EKENG & ANOR v. POLARIS BANK LTD & ORS (2020)

EKENG & ANOR v. POLARIS BANK LTD & ORS

(2020)LCN/14602(CA)

In The Court Of Appeal

(LAGOS JUDICIAL DIVISION)

On Tuesday, September 15, 2020

CA/L/117/2019

RATIO

PLEADINGS: CAUSE OF ACTION

Now ‘Cause of action’ is defined in The Black’s Law Dictionary, Ninth Edition page 251 as:
A group of operative facts giving rise to one or more bases for suing; a factual situation that entitles one person to obtain a remedy in Court from another person.
Similarly, this Court and the Supreme Court have, in several decisions adopted and expanded the above definition of ‘cause of action’ and laid down guidelines for determining whether or not a suit discloses not only a cause of action, but a reasonable cause of action fit for determination by a Court of law. Indeed the learned counsels on both sides have referred to some of those decisions in the parties’ respective briefs of arguments as shown supra. Cause of action is a fact or facts that gives a person, usually the claimant/plaintiff a right to judicial redress or relief against the other party named as the defendant. It has also been described as a situation or state of facts which would entitle a party to sustain an action and give him right to seek judicial remedy. Reasonable cause of action connotes all those things necessary to give a plaintiff a right of action, and it entails two elements; the wrongful act of the defendant, which gives the plaintiff his cause of complaint and the consequent damage or injury suffered by the plaintiff as a result of the wrongful act. See Esuwoye Vs. Bosere (2017) NWLR (pt. 1547) 256 at 297-298, Barbus & Company Nig. Ltd V. Okafor- Udeji (2019) ALL FWLR (pt. 998) 239 at 255, Diamond Bank Ltd Vs. Mocok Onu Nig. Ltd (2019) ALL FWLR (pt. 1001) 718 at 732 to 733 Savage & Ors. Vs. Uwechia (1972) 3 S.C. 214 at 221 and Hassan V. Aliyu (2010) 17 NWLR (pt. 1223) 547 (SC).
It is settled law and the learned counsel on both sides are in agreement on this that cause of action being a matter of fact, must be determined from the facts in the pleadings of the Plaintiff either in a statement of claim where the suit is commenced by way of a writ of summons; or in a supporting affidavit where the suit is commenced via an originating summons such as in this case. In either case, the Court will be looking for facts or combination of facts raising some issues in dispute not only calling for its determination, but which indeed raise questions that are fit for the determination of the Court. It is not just suing someone for the sake of just bringing him to Court, but suing another based on some wrong alleged against the defendant, which the Court is called upon to redress in favour of the claimant as the person wronged. That will make the cause of action one that is reasonable for the Court to look into, since litigation is a serious matter and should never be taken for jest.
Even in a situation where the claimant institutes the action quai timet, (because he fears) that defendant may wrongly interfere with his rights, he must place before the Court concrete facts that would clearly constitute a reasonable basis for his fear. In other words, there must be averments in the plaintiff’s pleadings that will convince the Court of the imminent danger of substantial damage or further damage to the plaintiff’s right to any property in issue. It must be shown in the pleadings before the Court that the injury to the claimant’s right will be irreparable, before a reasonable cause of action to sue can accrue to the plaintiff. The claim cannot be made by mere assertion, in vacuo. See Sotuminu V. Ocean Steam Ship (Nig.) Ltd & Ors. (1992) LPELR-3106 (SC).
The law is trite that unless the claim of the plaintiff rests on or is supported by concrete facts that show or establish a reasonable cause of action, it will be dismissed. See Hassan V. Aliyu (supra). In this case, I have to agree with the learned Appellants’ counsel that there are no facts whatsoever disclosing any reasonable cause of action in the affidavit in support of the Respondents’ originating summons. The fact that the Appellants are the Directors of the 3rd Plaintiff in itself alone cannot be the basis or form a reasonable cause of action in this suit as was held by the trial Court. I hold the view that having stated the settled principle of law to the effect that it is the affidavit evidence that should be examined where a complaint of lack of cause of action is to be determined, the learned trial Judge should have stopped only on the proper examination of the facts contained in the Respondents’ affidavit.
With regards to Section 393(4) of CAMA relied on by the learned trial Judge, it only provides that as from the date of the appointment of the receiver/manager, the powers of the directors of the company in receivership to deal with the properties of the company shall cease until the receiver/manager is discharged. Also, Section 397(1) of CAMA provides that the directors of the company in receivership shall furnish the receiver/manager with the statement of the affairs of the company in receivership as at the date of his appointment, which statement must show details of the company’s assets, liabilities, names and addresses of creditors and all other information in respect of the company.
By referring to and relying on the said provisions of CAMA to conclude the presence of a reasonable cause of action, the learned trial Judge failed to indicate where facts showing any infringement by the Appellants of Sections 393(4) and 397(1) of CAMA were averred in the Respondents’ affidavit. There are none at all. This means that the learned trial Judge’s reliance on the provisions of CAMA in deciding that a cause of action is disclosed was wrongful and baseless being unsupported by facts on the record.
I am not unmindful of the position of this Court and indeed the Apex Court that as much as possible, cases should be allowed to go to trial and be decided on the merits rather than being dismissed in limine. However, where it is glaringly obvious that there is no reasonable cause of action disclosed in the pleadings of the claimants, especially in this case, where the pleadings are in form of an affidavit which is the evidence in support of the suit, the Court will not hesitate to declare the suit as vexatious and an abuse of Court’s process.
In the final analysis, having found no facts whatsoever showing a reasonable cause of action in the Respondents’ affidavit in support of their Originating Summons, I agree in toto with the submissions of the learned Appellants’ counsel that there is no reasonable cause of action fit for determination of the Court in the Appellant’s originating summons. Per BALKISU BELLO ALIYU, J.C.A.

