DIAMOND BANK LTD & ANOR v. MR. ADEBAYO OLAOTI OLALERU
(2008)LCN/3057(CA)
In The Court of Appeal of Nigeria
On Friday, the 13th day of June, 2008
CA/L/439/2005
JUSTICES
DALHATU ADAMU Justice of The Court of Appeal of Nigeria
OFR Justice of The Court of Appeal of Nigeria
PAUL ADAMU GALINJE Justice of The Court of Appeal of Nigeria
HUSSEIN MUKHTAR Justice of The Court of Appeal of Nigeria
Between
1. DIAMOND BANK LTD
2. MR. PHILLIPS ODUOZA Appellant(s)
AND
MR. ADEBAYO OLAOTI OLALERU Respondent(s)
RATIO
THE NATURE OF A DEMURRER
For a proper consideration of this issue, I will refer to the relevant provisions of the 1994 rules. Order 23 rules 1, 2 and 3 of the High Court of Lagos State (Civil Procedure) Rules 1994 provide thus: –
“1. No demurrer shall be allowed.
2. Any party shall be entitled to raise by his pleading any point or law and, unless the court or judge in chambers otherwise orders, any point so raised shall be disposed of by the judge who tries the cause at or after the trial.
3. If in the opinion of the court or a judge in chambers the decision of such point of law substantially disposes of the whole action, or any distinct cause of action, ground of defence, set off counter claim, or reply therein, the court or judge may there upon dismiss the action or make such other order therein as may be just.”
By these rules quoted above, there is no doubt whatsoever that proceedings by way of demurrer have been abolished by rule 1 and in its place rules 2 and 3 are to be used by parties in raising any point of law in their pleadings, namely, statement of claim, statement of defence, counterclaim or reply to a counter claim for determination and disposal by the learned trial judge in the cause of the hearing or the matter or in the judgment at the end of the trial.
In Mobil Oil (Nigeria) Plc v. I. A. L. 36 Inc. (200) 6 NWLR (Pt. 659) 146 at 175-176 Iguh, JSC said:-
“I think I should point out that an application by way of demurrer under the Federal High Court (Civil Procedure) Rules, 1976 must not be confused with or mistaken for an application in lieu of demurrer applicable presently in Lagos and the Western State. In the latter class of applications, the points of law desired to be raised by the defendant as a preliminary issue are required to be set out in the statement of defence before such application in lieu of demurrer is raised.”
Clearly all what is being explained in the passage hereinabove is that a Defendant wishing to rely on points of law to raise a preliminary issue, is required to set out such points of law in the statement of defence before the preliminary issue is regarded as properly raised.
In Disu v. Ajilowura (2006) 14 NWLR (Pt. 1000) 783 at 809 paragraphs D-E, Kutigi, JSC as he then was had this to say: –
“There is no doubt, demurrer proceedings have been abolished in view of the clear provisions or Order 22 rule 1 of the High Court (Civil Procedure) Rules of Lagos State. I think it is settled that the issue of locus standi or jurisdiction being a point of law cannot properly be raised under order 22 rule 4 as was done by the appellants in this case. However, the issue may be raised under rules 2 and 3 by pleadings.”
See also Dada v. Ogunsanya (1992) 3 NWLR (Pt. 232) 754; Fadare v. AU. General of Oyo State (1982) All NLR 26.
Demurrer is an allegation of Defendant admitting the matters of fact alleged by complaint to be true but shows that as they are therein set forth, their legal consequences are not such as to put the demurring party to the necessity of answering them. The learned counsel for the Appellant submitted that the Appellant’s application under Order 14 Rule 19 of the High Court of Lagos State (Civil Procedure) Rules 1994 does not constitute a demurrer within the con of Order 25 Rule 1 of the said rule. I do not agree with this argument. An application to strike out a name of the 2nd Defendant is a preliminary issue of law under Section 65 of the Companies and Allied Matters Act, 2004 and it is therefore in the nature of demurrer.
