CIL RISK & ASSET MANAGEMENT LTD v. FBN MERCHANT BANK LTD (2020)

CIL RISK & ASSET MANAGEMENT LTD v. FBN MERCHANT BANK LTD

(2020)LCN/14610(CA)

In The Court Of Appeal

(LAGOS JUDICIAL DIVISION)

On Monday, September 14, 2020

CA/L/419/2017

RATIO

PLEADINGS: THE JURISDICTION OF A SUPERIOR COURT

It is trite that no cause or matter is, prima facie, deemed to be beyond the jurisdiction of a superior Court unless it is specifically or expressly shown or stated to be so vide Anakwenze v. Aneke and Ors. (1985) 6 SC 41, Adigun v. A.-G., Oyo State (1987) 1 NWLR (pt. 63) 678 at 742, Musaconi Ltd. v. Aspinall (supra) at 464.
The Court below being a creature of the Constitution and/or statute, its jurisdiction would be confined, limited or circumscribed by the Constitution and/or statute creating it. In that wise, caution or circumspection has to be exercised to ensure that the Court below as a superior Court of record is not hungry after jurisdiction by expounding, not expanding, its jurisdiction to give it the jurisdiction it does not have by misconstruing the relevant provisions of the Constitution and/or statute. It has to be so because the Court below ought not to encroach or enlarge or shrink its jurisdiction as to usurp the functions of the legislature; and, that, although a superior Court has great powers, yet these powers are limited and bound by some line of demarcation created by the Constitution and/or statute vide the Supreme Court case of African Newspapers of Nigeria Ltd. and Ors. v. The Federal Republic of Nigeria (1985) 2 NWLR (pt. 6) 137 at 159 – 150. It is on account of the parameters (supra) that I will look at the statement of claim and/or the evidence adduced in support thereof to determine the issue of jurisdiction of the Court below and ascertain whether the Court below was right to decline jurisdiction with respect to legs (a) and (b) of the reliefs sought for in the statement of claim.
Paragraph 31 (a) and (b) of the statement of claim which is contained in pages 9 — 10 of the record reads — “WHEREOF the claimant claims against the defendant as follows: –
(a) A perpetual order of injunction restraining the defendant either by itself, its servants, privies, agents or howsoever called from winding up or taking such steps with a view to putting out the claimant out of business or swooping or seizing funds or assets belonging to the claimant.
(b) A declaration that the margin/trading facility arrangement by its very nature is self liquidating and does not occasion liability of any kind on any of the parties if properly implemented”.
Paragraph 30 of the statement of claim which is contained in page 9 of the record pleaded thus —
“30. The claimant avers that the defendant has a knack for stifling corporate bodies and individuals from business and unless the defendant is restrained by this Honourable Court, it will take some dangerous steps with a view to winding up the claimant and putting it completely out of business including seizing or swooping on the accounts of the claimant”. The appellant’s sole witness repeated the averments in paragraphs 30 and 31 of the statement of claim (supra) in paragraphs 33 and 34 (a) of the written statement of oath of its sole witness contained in page 19 of the record which are interrelated and have to be read together as is the case with pleadings which must be considered holistically, not in isolation. When so read grammatically, the relief sought in paragraph 31 (a) of the statement of claim (supra) is aimed at restraining the defendant, now respondent, from taking steps to wind up the claimant, now appellant, a corporate body. To wind up a corporate body is to stop it from running and close it completely vide Oxford Advanced Learner’s Dictionary (7th Edition) page 1367. Relief 31 (a) (supra) would therefore depend on the Court below having the substantive jurisdiction to grant the winding up of a corporate body. In the light of the above discourse, I agree with the Court below in part of its judgment contained in page 381 of the record, and also, accept the respondent’s arguments (supra) on jurisdiction with respect to the relief sought for in paragraph 31 (a) of the statement of claim (supra) that the Court below was right to decline jurisdiction in respect of the said relief, which is a matter for the exclusive jurisdiction of the Federal High Court. The relief in paragraph 31 (b) of the statement of claim (supra) was elaborated upon in paragraphs 1 — 29 of the statement of claim contained in pages 5 — 9 of the record and paragraphs 1 —32 of the written statement on oath of the appellant’s sole witness contained in pages 12 — 19 of the record plus the additional written statement on oath of the appellant’s sole witness contained in pages 121 — 125 of the record that its case at the Court below was built on breach of contract and the tort of negligence, alleged to have been committed by the respondent in the handling of shares and stocks pledged by the appellant to it as security for a loan facility granted to the appellant by the respondent.
The Court below therefore had the jurisdiction to entertain the action for alleged breach of contract and negligence under Section 272(1) of the 1999 Constitution read with the fairly recent case of Uzodima Chukwuma Kuzi-Orizu v. Fidelity Union Securities Limited (supra), cited by the appellant in the reply brief where this Court held inter alia that a dispute relating to margin loan agreement was within the jurisdiction of a State High Court. Per JOSEPH SHAGBAOR IKYEGH, J.C.A.

Before Our Lordships:

Joseph Shagbaor Ikyegh Justice of the Court of Appeal

Tijjani Abubakar Justice of the Court of Appeal

Gabriel Omoniyi Kolawole Justice of the Court of Appeal

Between

CIL RISK & ASSET MANAGEMENT LTD. APPELANT(S)

And

FBN MERCHANT BANK LTD. RESPONDENT(S)

JOSEPH SHAGBAOR IKYEGH, J.C.A. (Delivering the Leading Judgment): The appeal is against the judgment of the High Court of Justice of Lagos State (the Court below) whereby it struck out the legs of claim of perpetual injunction for the winding up of the appellant and for a declaration that the margin/trading facility arrangement between the appellant and the respondent by its very nature is self-liquidating, and does not occasion liability of any kind on any of the parties, if properly implemented, for want of jurisdiction. The Court below dismissed the other legs of claim on the merit dealing with return of 660,000,000 units of Mutual Benefits Assurance Plc shares pledged with the respondent; the sum of N1,199,930,000.00 made up of being equity contribution of 33.33% of the facility sum made by the appellant to the respondent through the respondent’s agent, Cashcraft Asset Management Ltd; and general damages for breach of the contract and for negligence.