Before Our Lordships:

Obande Festus Ogbuinya Justice of the Court of Appeal

Ugochukwu Anthony Ogakwu Justice of the Court of Appeal

Balkisu Bello Aliyu Justice of the Court of Appeal

Between

1. FRANCIS EKENG 2. OLUBUKOLA EKENG APPELANT(S)

And

POLARIS BANK LTD (SUBSTITUTED FOR SKYE BANK PLC BY ORDER OF COURT DATED THE 11TH DAY OF January 2019) 2. MR. SEYI AKINWUNMI (APPOINTED BY SKYE BANK PLC AS RECEIVER/MANAGER OVER THE ASSETS OF SERVETEK CONSTRUCTION COMPANY LIMITED) 3.SERVETEK CONSTRUCTION COMPANY LIMITED (IN RECEIVERSHIP) RESPONDENT(S)

BALKISU BELLO ALIYU, J.C.A. (Delivering the Leading Judgment):
The instant appeal is against the ruling of the Federal High Court, Lagos judicial division (trial Court), delivered on the 17th December 2018 by Hon. Justice N. Ayo-Emmanuel in respect of two applications filed in suit No: FHC/L/CS/813/2017. The Appellants herein were the 1st and 2nd Defendants, while the Respondents were the Plaintiffs in the said suit commenced via an originating summons filed on the 17th May 2017 against the Appellants. By the said originating summons, the Respondents prayed the trial Court to determine six (6) questions and to make six declaratory reliefs against the Appellants. The originating summons is supported by an affidavit stating the facts relied upon by the Respondents. Both originating summons and the supporting affidavit stating the background facts of the case are contained in pages 1 to 13 of the record of appeal.

The 3rd Respondent is a limited liability company and a customer of the 1st Respondent (then Skye Bank Plc.), which granted various and several credit facilities to the 3rd Respondent. The 1st Respondent claimed that some of the credit

facilities it granted to the 3rd Respondent remained unliquidated. Further, that sometimes in 2010, the Edo State Government awarded a contract to the 3rd Respondent for the re-construction of Ososo-Ojah-Uneme-Igara Road in Akoko Edo in the total sum of N4, 185, 585, 750. 15 out of which contract sum the Edo State Government agreed to pay the advance sum of N1, 092, 437, 880. 75 to the 3rd Respondent, subject to a bank guarantee secured by the 3rd Respondent. The 3rd Respondent through its Directors, who included the Appellants herein, approached the 1st Respondent for an advance payment guarantee and the 1st Respondent agreed to guaranteeing the advance payment for the contract. However, due to disagreement between the 3rd Respondent and the Edo State Government, the latter revoked the contract citing violations of the conditions of the contract. The Edo State Government called in the guarantee and demanded from the 1st Respondent the repayment of the unutilized advanced payment made to the 3rd Respondent, valued as N299, 207, 355. 07. Though the bank requested the 3rd Respondent severally to refund the unused advance to the Edo State Government it failed to

do so. The 1st Respondent was therefore forced to refund the said sum to the Edo State Government and this increased the 3rd Respondent’s indebtedness to it.

As the security to the various credit facilities granted to the 3rd Respondent, it created various deeds of debentures over its fixed and floating assets in Lagos and elsewhere in favour of the 1st Respondent. The Respondents claimed that the outstanding indebtedness of the 3rd Respondent stood at 20th April 2017 stood at N6, 978, 617, 866, 11 (Six Billion, nine hundred and seventy-eight million, six hundred and seventeen thousand eight hundred and sixty Naira, eleven kobo). The 1st Respondent claimed that the 3rd Respondent and its directors, including the Appellants herein, have refused to repay the said sums despite repeated demands. This resulted in the 1st Respondent appointing the 2nd Respondent as receiver/manager of the 3rd Respondent through a deed of appointment dated 27th May 2016, duly registered with the Corporate Affairs Commission (CAC) on the 15th June 2016.

It is for the above reasons that the 1st and 2nd Respondents approached the lower Court seeking protection for the

2nd Respondent as receiver/manager of the 3rd Respondent against any interference with his duties in recovering the loan facilities, and they prayed the trial Court for the following orders:
1. A declaration that upon the inability of the 3rd Plaintiff and the Defendants to pay the outstanding sum of N6, 978, 617, 866. 11 (six billion, nine hundred and seventy eight thousand, eight hundred and sixty six Naira, eleven Kobo) owed to the 1st Plaintiff, the 1st Plaintiff is by virtue of the provisions of the Deed of All Assets Debenture dated 13th September 2011 entitled and/or permitted to appoint the 2nd Plaintiff as Receiver/Manager over the assets, properties and machinery of the 3rd plaintiff located at Plot 52 Morrison Crescent, Oregun Ikeja, Lagos State, Plot 54, Michael Otedola Crescent, Ikeja, Lagos State and any other properties used by and/or belonging to the 3rd Plaintiff and/or which the 2nd Plaintiff ascertains are the assets of the 3rd Plaintiff and are located within the jurisdiction of the Honorable Court .
2. A declaration that the having executed the Deed of all Assets Debenture dated 13th September 2011 as security for the

aforementioned facilities and having failed to repay the debt despite repeated demands, the 3rd Plaintiff and the Defendants (being Directors, their agents, servants, privies howsoever described and called) lack any power and are prohibited from disturbing and/or obstructing the 2nd Plaintiff, Receiver/Manager duly appointed by the 1st Plaintiff from taking over the 3rd Plaintiff’s equipment, properties and assets including those contained in the Deed of All Assets Debenture.
3. An Order of Perpetual injunction restraining the Defendants as Directors of the 3rd Plaintiff, their servants and privies from having access to any sum outstanding to the credit of the 3rd Plaintiff until the sum of N6, 978, 617, 866. 11 (Six billion, nine hundred and seventy-eight million, six hundred and seventeen thousand, eight hundred and sixty-six Naira, eleven Kobo) being the sum owed by the 3rd Plaintiff and/or the Defendants to the 1st Plaintiff is fully liquidated.
4. An Order of perpetual injunction restraining the Defendants as Directors of the 3rd plaintiff, by themselves, privies, servants, agents or other persons howsoever described from preventing the

