CHIEMEKA TAPAULINE IND. NIG. LTD. v. UNION BANK OF NIGERIA PLC. (2011)

CHIEMEKA TAPAULINE IND. NIG. LTD. v. UNION BANK OF NIGERIA PLC.

(2011)LCN/4574(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 25th day of May, 2011

CA/PH/68/2005

RATIO

NOTICE OF DISCONTINUANCE: EFFECT OF A NOTICE OF DISCONTINUANCE FILED BY A PLAINTIFF UNDER OR 30 R 2 (1) OF THE FEDERAL HIGH COURT RULES 2000

Ordinarily when a notice of discontinuance is filed by a Plaintiff under Or 30 r 2 (1) of the Federal High Court Rules 2000, the suit is deemed terminated and should be consequently struck out. This is because before the conclusion of pleadings, a Plaintiff may discontinue litigation. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

NOTICE OF DISCONTINUANCE: DUTY OF THE TRIAL COURT WHERE A NOTICE OF DISCONTINUANCE HAS BEEN FILED

Both learned counsel are ad idem before this court on the statement of the true position of the law that where a notice of discontinuance had been filed, the trial court is obliged without more, to strike out the suit. I would agree to the extent that their position represents general law in the normal state of affairs. In fact theoretically speaking, the action discontinues on the date the notice was filed by the Plaintiff. See EZEOMU v. AGHEZE (1991) 4 NWLR Pt. 187 Pg. 631. This is because a Plaintiff has the right to discontinue his action before the case is set for hearing without leave of court. The court must strike out the suit and it cannot be recalled. He can only file a fresh one. Let us examine the old authorities. In SHONEKAN v. SMITH (1967) 1 ALL NLR 329, the court held that a Judge ought to consider all the circumstances of the case, and where injustice will be done to the Defendant, the court ought not to give the Plaintiff the opportunity to re-institute the claim against the Defendant. Therefore, in the exercise of the court’s discretion, in cases of discontinuance of a suit, the interest of justice, balancing of the interest of the parties involved and balance of convenience are matters to be taken into consideration. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

COUNTER-CLAIM: WHETHER A COUNTER-CLAIM CAN SURVIVE THE WITHDRAWAL OR DISCONTINUANCE OF THE MAIN CLAIM

A counter claim is a separate and distinct claim which is independent of the main claim and can survive the withdrawal or discontinuance of the main claim. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

CONSEQUENTIAL ORDER: NATURE OF A CONSEQUENTIAL ORDER

A consequential order is not an independent order of the main claim/relief. A consequential order is an order which gives effect to a judgment or order to which it is consequential. It is directly traceable or flowing from that other judgment or order duly prayed for and made consequent upon the reliefs claimed by the plaintiff. Therefore, any consequential order whether made by a trial court or an appellate court must be incidental and flow directly and naturally from those reliefs. It is an offshoot of the main claim/relief sought and owes its existence to the main claim/relief. It gives effect to the judgment already given and not as was done by the learned trial judge in the instant case by granting a fresh and unclaimed or unproven relief. See WAHAB KOLAWOLE ISHOLA & ANOR. v. ALHAJI KARIMU FOLORUNSO & ORS. (2010) 13 NWLR Pt. 1210 Pg.169 at 192; ODOFIN v. AGU (1992) 3 NWLR Pt. 229 Pg. 350; LIMAN v. MOHAMMED (1999) 9 NWLR Pt. 617 Pg. 116; OBAYAGBONE v. AKINBOBOLA v. PLISSON (NIG) LTD. (1991) 1 NWLR Pt.167 Pg. 270. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

ABUSE OF COURT PROCESS: WHAT CONSTITUTES ABUSE OF COURT PROCESS

This issue as couched by counsel needs us to examine and determine what constitutes abuse of court process? The Supreme Court in AMAEFULE v. THE STATE supra held as follows per Oputa JSC: “Abuse of process of the court is a term generally applied to a proceeding which is wanting in bona fide and is frivolous, vexatious or oppressive. Abuse of process can also mean abuse of legal procedure or improper use of legal process. The term abuse of process has an element of malice in it. It thus has to be a malicious perversion of a regularly issued process, civil or criminal, for a purpose and to obtain a result not lawfully warranted or properly attainable thereby.” Similarly, Karibi-Whyte JSC in SARAKI v. KOTOYE (1992) 9 NWLR Pt. 264 Pg. 156 at 188 -189 stated thus: “The concept of abuse of judicial process is imprecise. It involves circumstances and situations of infinite variety and conditions. Its one common feature is the improper use of the judicial process by a party in litigation to interfere with the due admission of justice. The employment of judicial process is only regarded generally as an abuse when the party properly uses the issue of the judicial process to the irritation and annoyance of his opponent, and the efficient and effective administration of justice. This will arise in instituting a multiplicity of actions on the same subject matter against the same opponent on the same issues. See OKORODUDU v. OKOROMADU (1977) 3 SC 21; OYAGBOLA v. ESSO WEST AFRICA INC. (1966) 1 ALL NLR 170. An abuse of court process is an imprecise concept and can occur in various ways and conditions such as filing of a new action against the same Defendant in the same subject matter when a suit in the same subject-matter is pending: see OKORODUDU v. OKOROMADU ( 1977) 3 SC 21. Application to strike out or dismiss a suit when the case was over half way through its life span is an abuse of the court process. See CARDEN (NIG) LTD v. UNIJOS (1994) 1 NWLR Pt. 323 Pg. 631 . Filing a notice of discontinuance immediately after obtaining substantial interim advantage or some unjust enrichment in a suit to the prejudice of the Defendant also is an abuse of process: see THE VESSEL OF ST. ROLAND v. OSINLOYE (1997) 4 NWLR Pt. 500 at 387. The abuse lies in the multiplicity and/or manner of exercise of the right rather than the exercise of the right per se. See NIGERIAN AIRFORCE v. AKUKALIA supra. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

