AFRIJET AIRLINES LIMITED v. PROF. GBOLAHAN ELIAS, SAN & ANOR
(2019)LCN/12614(CA)
In The Court of Appeal of Nigeria
On Thursday, the 31st day of January, 2019
CA/L/731/2018
RATIO
COURT AND PROCEDURE: LOCUS STANDI
“Locus standi is conferred on a party by the existence of sufficient legal interest in a subject matter. See the cases of UKEGBU v NBC [2007] 14 NWLR (PT 1055) 551; BEWAJI v OBASANJO [2008] 9 NWLR (PT 1093) 540. It is a condition precedent to the hearing and determination of a matter.” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
INTERPRETATION: INTERPRETATION OF STATUTE
“In the interpretation of the provisions of a statute, the intention or purpose for which the statute was enacted is what serves as a guide to the Court in the interpretation or construction of a provision. Such interpretation seeks to know the mischief that the statute is trying to correct. This approach to interpretation of statute was endorsed by the Supreme Court in the case of FCSC v LAOYE [1989] 2 NWLR (PT 106) 632, where it was held that:
It has long been established that the legislator himself intends the interpreter of an enactment in such a way as to implement, rather than defeat the legislative intention. The maxim is ut res magis valeat quam pereat.” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
WORDS AND INTERPRETATION: WHO IS A ‘RECEIVER’
“Unlike a Receiver in general, a Receiver appointed by AMCON automatically qualifies as a Receiver/Manager. This is so because unless a Receiver is also appointed as a Manager, he lacks the power to manage the affairs of the debtor company. A Receiver simpliciter has only the power to realise the assets of the debtor company with a view to repayment of the crystallised debts. A Receiver/Manager appointed under the AMCON Act is statutorily empowered to take possession of and protect the property under his receivership, to receive rents and profits and to discharge all outgoings and realise the security for the benefit of those on whose behalf he is appointed. See the case of PIB LTD v TRADE BANK NIG PLC [2009] 13 NWLR (PT 1159) 577.” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
WORDS AND INTERPRETATION: WHETHER VYING FOR A POST, QUALIFIES ONE TO THE POST
“An election to be a Manager is not the same as becoming a Receiver/Manager. The intention of Section 48(4) of the Act is to ensure that members of the public are aware of the new management of the debtor company via Receivership. The 1st Respondent does not require any statutory provision conferring on him the power to elect to become a Manager as erroneously argued by the Appellant. It is after he makes an election to manage the affairs of the debtor company that he must then proceed to give notice of his election by publication in two newspapers with nationwide circulation and also prepare a comprehensive plan for the rehabilitation of the debtor company within 30 days of the publication. The reason for this is because the enormous powers of the Receiver/Manager to act are not restricted to disposing off the debtor companys asset in order to realise debt. The power extends to the management of the affairs of the company and running the business effectively (where practicable) until the full outstanding sum of the creditor is recovered.” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
JUSTICES:
TIJJANI ABUBAKAR Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
JAMILU YAMMAMA TUKUR Justice of The Court of Appeal of Nigeria
Between
AFRIJET AIRLINES LTD
(IN RECEIVERSHIP) – Appellant(s)
AND
1. PROF. GBOLAHAN ELIAS, SAN
(THE RECEIVER/MANAGER OF AFRIJET AIRLINES LTD APPOINTED BY ASSET MANAGEMENT CORPORATION OF NIGERIA)
2. ASSET MANAGEMENT CORPORATION OF NIGERIA
(THE CORPORATION THAT APPOINTED PROF. GBOLAHAN ELIAS, SAN AS THE RECEIVER/MANAGER OF AFRIJET AIRLINES LTD) – Respondent(s)
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A. (Delivering the Leading Judgment):
The Respondents on 16/5/2016 commenced an action at the lower Court by way of an originating summons seeking for declaration to enable the 1st Respondent exercise his powers unhindered as the Receiver/Manager of the Appellant. The Appellant then filed processes in opposition to the originating summons and also a motion challenging the jurisdiction of the lower Court to entertain the suit.
On 12/1/2017, the lower Court per Honourable Justice (Prof) C.A. OBIOZOR of the Federal High Court sitting in Lagos delivered the judgment and the ruling in the suit. The ruling held that the lower Court had the jurisdiction to entertain the matter. The Court also granted all the reliefs of the Respondents in the originating summons and held that the Respondents shall not dispose of the assets of the Appellant until there is compliance with Section 48(4) of the AMCON Act.
Dissatisfied with the decision of the Court, the Appellant has appealed against the ruling of the lower Court. The appeal is brought pursuant to the leave of this Court dated 11/5/2018
The Appellant filed a Notice of Appeal on 18/5/2018 containing fifteen (15) grounds of appeal.
