STAR INSURANCE BROKERS LIMITED v. NICON INSURANCE PLC
(2015)LCN/7841(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 31st day of March, 2015
CA/A/91/2013
RATIO
CASE LAW: UGWUANYI v. NICON; THE APPLICATION OF UGWUANYI V. NICON
Section 26 (1) of the National Insurance Corporation of Nigeria Act on the basis of which this suit was struck out by the lower Court in its ruling for the avoidance of doubt reads:
“Notwithstanding in any other enactment, no suit against the corporation, a director or any officer or servant of the corporation for any Act done in pursuance or execution or intended execution of any enactment or law, or of any public duties or authority, or in respect of any alleged neglect or default in the execution of such enactment or law, duties or authority shall lie or be instituted in any court, unless it is commenced twelve months next after the act, neglect or default complained of or, in the continuance of damage or injury, within twelve months next after the ceasing thereof.”
The trial court held the provisions of the NICON Act applied to the respondent because the National Insurance Corporation and the respondent were one and the same; the Court was compelled to take this decision because it relied on the decision in UGWUANYI v. NICON INSURANCE PLC (2004)15 NWLR part 897 at 612, where it was held that the two were the same.
It is the considered opinion of this Court that differences exist between UGWUANYI v. NICON INSURANCE PLC supra, and the case at hand, not least because the decision, as far as legal relationships between the two bodies go, was indeed arrived at per incuriam, and as pointed out by learned counsel for the appellant ought not to have been cited as precedent, see OKONJO NGOWO & ORS v. RAPHAEL MONYE & 7 ORS (1970) ALL NLR 94 where the Supreme Court held:
“when a decision is impugned on the ground that it has been arrived at by the court only because the court had acted in ignorance or concealment of an authority, statutory or otherwise, which is binding on the court, the decision is said to have been given per incuriam and constitutes a special case, where the court is not bound to apply the principle of stare decisis…”; this view is made even more compelling by the fact that even the trial court recognized the inadequacy of the application of UGWUANYI v. NICON supra to the present case, yet it went ahead to apply same, when it held at page 72-73 of the record that:
“… by reason of the similarity in the facts of the two cases… the authority in UGWUANYI seems to be the governing law on the point in contention in the case before me… however, it sounds absurd and ridiculous to hold that a statutory corporation whose business and proprietary interest have been sold to other stake holders and was subsequently registered as a new company with a different legal personality and ownership structure should still be regarded as one whose affairs are governed by the statute of the moribund corporation. The fact that the statute has not been repealed should not blind any person and induce him to reason that the corporation is still in existence. Worse still, to think that it is one and the same entity with exactly the same legal personality as the newly incorporated company does not, with due respect, commend itself to good reason.
It is my respectful view that while the affairs of the National Insurance Corporation as a going concern, including its relationship with members of the public, were governed by statute that established it the newly incorporated company’s affairs would be regulated by the Memorandum and Articles of Association, coupled with the provisions of the CAMA and subsidiary instruments issued by the regulating agency, the Corporate Affairs Commission (C.A.C.) from time to time.
I wish to state that but for the authority in UGWUANYI v. NICON I certainly would have determined this objection differently. But I am under obligation to follow the precedent laid down by the Court of Appeal.”
It is very clear that the Supreme Court did not in UGWUANYI v. NICON (2013) 11 NWLR part 1366 at 546 lay down any principle that the National Insurance Corporation is legally one and the same as the respondent, as a matter of both fact and law it held: “a case decided on facts is not a guiding precedent in determining other issues. Thus the determination of question of facts or question of mixed law and facts depends on the particular facts of a case.” And in another breath it held at page 604 that: “…if the facts or legislation or both which were the basis of the decision of a case are different from those in a case are different from those in a subsequent case, the earlier decision cannot serve as a precedent for deciding the subsequent case.”
Furthermore, the respondent did not state anywhere that it is one or the same with the National Insurance Corporation, on the other hand the decision in UGWUANYI v. NICON supra considered the appellant’s averment in his affidavit that National Insurance Corporation of Nigeria and NICON Insurance are one, because the former is now known as the later; and held that the plaintiff was bound by his deposition.