The Court below, however, granted the counter-claim of the respondent by entering judgment in the sum of N1,858,110,048.65 against the appellant being amount outstanding on the loan facility granted to

the appellant with 15% interest per annum on the said judgment sum from 28.07.2010 till judgment and 10% per annum on the sum from date of judgment till the amount is fully paid up; as well as N2 million cost of the action including legal practitioner’s fees.

The facts of the case as gleaned from the statement of claim and evidence hinged on whether there was a breach of contract of the margin/trading facility and whether the respondent was negligent in handling the margin/trading transaction between the parties; as well as whether by the counter-claim the appellant was liable to the respondent for the sum of money counter-claimed. The Court below summarized these respective contentions in its judgment and the evidence for and against the rival contentions of the parties vide pages 370 — 378 of the record of appeal (the record) with the capstone contained in page 379 of the record thus —
“THE FACTS: The facts of this matter from the pleadings and both the documentary and oral evidence adduced before the Court, the Claimant claimed that the Defendant granted a margin facility to the claimant in the sum of N2, 100, 000,000.00 (Two

Billion, one Hundred Million Naira) by its letter dated February 15, 2008 whilst the Defendant’s stated by Exhibit C1 letter dated February 28, 2008 it made a counter offer in the sum of N2,100,000,000.00 (Two Billion, one Hundred Million Naira) Asset Backed (Shares) PNI in favour of the Claimant which was duly accepted by the Claimant. The terms of the Exhibit C1 is the basis of the relationship between the parties and this is evident in the Final Written Addresses of both parties.
The contention of the Claimant is that the Defendant is under the contractual obligation to sell the pledged securities once the value falls by 20% .and that the failure to perform its contractual obligation, the Defendant breached the contract and also was negligent in the performance of the contract, hence this suit was instituted and the Claimant has claimed as stated in the statement of Claim. Defendant on the other hand has counterclaimed against the Claimant herein for failure and omission to meet its contractual obligation of repaying the outstanding debt upon demands made on several occasions as evident in several letters of demand tendered as Exhibits before this

Court.”

I adopt the fact for and against the action and the counter-claim as summarised by the Court below in its judgment in pages 370 — 379 of the record earlier alluded to as representing the state of affairs of the case. It was based on these facts that the Court below entered judgment in the case against the appellant.

Not satisfied with the judgment, the appellant filed a notice of appeal with sundry grounds on 08.02.17. The appellant filed its brief of argument on 23.10.17 which was deemed as properly filed on 06.07.20 with these issues for determination —
“ISSUES FOR DETERMINATION
“3.1 Upon due evaluation of the judgment of the Court below in this case, the appellant respectfully submits that the issues that call for determination in this appeal are:
(a) Whether the Court below has the competence and jurisdiction to hear and determine reliefs 1 and 2 of the appellant’s claims.
(Distilled from ground 1)
(b) Whether the respondent is bestowed with the responsibility to sell the pledged securities under the margin/trading arrangement between the appellant and the respondent.
(Distilled from ground 2)

(c) Whether the order against the appellant to pay the sum of N1,858,110,018.68 to the respondent is justifiable in the peculiar circumstance of this case.
(Distilled from grounds 3 and 5)
(d) Whether it is not against Public Policy to order a litigant to pay the Solicitors’ fees of its adversary.
(Distilled from ground 4)

The appellant referred to the writ of summons and the statement of claim of 09.07.2010 particularly reliefs (a) and (b) thereof to contend that an issue of jurisdiction being fundamental to adjudication is determined by looking at the statement of claim where pleadings are frontloaded, as in this case, and that having regard to the statement of claim the appellant who had claimed an injunctive relief as a protective order restraining the respondent from doing anything that would terminate the life of the appellant brought its action within the jurisdiction of the Court below, as its claim was not based on any winding up proceedings, therefore, the Court below should not have struck out reliefs (a) and (b) contained in the statement of claim placing reliance on the cases of Utih v. Onoyivwe (1991) 1 SC (pt. 1)

65 at 96 – 97, Ndaeyo v. Ogunaya (1997) 1 SC 11, Chacharos v. Ekimpex Ltd. (1988) 1 NWLR (pt. 68) 88, Bakare v. A.-G., Federation (1990) 3 NWLR (pt. 229) 350, Ajayi v. Military Administrator, Ondo State (1997) 5 NWLR (pt. 504) 237, A.-G., Anambra State v. A.-G., Federation (2007) 12 NWLR (pt. 1047) 4, Okulate v. Awosanya (2000) 2NWLR (pt. 646) 530 at 555 – 556, Adeyemi v. Opeyori (1976) 10 – 11 SC 18, Izenkwe v. Nnadozie (1953) 14 WACA 361, A.-G., Federation v. A.-G., Abia State (2001) 7 SC (pt. 1) 32 at 102, Society BIC SA v. Char-zin Ind. Ltd. (2014) 4 NWLR (pt. 1398) 497 at 536, Ogbunyiya (?) v. Okudo (1979) 6-9 SC 52, PDP v. INEC (1999) 11 NWLR (pt. 626) 200, Buhari v. Yusuf (2003) 14 NWLR (pt. 841) 446, Udoh v. Orthopaedic Hospital Management Board (1993) 7 NWLR (pt. 304) 139, Adelekan v. Ecu-Linen (2006) 12 NWLR (pt. 993) (no pagination), Onuorah v. KRPC Ltd. (2005) 6 NWLR (pt. 921) 393, Sun Insurance (Nig.) Plc v. U.E.C.C. Ltd. (2015) 11 NWLR (pt. 1471) 576 read with Sections 251 (a)-(s), (5), and 272(1) of the Constitution of the Federal Republic of Nigeria 1999, as altered (1999 Constitution) and Section 10 of the High Court Law of Lagos State, 2003.

