FIRST BANK OF NIGERIA PLC & ORS v. UDOBONG NTIA & ORS (2014)

FIRST BANK OF NIGERIA PLC & ORS v. UDOBONG NTIA & ORS

(2014)LCN/7547(CA)

In The Court of Appeal of Nigeria

On Friday, the 21st day of November, 2014

CA/A/143/2009

RATIO

COMPANY LAW: INVESTMENT AND SECURITY ACT; WHAT MUST BE RESORT TO IN DETERMINING WHETHER OR NOT THE ISA IS AN ACT THAT REGULATES THE OPERATIONS OF COMPANIES

That in determining whether or not the ISA is an Act that regulates the operations of companies incorporated under CAMA within the meaning of Section 251 (1)(e) resort ought to be had to the long title of the ISA; and clearly the ISA is an act for the regulation of the Nigerian capital market and not operation of companies; though invariably the players in the capital market are companies incorporated under CAMA.

COURT: JURISDICTION; THE JURISDICTION OF THE FEDERAL HIGH COURT UNDER THE CONSTITUTION AND WHAT MUST BE EXAMINED IN DETERMINING WHETHER A COURT HAS JURISDICTION IN A MATTER BEFORE IT

This court is satisfied that Section 251 (1) of the 1999 Constitution clearly states the jurisdiction of the Federal High Court; and the jurisdiction conferred therein is “to the exclusion of all other courts. In determining whether a court has jurisdiction in a matter before it, the writ of summons and the statement of claim ought to be examined; FEDERAL COLLEGE OF EDUCATION OYO v. AKINYEMI (2007) LPELR-8482 CA.

DEFINITION OF WORDS: BANKING; THE DEFINITION OF BANKING

The Black’s Law Dictionary, 7th edition defines banking as:

“the business of banking, as defined by the law and custom, consist in the issue of notes payable on demand intended to circulate as money when the banks are banks of issue; in receiving deposits payable on demand in discounting commercial paper; making loan of money on collateral security; buying and selling bills of exchange; negotiating loans, and dealing in negotiable securities issued by the government’ state and national, and municipal and other corporations.” per. MOHAMMED MUSTAPHA, J.C.A.

COURT: JURISDICTION; THE EXCLUSIVE JURISDICTION OF THE FEDERAL HIGH COURT IN ANY CASE PERTAINING TO BANKING

It stands to reason therefore that any case pertaining to banking falls within the exclusive jurisdiction of the Federal High Court, except where such banking matter is between a customer and his bank the Federal High Court and the High Court of a state share concurrent jurisdiction; “it can be seen that section 251(1) (d) was meant to give the Federal High Court exclusive jurisdiction in “Banking” in the wide sense to involve all banking transactions.” NDIC V OKEM ENT. LTD supra; learned counsel to the appellants’ effort therefore to distinguish this case with TRADE BANK PLC V BENILUX NIG LTD (2003) 9 NWLR part 825 at 416 with all due respect fell flat on its face because the circumstance of this case is far from what can may be termed the “tort of conversion”; and banking within the meaning of Section 251 (1) (d) is not restricted only to “receiving deposits payable on demand or discounting commercial papers nor negotiating loans etc.”, as contended by learned counsel to the appellants. per. MOHAMMED MUSTAPHA, J.C.A.

ACTION: CAUSE OF ACTION; THE MEANING OF A CAUSE OF ACTION AND WHEN DOES A CAUSE OF ACTION ARISE

In COOKEY V FOMB (2005) 15 NWLR (Pt. 947) 182, the Supreme Court gave the meaning of cause of action as follows:

“A cause of action is the bundle of aggregate of facts which the law will recognize as giving the plaintiff a substantive right to make the claim for the relief or remedy being sought…”

In NEPA vs. OLAGUNJU (2005) 3 NWLR (Pt. 913) 602, the Supreme Court held:

“A cause of action means:

(a) a cause of complaint;

(b) a civil right or obligation for determination by a court of law; and

A cause of action is indeed a factual situation which enables a person to obtain a remedy from another in court with respect of the injury. Secondly, a cause of action matures or arises on the date or from the time when a breach of any duty or act occurs which warrants the person thereby injured or the victim who is adversely affected by such breach to take a court action in assertion or prosecution of his legal right that has been breached.” per. MOHAMMED MUSTAPHA, J.C.A.

JUSTICES

ABUBAKAR DATTI YAHAYA Justice of The Court of Appeal of Nigeria

JOSEPH E. EKANEM Justice of The Court of Appeal of Nigeria

MOHAMMED MUSTAPHA Justice of The Court of Appeal of Nigeria

Between

1. FIRST BANK OF NIGERIA PLC

2. IBTC CHARTERED BANK PLC

3. FBN CAPITAL LIMITED

4. DIAMOND BANK PLC

5. GUARANTY TRUST BANK PLC

6. OCEANIC BANK INTERNATIONAL PLC – Appellant(s)

AND

1. UDOBONG NTIA

2. STAFFFORDS LIMITED

3. SETH ORJINTA

4. IKE OGUINE

(for themselves and on behalf of and as Representing All the Applicants for the allotment of ordinary shares of First Bank of Nig. Plc in respect of the offer for subscription And right issue (Hybrid Offer) of 14th May, 2007.

