RFG LIMITED & ANOR v. SKYE BANK PLC. (2012)

RFG LIMITED & ANOR v. SKYE BANK PLC.

(2012)LCN/5296(CA)

(2012) LPELR-7880(CA)

In The Court of Appeal of Nigeria

On Thursday, the 5th day of April, 2012

CA/L/711/08

RATIO

JURISDICTION: HOW DOES THE COURT ASSUME SUBSTANTIVE JUSTICE

I agree with learned Respondent’s counsel that the learned Appellants’ counsel seem to have forgotten the fact that there is a difference between substantive jurisdiction and procedural competence or jurisdiction. All a court has to do to assume substantive jurisdiction is to look at the reliefs sought in the writ of summons in order to determine whether the subject matter of the suit falls within the constitutional and statutory jurisdiction of the court. PER MORONKEJI OGUNWUMIJU, J.C.A.

PROCEDURE: DIFFERENCE BETWEEN IMPROPER SERVICE AND NON-SERVICE OF COURT PROCESS

There is no doubt that the issue of a writ and proper service of same are conditions precedent for the exercise of the court’s jurisdiction over the subject matter in dispute. See BEN OBI NWABUEZE V. JUSTICE OBI OKEE (1988) 10-11 SC 60. PER MORONKEJI OGUNWUMIJU, J.C.A.

PROCEDURE: WHETHER A COURT MAY REFUSE TO HEAR THE OTHER PARTY DURING THE ARGUMENT OF AN EX PARTE APPLICATION

In the first instance, a court may refuse to hear the other party during the argument of an ex parte application unless in the circumstances the interest of justice preponderates. See 7UP BOTTLING CO. V. ABIOLA & SONS (1995) 3 NWLR Pt. 383 Pg.275; ADEBISI V. ODUKOYA (1997) 11 NWLR Pt. 527 pg.83 @ 92. PER MORONKEJI OGUNWUMIJU, J.C.A.

PROCEDURE: DUTY OF A COURT WHERE THERE ARE TWO MOTIONS WHERE ONE SEEKS TO TERMINATE THE ACTION AND THE OTHER SEEKS TO CURE THE DEFECT

It is trite as already indicated while treating issue one in this appeal that the order of hearing motions or precedence where one motion sticks to terminate the action and another seeks to cure the defect is that it is the duty of the court to hear the latter first, so long as the application to cure the defect is a proper application. See NALSA & TEAM ASS. V. NNPC (1991) 11 SCNJ 1; CONSORTIUM M. C. 3632 LOT 4 NIG. V. NEPA (1991) 7 SCNJ 1. PER MORONKEJI OGUNWUMIJU, J.C.A.

PROCEDURE: WHETHER PROPER SERVICE CAN EMANATE FROM AN EXPIRED WRIT OF SUMMONS

No proper service can emanate from an expired writ of summons. PER MORONKEJI OGUNWUMIJU, J.C.A.

JUSTICE

HELEN MORONKEJI OGUNWUMIJU justice of The Court of Appeal of Nigeria

IBRAHIM MOHAMMED MUSA SAULAWA justice of The Court of Appeal of Nigeria

SIDI DAUDA BAGE justice of The Court of Appeal of Nigeria

Between

1. RFG LIMITED
2. MARGARET OLUYEMISI GIWAAppellant(s)

AND

SKYE BANK PLCRespondent(s)