APPOINTMENT OF A RECEIVER: EFFECT OF THE APPOINTMENT OF A RECEIVER ON THE POWERS OF THE DIRECTORS OVER THE PROPERTIES OF THE COMPANY COMPRISED IN THE SECURITY IN QUESTION

The appointment of a Receiver paralyses the powers of the Directors over the properties of the Company comprised in the security in question. The Company comprised in the enabling security, by operation of Law, come under the general control of the Receiver/Manager. See: INTER-CONTRACTORS (NIG) LTD v. NATIONAL PROVIDENT FUND MANAGEMENT BOARD (1988) 2 NWLR Pt. 76 Pg. 280 and UNIBIZ (NIG) LTD v. COMMERCIAL BANK CREDIT LYONNAIS NIG LTD (2001) 7 NWLR Pt. 713 Pg. 534 at 541 B-D. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

LIS PENDENS: CONDITIONS THAT MUST BE SHOWN FOR THE DOCTRINE OF LIS PENDENS

In EFPC v. NDIC (2007) ALL FWLR Pt. 367 Pg. 793 at 824, (2007) 3 SC (Pt. 11) 175 the Supreme Court per Tobi JSC held as follows: “Lis pendens, as a doctrine, applies in respect of title to property and it is that when title to property is the subject matter of the litigation, all intending sales must abate, pending the outcome of the litigation. For the doctrine of lis pendens to apply, the following must be shown:- (a) That at the time of the sale of the property, the suit regarding the dispute about the said property was already pending. (b) The action for lis was in respect of real property, it never applies to personal property. (c) That the object of the action was to receive or assert title to a specific real property; that is to say, an action in a subject matter adverse to the owner in some respect of some substantive right which is proprietary in nature. (d) That the other party had been served with the original process in the pending action”. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.

JUSTICES:

ABUBAKAR JEGA ABDUL-KADIR Justice of The Court of Appeal of Nigeria

HELEN MORONKEJI OGUNWUMIJU Justice of The Court of Appeal of Nigeria

MOJEED ADEKUNLE OWOADE Justice of The Court of Appeal of Nigeria

Between

CHIEMEKA TAPAULINE IND. NIG. LTD. – Appellant(s)

AND

UNION BANK OF NIGERIA PLC. – Respondent(s)