Most importantly, Section 4 of the National Insurance Corporation Act was repealed by Section 99 of the Insurance Act 2003, cap 1.17 2004 LFN; by that repeal, NICON ceased to have power to enter contracts of any sort, regardless of its status in the past; and that in the considered opinion of this court means that Section 26(1) of the NICON Act cannot therefore regulate the activities of the respondent in that regard; this fact in itself distinguishes this case from IGWUANYI supra, referred to and relied upon by the lower court. per. MOHAMMED MUSTAPHA, J.C.A.
JUSTICES
TINUADE AKOMOLAFE-WILSON Justice of The Court of Appeal of Nigeria
JOSEPH EYO EKANEM Justice of The Court of Appeal of Nigeria
MOHAMMED MUSTAPHA Justice of The Court of Appeal of Nigeria
Between
STAR INSURANCE BROKERS LIMITED Appellant(s)
AND
NICON INSURANCE PLC Respondent(s)
MOHAMMED MUSTAPHA, J.C.A. (Delivering the Leading Judgment): This is an appeal against the ruling of the High Court of the Federal Capital Territory, presided over by Valentine B. Ashi, delivered on the 12th of October, 2012.
Facts in Brief:
The appellant entered into a contract with the respondent’s predecessor, the National Insurance Corporation of Nigeria, wherein the appellant placed Insurance Risks and Pension Schemes with the respondent; following a dispute over brokerage fees the appellant sued the respondent at the lower court for unpaid commission; and the question arose, whether the suit ought to have been filed within twelve months, as prescribed by Section 26(1) of the National Insurance Corporation Act.
The notice of appeal on pages 75 to 81 of the record of proceedings contains five grounds of appeal from which the following issues for determination were formulated for the appellant, in its brief settled by Professor M. O. Adeyemi:
1. Whether the defendant/respondent, which was incorporated under the Companies and Allied Matters Act in the year 2002 and the National Insurance Corporation Nigeria, which was created by legislation (Act No. 22 of 1969, now Cap N54 2004 LFN), are one and the same person, (Grounds 1, 2 and 4).
2. Whether the Court below was right in holding that the limitation stipulated in Section 26 (i) of the National Insurance Corporation of Nigeria Act was applicable to oust the jurisdiction of the Court in this suit. (Grounds 3 and 5).
On issue one learned counsel submitted that the trial Court ought to have distinguished this case from UWUANYI v. NICON PLC (2004) 15 NWLR part 892 at 612, because the matter arose from Section 26(2) of the National Insurance Corporation of Nigeria Act, which regulates pre action notice in all suits, whereas Section 26 (1) which applies in the instant case affects only limited number of cases, i.e. acts done in pursuance of statutes or any public duty; that (1) does not apply to simple contracts as in this case; especially as the issue of legal relationship between the two bodies in the said judgment, which was found to be absurd by the lower Court, was arrived at per incuriam and should not be cited as precedent.
That the National Insurance Corporation is a creation of Statute embodied in Cap N54 of the 2004 LFN, with the name of the corporation prescribed in Section 1 of the Act; the name has not been amended by the National Assembly to “NICON Insurance Plc” or any other name.
Learned counsel submitted while referring to COMMERCIAL BANK CREDIT LYONNAIRS NIGERIA LTD v. OKOLI & ORS (2009) 5 NWLR PART 1135 AT 446 that where a company is taken over it does not lose its legal personality; and therefore UGWUANYI’S case was decided wrongly because the National Assembly has not changed the name of the National Insurance Corporation to NICON Insurance Plc, and this Court is not bound to follow its previous decision arrived at per incuriam, he referred to COOPERATIVE & COMMERCE BANK LTD v. OZOBU (1988) 3 NWLR part 451 at 306.
That NICON Insurance Plc is not known to the National Insurance Corporation Act; the respondent which was incorporated in 2002 under CAMA and the National Insurance Corporation of Nigeria created by an Act of Parliament are not one and the same entity, and the trial judge was wrong to have applied the provisions of the National Insurance Corporation Act to the respondent in this suit.