2nd Plaintiff as Receiver/Manager, his agents, or servants from exercising the powers vested in him, performing his duties as Receiver/Manager and having free access to and from the 3rd Plaintiff’s principal place of business and/or property situate at Plot 52 Morrison Crescent, Oregun Ikeja, Lagos State, 54, Michael Otedola Crescent, Ikeja, Lagos State and any other properties and assets used by and/or belonging to the 3rd Plaintiff and/or in which the 2nd Plaintiff ascertains are the assets of the 3rd Plaintiff and are located within the jurisdiction of the Honorable Court .
5. An Order of perpetual injunction preventing and restraining the Defendants and anyone acting or purporting to act on their behalf from further operating, transferring, obtaining, dissipating or otherwise dealing with any and all monies standing to the credit of the 3rd Plaintiff in any bank or financial institution in Nigeria or otherwise up to the amount of the 1st and 2nd Plaintiffs’ claim in this suit that is in the sum of N6, 978, 617, 866. 11 (Six billion, nine hundred and seventy-eight million, six hundred and seventeen thousand, eight hundred and sixty-six

Naira, eleven Kobo), being amount owed the 1st Plaintiff.
6. Cost of this action.
In response to the originating summons, the Appellants (as the 1st and 2nd Defendants) filed a motion on notice on the 17th May 2018 praying the trial Court for:
1. An Order striking out this suit in that the issues raised in the Originating Summons have become spent and the reliefs sought are academic.
2. Such further orders as this Honorable Court may deem fit to make in the circumstances.

The application was predicated on the following four grounds:
1. Pursuant to the appointment of 2nd Plaintiff as the Receiver/Manager of the 3rd Plaintiff by the 1st Plaintiff, this suit was instituted to enable the 2nd Plaintiff assume his duties as the Receiver/Manager and realize the charged assets to liquidate the indebtedness of the 3rd Plaintiff to the 1st Plaintiff.
2. Sequel to the ex-parte orders made on the 2nd day of June 2017 the 2nd Plaintiff took over all the charged assets of the 3rd Plaintiff mentioned in the Assets Debenture dated the 13th day of September 2011 as well as the 1st Defendant’s properties at Plot 54, Michael Otedola

Crescent, Ikeja Lagos respectively.
3. The 1st and 2nd Defendants yielded possession of the charged assets of the 3rd Plaintiff covered by the All Assets Debenture dated the 13th day of September 2011 to the 2nd Plaintiff and the 2nd Plaintiff took over and sold them to defray the indebtedness of the 3rd Plaintiff.
4. None of the reliefs sought in the Originating Summons will be beneficial to the plaintiffs or have any effect whatsoever as the 2nd Plaintiff has already exercised his powers as Receiver/Manager of the 3rd Plaintiff and disposed of the assets covered by the Debenture executed in favour of the 1st Plaintiff. Consequently, the reliefs sought have become spent and the entire suit is now academic.

The Appellant’s application was supported by an affidavit and a written address of counsel as shown at pages 153 to 167 of the record of appeal. In response to the application of the Appellants/Defendants, the Respondents/Plaintiffs filed a counter affidavit which is located at pages 168 to 171 of the record of appeal in which they denied the assertion of the Appellants that the 2nd Respondent has taken over all assets charged in

the deed of debenture. They however admitted that the reliefs sought by them in the originating summons relating to the properties at Plot 52, Morrison Cresent Oregun, Ikeja, Lagos and Plot 54, Michael Otedola Crescent, Ikeja have been overtaken by events, but that other reliefs are still alive and relevant. In fact, the Respondents had already filed an application to amend their originating summons to delete these properties from the claims therein. The counter affidavit was accompanied with counsel’s written address.

The Appellants further filed a second application on the 28th June 2017 (located at pages 185 to 200 of the record of appeal) by which they prayed the trial Court for:
1. AN ORDER striking out the Originating Summons dated the 19th day of May 2017 and this suit in its entirety in that the affidavit in support thereof does not disclose any cause of action against the Defendants.
2. Such other consequential orders as this Honorable Court may deem fit to make.

The application was made on the following grounds:
i. The affidavit in support of the Originating Summons does not disclose any cause of action against the

Defendants.
ii. The facts deposed in the affidavit in support upon which the reliefs against the Defendants are premised, are speculative, anticipatory and based on conjecture.
iii. The Honourable Court lacks jurisdiction to entertain the suit in that the aggregate of facts upon which the suit is premised do not lend the plaintiff a cause of action against the Defendants.

This application was supported by a 9 paragraphed affidavit deposed to by Omoelo Akokaike, exhibits and counsel written address. The Respondents filed counter affidavit, supported by counsel written address in opposition to the Appellant’s motion. See pages 201 to 210 of the record. The Appellants filed a reply on points of law to the counter affidavit.