MORONKEJI OGUNWUMIJU, J.C.A. (Delivering the Leading Judgment): This is an interlocutory appeal against the ruling of the Honourable justice R. I. B Adebiyi sitting at the High Court of Lagos State, Lagos Judicial Division delivered on the 6th day of November, 2007. The facts that led to the appeal are as follows:
The Claimant, now the Respondent by a writ of summons dated 6th of December 2006 instituted an action against the 1st and 3rd Defendants, now Appellants and one other defendant at the trial court claiming the following reliefs.
1. The sum of N39,386,000.25 (Thirty Nine Million, Three Hundred and Eighty Six Thousand Naira and Twenty Five Kobo only) being the sum outstanding against the Defendants on a credit facility of N30,000,000 (Thirty Million Naira Only) extended to the Defendants by the Claimant on or about February 28, 2003
2. Interest on the said sum of N39, 386,000.25 (Thirty Nine Million, Three Hundred and Eighty Six Thousand Naira and Twenty Five Kobo only) at the rate of 22.5% per annum from the 1st day of August 2004 until judgment is given in this suit and thereafter at the rate of 7% per annum until the entire debt is fully paid up
3. The sum of N200,000 (Two Hundred Thousand Naira Only) as cost of the suit
The 1st and 3rd Defendants now Appellants, by a Preliminary Objection dated the 29th day of June 2007 challenged the jurisdiction of the trial court to hear the suit on the ground of improper service of the originating Processes’ on the 6th of November, 2007, the matter was called for hearing and the Claimant’s counsel sought the leave of the court to move an exparte application filed the previous day for extension of time within which to seek leave to renew the Writ of summons, an order renewing the writ of summons and an order to serve on the Defendants the renewed writ by substituted means. The trial court granted this application and struck out the preliminary objection of the Appellants. Being dissatisfied with the ruling of the court, the Appellants have brought this appeal. The Appellants’ brief dated 25th of March, 2010 was filed on the 26th of March, 2010.
The Appellants’ reply brief dated 15th of July 2010 was filed on the 19th of July, 2010 and deemed filed on the 8th of February, 2011. The Respondent’s brief dated 6th of May, 2010 was filed on the 7th of May, 2010.
Counsel to the Appellants, Jennifer Aburime identified four issues for determination as follows:
1. Whether the Learned trial judge lacked the jurisdiction to and thus erred in law when she proceeded to hear and determine the Respondent/Claimant’s ex parte application dated the 2nd of November, 2007 and its Counsel’s oral application for an order setting aside the service at all and purportedly make orders and granted the reliefs sought thereby in spite of the 1st and 3rd Defendants, subsisting Notice of Preliminary objection dated 29th of June 2007 challenging the jurisdiction of the court to entertain further Proceedings in the suit’
2. Whether the Learned trial Judge breached the rules of natural justice and fair hearing when she heard and determined the Respondent claimant’s applications ex-parte and as a result over reached the defendants’ application and subsequently striking same out without hearing the 1st and 3rd defendants particularly in the face of a request for an adjournment within the prescribed limits of the rules of court.
3. Whether the Learned trial judge was right in determining an application ex-parte on a date fixed for the hearing of a Preliminary Objection, moreso as both parties were present in Court on the said day.
4. Whether the consequential orders made by the learned trial Judge were valid in law.
The Respondent’s Counsel, Fayo Adeleye adopted all the issues as canvassed by the Appellants’ counsel.
ISSUE ONE
Counsel to the Appellants submitted that the issue of jurisdiction is foundational and goes to the root of adjudication and that non-service of originating process is a defect that affects the jurisdiction of the court. She cited NNPG V. O. E. NIG LTD (2008) 8 NWLR Pt.1090 pg.583 @ 593; SPDCN v. GOODLUCK (2008) 14 NWLR Pt.1107 Pg. 294; OBIMONURE V. ERINOSHO & ANOTHER (1966) NSCC290; KENNEDY V. INEC (2009) 1 NWLR Pt.1123 Pg.614; DENR VS. TRANS INT’L BANK LTD (2008) 18 NWLR Pt. 1119 Pg.399.