5. SECURITY & EXCHANGE COMMISSION – Respondent(s)

MOHAMMED MUSTAPHA, J.C.A. (Delivering the Leading Judgment):

IN BRIEF:

The 1st to 4th respondents (Plaintiffs at the lower court) filed an action in a representative capacity for themselves, and on behalf of all the subscribers to the First Bank of Nigeria Plc hybrid offer of May, 2007, claiming pre and post allotment interest in respect of the retention of the respondents’ application for monies during and after the allotment process.

The appellants filed a preliminary objection to the action of the respondents at the Federal High Court, contending among other things that the lower court has no jurisdiction, and that the suit did not disclose any reasonable cause of action.

The preliminary objection was struck out in a ruling by the lower court delivered on the 27th of March, 2009; this is an appeal against that ruling by the Federal High Court, Abuja, presided by the Honourable Justice A.I. Chikere.

The notice of appeal contained seven grounds, from which the following issues for determination were formulated in the appellants’ brief of argument, settled by Kola Awodein, SAN.

1. Whether the learned trial judge was right in holding that the action pertains to Banking, Banks and other financial institutions, arises from the operation of Companies and Allied Matters Act and/or also relates to the validity of the executive and administrative action of the agency of the Federal Government, thus giving the Federal High Court jurisdiction.

2. Whether the learned trial judge was right to hold the plaintiffs to have a reasonable cause of action and/or locus standi to institute the action.

3. Whether the learned trial judge was right to hold that failure to obtain the authority of the represented parties to sue in a representative capacity does not vitiate the action as constituted.

4. Whether the learned trial judge was right in all the circumstances to assume jurisdiction to entertain the action.

The respondents’ brief of argument settled by Etigwe Uwa, SAN adopted the issues as formulated by the appellants; this court will resolve the issues as they are.

ISSUE ONE:

Whether the trial judge was right in holding that the action pertains to Banking, Banks and other financial institutions, arises from the operation of Companies and Allied Matters Act and/or also relates to the validity of the executive and administrative action of the agency of the Federal Government, thus giving the Federal High Court jurisdiction.

It is submitted for the appellants that the jurisdiction of the Federal High Court is not unlimited, as it is confined to those issues in Section 251 of the Constitution; and therefore the Federal High Court is not the competent court for the plaintiff/respondents to ventilate their grievances.

That the plaintiff/respondents claim is only as to interest on monies deposited for shares applied for, before and after allotment and nothing more; as such it is a claim in the tort of false enrichment, and nothing to do with Banking, Banks and other financial institutions, within the meaning of Section 251 of the Constitution. Learned counsel referred to TRADE BANK PLC V BENILUX NIG. LTD (2003) 9 NWLR part 825, contending that the trial court was wrong in assuming jurisdiction.

That also the claim is not one arising from the operation of the Companies and Allied Matters Act, as the issue of shares by a public company such as the 1st appellant is regulated by the Investment and Securities Act, Sections 67-96.

That the suit does not concern the validity of executive or administrative action of the Securities and Exchange Commission as held by the lower court; as the objector in the suit is not SEC, but the 1st-6th appellants, who are not agencies of the Federal Government. He urged this court to resolve this issue in favour of the appellants.

In response it is submitted for the respondents while referring to Section 251 of the Constitution that the jurisdiction of the Federal High Court is to the “exclusion of all other courts”; and that from the averments in the statement of claim this action falls within the ambit of section 251(1) (d) (p) and (r) of the constitution; learned counsel referred this court S.B.N. LTD V DR. DE LLUCH (2004) 18 NWLR part 905 and paragraphs 13-18 of the statement of claim, at pages 7-8 of the record of appeal.

That it was a cardinal term of the agreement, as per paragraph 13 of the statement of claim that the monies deposited for shares by the 1st to 4th respondents would be “retained in separate interest yielding bank accounts by the receiving bankers, pending allotment.” Relying on this the 1st to 4th respondents made their investments, and it is the foundation for the claim of 12% interest.

Learned counsel contended while referring to ADETONA V EDET (2004) 16 NWLR part 899 at 30 and A.G. LAGOS STATE V EKO HOTELS LTD (2006) 18 NWLR part 1011 at 460 that this action sprang up from the 1st defendant’s public offer of shares and rights, without which there would be no dispute between the parties.

