NIGERIAN INDUSTRIAL DEVELOPMENT BANK LIMITED v. ELDERSON NIGERIA LIMITED
(2018)LCN/12249(CA)
In The Court of Appeal of Nigeria
On Thursday, the 6th day of December, 2018
CA/AK/104/2013
RATIO
LEGAL PRACTIONERS: WHO CAN SIGN A SUIT
“On the question of whether the suit was not incompetent, parties addressed on the decision in Madukolu V. Nkemdilim (supra) and the Appeal as filed. The suit as instituted was incompetent as the originating processes were signed by a law firm rather than a legal practitioner. Okafor V. Nweke (supra). The argument that Respondent did not effect a competent suit, I agree that the Writ of Summons and the Statement of Claim were both defective and incompetent as they contravened the Section 1 (2) and Section 24 of the Legal Practitioners’ Act 1990, now Act of 2004.” PER MOHAMMED AMBI-USI DANJUMA, J.C.A.
JUSTICES
MOHAMMED AMBI-USI DANJUMA Justice of The Court of Appeal of Nigeria
RIDWAN MAIWADA ABDULLAHI Justice of The Court of Appeal of Nigeria
PATRICIA AJUMA MAHMOUD Justice of The Court of Appeal of Nigeria
Between
NIGERIAN INDUSTRIAL DEVELOPMENT BANK LIMITED Appellant(s)
AND
ELDERSON NIGERIA LIMITED Respondent(s)
MOHAMMED AMBI-USI DANJUMA, J.C.A. (Delivering the Leading Judgment):
This is an appeal against the decision of the High Court of Justice, Ondo State delivered on the 18th January, 2000 in Suit No. AK. 34/91 by His Lordship, Hon. Justice G. O. Olateru Olagbegi. The Judgment is at page 148 ? 193 of the record of appeal.
By paragraph 91 of the further and better Amended Statement of claim, the Plaintiff/Respondent claims as follows:-
1.Declaration that the 2nd Defendant is in breach of its implied duty and/or obligation to run the Plaintiffs Company efficiently since 1987 when it took over the management.
2. N103,755,906 being special damages by way of loss of profit suffered by the Plaintiff as a result of mis-management by the 2nd Defendant by the Plaintiff’s Company/factory between 1987 and 1991.
2(a) N100 Million being general damages suffered by the Plaintiff Company as a result of the mis-management by the 2nd defendant of the Plaintiff’s soft drinks plants.
2(b) Declaration that the Plaintiff is not indebted to the 2nd Defendant as reflected in it book of account as at 31st January, 1991.
2(c) An order of Court declaring the state of indebtedness of the Plaintiff to the 2nd Defendant.
2(d) Declaration that the Plaintiff is not indebted to the 1st Defendant in the sum of N773,966.04k as reflected in the books of account of the 1st Defendant as at January, 1991 or at any time.
2(e) An order of Court declaring the actual amount owed to the 1st Defendant.
2(f) An order setting aside the illegal entries, double entries and unilateral interest posted into the account of the Plaintiff by the 1st Defendant.
3. DECLARATION that the purported appointment of the 3rd Defendant as a Receiver of the Plaintiff company is irregular, invalid, ultra vires the power of the 1st & 2nd Defendants.
4. DECLARATION that the purported appointment of the 3rd Defendant as Receiver by the 1st Defendant and 2nd Defendant under and by the virtue of Deeds of Debenture and Mortgage registered as No. 25 at page 25 in volume 218 and No. 30 at page 30 in volume 396 of the Akure Lands Registry is irregular, invalid, null and void on the ground that the conditions precedent to such appointment have not been fulfilled.
5. INJUNCTION restraining the Defendant by themselves their servants, agents and/or privies howsoever from taking over, managing, selling or transferring by public Auction or private Treaty or otherwise deal with the assets of the Plaintiff company comprised in the Deeds of Debenture dated 25th April, 1985 and 4th June, 1985 (Registered as No. 25 at page 25 in volume 218 and No. 30 at page 30 in volume 396 of the Akure Lands Registry.
The trial Court at the end of the trial granted the reliefs of the Plaintiff/Respondent.
Dissatisfied with the Judgment of the trial Court, the Appellant has filed this appeal. However, suffice it to state that the initial Notice of Appeal filed on 17th May, 2000 was struck out on 27th October, 2008 for being incompetent. On 20th June, 2013, another Notice of Appeal of 13 (thirteen) Grounds of Appeal was filed and subsequently amended and deemed filed on 12th March, 2014.
Pleadings were filed and exchanged between the parties. The 2nd Further and Better Amended Statement of Claim of the plaintiff/respondent could be found at pages 17-25 of the record, while the Further Amended Statement of Defence of the 2nd Defendant/Appellant is at pages 26-32 of the record.
The parties called Oral Evidence in support of their respective pleadings. In all, the Plaintiff relied on the testimonies of four witnesses, PW1 – PW4 while four witnesses also testified for the 3 defendants. The other two defendants apart from the appellants were United Bank for Africa (UBA) and T. S. Oyelami who was the receiver manager appointed by UBA for the plaintiff/respondent upon the default of the plaintiff/respondent to fulfill her obligation to the said UBA.
On the 26th day of February, 1998 the respondent and the 1st and 3rd Defendants filed a term of settlement embodying the terms on which they resolved amicably their differences and the said terms of settlement was adopted by the Court as its judgment as between the respondent and the 1st and 3rd defendants on the 26th day of March, 1998. The content of the said terms is contained at page 180 of the record.