Counsel then argued that the trial court was wrong in entertaining the Respondents ex parte application when there was still a subsisting preliminary objection on the jurisdiction of the court. Counsel cited ACCESS BANK Plc V. U. L. O. CONSULT LTD (2009) 12 NWLR Pt. 1156 Pg. 534 where it was held that in the event of pendency of various applications of a party and notwithstanding the propriety of the applications, it behoves the learned trial judge to first sort out the one challenging the jurisdiction of the court. Counsel then argued that the trial court erred in excising jurisdiction to entertain the Respondent’s application because failure to serve was a substantial defect which rendered the whole proceeding a nullity and not a mere technicality. Counsel cited AKPAJI V. UDEMBA (2009) 6 NWLR Pt.1138 P9.545.
Counsel submitted that at the worst, the trial court could have taken both the Appellants’ and the Respondent’s applications simultaneously to ensure fair hearing. Counsel cited LASDPC V. ADOLD STAMN INT’L LTD (2005) 2 NWLR Pt. 910 Pg.603.
In reply, counsel to the Respondent attempted to differentiate between jurisdiction and competence of a court. He submitted that the jurisdiction of a court is the power of the court to adjudicate on a matter as clearly stated in the Constitution or enabling statute. Counsel admitted that it is trite law that the issue of jurisdiction is crucial. He however submitted that not every infraction on the competence of a court will rob a court of its capacity to exercise jurisdiction. He cited NWAKA V. H.O.S. EBONYI STATE (2008) 3 NWLR pt.1073 Pg. 156 at 160; ANSA V. R.T.P.C.N. (2008) 7 NWLR pt.1086 Pg.421 at 428; I.T.P.P. LTD V. UBN PLC (2006) 12 NWLR Pt. 995 Pg. 483 at 488
Counsel explained that for a court to determine whether a particular infarction robs the court of jurisdiction, it has to determine whether the infraction robs it of its substantive or procedural competence. Counsel argued that if it is procedural, as in this case, then it can be cured. Counsel cited MOBIL PRODUCING NIGERIA ULTD V. LASEPA (2002) 18 NWLR Pt.798 Pg.1 at 32; ETI-OSA LOCAL GOVERNMENT v. JEGEDE (20071 10 NWLR Pt. 1043 Pg.537 at 555
Counsel argued that even though the ex parte application was not filed in response to the Appellants’ preliminary objection, it had the potency of curing the defect in service complained of by the Appellants and in the light of such, the Appellants, application would no longer be necessary. Counsel submitted that the law is well settled that in such circumstances, the application seeking to regularize should be heard first. He cited MATINJA V. MILITARY ADMINSTRATOR OF PLATEAU STATE (1998) 1 NWLR pt.567 Pg.694 at 696; NALSA & TEAM ASSOCIATES V. NNPC (1991) 11 SCNJ 51; ABIEGB V. UGBODUME (1991) 11 SCNJ 1. Counsel further submitted that a close perusal of the decision in LASDPC v. ADOLD STAMN INT’L LTD (2005) 2 NWLR Pt. 910 Pg. 603 as cited by the Appellants’ counsel will reveal that the Supreme court used the word ‘can’ which is indicative of the power of the trial court to exercise some discretion.
In the Appellants’ reply, counsel to the Appellants argued that the distinction between improper service and non service is a fiction created by the counsel to the respondent as both have the same effect. He cited ONONYE V. CHUKWUMA (2005) 17 NWLR Pt. 953 Pg. 90 at 109, 114-115
I agree with learned Respondent’s counsel that the learned Appellants’ counsel seem to have forgotten the fact that there is a difference between substantive jurisdiction and procedural competence or jurisdiction. All a court has to do to assume substantive jurisdiction is to look at the reliefs sought in the writ of summons in order to determine whether the subject matter of the suit falls within the constitutional and statutory jurisdiction of the court.
The gravamen of the Appellants argument is that because the notice of preliminary objection was pending between the parties, then the court had no jurisdiction to entertain the Respondent’s motion exparte. Let us first see what the basis of the objection was. On page 19 of the record, the Appellants as objectors sought the following orders:
1. An ORDER setting aside the writ of summons, statement of claim and all other processes filed in this suit as against the 1st and 3rd Defendants
2. An ORDER striking out the suit for lack of jurisdiction
The grounds for the objection are stated as follows:
1. That the 1st and 3rd Defendants were not served with the originating processes in the suit as prescribed by law
2. The purported service of the originating processes on a non-party is irregular, illegal, null and void.
Thus, the preliminary objection was a complaint against the competence of the court to entertain the suit because not only had proper parties not been served with the originating processes, the parties served were not served according to law. It was basically a challenge to the procedural jurisdiction or competence of the court rather than a challenge to its substantive constitutional or statutory jurisdiction to entertain the suit.