The Appellants brief of argument and also a reply brief was filed on 7/6/2018 and 13/9/2018 respectively. The brief was settled by Andrew C. Igboekwe, SAN; Joseph Ohakpo, Esq; J.C. Ugo, Esq; Ogochukwu Ofili (Miss); Oluwadamilola Ajayi (Mrs); N.J. Inyang, Esq and Stanley C. Ugwuoke, Esq all of Andy Igboekwe, SAN & Co. The Appellant settled five (5) issues for determination to wit:
1. Whether on proper construction of S. 48 of the AMCON Act 2010 (as amended by the AMCON Amendment Act No 7 of 2015), the only way a Manager can come into existence for a debtor company is by a receiver appointed by AMCON to elect to be a Manager of the debtor company.
2. Whether on proper construction of S. 48 of the AMCON Act 2010 (as amended by the AMCON Amendment Act No 7 of 2015), the 2nd Respondent i.e. AMCON can legally and lawfully appoint a Receiver/Manager for a debtor company.
3. Whether despite the clear, unambiguous and unequivocal stand of the 1st Respondent that he had voluntarily decided not to elect to be a Manager of the Appellant pursuant to S. 48(4) of the AMCON Act, the learned trial judge was right to compulsorily confer and/or foist the legal capacity of Manager of the Appellant on the 1st Respondent and thereafter assume jurisdiction in the suit and enter judgment in favour of the 1st Respondent qua Manager of the Appellant.
4. Whether from the facts and circumstances of this case, the Court below was right to hold that it had the jurisdiction and/or competence to entertain this suit and enter judgment in favour of the Respondents.
5. Whether the learned trial judge was right in law to assume jurisdiction, rely on and determine the Respondents amended originating summons based on an amended but unsworn affidavit in support.
The Respondents brief was filed 18/7/2018 and it was settled by Fred Onuobia; Abubakar G. Anafi and Temitayo Bukoye of G. Elias & Co., formulating four (4) issues thus:
1. Whether the publication of an election as to management of the Appellant by the 1st Respondent is a condition precedent to the institution of the suit.
2. Whether AMCON validly appointed the 1st Respondent as the Receiver/Manager of the Appellant.
3. Whether the lower Court foisted on the 1st Respondent the status of Manager of the Appellant to assume jurisdiction over the suit.
4. Whether the lower Court determined the originating summons by relying on an amended but unsworn affidavit.
The issues formulated by the Appellant will be adopted in the resolution of this appeal. The Appellant made his submissions under two broad issues and the resolution of this appeal will follow the same pattern. The submissions of the Respondents will be considered under the corresponding Appellants issue.
ISSUE 1 (issues 1, 2 & 3)
The Appellant submitted that by virtue of the amendment to the AMCON Act in 2015, new Subsections 3 to 9 were added to the existing Sections 48(1) & (2) and that by the said amendments, the only way a manager can come into existence for a debtor company is by a Receiver appointed by AMCON to elect to be a Manager of the debtor company pursuant to Section 48(4) of the AMCON Act 2010 (as amended).
Appellant submitted that the lower Court however interpreted Section 48 to mean that AMCON can appoint a Receiver/Manager and had appointed the 1st Respondent as the Receiver/Manager of the Appellant vide the deed of appointment dated 21st April, 2016. Appellant contended that this interpretation is wrong for several reasons.
He contended that from the clear provisions of Section 48(4), the choice to become a Manager is statutorily left in the absolute discretion of the Receiver and that the role of the Court is to interpret the law and not amend it. He referred to UGWU v ARARUME [2007] 12 NWLR (PT 1048) 367 at 498, paras C-D. He also contended that if there was no requirement for election, then why would such a person who is already a Receiver/Manager be expected to elect under Section 48(4) to become a Manager which he already is by virtue of his appointment by AMCON. Appellant added that in the construction of statutes, the express mention of one thing means the exclusion of other things not mentioned. He referred to JEV v IYORTOM [2015] 15 NWLR (PT 1483) 484; UWAKWE v ODOGWU [1989] 5 NWLR (PT 123) 562; amongst other cases.
The Appellant submitted citing Section 48(4) – (9) that some questions will remain unanswered if the lower Courts interpretation is accepted. Questions of who will have the statutory obligation of publication of the appointment and question of who will prepare a plan for the rehabilitation of the debtor company and how long will the Receiver/Manager appointed by AMCON manage the company. He added that the instant case now has a situation where the requirement of Section 48(4) (9) has not been complied with.
It was submitted that it was illogical and inconsistent for the lower Court to recognise the 1st Respondent as a Manager and then turn around at the end of the judgment to expect the 1st Respondent to elect to be a Manager. The Appellant submitted that the lower Court was wrong to have assumed jurisdiction without the Respondents complying with the conditions precedents in the AMCON Act.
He contended also that the interpretation of the lower Court has created a situation where the Receiver will be compulsorily conferred with the legal capacity of Manager against his free will. He submitted that the 1st Respondent had voluntarily elected not to be a Manager as there was nothing to manage and that the lower Court ignored this. He noted that it is not the duty of a Court to compulsorily confer a right when the person chooses to relinquish the said right. He referred to AKINYEMI v ODUA INV. CO. LTD. [2012] 17 NWLR (PT 1329) 209 and submitted that the lower Court ought to have dismissed or struck out the Respondents claims.