The record of appeal shows that the two motions were heard simultaneously by the trial Court on the 5th November 2018. See pages 227 to 229 of the record of appeal. On that date (5th November 2018), the parties’ respective counsel relied on their processes for and against the two Applications after which the two motions were adjourned for ruling. On the 17th December 2018, the learned trial Judge delivered

a joint ruling on the two motions and dismissed the two applications for lacking in merit.

The Appellants were aggrieved with the ruling and they filed a notice of appeal against it on the 20th December 2018 relying on two grounds of appeal. The record of appeal was transmitted on the 30th January 2019 after which the Appellants’ brief of argument settled by Okechukwu Tagboo Dike Esq. was filed on the 12th March 2019. The Appellants’ learned Counsel proposed a sole issue from the grounds of appeal for the determination of this appeal, thus:
Whether the learned trial Judge came to a right decision when he held that the Affidavit in support of the Originating Summons disclosed a reasonable cause of action against the Appellants. (Grounds 1 and 2 of the Notice of Appeal).

In response to the appeal, the Respondents filed a joint brief of argument settled by Anita David-Akoro Esq. on the 6th May 2019, which was deemed properly filed and served by the order of this Court made on the 24th June 2020. The Respondents’ learned counsel equally distilled the following sole issue for determination:
Whether the Lower Court was right

when it dismissed the 1st and 2nd Defendants/Appellants’ motion on notice dated 28th June 2017 on the ground that the 1st to 3rd Respondents’ Originating Summons and the Affidavit in support disclosed a reasonable cause of action against the 1st and 2nd Defendants/Appellants. (Distilled from Grounds 1 and 2).

The Appellants’ Reply brief was filed on the 11th September 2019 and consequentially deemed properly filed on the 24th June 2020.

The appeal came up for hearing on the 24th June 2020 and Richard Abdulahi Esq. adopted the Appellants’ brief of argument and the reply brief in urging the Court to allow the appeal and to set aside the ruling of the trial Court. The Respondent’s learned counsel Funke Onakoya Esq. adopted the Respondents’ brief and prayed the Court to dismiss the appeal and to affirm the ruling of the trial Court.

A close examination of the sole issue proposed by each of the parties revealed that the two issues are same almost word for word, which means that the parties are in agreement on the issue in controversy to be resolved in this appeal. I therefore adopt the sole issue distilled by

the Appellant as my guide for the determination of this appeal.

APPELLANTS’ SUBMISSIONS.
In arguing the sole issue for determination, the learned Appellants’ counsel submitted, on the authority of the case of Savage V. Uwechia (1982) 3 S. C. 214, that the two elements of a cause of action are the wrongful act of the defendant which gives the plaintiff his cause of complaint and the consequent damage. He further submitted that in determining the existence or otherwise of a cause of action in any suit, the Court must confine itself to the averments in the statement of claim or in the affidavit where the suit was commenced by an originating summons such as in this case. He argued that the Respondents did not make any reference to any wrongful act of the Appellants against them and the consequent damage they suffered as a result; nor did they state in their affidavit that the Appellants have in any way interfered with the 2nd Respondent’s performance of his duties as receiver/manager of the 3rd Respondent, or prevented the 2nd Respondent from exercising the powers vested in him by the 11th Schedule of the Companies And Allied Matters Act (CAMA).

He relied for support on the cases of Yusuf V. Akindipe (2000) 8 NWLR (pt. 669) 376 at 387, Adeyemi V. Opeyori (1976) 9-10 S.C. 31 at 49 and P.D. P. Vs. Sylva (2012) 13 NWLR (pt. 1316) 85 at 49.

The learned Appellants’ counsel also referred us to paragraphs 19 to 26 of the Respondents’ affidavit in support of their originating summons, and argued that the facts stated therein did not show any wrongful act of the Appellants, but they consist only of whatever they (Appellants) may possibly do. He argued that a wrongful act as an element of a cause of action is an act that had occurred before the action was instituted and not an anticipatory act, which cannot ground a cause of action. He referred to the cases of S. P. D. C. LTD V. Nwawka (2003) 6 NWLR (pt. 815) 184 at 209 and Uwazuruonye V. Gov. of Imo State (2013) 8 NWLR (pt. 1355) 28 at 57 where the said principle of law was expounded.

He further submitted that in this case, the learned trial Judge was required to clearly indicate the paragraphs of the affidavit in support of the originating summons which disclosed the wrongful acts of the Appellants against the Respondents and

the consequent damage, which will validate the conclusion he reached in the ruling. The learned Counsel submitted that the learned trial Judge acted contrary to the settled principle of law, when he relied on the questions set for determination in the originating summons and Sections 393(4) and 397(1) of CAMA as the basis of his conclusion that there is a reasonable cause of action. He argued that once the affidavit in support of the originating summons did not reflect the wrongful acts of the Appellants against the 1st and 3rd Respondents, the trial Court has no option than to strike out the suit in limine, as was held in the case of Ibrahim V. Osim (1998) 3 NWLR (pt. 82) 257 at 274. He urged the Court to answer the sole issue in the negative and to set aside the decision of the trial Court.

RESPONDENTS’ SUBMISSIONS
The learned Respondents’ counsel conceded to the Appellants’ submissions when he argued in paragraph 4.3 of the Respondents’ brief that whenever issue of reasonable cause of action is raised, it is the statement of claim or as in this case the averments in the affidavit in support of an originating summons that

ought to be considered. He also relied of the decisions of this Court and the Apex Court in the cases of SPDC Nig. Ltd & Anor. Vs. X.M. Federal Ltd & Anor. (2006) 16 NWLR (pt. 1004) 189 and Afolayan Vs. Ogunrinde (1990) NWLR (pt. 127) 369, that affirmed that principle of law.