If the Appellants were complaining of irregular service at the trial court, then the Respondent was at liberty to regularize their position even though there was a pending notice of objection to the irregular service. An infraction that robs the court of its procedural competence rather than its substantive competence can be cured. Where a court has substantive jurisdiction, and there is lack of competence because of a procedural hitch, such incompetence can be waived by the court or the court can allow the party in disobedience to cure same. See MOBIL PRODUCING NIG. LTD. V. LASEPA (2002) 18 NWLR Pt.786 Pg. 1 at 32; ETI-OSA LG V. JEGEDE (2007) 10 NWLR Pt. 1043 Pg. 537 at 555.
In Tsokwa Oil v. BON (2002) 11 NWLR Pt.777 Pg.163, the Supreme Court held that a preliminary objection does not estop the Respondent from taking steps to remedy the defects in his process. See also SHANU V. AFRIBANK PLC (2001) 10-11 SC 1.

I also agree with learned Respondent’s counsel that there is a world of difference between improper service and non-service of court process. Counsel argued that while non-service will amount to a breach of a substantive requirement of the law, improper service will only amount to a breach of procedural requirement which can be regularized, I am of the view that the Appellants’ argument as regards non-service is totally irrelevant to the appeal and is not supported by facts deducible from the records of Proceedings.
There is no doubt that the issue of a writ and proper service of same are conditions precedent for the exercise of the court’s jurisdiction over the subject matter in dispute. See BEN OBI NWABUEZE V. JUSTICE OBI OKEE (1988) 10-11 SC 60. The writ was allegedly not properly served on all the parties which constitutes an irregularity which could be amended and which the Respondent tried to amend by the motion exparte. The first two prayers on the ex parte application on page 29 of the record were to renew the life of the writ of summons which had expired before proper service could be effected. The third prayer was for substituted service by pasting on the residential abode, the originating processes on the known residential address of the third Defendant/Appellant to serve as proper service on all the Defendants at the trial court.
In the first instance since the Respondent’s ex parte application at the trial court did not touch on and had nothing to do with the Appellants’ preliminary objection, the trial court was right in hearing the application. The ex parte application had sought to renew the life of the Writ of summons and regularize it and consequently all proceedings (including the notice of preliminary objection) conducted based on the expired writ of summons is a nullity ab initio, notwithstanding the proper or improper service of same on the Appellants.
I am of the view that the issue for determination be answered in the affirmative in favour of the Respondent.
ISSUES TWO & THREE
Appellants’ counsel submitted that the trial court breached the rules of natural justice and fair hearing when it heard and determined the ex parte application of the Respondent which over reached the Appellants application and to have struck out the Appellant’s application. Counsel also averred that the trial court was wrong in determining the ex parte application on a date fixed for the hearing of the Appellants’ preliminary objection especially since the Appellants’ counsel was present in court.
Counsel argued that a court of law must hear and determine all applications before it on merit and failure to hear an applicant’s motion amounts to infringement of the fundamental right to fair hearing and as such renders the proceedings and orders granted null and void. Counsel further argued that the proper procedure in hearing an application is for the applicant and the respondent to address the court on the motion. Counsel submitted the trial court failed to follow the proper procedure and that the effect of the actions of the trial court was to effectively shut out the Applicants from airing their grievances. He cited AGBU VS. AGBU (2007) 1 NWLR pt.1016 pg. 528 @ 537 & 538; OLIVER V. DANGOTE IND. (2009) 10 NWLR Pt.1150 Pg.467.
Counsel claimed that as a result of the order granted by the trial court after the determination of the Respondent’s ex parte application, the Appellants’ application was rendered useless and subsequently struck out by the court. Counsel argued that the proceedings of the court occasioned a travesty of justice. She cited OLIVER V. DANGOTE IND. (Supra); TAMTI V. NCSB (2009) 7 NWLR Pt.1141 Pg. 631
In reply Counsel to the Respondent argued that the Appellants’ notice of preliminary objection was set down for hearing on November 6, 2007 and on the said date the Appellants’ sought an adjournment to enable them file a reply to the Respondent’s reply. Counsel further explained that when the court asked for the Respondent’s reaction, respondent’s counsel notified the court that the writ of summons pursuant to which proceedings were being conducted had in fact expired since July, 2007 and that the Respondent had filed a motion ex parte to renew same. The trial judge allowed the motion to be moved and granted the orders sought without any objection from the counsel to the Appellants. Appellants’ counsel then went ahead to withdraw its notice of preliminary objection presumably for the reason that the defect sought to be challenged had been cured and the application was struck out.