At the close of evidence, parties through their respective learned counsel addressed the Court orally. The address of the appellant could be found at pages 134-136 and 137-138 while that of the respondent is contained at pages 139-146.
The defendant’s reply address is contained at pages 146-147.
The resume of the facts of this case is that the plaintiff/respondent was an incorporated company that engages in bottling of soft drinks while the appellant also an incorporated company, performed banking functions as it lends money to its customers including the respondent. The respondent applied for credit facilities from the appellant which were granted and utilized and as securities for the facilities executed Deed of Mortgage by which its properties were charged to the appellant and also a mortgage debenture. These documents contain the terms and conditions guiding the credit facilities extended to the respondent. The appellant at all relevant time was also a share holder of the respondent holding 26% of her equity.
The respondent also took credit facilities from UBA for which it also charged some of its properties. At some point, the PW4, Dr. Femi Adekanye who was the promoter and the Chief Executive of the respondent was arrested by the then Military Government and that negatively affected the operations of the respondent which in turn affected its ability to meet her obligations to her creditors especially the 1st and 2nd defendants. It was on this note that the DW4 was seconded to the respondent’s factory to assist in the management of its plant. The DW4 did this until the return of the PW4 and even beyond with the concurrence of the respondent, the PW4 and his wife, PW1. The economic position of the respondent did not fare better and UBA the original 1st defendant had to appoint the 3rd defendant Mr. T. S. Oyelami as the Receiver/Manager for the respondent pursuant to our agreement executed in the wise.
Though appointed and performing his functions, the 3rd defendant could not take physical possession of the respondent’s plant because of the attitude of the PW4 and the Court case that culminated into this appeal. Meanwhile the obligations of the respondent to the appellant on account of credit facilities granted her by the appellant remained unsettled.
The appointment of Mr. Njemanze DW4 was extended initially at the request of the Respondent’s Chief Executive, the PW4. In keeping with the requirement for the procurement of additional facilities for the appellant, the said DW4 was again seconded to the respondent plant in 1987.
The PW1 and PW4 were expected to stop acting in executive capacity in relation to the management of the respondent’s plant though they continued maintaining their positions which they had occupied hitherto as Director and Chairman/ Managing Director respectively. The DW4 was recalled in October 1990 by the respondent though, the company continued production even after his departure. This was the situation until the original 3rd defendant was appointed as the receiver manager by the original 1st defendant, UBA Ltd.
Meanwhile, the defendants had strenuously challenged the competence of the action that culminated into the appeal on the ground that the trial Ondo State High Court lacked the requisite jurisdiction to entertain the case as the proper forum was the Federal High Court in view of the provisions of Decree 107 of 1993 and the Companies and Allied Matters Act. The Locus Standi of the respondent to institute and maintain the action was also challenged in view of the appointment of the original 3rd defendant by the original 1st defendant as the respondent’s/receiver/manager. The defendants also contended that in view of some reliefs adumbrated on the Further and Better Amended Statement of Claim the case did not disclose a cognizable cause of action. The Respondent contended to the contrary and urged that her reliefs be granted.
ISSUES FOR DETERMINATION
From its amended Notice of Appeal containing 13 Grounds of Appeal, the Appellant formulated the following six (6) Issues for determination, to wit:
1. Whether the trial Court possessed the requisite jurisdiction or vires to have taken cognizance of, countenance and/or entertained and give judgment in the respondent’s case before it, when the originating processes of the respondent before it were not competently brought before the trial Court same having been signed by Chief Afe Babalola SAN & Co, a non-legal practitioner.
2.Whether the trial Court was not in error in holding that the respondent had locus standi to institute the case culminating in this appeal in view of the appointment of a receiver/manager for her at the relevant time and in exercising jurisdiction on the case notwithstanding the provisions of the applicable laws and the non-disclosure of cause of action in the case?
3.Whether the trial Court was right in declaring that the appellant had an implied obligation to manage the respondent’s company more efficiently and that the appellant breached that duty/obligation to manage the respondent as professional managers and in further holding that the appellant was responsible for the inability of the respondent to settle her indebtedness to her creditors which led to the appointment of a receiver/manager for her by the 1st defendant before the trial Court?
4. Whether the trial Court was right in awarding the sum of N54,716,200.00 to the respondent as projected profit and in also granting the injunctive relief in the respondent’s favour and against the appellant.
5. Whether the learned trial judge was correct in ordering charging of interest on the respondent’s indebtedness to the appellant not beyond October 1990 and in declaring that the indebtedness of the respondent to the appellant was only N13,058,077,91?
6. Whether the judgment of the trial Court ought not to be set aside in view of the fact that it was predicated on wrong findings unpleaded facts and contrary to the evidence adduced before the trial Court?
The Appellant’s Brief of Argument filed on the 26th February, 2015 but deemed filed on the 8th February, 2016, while the Respondent’s Brief of Argument filed on 30/11/17 and deemed filed on 6/12/17.
Appellant also filed the Appellant’s Reply Brief, settled by Taofiq Olateju, Esq. On 2/7/18. The respective Briefs was adopted at the hearing. On their part, the Respondent formulated three Issues to wit;
1. Whether the suit initiated at the trial Court was not competent.
2. Whether or not the Appellant did not mismanage the Respondent’s company as professional managers.
3. Whether the trial Court was not right in awarding the sum of N54,719,200.00 to the Respondent as projected profit and also in granting the injunctive relief in the Respondents favour.