HELEN MORONKEJI OGUNWUMIJU, J.C.A.(Delivering the Leading Judgment): This is an appeal against the decision of Hon. Justice J. T. Isoho sitting at the Federal High Court Umuahia on the 19th day of October, 2004.
The facts that led to this appeal are as follows:
The Plaintiff commenced an action on 31/5/01 claiming against the Defendant the following reliefs:
(i) A declaration that the Plaintiff is the duly appointed Receiver by virtue of a Deed of Appointment dated 27/4/2001 made by the Union Bank of Nigeria Plc, pursuant to clauses 7 and 3(v) of the Deed of Legal Mortgagee/3rd party Legal Mortgagee respectively and clause 6 of the Deed of Floating Debenture by which the Defendant charged in favour of the said Union Bank of Nigeria Plc ALL its properties undertaking and its and other assets including book debts and uncalled capital fixed plants and machinery and all its stock in trade or otherwise under its control both present and future as a floating security and the properties described in the Deeds of Legal Mortgage as a fixed security securing such sums of money advanced to the Defendant with other liabilities together with interest to the Bank thereof.
(ii) An order of court permanently restraining the Defendants, its agents, workmen and/or privies from further disturbing or interfering with Plaintiff’s discharge of his duties under the Receivership”. (Record Pg. 2)
On the same date when the Writ of Summons was filed, the Plaintiff filed a motion ex-parte without filing any motion on notice. In the motion ex-parte, the Plaintiff prayed as follows:
“For an order of court restraining the Defendants, its agent, workmen and /or privies from disturbing or interfering however with the Plaintiff/Applicant in the discharge of his duties under the Receivership pending the determination of the motion on notice.
And for further or other orders as the Honourable Court may deem fit to make in the circumstances. (Record Pg. 3)
The trial Court granted this ex-parte application made by the Plaintiff on the 7th day of June, 2001 and made the following orders:
“It Is Hereby Ordered As Follows:-
(i) That the application is granted as prayed.
(ii) That the Defendant, its agents, workmen and /or privies are restrained from disturbing or interfering however with the Plaintiff/Applicant in the discharge of his duties under the Receivership, pending the determination of the Motion on Notice.
(iii) That the order of court is not to be enrolled except upon the filing of the Motion on Notice which will be served together with order.
(iv) That the Applicant is to also execute a bond of undertaking as to damages and file same before the order of court is enrolled.
(v) That this order is to last for 14 days subject to further direction by the court.
(vi) That the return date is 23rd July, 2001.
The Defendant was served with a copy of the Writ of Summons, he entered an appearance on 24/7/02 a year later after which he filed a notice of counter claim as follows:
“(i). A declaration that the purported appointment of the plaintiff
as Receiver over the assets and business of the Defendant by the Union Bank of Nigeria Plc is invalid, incompetent, unlawful and pro tanto null and void.
ALTERNATIVELY,
(ii) A declaration that the sale of the Defendant’s assets by the Plaintiff as a Receiver, during the pendency of this suit is in breach of the lis pendens rule and in breach of the Plaintiff’s statutory and fiduciary duties to the Defendant.
(iii) An order setting aside any such sale: alternatively.
(iv) An order of injunction restraining the Plaintiff from exercising the powers as Receiver appointed by the Union Bank of Nigeria Plc over the assets and business of the Plaintiff in a manner unnecessarily injurious to the property of the Defendant particularly by sale at one price when a better offer is available for acceptance, or by sale at ridiculous low price.
(v) An order of injunction compelling the Plaintiff to render account to the Defendant for all monies so far realized by the Plaintiff from sale of the property of the Defendant in the Plaintiff’s capacity as Receiver.
(vi) An order of injunction restraining the Plaintiff from further sale of any property of the Plaintiff allegedly mortgaged to Union Bank Nigeria Plc including all immovable property of the Defendant until an account of the proceeds realized from the sales so far made by the Plaintiff has been made available by the Plaintiff to the Defendant.
(vii) The sum of N500 Million, being special and general damages for gross or willful negligence by the plaintiff in respect of the Plaintiff’s acts whilst in possession of the property of the Defendant or its proceeds as a Receiver”. (Record Pg. 74)
The Defendant immediately followed up with a motion praying as follows:
(i) An order of this Honourable Court setting aside the Plaintiff’s Writ of Summons in this suit and all other processes founded on the said Writ of Summons for the fundamental irregularity and non compliance with mandatory requirements of the rules of this Honourable Court, prescribed in Order 6 Rule 8(a) and (b) and Order 26 rule 1 of the Federal High Court (Civil Procedure) Rules 2000. Alternatively
(ii) An Order dissolving the Interim Order of injunction made by the court on the 7th day of June, 2001 on the grounds of the Plaintiff’s misconduct, abuse of the process of the Court, and non compliance with the express terms of the Orders.
(iii) An Order striking out or dismissing the Plaintiff’s application for interlocutory injunction on the grounds of the Plaintiff’s misconduct, abuse of process and breach of the lis pendes rule.
(iv) An order of interlocutory injunction restraining the plaintiff from further exercising powers as Receiver appointed by the Union Bank of Nigeria Plc over the assets and business of the Defendant/counter claimant/Applicant pending the determination of the substantive suit filed by the Plaintiff whereby is seeking a declaration of this Honourable Court that he is the duly appointed Receiver.
(v) An Order directing the Plaintiff to file in court an inventory of all properties of the Defendant/Counter Claimant/Applicant so far sold by the Plaintiff during the pendency of this suit and to deposit the proceeds of such sale in Court, pending the determination of this suit.