The appellant relied on the letter of offer, Exhibit B, particularly paragraph 9(b) thereof and its acceptance by Exhibit C1 contained in pages 349 and 350 of the record to contend that as the parties had agreed on the fact that overriding consideration was that the respondent who had a lien over the pledged securities must sell same at any time the cumulative value of the securities falls by 20% for the protection of their joint investment, the Court below was wrong when it held that the respondent “is no bound to sell at the bench mark” vide page 385 of the record, as by so holding the Court below went outside the terms of the contract contrary to its duty to interpret and enforce an agreement placing reliance on the cases of Ibama v. Shell Petroleum Development Coy. Nig. Ltd. (2005) 17 NWLR (pt. 954) 364 at 391, Omega Bank (Nig.) Plc v. O.B.C. Ltd. (2005) 8 NWLR (pt. 928) 547 at 574 – 575.

The appellant referred to the evidence of the respondent’s sole witness contained in pages 359 — 361 of the record to contend that having admitted that the appellant contributed the sum of N699,000,930.00 being 33.33% equity contribution of the investment; and

that the respondent has a lien over the securities which the respondent was to dispose of in the margin/trading arrangement to secure the interest of both parties which if sold as at July, 2008, the facility sum could have been liquidated without the parties incurring loss; more so, the respondent realized over N1,123,325,703.15 from the facility arrangement whilst the appellant who contributed 33.33% to the investment got nothing; as well as the fact that the shares sold by the respondent were the ones pledged by the appellant without the respondent remitting any sum of money to the appellant, the Court below was wrong to award the sum of N1,858,110,048.65 against the appellant when there was no evidence to support the award; therefore, the Court should intervene and set aside the award as being perverse and for allowing the respondent to benefit from its own wrong vide the cases of Teriba v. Adeyemo (2010) 13 NWLR (pt. 1211) 242 at 263, Achu v. Civil Service Commission of Cross River State (2009) 3 NWLR (pt. 1129) 475 at 501, Ekanem v. Akpan (1991) 8 NWLR (pt. 211) 611, Adedeji v. National Bank (Nig.) Ltd. (1989) 1 NWLR (pt. 96) 212, Ibekwev. Maduka (1995)

4 NWLR (pt. 392) 716, FBN Plc v. May Med. Clinics and Diagnostic Centre Ltd. (1996) 9 NWLR (pt. 595) 406, NBA v. Maba Wonku (2013) 15 NWLR (pt. 1378) 584 at 620, Gaji v. Paye (2003) 8 NWLR (pt. 828) 583 at 601 – 602, Agbonifo v. Aiwereoba (1988) 1 NWLR (pt. 70) 325, Ebba v. Ogodo (1984) 1 SCNLR 372, Sanusi v. Adebiyi (1997) 11 NWLR (pt. 530) 565, Okino v. Obanebira (1999) 13 NWLR (pt. 636) 535, Olagunju v. Adesoye (2009) 9 NWLR (pt. 1146) 225 at 263, Daspan v. Mangu Local Government Council (2013) 2 NWLR (pt. 1338) 203 at 221.

The appellant relied on the case of Guinness (Nigeria) Plc v. Nwoke (2000) 15 NWLR (pt. 689) 135 at 150 to contend that the order for payment of the sum of N2 million to the respondent as legal practitioners’ fees is against public policy and should be set aside and judgment be entered for the appellant in terms of the statement of claim and the evidence led at the Court below vide Order 4 rules 3 and 4 of the Court of Appeal Rules 2016 (Rules of the Court) and Section 15 of the Court of Appeal Act, 2004 read with the cases ofInakoju v. Adeleke (2007) 4 NWLR (pt. 1025) 422 at 613, Union Bank of Nigeria v. Fajebe Foods and Poultry Farms (1994) 5 NWLR (pt. 344) 325, lgiehon v. Omoregie

(1993) 2 NWLR (pt. 276) 398, Ejowhomu v. Edok-Eter Mandilas Ltd. (1986) 5 NWLR (pt. 29) 1, Igweshi v. Atu (1993) 6 NWLR (pt. 300) 484, Uzoukwu v. Ezeonu 11 (1991) 6 NWLR (pt. 200) 708, Kokoro-owo v. Ogunbambi (1993) 8 NWLR (pt. 313) 627, Darko v. Ajyakwa (1943) 9 WACA 15, Jadesimi v. Okotie Eboh (1986) 1 NWLR (pt. 16) 264, Ekpa v. Utong (1991) 6 NWLR (pt. 197) 258, Oshoboja v. Amuda (1992) 6 NWLR (pt. 248) 396, A.-G., Anambra State v. Okeke (2002) 12 NWLR (pt. 782) 572, Cappa & D’Alberto Ltd. v. Akintilo (2003) 9 NWLR (pt. 824) 49; upon which the appellant concluded that the appeal should be allowed and the decision of the Court below set aside and in its place judgment be entered in favour of the appellant in terms of the statement of claim and the evidence adduced at the court below.

The respondent argued the respondent’s notice of intention to contend that the decision of the Court below be varied filed on 23.01.20, but deemed as properly filed on 06.07.20, in its brief filed on 23.01.20, but deemed as properly filed on 06.07.20, by referring to page 344 of the record where the Court below

granted its application to amend the statement of defence and counter-claim which upon amendment was duly filed along with the witness deposition of the respondent’s new witness, a Mr. Olasunkanmi Osho, vide pages 192 — 195 and 197 — 203 of the record, respectively.

The respondent then argued that by paragraph 13 of the amended statement of defence and counter-claim, it had, as the counter-claimant, sought for the sum of N1,861,130,956.47, being the amount outstanding on the loan facility granted to and used by the appellant as at 31.08.2010; (b) compound interest on the said sum of money at the rate of 15% per annum from 01.09.2010 till judgment; (c) cost of the action including legal practitioner’s fees of N2,000,000.00 and (d) post judgment interest at the rate of 15% per annum from date of judgment till the amount is paid up to which the Court below referred in the introduction to its judgment contained in page 370 lines 17 — 20 of the record but ended in granting the monetary relief of the principal sum sought by the original counter-claim contained in pages 60 — 63 of the record in its judgment contained in pages 385 —

386 of the record; consequently. the respondent argued that the Court below acted under an accidental error or slip in making the award and same should be varied to harmonise with the amended statement of defence and counter-claim vide the case ofA.T.E. Co. Ltd. v. Military Governor of Ogun State (2009) 15 NWLR (pt. 1163) 26 at 60.