Learned counsel submitted that the trial judge was wrong to hold at page 71 of the record that he could not conclusively say that the respondent was a registered liability company in the absence of a certificate of incorporation, because such certificate was not necessary for the preliminary objection, especially as the parties have not joined issues on whether the respondent was registered under CAMA.
That in any event the name with which the respondent was sued showed that it was registered under CAMA, and had been referred to in several affidavits by the appellant without rebuttal by the respondent, thus giving this Court enough reason to set aside the ruling of the trial Court. He urged this Court to resolve this issue in the appellant’s favour.
On issue two, learned counsel submitted that even if the respondent and the National Insurance Corporation of Nigeria are one and the same, the trial Court erred in applying Section 26(1) of the National Insurance Corporation of Nigeria Act to hold that the action was statute barred.
That for the limitation to apply the corporation must prove that the act complained of or the cause of action in issue occurred in pursuance of an enactment or law or occurred in the course of execution of a public duty.
Learned counsel submitted that “public duty” connotes duties which an agency of the government owes to members of the public, breach of which causes a tortuous wrong, rather than duties owed to an individual.
That the cause of action in this appeal does not fall within Section 26 (1) of the Act, because it is a simple breach of contract, and therefore a private matter between the appellant and the respondent.
That the other ground which may entitle the Statutory Corporation in question to invoke the provisions of the Act is if it proves that the cause of action arose from an act done in pursuance of an enactment, and the respondent has not done that; learned counsel referred this Court to NIGERIAN PORTS AUTHORITY v. CONSTRUZIONI GENERALI (1974) 12 SC 69, which he contended dealt with Section 97 of the Ports Act Cap 361 in pari materia with Section 26(1).
Learned counsel urged this Court to hold that the trial Court was wrong to have declined jurisdiction by reason of Section 26(1) on account of statute bar, and allow this appeal and remit the case back to the trial Court for retrial.
In response Emmanuel A. Pippa Esq., learned counsel for the respondent formulated the following issue for determination by this court:
Whether the lower court was right in striking out the suit of the appellant as being statute barred for non-compliance with the provisions of Section 26(1) of the NICON Act.
He submitted that the trial Court was right in striking out the suit for not being commenced within 12 calendar months, as prescribed by Section 26 (1) of the NICON Act, especially in view of IGWUANYI v. NICON supra, whose decision is on all fours with this case, decision affirmed by the Supreme Court.
That the trial Court also held at pages 3 to 4 in its ruling (page 60-70 of the record of proceedings) that the appellant failed to prove as alleged that the respondent is a Limited Liability Company by not tendering the certificate of incorporation of the respondent before the Court, as held in MAGBAGBEOLA v. SANNI (2005) ALL FWLR part 267 at 1367.
Learned counsel contended that the argument that the respondent is not protected under Section 26(1) because the transaction arose from a contract between the parties did not arise as an issue before the lower Court, just as the argument also that the National Insurance Corporation of Nigeria and the respondent are not one and the same because the National Assembly did not amend the Act to fuse the two did not arise from the ruling of the lower Court; that neither party raised these issues, and the lower Court did not as well; as such they cannot be raised for the first time before this Court without leave of Court.
Learned counsel submitted that there should be consistency in the prosecution of a case, both at the trial Court and on appeal, that way the other party is not surprised; he referred this Court to AJIDE v. KELANI (1985) 3 NWLR part 12 at 248.
That this Court has no vires to decide on issues that were not raised or decided at the lower Court; as a consequence grounds 1 and 3 of the notice of appeal did not emanate from the ruling of the lower Court and therefore liable to be struck out for raising fresh issues.
That also paragraph 5.5 of the appellant’s brief should be discountenanced because the portion of the judgment of the lower Court referring to IGWUANYI v. NICON supra as absurd is merely an obiter.