Counsel then argued that the decision of the court to hear the motion ex parte before the notice of preliminary objection did not in any way over reach the Appellants. Since the Appellants of their own volition withdrew the objection, they cannot validly argue that the lower court deprived them of their right to be heard on their motion. Counsel argued that the issue of fair hearing does not arise at all.
I agree with the submissions of learned Respondent’s counsel, Fayo Adeleye and Aina Blanks on that the arguments of the Appellants are manifestly misconceived and that the trial court acted within the confines of the law when it assumed jurisdiction to hear the ex parte application.
On the 6th of November, 2001, on page 38-39 of the record of proceedings, the Respondent’s counsel had conceded not only the fact that service on the 1st and 3rd Defendants/Appellants was improper but the fact that the writ of summons had expired. Counsel asked for a renewal of the writ and the setting aside of the defective service which prayers were granted. The Appellants’ counsel, Ms Aburime then said.
“This order will affect our notice of preliminary objection. I believe they have over reached us, I seek to withdraw our notice of preliminary objection.”
The learned trial judge then struck the notice of objection out. In the first instance, a court may refuse to hear the other party during the argument of an ex parte application unless in the circumstances the interest of justice preponderates. See 7UP BOTTLING CO. V. ABIOLA & SONS (1995) 3 NWLR Pt. 383 Pg.275; ADEBISI V. ODUKOYA (1997) 11 NWLR Pt. 527 pg.83 @ 92.
I cannot see how in the circumstances of this case, the Appellant can claim that they have been over reached. It is trite as already indicated while treating issue one in this appeal that the order of hearing motions or precedence where one motion sticks to terminate the action and another seeks to cure the defect is that it is the duty of the court to hear the latter first, so long as the application to cure the defect is a proper application. See NALSA & TEAM ASS. V. NNPC (1991) 11 SCNJ 1; CONSORTIUM M. C. 3632 LOT 4 NIG. V. NEPA (1991) 7 SCNJ 1.
The application to renew the writ and for order of substituted service are usually brought ex parte. A close examination of the facts and circumstances of this case cannot justify any complaint of lack of fair hearing by the court or being over reached by the Respondents. In no way have any of the interests of the Appellants been permanently damaged or compromised by the order to renew the writ of summons and substituted service of the originating summons. This issue is resolved in favour of the Respondent.
ISSUE FOUR
Counsel submitted that the consequential orders granted by the learned trial judge were null and void because the trial court lacked the jurisdiction to adjudicate over the matter in the first place. Counsel cited NDIC V. CBN (2002) 7 NWLR Pt. 766 Pg. 272; ASOGWA V. CHUKWU (2003) 4 NWLR Pt. 811 Pg’ 540 Counsel argued as regards the order granted by the trial court for substituted service on the Appellants by pasting at 53, Eromosele Street, Parkview Estate, Ikoyi Lagos that such order is not known to law. Counsel argued that since the 1st Appellant is a duly incorporated entity under the law, service of processes on it can only be effected in accordance with section 78 of the Companies and Allied Matters Act and Order 7, Rule 9 of the High Court of Lagos State (Civil Procedure) Rules 2004. He cited MARK V. EKE (2004) 5 NWLR Pt.768 Pg.54
Counsel submitted that there was no evidence before the trial court to show that 53, Eromosele Street, Parkview Estate, Ikoyi is the registered or advertised office of the 1st Appellant and to show that attempts had been made to serve the Appellants in accordance with the provisions of law. Counsel argued that as admitted by the Respondent, the processes were wrongly served and instead of effecting proper service, the Respondent wrongly brought an application for substituted service and the trial court wrongly granted it. Counsel also pointed out that as regards the 2nd Appellant, no attempt was made at personal service on her after the renewal of the writ.
Counsel also argued that the order made by the court renewing the writ of summons was erroneous. Counsel argued that the trial court wrongfully made that order when by the proof of service in the court’s file, service had been effected on the Appellants and the said service had not been set aside. Counsel argued that as such, the order elongating the life of the writ was in all respects misconceived and null and void. Counsel claimed that what the court should have done was set aside the improper service first before ordering the renewal and service of the writ. She cited MACFOY V. UAC (1961) 3 ALL ER 1169 @ 1172.
In response counsel to the Respondent argued that the argument of the Appellants that substituted means of service is not applicable to companies is strange to law and a misconception.