Appellant further submitted that if AMCON appoints the 1st Respondent as a Manager as claimed by the Respondents, then such an appointment is ultra vires AMCON’s statutory powers and constitutes a nullity. He referred to OLANIYAN v UNILAG [1985] 2 NWLR (PT 9) 599 and urged this Court to resolve the issues in the Appellants favour.
The Respondents on the other hand argued that the publication of the 1st Respondents election as to whether or not the 1st Respondent intends to act as Manager of the Appellant is not a condition precedent to the Respondents instituting the suit. He submitted that for Section 48 to apply, the 1st Respondent must have elected to manage the affairs of the Appellant and that it is the Receiver/Manager that is required to give notice of the publication in at least two national newspapers. He added that it is trite that the Receivership will remain in place until the indebtedness of the Appellant is satisfied. He referred to Section 393(1) of the CAMA; GOLDANA INVESTMENTS PTY LTD (RECEIVER & MANAGERS APPOINTED) v NATIONAL MUTUAL LIFE NOMINEES LTD & ORS (2011) NSWC 1134.
Respondents also submitted that the fact that the Receivership has been in place since April 21, 2016 is not due to any default on the part of the Respondents but that of the Appellant. He submitted that the Appellant has spuriously and severally challenged the powers of the 1st Respondent and has refused to provide the 1st Respondent with the necessary information regarding the affairs of the Appellant to enable the 1st Respondent make the appropriate election.
Respondents submitted that the essence of Section 48 is to ensure that where the Receiver/Manager appointed by AMCON decides to manage the affairs of a debtor company, such decision should be made known to members of the public and that the lower Courts interpretation confirms this position.
He also submitted that contrary to the Appellants erroneous arguments, the 1st Respondent does not become a Manager only after he has made an election. He contended that the 1st Respondent became a Receiver/Manager by virtue of his appointment by AMCON and that Section 48 of the AMCON Act should be given its clear and unambiguous meaning. He referred to the cases of OKUMAGBA v EGBE (1965) 1 NMLR 62; N.C.C. v MTN NIG COMM LTD [2008] 7 NWLR (PT 1086) 229. He noted that any person that has been appointed Receiver/Manager may still decide whether or not to be Manager and that it is the prerogative of the 1st Respondent. He submitted that by Section 48, publication in the newspapers is an act subsequent after the 1st Respondent has made his election and not a prerequisite for instituting an action to seek judicial protection. He referred to Orders 3 & 9 of the Federal High Court (Civil Procedure) Rules, 2009.
Respondents also submitted that it is only where the 1st Respondent decides to manage the affairs of the Appellant that he would be required to prepare detailed and comprehensive plan for the Appellant as provided by Section 48 (8) of the AMCON Act. He submitted that this appeal is an attempt by the Appellant to challenge the judgment of the lower Court even though he claims that the appeal is against the Ruling of the lower Court.
The Respondents submitted that AMCON has the power to appoint and did validly appoint the 1st Respondent as the Receiver/Manager of the Appellant. That the appointment was within the statutory and contractual powers of AMCON. He also submitted that the definition of the 1st Respondent as the Receiver in paragraph 4 of the affidavit in support of the originating summons is for the purpose of convenient drafting.
He contended that the case of the Respondents before the lower Court was that the 1st Respondent was appointed the Receiver/Manager of the Appellant and that is the premise upon which the Appellant predicated the motion and its defence. He submitted that it is after the Managers appointment that the Manager can look into the affairs of the debtor company and decide whether or not he will manage the affairs of the debtor company.
Respondents argued that upon his appointment, he has two major alternative roles: (a) recover the indebtedness of the Appellant by disposing the assets or (b) manage the affairs of the Appellant to recover the debt of the Appellant and that what Section 48 has done is to statutorily recognise the power of the 1st Respondent to choose either (a) or (a) and (b). That the election contemplated in Section 48 is not as to the 1st Respondent being the Manager but as to the 1st Respondent carrying out his functions as the Receiver/Manager.
RESOLUTION
The crux of the issue here is the proper interpretation of Section 48 of the AMCON Act (as amended) and its application to the circumstances of this appeal. The section is reproduced below:
48. (1) the Corporation shall have the power to act as, or appoint a receiver for, a debtor company whose assets have been charged, mortgaged or pledge as security for an eligible bank asset acquired by the Corporation.
(2) A Receiver under this Act shall have power to-
(a) realise the assets of the debtor company;
(b) enforce the individual liability of the shareholders and directors of the debtor company; and
(c) manage the affairs of the debtor company.
(3) The powers of a Receiver acting under the provisions of this section, shall be exercisable over all the assets and entire undertaking of the debtor company notwithstanding that only a part of the assets of the debtor or part was charged, mortgaged or pledged as security in relation to the eligible bank asset acquired by the Corporation:
Provided that such exercise of power shall be without prejudice to the existing rights of secured creditors or third parties in such assets.
(4) Where a Receiver under this section elects to manage the affairs of a debtor company or other debtor entity, under Section 48(2)(c), it shall give notice of its election by publication in at least two newspapers with nationwide circulation.