Learned counsel further submitted that grounds 1 and 3 of the notice of appeal did not emanate from the ruling of the lower Court and therefore should be struck out along with all the arguments related to it; he referred this Court to NDIC v. OKEM ENTERPRISES (2004) 4 SC part 11 at 77 and OLORUNTOBA & 4 ORS v. ABDULRAHEEM & 3 ORS (2009) 5-6 part 11; he argued that these grounds raised new issues which can only be sustained with leave of Court, in the absence of same he urged this Court to strike them out.
That on the position of Section 26 (1) of the NICON Act, NPA v. CONSTRUZIONI GENERALI & ANR (1974) 12 SC 69 was clarified by this Court in KOLO v. A-G FEDERATION (2013) 10 NWLR part 829 at 602; and AMADI v. NNPC (2000) 5 WRN 47 where it was assumed it presupposes the prohibition of all suits whatsoever; meaning in effect that the NICON Act applies to all cases including contract. He urged this Court to resolve this issue in favour of the respondent and dismiss the appeal for lack of merit.
In reply it is submitted for the appellant that UGWUANYI v. NICON supra was decided with relation to Section 26 (2) of the NICON Act, while the provision applied in the instant case is 26(1) of the Act; and that in UGWUANYI what was in issue was an employment contract while in this case it is an independent contract; that also UGWUANYI’s case was decided on peculiar facts and did not lay down any general principle.
Having gone through the submission of counsel on both sides this Court is satisfied that the sole issue formulated for determination by the respondent suffices for the determination of this appeal because it encompasses all the issues raised by both sides; at the risk of repetition the issue is stated thus:
Whether the lower Court was right in striking out the suit of the appellant as being statute barred for non-compliance with the provisions of Section 26(1) of the NICON Act.
Section 26 (1) of the National Insurance Corporation of Nigeria Act on the basis of which this suit was struck out by the lower Court in its ruling for the avoidance of doubt reads:
“Notwithstanding in any other enactment, no suit against the corporation, a director or any officer or servant of the corporation for any Act done in pursuance or execution or intended execution of any enactment or law, or of any public duties or authority, or in respect of any alleged neglect or default in the execution of such enactment or law, duties or authority shall lie or be instituted in any court, unless it is commenced twelve months next after the act, neglect or default complained of or, in the continuance of damage or injury, within twelve months next after the ceasing thereof.”
The trial court held the provisions of the NICON Act applied to the respondent because the National Insurance Corporation and the respondent were one and the same; the Court was compelled to take this decision because it relied on the decision in UGWUANYI v. NICON INSURANCE PLC (2004)15 NWLR part 897 at 612, where it was held that the two were the same.
It is the considered opinion of this Court that differences exist between UGWUANYI v. NICON INSURANCE PLC supra, and the case at hand, not least because the decision, as far as legal relationships between the two bodies go, was indeed arrived at per incuriam, and as pointed out by learned counsel for the appellant ought not to have been cited as precedent, see OKONJO NGOWO & ORS v. RAPHAEL MONYE & 7 ORS (1970) ALL NLR 94 where the Supreme Court held:
“when a decision is impugned on the ground that it has been arrived at by the court only because the court had acted in ignorance or concealment of an authority, statutory or otherwise, which is binding on the court, the decision is said to have been given per incuriam and constitutes a special case, where the court is not bound to apply the principle of stare decisis…”; this view is made even more compelling by the fact that even the trial court recognized the inadequacy of the application of UGWUANYI v. NICON supra to the present case, yet it went ahead to apply same, when it held at page 72-73 of the record that:
“… by reason of the similarity in the facts of the two cases… the authority in UGWUANYI seems to be the governing law on the point in contention in the case before me… however, it sounds absurd and ridiculous to hold that a statutory corporation whose business and proprietary interest have been sold to other stake holders and was subsequently registered as a new company with a different legal personality and ownership structure should still be regarded as one whose affairs are governed by the statute of the moribund corporation. The fact that the statute has not been repealed should not blind any person and induce him to reason that the corporation is still in existence. Worse still, to think that it is one and the same entity with exactly the same legal personality as the newly incorporated company does not, with due respect, commend itself to good reason.
