company in Receivership functus officio, as the Directors have the right to ensure that the property of the company is not dissipated. The Court was urged to find that the Applicant, as a Director of the 1st and 2nd Respondents, has disclosed sufficient interest to be joined as a Co-Respondent.
On his part, learned counsel for the Appellant submitted that the Applicant has failed to disclose sufficient interest in the instant appeal that would warrant the grant of this application. On the conditions for the grant of application for joinder, counsel cited and relied on Bala vs. Dikko (2013) 4 NWLR (Pt.1343) 62, and contended that in this application the imagined fears of the Appellant in the impending decision of this Court in this appeal is not sufficient to warrant the grant of the application. Appellant’s counsel argued that since the Respondent chose the option of only being a witness at the lower Court instead of joining the suit as a party, he cannot now make the application for joinder before the Court of Appeal, as he is caught by the doctrine of estoppel by conduct and standing by, citing Kpansangi vs. Shabako (1993) 5 NWLR (Pt.291) 67 AT 80; Obineche & Ors vs. Akusobi & Ors (2010) LPELR-2178 (SC). Counsel contended that by his affidavit, the Applicant seeks to raise issue of Directorship or otherwise in the 1st and 2nd Respondents which was not an issue before the lower Court and cannot therefore be raised in this Court, relying on Idufueko vs. Pfizer Products Ltd (2014) 12 NWLR (Pt.1420) 121-122. I have already resolved this last issue when I was treating the Appellant’s preliminary objection, by holding that the argument is anticipatory, preemptive and speculative as the Applicant is not yet a party before the Court, so one cannot anticipate his line of defence to the appeal, in the event he succeeds in this application. I referred to this kind of argument as putting the cart before the horse. In conclusion, the Appellant urged the Court to dismiss the application for non-disclosure of sufficient grounds.

On behalf of the 1st and 2nd Respondents, learned counsel attacked the plank upon which the application was made as argued in the Applicant’s written address, by submitting that in the case at the lower Court, the liability or otherwise of the Directors of the Claimants (Respondents herein) was never in issue, rather, what was in issue was the validity of the assignment to the Appellant of 2.4 hectares of land which belonged to the 3rd Respondent. Learned counsel contended in the alternative that assuming that the liability of the Directors was in issue, the power and authority of the Directors of the company to deal with the affairs and property of the company ceases or becomes suspended upon the appointment of a Receiver/Manager over the affairs and property of the company, by virtue of Section 393 (4) of the Companies and Allied Matters Act. Counsel argued with the aid of Jukok International Ltd vs. Diamond Bank Plc (2015) 7 WRN 1, 40, that the effect of appointment of a Receiver/Manager over a company is to suspend the powers and rights of the directors and members in relation to the business and undertakings of the company. It was submitted that the Applicant, having failed to show that the assets or subject matter of the dispute involving the companies under Receivership falls outside the scope of the receivership, his powers and rights as a Director in the companies over the subject matter of the dispute is suspended. He also submitted, relying on Oluyori Bottling Industry Ltd vs. Union Bank of Nigeria Plc & Anor (2009) 3 NWLR (Pt.1127) 129, 154-155, that the assets of the Respondents in issue in this appeal are the assets affected by the Receivership, as the Applicant has failed to show that the matters involved in this appeal are “those matters outside the control of the receiver.” Reference was also made to the case of European Soaps & Detergent Ltd vs. Mw. Beer & Co. Ltd (2017) 28 WRN 135, 150 and Eleventh Schedule to the Companies and Allied Matters Act, on the powers, functions and duties of a Receiver/Manager, which includes power to appoint a Solicitor and power to bring or defend any action or other legal proceedings in the name and on behalf of the company. 1st and 2nd Respondents’ counsel referred to the case of Onafowokan vs. Wema Bank Plc (2011) 48 WRN 1, 20-21, and noted that ‘managing the undertaking of a company’ would clearly include taking decisions, regarding pending ongoing or new litigation affecting the companies, which means that the Receiver/Manager has power to effect a change of legal representation for the Respondents. He urged the Court to hold that the Applicant has not disclosed sufficient interest to be joined as a Co-Respondent to this appeal, and to dismiss the application.

Learned counsel for the Applicant annexed Reply addresses to the Reply affidavits filed against the counter-affidavit of the Appellant and that of the 1st and 2nd Respondents which he titled “Reply affidavit to the A. Mouka & Co’s counter-affidavit to the motion on notice dated 23rd October, 2019.” In the said Reply addresses, he re-argued his application with respect to ‘who is a necessary party.’ He also argued that the right of a receiver under CAMA is not automatic, as the Court will not allow the exercise of the powers of receivership if it will lead to manifest injustice and absurdity as in this case. He cited in support, the case of European Soaps & Detergents Ltd vs. MW Beer & Co. Ltd (2017) LPELR-41863 and 41873 (CA). He urged the Court to discountenance the counter affidavit of the Appellant for failure to address the fundamental issues in the affidavit in support of the application.