(5) A Receiver under this section approved to manage the affairs of a debtor company or debtor entity, shall, on the publication of the notice referred to in Section 48(4) become entitled to take over the management of the affairs of the debtor company or debtor entity in the name, and on behalf of the debtor company or debtor entity, for the benefit of the debtor company or debtor entity and the general body of creditors of the debtor company or debtor entity for the period specified in the notice.
(6) A Receiver managing the affairs of a debtor company or debtor entity under the provisions of this section shall be deemed to be a fiduciary of the debtor company or debtor entity and all its creditors; and shall in paying off any debts owed by the debtor company or debtor entity adhere to debt priority ranking prescribed under Section 494 of the CAMA.
(7) Subject to Section 48(9) of this Act and on the publication of the notice referred to Section 48(4) thereof, all judgments, claims, debt enforcement procedures existing or being pursued before the publication of the notice shall stand automatically suspended and be unenforceable against the debtor company for the shorter of a period of 1 year from the date of the publication of the notice or the period that the Receiver continues to manage the affairs of the debtor company:
Provided that claims relating to wages and other entitlements of existing staff of the debtor company or debtor entity and professional advisers shall not be so suspended.
(8) A Receiver acting under Section 48(2) (c) shall within 30 days of the publication of the notice referred to in Section 48(4) cause to be prepared a detailed and comprehensive plan for the rehabilitation of the debtor company or debtor entity.
(9) Where a Receiver acting under Section 48 (2) (c) fails to comply with the provisions of Section 48 (8), the provisions of Section 48(7) shall cease to apply.
The contention of the Appellant is that Section 48 of the Act intended that AMCON can only appoint a Receiver and that consequent upon the appointment, the Receiver has the statutory discretion of electing to become a Manager. He posits that AMCON can only appoint a Receiver and not a Receiver/Manager and that the lower Court had no jurisdiction to compel the 1st Respondent to elect to be a Manager.
In the interpretation of the provisions of a statute, the intention or purpose for which the statute was enacted is what serves as a guide to the Court in the interpretation or construction of a provision. Such interpretation seeks to know the mischief that the statute is trying to correct. This approach to interpretation of statute was endorsed by the Supreme Court in the case of FCSC v LAOYE [1989] 2 NWLR (PT 106) 632, where it was held that:
It has long been established that the legislator himself intends the interpreter of an enactment in such a way as to implement, rather than defeat the legislative intention. The maxim is ut res magis valeat quam pereat.
Consequently, interpretation of a statute cannot be based on the wording of the legislation alone. The words of a statute are to be read in their entire context, ordinary sense and in harmony with the object or intention of the statute.
The AMCON Act is a response to the banking crisis that rocked the country in 2009 as a result of different banks that suffered from the effects of non-performing loans. The reason or purpose for the enactment of the AMCON Act can be found in the recital to wit:
An Act to establish the Asset Management Corporation of Nigeria for the purposes of efficiently resolving the non-performing loan assets of banks in Nigeria and for related matters.
By a community reading of Section 34, 35 and 48 of the AMCON Act, AMCON as a corporation can either act as a Receiver or appoint a person as a Receiver and thus steps into the shoes of an eligible financial institution under the relevant deed of debenture upon becoming entitled to realise its security. In this vein, AMCON can appoint a Receiver of any assets subject to a mortgage, charge or security.
Unlike a Receiver in general, a Receiver appointed by AMCON automatically qualifies as a Receiver/Manager. This is so because unless a Receiver is also appointed as a Manager, he lacks the power to manage the affairs of the debtor company.
A Receiver simpliciter has only the power to realise the assets of the debtor company with a view to repayment of the crystallised debts. A Receiver/Manager appointed under the AMCON Act is statutorily empowered to take possession of and protect the property under his receivership, to receive rents and profits and to discharge all outgoings and realise the security for the benefit of those on whose behalf he is appointed. See the case of PIB LTD v TRADE BANK NIG PLC [2009] 13 NWLR (PT 1159) 577.
Following from this, Section 48 of the AMCON Act (as amended), reveals that:
1. The powers of the Receiver extends to all the assets of a debtor company
2. The notice of election is to be given if an election to manage has been made by the Receiver
3. Upon publication/giving notice of the election, the Receiver shall be entitled to take over the management of a debtor company
4. The Receiver is the fiduciary of the debtor company and its creditors, all claims and enforcement procedures stand suspended upon publication
5. A detailed and comprehensive plan is to be made thirty (30) days after the publication of notice.
6. The failure to prepare a detailed and comprehensive plan after the publication of notice shall make the provisions suspending all claims and enforcement to cease.
The provision is clear and unambiguous and what this means is that where a provision is clear and unambiguous, the provision must be given its plain and clear interpretation. See the cases of THE NIGERIA ARMY v SGT ASANU SAMUEL & ORS (2013) LPELR-20931 (SC); CALABAR CENTRAL CO-OPERATIVE THRIFT & CREDIT SOCIETY LTD & ORS v BASSEY EBONG EKPO (2008) LPELR-825 (SC).