(vi) An Order of interlocutory injunction restraining the Plaintiff from further sale of any property of the Defendant/Counter Claimant/Applicant allegedly mortgaged to the Union Bank Nigeria plc including all immovable property of the Defendant pending the determination of the substantive suit.
(vii) Any other order or orders as the court may consider necessary to make for the maintenance of the status quo as at the date of commencement of the substantive suit by the Plaintiff and in compliance with the principle of lis pendes. (Record Pg. 76).
On the 26th day of November, 2002, the trial Court heard the motion of the Defendant praying for an order setting aside the writ of summon etc and made the following orders enrolled and on Pg. 104 of the Record:
(i) That the Interim Order of Injunction made by this court on the 7th day of June, 2001 is dissolved on the grounds of the Plaintiff’s misconduct, abuse of the process of the court and non-compliance with the express terms of the Order.
(ii) That the Plaintiff’s application for interlocutory application is struck out on the grounds of the Plaintiff’s misconduct, abuse of process and breach of the lis pendes rule.
(iii) That the Plaintiff is directed to file in court an inventory of all properties of the Defendant/Counter Claimant/Applicant so far sold by the Plaintiff, during the pendency of this suit and to deposit the proceeds of such sale in the court, pending the determination of this suit or court orders otherwise.
(iv) That the Plaintiff is restrained from further sale of any property of the Defendant/Counter Claimant/Applicant allegedly mortgaged to the Union Bank of Nigeria Plc including all immovable property of the Defendant pending the determination of the substantive suit or court orders otherwise.
(v) That the suit is adjourned to 10th January, 2003 for mention. (The enrolled order is at Pg. 104 of the record while the full ruling is contained at Pg. 186 of the record).
Plaintiff then filed a notice of discontinuance of the suit. The Court below on the 19th October, 2004 delivered the ruling now the subject of this appeal.
A careful reading of the Records Pg. 178-184 shows that on the 29th day of March, 2004, counsel to the Plaintiff now the Respondent referred the trial Court to the Notice of Discontinuance and applied to the Court to strike out the case.
The Defendant’s counsel (now Appellant’s Counsel) opposed the application and urged the trial Court to hold that the Notice of Discontinuance was an abuse of the Court’s process and also to strike out the suit or order that the process of the sales be paid into the registry of the Lower Court.
Then the court ordered as follows on Pg. 200 of the Record:
“Considering all the circumstances of this case, it is my considered opinion that abuse of process has not been established on the part of the Plaintiff, hence setting aside of the Notice of Discontinuance does not arise. However, the justice of the case demands that the Defendant should get back the difference between the ascertained value of the assets given as N17,817.000.00 in Exhibit “RAC” and the proceeds of sale, put at N18,522.900.00 in Exhibits “RAD”, which documents have not been challenged by the Defendant. The difference between the two aforestated sums, by my computation is N705,900.00 (Seven Hundred and Five Thousand, Nine Hundred Naira).
Accordingly, it is hereby ordered that the Plaintiff pays the sum of N705,900.00 to the Registry of this court within 30 days, for the benefit of the Defendant. The Registry upon receipt of the said sum, shall deposit same in an interest-yielding account with a reputable commercial bank, until the Defendant is ready for it”.
The Appellant being dissatisfied with the above orders has brought this appeal raising three grounds of appeal. The Appellant’s amended brief dated 7/5/10 was filed on 11/5/10 deemed filed on 9/11/10. The Respondent brief dated 15/4/10 was filed same day and deemed filed on 19/4/10.
The Appellant’s Counsel Mr. M. U. Uzoma in his brief identified two issues for determination also adopted by the Respondent’s Counsel Mr. Chukwuemeka C. Ibejiako Esq. The Defendant at the trial court is the Appellant in this appeal. The Plaintiffs are now the Respondents. On 27/11/07 this court had substituted Union Bank in place of the deceased original Respondent.
The issues distilled by both parties also adopted by the court for the determination of this appeal are as follows:
(i) Whether the decision and orders made by the court below is justifiable in law having regard to the fact that the Plaintiff had wholly discontinued his suit by filing a notice of discontinuance.
(ii) Whether the learned trial Judge at the Court below was justified in holding that there had not been an abuse of the process of the court by the Plaintiff in this suit.
Issue one
On this issue, learned Appellant’s Counsel argued that once a Plaintiff files a notice of discontinuance of his suit under Order 30 of the Federal High Court (Civil Procedure) Rules, 2000, the suit stands withdrawn and discontinued from the date notice of discontinuance is filed. The only order the court may make on the adjourned date of the case if any is to strike the suit out from the cause list. He cited SOETAN v. TOTAL NIG. LTD (1972) 1 ALL NLR 1. See also GBAJOR v. OGUNBUREGUJI (1961) ALL NLR Pt. 4 Pg. 853. See also ERONINI v. IHEUKO (1989) 2 NWLR Pt.101 Pg. 46.
He argued that the orders of the learned trial judge were erroneous because none of the parties asked for the order which he made in the term which he made it or at all. All that the Appellant did was to file a notice of discontinuance. The suit should have simply been struck out without more.
Counsel also argued that the proper order to make in the circumstance was to strike out the Respondent suit which he had discontinued and then to entertain the Defendant’s motion to file pleadings in support of the counter claim. This was pending at Pg. 107 of the Record. Counsel argued that in effect, His Lordship failed to consider the Appellant’s motion at Pg. 107 of the record at all.
Learned Appellant’s counsel complained that by going out of its way to apportion funds the way it did in its judgment now complained of, the trial court had assigned to the Respondent the benefit of a sale which it had found to be null and void for breach of the lis pendens rule and an interim order which the court had dissolved for misconduct.
