BANK PHB PLC v. NIGERIA DEPOSIT INSURANCE CORPORATION
(2019)LCN/13173(CA)
In The Court of Appeal of Nigeria
On Friday, the 3rd day of May, 2019
CA/L/833/2013
RATIO
SECTIONS 40(1) AND (2) AND 59 OF THE NDIC ACT
Sections 40 (1) and (2) and 59 of the NDIC Act confer locus standi on the respondent to file the petition at the Court below. The petition which was filed by the respondent is the only document to look at for the purpose of determining whether it has a reasonable cause of action, shows on the face of it that it has a chance of success or is not a hopeless petition or is not a petition that is premised on a fable or incontestably bad, therefore the Court below was right in holding that the petition disclosed a reasonable cause of action vide Ibrahim v. Osim (1988) 3 NWLR (pt. 82) 257, Uwazuruonye v. Governor of Imo State (2013) 8 NWLR (pt. 1355) 28, Barbus and Co. Nig. Ltd. v. Okafor ? Udeji (2018) 11 NWLR (pt. 1630) 298, F.C.M.B. v. Zarami (2016) 10 NWLR (pt. 1520) 217, Dantata v. Mohammed (2000) 7 NWLR (pt. 664) 176.PER JOSEPH SHAGBAOR IKYEGH, J.C.A.
JUSTICES
MOHAMMED LAWAL GARBA Justice of The Court of Appeal of Nigeria
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
Between
BANK PHB PLC Appellant(s)
AND
NIGERIA DEPOSIT INSURANCE CORPORATION Respondent(s)
JOSEPH SHAGBAOR IKYEGH, J.C.A. (Delivering the Leading Judgment): The appeal is from the decision of the Federal High Court (the Court below) by which it dismissed the appellant?s notice of preliminary objection that it had the jurisdiction to entertain the petition as presently constituted which, according to the Court below, disclosed a reasonable cause of action and did not amount to an abuse of the process of the Court.
In a nutshell, the respondent filed an originating petition at the Court below praying for the appellant to be wound up as the appellant?s licence had been revoked rendering it impossible and illegal for the appellant which was formerly primarily carrying on banking business, to continue to carry on same, therefore it was just and equitable in the circumstances to wind up the appellant.
?The petition was accompanied by a verifying affidavit, documents to be relied upon, written address, affidavit of urgency and a motion ex parte for substituted service. The appellant, in opposition to the petition, filed a counter affidavit and a notice of preliminary objection to dismiss the petition for being an abuse
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of the process of the Court and for want of jurisdiction. The substance of the appellant?s contention at the Court below was that the respondent had initially filed a petition in suit No. FHC/L/CP/1366/11 dated 21.11.2011 before the Federal High Court Lagos praying for an order of winding up of the appellant; while the petition was still pending the respondent filed another petition before the same Court on 22.12.2011 seeking for the same relief.
The appellant filed a notice of preliminary objection and an application to regularise the processes before the Court below; while counsel to the appellant was prepared to move his application to regularise the processes, he prayed the Court below for an adjournment to move his notice of preliminary objection. The Court below without hearing either party on the merit of the preliminary objection struck out the petition. The appellant appealed against the order striking out the petition in Appeal No: CA/L/615/2012. The appeal has since been entered at the Court of Appeal and briefs settled and filed.
Without awaiting the outcome of the appeal, the respondent filed another petition before the Court below
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praying for the same relief which the appellant urged in the notice of preliminary objection to be dismissed for being incompetent, an abuse of the process of the Court and for disclosing no reasonable cause of action; or, in the alternative striking out the petition dated 03.07.2012 for want of jurisdiction.
Upon hearing argument for and against the notice of preliminary objection, the Court below ruled and dismissed it on the grounds that the pendency of the appeal against the decision of the Court below revoking the banking licence of the appellant without any order for a stay of execution of that judgment and without a valid order of Court setting aside the said decision makes the decision subsisting and did not vest the Court below with the jurisdiction to entertain the petition for the winding up of the appellant based on the revocation of its licence; and that premised on the materials in the petition, the respondent disclosed a reasonable cause of action in the petition.
Not satisfied with the decision of the Court below, the appellant filed a notice of appeal containing six (6) grounds of appeal challenging the said decision.