The respondent argued in the brief on jurisdiction that contrary to the appellant’s contention, the Court below did not strike out reliefs Nos. 1 and 2 of the statement of claim because they bordered on the winding up of a company but because the reliefs did not fall within the subject-matter jurisdiction of the Court vide part of the judgment of the Court below contained in page 381 of the record.

Consequently, the respondent argued that the Court below could only have entertained relief 1 of the statement of claim to protect the corporate life of the appellant if it had the jurisdiction to entertain an action for the winding up of a company which jurisdiction is, however, exclusively vested in the Federal High Court as well as the procedure therefor to have been followed to do justice in the case; and, that the Court

below was right in declining jurisdiction in respect of reliefs 1 and 2 of the statement of claim which, according to the contention of the respondent, the Court below rightly struck out reliefs 1 and 2 as it had no inherent powers to entertain the said reliefs which could only be conferred on it by substantive law as the power to grant injunctions is not equivalent to jurisdiction vide Sections 6(6)(a) and 251(1)(e) of the 1999 Constitution, Sections 401 — 567 of the Companies and Allied Matters Act (CAMA) and the cases of Edun v. Odan Community (1980) 11 SC 103 at 127 — 128, Madukolu v. Nkemdilim (1962) 2 SCNLR 341, Nnah v. Longse (2018) LPELR – 45640 (CA).

It was also argued that relief 2 of the statement of claim was based on Exhibit C, whereas the Court below relied on Exhibit C1, an Asset Backed Shares Promissory Note Instrument (PNI) not a margin/trading facility, therefore the arguments of the appellant on margin/trading facility is academic and should not be countenanced vide the case of Alli v. Aleshinloye (2000) 6 NWLR (pt. 660) 177, Thomas v. Olufosoye (1986) 1 NWLR (pt. 18) 669.

The respondent argued, in the alternative,

that a perusal of Exhibit C which is contained in pages 72 — 77 of the record shows that the margin/trading facility involved trading or funding trade in company stocks/shares listed on the Nigerian Stock Exchange which is not within the jurisdiction of the Court below to entertain vide Sections 114 — 210 of CAMA, Sections 28, 29(1), 105 — 116, 294, 312 and 315 of Investment and Securities Act (ISA) read with Section 251(1)(e) of the 1999 Constitution and the case of Okeke v. SEC (2013) LPELR 20355.

The respondent also argued that after citing Section 10 of the High Court Law of Lagos State, the appellant contended that it was very clear that the High Court of Justice in England will certainly entertain reliefs (1) and (2) of the appellant’s claim when the foreign law of England was not pleaded as required by Section 69 of the Evidence Act 2011 (Evidence Act); and that, at any rate, foreign law cannot override the provisions of the Evidence Act vide Araka v. Egbue (2003) 17 NWLR (pt. 848) 1.

The respondent further argued that by paragraph 9(b) of Exhibit C1 which should not have been subjected to extrinsic evidence which is

inadmissible to vary or alter written agreements, the respondent was under no duty to sell the shares but that by paragraph 9(11)(b) and (c) of Exhibit C1, the asset backed share facility agreement merely recognized the respondent’s interest in recovering the loan amount vide Sakati v. Bako (2015) 14 NWLR (pt. 1480) 531, Union Bank of Nigeria Ltd. v. Nwaokolo (1995) LPELR 3385, NIPC Ltd. v. The Thompson Organisation (1969) 1 All NLR 134, Black’s Law Dictionary 7th Edition on the meaning of ‘right’, Sections 128(1) and 129(2) of the Evidence Act, and Lewis Caroll’s ‘Through the Looking Glass and What Alice Found There’ as shown by the dialogue between Alice and Humpty Dumpty to drive home the point that words should be given their ordinary meaning, not the meaning a party chooses to give them.

The respondent argued that the award of N1,858,110,018.68 was based on the counter-claim of the respondent as representing the sum outstanding on the loan facility granted to the appellant vide part of the judgment of the Court below contained in page 388 of the record, therefore the award was based on the counter-claim which is distinct from the appellant’s claim

or action and upon which the cause of action therein should be determined vide the cases of Afrilec Ltd. v. Lee (2012) LPELR – 7872 (CA), Sifax (Nig.) Ltd. v. Migfo (Nig.) Ltd. (2018) 9 NWLR (pt. 1623) 138, Society Bic SA v. Charzin Ind. Ltd. (2014) 4 NWLR (pt. 1398) 497.

The respondent also argued that the cause of action as set out in the counter-claim is for a breach of the loan facility of N2.1 billion that the respondent advanced to the appellant which had become due and unpaid by the appellant, not a claim for business transaction relating to securities market vide Exhibit C1 contained in pages 78 — 81 of the record upon which the Court below based its finding on the evidence of DW1 in page 357 of the record as well as the statement of account, Exhibit D2, together with the admission of CW1 under cross-examination in page 349 of the record that the loan facility was not repaid which finding contained in part of the judgment of the Court below contained in page 379 of the record was not appealed against and should on that basis be binding on the appellant.

The respondent argued that the cost of litigation or action including professional

fees of a legal practitioner is not against public policy and can be awarded citing in support the cases of Conoil Plc v. Vitol S.A. (2012) 2 NWLR (pt. 1283) 50, Total (Nig.) Plc v. Ajayi (2004) 3 NWLR (pt. 860) 270, Naude v. Simon (2013) LPELR — 20491, Union Bank of Nigeria Plc v. Chimaeze (2014) 9 NWLR (pt. 1411) 166, Rewane v. Okotie-Eboh (1960) SCNLR 461, Abia State Transport Corporation v. Quorum Consortium Ltd. (2009) 9 NWLR (pt. 1145) 1, Owner of MV Arabella v. Nigeria Agricultural Insurance Corporation (2008) 11 NWLR (pt. 1097) 182, Edet v. Chagoon (2008) 2 NWLR (pt. 1070) 85 at 105 read with Order 49 rules 1(a) and (b) of the High Court of Lagos State (Civil Procedure) Rules 2012 (rules of the Court below) upon which the respondent urged that the appeal should be dismissed and the judgment sum be varied to N1,861,130,956.47 in place of the award of N1,858,110,048.65 made by the Court below.