It was his contention however, that the affidavit in support of the originating summons stated the entire circumstances and facts which gave rise to an enforceable claim against the Appellants. He quoted the provisions of Sections 393(4) and 387(1) of CAMA and submitted that the combined implications of the two sections is that the Directors of the company in receivership must surrender the assets and properties of the company to the receiver manager and provide a statement of affairs of the said company to him. He argued in paragraph 4.9 of the Respondents’ brief that the 2nd Respondent as receiver/manager of the 3rd Respondent.

“would have the Directors of the company (i.e. the Defendants herein) to contend with in order to be able to first take possession of the assets and properties of the company and then carry out his duties and responsibilities. This

My Lord explains the reason for the questions and reliefs contained in the Originating Summons.”

In response to the argument of the Appellants to the effect that the trial Court was unable to indicate or identify specific paragraphs of the affidavit in support of the originating summons where any wrongful act of the Appellants against the Respondents were set out, learned Respondents’ counsel submitted that there is no requirement by law that the lower Court must specify the paragraphs in the affidavit in support of the Originating Summons which disclose a cause of action. What the law requires, according to the learned Counsel, is that the trial Court should consider the entire set and a combination of the facts and circumstances in support of a party’s claim to determine a cause of action. He relied on the cases of The Hon. Egbue Vs. Hon. E. O. Araka (1988) 7 SCNJ (pt. 1) 190 at 201, Adesokan V. Adegorolu (1997) 3 NWLR (pt. 493) 261 at 279 and Conoil Plc Vs. I. T. F. Governing Council (2015) 9 NWLR (pt. 1464) 418-419 in urging the Court to hold that the trial Court was right when it held that the affidavit in support of the originating

summons disclosed a reasonable cause of action against the Appellants. He urged the Court to resolve the sole issue in favour of the Respondents and to dismiss this appeal.

By way of a reply on points of law contained in the Appellants’ reply brief, their learned counsel argued that the submissions of the Respondents in paragraph 4.9 is premised on premonitions and speculations about what may happen in future and not about any wrongful act of the Appellants. Relying on the case of A. G. Lagos State V. Eko Hotels Ltd (2006) 18 NWLR (pt. 1011) 378 at 438, learned Appellants’ counsel submitted that the inability of the Respondents to cite the past wrongful acts of the Appellants in the affidavit in support of their Originating Summons validates the point that there is no cause of action against the Appellants.

On the argument of the Respondents that their suit falls within the ambit of the law of secured credit transaction and under the provisions of Sections 393(4) and 397(1) of CAMA, the learned Appellants’ counsel submitted that the issue of secured credit transactions and the said provisions of CAMA are irrelevant to the

determination of the disclosure or non-disclosure of cause of action in the affidavit in support of the originating summons. He referred to the case of Rebold Ind. Ltd V. Magreola (2015) 8 NWLR (pt. 1461) 210 at 225 where the correct position of the law was stated to the effect that before a party files a matter in Court, he must possess a cause of action against some persons or institutions. That in this case, the Respondents sued the Appellants who have done no wrong against them. He urged the Court to discountenance the submissions of the Respondents and to allow this appeal.

RESOLUTION
In resolving the sole issue for determination, I consider it important to state the exact grouse of the Appellants in this appeal, which is that the Respondent’s affidavit in support of their originating summons did not disclose any wrongful act on their part to warrant the filing of the suit. That the Respondent’s suit is an anticipatory proceeding devoid of any reasonable cause of action. Now ‘Cause of action’ is defined in The Black’s Law Dictionary, Ninth Edition page 251 as:
A group of operative facts giving rise to one or

more bases for suing; a factual situation that entitles one person to obtain a remedy in Court from another person.
Similarly, this Court and the Supreme Court have, in several decisions adopted and expanded the above definition of ‘cause of action’ and laid down guidelines for determining whether or not a suit discloses not only a cause of action, but a reasonable cause of action fit for determination by a Court of law. Indeed the learned counsels on both sides have referred to some of those decisions in the parties’ respective briefs of arguments as shown supra. Cause of action is a fact or facts that gives a person, usually the claimant/plaintiff a right to judicial redress or relief against the other party named as the defendant. It has also been described as a situation or state of facts which would entitle a party to sustain an action and give him right to seek judicial remedy. Reasonable cause of action connotes all those things necessary to give a plaintiff a right of action, and it entails two elements; the wrongful act of the defendant, which gives the plaintiff his cause of complaint and the consequent damage or injury suffered

by the plaintiff as a result of the wrongful act. See Esuwoye Vs. Bosere (2017) NWLR (pt. 1547) 256 at 297-298, Barbus & Company Nig. Ltd V. Okafor- Udeji (2019) ALL FWLR (pt. 998) 239 at 255, Diamond Bank Ltd Vs. Mocok Onu Nig. Ltd (2019) ALL FWLR (pt. 1001) 718 at 732 to 733 Savage & Ors. Vs. Uwechia (1972) 3 S.C. 214 at 221 and Hassan V. Aliyu (2010) 17 NWLR (pt. 1223) 547 (SC).
It is settled law and the learned counsel on both sides are in agreement on this that cause of action being a matter of fact, must be determined from the facts in the pleadings of the Plaintiff either in a statement of claim where the suit is commenced by way of a writ of summons; or in a supporting affidavit where the suit is commenced via an originating summons such as in this case. In either case, the Court will be looking for facts or combination of facts raising some issues in dispute not only calling for its determination, but which indeed raise questions that are fit for the determination of the Court. It is not just suing someone for the sake of just bringing him to Court, but suing another based on some wrong alleged against the defendant, which the Court is