Since demurrer has been abolished in Lagos State, by virtue of Order 23 Rule I of the High Court of Lagos State (Civil Procedure) Rules of 1994. the Appellant’s application of 12th March 2002 was incompetent by reason of his failure to file a statement of defence before the prayer contained in the motion aforesaid was raised. This is the spirit behind Order 23 rule 2 of the High court of Lagos state (Civil Procedure) Rules 1994 which provides thus:-
“Any party shall be entitled to raise by his pleading any point of law and unless the court or a judge in chambers otherwise orders any point so raised shall be disposed by the Judge who tries the cause at or after the trial.”
(Underlining is mine). PER GALINJE, J.C.A.
P. A. GALINJE, J.C.A (Delivered the Leading Judgment): This is an appeal against the ruling of the Lagos State High Court which was delivered on the 28th June 2002.
The Respondent herein as Plaintiff at the lower Court claimed against Diamond Bank Ltd as 1st Respondent and the Appellant, who was the 2nd Defendant as well as the Managing Director of the 1st Respondent the following reliefs: –
“1. A declaration that the purported letter of resignation dated 5th February 2002 under the hand of the Plaintiff is void and of no effect whatsoever same having been procured by the 1st Defendant from the Plaintiff unlawfully under duress.
2. A declaration that the letter of the 1st Defendant dated 5/2/2002 acknowledging the Plaintiff purported resignation cannot in law or in any event, qualify as an acceptance of the purported resignation by the Plaintiff.
3. A declaration that the Plaintiff is not indebted to the 1st Defendant in the sum of N 163,85 8k or in any sum whatsoever.
4. An order of perpetual injunction restraining the 1st Defendant from debiting the Plaintiffs account No.0162030002165 in the sum of N163,858.85 or charging any interest whatsoever on the said sum as against the Plaintiffs account with the 1st Defendant.
5. N20,000,000.00 general damages against the 1st Defendant for the injury suffered by the Plaintiff.
6. 64,200.00K being special damages against the 1st Defendant for the medical expenses incurred by the Plaintiff by reason of injury to his person on 5/2/002.
7. 10,000,000.00 against the 2nd Defendant being general damages for the injury to the person/character of the Plaintiff by the publication of the 2nd Defendants defamatory words aforesaid.
8. Costs.”
After filing the writ and the statement of claim, the Appellant entered a conditional appearance and subsequently brought an application dated and filed on the 12th day of March 2002 in which he sought for an order striking out his name from the suit. In reaction to the application aforesaid, the Respondent filed a notice of preliminary objection dated 25th March 2002, on the grounds that the application was an abuse of Court process, premature and incompetent, frivolous, vexatious and cannot be entertained in law.
Parties filed written addresses on the preliminary objection which were adopted on the 7th of May 2000. In a reserved and considered ruling, Pedro, J. upheld the preliminary in the following words: –
“I therefore hold that the preliminary objection of the plaintiff brought pursuant to order 23 Rule 1 of the High Court of Lagos State (Civil Procedure) Rules 1994, succeed (sic) and that this application brought by the 2nd Defendant/ Applicant is premature and incompetent and cannot be entertained at this stage. The 2nd Defendant is ordered to file his defence wherein he can raise his point of law.
The 2nd Defendant application dated the 12th day of March 2002 is hereby struck out.”
It is against this decision that the Appellant has brought this appeal.
His notice of appeal, which is dated and filed on the 17th day of July 2002, contains two grounds of appeal which I reproduce hereunder without their particulars as follows: –
“1. The learned trial Judge erred in law in that part of her decision when she held that:
“A careful and critical perusal of the ground upon which the 2nd Defendant application is brought in particular paragraphs 3, 4, 5 show that the 2nd defendant is by his application raising a point of law. By raising a point of law without the 2nd defendant filing any defence: I find that this application of the 2nd Defendant is in the nature of demurrer.”
2. The learned Trial Judge erred in law when she held in her ruling that:
“I therefore hold that the preliminary objection of the Plaintiff brought pursuant to order 23 Rule I of the High Court of Lagos State (Civil Procedure) Rules 1994 succeed and that this application brought by the 2nd Defendant/Applicant is premature and incompetent and cannot be entertained at this stage. The 2nd Defendant is ordered to file his defence wherein he can raise his point of law.”