The appellant filed its reply brief on 30.06.20, which was deemed as properly filed on 06.07.20, wherein the appellant contended that it was common ground between the parties that the case was strictly based on loan transaction within the jurisdiction

of the Court below under Section 272(1) of the 1999 Constitution, therefore relief (a) of the appellant’s claim which sought the protection of the Court below to prevent the respondent from taking any action that may endanger the appellant’s corporate existence was within the jurisdiction of the Court below; that a dispute whether a customer has to honour and uphold the margin loan agreement entered into is within the jurisdiction of a State High Court, as capital market, shares and trading therein are not contemplated by Section 251(1) of the 1999 Constitution vide the case of Kuzi-Orizu v. Fidelity Union Securities Limited (2018) LPELR – 46832 (CA).

It was also argued that Exhibit C contained in pages 72 — 77 of the record was a margin/trading facility which is a loan and was the basis of the appellant’s claim under relief 3 of the statement of claim; likewise, the PN1, showing the Court below had the jurisdiction to entertain relief (b) of the statement of claim, more so the reference to shares and debentures in Exhibit C was the use to which the loan facility was to be applied; and, that the respondent should not have misled the Court on the

issue of foreign law as the appellant relied on Section 10 of the High Court Law of Lagos State 2003, not foreign law, vide MV Peace and Ors. v. FRN (2019) LPELR – 47870 (CA), CCB v. Okpala (1997) 8 NWLR (pt. 518) 673, Orji v. Onyemere (2015) LPELR – 25649, Agoro v. Aromolaran (2011) LPELR – 8906, Usman v. FRN (2018) LPELR – 45629 on the duty of counsel not to mislead the Court.

The appellant further contended in the reply brief that the phrase “reserves the right to sell” as used in paragraph 9(b) of Exhibit C1 connotes compulsion to sell in case of bearish trend in stock market that results in the value of the pledged securities falling by 20% of the original value and that even if it was seemingly permissive it connoted compulsion and put the respondent on alert or vigilance to ensure that both parties did not lose their collective investment by virtue of an unfavourable market having regard to all the clauses of Exhibit C1 and the maxim of equity on vigilance showing the respondent who was guilty of indolence was wrongly allowed by the Court below to benefit from its own ineptitude vide Sheriff and Anor. v. PDP and Ors. (2017) LPELR – 41805 (CA),

Liverpool Borough Bank v. Turner (1861) 30 CJ CH 379 at 657, Amadi v. NNPC (2000) 10 NWLR (pt. 674) 76 at 97 — 98, Unilife Development Co Ltd. v. Adeshigbin (2001) 4 NWLR (pt. 704) 609 at 629, Teriba v. Adeyemo (2010) 13 NWLR (pt. 1211) 242 at 263, Achu v. Civil Service Commission of Cross River State (2009) 3 NWLR (pt. 1129) 475 at 501, Ibeziako v. Abutu (1954) 3 E.N.L.R. 24, Smith v. Clay (1967) 3 Bro. C. 639 at 640 cited in Introduction to Equity in Nigeria (Reprint 2009) by Kodilinye.

The appellant reiterated arguments earlier made in the appellant’s brief on alleged perverse findings of fact with respect to the award of N1,858,110,018.68 in pages 9— 11 of the reply brief.
The appellant further argued in the reply brief that the notice to vary the judgment was inappropriate as the challenge is on the verdict of the Court below on the sum of money awarded by it which should have been by way of a cross-appeal, more so, the counter-claim was not amended and as such the only sum contained in the initial counter-claim in pages 194 — 195 of the record remained intact vide Okezie and Ors. v. Mainstreet Bank Ltd. and Ors. (2015)

LPELR – 40886 (CA).

The appellant also argued that the Court may award solicitors’ fees only if such claim forms part of the cause of action videIbe and Anor. -v. Bonum (Nig.) Ltd. (2019) LPELR – 46452 (CA), Nwanji v. Coastal Services Ltd. (2004) 36 WRN 1 at 14 — 15; and that the leg of claim of solicitors’ fees was not proved in the instant case and should not have been granted as a matter of course, upon which the appellant concluded that the appeal should be allowed and the judgment of the Court below be set aside.

Jurisdiction is the bedrock or blood-line of adjudication. It is determined on the basis of the statement of claim where pleadings have been filed and exchanged; or on the basis of the evidence received; or on the face of the writ of summons, where appropriate; or by motion on notice supported by affidavit setting out the facts relied upon vide Musaconi Limited v. Mr. H. Aspinall (2013) 14 NWLR (pt. 1375) 435 at 459 – 460 following the cases of Chief Nnonye v. Anyichie & Ors. (2005) 2 NWLR (pt. 910) 623, A.-G., Kwara State v. Olawale (1993) 1 NWLR (pt. 272) 645, N.D.I.C. v. Central Bank of Nigeria (2002) 7 NWLR (pt.

766) 272, Arjay Limited and Ors. v. Airline Management Support Limited (2003) 7 NWLR (pt. 820) 577 and the cases (supra) cited by the parties in their respective briefs.
By Section 6(2), (3), 5(e) of the 1999 Constitution, the Court below being a High Court of a State (Lagos State), is a superior Court of record. It is trite that no cause or matter is, prima facie, deemed to be beyond the jurisdiction of a superior Court unless it is specifically or expressly shown or stated to be so vide Anakwenze v. Aneke and Ors. (1985) 6 SC 41, Adigun v. A.-G., Oyo State (1987) 1 NWLR (pt. 63) 678 at 742, Musaconi Ltd. v. Aspinall (supra) at 464.
The Court below being a creature of the Constitution and/or statute, its jurisdiction would be confined, limited or circumscribed by the Constitution and/or statute creating it. In that wise, caution or circumspection has to be exercised to ensure that the Court below as a superior Court of record is not hungry after jurisdiction by expounding, not expanding, its jurisdiction to give it the jurisdiction it does not have by misconstruing the relevant provisions of the Constitution and/or statute. It has to be so

because the Court below ought not to encroach or enlarge or shrink its jurisdiction as to usurp the functions of the legislature; and, that, although a superior Court has great powers, yet these powers are limited and bound by some line of demarcation created by the Constitution and/or statute vide the Supreme Court case of African Newspapers of Nigeria Ltd. and Ors. v. The Federal Republic of Nigeria (1985) 2 NWLR (pt. 6) 137 at 159 – 150.