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The appellant filed brief of argument on 29.10.13. It was argued in the brief that since the legality or otherwise of the ?purported? revocation of its licence was pending on appeal, the right of the respondent to bring a petition of this nature which was based on the revocation of the licence would only have crystallised upon the determination of the pending appeals therefore the respondent lacked the capacity to file the petition which deprived the Court below of subject matter jurisdiction which is the lifeblood of adjudication and which was properly raised by way of notice of preliminary objection supported by affidavit evidence vide the cases of Akinbobola v. Plisson Fisko (1991) 1 NWLR (pt. 166) 270 at 288, Drexel Energy and Ors. v. Trans International Bank Ltd and Ors. (2008) 12 SC (pt. 11) 240 at 260 ? 261, Nigerian Airways Ltd. v. Lapite (1990) 7 NWLR (pt. 163) 392; Ebongo v. Uwemedimo (1995) 8 NWLR (pt. 411) 22, Goldmark Nigeria Limited and Ors. v. Ibafon Company Ltd and Ors. (2012) 3 SC (pt. 111) 72 at 114, Madukolu and Ors. v. Nkemdilim (1962) 2 SCNLR 342, Plateau State v. A. ? G., Federation (2006) 3 NWLR (pt. 967) 346.
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It was contended in the brief that the appellant was not conclusively established to be a failed institution as the issue of the revocation of its licence was pending on appeal, therefore the cause of action cannot be said to have accrued showing there was not in existence the factual situation to entitle the respondent to obtain a remedy under the circumstances therefore there was not reasonable cause of action and the manner of exercising the right and purpose of filing the petition based on the revocation of the appellant?s licence which was pending on appeal amounted to an abuse of the process of the Court below as it was intended to harass and embarrass the appellant vide Section 6(6) (b) of the Constitution of the Federal Republic of Nigeria 1999 (1999) Constitution), Banks and Other Financial Institutions Act (BOFIA) and the cases of A. ? G., Kwara State v. Olawale (1993) 1 SCNJ 208 at 235 or (1993) 1 NWLR (pt. 272) 645, Macfoy v. U.A.C. (1962) AC 152 at 160, Bello v. A. ? G., Oyo State (1986) 5 NWLR (pt. 45) 625, Ojukwu v. Yar?Adua (2009) 12 NWLR (pt. 1154) 50 at 130 ? 131, Black?s Law Dictionary 8th Edition page 235,
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Abubakar v. Bebeji Oil and Allied Products Ltd. (2007) 2 SC 48 at 102, Okorodudu v. Okoromadu (1977) 3 SC 21.
It was contended in the brief that the crux of the notice of preliminary objection was that the petition was premature, pre-emptive and ?a reckless attempt to over reach? the decision of the Court of Appeal in respect of the appeals arising from suit No. FHC/L/CS/1243/2011 Bank PHB Plc v. Central Bank of Nigeria and FHC/L/CS/1550/2011 between the respondent and the appellant, as in the event that an order of winding up is made and the Court of Appeal in Bank PHB Plc v. Central Bank of Nigeria and Ors. nullifies the revocation which formed the basis of the petition or gives whatever order in the appeal, the petition posed a threat to the jurisdiction of the Court of Appeal to determine the appeals showing the notice of preliminary objection had merit and should not have been dismissed by the Court below vide Sections 6 (6) (b), 240 and 241 of the 1999 Constitution; upon which the appellant urged that the appeal should be allowed and the decision of the Court below set aside and the respondent?s petition be dismissed for being
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incompetent, an abuse of the process of the Court, and for failure to disclose a reasonable cause of action.
The respondent filed its brief on 28.01.14. It was argued in the brief that by the combined provisions of Sections 40(1) and (2) of the Nigeria Deposit Insurance Corporation Act 2006 (NDIC Act) and Section 12 of BOFIA coupled with the subsisting judgment of the Federal High Court presently on appeal at the Court of Appeal, the Court below had the requisite jurisdiction to entertain the action as the pendency of the appeal per se does not affect the validity of the subsisting judgment of the Federal High Court upholding the revocation of the appellant?s banking licence by the Central Bank of Nigeria (CBN) therefore it cannot operate to deprive the Court below of the jurisdiction it has in the matter vide Usman v. K.S.H.A. (2007) 11 NWLR (pt. 1044) 148 at 191, Arjay v. AMS Ltd (2003) 7 NWLR (pt. 820) 577, Dongtoe v. Civil Service Commission, Plateau State (2001) FWLR (pt. 50) 1639, Gwandu v. C.O,P. Kebbi State (2006) FWLR (pt. 294) 529, Rossek v. ACB (1993) 8 NWLR (pt. 312) 382 at 471 ? 472, Ogbechie v. Onochie (1988) 1 NWLR 370, Graseg
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(Nig.) Ltd. v. RTTBC (2012) 13 NWLR (pt. 1316) 168 at 179, Abiola and Sons Bottling Company Ltd. v. Seven-Up Bottling Company Ltd (2012) 15 NWLR (pt. 184) 203.