There is nothing in the Act that requires that the Receiver can only become a Manager only after he has made an election. The section does not make a dichotomy between a Receiver and a Manager. The fact that Section 48 of the AMCON Act only made use of the word Receiver does not negate the fact that a Receiver can act both as a Receiver and Manager. There is nowhere the AMCON Act made an express prohibition of appointment as a Receiver/Manager. The argument of the Appellant is therefore misconceived and erroneous.
The 1st Respondent became a Receiver/Manager of the Appellant by virtue of his appointment by AMCON. Section 48 of the Act conferred the power upon AMCON to act or appoint a Receiver for a debtor company. The appointment of the 1st Respondent by the 2nd Respondent (AMCON) as the Receiver/Manager of the Appellant is therefore lawful.
AMCON having assumed the contractual rights of the lenders/creditors in respect of the purchased facilities also has the right to appoint a Receiver/Manager.
It is the prerogative of the 1st Respondent to elect and it is the reason why Section 48(4) of the Act provides that where a Receiver under this section elects to manage the affairs of a debtor company or other debtor entity, under Section 48(2)(c), it shall give notice of its election by publication in at least two newspapers with nationwide circulation.
It is pertinent at this point to define clearly what it is to make an election. The Blacks law dictionary, 8th edition at page 557 defined it as an exercise of choice or the act of choosing from several possible rights or remedies in a way that precludes the use of other rights or remedies.
In the light of the above definition, the 1st Respondent upon his appointment has to make an election in line with Section 48(4). However, the election has to be based on an informed decision, which will involve a thorough and in-depth knowledge of the affairs of the company leading to its indebtedness in the first place.
The 1st Respondent has been clothed with the power to function as a Receiver/Manager but has been inhibited from performing his duty which is backed by law and has not been in a position to make an election.
Therefore, it is a discretion that the 1st Respondent is to make after he is fully satisfied that this is the election he wants to make in addition to being a Receiver.
An election to be a Manager is not the same as becoming a Receiver/Manager. The intention of Section 48(4) of the Act is to ensure that members of the public are aware of the new management of the debtor company via Receivership. The 1st Respondent does not require any statutory provision conferring on him the power to elect to become a Manager as erroneously argued by the Appellant.
It is after he makes an election to manage the affairs of the debtor company that he must then proceed to give notice of his election by publication in two newspapers with nationwide circulation and also prepare a comprehensive plan for the rehabilitation of the debtor company within 30 days of the publication.
The reason for this is because the enormous powers of the Receiver/Manager to act are not restricted to disposing off the debtor companys asset in order to realise debt. The power extends to the management of the affairs of the company and running the business effectively (where practicable) until the full outstanding sum of the creditor is recovered.
It is in the light of this that the 1st Respondent applied to the lower Court seeking declaration to enable the 1st Respondent exercise his powers unhindered as the Receiver/Manager of the Appellant.
Apart from the power to manage the affairs, exercise power over all the assets and the entire undertaking of the debtor company, there is the legal implication that while the right of the
20
directors of the debtor company in receivership to deal with its assets not in receivership and other matters is preserved, in Receivership under the AMCON Act, such power has been taken away upon the appointment of a Receiver by AMCON. A Receiver/Manager therefore has the statutory power to manage the entire affairs of the company.
It must be noted that the power under the CAMA is different from the powers of a Receiver under the AMCON Act. Under CAMA, it is only the asset pledged by the debtor company that a Receiver is restricted to while a Receiver under AMCON is to exercise control over all the assets of the debtor company as well as manage the affairs of the company- see Section 48(3) of the AMCON Act; PROVISIONAL LIQUIDATOR OF TAPP IDUSTRIES LTD & ANOR v TAPP INDUSTRIES LTD & ORS (1995) LPELR – 2928 (SC); NIGERIA BANK FOR COMMERCE & INDUSTRY & ANOR v ALFIJIR (MINING) NIG LTD [1999] 14 NWLR (PT 638) 176; CANSCO DUBAI LLC v SEAWOLF OILFIELD SERVICES LTD & ANOR (2018) LPELR – 43674 (CA).
The Blacks law dictionary, 8th edition at pages 1296 & 979 respectively defined a Receiver as a disinterested person appointed by a Court, or by a corporation or other person, for the protection or collection of property that is the subject of diverse claims while a Manager is a person responsible for the operations of the company or a person who administers or supervises the affairs of a business, office or other organisation.
Going by this definition the provision of Section 48(2) covers both the duties of a Receiver/Manager and a Receiver/Manager appointed under the AMCON Act will only refer to the relevant provisions of the CAMA in the case of any lacuna in the AMCON Act.
The argument of the Appellant that the 1st Respondent voluntarily decided not to elect to be a Manager and that the lower Court had no right to confer/foist on the 1st Respondent the capacity of a Manager is erroneous and contrary to the intention of the AMCON Act.
Furthermore, in response to the Appellants submission, I find from the records that there is nothing to prove that the lower Court foisted upon the 1st Respondent the role of a Manager. Instead the Court merely directed that the 1st Respondent should make the election as to whether or not he will manage the affairs of the Appellant, which is in line with the AMCON Act.