It is on account of the parameters (supra) that I will look at the statement of claim and/or the evidence adduced in support thereof to determine the issue of jurisdiction of the Court below and ascertain whether the Court below was right to decline jurisdiction with respect to legs (a) and (b) of the reliefs sought for in the statement of claim.
Paragraph 31 (a) and (b) of the statement of claim which is contained in pages 9 — 10 of the record reads — “WHEREOF the claimant claims against the defendant as follows: –
(a) A perpetual order of injunction restraining the defendant either by itself, its servants, privies, agents or howsoever called from winding up or taking such steps with a view to

putting out the claimant out of business or swooping or seizing funds or assets belonging to the claimant.
(b) A declaration that the margin/trading facility arrangement by its very nature is self liquidating and does not occasion liability of any kind on any of the parties if properly implemented”.
Paragraph 30 of the statement of claim which is contained in page 9 of the record pleaded thus —
“30. The claimant avers that the defendant has a knack for stifling corporate bodies and individuals from business and unless the defendant is restrained by this Honourable Court, it will take some dangerous steps with a view to winding up the claimant and putting it completely out of business including seizing or swooping on the accounts of the claimant”.

The appellant’s sole witness repeated the averments in paragraphs 30 and 31 of the statement of claim (supra) in paragraphs 33 and 34 (a) of the written statement of oath of its sole witness contained in page 19 of the record which are interrelated and have to be read together as is the case with pleadings which must be considered holistically, not in isolation. When so read

grammatically, the relief sought in paragraph 31 (a) of the statement of claim (supra) is aimed at restraining the defendant, now respondent, from taking steps to wind up the claimant, now appellant, a corporate body. To wind up a corporate body is to stop it from running and close it completely vide Oxford Advanced Learner’s Dictionary (7th Edition) page 1367. Relief 31 (a) (supra) would therefore depend on the Court below having the substantive jurisdiction to grant the winding up of a corporate body.

In the light of the above discourse, I agree with the Court below in part of its judgment contained in page 381 of the record, and also, accept the respondent’s arguments (supra) on jurisdiction with respect to the relief sought for in paragraph 31 (a) of the statement of claim (supra) that the Court below was right to decline jurisdiction in respect of the said relief, which is a matter for the exclusive jurisdiction of the Federal High Court.

The relief in paragraph 31 (b) of the statement of claim (supra) was elaborated upon in paragraphs 1 — 29 of the statement of claim contained in pages 5 — 9 of the record and paragraphs 1 —

32 of the written statement on oath of the appellant’s sole witness contained in pages 12 — 19 of the record plus the additional written statement on oath of the appellant’s sole witness contained in pages 121 — 125 of the record that its case at the Court below was built on breach of contract and the tort of negligence, alleged to have been committed by the respondent in the handling of shares and stocks pledged by the appellant to it as security for a loan facility granted to the appellant by the respondent.
The Court below therefore had the jurisdiction to entertain the action for alleged breach of contract and negligence under Section 272(1) of the 1999 Constitution read with the fairly recent case of Uzodima Chukwuma Kuzi-Orizu v. Fidelity Union Securities Limited (supra), cited by the appellant in the reply brief where this Court held inter alia that a dispute relating to margin loan agreement was within the jurisdiction of a State High Court.

The appellant stated in cross-examination through its sole witness, the managing director, in pages 349 — 351 of the record that — “l have been the Managing Director from

inception of the Company till date. The facility is 2.1 Billion Naira. Facility was granted in 2008. No, I have not paid back.
I signed most of the letter and also consigned some the letter to the Defendant by nature of banking relationship.
The letters from the Defendant were addressed to the company attention me as the Managing Director. I have seen all of these documents before they are as follows: –
1. Claimant letter dated 15th February 2008 – C.
2. Defendant’s Letter dated February, 2008 – C1
3. Claimant Letter dated 14th March, 2008 – C2
4. Defendant’s Letter dated 2 d May, 2008 – C3
5. Defendant’s Letter dated 26th May, 2008 – C4
6. Claimant’s Letter dated 4th March, 2009 – CS
7. Defendant’s Letter dated 2dh June, 2008 – C6.
8. Defendant’s Letter dated 29th October, 2008 – C7.
9. Defendant’s Letter dated 24th March, 2009 – CS.
10. Claimant’s Board Resolution dated 6th May, 2009 – C9.
11. Defendant’s Letter dated 25th September, 2009 – C10.
12. Defendant’s Letter dated 31st March. 2010 – C11<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

</br<>

Defendant’s Letter dated 4th May, 2010 – C12
14. Defendant’s Letter dated 1st July. 2010 – C13.
Mr. Ezeani: I seek to tender these documents.
Eke Esq.: No objection, but that some of these documents have been tendered before.
Mn Ezeani: C.W1 tendered- photocopies and some of the documents tendered are not complete.

Court: The documents are admitted and marked Exhibit C – C13.
C.W1: To look at Exhibit C page “3” paragraph 3 and page 4 the whole.
C.W1: Yes, the representation on page 3 paragraph 3 at page 4 represent our capacity to monitor stocks and shares because we put this process in place.
C.W1: Refer to page 4 No.2 line 5 “we are able to establish how strong a company fundamental. Yes, the Claimant approached the Defendant to sell the stocks. I cannot be specific as-to-the date-when-the Defendant is advised to sell the stock.
No, I told them that the Defendant should some of the stocks. No, it is not correct to say that it was after the filing of this suit that I advised the Defendant to sell the stock.
Mr. Ezeani: May I apply for Exhibit C5. I refer to paragraphs 3 and 4.