Having studied the entirety of the Record of Appeal and the respective Briefs of Argument filed in this Court, I am of the view that the issues formulated by the Respondent are all encompassing of the Appellants prolix issues and will be adequate to determine this appeal thereon.
Issues 1 and 2 of the Appellant is the same as the Respondents issue Number one (1).
Issue 3 of the Appellant is same as Respondents issue 2; while Issues 4 and 5 are same as the Respondent’s Issue 3.
APPELLANT’S ARGUMENTS
On Issue 1, it was argued that by the Ondo State Civil Procedure Rules, it was only a natural person or a legal practitioner that could validly issue an originating process, in this case, a writ of summons and the statement of claim. The Learned Counsel submitted that in the case of an originating process or any process filed by a legal practitioner, it must be signed by a legal practitioner in accordance with the dictates of the relevant laws.
The case of Oketade V. Adewunmi (2010) 8 NWLR (Pt. 1195) 63 at 78; Okafor V. Nweke (2007) 10 NWLR (Pt. 1043) 521 at 531; Mobil Oil V. Yusuf (2012) 9 NWLR (Pt. 1304) 47 at 57 and SLB Consortium Ltd V. NNPC (2011) 9 NWLR (Pt. 1252) 317 at 331 – 332 were relied upon. That the above decisions were given in full reliance on the provisions of Section 2 (1) and 24 of the Legal Practitioners Act, cap L11 LFN. 2004.
It is contended that a Court is only competent to hear a matter before it if certain conditions precedent have been met, as laid down in the case of Madukolu V. Nkemdilim (1962) 2 NSCC 374 at 379 – 380.
It was argued that a Court can have a look at its own file/record suo motu and make use of the documents/processes therein to arrive at a just decision in respect of action before it Mhambe V. Shidi (1994) 2 NWLR (Pt. 326) 321 at 330 and Fumdoh V. Aboro (1991) 9 NWLR (Pt. 214) 210 at 229 par E referred.
Flowing from the above position, it was observed that the writ of summons dated 7th February, 1991 found on pages 1 – 2 of the record and the statement of claim, found at pages 4 – 10 of the record at the trial Court are not signed by a legal practitioner as required by Section 2 (1) and S. 24 of the Legal Practitioners Act as they were signed by Chief Afe Babalola, SAN & Co, which is not on the roll of the Supreme Court and that this rendered the two processes incompetent, null and void. That the effect is that the suit was not initiated by due process of law.
That the Judgment was an exercise in futility as ‘ex-nihilo, nihilo fit’ ‘which means ‘you cannot put something on nothing and expect it to stand; it must definitely collapse or fall flat, like the wall of Jericho SLB Consortium V. NPPC (2011) 9 NWLR (Pt. 1252) 317 at 336 – 337, 338; Oketade V. Adewumi (2010) 8 NWLR (Pt. 1195) 63 at 78 par A – D were further relied upon. That no amendment could have cured the defect.
That the position was as if no processes were filed in this matter at the trial Court Goldmark Nig. Ltd & Ors V. Ibafon Co. Ltd & Ors (2012) 5 SCM 113 at 170 – 171 par 1 – C.
That the Court should strike out the Suit and this appeal as nothing had been filed validly. That this issue be resolved in favour of the Appellant.
Arguing on the aforesaid issue, the Respondent argued that the suit instituted at the trial Court was competent as the trial Court was seized of jurisdiction to hear the matter.
That the conditions in Madukolu V. Nkemdilim (1962) 2 NSCC 374 at 371 – 380 were met. That at the time of the institution of the suit, Decree No. 107 of 1993 which was the Constitution (Suspension and Modification) Decree 1993 was yet to be promulgated. That the Decree 109 of 1993 was effective on 17th November, 1993 and that the trial Court having taken addresses on the question raised suo motu and given a Ruling that he had jurisdiction to continue to hear the case and there being no appeal therefrom, this Court had the jurisdiction to entertain the matter.
On the non-signing by a legal practitioner, Counsel argued that all the processes of the respective parties were so signed by law firms and wondered why the Appellant glossed over their own processes.
That Appellant also signed their own Further Amended Statement of Defence in the name of S. A. Onadele & Chief Taiye Omoniyi & Co. 2nd Defendants Counsel, 7 New Hospital Road, Akure.
That laws are not meant to have retroactive effect; relies on Section 4 (9) of the 1999 Constitution of the Federal Republic of Nigeria (as amended).
That that applies to Judgments too, being also a source of our laws. That the decision in Okafor V. Nweke should have no retroactive effect on the processes and Judgment in this case delivered before Okafor V. Nweke (supra).
That this Court has decided that the mistake of Counsel be not visited on litigants who are innocent and not conversant with style and procedure of signing and filing of processes.
Attorney-General of Federation v. Bi-Courtney Limited (2014) LPELR 22968 C.A. and Adeosun V. Akinyemi (2007) 4 NWLR (Pt. 1023) 47 relied upon on this point; we were urged to rely on the Supreme Court decision of full Court billed to Rule on the question whether the Rule in Okafor V. Nweke Supra should be departed from. On the related question of locus standi: The Respondent had argued that the Respondent/Plaintiff had the locus standi to institute the action at the trial Court. That Mr. T. A Oyelami never took over the affairs of the company as a receiver/manager.