In reply, the learned trial Respondent’s Counsel conceded and submitted that since pleadings were never filed in this case at the trial court, the case became terminated immediately a notice of discontinuance was filed by the Respondent pursuant to Or 30 r 2 (1) of the Federal High Court Rules 2000 and the court had a duty to strike out the suit. He cited the following cases: ANSA v. CROSS LINES LTD (2006) ALL FWLR Pt.321 Pg. 127 at 1292; PARAS B-E; EMEGHARA v. H.M.B. IMO STATE (1987) 2 NWLR Pt. 56 Pg. 330; OBIENU v. ORIZU & ORS (1972) 2 ECSLR 606.
Respondent’s Counsel argued that the ruling being challenged wherein consequential orders were made was delivered in response to the address from counsel on both sides. He submitted that fundamentally, the trial Court reviewed the submission of counsel on both sides as prescribed by Law and delivered its Ruling in respect of the Notice of Discontinuance filed by the Respondent. The posture of the Appellant in turning back to attack the court for performing its judicial function in that behalf is equivalent to approbating and reprobating in the same breadth, which the Law forbids: He cited UNION BANK OF NIGERIA PLC v. NWACHUKWU (2000) FWLR Pt. 6 Pg.986 at 995H-996C.
Counsel argued that while conceding that the decision of the trial court striking out the suit in pursuance of the Notice of Discontinuance as dully filed by the Respondent is proper in Law, the order for the payment of the sum of N705,900.00 into the Registry of the Court for the benefit of the Appellant was made contrary to Law.
Counsel then submitted that a court cannot grant a remedy which has not been claimed and established by the pleadings and evidence. He cited EKPENYONG & ORS. v. NYONG & ORS. (1975) 2 S.C 71; KALIO (1975) 2 S.C. 15; NIGERIAN HOUSING DEVELOPMENT LTD v. MUNINI (1977) 1 NWLR Pt. 68 Pg. 128, DYKTRADE v. OMNIA (2000) 12 NWLR Pt. 680 1; ONYEKANMI v. NEPA (2000) 15 NWLR Pt. 690 Pg. 414 and IMNL v. NWACHUKWU (2004) 13 NWLR Pt. 891 Pg. 543 at 564G-565.
It appears to me that both the Appellants and Respondents are dissatisfied with the consequential orders of the learned trial judge. Ordinarily when a notice of discontinuance is filed by a Plaintiff under Or 30 r 2 (1) of the Federal High Court Rules 2000, the suit is deemed terminated and should be consequently struck out. This is because before the conclusion of pleadings, a Plaintiff may discontinue litigation. In this case, the original Plaintiff filed the Statement of Claim on 31/5/2001 along with an ex parte motion which was moved and conditional orders were granted as prayed.
The purpose of the suit was to validate his appointment as a Receiver for Union Bank and prevent any disturbance from the performance of his duties by the Defendant/Appellant. It was not until more than a year later on 25/7/02 that the Appellant filed a notice of counter claim to the suit. Therein he prayed that the appointment of the Receiver by the Bank be declared unlawful and any sale of property also to be declared unlawful. In the interim and after the service of the ex parte orders of the court and the motion on notice on the Appellant in December 2001, the Managing Director of the Appellant was in constant communication with the present Respondent Bank and the Receiver appointed by the Bank. The Records show- see from page 143, of the records that the Receiver had sold various property of the Appellant between 11th November, 2001 and 10th May, 2002 and had filed a Receiver’s Abstract of Receipts in compliance with S. 398 (1) of CAMA.
The peculiarity of this case which struck me is that even though the receiver first went to court to get validation of his appointment, he was not challenged until more than a year later by the Appellant.
Learned Appellant’s Counsel in paragraph 4.04 of his brief argued that when a Plaintiff discontinues a suit, the parties are then returned to the status quo ante before the suit was filed and that the learned trial judge should have made such an order. In my humble view, the learned trial judge was right not to make an order that would be in vain in view of the antecedents of the matter. By November 2002 when the court made an order dissolving its interim order, several movable property of the Appellant had been sold. How then can the court order that the parties be returned to status quo ante bellum? (before the suit was filed). The court does not act in vain.
Appellant’s Counsel has argued that the learned trial judge suo motu without any address on the point and none of the parties asking for the orders in the terms in which they were made, granted these orders.
I have read the proceedings of the trial court leading to the ruling and orders made. It starts from Pg. 178 of the Record. On 29/3/04 learned counsel for the Plaintiff at the trial court C. C. Ibeziako Esq. moved the court to strike out the case pursuant to the notice of Discontinuance filed. Learned counsel for the Defendant at the trial court Mr. A. O. Opkaha Esq. objected vehemently and drew the attention of the court to the fact that the Plaintiff/Respondent after securing the ex parte motion took no further steps in the matter. He pointed out to the court that the Respondent had refused to obey the court’s order to deposit the proceeds of Appellant’s property already sold to the court’s registry. Appellant’s counsel on Pg. 181 of the records argued vociferously before the trial court as follows:
“I submit that even if court holds the view that the Notice of Discontinuance made the point is an abuse, it has discretion to allow it be, but it has the right to order compliance with a right that has accrued to the Defendant; which in this case relates to the sum of N18,522,900.00.
I urged the court to hold that the Notice of Discontinuance is an abuse and that court has discretion to strike out the suit or order that the proceeds of sale be paid to the Registry”.