The record of appeal, which was forwarded to the registry of this Court, was duly served on the parties on the 26th August 2005. The Appellant’s brief of argument was filed on the 26th September 2005. The Respondent failed and/or neglected to file a brief of argument. By a motion on notice dated and filed on the 24th July 2006, the Appellant sought for and was granted an order by this Court directing that the appeal herein be heard and determined on the Appellant’s brief of argument only.
This appeal came up for hearing on the 6th May 2008. Mr. Segun Ololade, learned counsel for the Appellant adopted the Appellant’s brief of argument, in which he formulated two issues. He however withdrew the alternative issue which was accordingly struck out. The two issues formulated on behalf of the Appellant read as follows: –
“1. Whether the application (motion) brought by the 2nd Defendant/Appellant under Order 14 Rule 19 of the High Court of Lagos State (civil Procedure) Rules 1994 constitutes a demurrer within the con Of order 25 Rule I of the same rules.
2. Whether the 2nd Defendant/Appellant needs file a statement of defence first before his application under order 14 Rule 19 to have under (sic) 14 Rule 19 of the High Court of Lagos State (Civil Procedure) Rules 1994 to have his name struck out for misjoinder can be entertained.”
In arguing the 1st issue for determination of this appeal, Mr. Segun Ololade called on the Court to hold that the application of the Appellant under Order 14 Rule 10 of the High Court of Lagos State (Civil Procedure) Rules 1994 does not constitute a demurrer within the con of Order 25 Rule I of the High Court of Lagos State Civil Procedure Rules 1994 thereof. Still in argument, learned counsel submitted that Order 23 and Order 14 of the High Court of Lagos State (Civil Procedure) Rules (1994) are mutually exclusive and are not the same.
Learned counsel made reference to the submissions of the learned counsel for the Plaintiff at pages 42 and 43 of the bundle of records and contended that those submissions were made under misconception, because if the argument is anything to go by, he was wrong to have joined the 2nd
Defendant because the act complained of against the 2nd Defendant was not committed in the cause of his engagement as an officer of the 1st Defendant.
In a further argument learned counsel submitted that the quarterly business review is a business properly within the usual business of the 1st Defendant and it being a limited company is responsible for all its acts and the Respondent was wrong to have joined the Appellant with the 1st Defendant in this suit.
Finally on this issue learned counsel submitted that the Appellant’s application challenged misjoinder of the Appellant and that this issue can be resolved without first filing a defence under Order 14 Rules 19 and 20 of the High Court (Civil Procedure) Rules. In aid learned counsel cited C. C. B. (Nig) Plc v. Rose (1998) 4 NWLR (pt. 544) 37.
On issue 2, learned counsel submitted that the wrong allegedly committed by the Appellant was done in furtherance of the 1st Defendant’s quarterly business review meeting held on 3rd February 2002, as such by S. 65 of the company and Allied Matters Act the 1st Defendant should be held liable for the alleged act or wrong of the Appellant, since the Appellant was at every material time to this suit the Executive Director of the 1st Defendant. In aid learned counsel cited Delta Steel Nigeria Ltd. V. Am Compo Tech. Incorp (1999) NWLR (pt. 597) 53; Orji V. Anyaso (2000) 2 NWLR (Pt. 643) 1.
Finally, learned counsel urged this Court to strike out the name of the Appellant because the 2nd Respondent was improperly joined in the suit pending before the lower Court.
After a careful perusal of the Appellant’s brief of argument and having heard Mr. Segun Ololade, learned counsel for the Appellant. I am of the firm view that the only issue calling for the determination of this appeal is, whether the Appellant’s motion dated and filed on the 12th of March 2002 in which he sought for an order striking out his name in suit No. LO/418/02 without first filing a statement of defence is in the nature of demurrer and if so, could he properly raise a point of law under the Lagos State (Civil Procedure) Rules of 1994 under which the motion was filed and determined.
For a proper consideration of this issue, I will refer to the relevant provisions of the 1994 rules. Order 23 rules 1, 2 and 3 of the High Court of Lagos State (Civil Procedure) Rules 1994 provide thus: –
“1. No demurrer shall be allowed.
2. Any party shall be entitled to raise by his pleading any point or law and, unless the court or judge in chambers otherwise orders, any point so raised shall be disposed of by the judge who tries the cause at or after the trial.