That the said Mr. T.A. Oyelami had in his evidence stated that:
“Assuming I had resumed as Receiver/manager of the Plaintiff on realising the debt owed the 1st Defendant, I would have left the Plaintiff Company. I did not get to the stage of preparing a statement of the affairs of the company or taking inventory of it. I never took physical control of the Plaintiff/company before the order of injunction was served on me.” Pages 121 – 122 of the Record of Appeal).
That the Appellant was not appointed a Receiver manager and no 14-day notice was given and so he cannot be said to have taken charge of the affairs of the company as stipulated by law.
Relying on Section 299 of CAMA it was submitted that if an irregularity had been committed in the affairs or wrong done to the company, only the company can rectify the irregular conduct.
That the wrongful takeover of the respondent’s company by the Appellant and mismanagement of the company can only be challenged by the company i.e. Respondent itself and no other.
That the Respondent had the locus standi to institute the action. On the question of jurisdiction, revolving round Decree No. 107 of 1993, it was submitted that laws are not meant to have retroactive effect. That the decisions relied upon by the Appellant are not in its favour. On the non-disclosure of cause of action; that it is the statement of claim that will be considered. SeeAkilu V. Fawehinmi (1988) SC 215. That the statement of claim disclosed a cause of action. That the suit was therefore competent.
In reply, the Appellant had argued as relating lack of locus standi that a perusal of paragraphs 84, 85, 86 and 89 of the statement of claim on pages 23 – 24 of the record and paragraphs 27 and 29 of the Further and Better Amended Statement of Claim at page 18 of the record reveals unequivocally that before the filing of the suit, one Mr. T. A. Oyelami had been appointed as the receiver manager of the Respondent by United Bank for Africa Ltd. That that was why the United Bank for Africa Ltd who appointed Mr. T. A. Oyelami and its said appointee (Mr. T. A. Oyelami) were sued as 1st and 3rd defendants respectively, before there was an amicable settlement between them and the Respondent.
The Learned Counsel referred to the reliefs claimed in paragraphs 91 (3) and (4) of the statement of claim at pages 24 and 25 of the record to drive home the point being made.
The evidence-in-chief of Dr. (Chief) Femi Adekanye, the chief-promoter of the Respondent and its Chief Executive at page 75, lines 9 – 14 and his testimony under cross-examination at page 83, lines 20 – 25 and page 96 line 31 to page 97 lines 1 – 5 showing that at the time of the commencement of action Mr. T. A. Oyelami had been appointed as the receiver/manager for the Respondent company. That since the company was under receivership and there was paucity of evidence to show that the Board of Directors of the Company authorised the filing of the action then the Respondent lacked the requisite locus standi to institute the action and the trial Court was in error in overruling the Appellant’s objection to the locus standi of the plaintiff.
That locus standi was so crucial and goes to the jurisdiction of the Court and must be ascertained before an action could be held competent.F.M.B. Ltd V. N.D.I.C. (1995) 6 NWLR (Pt. 400) 226 at 244.
It is submitted that though locus standi could be conferred by the Constitution or a Statute, it cannot be presumed or implied, but must be disclosed by the matter seeking to invoke the judicial power of the Court. F.M.B. Ltd V. N.D.I.C. supra at 239. That Section 393 (1) of the Companies and Allied Matters Act 1990 vests in the receiver the power to take possession of and protect the property of the company over which he was appointed receiver, amongst other powers.
That premised on the above, it was only the receiver/manager that had the powers to institute an action for the benefit of the company or with his concurrence as it is only with the leave of the Court that an action may be maintained in the name of the company.
That the Board of the Company (Respondent) which the Appellant had a nominee by virtue of his equity shareholding did not ever authorise the institution of the suit. That the Respondent lacked the locus standi to have instituted this suit. Inter Contractors (Nig.) Ltd V. UAC of Nigeria Ltd (1988) 1 NSCC 737 at 751.
That the trial Court’s holding that though the 3rd Defendant was appointed a receiver/manager he never took over the management of the respondent company at any time (which weighed in his mind) was wrong. That taking over was not a condition for the effectiveness of the receivership.
That Section 392 (1) merely prescribes punishment or penalty where the requirement of Notification was not satisfied by the receiver. That Exhibit BB, however has satisfied the requirement before the commencement of the action.
That the receiver has legal title to all the properties and assets of the company and because he has legal title, he has possession. That non-possession and non-notification were not tenable views against the status of the receiver.
The Learned Counsel argued that the Section 299 of CAMA, 1990, that was relied upon by the trial Court to invest jurisdiction in the respondent was a general provision protecting the minority against the operation of the majority; that it was a codification of the common law Rule in Foss V. Harbottle (1843) 2 Hare 461. That is to say where a wrong has been done to a company, the proper Plaintiff is the company itself as opposed to a shareholder.
That Section 387 to 394 under Part IV of CAMA, was a special provision, dealing with a situation where a receiver has been appointed; that its provisions will preponderate over the general provisions of Section 299 of CAMA, therefore Schroder V. Major (1998) 2 NWLR (Pt. 101) 1 at 21; Akpan V. State (1986) 3 NWLR (Pt. 27) 225 at 228 relied up and finally we have been urged to strike out the case for lack of locus standi; and to allow the appeal. Senator Abraham Adesanya V. President Federal Republic of Nigeria (1981) NSCC Vol. 12 146 at 161 relied upon.