Resolution of the substantive application.
The relief sought by the Applicant, Olawunmi Olajide-Awosedo, in this application is an order joining him as a Co-Respondent to this appeal, which is against the decision of the High Court of Lagos State in Suit No. LD/576/2012, between Grant Properties Limited & Anor vs. UAC Properties Development Company Plc & Anor. In that case, the lower Court nullified the assignment of 2.4321 hectares of land in favour of UAC Properties Ltd. That land was part of the 10 hectares of land used as collateral for facilities given to the 1st Respondent, Grant Properties Ltd by a consortium of four Banks. Aggrieved by that decision, UAC Properties Ltd appealed to this Court. It should be borne in mind that the Applicant and his late father, Rev. Olajide Awosedo, were Directors of the Respondents in this appeal. When the Respondents failed to perform their loans, the consortium of four Banks assigned the security and the debt to Asset Management Corporation of Nigeria and the latter appointed Mr. Lanre Olaoluwa, of Matrix Solicitors, as Receiver/Manager over the assets of the Respondents. The suit appealed against was filed on the instruction of the Applicant and his father as Directors of the 1st and 2nd Respondents. As at the time of the commencement of the suit at the lower Court in 2012, the Respondents were not in receivership so the Directors have full powers over the affairs and management of the Respondents. Mr. Lanre Olaoluwa was appointed a Receiver/Manager by the Asset Management Corporation of Nigeria by a ‘Deed of Appointment of Receiver/Manager’ dated 27th day of June, 2016, about a year before the judgment of the lower Court, now appealed against, was delivered on 02/06/2017. Upon his appointment as Receiver/Manager, Mr. Lanre Olaoluwa debriefed the law firm of Bonajo Badejo & Co, which had hitherto represented the 1st and 2nd Respondents in this appeal and appointed Messrs A. Mouka & Co. to represent the 1st and 2nd Respondents in this appeal. This is the state of affairrs that prompted the filing of the application, as according to the Applicant, Mr. Lanre Olaoluwa, whose firm was the former counsel to AMCON, will compromise the judgment deservedly obtained at the lower Court by the 1st and 2nd Respondents. The Applicant, as a Director of the 1st and 2nd Respondents, was not a party to the suit at the lower Court. The question now is, under what circumstances can a person, who was not a party at the lower Court be allowed to join the matter on appeal either as Appellant or Respondent? Before venturing an answer to this question, it is apposite at this point to consider what the Applicant referred to as the interest of Directors of a company in receivership to protect the assets of the company. In doing that, I will also take into account the Applicant’s protest on the appointment of A. Mouka & Co. as counsel to the 1st and 2nd Respondents, to the extent that the Applicant refused to recognize the counter-affidavit filed on behalf of the 1st and 2nd Respondents by A. Mouka & Co, by choosing to call it ‘A. Mouka & Co’s counter-affidavit.’

The appointment of Mr. Lanre Olaoluwa as Receiver/Manager by AMCON was made pursuant to powers enabling it on that behalf in Sections 34, 35 and 48 of the Asset Management Corporation Act, 2010 (as amended). By the Deed of Appointment as a Receiver/Manager, Mr. Lanre Olaoluwa becomes the alter ego of Grant Properties Limited, the 1st Respondent herein. He has taken over the affairs and management of the company from the Directors. Indeed the powers of the Directors of the Company became paralyzed /suspended because of the appointment of the Receiver/Manager. Under the AMCON Act, the Directors of the Debtor Company are rendered functus officio. The assets and the entire undertaking of the Debtor Company remain under the control of the Receiver/Manager and he alone has the right to deal with these assets as long as he remains the Receiver/Manager. The rights to deal with the assets inherent in the receivership can only be revived at the end and/or termination of the Receivership. The Receiver/Manager has statutory power to continue with the prosecution or defence of any ongoing action or legal proceeding or to institute fresh action on behalf of the company in receivership. Even where there is a challenge to the powers of the Receiver/Manager, unless and until the appointment is set aside, his powers over the assets and subject matter within his receivership remains sacrosanct and supersede the powers of the Directors of the company under his receivership. See European Soaps and Detergent Limited vs. MW Beer & Co. Ltd (supra); Akinwale-Oguntimehin & Ors vs. Trade Bank Plc (2016) LPELR-40581 (CA); Lawson & Ors vs. Polfa Nig. Plc & Ors (2019) LPELR-48931; Uthman vs. Canvass Farms Nig. Ltd & Ors (2021) LPELR-54653 (CA). It follows from the above discourse that the Receiver/Manager has the full powers to appoint counsel for the 1st and 2nd Respondents in exercise of his power to prosecute or defend any suit, including an appeal, on behalf of the 1st and 2nd Respondents.

I now revert to the question posed earlier, i.e., Under what circumstances can a person, who was not a party to a case at the lower Court, be allowed to join the matter on appeal either as Appellant or Respondent.