The issue of the lower Court conferring a purported relinquished right on the 1st Respondent does not arise and therefore did not in any way deprive the lower Court of jurisdiction.
From the foregoing, I am of the firm view that the 1st Respondent was rightfully appointed by AMCON as the Receiver/Manager of the Appellant and the lower Court had the jurisdiction to entertain the claim of the Respondents.
Issue 1 (1, 2 & 3) is therefore resolved in favour of the Respondents.
ISSUE 2 (issues 4 & 5)
On the issue of jurisdiction, the Appellant submitted that the Respondents commenced this suit in wrong and unlawful capacities and that did not confer the Court with the jurisdiction to entertain the suit. He relied on the cases of H.K.S.F v AJIBAWO [2008] 7 NWLR (PT 1087) 511; NYEMSOM v PETERSIDE [2016] 7 NWLR (PT 1512) 452; AGBABIAKA v SAIBU [1998] 10 NWLR (PT 571) 534.
He also submitted that the Court lacked jurisdiction because of the failure of the 1st Respondent to fulfil the condition precedents under the Act and that the 1st Respondent had no locus to sue the Appellant in his personal name as the 1st Respondent was de jure and de facto the defendant. He referred to Section 393 (3) & Paragraph 5 to the 11th schedule of the CAMA and Section 48(5) of AMCON Act 2010 (as amended); INTERCONTRACTORS v NPFMB [1988] 2 NWLR (PT 76) 280; RE: ADETONA [1994] 3 NWLR (PT 333) 481; IHESIABA & ORS v OCHEPA (2015) LPELR – 24822 (CA).
Appellant contended that the 1st Respondent sued in the legal capacity of Receive/Manager but the lower Court amended the originating process to state that the 1st Respondent sued in a representative capacity and that it conferred on the 1st Respondent a legal capacity it did not have in law. He therefore submitted that the lower Court was in error when he granted all the reliefs in the originating summons and that the reliefs were for the benefit of the 1st Respondent who had become an illegal and void party by the presence of the 2nd Respondent.
It was also the contention of the Appellant that the Court lacked the jurisdiction to rely on the amended originating summons based on an amended unsworn affidavit in support. He referred to Section 114, 117(2) & 118 of the Evidence Act, 2011; ONUJABE v IDRIS [2012] 2 NWLR (PT 1284) 285; amongst other cases. He also submitted that the lower Courts amendment of the Respondents originating processes breached Order 17 of the Federal High Court (Civil Procedure) Rules, 2009 and the processes were incapable of legally invoking the jurisdiction of the Court.
The Respondents on the other hand submitted that it is the existence of sufficient legal interest in a subject matter or existence of a justifiable right which should be protected that confers locus on a party and not the nomenclature of the party. He referred to UKEGBU v NBC [2007] 14 NWLR (PT 1055) 551. He submitted that the Respondents have shown in the originating summons that they had the locus standi to institute the suit and that having not taken up management of the Appellant; the 1st Respondent is not the alter ego of the Appellant. He contended that Section 393(3) of the CAMA is in respect of the assets or the affairs of the company and not in respect of an action for judicial protection of a Receiver/Manager. He added that the fact that the 1st Respondent has not made the election does not erase that he was appointed the Receiver/Manager of the Appellant. He also submitted that the Appellant admitted before the lower Court that the 1st Respondent was a necessary party. He referred to paragraph 4.30 of the Appellants written address at page 11, line 3 – 10 of the additional record of appeal; SUBERU v STATE [2010] 8 NWLR (PT 1197) 586; NJABA LG COUNCIL v CHIGOZIE [2010) 16 NWLR (PT 1218) 166.
Respondents submitted that the Appellants argument bothers on defect in procedure which is not fatal. He referred to EJIKE v IFEADI [1998] 8 NWLR (PT 561) 323.
Respondents also submitted that the suit was instituted for the 1st Respondent and also for and on behalf of the 2nd Respondent and that the lower Court having rightly held that the suit was commenced in a representative capacity, nevertheless went ahead to amend the Court process to reflect the representative capacity. He also submitted that the position adopted by the lower Court was misconstrued by the Appellant and that no appeal can be lodged against an obiter. He referred to SARAKI v KOTOYE (1992) 3 NSCC 331; SAUDE v ABDULLAHI [1989] 4 NWLR (PT 116) 387; EDE v OMEKE [1992] 5 NWLR (PT 242) 428.
Respondents argued further that exhibit 10 annexed to the affidavit conferred on the 1st Respondent power to do all things necessary for his statutory and official functions and that that is the reason why he can sue on behalf of the 2nd Respondent. He also submitted that the 1st Respondent is not required to show express authority before it could institute the suit. He referred to SHELL PDC NIG LTD v CHIEF EDAMKUE (2009) FWLR (PT 489) 407.