3. If in the opinion of the court or a judge in chambers the decision of such point of law substantially disposes of the whole action, or any distinct cause of action, ground of defence, set off counter claim, or reply therein, the court or judge may there upon dismiss the action or make such other order therein as may be just.”
By these rules quoted above, there is no doubt whatsoever that proceedings by way of demurrer have been abolished by rule 1 and in its place rules 2 and 3 are to be used by parties in raising any point of law in their pleadings, namely, statement of claim, statement of defence, counterclaim or reply to a counter claim for determination and disposal by the learned trial judge in the cause of the hearing or the matter or in the judgment at the end of the trial.
In Mobil Oil (Nigeria) Plc v. I. A. L. 36 Inc. (200) 6 NWLR (Pt. 659) 146 at 175-176 Iguh, JSC said:-
“I think I should point out that an application by way of demurrer under the Federal High Court (Civil Procedure) Rules, 1976 must not be confused with or mistaken for an application in lieu of demurrer applicable presently in Lagos and the Western State. In the latter class of applications, the points of law desired to be raised by the defendant as a preliminary issue are required to be set out in the statement of defence before such application in lieu of demurrer is raised.”
Clearly all what is being explained in the passage hereinabove is that a Defendant wishing to rely on points of law to raise a preliminary issue, is required to set out such points of law in the statement of defence before the preliminary issue is regarded as properly raised.
In Disu v. Ajilowura (2006) 14 NWLR (Pt. 1000) 783 at 809 paragraphs D-E, Kutigi, JSC as he then was had this to say: –
“There is no doubt, demurrer proceedings have been abolished in view of the clear provisions or Order 22 rule 1 of the High Court (Civil Procedure) Rules of Lagos State. I think it is settled that the issue of locus standi or jurisdiction being a point of law cannot properly be raised under order 22 rule 4 as was done by the appellants in this case. However, the issue may be raised under rules 2 and 3 by pleadings.”
See also Dada v. Ogunsanya (1992) 3 NWLR (Pt. 232) 754; Fadare v. AU. General of Oyo State (1982) All NLR 26.
Demurrer is an allegation of Defendant admitting the matters of fact alleged by complaint to be true but shows that as they are therein set forth, their legal consequences are not such as to put the demurring party to the necessity of answering them. The learned counsel for the Appellant submitted that the Appellant’s application under Order 14 Rule 19 of the High Court of Lagos State (Civil Procedure) Rules 1994 does not constitute a demurrer within the con of Order 25 Rule 1 of the said rule. I do not agree with this argument. An application to strike out a name of the 2nd Defendant is a preliminary issue of law under Section 65 of the Companies and Allied Matters Act, 2004 and it is therefore in the nature of demurrer.
Since demurrer has been abolished in Lagos State, by virtue of Order 23 Rule I of the High Court of Lagos State (Civil Procedure) Rules of 1994. the Appellant’s application of 12th March 2002 was incompetent by reason of his failure to file a statement of defence before the prayer contained in the motion aforesaid was raised. This is the spirit behind Order 23 rule 2 of the High court of Lagos state (Civil Procedure) Rules 1994 which provides thus:-
“Any party shall be entitled to raise by his pleading any point of law and unless the court or a judge in chambers otherwise orders any point so raised shall be disposed by the Judge who tries the cause at or after the trial.”
(Underlining is mine)
However, where an application before the trial Court is not on an ordinary point of law that could have been raised under Order 23 of the Lagos State High Court (Civil Procedure) Rules 1994, but brought to challenge the jurisdiction of the trial Court based on the statutory provisions, the defence can raise such issue in his application as a preliminary issue of law even though he did not file a statement of defence. See Elabanjo v. Dawodu (2006) 15 NWLR (pt. 1001) 76.
The question of joinder and/or striking out of the Appellant’s name is not an issue of jurisdiction and so the Appellant was bound to obey the rules of the lower Court.
For all I have said here, I find nothing wrong with the decision of the lower Court as to warrant an interference with same. Accordingly this sole issue identified by me is resolved against the Appellant.
On the whole this appeal fails and it is dismissed.
I make no order as to cost.