Section 243 of the Constitution of the Feral Republic of Nigeria, 1999 (as altered) provides:

The purpose of granting leave for a party to be joined as an interested party on appeal is for the effectual and final resolution of the dispute between the parties, so that justice can be done once and for all. See Nigeria Customs Service Board & Anor vs. Innoson Nig. Ltd & Ors (2022) LPELR-56659 (SC). The Court will join an interested party to an appeal before it if such a person is a necessary party and has a legal interest that is common or similar to the interest of the party he seeks to join; Green vs. Green (1987) LPELR-1338 (SC), and the test is whether the Applicant could have been joined as a party to the suit at the lower Court; Enyibros Food Processing Co. Ltd vs. N.D.I.C. (2007) LPELR-1149 (SC).

The Applicant herein is not seeking for leave to appeal against the decision of the lower Court, rather, he is seeking for an order joining him as a Co-Respondent to this appeal in order to robustly defend the success recorded by the 1st and 2nd Respondents in their suit against the Appellant and the 3rd Respondent at the lower Court. Learned counsel for the Applicant aptly summarized the basis for the interest of the Applicant in paragraph 4.03 of the Applicant’s written address in support of the application, as follows:
“The interest of the Applicant from the affidavit evidence is premised on two main planks. The first plank is the potential personal liability of the Applicant as a Director, if the Appellant is allowed to appropriate the property that was pledged as security, and the second plank is on the interest of Directors to protect the assets of a company in receivership.”

Now, the subject matter of the suit giving rise to the appeal is part of the land surrendered to the consortium of four Banks as security for facility extended by them to the 1st Respondent. The land belonged to the 3rd Respondent, Knight Brook Ltd, while all the shares of the 3rd Respondent were owned by the 1st and 2nd Respondents. With the purchase of the non-performing loans and assets of the 1st Respondent from the consortium of Banks by Asset Management Corporation of Nigeria, the Corporation appointed Mr. Lanre Olaoluwa as the Receiver/Manager for the Debtor Company. By that appointment, the powers of the Directors of the Company, which includes the Applicant herein, becomes paralyzed or suspended, as the affairs and management of the Debtor Company remains with the Receiver/Manager. Legally speaking, it is the duty of the Receiver/Manager to protect the assets of the Debtor Company, not the Directors. Furthermore, under receivership or not, the land, subject matter of the appeal belongs to the 1st and 2nd Respondents as distinct legal entities, not to their Directors. The suit at the lower Court could have been be effectually and finally determined between the parties, as it was done, without the joinder of the Applicant, as the Applicant does not share ownership of the land in dispute jointly with the 1st and 2nd Respondents. Similarly, the current appeal can be effectually determined between the Appellant and the current Respondents without the joinder of the Applicant as a Co-Respondent. The Applicant want to join the appeal to protect his personal liability, but his personal liability was not the subject matter of the suit at the lower Court and in this appeal. The subject matter is interest in a parcel of land which does not belong to the Applicant. The Applicant also wants to join the appeal because, according to him, the Solicitors appointed by the Receiver have no intention of defending this appeal, just as the Receiver is proceeding to compromise the illegal acquisition of the land, subject matter of the appeal. This allegation, as wild and fundamental as it is, has not been substantiated by credible evidence. There is no evidence on record to show that the Receiver/Manager has colluded with the Appellant not to defend and/or contest the appeal. I do appreciate the sentiment of the Applicant and the precarious situation he found himself, unfortunately however, under the Asset Management Corporation Act, unlike under the general rule governing receivership, a Director of a Debtor Company has no power over the assets of the Company as to take step to protect them. That power resides in the Receiver/Manager, whose duty it is to protect the Debtor Company’s assets. For this reason, the Appellant as a Director of a Debtor Company for whom a Receiver/Manager has been appointed, ceases to have legal interest in the affairs and assets of the Debtor Company during the period of receivership. The Applicant has failed to show by his affidavit, vis-a-vis the current state of the law under the AMCON Act, that he is a necessary party, whose joinder is inevitable to the effectual resolution of this I find this application to be unmeritorious and I dismiss it accordingly.

OBANDE FESTUS OGBUINYA, J.C.A.: I had the singular opportunity to peruse, in advance, the erudite lead ruling delivered by my learned brother: Muhammad Ibrahim Sirajo, JCA. I endorse in toto the sound legal reasoning and conclusion in it. l, too, dismiss the application. I abide by the consequential orders decreed in the elegant ruling.

ABDULLAHI MAHMUD BAYERO, J.C.A.: I was privileged to read in draft, the lead ruling delivered by my learned brother Muhammad Ibrahim Sirajo, JCA. I agree entirely that the application is unmeritorious and is hereby dismissed by me.

Appearances:

O. A. Owolabi For Appellant(s)

Chief Olalekan Yusuf, SAN, with him, Victor Ozoudeh and Ganiyat Zubair-Bakenne (Mrs)
Olusola Jolayemi – for 1st and 2nd Respondents. For Respondent(s)

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