FIRST MARINA TRUST LIMITED v. BAMIDELE FOLABI-OWOLABI & ANOR
(2018)LCN/11843(CA)
In The Court of Appeal of Nigeria
On Thursday, the 5th day of July, 2018
RATIO
COURT AND PROCEDURE: A WRIT OF SUMMONS
“A Writ of Summons ought to have been used to commence this action being a contentious one. It will give both parties the opportunity to properly present both documentary and oral evidence before the Court. See the case of ZENITH BANK PLC v UMOM (2013) LPELR – 22001 (CA). A writ of summons is an initiating legal process by which the jurisdiction of a trial High Court can properly and validly b e invoked by a person or party who intends to seek for reliefs or remedies from the Court against another on any legal ground. It is on the writ of summons that all other processes statement of claim, statement of defence, counter-claim, et al, will stand. The documentary evidence to be relied upon will also be frontloaded before trial commences. It is based on these that the High Court will assume jurisdiction, hear the case of both parties on documentary and oral evidence before coming to a decision.” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
JURISDICTION: THE QUESTION OF JURISDICTION
“It is settled law that jurisdiction is the threshold of any case and whenever the question as to jurisdiction is raised, it should be considered and determined first before considering anything else. As any decision no matter how well thought out will amount to a nullity once the Court lacks the authority to try it. See the cases of UGWA v LEKWAUWA [2010] 19 NWLR (PT 1226) 26 SC; OGUMKA v CAC (2010) LPELR 4891 CA; NNAJI v NFA & ANOR (2010) LPELR 4629 CA.” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.(Delivering the Leading Judgment):
This is an appeal against the judgment of Honourable Justice O. A. OLAYINKA (MRS) of the High Court of Lagos State, family Court division, delivered on the 15th of December, 2014 wherein it held in favour of the 1st Respondent/Claimant that, at the time the property in dispute was purportedly used as security for the facility obtained from the Appellant/1st Defendant by Credence Assets Management Limited through the 1st Respondents father who was then the Managing Director of the said Credence Assets Management Limited, the property belonged to the 1st Respondent/Claimant who was a minor at that time and as such, the property cannot be validly used as a collateral as the 1st Respondent been a minor lacked the required capacity to enter into such a contract. The Appellant been dissatisfied with the judgment filed a Notice of Appeal on 23/11/14 based on five grounds of appeal.
The Appellants brief of argument is dated 3/7/2017 and filed on the same day. The brief was settled by Ademola Ekundayo; Ayodele Osanyinlusi and Aiyegbusi Ruth M. all of Hillcity Associates, wherein three issues were formulated thus:
1.Whether the learned trial judge was right in law by assuming jurisdiction over this matter in the capacity of a Family Court knowing fully well that the subject matter of the dispute relates to an entirely commercial transaction.
2. Whether the learned trial judge was right in law to have held that a guardian lacks the capacity to enter into a contract of guarantee on behalf of a minor.
3. Whether the learned trial judge properly evaluated the evidence led in proof of the case in arriving at the decision of nullifying a contract of sale validly entered by the Respondents father for himself and on behalf of a minor, ordering a refund of rents and incomes never received and granting cost of N500,000 against the Appellant.
The 1st Respondents brief of argument is dated 17/1/18 and filed on the same day. The brief was settled by Osahon Idemudia of Libra Law office, wherein two issues was formulated thus:
1.Whether the Lower Court rightly assumed jurisdiction by relying on the Child Rights Law of Lagos State 2007 in determining the dispute between parties.
2.Whether the Court was right in directing the Appellant to refund all the rents and sundry income and payment received from the Claimants property.
The 2nd Respondent did not file a brief of argument and the Appellant did not file a reply brief.
The issues formulated by the parties are all connected and I will therefore adopt the issues as formulated by the 1st Respondent for the determination of this appeal.