It is further submitted that the claims arise from the Investment and Securities Act 1999, the Act in force at the time the Hybrid offer opened, especially as the Act regulates the operation of companies incorporated under CAMA.

That the appellants argument that the matter is “…not arising from operation of the companies and allied matters act as the issue of share by a public company…is regulated by the Investment and Securities Act.” Is self defeating because the Investment and Securities Act regulates the operation of companies incorporated under CAMA.

That also paragraphs 28 and 29 of the statement of claim of the 1st to 4th respondents clearly questioned the validity of an executive or administrative action on the part of the 5th respondent, an agency of the Federal Government; learned counsel referred to OSAKWUE V F.C.E. ASABA (2010) 10 NWLR part 1201 at 44.

In reply learned counsel to the appellant submitted further while referring to SGBN LTD v DR DE LLUCH supra that acting as an issuing house or capital market operator under the Investment and Securities Act is not the same as carrying out a banking operation, he referred this court to TRADE BANK PLC V BENILUX NIG. LTD (2003) 9 NWLR part 825 at 416 to contend that the Federal High Court has no jurisdiction to entertain a claim whose nature is that of the tort of conversion.

In determining whether a court has jurisdiction in a matter before it, the writ of summons and the statement of claim ought to be examined; FEDERAL COLLEGE OF EDUCATION OYO v. AKINYEMI (2007) LPELR-8482 CA.

Paragraphs 13 to 18 of the statement of claim are reproduced hereunder as per pages 7 and 8 of the record of proceedings:

“13. at page 94 of prospectus paragraph 3 thereof the 1st plaintiff stated:

“All application monies will be retained in separate interest yielding bank accounts by the Receiving Bankers pending allotment. If any application is not accepted, or is accepted for fewer shares than the balance applied for, a crossed cheque for the full amount or the amount paid (as the case may be) will be returned by registered post within 5 working days of allotment. A share certificate will be sent by registered post not later than 15 working days from the date of allotment.”

14. It was in part reliance on this representation that application monies would be retained in interest yielding account that the Plaintiff applied for the allotment of the said shares to them.

15. The Plaintiff aver that the 1st to 3rd Defendants were under a fiduciary duty to the Plaintiffs to ensure that the monies were retained in accounts where interest at the prevailing market rate were obtainable in respect of the application monies.

16. The Plaintiffs aver that the average interest rate for the placing of funds in banks in Nigeria for between 60 and 90 days is about 12% per annum. The Plaintiff will lead evidence to establish this fact.

17. The Plaintiffs aver that by virtue of applicable laws particularly Sections 135 and 136 of the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria 2004, the Plaintiff were only obliged to pay for the shares at the point of the agreement to issue the shares viz when the notice of allotment of the shares was given or subsequent thereto.

18. The Plaintiffs aver that from the respective times when the application monies were received by the receiving banks on behalf of the 1st Defendant to the time of the notice of allotment, all the application monies belonged to the respective applicants for allotment of the shares of the 1st Defendant.”

Section 251(1) (d) of the Constitution on the other hand provides: “the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil cases and matters: connected with, pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against the central bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures: provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.”

The 1st to 4h respondents contend that their averments in paragraphs 13 to 18 above and a term of the prospectus that the monies they deposited for shares would be retained in interest yielding accounts by the receiving bankers pending allotment as promised, and rightly so.

The Black’s Law Dictionary, 7th edition defines banking as:

Even if this court accepts the argument that the 1st to 4th respondents’ claim is not about any dispute concerning the offering of shares, but interest payable before and after allotment, the respondents’ case cannot be reduced to “you collected money from me to buy shares but failed to pay me for interest that would have accrued on my money before and after allotment”, doing so will in the considered opinion of this court be too simplistic when paragraphs 13 to 18 of the statement of claim are reckoned with.

This court is borne out in this belief by the Supreme Court decision per Pats Acholonu J.S.C in S.B.N. LTD V DR. DE LLURCH supra, where it held: “I believe that the expression “connected with or pertaining to” involves a transaction which is peculiar to a banking operation and can only be carried on by a bank or a financial institution.

It equally connotes the operational duties of a bank in respect of or in relation to its functions within the limits of its license…section 251 (1) (d) in its tenor and intendment embraces all possible conceivable matters touching on banking, whether on issues of tort or contract but not being a point on bank and customer relationship…the expression “connected with or pertaining to banking” whether examined synthetically imports transaction on matters that are related to or show affinity or intertwine or have semblance or have interrelationship with banking…”

Granted, as argued by learned counsel to the appellants the facts in this case and S.B.N. LTD v DR. DE LLUCH supra are not exactly the same. They don’t have to be, they need not be, as the principle is what matters, in the circumstances, and it is the considered opinion of this court that the principle fits the circumstances of this case like a glove.