On the sub issue on jurisdiction, it was also contended that jurisdiction was in the Federal High Court as opposed to the State High Court. That jurisdiction was so fundamental that where it was lacking, the whole proceedings becomes a nullity no matter how well conducted. Senate President v. Nzeribe (2004) All FWLR (Pt. 215) 359 at 373 and Labaran V. Okoye (1995) 4 NWLR (pt. 389) 3030 at 317.
It was contended that it is the claims of the Plaintiff that determines jurisdiction, see Okulate V. Awosanya (2000) 2 NWLR (Pt. 646) 530 at 555 – 556, and therefore that the Court must have vires to pronounce on all the issues in the case, especially where they are bound together as in the case now on appeal as the Court cannot entertain jurisdiction on only a part of the case and lacking in jurisdiction in some aspects. The cases of Tukur V. Gov. Taraba State (1997) 6 NWLR (Pt. 510) 549 at 582 – 583 and Nigeria Social Insurance Trust Fund V. Adebiyi (1999) 13 NWLR (pt. 633) 16, at 27 ? 28.
It was contended that with the promulgation of the Decree 107 of 1993 on 17 November, 1993, when the case was pending, the unlimited jurisdiction of the High Court conferred vide Section 236 of the Constitution of 1979, was altered by Section 230 (e) of the Decree that transferred all such jurisdiction exclusively to the Federal high Court as relating companies and allied matters and any other common laws regulating the operation of companies.
It was contended that the High Court had lost jurisdiction by the enactment of the Decree No. 103 of 1993. The case of Olutola V. University of Ilorin (2005) All FWLR (Pt. 245) 1151 at 1185 Per Edozie, JSC relied upon. Adah V. NYSC (2004) 13 NWLR (Pt. 891) 639 at 648.
It was also argued that no cause of action had been disclosed; Relying on Thomas V. Olufosoye (1986) 7 NWLR, it was contended that the reliefs sought in paragraphs 91, 2b, 2c, 2d, 2e and 2f among others are such that disclosed no reasonable cause of action.
That a Debtor like the Appellant cannot sue his Creditor that he is owing a certain amount of money. That that will disclose no cause of action and where so filed, it should be dismissed.
That the trial Court wrongly assumed jurisdiction and also wrongly granted the reliefs sought. He cited UBN Ltd V. Penny Mayt Ltd (1992) 5 NWLR (Pt. 240) 228 at 245 ? 246 per Ogundare, JCA (as he then was).
On the substance and merit of the decision appealed, the Appellant argued same by its Issues 3, 4, 5 and 6.
On Issue 3; it was argued that the Appellant was not in any form of contract with the Respondent to manage the affairs of the company as professional manager, that there was no such undertaking directly or indirectly and therefore that the Appellant was not in breach of any term of any such contract between the parties as non existed. That that was not the pleadings or the case of the Respondent; That the trial Judge set up a new and different case for the Respondent. That just as parties cannot set up a different case in the pleadings and seek to establish a different case, the Court cannot also set up a case different from the one formulated by the parties in their pleadings.George V. Dominion Flour Mills Ltd (1963) 1 ALL NLR (1995) 2 NWLR (Pt. 380) 647 at 671 and Iheanacho V. Ejiogu (1995) 4 NWLR (Pt. 389) 324 at 335.
That the pleadings only alleged mismanagement. That it must be pleaded that the company was to be managed by professional managers and strictly before the Court could so hold. That this has to be as the purport of pleading is to bring out clearly what facts the other side or adversary was expected to meet at the trial. Bamisile V. Ote (1995) 8 NWLR (Pt. 411) 1 at 10 relied upon.
It was submitted further that the pleading in paragraph 73 upon which the relief granted in paragraph 91.1 by the trial Court was presumably predicated was ambiguous, unclear and evasive in relation to what the trial Court found to be a contract, express or implied to manage the Respondent’s company as professional managers by the Appellant. Ifeanyi chukwu Osondu Co. Ltd V. Akhigbe (1999) 11 NWLR (Pt. 625) 1 at 16 – 17.
That since there was no clear pleadings on the issue, the Court had no vires to make any award on it and where so made, it should be set aside; that a decision predicated on unpleaded facts ably qualifies for a perverse decision which this Court should not allow to stand. Nnorodim V. Ezeani (1995) 2 NWLR (Pt. 378) 378 at 467.
That a Court cannot make a case out of the evidence and give its judgment as opposed to the case put forward by the parties before it. That if it so happens, the decision should be set aside. Relies on Adeniji V. Adeniji (1972) 1 ALL NLR 301 at 308; Anie V. Uzorka (1993) 8 NWLR (Pt. 309) 1 at 16.
That even if there was pleadings to not managing the respondent plant efficiently, there was no plausible evidence to back up that assertion and the trial Court was in error to have so held. Help Nig. Ltd v. Silver Anchor (Nig) Ltd (2006) 5 NWLR (Pt. 972) 196 at 212.
It was submitted that the holding that the Appellant failed to improve on the fortune of the Respondent plant lost sight of the myriad problems confronting the plant even before the secondment of Mr. Njemanze.