ISSUE ONE
The Appellants counsel submitted that in ascertaining the jurisdiction of the Court to entertain any matter, the Court looks into the pleadings of the claimant with specific reference to the claims set out therein. He relied on ANYANWOKO v OKOYE (2010) ALL FWLR (PT 515) 214. He opined that a look at the reliefs sought by the 1st Respondent at the family Court will reveal that what lies at the threshold of this action is a mortgage or commercial transaction. This is because all the prayers made by the 1st Respondent was hinged on the commercial transaction between the 1st Respondents father (Late Mr. Folabi Owolabi) and the Appellant and does not in any way relate to the welfare, interest, or rights of a minor. To him, the reference made to the minor is just a smart attempt by the 1st Respondent to hide under the inapplicable provisions of the Childs Rights Law. He referred to the 1st Respondents claim in his Originating Summon.
Counsel stated that the loan was validated by Exhibit E & G as seen in pages 134 & 141 of records of proceeding. Exhibit E is a Deed of Assignment executed by the Late Mr. Owolabi in the name of Bamidele Owolabi transferring the title of the property in dispute to the Appellant, while Exhibit G is an Irrevocable Letter of Authority instructing the 2nd Respondent to deliver the said Deed of Assignment to the Appellant. According to him, it is very clear that the Respondents are not challenging the validity or legality of the document used to effect the transfer.
The Appellants counsel submitted that the issue in dispute is not whether a child can enter into a contract; it rather bothers on the question of whether a guardian has the capacity or right to contract on behalf of a child. He stated that guardianship is a form of relationship between a minor and the guardian which gives the guardian certain rights and obligations regarding the child. This led to the representation of the minor in this case by his father, to enable a valid and effective transaction which later resulted in the sale of the property in question. To him, this transaction forms the bedrock of this case, not the welfare or interest of a child hence the jurisdiction of the family Court cannot be invoked.
He further argued that that the subject matter of this case relates to simple contract and loan recovery over which the family Court lacks jurisdiction, as the mere fact that a child is mentioned in a case does not automatically clothe it with jurisdiction, because if that is the case, anyone can in a bid to enjoy the protection under the Childs Right Law carry out some transactions in the name of a child and perpetrate fraud. He also argued that the guardian in issue in this case is a natural guardian who has unlimited rights over the assets of his child and not the one envisaged under the law with limited rights (that is guardian appointed by the Order of Court) as seen in Section 262 & 86 (1) of the Child’s Right Law Of Lagos State, 2007. He opined that the limitation of a guardian as expressed in the Childs Right Law of Lagos State is not applicable to a natural guardian. Thus the proceedings of this case should be outside the purview of the Family Court.
He further submitted that this matter should not have been commenced by way of an originating motion rather by writ of summons as the matter is a highly contentious matter. He argued that the manner of proceedings adopted is totally inappropriate for a matter of this nature as there was no opportunity for placing documents properly before the Court neither were parties allowed to give testimonies to support their cases. The decision of the lower Court was solely based on affidavit evidence and that a case of this nature cannot be resolved through affidavit evidence.
Appellant counsel on its 2nd issue submitted that Mr. Folabi Owolabi who was the 1st Respondents natural guardian had the necessary legal power to deal with the property of the 1st Respondent on his behalf and in his interest and that the limitations set out in the Childs Right Law of Lagos are not applicable to a natural guardian. He contended that the issue of a childs capacity to contract is not necessary in this case because the minor never entered into any contract. That there was no record as to the childs involvement in any of the transaction mentioned hence, the right of a child to contract is totally out of the question. On this premise, Appellants counsel was of the view that a natural guardian, not being a guardian envisaged under the law can enter into any form of contract on behalf of the minor and that the natural guardian can also go to the extent of carrying out a valid transfer of title on behalf of the minor. He referred to the Indian case of GOPAL KRISHNA SHAH v KRISHNA SHAH (2013) 3 ARC 831 to be of persuasive authority.