It is my respectful view that while the affairs of the National Insurance Corporation as a going concern, including its relationship with members of the public, were governed by statute that established it the newly incorporated company’s affairs would be regulated by the Memorandum and Articles of Association, coupled with the provisions of the CAMA and subsidiary instruments issued by the regulating agency, the Corporate Affairs Commission (C.A.C.) from time to time.
I wish to state that but for the authority in UGWUANYI v. NICON I certainly would have determined this objection differently. But I am under obligation to follow the precedent laid down by the Court of Appeal.”
It is very clear that the Supreme Court did not in UGWUANYI v. NICON (2013) 11 NWLR part 1366 at 546 lay down any principle that the National Insurance Corporation is legally one and the same as the respondent, as a matter of both fact and law it held: “a case decided on facts is not a guiding precedent in determining other issues. Thus the determination of question of facts or question of mixed law and facts depends on the particular facts of a case.” And in another breath it held at page 604 that: “…if the facts or legislation or both which were the basis of the decision of a case are different from those in a case are different from those in a subsequent case, the earlier decision cannot serve as a precedent for deciding the subsequent case.”
Furthermore, the respondent did not state anywhere that it is one or the same with the National Insurance Corporation, on the other hand the decision in UGWUANYI v. NICON supra considered the appellant’s averment in his affidavit that National Insurance Corporation of Nigeria and NICON Insurance are one, because the former is now known as the later; and held that the plaintiff was bound by his deposition.
Most importantly, Section 4 of the National Insurance Corporation Act was repealed by Section 99 of the Insurance Act 2003, cap 1.17 2004 LFN; by that repeal, NICON ceased to have power to enter contracts of any sort, regardless of its status in the past; and that in the considered opinion of this court means that Section 26(1) of the NICON Act cannot therefore regulate the activities of the respondent in that regard; this fact in itself distinguishes this case from IGWUANYI supra, referred to and relied upon by the lower court.
The lower court recognized that the respondent was registered under CAMA to take over the assets and liabilities of the National Insurance Corporation of Nigeria; and that fact exposed the fallibility of UGWUANYI v. NICON supra even by the standards of the lower court, this is a clear admission that the National Insurance Corporation of Nigeria and the respondent are not one and the same; for the avoidance of doubt the Act states:
“there shall be for the purpose of this Act a corporation to be known as the National Insurance Corporation of Nigeria which shall be constituted in accordance with and shall have such power and duties as conferred on it by, or by virtue of the following provision of this Act.”
NICON Insurance Plc as rightly contended for the appellant is not known to the National Insurance Corporation of Nigeria Act; the respondent was incorporated in 2002 under CAMA, and the National Insurance Corporation of Nigeria, was created by an Act of Parliament, the NICON Act 1969 Cap N54 of the 2004 LFN, this court holds the view that the two are not the same.
The respondent also argues that this case is on all fours with UGWUANYI v. NICON supra, which was affirmed by the Supreme Court, and for that reason it should be the governing law; especially as there is always a need for consistency, contending that otherwise unsuspecting litigants will be prone to surprises sprung at them, this is more so, it is argued, as there was no decision by the trial court on whether or not Section 26(1) can avail the appellant, and whether the National Insurance Corporation of Nigeria and the respondent are one and the same.
It is very important at this juncture to have recourse to Grounds 1 and 3 of the notice of appeal, contained at pages 75 to 78 of the record of appeal, which for the avoidance of doubt read as follows without their respective particulars:
“1. That the honourable and learned judge erred in law in holding that the provisions of the National Insurance Corporation of Nigeria Act, CAP N54 2004 LFN are applicable to the defendant/respondent and that both the respondent and the National Insurance Corporation of Nigeria are one and the same when the National Assembly has not enacted a law to amend the name or legal personality of the said corporation or to fuse the corporation with the defendant/respondent”
“3. The honourable and learned judge erred in law when he held that he lacked jurisdiction on the ground of non compliance by the plaintiff/respondent with Section 26, 91 of the National Insurance Corporation of Nigeria Act, CAP N54 2004 filed by the plaintiff/appellant against the defendant/respondent which is now on appeal.”