It was argued that Suit No: FHC/L/CP/1550/11 was struck out by the Court below (Archibong, J.) which did not determine the action but merely got rid of it, leaving the claimant at liberty to begin de novo either in the same or a subsequent suit vide Idoko v. Ogbeikwu (2003) 7 NWLR (pt. 819) 275 at 292, Omeregbe v. Lawani (1980) 3 ? 4 SC 108, therefore the striking out of Suit No: FHC/L/CP/1550/11 is immaterial to whether the respondent could file the present petition, or whether the Court below has jurisdiction to entertain the petition; and that what is important is that Suit No: FHC/L/CP/1550/11 which is distinct from the instant petition was struck out and not dismissed, before the instant petition was filed.
The respondent also argued that by the statutory compulsion of Sections 40 (1) (2) and 59 of the NDIC Act and the judgment of the Court below (Archibong, J.) the respondent?s cause of action and the right of action accrued immediately following the publication in the
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gazette of the revocation of the licence of the appellant as a failed insured institution and the decision of the Federal High Court upholding the revocation of the licence which justified the presentation of the petition as a reasonable cause of action as contained in the petition, therefore the existence of those appeals in Suits No: FHC/L/CP/1550/11 and FHC/L/CS/1243/2011 cannot rob the Court below of the jurisdiction to entertain the petition vide Thomas v. Olufosoye (1986) 1NWLR (pt. 18) 669 at 682, Chevron (Nig.) Ltd. v. L.D. (Nig.) Ltd. (2007) 16 NWLR (pt. 1059) 168 at 178, Dunu v. Oladejo (2004) 17 NWLR (pt. 903) 621 at 642, Nnamani v. Nnaji (1999) 7 NWLR (pt. 610) 313 at 330, Emordi v. Igeke (2011) 9 NWLR (pt. 1251) 24 at 39.
It was further argued that the Court below gave dispassionate consideration to the materials before it in arriving at the decision dismissing the preliminary objection which was filed to short-circuit the case and deprive the respondent of full and meritorious hearing, therefore the decision of the Court below was not perverse vide Onu v. Idu (2006) 12 NWLR (pt. 995) 657 at 686, Tabiowo v. Disu (2008) 7 NWLR (pt. 1087) 533.
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It was also argued that the Court below did not dismiss the preliminary objection on ground of incompetence but on the ground that it lacked merit after hearing arguments on it as it is ?beholden? on the Court below vide page 326 of the record citing in support the cases of Ogunlowo v. Ogundare (1993) 7 NWLR (pt. 307) 610 at 624, U.T.B. v. Ozoemena (2007) ALL FWLR (pt. 358) 1014; upon which the respondent urged that the appeal be dismissed with substantial costs.
The reply brief was filed on 19.02.15. The appellant contended in the reply brief that the jurisdiction of the Court is determined by law and the subject matter in dispute and that the rights of the parties extend up to the Court of Appeal and the Supreme Court vide Oliver v. Dangote Ind. Ltd. (2009) 10 NWLR (pt.1150) 467 and Sections 6(6)(b), 240, 241, 233 of the 1999 Constitution; that as the suit is on appeal the subsequent action would constitute an abuse of the process of the Court and should be struck out vide Umeh and Ors. v. Iwu and Ors. (2008) 3 S.C. (pt.1) 135 at 153, Okorodudu v. Okoromadu (1977) 3 SC 21, Ogwuche and Ors. v. Mba and Ors. (1994) 4 NWLR (pt.336) 75
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at 87; that jurisdiction is the hub of the judicial process and that since the pending appeal over the decision in suit No.FHC/L/CP/1550/11 has the same subject matter with the present petition, the Court below is stripped of the jurisdiction to entertain the petition and should have struck it out for being an abuse of the process of the Court vide Okoro v. Egbuoh (2006) 15 NWLR (pt.1001) 23 ? 24, Drexel Energy and Ors. v. Trans International Bank Ltd. and Ors. (supra), Umeh v. Iwu (supra).
It was also argued that the appellant is a legal person and to terminate its life during the pendency of an appeal is the same as the case of Bello v. A.-G., Oyo State (supra) vide ALR VIA Ltd. v. Oriental Airlines Ltd. (2004) 4 SC (pt.11) 37 at 56; that the NDIC Act should be considered holistically and when so done the mere withdrawal of the appellants licence by the Central Bank of Nigeria does not make the appellant a failed institution within the meaning of the combined Sections 40(1)(2) and 59 of the NDIC Act; therefore the appeal should be allowed.