He submitted that the totality of the transaction effected by Mr. Folabi Owolabi in respect of the property in dispute is valid considering the fact that the 1st Respondent lacked the capacity to contract in the capacity in which his father contracted. Counsel therefore urged this Court to overturn the decision of the lower Court.
The 1st Respondent counsel in opposition made reference to the provisions of Sections 1, 2, 151, 138, 139 & 140 of the Child Rights Law of Lagos State, 2007; Order 6 Rule 1 of the Family Court of Lagos State Civil Procedure Rules, 2015 to contend that any dispute relating to the legal right, duty and liability of a child can only be entertained by the Family Court division of the High Court of Lagos or the Magistrate Court as they are the only Courts vested with the exclusive jurisdiction to so do and that the only acceptable way by which a suit can be commenced at the Family Court is by the filing of an Originating motion.
Counsel also submitted that Section 17 (1) & (2) of the Child Rights Law of Lagos State, 2007 provides that a child has been proscribed by law from entering into any contract of guarantee for the repayment of money lent and that if a child is made to enter into any contract for the repayment of any money lent, except for necessaries, such contract shall be declared void. He contended that based on this premise, the transaction that the 1st Respondent was made to enter is automatically null and void and that the Court need not make a pronouncement declaring it as void because it is in law a nullity. He relied on the case of DAKAN v ASALU [2015] 13 NWLR (PT 1475) 50. Counsel also noted relying on the cases of ANIBI v SHOTIMEHIN [1993] 3 NWLR (PT 282) 641; ODUA INVESTMENT LTD v TALABI [1997] 10 NWLR (PT 523) 59 that the operative word in Section 17 of the Child Rights Law of Lagos is “shall” and that it makes compliance mandatory and that clear and unambiguous effect should be given to the words in the statute.
1st Respondent counsel submitted that the 1st Respondents late father by virtue of the fact that he is not the registered owner of the property and his name not been on the title document, could not have used the property as a security for the facility obtained by the company from the Appellant as he cannot give what he does not have. He referred to the case of BOUARI v BANK OF THE NORTH LTD (2002) 44 WRN at 28. He also submitted citing the provision of Section 22 of the Land Use Act that the deed of assignment transferring the property to the Appellant is not valid, as same was executed without the governors consent and was signed by the 1st Respondent. He relied on the case of CCC THRIFT & CREDIT SOCIETY v EKPO [2001] 17 NWLR (PT 743) 6499; MACFOY v UAC (1961) 3 WLR (PC) 1405 and submitted that the agreement entered into with a minor which is not for necessaries is void ab initio.
Counsel also held that the ignorance of the law is not an excuse for the Appellant. That the Appellants act of feigning ignorance of the existence of the Child Rights Law and its exigencies at this stage is not a good reason for this Court to set aside the judgment of the lower Court. Counsel premised this on the argument that before a person enters into an agreement, he must have approached his Solicitor to advise him of the legality or otherwise of the agreement he seeks to be a part of.
RESOLUTION
The bone of contention in this issue is whether the lower Court rightly exercised jurisdiction in this case and the applicability of the Child Rights Law of Lagos State, 2007. It is settled law that jurisdiction is the threshold of any case and whenever the question as to jurisdiction is raised, it should be considered and determined first before considering anything else. As any decision no matter how well thought out will amount to a nullity once the Court lacks the authority to try it. See the cases of UGWA v LEKWAUWA [2010] 19 NWLR (PT 1226) 26 SC; OGUMKA v CAC (2010) LPELR 4891 CA; NNAJI v NFA & ANOR (2010) LPELR 4629 CA.
The contention of the Appellant is that the case is one of a mortgage or commercial transaction and the proper fora is the High Court and not the family Court. The 1st Respondent on the other hand is of the contention that the case has to do with the interest and right of a child. The first point of call in ascertaining which Court has jurisdiction is to consider the pleadings of the Claimant and the claims contained therein. The law is elementary that in the determination of whether a Court has jurisdiction, it is the claims or reliefs therein that will be considered. See the cases of ONUORAH v KADUNA REFINING & PETROCHEMICAL CO. LTD [2005] 6 NWLR (PT 921) 393; ADEOGUN v FASHOGBON [2008] 17 NWLR (PT 1115) 149 SC; UNITED PARCEL SERVICE v ADEYOSOYE (2010) LPELR 8668 CA.