Both learned counsel are ad idem before this court on the statement of the true position of the law that where a notice of discontinuance had been filed, the trial court is obliged without more, to strike out the suit. I would agree to the extent that their position represents general law in the normal state of affairs. In fact theoretically speaking, the action discontinues on the date the notice was filed by the Plaintiff. See EZEOMU v. AGHEZE (1991) 4 NWLR Pt. 187 Pg. 631. This is because a Plaintiff has the right to discontinue his action before the case is set for hearing without leave of court. The court must strike out the suit and it cannot be recalled. He can only file a fresh one. Let us examine the old authorities. In SHONEKAN v. SMITH (1967) 1 ALL NLR 329, the court held that a Judge ought to consider all the circumstances of the case, and where injustice will be done to the Defendant, the court ought not to give the Plaintiff the opportunity to re-institute the claim against the Defendant.
Therefore, in the exercise of the court’s discretion, in cases of discontinuance of a suit, the interest of justice, balancing of the interest of the parties involved and balance of convenience are matters to be taken into consideration. At the hearing which culminated in the orders of the court, the Appellant’s counsel as Defendant drew the attention of the court to the issue of the money realized from sale of the Appellant’s property. He made a specific prayer that the money already paid to Appellant’s Union Bank account to validate the debt be paid into the court.
My observation with the greatest respect is that there seems to be a lot of miscomprehension of the law in this regard. This led to a lot of double speak on the part of the Appellant’s counsel at the lower court and this court. If the case of the Appellant was that the notice of discontinuance was an abuse of court process, then it should be opposed and the court urged to strike it out and the case allowed to continue with parties to file pleadings. In such a case, the prayer of learned Appellant’s counsel at the lower court that the suit be struck out is contrary to the prayer that the notice of discontinuance be struck out.
This has led to a lot of confusion which caused the learned trial judge to give the orders he gave which turned out to be unsatisfactory to both parties. Before the date for the hearing of the Respondent’s motion for discontinuance, there was pending in the court’s file a motion by the Appellant to file pleadings in respect of the counter-claim.
A counter claim is a separate and distinct claim which is independent of the main claim and can survive the withdrawal or discontinuance of the main claim. The Appellant had made serious claims and allegations in the counter claim which ought to have been looked into. Ordinarily, the court had two choices – to refuse to entertain the discontinuance and to strike it out as an abuse of court process and order both parties to file pleadings or to strike out the Respondents’ claim as prayed in the notice of discontinuance and then call upon the Appellant to move the notice of counter claim and the parties to subsequently file pleadings. In the event of the later option, the Respondent would become effectively the defendant to the counter-claim. His Lordship did not pursue either of the two options but made consequential orders which meant that the suit was effectively terminated.
His Lordship had observed on Pg. 193-194 of the record that the notice of counter claim did not yet amount to a counter-claim since the Respondent as Plaintiff had not yet filed pleadings. That in essence accounts for his Lordship’s posture in ignoring the existence of a notice by the Appellant that he intended to challenge the appointment of the Receiver and the steps taken so far by the receiver.
I am of the strong but humble view that in the circumstances of this case and given the antecedents that the Respondent had done many things against the orders of the trial court it was wrong to have made these orders.
The orders made could only have been made after a trial on the merits and findings made on certain facts.
A consequential order is not an independent order of the main claim/relief. A consequential order is an order which gives effect to a judgment or order to which it is consequential. It is directly traceable or flowing from that other judgment or order duly prayed for and made consequent upon the reliefs claimed by the plaintiff. Therefore, any consequential order whether made by a trial court or an appellate court must be incidental and flow directly and naturally from those reliefs. It is an offshoot of the main claim/relief sought and owes its existence to the main claim/relief. It gives effect to the judgment already given and not as was done by the learned trial judge in the instant case by granting a fresh and unclaimed or unproven relief.
See WAHAB KOLAWOLE ISHOLA & ANOR. v. ALHAJI KARIMU FOLORUNSO & ORS. (2010) 13 NWLR Pt. 1210 Pg.169 at 192; ODOFIN v. AGU (1992) 3 NWLR Pt. 229 Pg. 350; LIMAN v. MOHAMMED (1999) 9 NWLR Pt. 617 Pg. 116; OBAYAGBONE v. AKINBOBOLA v. PLISSON (NIG) LTD. (1991) 1 NWLR Pt.167 Pg. 270.
I am of the view that there was a rush to judgment in the circumstances. Without a hearing on the merit the learned trial Judge couldn’t possibly have known who was entitled to what out of the money realized. Moreso that the very validity and actions of the receiver is the subject matter of the counter-claim. I resolve the first issue in favour of the Appellant.
ISSUE TWO
On this issue, learned Appellant’s counsel cited the opinion of the Supreme Court in THE VESSEL SAINT ROLAND v. OSINLOYE (1997) 4 NWLR Pt. 500 Pg. 387 to the effect that it is an abuse of process to use the machinery of notice of discontinuance to improve a Plaintiff’s position unjustly. Counsel argued that if any situation exemplifies an abuse of process with the use of a notice of discontinuance, this case offers a classic example. He argued that the Respondent abandoned the suit after obtaining this interim advantage until the Appellant applied that the suit be dismissed with leave for the Defendant to pursue his counter claim. It was at this stage and time that the Responent then filed a notice of discontinuance so as to retain the advantage he had illegally obtained to the detriment of the Appellant.