called upon to redress in favour of the claimant as the person wronged. That will make the cause of action one that is reasonable for the Court to look into, since litigation is a serious matter and should never be taken for jest.
Even in a situation where the claimant institutes the action quai timet, (because he fears) that defendant may wrongly interfere with his rights, he must place before the Court concrete facts that would clearly constitute a reasonable basis for his fear. In other words, there must be averments in the plaintiff’s pleadings that will convince the Court of the imminent danger of substantial damage or further damage to the plaintiff’s right to any property in issue. It must be shown in the pleadings before the Court that the injury to the claimant’s right will be irreparable, before a reasonable cause of action to sue can accrue to the plaintiff. The claim cannot be made by mere assertion, in vacuo. See Sotuminu V. Ocean Steam Ship (Nig.) Ltd & Ors. (1992) LPELR-3106 (SC).

At this juncture, I consider it important to reproduce the learned trial Judge’s ruling, contained in pages 236 to 237 of the

record of appeal on the application of the Appellants. His Lordship found and held that:
It is trite law as rightly submitted by the Defendants’ counsel that the issue of disclosure of cause of action in a Suit is determinable from the Plaintiff’s pleadings and in action commenced by Originating summons, as in this instant case. It is the summons and the deposition in the affidavit in support that the Court will examine. In this wise, I have perused the questions set out in the Originating summons for determination and the affidavit in support particular (sic) paragraph 5 thereof. I also refer to the Orders sought against the Defendants which is (sic) jointly and severally. A community reading of the questions set out for determination, the reliefs sought and the affidavit in support of the originating summons when read in conjunction with Sections 393(4) and 397(1) of the Companies and Allied Matters Act 2004 leaves no one in doubt that there is a reasonable cause of action against the 1st and 2nd Defendant/Applicants. On this point alone, I must say that the Application lacks merit and same ought to be dismissed and I so order.

The grouse of the Appellants against the above findings and conclusion reached by the learned trial Judge as I stated supra, is that, apart from the fact stated in paragraph 5 of the Respondent’s affidavit which the learned trial Judge referred to, where it was simply stated that they are Directors of the 3rd Plaintiff (in receivership), they did nothing wrong against the Respondents that would warrant the institution of this suit against them. In other words, the two elements that constitute a reasonable cause of action are absent in the facts averred in the affidavit that supports the originating summons of the Respondents before the trial Court. They asserted that the learned trial Judge’s conclusion is not supported by the facts contained in the affidavit of the Respondents.

It is pertinent to point out that the learned trial Judge did in fact state that he considered the affidavit in support of the originating summons before reaching the conclusion that there is a cause of action disclosed therein. However, he failed to expatiate/elucidate the reasoning by referring to the facts contained in the affidavit that led him to reach that

conclusion. Therefore in order to resolve the complaint in the sole issue whether or not the learned trial Judge was right in holding that there is a cause of action disclosed in the affidavit in support, I will proceed to closely examine the entire affidavit in support of the originating summons.

The said affidavit in support of the originating summons contains 28 paragraphs and it is located in pages 6 to 138 of the record of appeal, together with all the documentary exhibits attached. In paragraphs 1 to 5 of the supporting affidavit, the Respondents identified and described the parties to the suit; specifically describing the Appellants in paragraph 5, as the Directors of the 3rd Respondent before it was put in to receivership.

In paragraph 6(a) to (c) of the affidavit, the Respondents stated the three orders they seek from the trial Court. The first order they seek is declaration of their entitlement to appoint a receiver manager over the 3rd Respondent by virtue of its indebtedness and pursuant to their power to do so via the Deed of All Assets Debenture dated 13th September 2011. The Respondents having appointed the 2nd Plaintiff as receiver/

manager, as stated in paragraph 4 of their affidavit, they have already exercised this power. Prayer 6(b) is for perpetual injunction restraining the Appellants from “having access to any sum outstanding to the credit of the 3rd Respondent” until the sums of money being owed to the 1st Respondent are fully liquidated. Prayer 6(c) is for an order of injunction restraining the Appellants as Directors of the 3rd Respondent from “preventing” the 2nd Respondent from exercising the powers invested in him in the performance of his duties as Receiver/Manager of the 3rd Respondent.

In paragraphs 7 (i) to (ix) and 8(i) to (viii), the Respondents stated in details and described all the credit facilities that the 1st Respondent granted to the 3rd Respondent leading to the appointment of the 2nd Respondent as the receiver/manager. In paragraph 9, the Respondents averred that in order to secure the various credit facilities granted to the 3rd Respondent as shown in paragraphs 7 to 8 of the affidavit, the 3rd Respondent executed a deed of all assets debenture in favour of the 1st Respondent (the bank). In paragraphs 10 and 11, the Respondents

pleaded the various letters of offer of the stated credit facilities granted to the 3rd Respondent along with the terms and conditions for re-repayment; and the fact that the 3rd Respondent withdrew and utilized the said sums of money, which stood at over N6.9billion as at 20th April 2017, as shown in the statement of account of the 3rd Respondent attached as exhibit A21.

In paragraph 12, the Respondents pleaded the several letters of demand they sent to the 3rd Respondent demanding for the repayment of the loan facilities. In paragraphs 13, 14, 15 and 16, the Respondents pleaded facts leading to the 3rd Respondent’s letter (exhibit A24) by which it begged the 1st Respondent not publish its name in newspapers as a defaulting debtor, but instead it assured the 1st Respondent that the properties which it used to secure the credit facilities have been placed in the market to be sold for the purpose of liquidating its indebtedness. But rather than sell the properties to liquidate its debts as promised, the 3rd Respondent wrote further e-mails to the 1st Respondent requesting that its account be frozen to stop further accrual of interests on the loan

facilities. The 1st Respondent refused this request and exercised its right under the deed of debenture and appointed the 2nd Respondent as receiver/manager of the 3rd Respondent.