The admission of Dr. (Chief) Femi Adekanye in cross-examination at page 81 lines 16 to 25 of the record:
“The problem started in 1985 with my arrest and detention and all accounts belonging to the company were frozen. The account with the 1st Defendant was an operating Account into which all proceeds were paid. Because the account was frozen, it was not possible to settle all indebtedness to the 1st defendant. Immediately after my arrest and detention, there were paralysis in the operation of the company which made it necessary for the NICB to come in, in the first place, my wife, Mrs Adekanye was still in charge when I was incarcerated. However, she could not do much other than to assure workers that everything would soon be done to re-activate the company and also secure my release. I was released towards the end of September, 1985 and the accounts were not defrozen until towards the end of 1986. During this period, we had not paid indebtedness to the 1st Defendant.”
That there was no evidence that the Appellant did anything that it ought not to have done or omitted to do something which it ought to have done. That the Court imposed strict liability on the Appellant.
That the appellant was a shareholder in the company and took steps in protecting the interest of the company including its own investment. That even the chief-promoter Chief Dr. Adekanye was quick to admitting in cross-examination that the Appellant did nothing unusual. It was submitted after a review of the evidence of DW4 that there was no fault at all on the part of the Appellant in the conduct of the affairs of the Respondent, nor was the appellant responsible for any loss. That it was the fault of the promoters of the company who had vindicated the Appellant and DW4. That Issue 4 be resolved in favour of the Appellant and the finding I purported on breach of any implied or actual condition of supposed contract be set aside as perverse and the Issue 3 be resolved in favour of the Appellant.
On issue 4 relating the award of special damages and injunction, it was argued that there was no basis established for the award either by the pleadings or evidence led.
The learned Counsel referring to the Court?s reliance on the testimony of PW2 in finding liability for the special damages decried that practice as the evidence led and the Exhibits tendered in that respect were all on projections, speculations and not certainty of income or expected incomes/profits. That the so called unchallenged Exhibits GG to GG 3 did not amount to proof by the Respondents of the sum awarded in their favour.
On the injunction sought, it was contended that by the Deed of Legal Mortgage and Debenture Deeds, the Respondent was an undischarged Debtor and cannot be granted an order of injunction restraining the enjoyment of the legal right in the Appellant, Akibu V. Oduntan (1991) 2 NWLR (Pt. 171) 1 at 10. That the perpetual order of injunction was wrongful. Iyimogu V. Gov. Of Plateau State (1994) 8 NWLR (Pt. 360 73 at 103, Biyo V. Aku (1996) 1 NWLR (Pt. 422) 1 at 34. The legal right of the Respondent had been voluntarily mortgaged and put in abeyance as it had not redeemed same. The relief of perpetual injunction was without basis, it was contended.
On the Issue Five, it was submitted that it was incumbent on the respondent to show that it was not indebted to the Appellant. That to proceed to limit the period for the computation of interests against the indebtedness amounted to making a case for the Respondent contrary to the pleadings and evidence led. That it amounted to granting a relief not prayed for. That there was no cause of action to seek a declaration of the Plaintiff’s indebtedness to the defendant when the creditor/Appellant had not evinced an intention to enforce a debt.
That there was no counter claim by the Appellant to have warranted the relief thus entertained and granted. That it was incumbent for the Respondent to show that it was not indebted to the Appellant as reflected in his book of Account as at 31st January 1991 or at any time. The same Respondent had a duty to show illegal entries, double entries and unilateral posting of interests into her account as alleged in paragraph 91 – of the claim. See Sanusi V. Ameyogun (1992) 4 NWLR (Pt. 237) 524 at 557; Onyemelukwe V. WACC (1995) (Pt. 387) 44 at 56. That there was no pleading warranting that award.
That the laconic and generic averment in paragraph 87 of the claim at page 23 of the record that Appellant has been charging interest at a rate ranging from 15% to 30% without the periodic rate was in contravention of Order 25 Rule 5 (1) of the Ondo State High Court (Civil Procedure) Rules applicable at the time relevant for none specification and the declaration granted thereon was wrong.
That the reliefs were in the nature of special damages which were to be strictly pleaded and proved strictly; failing which the claims ought to have been dismissed. That the PW2 the only expert witness only testified to projected profit of the company and did not say the statement of account prepared by the Appellant was either faulty or unreliable. (Page 66 – 99 of the record).
That PW3 -staff of the Central Bank did not say the statement of account prepared by the Appellant was faulty. That even PW4, the Chief-Promoter of the Respondent did not fault the statement of account.
That a Court of law is not a gratuitous institution and so the order of the Court limiting the period of interest and the calculation based on it was liable to be set aside. Ekpeyong V. Nyong (1995) NSCC Vol. 9, 28 at 32.
That confining the indebtedness to 1990 as against 1992 and also in saying that the Exhibit LL ? LL1 has not has been controverted, it would have been taken as the correct position of the Respondent?s indebtedness to the Appellant. The non-communication of the Exhibit LL ? LL1 and MM ? MM3 to the Respondent as Debtor will not diminish the amount of indebtedness, except if the correctness of the indebtedness is successfully challenged.
That it is not correct that the operation of the company ceased on the recall of Mr. Njemanze DW5, as Njemanze himself testified that the operation of the company continued even after his recall.
That the trial Judge was wrong in retiring to his chambers to conduct investigations to arrive at a decision, not on facts demonstrated at the hearing. Durumiya V. C.O.P (1961) NNLR 70. That passing the period for the payment of interest to October 1990 and in declaring that the indebtedness of the Respondent to the Appellant was N13,058,077.99 was in error. That this issue be resolved in favour of the Appellant.
On Issue 6, it was argued that the decision was perverse for the respective findings found by the Court and which were a negation of the award. DW5 left office by October 1990.