Respondent submitted that the defect in the heading of the suit is not fundamental as to make the Court overturn the Ruling. He referred to ADELEKE v OYO STATE HOUSE OF ASSEMBLY [2006] 10 NWLR (PT 987) 50. He contended that the amendment made by the lower Court does not require the Respondents to have amended the affidavit. That it is an amendment that the lower Court is allowed to make under the law and its inherent power. He referred to DIVISIONAL CHIEF GBOGBOLOLU OF VAKPO v HEAD CHIEF HODO (1941) 7 WACA 164; TOTTENHAM v TOTTENHAM (1986) 1 CH 628; AKINNUBI v AKINNUBI [1997] 2 NWLR (PT 486) 144.
Respondents also submitted that the argument of the Appellant that the 1st Respondent should not have been parties to the suit is misconceived. He submitted that the presence of the 1st Respondent does not render the suit incompetent and that Order 9 Rule 14 of the Federal High Court Rules and the case of AYANKOYA v OLUKOYA [1996] 4 NWLR (PT 440) 1 provides that a suit shall not be defeated by reason of a misjoinder.
The Respondents concluded by submitting that although Section 118 of the Evidence Act provides that an altered affidavit be re-sworn, that the provision applies where the deponent makes the alteration and not where it was made by the Court. He added that the lower Court did not amend the factual contents of the affidavit but the title/heading of the suit. He also submitted that Section 113 of the Evidence Act provides that the Court may permit an affidavit defective in form if the Court is satisfied that it has been sworn before a person duly authorised. He referred to ATAYI FARMS LTD v NACB LTD [2003] 4 NWLR (PT 810) 427. He urged this Court to hold that the lower Court rightly exercised jurisdiction over the matter.
The Appellant in its reply brief majorly reiterated all the arguments in its main brief and also submitted that the 1st Respondent has admitted suing in the capacity of Manager which he is not.
He also submitted that contrary to the contention of the Respondents, the law does not recognise the concept of convenient drafting. He submitted that a party is bound by his pleading. He referred to the cases of NNPC v FAMFA OIL LTD [2012] 17 NWLR (PT 1328) 148; GBAJABIAMILA v CBN (2014) LPELR 22756 (CA).
The Appellant submitted that the judgment of the lower Court was based on AMCON having power to appoint Receiver/Manager based on Section 48 of the AMCON Act and that it was the basis of the Appellants preliminary objection before the lower Court. He submitted that the arguments of the Respondents must be limited to the scope of Section 48 and not extend to contractual powers of the Respondents. He added that the Respondents can only go outside the scope of Section 48 if it had filed a Respondents Notice.
Appellant submitted that in so far as the Respondents have admitted that ground 10 of the Notice of Appeal was a decision of the lower Court, it is estopped from saying that the decision is obiter.
The Appellant on the issue of the affidavit argued that the amendment of an affidavit without being re-sworn is a substantial matter of law. He relied on EIMSKIP LTD v EXQUISITE IND LTD [2003] 4 NWLR (PT 809) 88; ONUJABE v IDRIS [2012] 2 NWLR (PT 1284) 285; UDUSEGBE v SPDC NIG LTD [2008] 9 NWLR (PT 1093) 593; amongst other cases. Appellant submitted that the only originating process that could have been validly amended by the lower Courts order of amendment was the originating summons. He submitted that the order of amendment cannot lawfully amend the affidavit in support of the originating summons without it being re-sworn.
RESOLUTION
The contention here is whether or not the lower Court had the jurisdiction to entertain the case of the Respondents.
The Appellant has argued that the lower Court lacked the jurisdiction to entertain the suit and enter judgment in favour of the Respondents based on the fact that the Respondents did not have the locus standi to sue, and because the Respondents did not fulfil some condition precedents under Section 48 of the AMCON Act.
Locus standi is conferred on a party by the existence of sufficient legal interest in a subject matter. See the cases of UKEGBU v NBC [2007] 14 NWLR (PT 1055) 551; BEWAJI v OBASANJO [2008] 9 NWLR (PT 1093) 540. It is a condition precedent to the hearing and determination of a matter.
The Respondents have shown in their originating summons that they have the locus to institute this case. The 1st Respondent was duly appointed by the 2nd Respondent as the Receiver/Manager of the Appellant and it is based on that capacity that he instituted the suit to seek for the necessary order to help him carry out his statutory functions.
The Appellant went further in his argument to contend that the Respondents did not fulfil the necessary condition precedents before filing the suit. He argued that Section 48 of the AMCON Act provided that an election to be a Manager must be made and publicised in two newspapers with nationwide circulation, and a detailed and comprehensive plan for the rehabilitation of the debtor company be also made before he can be recognised as a Manager and consequently have the capacity to sue in that light.
This contention of the Appellant is a misconceived and erroneous interpretation of Section 48 of the AMCON Act. The 1st Respondent by virtue of his appointment as the Receiver/Manager is already clothed with the capacity to sue and does not need to fulfill any condition precedent to do same.
Section 48 relates only to the management of the debtor company. It is where the 1st Respondent decides to manage the affairs of the Appellant that he will be required to make a publication of his election and prepare a detailed plan for the rehabilitation of the debtor company. The requirement of publication is for the public to be aware of the change in the companys management.
The lower Court came to the right conclusion in its decision because the requirements of Section 48 (4) (9) of the AMCON Act are not condition precedents to the institution of the suit.