Learned Respondent’s counsel conceded that filing a notice of discontinuance immediately after obtaining substantial interim advantage or some unjust enrichment in a suit to the prejudice of the Defendant is indeed an abuse of court process as argued by learned Appellant’s counsel but argued that such a situation is not applicable to the facts of this case. He cited AMAEFULE v. THE STATE (1988) 2 NWLR Pt. 75 Pg. 128 AT 177; SARAKI v. KOTOYE (1992) 9 NWLR Pt. 264 Pg. 156 at 188; OKORODUDU v. OKOROMADU (1977) 3 SC 21; OYAGBOLA v. ESSO WA (1966) 1 ALL NLR 170; CARDEN v. UNIJOS (1994) 1 NWLR Pt. 323 Pg. 631 , NAF v. AKUKALIA (2008) ALL FWLR Pt. 441 Pg.967at 989.
Counsel argued that by virtue of Section 393(1) and (3) of, and the Eleventh Schedule to the Companies and Allied Matters Acts, 1990 (particularly item 2 of the said schedule) the Respondent receiver had the power to sell or otherwise dispose of the property of the Appellant by public auction or private contract. This power was exercised by the Respondent and he raised more money from the sale of the assets of the Appellant beyond the professionally determined value of the assets of the Appellant. This was found as a fact by the Learned Trial Judge at Pg. 199-200 of the record of Appeal.
The money realized from the sale was paid into the Appellant’s Account maintained with the Union Bank of Nigeria Plc. See Pg. 113-114 and 134 of the record of Appeal.
Respondent’s counsel argued that there is nothing to show that the Respondent obtained any substantial or other inimical interim advantage or unjust enrichment or acted in any other manner to the detriment of the Appellant before the Notice of Discontinuance was filed in that the Receiver performed the functions stipulated in the Companies and Allied Matters Acts, 1990.
The learned trial judge held on Pg. 199-200 of the Record as follows:
“I wish to confirm the observation of Plaintiff’s Counsel that these affidavit depositions have not been challenged and are therefore deemed admitted. From my examination of Exhibits “RAA” annexed to the plaintiff’s affidavit verifying Receiver’s Account, I am convinced that the Plaintiff took appropriate step in the discharge of his functions as a Receiver. I do not find apparent evidence of fraud or recklessness on his part in that process. In this case of the VESSEL “SAINT ROLAND” v. OSINLOYE (supra) at Pg. 412 paragraphs C-V, the Supreme Court held thus:
“It is a clear abuse of process to use the machinery of Notice of Discontinuance without leave to improve a Plaintiff’s position unjustly. Similarly, filing a Notice of Discontinuance immediately after obtaining substantial interim advantages or some unjust enrichment in a suit to the prejudice of the Defendant constitutes an abuse of process. Such interim advantage may include securing unjustifiable substantial payments in the suit just before the notice to the detriment of the Defendant”.
I do not find this kind of situation applicable in the instant case. What could be termed interim advantage to the Plaintiff in this case is the Court Order he got to insulate himself from disturbances or interferences with his duties. Exhibit “RAC” viewed with Exhibit “RAD” disclose no instance of unjust enrichment. Rather, they reveal that the Plaintiff derived higher proceeds from sale and disposal of the Defendant’s property than at their Open Market Value. Whereas the Defendant’s total assets valued N17,817,000.00 “RAC”, it is shown in Exhibits “RAD” and “RAE” that the total amount realized on the assets and lodged with Union Bank of Nigeria Plc, Factory Road, Aba was N18,522,900.00. I do not in the circumstance find a case of abuse of process established”.
This issue as couched by counsel needs us to examine and determine what constitutes abuse of court process? The Supreme Court in AMAEFULE v. THE STATE supra held as follows per Oputa JSC:
“Abuse of process of the court is a term generally applied to a proceeding which is wanting in bona fide and is frivolous, vexatious or oppressive. Abuse of process can also mean abuse of legal procedure or improper use of legal process. The term abuse of process has an element of malice in it. It thus has to be a malicious perversion of a regularly issued process, civil or criminal, for a purpose and to obtain a result not lawfully warranted or properly attainable thereby.”
Similarly, Karibi-Whyte JSC in SARAKI v. KOTOYE (1992) 9 NWLR Pt. 264 Pg. 156 at 188 -189 stated thus:
“The concept of abuse of judicial process is imprecise. It involves circumstances and situations of infinite variety and conditions. Its one common feature is the improper use of the judicial process by a party in litigation to interfere with the due admission of justice. The employment of judicial process is only regarded generally as an abuse when the party properly uses the issue of the judicial process to the irritation and annoyance of his opponent, and the efficient and effective administration of justice. This will arise in instituting a multiplicity of actions on the same subject matter against the same opponent on the same issues. See OKORODUDU v. OKOROMADU (1977) 3 SC 21; OYAGBOLA v. ESSO WEST AFRICA INC. (1966) 1 ALL NLR 170.
An abuse of court process is an imprecise concept and can occur in various ways and conditions such as filing of a new action against the same Defendant in the same subject matter when a suit in the same subject-matter is pending: see OKORODUDU v. OKOROMADU (1977) 3 SC 21. Application to strike out or dismiss a suit when the case was over half way through its life span is an abuse of the court process. See CARDEN (NIG) LTD v. UNIJOS (1994) 1 NWLR Pt. 323 Pg. 631. Filing a notice of discontinuance immediately after obtaining substantial interim advantage or some unjust enrichment in a suit to the prejudice of the Defendant also is an abuse of process: see THE VESSEL OF ST. ROLAND v. OSINLOYE (1997) 4 NWLR Pt. 500 at 387.
The abuse lies in the multiplicity and/or manner of exercise of the right rather than the exercise of the right per se. See NIGERIAN AIRFORCE v. AKUKALIA supra.
In this case, the record of Appeal at Pg. 36 shows that the original Plaintiff was appointed Receiver on 27/4/01 by Union Bank of Nigeria Plc over the undertaking, properties and assets of the Appellant pursuant to section 392(1) of the Companies Allied Matters Act, 1990.
As I said earlier, the appointment was not challenged timeously by the Appellant.