There was evidence of PW1 and PW4 that the keys of the Respondent plant was with PW1 after the recall of DW5 by October. That where evidence was not reckoned or the Court made a decision on facts not proved, the decision was perverse and should be set aside.
The Respondents had urged that all the issues be resolved in their favour and the appeal be dismissed.
RESOLUTION OF ISSUES.
The Appeal could be determined fairly and justly on the 3 Issues raised by the Respondent which are the same as the Appellant’s Issues 1 – 3.
On the question of whether the suit was not incompetent, parties addressed on the decision in Madukolu V. Nkemdilim (supra) and the Appeal as filed.
The suit as instituted was incompetent as the originating processes were signed by a law firm rather than a legal practitioner. Okafor V. Nweke (supra). The argument that Respondent did not effect a competent suit, I agree that the Writ of Summons and the Statement of Claim were both defective and incompetent as they contravened the Section 1 (2) and Section 24 of the Legal Practitioners’ Act 1990, now Act of 2004.
As this Court stated in Appeal No. CA/AK/52/12 Medical And Health Workers Union of Nigeria (MHWUN) & 6 Ors V. Comrade G.O. Oyebode (Chairman) & 4 Ors delivered on… (unreported), Danjuma, JCA stated thus:
“On the competence of the 1st to 8th Respondents’ Brief of Argument, as contended by the Learned Counsel for Appellants in their Reply Brief, the law is settled that a process before the Court is incompetent, invalid, null and void if it is not signed by a legal practitioner who is, in accordance with the Legal Practitioners Act, entitled to practice as a barrister or a barrister and a solicitor, either generally or for the purpose of any particular office or proceedings. See the case of Oketade V. Adewunmi (2010) 8 NWLR (Pt. 1195 63 and Sections 2 (1) and 24 of the Legal Practitioners Act, Cap. L 11…”.
The argument on the non-retroactive effect of the decision in Okafor V. Nweke (supra) cannot sail, as the Legal Practitioners Act which defines a legal practitioner and provides for the qualification of a person to sign and file any legal process in Courts of law in Nigeria is, as defined in the law that existed since 1962 i.e. The Legal Practitioners Act, 1962. (before the suit or decision the subject of this appeal).
Chief Afe Babalola (SAN) & Co. Is certainly not a legal practitioner to sign any such legal process. The Okafor V. Nweke case only re-emphasises the existence of a binding statutory law, which was binding on the Court of trial. The authorities in the cases decided before the suit and these after the commencement or determination of the suit are all good and applicable law. The writ, having been signed as objected to, simply means that one of the conditions precedent for the validity of the writ and statement of the claim was absent; this made those processes incompetent; the trial Court therefore had no jurisdiction. See Madukolu V. Nkemdilim (1962) 2 NSCC 374 at 371 – 380.
In the same token, the promulgation of the Decree No. 107 of 1993 effectively ousted the jurisdiction of the High Court of the State and Federal Capital Territory and effectively vested the exclusive jurisdiction in respect of the matters in dispute on the Federal High Court. See Osakwe V. Federal College of Education (2010) 3 SCNJ 529.
The suit, at the point of the cessation of jurisdiction to try the same on the subject matters stood good for the inevitable order of transfer to the appropriate Federal High Court. It could not have been struck out since it was within jurisdiction at the time the cause of action arose. See Osakwe V. FCE Asaba (supra).
An order of transfer, in this circumstance, cannot, however, be made as the suit was, ab-initio incompetently initiated by the defective originating processes and does not exist in law, therefore. See Agbiti V. Nigeria Navy (2011) 2 SCNJ 1.
The cases of Afolabi & ors V. Gov. Of Oyo State & Ors (1985) 2 NSCC 1151 at 1165 frowning against retroactivity of statutes cannot operate to confer jurisdiction that had been ousted in the substantive matter. It is not the application or otherwise of a rule of practice at a relevant stage of a matter pending in Court that is at play. That the other side also filed an incompetent originating process does not justify or validate or make competent the processes impugned as, after all, there is no complaint raised against the Plaintiff/Appellant’s processes in any suit or counter claim.
This statutory infraction that has occasioned the incompetence here-in cannot be waived as an inadvertence of Counsel or procedural irregularity, tardiness, inadvertence or mistake of Counsel warranting the judicious exercise of any Court’s discretion to warrant accommodation and the determination of the case on its merit. The cases of A.G. (Federation) V. Bi-Courtney Ltd, (2014) LPELR 2298 CA and Adeosun V. Akinyemi (2007) 4 NWLR (Pt. 1023) 47 cannot be invoked to cure the incompetent processes. Okafor V. Nweke remains the law, no matter the period covered.
On the related argument on locus standi: grounding a competent party and hence competent suit in the Court, it is clear to me that Mr. T. A. Oyelami had been appointed a receiver/Manager. He was bound to take possession and is in law deemed to take possession, as equity imputes as done which ought to have been done; and therefore it is he, who could sue for the protection of the company property and the realisation of its indebtedness and with a right to settle the pending claims and debts. The Receiver’s powers/duties are subject only to ‘Prior encumbrances’. See Section 393 (1) of the Companies and Allied Matters Act, 1990, (now 2004).
The Respondent had contended that without the prior Notice given within 14 days of the Appointment of the Receiver and the non taking of possession, the Receiver cannot be said to have taken charge of the Affairs of the company as stipulated in law.