In paragraph 17 of the affidavit, the Respondents averred that the 2nd Respondent’s duty as the receiver/manager is to take possession and control of all assets of the 3rd Respondent and its properties at Lagos and any other properties in order to secure the repayment of the credit facilities. In paragraphs 18 to 26 of the affidavit the Respondents averred:
18. That I verily believe that by the Contents of the offer letters and All Assets Debenture dated 13th September 2011, the 3rd Plaintiff expressed willingness to be bound by the terms of the said documents and is not adverse to the activities of the 2nd Plaintiff.
19. That I am informed by the 2nd Plaintiff and I verily believe him that unless restrained by the Honourable Court from doing so, the Defendants being the Directors of the 3rd Respondent will obstruct, hinder and interfere with the discharge of the 2nd Plaintiff’s functions as Receiver/Manager over the 3rd Respondent’s assets.

That the known property of the 3rd Plaintiff are situate at Plot 52 Morrison Crescent, Oregun Ikeja Lagos State, Plot 54, Michael Otedola Crescent Ikeja Lagos State including assets secured in Lagos State, Akure, Ondo State and Benin Edo State respectively.
21. In view of the current stringent measures put in place by the Central Bank of Nigeria (CBN), the 1st Plaintiff is under an obligation to take immediate steps to recoup the debt due from the 3rd Plaintiff and unless restrained by this Honourable Court, the Defendants are likely to dispose of the 3rd Plaintiff’s assets without paying the proceeds over to the 1st Plaintiff, leaving the 1st Plaintiff without any other means of recouping the indebtedness of the 3rd Plaintiff.
22. That some of the assets pledged as security are movable items and can easily be removed from the premises of the 3rd Plaintiff and disposed of, and the 1st and 2nd Plaintiffs will have no means of tracing or recovering them. The Immovable asset can easily be sold off by the Defendants to a third party who in turn could dispose same to another third party and the circle continues, making it impracticable, if not

impossible for the 2nd Plaintiff to recover any tangible assets.
23. That if the 2nd Plaintiff is not allowed to have free access to and from the 3rd Plaintiff’s premises to discharge his functions as Receiver/Manager, the 2nd Plaintiff will be unable to monitor necessary cash inflow and expenditure of the 3rd Plaintiff and also the likely sale of the charged assets to ensure that the proceeds are paid to the 1st Plaintiff.
24. That should the 2nd Plaintiff be disturbed from discharging his functions as Receiver/Manager of the 3rd Plaintiff, he would not be able to put in place adequate security to ensure that the assets of the 3rd Plaintiff are not dissipated so that the whole essence of the receivership is not rendered nugatory.
25. That the Plaintiffs are desirous of obtaining an order of this Honourable Court restraining the Defendants from interfering with the appointment of the 2nd Plaintiff as Receiver/Manager to the 3rd Plaintiff for the realization of the security given by the 3rd Plaintiff for the credit facilities granted to it by the 1st Plaintiff and in order to avoid a breach of the peace in the process of taking over the

assets.
26. That it is in the interest of justice that this Honourable Court grants the orders sought by the Plaintiffs in order that the whole essence of the receivership is not rendered nugatory.
27. That the interest of the Plaintiffs will be severely prejudicial if these orders are not granted. (Underlining provided for emphasis).

Having examined the averments of the 1st and 2nd Respondents with a fine toothcomb, I discover that in paragraphs 1 to 17 of the affidavit identified the Appellants as the directors of the 3rd plaintiff (in receivership). In these paragraphs, the 1st and 2nd Respondents traced the history of the relationship between the Appellants and the 3rd Respondent and the 1st Respondent, which is a history of banker/customer relationship. In the course of their relationship, the 1st Respondent granted credit facilities to the 3rd Plaintiff for various purposes and the consequent failure of the 3rd Plaintiff to repay the loans leading to the appointment of the 2nd Plaintiff as receiver/manager over the assets of the 3rd Respondent.

In paragraph 18 of the affidavit, the 1st and 2nd Respondents stated that the 3rd Respondent

is not “adverse” to the activities of the receiver/manager. We know that a company acts through its directors being not human but a corporate entity. By referring to the company as not being adverse to the activities of the receiver/manager, the 1st and 2nd Respondents could only be referring to the directing mind of the company, namely the Appellants being its Directors. But in contrast to the facts stated in paragraph 18, the 1st and 2nd Respondents in paragraph 19 speculated that the Appellants as the Directors of the 3rd Respondent “will obstruct, hinder and interfere with the discharge of the 2nd Plaintiff’s functions as Receiver/Manager over the 3rd Respondent’s assets”. They did not state/aver to any facts as the basis of this claim.

It is also observed that in paragraphs 20 and 21, the 1st and 2nd Respondents admitted that the properties charged via the deed of all assets debenture are known, but they claimed that the Appellants “are likely to dispose of the 3rd Plaintiff’s assets without paying the proceeds over to the 1st Plaintiff, leaving the 1st Plaintiff without any other means of recouping

the indebtedness of the 3rd Plaintiff.” Again, there are no further facts stated upon which the Respondents suspect that the Appellants will likely dispose of the 3rd Respondent’s properties, which properties are already known to them.