Sections 40 (1) and (2) and 59 of the NDIC Act confer locus standi on the respondent to file
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the petition at the Court below. The petition which was filed by the respondent is the only document to look at for the purpose of determining whether it has a reasonable cause of action, shows on the face of it that it has a chance of success or is not a hopeless petition or is not a petition that is premised on a fable or incontestably bad, therefore the Court below was right in holding that the petition disclosed a reasonable cause of action vide Ibrahim v. Osim (1988) 3 NWLR (pt. 82) 257, Uwazuruonye v. Governor of Imo State (2013) 8 NWLR (pt. 1355) 28, Barbus and Co. Nig. Ltd. v. Okafor ? Udeji (2018) 11 NWLR (pt. 1630) 298, F.C.M.B. v. Zarami (2016) 10 NWLR (pt. 1520) 217, Dantata v. Mohammed (2000) 7 NWLR (pt. 664) 176.
The fact that the petition was filed oblivious of the pending appeal on revocation of the appellant?s licence by the C.B.N. when the respondent was not a party in the action now on appeal and is claiming different reliefs from the same facts shows the petition was not an abuse of the process of the Court vide Fasakin Foods (Nig.) Ltd. v. Shosanya (2003) 17 NWLR (pt. 848) 237 at 247 – 248, C.O.M. v. Cobham (2006) 15
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NWLR (pt. 1002) 283, Ogoejeofo v. Ogoejeofo (2006) 3 NWLR (pt. 966) 205, R ? Benkay (Nig.) Ltd. v. Cadbury (Nig.) Plc (2012) 9 NWLR (pt. 1306) 596 at 614 615, 616 618.
Having regard to the fact that the revocation of the appellants licence which was upheld by the Court below and is now on appeal is the linchpin of the petition should have informed the Court below to stay action on the petition pending the determination of the appeal as the appeal is continuation of the proceedings of the Court from which the appeal is brought and thus not render the appeal nugatory vide the case of Shekoni v. Ojoko (1954) 14 WACA 504 where it was held that –
Foster-Sutton, P. In our opinion there is substance in the point raised by counsel for the appellants. In view of the fact that there was an appeal pending in a suit involving ownership of the land which is the subject of the present suit the proper course for the learned trial Judge to have adopted would have been to adjourn the case pending determination of the appeal, with liberty to either side to apply for the hearing to be continued. To do otherwise would work an
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injustice to the appellants in the event of their appeal in Ekiti Divisional Native Court Suit No. 2 of 1949 being successful, as they could not then renew their claim in the present suit.
We accordingly allow this appeal, set aside the judgment of the Court below and remit this suit to the Court below for it to be adjourned sine die with liberty to either party to apply for the hearing to take place.?
It is based on the discourse (supra) that I would allow the appeal in part and order that the petition at the Court below be adjourned sine die pending the outcome of the appeal in respect of the revocation of the licence of the appellant. Parties to bear their costs.
MOHAMMED LAWAL GARBA, J.C.A.: I have read a draft of the lead judgement written by my learned brother Joseph Shagbaor Ikyegh, JCA in this appeal and for reasons set out therein, agree that the appeal deserves to succeed in part since the substratum of the Respondent’s petition the Lower Court is premised on the same facts which led to the revocation of the Appellant’s licence that is now subject of a pending appeal.
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I join the lead judgement in allowing the appeal in part as set out
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.: I read the judgment of my learned brother JOSEPH SHAGBAOR IKYEGH, JCA. I agree entirely with his reasoning and conclusion that the appeal is allowed in part and the petition at the lower Court be adjourned pending the outcome of the appeal in respect of the revocation of the licence of the appellant.
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Appearances:
Mr. C.V.C. Ihekweazu with him, Messrs L. Owube, T.A. Micah, R.N. Onwuka, O.R. Iboko and N.B. IgbokeFor Appellant(s)
K. Belgore-Yusuf, Esq. with him, Mr. I. Ibikunle, I. Olisaeloka, Esq.For Respondent(s)
Appearances
Mr. C.V.C. Ihekweazu with him, Messrs L. Owube, T.A. Micah, R.N. Onwuka, O.R. Iboko and N.B. IgbokeFor Appellant
AND
K. Belgore-Yusuf, Esq. with him, Mr. I. Ibikunle, I. Olisaeloka, Esq.For Respondent