I do not think so; It is, therefore, not correct as contended by the Respondent that the company Respondent rightly commenced the suit and under Section 299 of CAMA 1990; this cannot be, as the right of the company to sue is subject to the provisions of the S. 392 (1) of a Receiver. The Company’s right to ‘Sue to remedy an irregularity in the course of the company’s affairs or to remedy any wrong done to the company and/or to ratify the irregular conduct’ simply refers to the exercise of minority rights or the right to sue the Directors to prevent abuse, such as inside trading or conflicts of interests. The taking over of the Respondent did not in the circumstances, confer a status against the Appellant herein to institute an action. That is to say, that the Respondent’s right to sue was in the circumstance unavailable, in law.
While the State trial High Court may have rightly assumed jurisdiction but with the promulgation of Decree No. 107 of 1993, the Court ceased to have jurisdiction and the matter ought to have been transferred to the Federal High Court, at best. This case commenced at the trial Court on 22nd day of October, 1996 at the latest when hearing started and the Decree had effectively come into force ? almost 3 years before then. At the earliest, it was in 1994 when motions and objections were taken.
Indeed, I would agree with the Appellant’s Counsel that upon the non-existence of either a competent claimant and apparent liability disclosed, there was no cause of action disclosed to warrant the view that there was a competent suit worthy of a transfer.
Appellant’s Issues One and Two are both resolved in her favour. With the resolution as above, the respondents Issue One is therefore resolved against it to wit, that the suit instituted at the trial Court was (i) incompetent, lacking in (ii) locus standi, and (iii) disclosed no cause of action. This Appeal, upon these issues alone should succeed and the trial Judgment be set aside and suit struck out.
However, I shall comment on the remaining issues of the Appellant. The Issues 3, 4, 5 and 6 are all resolved in favour of the Appellant as clearly the resolutions in the Judgment were upon unpleaded or unproved averments in the main. The trial Judge had in perversity, with due respect, and against the evidence, made out a different case for the parties and given judgment for remedies unproved by evidence. Romaine V. Romaine (1992) 4 NWLR (Pt. 238) 650 at 668.
It is to avoid delving into an academic exercise that I think, that with an incompetent suit in all ramifications, it suffices that the Appeal is allowed and the Judgment in Suit No. AK/34/91 delivered on 18th February 2000 is set aside and the suit struck out. I so order.
Appeal allowed.
RIDWAN MAIWADA ABDULLAHI, J.C.A.: I have been availed the benefit of reading in draft the lead judgment just delivered by my learned brother, Mohammed Ambi – Usi Danjuma, JCA, I agree entirely with the reasoning and conclusion reached therein, that the originating process filed at the trial Court in this case leading to this appeal is incompetent and should be struck out.
A process prepared by a legal practitioner must be signed by the legal practitioner but not by name of his firm. This is because, the effect of signing of an originating process by a law firm, as in the instant case, is that the originating process is incompetent, fundamentally defective and legally non-existent. The suit commenced by such originating process is incompetent ab initio. See Okafor v. Nweke (2007) 10 NWLR (Pt. 1043) 521; FBN Plc v. Maiwada (2013) 5 NWLR (pt. 1348) 444 and Okwuosa v. Gomwalk (2017) 9 NWLR (Pt. 1570) 259. The contention that the other side also filed an incompetent originating process does not and cannot validate the incompetent processes. It is for this reason and the fuller reasons given by my learned brother that I too struck out the incompetent suit and also allow the appeal. I abide by the order decreed therein.
PATRICIA AJUMA MAHMOUD, J.C.A.: I have read in advance the lead judgment just delivered by my learned brother, MOHAMMED A. DANJUMA, JCA. I agree entirely with his analysis and conclusion that the appeal is meritorious and should be allowed.
The main issue upon which this appeal was determined is the competence of the Writ of Summons, the originating process in this suit. The originating process forms the substratum of every case. In determining the importance or validity of an originating process in a proceeding and its effect on the jurisdiction of the Court, MUHAMMAD, JSC in the case of OLU ODE OKPE V. FAN MILK PLC & ANOR (2016) LPELR – 42562 held that
“an Originating Process is the foundation stone of any in any Court. It thus affects the jurisdiction of the Court. No Court of law can assume jurisdiction through a defective originating process. If it does, the proceeding however well conducted will amount to a nullity. As a nullity nothing more can competently be considered in this appeal. All other issues formulated by the respective parties collapse and are accordingly struck out”
The basis of this appeal is noncompliance with SECTION 2(1) AND (24) OF THE LEGAL PRACTITIONERS’ ACT, CAP L 11, LAWS OF THE FEDERATION, 2004. This provision requires processes of Court to be signed by the litigant himself or his legal practitioner. The Writ of Summons in dispute was signed by the firm and not the legal practitioner. The locus classicus on this issue is the case of OKAFOR V. NWEKE (2007) 10 NWLR PT. 1043, 521 AT 531. The contention of the Respondent in the instant case is that at the time this matter was instituted the decision in OKAFOR V. NWEKE was not in existence and can not be made to have retroactive effect. I agree with my learned brother that this argument is of no moment as the law has been in existence since 1962 and the case is only a judicial pronouncement of the law. Consequently I also allow this appeal and abide with all the consequential orders made therein.
Appearances:
Sulman O. Babakebe For Appellant(s)
O. G. Balogun, Esq.For Respondent(s)