The claim/reliefs of the 1st Respondent are reproduced thus:
1. AN ORDER setting aside the purported sale by the 1st defendant of the claimant/applicants property known and described as flat 707, block b10, 1004 estates, Victoria Island, Lagos. (hereinafter referred to as the property)
2. AN ORDER declaring null and void, the contract of guarantee/suretiship entered into by the claimant/applicant with the 1st defendant purportedly guaranteeing the debts owed and due to the 1st defendant by Credence Assets management ltd.
3. AN ORDER, directing the 1st defendant to refund to claimant/applicant all the rents and sundry income and payments it has received from the property pursuant to the said contract of guarantee, a schedule of which is annexed to this motion.
4. AN ORDER of injunction restraining the 2nd defendant from having any dealings or further dealings with the 1st defendant in respect of the said property an account of the said guarantee of the indebtedness or the credit facility extended to Credence Assets management Ltd by the 1st defendant.
5. AND FOR such Orders or further Orders as this honourable Court may deem fit to make in the circumstances.
A critical look at the claim/reliefs in the 1st Respondent/claimants Originating Summons will reveal that the case bothers on whether or not the Appellant rightly exercised the power of sale over the property in dispute. All the claims are hinged on the transaction/contract between the late Mr. Folabi Owolabi and the Appellant. Based on the record before this Court, the transaction was a fifty-million-naira loan granted to Credence Asset management Ltd, a company which Folabi Owolabi was the MD/CEO. The loan was granted for the refinancing of stock glass and hard board from China for sale in Nigeria and the security for the loan was an unconditional personal guarantee and lien on the set off over Folabi Owolabis 3 bedroom flat at 1004 estate, Victoria Island Lagos. The said property which is the crux of this case was purchased by Folabi Owolabi in the name of his son the 1st Respondent. The 1st Respondents father signed a Deed of Assignment in the name of the 1st Respondent transferring the title of the property to the Appellant (copy of the Deed of Assignment is at page 134 of the record). Also, an irrevocable letter of authority instructing the 2nd Respondent to deliver the Deed of Assignment to the Appellant when necessary was executed (see page 141 of the record).
The contention of the 1st Respondent is whether the transaction can stand in relation to the childs right. The indebtedness of Folabi Owolabi the 1st Respondents late father was not denied and some part of the debt was settled by Dr. Rita Folabi-Owolabi the mother of the 1st Respondent. She paid the sum of 3 million naira out of the total indebtedness of 17million naira plus. Several demands to amortize the loan proved abortive and it led to a final demand notice on the 28th of June, 2013 and the property was finally sold in July 2013 in order to recover the outstanding loan of Credence Asset management Ltd which said property was used as a security for loan.
The issue is not whether a child can enter into a contract rather it bothers on whether a guardian can enter into a contract on behalf of a child. The 1st Respondents father who was also his guardian dealt with the property in dispute as he purchased same in the name of the child and had control over it. He is the one that decided to buy the property in the first place albeit in the name of the child. The child is still a minor who can only lawfully own properties through his parents/guardian. A guardian can step into the shoes of a minor to undertake certain transactions and this was what led to the 1st Respondents father signing the Deed of Assignment on behalf of the 1st Respondent so as to validate the loan he was granted. I am sure the 1st Respondents father was aware of the implication of using the property he bought in the name of the child as a security for loan. Using the property as security for loan means he is willing to risk forfeiting the property in the event of failure to repay the loan. It was an unconditional personal guarantee to secure the loan.