Now in view of these two grounds the respondent cannot be heard to complain of same as new issues or surprises sprung at them especially as the issue was also considered by the lower court in its ruling at page 68 to 73 of the record of proceedings, where it held among other things that:
“…The plaintiff also formulated one issue for determination… “whether the provision of Section 26 of the National Insurance Corporation Act can avail the defendant/applicant in view of the fact that the defendant/applicant is public liability company…” “…the mesh of issues formulated by learned counsel may be consolidated into one concise issue appropriate for determination the single issue is whether the National Insurance Corporation Act is an existing law whose provisions are applicable to the defendant company?”
On whether views of the Supreme Court in NIGERIAN PORTS AUTHORITY v. CONSTRUZIONI GENERAL (1974) 12 SC 69 with regard to Section 97 (1) of the Ports Act, which is in pari material with Section 26 (1) of the NICON Act was an obiter dictum and not the ratio of the case, and therefore not applicable to this case, it is important to first understand that, the same court held that the section does not apply to specific contracts: “…the section does not apply to cases of specific contracts…it would be unjust to clothe the Nigerian Ports Authority with special protection in all cases of contracts, as that would negate the general principles upon which the law of contract is based…”
This court also followed this decision in ELDER V. B. ODEDIRAN & 2 ORS v. NIGERIAN PORTS AUTHORITY & 1 OR (2004) 7 NWLR at 232, where ODUYEMI J.C.A. reversed his earlier decision in KOLO v. A-G OF THE FEDERATION (2003) 10 NWLR part 826 at 602 by holding that: “I must consider myself bound that Section 97 of the Port’s Decree (now 1.110 of the Ports ACT, Cap 361, LFN 1990) does not apply to specific contracts and withdraw my previously held view expressed in KOLO v. A-G FEDERATION…”
It follows from these therefore, that the respondent cannot invoke Section 26(1) to protect itself, as it does not have such powers any longer; because as at the time of filling this suit i.e. September, 2011, the respondent does not have the statutory powers it claimed; Section 26(1) in the considered opinion of this Court does not give a blanket cover to all contracts entered into by the respondent, that much is clear.
This court is in agreement with learned counsel for the appellant, and shares his view that where the cause of action involves breach of public duty, the NICON Act requires that the action be commenced within twelve months of the breach; but special contracts or their breaches, i.e. contracts in which the respondent is not under a statutory duty to enter or entered into or refusal to pay for goods or services rendered, are not covered by Section 26(1) of the Act.
There is no denying that the respondent and the National Insurance Corporation of Nigeria were once the same; but the contract in issue is not one the respondent was mandated to undertake. The respondent is in our considered opinion a distinct entity, now, from the National Insurance Corporation of Nigeria and cannot as a result cannot be availed of protection under Section 26(1) of the Act.
For all the reasons stated above, the sole issue for determination in this case is resolved in favour of the appellant, and against the respondent; accordingly, this appeal succeeds, and is now allowed. The ruling of the lower court, the subject of this appeal is as a result set aside. However as the case was not decided on its merits at the lower court the appropriate order in the circumstances is for a retrial on the merits of this case, which I now order, as the justice of this case demands; such retrial shall be by a different judge of the same court.
Parties to bear their costs.
TINUADE AKOMOLAFE-WILSON, J.C.A.: I read in draft the judgment just delivered by my learned brother, Mustapha, JCA and I agree with the reasoning and conclusion reached therein to allow the appeal.
I also abide by the consequential orders made by his Lordship.
JOSEPH EYO EKANEM, J.C.A.: I read in draft the judgment just delivered by my learned brother, Mustapha, JCA. I agree with my Lord’s reasoning and conclusion in the judgment. I allow the appeal and order a fresh trial before a different Judge of the High Court of the Federal Capital Territory.
Appearances
Professor M. O. AdeyemiFor Appellant
AND
Emmanuel A. Pippa, Esq.For Respondent