In the said letter as shown to me Exhibit C5 1 instructed the bank to hold on to the asset based on earlier we had with Defendant.
Mr. Ezeani: I apply that witness look at Exhibit C8.
C.W1: My Lord, confirm that by Exhibit C8 we accepted the rollover of the facility.
Mr. Ezeani: Applies for Exhibit C9 for witness to see.
Yes, by this Exhibit C9 Claimants Board Resolution dated 6th May, 2009 we agreed that the facility by rolled over and that the shares should not be sold. The Defendant has damaged the Claimant business beyond repairs.
The evidence contained in the Exhibits shows that there has been damage.
No, the Defendant has active right of sale by the terms of facility and they exercised that right of sale”.
(My emphasis).

The respondent had through its witness stated under cross- examination in pages 360 – 361 of the record that —
“DW1: It is true that the Claimant had paid to the Defendant on the facility sum 358,425,252.58k.
DW1: The Defendant sold some shares in the sum of 764, 900,450.57k inclusive dividend receipt in respect of the shares.
DW1: The sum of 764,900,450.57

and part of the payment of the principal and interest on the facility and the Claimant was notified accordingly.
DW1: The shares pledges are the ones we sold.
Learned Counsel: Did you remit any part of the proceed to the Claimant?
DW1: No, I don’t remit any part of the proceed to the Claimant who was still owing the Defendant.
Learned Counsel: Request for “Exhibit C1″.
DW1: All the conditions were fulfilled before the draw down.
DW1: We started selling when the client did not accede to our notification on the state of the shares.
DW1: No, it is not the gross negligence that made both parties lose in respect of this transaction. ”
(My emphasis).

Evidence given in cross-examination strengthening the case of the party whose witness had been cross-examined is good evidence to be acted upon by the Court.

The Court below considered the case and held inter alia in its judgment in page 385 of the record (unedited) with respect to the transaction that — “In the instant case, this Court is of the considered and unfettered opinion that by given the words used its literal and simply meaning, the defendant

is not compelled to sell at the bench mark so referred but had a discretion to so do.
This fact is deducible from the provision of Clause 9(1) (c) and given credence by Exhibit B8 and C6 the Letter to the Claimant from the Defendant informing it of the decrease in facility.
Paragraph 3 of this letter is very instructive which excerpt reads thus: “If however, this security cover shortfall persists beyond 10 working days of the date of this letter and we are yet to receive any definite response from you to correct the situation, we will be at liberty to sell part/all of your shares and to immediately demand a liquidation of all sums outstanding to our favour on this facility.”
From the foregoing and based on other documentary evidence before this Court such as Exhibits C5 and C9, it is apparent that what the Defendant has is a right to sell upon certain conditions and not under any obligation to sell. It could be inferred as argued by the Defendant that the Claimant does not want the securities sold, hence, it compliance by providing additional securities as shown in Exhibit 88.”

The Court below then concluded in its judgment on the issue

that it had found that the respondent was within the terms of the contract not “obligated” to sell the securities at the time alleged by the appellant as the appellant failed to lead credible evidence in that regard. These findings are supported by the documentary evidence mentioned by the Court below in its judgment.

I respectfully hold that grammatically the phrase “reserves the right” means to have or keep a particular power to do something or make a decision vide Oxford Advanced Learner’s Dictionary (7th Edition) 999. The said phrase is of discretionary or permissive import as the phrase ‘may’ which makes room for discretion as an enabling, optional and permissive word videZakirai v. Mohammad (2017) 17 NWLR (pt. 1594) 181 at 227 following the case ofMokelu v. Federal Commissioner for Works and Housing (1976) ALL NLR 224.

Negligence is a question of fact. It comprises the existence of a duty of care owed to the plaintiff by the defendant and its breach by the defendant resulting in the plaintiff suffering damages.

Even though the respondent was not obliged to sell the shares at the time the appellant expected the shares to be sold as it had

discretion in the matter in virtue of the written agreement between the parties earlier alluded to in the judgment, it still drew the attention of the appellant to the adverse or ‘bearish’ down-turn of the market forces and gave the appellant 10 days to react to it without the appellant giving the respondent the nod to act within the period in question to avert disastrous consequences showing the respondent out of prudence, not upon a duty or burden placed on it by the agreement, put the appellant on notice of the unfavourable market forces to protect the value of the shares. See the analogous case of Uzodinma Chukwuma Kuzi-Orizu v. Fidelity Union Securities Limited (supra) or unreported judgment of the Court (Abubakar, Georgewill and Obaseki-Adejumo, J.J.C.A.) in Appeal No. CA/L/728/2017 delivered on 25.05.2018 particularly the decision on negligence.
Not having established by the totality of the evidence that the respondent was obligated to sell the shares on a particular occasion and upon terms imposed by the appellant as the wording of the margin/trading agreement read together gave the respondent the lee-way to handle the issue of the sale of the

shares, there was no binding contract between the parties obliging the respondent to so act as erroneously contended by the appellant as to constitute a breach of contract by the respondent. In my modest view, a transaction in which one of the parties has an option or discretion to proceed with it would not constitute a binding, valid and enforceable contract vide the case of Akinyemi v. Odu’a Investment Co. Ltd. (2012) 17 NWLR (pt. 1329) 209 at 236 to the effect that an agreement must be binding before it can be enforced as a contract.
Consequently, I am of the respectful view that the allegations of breach of contract and negligence were not established by the appellant and the refusal to award damages in the case in favour of the appellant was rightly reached by the Court below.

The Court below considered the counter-claim in its judgment contained in pages 385 — 388 of the record. The documentary evidence particularly Exhibits C1, C5, C8, C9, C10 – C13, D3 were relied upon by the Court below to grant the counter-claim. The judgment of the Court below on the counter-claim was amply supported by the said documentary evidence and the

admission made by the appellant’s sole witness (supra).