DALHATU ADAMU (OFR), J.C.A.: I have read in advanced, the lead judgment of my learned brother P.A. GALINJE, JCA in this interlocutory appeal. I fully agree with and adopt the reasons given and the conclusion arrived at in the said lead judgment.
I also endorse the resolution of the sale issue identified in the lead judgment that the appellants application before the lower Court to have his name struck out from the suit was not a demurrer but rather a proceeding or an application in lieu of demurrer for which from the express wordings of order 23 Rule (3) the point of law raised in such an application can only be determined from the pleadings of the defendant who raises it or who brings the application. With the express abolition or prohibition of a demurrer proceedings in Lagos State under order 23 Rule (1) or the High Court of Lagos State (Civil procedure) Rules 1994 and in the spirit of Rule (2) of the said order the only legally permissible way of raising any preliminary point of law to terminate a proceeding in lamine is by the manner or procedure in lieu of a demurrer as prescribed in Rules (2) and (3) of the said order (supra).
Consequently and by that latter procedure a defendant wishing to raise such a preliminary point of law, has to file his statement of defence before making or filing his application for the purpose. In the present case, the appellant’s failure to file his defence before making his application in which he sought to raise a preliminary point of law rendered such application premature and incompetent.
The learned trial judge was therefore right in upholding the respondent’s preliminary objection and in striking out the appellant’s application dated 12/3/02.
On my above consideration and the more detailed consideration in the lead judgment, I also find no merit in the present appeal, which I hereby dismiss.
I abide by the consequential orders made in the said lead judgment.
HUSSEIN MUKHTAR, J.C.A.: I have read in advance the lead judgment of my learned brother Galinje, JCA. I entirely agree with his reasoning and conclusion that the appeal is bereft of merit and has to be dismissed perforce.
The procedure for attacking an opponents pleading by demurrer has long been abolished. Order 23 rule 1 of the High Court of Lagos State (Civil Procedure) Rules disallows demurrer whereby a defendant simply contends that the allegations in the statement of claim do not, even if established, disclose any cause of action for the defendant to answer without filing a statement of defence. That was precisely what the appellant did in this case by raising a defence by a motion filed on 12th March 2002 seeking his name to be struck out from the suit. That clearly tantamount to demurrer in all its ramifications.
The issue raised by the appellant relying on section 65 of the Companies and Allied Matter Act that the 1st defendant should be held liable for his wrong doing because he was Managing Director to the said 1st defendant could not properly be brought by motion. The right procedure, which the appellant would have adopted was by filing a statement of defence and raising the issue therein pursuant to order 23 rule 2 of the Lagos State High Court (Civil Procedure) Rules. This rule entitles a party to raise by his pleadings any point of law, which the trial court may hear and determine before, at or after the trial. However, the point of law so raised in a pleading may, with the consent of the parties or by order of the court upon application by either party, be heard and disposed as a preliminary issue before the trial.
See LASISI FADARE VS ATTORNEY GENERAL OF OYO STATE (1982) 4 S.C. 1. In OGUNMOKUN VS MILITARY ADMINISTRATOR OSUN STATE (1999) 3 NWLR (pt 594) 261 at 281 paras A-C my learned brother Onalaja, JCA applying similar provision of the Oyo State High Court (Civil Procedure) Rules applicable to Osun State observed thus:
“By virtue of Order 23 Rules 1 and 2 of the High Court (Civil Procedure) Rules of Oyo State applicable in Osun State, no demurrer shall be allowed and any party shall be entitled to raise by his pleading any point of law and any point so raised shall be disposed of by the judge who tries the case at or after the trial; provided that by consent of the parties or by order of the court or a judge on the application of either party the same may be set down for hearing and disposed of at any time before the trial.”
The learned trial judge therefore rightly upheld the preliminary objection of the respondent.
For the above appraisal of the procedural law and the more detailed reasons so well articulated in the lead judgment, I would similarly affirm the ruling of the court below delivered on the 28th June 2002 and accordingly hereby dismiss the appeal. I abide by the consequential orders made in the lead judgment.
Appearances
Mr. Segun Ololade with him is Mr. Charles OkonkwoFor Appellant
AND
Mr. Z. A. AnimashaunFor Respondent