Also the argument of the Appellant that the 1st Respondent cannot sue in his name and is therefore a void party is of no momentum. The Appellant has in his argument placed so much unnecessary reliance on technicalities. It is now trite that Courts are enjoined to do substantial justice and not let the justice of a case be defeated by so much technicalities. See the cases of OLAOSEBIKAN v INEC & ORS (2009) LPELR – 8513 (CA); DUKE v AKPABUYO LG (2005) LPELR- 963 (SC); ODONIGI v OYELEKE (2001) LPELR – 2230 (SC).
The Respondents in this case have justified the capacities in which they have instituted the action at the lower Court. The 1st Respondent has proved that it has sufficient interest to be protected by commencing the suit as a result of his appointment as the Receiver/Manager of the Appellant. See paragraph 4 of the affidavit in support of the Respondents originating summons dated 16th May, 2016 contained at page 5 of the records.
It is also reflected in all the Court processes filed at the lower Court that the 1st Respondent instituted the suit on behalf of himself and the 2nd Respondent. The 1st Respondent clearly described himself in the heading of the suit as the Receiver/Manager of Afrijet Airlines Ltd appointed by AMCON (see pages 1 – 3, volume 1 of the record of appeal).
Although the Respondents used the word Receiver in paragraph 4 of the affidavit, this does not defeat the purpose for which the suit was commenced. The paragraph also stated that AMCON appointed the 1st Respondent as the Receiver/Manager of the Appellant. This clearly indicates that the 1st Respondent instituted the action in a representative capacity. Also by exhibit 10 annexed to the affidavit, the 1st Respondent was conferred with the power to do all things necessary for his statutory and official functions including:
to present or defend a petition regarding the Receivership or for the winding up of the company (Appellant).
Furthermore, the Appellants complaint that the 1st Respondent should not have been made a party to the suit is misplaced. The 1st Respondent is a necessary party and he does not in any way render the suit incompetent.
The Respondents commenced the suit at the lower Court claiming among other things:
a declaration that the (1st Respondent), having been validly and lawfully appointed by (AMCON) pursuant to the Companies and Allied Matters Act, 1990, the Asset Management Corporation of Nigeria Act, 2010 (as amended), the Deed of Mortgage Debenture dated March 3, 2008, the Aircraft Mortgage Debenture dated October 28, 2010 and Deed of Appointment dated April 21, 2016 can exercise his powers unhindered and/or unimpeded and in accordance with the direction that may be given by the Honourable Court.
In any event, a suit shall not be defeated by reason of a misjoinder of party. See Order 9 Rule 14 of the Federal High Court Rules. Also see the cases of DIAMOND BANK PLC v HOLLIST & ORS (2015) LPELR 26023 (CA); SAPO & ANOR v SUNMONU (2010) LPELR – 3015 (SC); ADEKUNLE & ANOR v S.K. AJAYI NIG LTD & ANOR (2013) LPELR – 21959 (CA).
On the issue of an amended affidavit, the amendment made by the Court was to reflect the representative capacity of the 1st Respondent. The Court stated at page 910, lines 2 – 6, volume 2 of the record thus:
Assuming but without conceding that this finding is wrong, I hereby, in keeping with good principle, order that the 1st Plaintiffs name be and is hereby amended to fully and without argument, capture the representative capacity disclosed by evidence before me.
The amendment made by the lower Court was not fundamental as to require the Respondents to have amended the affidavit in support of the originating summons. Although Section 118 of the Evidence Act, 2011 provides that an altered affidavit must be re-sworn, the provision applies where the deponent makes the alteration and not when the alteration was made by the Court. The Court did not amend the factual contents of the affidavit.
Furthermore, Section 113 of the Evidence Act provides that the Court may permit an affidavit to be used if the defect is as to the form and the Court is satisfied that it has been sworn before a person duly authorised. See the cases of BAKARE v ODUNEYE (2010) LPELR 3844 (CA); PEDRO & ANOR v BALOGUN (2010) LPELR 4836 (CA).
I therefore have no hesitation in holding that the lower Court rightly and properly exercised jurisdiction over the matter.
Issue 2 (4 & 5) is therefore resolved in favour of the Respondents.
On the whole, this appeal fails and it is accordingly dismissed. The ruling of the lower Court is hereby upheld. Costs of N200,000 (two hundred thousand naira) is hereby awarded against the Appellant in favour of the Respondents.
TIJJANI ABUBAKAR, J.C.A.: My Lord and learned brother Abimbola Obaseki-Adejumo JCA, granted me the privilege of reading in advance the leading judgment just delivered.
I agree and adopt the judgment as my own. I have nothing extra to add. .
JAMILU YAMMAMA TUKUR, J.C.A.: My learned brother ABIMBOLA OSAUGUE OBASEKI-ADEJUMO JCA afforded me the opportunity of reading in draft before today the lead Judgment just delivered and I agree with the reasoning and conclusion contained therein. I adopt the Judgment as mine with nothing further to add.
Appearances:
Starnley Ugwuoke For Appellant(s)
A.G. Anafi with him, Temitayo Bukoye For Respondent(s)