Having agreed through the sole witness (supra) that the facility was N2.1 Billion and the respondent’s sole witness whose evidence was not further cross-examined upon on the issue that the appellant had repaid only N358,425,252.58 kobo out of the N2.1 Billion and the shares were sold for N764,900,450.57, it is hard to see how by arithmetic calculation the award made on the principal sum owed amounted to awarding what was not owed at all by the appellant. I would affirm the said findings of fact with respect to the outstanding principal debt of N 1,861,130,935.47 and the interest rate thereon.

The Court below referred to the amended statement of defence and counter-claim in the opening portion of its judgment contained in page 370 of the record as the basis of the respondent’s counter-claim. The Court below went back to the original statement of defence and counter-claim upon which it based its judgment. In other words, the Court below based its judgment of the monetary award on the sum of N 1,858,110,048.65 stated in the original statement of defence and counter-claim instead of the sum of

N1,861,130,935.47 contained in the amended statement of defence and counter-claim the Court below had referred to in the opening part of its judgment.

I agree with the respondent that by its respondent’s notice to contend that the judgment be varied by placing reliance on the amended statement of defence and counter-claim where the principal sum claimed was N1,861,130,935.47, the Court below accidentally slipped as the totality of the evidence for the counter-claim flowed or harmonized with the principal sum of N1,861,130,935.47. See the illuminating judgment of the Supreme Court in the case of Arisons Trading and Engineering Company Ltd. v. The Military Governor of Ogun State and Ors. (2009) 15 NWLR (pt. 1163) 26 at 71 — 72 per the lead judgment prepared by His Lordship, Muhammad J.S.C., (now CJN), thus — “Now, a respondent’s notice it is settled, postulates that the approach of the learned trial Judge to the case, was correct, but that his conclusions, had adversely affected the respondent who thereby, contends that by the same reasoning of the learned trial Judge, he should have received, such as for example, a greater award. See the case

of Alhaji Sunmonu & Ors. v. Ashorota (1975) 1 NMLR 16 @ 23.
On the other hand, if a plaintiff wants a complete reversal of the decision of the lower Court, he files a cross-appeal in other words, a party seeking to set aside a finding in a judgment which is crucial and fundamental to a case, can only do so, through a substantive cross-appeal and not an application to affirm or vary the judgment on other grounds”.
Accordingly, I find substance in the respondent’s notice to vary the judgment of the Court below and hereby grant it.

Order 49 Rule 1(1)(a) of the rules of the Court below makes provision for the cost of legal representation and assistance of a successful party to the extent that the Judge of the Court below determines that the amount of such cost is reasonable. The cost of legal representation should form part of the cause of action and be particularised in the pleadings and established by credible evidence like the tendering in evidence of the receipt of payment or any form of payment for the professional service issued to the successful party by counsel representing him in the action.

The Judge of the Court below will

then calculate or determine the cost of legal representation based on the particularised or itemized professional services recorded by the legal practitioner for the successful party before the Judge of the Court below will fix the cost on reasonable basis. These steps were not taken or observed in the present case, as the bill of costs, Exhibit D4, contained in page 88 of the record did not indicate the specific amount charged for the items stated therein. Nor was evidence of actual payment of N2 million professional fees to the solicitors established in the case.
Thus, in the case of Prime Merchant Bank Limited v. Man-Mountain Company (Incorporated Insurance Broker) (2000) FWLR (pt. 9) 1587 at 1593 — 1594 it was held that the engagement and cost of engagement of the services of a solicitor is a consequential loss tied to the case or cause of action and must be proved by calling evidence on the engagement and actual payment of the solicitor’s fees. In that case it happened that — “The defendant/appellant called a witness who gave evidence that the Defendant got a Bill of N300,000 as solicitor’s fees. See Exhibit D2. Witness also testified

that Defendant paid the said fees but he tendered no receipt in support. It is true that the Defendant/Appellant stated in his pleadings that he incurred solicitor’s fees to the tune of N300,000.00 and the pleadings were not traversed by the Plaintiff/Respondent. But the Plaintiff in a case must succeed on the strength of his case and not on the weakness of the case for the defence. See the case of Akinola vs. Oluwo (1962) 1 ANLR 224.
This is a case of special damages which must be pleaded in detail and strictly proved. See the case of A. G. Oyo State VS. Fairlakes Hotels Ltd. (1989) 5 NWLR (pt. 121) 255. I have examined D2 carefully and I don’t consider it as evidence of payment of the solicitor’s fees. Mere statement that the Bill has been paid doesn’t meet the required proof expected in a case of special damages. The pleadings specified that the expenses were incurred but the evidence does not support payment. There must be a receipt or a cheque signifying that payment had been made – not mere ipse dixit – “l have paid”. See the cases of Oshinjinrin vs. Elias (1970) 1 ANLR 153; A, G. oyo State VS. Fairlakes Hotels Ltd. No.2 (1989) 5 NWLR (pt. 121)

255; Ngilari VS. Mothercat Ltd. (1999) 13 NWLR (pt. 636) 626.”
The N2 million awarded as the cost of legal representation should not have been made off-the-cuff or as a matter of course and in en bloc by the Court below. It is based on the above parameters that I find the cost of N2 million for legal representation objectionable and hereby set it aside.

In conclusion, I find no merit in the appeal save on the award of N2 Million cost of legal representation and hereby dismiss it and affirm the decision of the Court below with variation of the principal judgment sum to N1,861,130,935.47 with N200,000 costs to the respondent against the appellant.

TIJJANI ABUBAKAR, J.C.A.: I read the comprehensive leading Judgment prepared and rendered in this appeal by my learned brother JOSEPH SHAGBAOR IKYEGH, J.C.A. I am in complete agreement and therefore adopt the Judgment as my own. I have nothing extra to add. I abide by all consequential orders including the order on costs.

GABRIEL OMONIYI KOLAWOLE, J.C.A.: My learned brother, the Honourable Justice JOSEPH SHAGBAOR IKYEGH, J.C.A. graciously afforded me the opportunity to read in its

draft form, the lead judgment just delivered and I agree with the reasoning and conclusion reached in the said judgment and I adopt it as mine and do not have anything to add.

I abide with the consequential order as to costs.

Appearances:

Mr. F.E. Eke For Appellant(s)

Mr. R.U. Ezeani For Respondent(s)