The appointment of a Receiver paralyses the powers of the Directors over the properties of the Company comprised in the security in question. The Company comprised in the enabling security, by operation of Law, come under the general control of the Receiver/Manager. See: INTER-CONTRACTORS (NIG) LTD v. NATIONAL PROVIDENT FUND MANAGEMENT BOARD (1988) 2 NWLR Pt. 76 Pg. 280 and UNIBIZ (NIG) LTD v. COMMERCIAL BANK CREDIT LYONNAIS NIG LTD (2001) 7 NWLR Pt. 713 Pg. 534 at 541 B-D.
Let us look again at the circumstances of this case. The Respondent after getting the Ex Parte order did not serve the Appellant timeously and went to sleep in respect of the litigation, while it continued to act on the powers obtained from the ex parte order.
I have considered the reasons given by the learned trial judge for failing to see that there has been abuse of court process in the circumstances of this case. The learned trial judge held at Pg. 199 of the record that from Exh RAA and RAF2 annexed to the Respondent’s Affidavit verifying Receiver’s account, he was convinced that the Respondent took appropriate steps in the discharge of his functions as Receiver and that he did not find apparent evidence of fraud or recklessness on the part of the Receiver. With the greatest respect, the learned trial judge has completely decided the merits of the counter claim without the benefit of the pleadings and hearing the parties. I do not think that our jurisprudence and the Constitution allows his Lordship to ignore the rule of audi alteram partem which enjoins him to hear both sides of a dispute before arriving at a conclusion.
The facts of the case of THE VESSEL OF SAINT ROLAND supra are quite similar to the facts of this case. In that case, the Plaintiff by an agreement with the defendant during the pendency of the action obtained a draft for the sum of N200,000.00 on condition that the Defendant would secure a bank guarantee in like sum to be given to the Plaintiff. Thereafter the Plaintiff unilaterally cashed the cheque even though the Defendant had subsequently given consent to release the Plaintiff’s ship which was detained. When the Plaintiff was asked to come and recover the vehicle he imported, he refused to yield up the money collected and filed a notice of discontinuance. The implication was that the Plaintiff kept the money and the car. That was why the Supreme Court held in that case that:
“It is a clear abuse of process to use the machinery of notice of discontinuance without leave to improve a Plaintiff’s position unjustly. Filing a notice of discontinuance immediately after obtaining a substantial interim advantage or some unjust enrichment in a suit to the prejudice of the Defendant constitutes an abuse of process. Such interim advantage may include securing unjustifiable substantial payments in the suit just before the notice to the detriment of the Defendant”.
The facts are similar to the facts here. The Court gave an ex parte order that the Receiver should be allowed to perform his duties. The order was to last for just 14 days. The Respondent who benefited from the order did not serve the Appellant and did not obey the conditions of the order. Later the order was discharged and the beneficiary was asked to pay money realized into the Court pending the outcome of litigation. He refused and paid same into the debit account of the Appellant with the Bank effectively handing it over to the Respondent. With that the Respondent now wants to escape the challenge to the actions of the receiver by filing a notice of discontinuance of the action. If that is not abuse of the process of the court, I wonder what is?
The learned Appellant’s counsel argued that the sale of the property of the Appellant by the Respondent was caught by the doctrine of lis pendens and that the learned trial judge should not have given validity to the actions of the Respondent by making orders regarding the disposition of the proceeds of sale of the Appellant’s property.
In EFPC v. NDIC (2007) ALL FWLR Pt. 367 Pg. 793 at 824, (2007) 3 SC (Pt. 11) 175 the Supreme Court per Tobi JSC held as follows:
“Lis pendens, as a doctrine, applies in respect of title to property and it is that when title to property is the subject matter of the litigation, all intending sales must abate, pending the outcome of the litigation. For the doctrine of lis pendens to apply, the following must be shown:-
(a) That at the time of the sale of the property, the suit regarding the dispute about the said property was already pending.
(b) The action for lis was in respect of real property, it never applies to personal property.
(c) That the object of the action was to receive or assert title to a specific real property; that is to say, an action in a subject matter adverse to the owner in some respect of some substantive right which is proprietary in nature.
(d) That the other party had been served with the original process in the pending action”.
In this case most of the actions by which the Respondent sold off the property of the Appellant both real and movable were completed after the institution of the action by the Respondent. Therefore the rule of lis pendens would ordinarily be applicable to reverse these actions. The reliefs sought by the Appellant in this appeal are as follows:
(a) Striking out the Plaintiff’s suit on the basis of the Plaintiff’s notice of discontinuance of same.
(b) Setting aside the order: ex parte obtained by the Plaintiff and restoring the parties to their positions before the order ex parte was obtained by the Plaintiff.
(c) Sending the Defendant’s counter down to the Court below to be heard on its merits should the Defendant choose to pursue it.
I am of the view that reliefs (a) and (c) are meritorious and should be granted.
I do not think however that this Court can grant relief (B) as this court would not act in vain. Most of the property sold have been acquired by third parties as purchasers for value unaware of pending litigation. In any event they were sold before the Appellant instituted the counter-claim. The second issue is resolved in favour of the Appellant.
The Appeal is allowed. The orders made by the trial court are hereby set aside. The cost of N30,000.00 for the Appellant against the Respondent .