The matter is purely one of a commercial/loan transaction. The claims of the 1st Respondent earlier reproduced above made reference to the setting aside of a sale and declaring as void the contract of guarantee. The fact that a child was mentioned in this case does not automatically clothe the Family Court with exclusive jurisdiction. If that were to be the case, then anyone can in a bid to enjoy the protection under the Childs Rights Law of Lagos State, 2007 carry out some transaction in the name of a child and perpetrate fraud. I am therefore of the firm view that the subject matter of this case is purely commercial which is outside the purview of the Family Court. The dispute has to do entirely with a loan contract entered into by the 1st Respondents late father company and the loan recovery. I do not see how this matter can be properly settled under the Family Court rules.
Having established that this case is outside the jurisdiction of the Family Court, the matter should not have commenced by way of an Originating Motion. The matter is contentious as to whether or not the selling of the property by the Appellant is void. The manner of proceedings adopted is inappropriate for a matter of this nature. There was no opportunity for placing documents properly before the lower Court neither were parties allowed to give testimonies in support of their cases. The decision of the lower Court was solely based on affidavit evidence.
A Writ of Summons ought to have been used to commence this action being a contentious one. It will give both parties the opportunity to properly present both documentary and oral evidence before the Court. See the case of ZENITH BANK PLC v UMOM (2013) LPELR – 22001 (CA).
A writ of summons is an initiating legal process by which the jurisdiction of a trial High Court can properly and validly b e invoked by a person or party who intends to seek for reliefs or remedies from the Court against another on any legal ground. It is on the writ of summons that all other processes statement of claim, statement of defence, counter-claim, et al, will stand. The documentary evidence to be relied upon will also be frontloaded before trial commences. It is based on these that the High Court will assume jurisdiction, hear the case of both parties on documentary and oral evidence before coming to a decision.
An originating motion on the other hand which is also a mode of commencement of action is used in the Family Court as provided for by the Childs Rights Law of Lagos State. It is also referred to as an originating application which is accompanied by an affidavit and mostly used where it is unlikely that there will be any substantial dispute of facts and for that reason, it is appropriate that there be no pleadings as evidence will not be led.
This case has raised the issue that has a commercial undertone. I believe the facts deposed to in both parties affidavit and counter affidavit of facts should be facts upon which both parties are examined and cross examined upon. The matter should be brought before the regular Court that will now make a decision on the preponderance of evidence.
Therefore having found that this case is purely one of a loan/commercial nature that does not affect the right/welfare of a child which makes the Childs Rights Law inapplicable and having also found that the mode of commencement will not bring about the justice of this case, I am of the firm view that the Family Court lacked the jurisdiction to sit on this matter.
This issue is therefore resolved in favour of the Appellant.
ISSUE TWO
Appellants counsel contended that the lower Court did not properly evaluate the evidence in this case before arriving at its decision. He referred to the case of OKE v NWIZI (2014) ALL FWLR (PT 757) 695at 744, paras G A on what evaluation of evidence entails. He contended that the lower Court failed to appreciate Exhibit E of the counter affidavit as an evidence of the transfer of the property in dispute from the 1st Respondent to the Appellant. He further contended that there is no controversy as to the ownership of the property. That Exhibit E was signed by Mr. Owolabi Folabi because of the incapacity of the 1st Respondent and that if the contention is that Mr. Folabi lacked the capacity to effect the sale of the property, then the property never belonged to the 1st Respondent in the first place and Mr. Folabi remains the legitimate owner of the block of flats.
Counsel reiterated that since a natural guardian can enter into an agreement to purchase a property on behalf of a child, there is nothing that stops such guardian from validating the sale of such property on behalf of the minor. He also submitted as baseless the argument that the 1st Respondent?s father is a separate legal entity from the fathers company and cannot pledge the property of his son for the company. He submitted that the 1st Respondent?s father was the alter ego of the company with majority shares and that the loan agreement between the Appellant and the 1st Respondents fathers company has Mr. Folabi Owolabi as the guarantor backed by a lien and right of setoff over the guarantors 3 bedroom property at 1004 estate. He submitted that the loan agreement is a valid contract that is enforceable and parties are bound by the terms of the agreement signed. He relied on the case of AJAYI v HARRY (2015) ALL FWLR (PT 770) 1302 at 1316, para F; AG NASSARAWA v AG PLATEAU (2012) ALL FWLR (PT 630) 1262 at 1282.