Counsel further argued that service on the 2nd Appellant by substituted means as a means of serving the 1st Appellant is right as the 2nd Appellant is currently the alter ego and sole signatory to the Accounts of the 1st Appellant, as long as the court is satisfied that personal service is otherwise impossible. Counsel urged the court to dismiss the Appellants’ arguments in its entirety.
I find it strange that learned Appellants’ counsels speaking from both sides of the mouth. In one breath, she is opposing the substituted service and in another breath, she is opposing the renewal of the writ while claiming that the Appellants were not properly served. It stands to reason in my humble view that where during the lifetime of a writ, it was not served on the parties, it needs to be renewed or its life expanded to enable proper service. The lifetime of a writ can be expanded upon an application to the court. See KOLAWOLE V. ALBERTO (1989) 2 SCNJ 1.
On page 31-34 of the record, the affidavit in support of the ex parte application indicated clearly that the writ was not served whether properly or improperly until it expired. The proper issuance of a writ and proper service of same are two different things. No proper service can emanate from an expired writ of summons. The learned trial judge in my humble view followed the proper order in renewing the writ then setting aside the improper service made on non-parties pursuant to an expired writ.
Let us even assume that the order in which the learned trial judge granted the various prayers in the same application was not perfect, how does that adversely affect the inherent right of the parties to substantial justice. I am of the view that the attack on the order in which the court pronounced its various orders as granted is wholly unwarranted.
With regard to whether an order for substituted service was warranted in the circumstances, I have read the affidavit in support of the ex parte application and I am convinced as the trial judge that it is only by means of substituted service that the 3rd Defendant sued at the trial court can be effectively served. The facts brought before the trial judge as at that time showed that the 2nd Appellant could not be served personally by the Respondent. It is for such instances that the rule for substituted service was put in place after all.
In respect of service on the 1st Defendant/Appellant I am aware of section 78 of the Companies and Allied Matters Act and Order 7 Rule 9 of the High Court of Lagos Rules. Section 78 of CAMA provides that:
A court process shall be served on a company in the manner provided by the Rules of court and any other document may be served on a company by leaving it at or sending it by post to the registered office or head office of the company”
Also, Order 7 Rule 9 Provides that:
“Subject to any statutory provision regulating service on a registered company, corporation or body corporate, every originating process or other process requiring personal service may be served on the organization by delivery to a director, secretary, trustee or other senior, principal or responsible officer of the organization, or by leaving it at the registered, principal or advertised office or place of business of the organization within the jurisdiction.”
The Supreme Court in Mark V. Eke supra per Musdapher, JSC made it clear that by the combined provisions of S.78 of CAMA and Order 7 Rule 9 of the Lagos state High court Rules, there cannot be substituted service on a company. This is because the need for substituted service arises because personal service cannot be effected and since personal service can only be effected on natural or juristic persons, the procedure for substituted service cannot be made to a corporation or company. I agree in the circumstances that the order of substituted service on the 1st Defendant now 1st Appellant must be set aside as erroneous. After all, the registered office of a company is a matter of public record easily ascertained by the claimants who wish to effect service. The originating process can be left at the said registered office and an affidavit sworn to that effect.
In totality the appeal succeeds in part, issues 1, 2 & 3 being resolved in favour of the Respondent. The order for substituted service on the 2nd Appellant is hereby affirmed.
The order for substituted service on the 1st Appellant is hereby set aside.
Cost of N30,000 in favour of the Respondent against the Appellants.

IBRAHIM MOHAMMED MUSA SAULAWA, J.C.A.: The Hon. justice H. M. Ogunwumiju, JCA, has graciously obliged me with a copy of the draft judgment just delivered. Having had the privilege of reading, before now, the briefs of argument of the respective learned counsel and the record of appeal, I have no hesitation in concurring with the reasoning and conclusion reached in the judgment, to the effect that the appeal succeeds in part.
Hence, I hereby allow the appeal in part, and accordingly set aside the lower court’s order for substituted service upon the 1st Appellant.

SIDI DAUDA BAGE, J.C.A.: I have had the privilege of reading before now the judgment just delivered by my learned brother OGUNWUMIJU, J.C.A. I am in agreement with both the reasoning and conclusion and abide by the consequential orders made in the lead judgment.
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Appearances

Jennifer AburimeFor Appellant

AND

O. V. IwejeFor Respondent