Again in paragraphs 22, 23, 24 and 25 of the affidavit, the 1st and 2nd Respondents continued to assert in the abstract, that since some of the charged assets of the 3rd Respondent are movable assets, they could be easily sold by the Appellants, and if the 2nd Respondent is not allowed access to the said known properties and/or should the 2nd Respondent be disturbed by the Appellants from discharging his duties, as being the reasons they are seeking for injunction against the Appellants.

The question that arises is, do the above-analyzed averments disclose any triable issue or any dispute upon which the trial Court should proceed with the hearing and the resolution of. I note particularly the underlined portions of the facts in the affidavit, and the fact that the 1st and 2nd Respondents did not indicate, even in the slightest, that the Appellants made, or are in the process of making any attempt to

interfere with or prevent the 2nd Respondent from discharging his duties.

The law is trite that unless the claim of the plaintiff rests on or is supported by concrete facts that show or establish a reasonable cause of action, it will be dismissed. See Hassan V. Aliyu (supra). In this case, I have to agree with the learned Appellants’ counsel that there are no facts whatsoever disclosing any reasonable cause of action in the affidavit in support of the Respondents’ originating summons. The fact that the Appellants are the Directors of the 3rd Plaintiff in itself alone cannot be the basis or form a reasonable cause of action in this suit as was held by the trial Court. I hold the view that having stated the settled principle of law to the effect that it is the affidavit evidence that should be examined where a complaint of lack of cause of action is to be determined, the learned trial Judge should have stopped only on the proper examination of the facts contained in the Respondents’ affidavit.
With regards to Section 393(4) of CAMA relied on by the learned trial Judge, it only provides that as from the date of the appointment of the

receiver/manager, the powers of the directors of the company in receivership to deal with the properties of the company shall cease until the receiver/manager is discharged. Also, Section 397(1) of CAMA provides that the directors of the company in receivership shall furnish the receiver/manager with the statement of the affairs of the company in receivership as at the date of his appointment, which statement must show details of the company’s assets, liabilities, names and addresses of creditors and all other information in respect of the company.
By referring to and relying on the said provisions of CAMA to conclude the presence of a reasonable cause of action, the learned trial Judge failed to indicate where facts showing any infringement by the Appellants of Sections 393(4) and 397(1) of CAMA were averred in the Respondents’ affidavit. There are none at all. This means that the learned trial Judge’s reliance on the provisions of CAMA in deciding that a cause of action is disclosed was wrongful and baseless being unsupported by facts on the record.
I am not unmindful of the position of this Court and indeed the Apex Court that

as much as possible, cases should be allowed to go to trial and be decided on the merits rather than being dismissed in limine. However, where it is glaringly obvious that there is no reasonable cause of action disclosed in the pleadings of the claimants, especially in this case, where the pleadings are in form of an affidavit which is the evidence in support of the suit, the Court will not hesitate to declare the suit as vexatious and an abuse of Court’s process.
In the final analysis, having found no facts whatsoever showing a reasonable cause of action in the Respondents’ affidavit in support of their Originating Summons, I agree in toto with the submissions of the learned Appellants’ counsel that there is no reasonable cause of action fit for determination of the Court in the Appellant’s originating summons. The Respondents failed to state facts, which amount to any wrongful act of the Appellants against the Respondents, which makes the suit vexatious and an abuse of Court’s process. I therefore resolve the lone issue in favour of the Appellants.

Consequently, this appeal has merit and it is allowed by me. The

Ruling of the Federal High Court delivered on the 17th December 2018 in respect of the motion on notice filed on the 28th June 2017 in Suit No: FHC/L/CS/813/2017 is hereby set aside and the said suit is struck out for lack of reasonable cause of action. Parties shall bear their cost of prosecuting the appeal. Appeal allowed by me.

OBANDE FESTUS OGBUINYA, J.C.A.: I had the ample opportunity to read, in draft, the succinct leading judgment delivered by my learned brother: Balkisu Bello Aliyu, JCA. I concur fully with the articulate reasoning and conclusion of it.

In an action commenced by originating summons, as in the instant case that mothered the appeal, the major barometer with which a Court gauges the presence or absence of reasonable cause of action is the affidavit in support of it. The respondents, in their infinite wisdom, starved the lower Court, in their affidavit, of the necessary facts showing that their action possessed reasonable cause of action. There were no facts on the adverse acts executed and displayed by the appellants to warrant the suit. The affidavit was devoid of the required facts and sounded in the echo of ipse

dixit. The barren state of the affidavit constituted a coup de grace to the fortune of the action. The lower Court, with due respect, deeply, erred in law when it allowed the vacuous affidavit to fetch a favour for the respondents.

For this reason, added to those well assembled in the attractive leading judgment, l, too, allow the appeal in the manner decreed in it.

UGOCHUKWU ANTHONY OGAKWU, J.C.A.: The leading judgment of my learned brother, Balkisu Bello Aliyu, JCA, which has just been delivered was made available to me in draft.

The accidence of the disclosure of a reasonable cause of action has been meticulously considered in the leading judgment and the analysis of the paragraphs of the affidavit in support of originating summons inexorably depicted that the wrong allegedly done by the Appellants to Respondents and the consequent damage thereupon was not deposed to. Accordingly, no cause of action, what more reasonable cause of action, was disclosed against the Appellants.

I am therefore allegiant to the reasoning and conclusion in the leading judgment that the appeal is meritorious. I equally join in allowing the

appeal on the same terms as set out in the leading judgment, inclusive of the order as to costs.

Appearances:

RICHARD ABDULAHI ESQ. For Appellant(s)

FUNKE ONAKOYA ESQ. For Respondent(s)