Counsel submitted citing the case of ABAH v OWEI (2015) ALL FWLR (PT 780) 1366 at 1367, para E C that where a trial Court fails to properly evaluate evidence, the appellate Court has the power to intervene and re-evaluate such evidence and draw the necessary conclusions in the case. He urged this Court to so do.
1st Respondent counsel in response contended that the 1st Respondent who is the legal owner of the property was illegally deprived from using the property and that the act was condemned by the lower Court. He submitted that the lower Court was therefore right to order the Appellant to give to the 1st Respondent all the rents and sundry income received from the property. Counsel was of the view that the Appellant is therefore duty bound to return the funds because the Appellant did not deny depriving the 1st Respondent the use of the property and the funds accrued and that he did not controvert the fact that it had been collecting the funds generated from the property.
RESOLUTION
Having come to the conclusion that the Family Court lacks jurisdiction in this case, there is nothing left to be considered under this issue. The issue has now become merely academic and trying to resolve the issue only ends in futility. See the case of OKE & ANOR v MIMIKO & ORS (2013) ALL FWLR (PT 693) 1853.
Resolving this issue will also mean going into the merit or otherwise of the dispute which should not be the situation at this point. As this Court has earlier stated under issue one that once a Court lacks jurisdiction to entertain a matter, the proceedings and judgment of the Court no matter how well conducted is a nullity and cannot stand. The judgment given without jurisdiction serves no purpose. The judgment cannot confer any right or benefit on any of the parties. It is a total nullity. See the case of OCHALA v FRN (2013) LPELR 21386 (CA). The claimant will have to commence the case afresh before the proper Court. See also the case of GBAGBARIGHA v TORUEMI & ANOR (2012) LPELR 15535 (SC) where it was held that:
All Courts and their jurisdiction are provided by the constitution, and/or relevant state legislation. Jurisdiction is a question of law. It is fundamental in all proceedings. Where a Court does not have jurisdiction over a matter before it and it proceeds to hear and determine the matter, the entire proceedings no matter how well concluded would amount to a nullity. This is so since a judgment given without jurisdiction creates no legal obligation, and so such a judgment does not confer any rights on any of the parties. Jurisdiction is so important, in that it can be raised at any stage of the proceedings, on appeal, and even in the Supreme Court for the first time. Once raised all proceedings must abate until it is resolved…
On the whole, having resolved issue one in favour of the Appellant, this appeal succeeds and same is hereby allowed. The judgment of the lower Court Honourable Justice O.A. OLAYINKA (MRS) of the High Court of Lagos State, Family Court division, delivered on the 15th of December,2014 is hereby set aside for lack of jurisdiction.
The case is hereby sent back to the Chief Judge of the Lagos State High Court for reassignment to a Judge sitting in his capacity as a regular judge of the Court.
MOHAMMED LAWAL GARBA, J.C.A.: After reading a draft of the lead judgement of my learned brother, Abimbola Osarugue Obaseki-Adejumo, JCA, in this appeal, I agree with reasoning and conclusion that the appeal is meritorious and deserves to be allowed.
I allow the appeal in terms of the lead judgement along with the consequential order made therein.
JAMILU YAMMAMA TUKUR, J.C.A.: I have read in draft the lead judgment just delivered by my learned brother ABIMBOLA OSARVGUE OBASEKI ADEJUMO JCA. I agree with the reasoning and conclusion contained therein. I adopt the judgment as mine with nothing further to add.
Appearances:
For Appellant(s)
Ademola Ekundayo with him, Ruth Ajibola and Temitayo Opajobi, for 1st Respondent.
Ihedilina Udughie, Mrs for 2nd Respondent.For Respondent(s)