The 1st to 4th respondents averred in paragraphs 31 of the record, page 31, to the effect that, the receiving banks were under an equitable obligation not to pay over all the application monies to the 1st appellant, but to retain them in interest bearing accounts have returned the monies for rejected applications and the overall accrued interest at prevailing market rates to the respondents.

This court cannot help but agree with learned counsel to the respondent that even the very act of being the holder or repository of the application monies is tantamount to “banking issue” as contemplated by section 251, as only a bank could have held the application monies in separate interest yielding accounts. The implication of which is that the Federal High Court has exclusive jurisdiction in this regard.

This court is also satisfied that sections 135 and 136 of CAMA are therefore the cardinal pillars upon which the action is built; this belief is supported by the authority of FAGBOLA V K.C.C.I.M.A (2006) 6 NWLR part 977 at 450, where it was held:

“the Federal High Court has exclusive jurisdiction to hear and determine a suit which involves civil causes and matters arising from the operation of the Companies And Allied Matters Act or any enactment replacing that Act or replacing the operation of companies…”

The respondents in paragraphs 28 and 29 of the statement of claim questioned the validity of an executive or administrative action on the part of the 5th respondent, alleging breach of the duties of the 5th respondent under the Investment and Securities Act, ISA; the 5th respondent for the avoidance of any doubt is an agency of the Federal Government, see SECURITIES & EXCHANGE COMMISSION V. KAUNMU (2009) 110 NWLR part 1150 at 534; and that being so by S.251 (1)(r) only the Federal High Court has jurisdiction to entertain this action by that reason. Accordingly this issue is resolved against the appellants, in favour of the 1st to 4th respondents.

ISSUE TWO:

Whether the learned trial judge was right to hold that the Plaintiffs have a reasonable cause of action and/or locus standi to institute the action.

It is submitted for the appellants that paragraph 29 of the statement of claim is an admission that the plaintiffs’ claim is subject to a statutory condition precedent; which has not been fulfilled and so the action as constituted is premature, learned counsel referred to RINCO CONST. CO V VEEPEE IND. LTD (2005) 9 NWLR part 929 at 96.

That nothing suggested that interest shall be paid to subscribers for failure to allot to an applicant the complete number of shares applied for, and since the demand for payment of interest is the plank of the respondents’ claim it has to fail.

That also the plaintiffs/respondents had established that there was no agreement between the parties for the 1st defendant/appellant to pay any interest on monies deposited pre and post allotment; thus there was no cause of action disclosed against the 1st defendant/appellant.

Learned counsel submitted that since the application monies for which interest is claimed was wholly paid in respect of shares in the 1st defendant/appellant bank and for its benefit, and not that of 2nd to 6th defendants/appellants’ the plaintiff/respondents’ claim discloses no reasonable cause of action against the 2nd to 6th defendants; he referred the court to MACKAY & ANR V. ESSEX AUTHORITY (1982) 2 ALL ER 771 at 778; BAMGBADE & ORS V. BALOGUN (1994)1 NWLR part 323 at 739 and urged this court to resolve this issue in favour of the appellants.

In response it is submitted for the respondents that because the 1st to 4th respondents had by an application for interlocutory judgment prayed the lower court to try the issue as to whether the appellants were entitled to interest; and because the appellants’ contention involves a consideration of the merits of the case of the 1st to 4th respondents’ claim for interest, their opposition to this issue has to be argued in line with the said application.

Learned counsel submitted that there was a breach by the 2nd to 6th appellants of their respective duties imposed by statute as issuing houses and banks, as per Sections 91, 95 and 40 of the ISA (2007); that the appellants, having been imbued with a statutory trust are bound to answer for the breach of such duty, and that breach is the main plank of the respondents’ claim, which translates to a cause of action; he referred this court to CHEVRON NIG. LTD V I.D. NIG. Ltd (2007) 16 NWLR part 1059 at 176-177.

That nothing suggests that a claim for interest on the application and returned monies may only be asserted if appropriate subsidiary legislation in that regard is made by the 5th respondent; he referred to Section 251(1) (p) (q) and (r) of the Constitution, because it underscores the point that actions can be based on statute, the common law or equity, the 1st to 4th respondents’ interest is partly based on equity. He referred this court to paragraphs 15 and 31 of the statement of claim at pages 7 and 10 of the record to buttress that the 1st to 4th respondents’ claims are based on equity as well as the 5th respondent’s failure to make adequate subordinate legislation to protect the public as it is bound to. He urged this court to resolve this issue in favour of the respondents.

In reply it is submitted for the appellants, that this court can only consider the 1st to 4th respondents’ statement of claim, and nothing more, as the application for interlocutory injunction was not considered by the lower court, and is irrelevant to the issue in this appeal.

Learned counsel submitted that the admission that the 1st to 4th respondents’ claim is based on equity as a result of the 5th respondent’s failure means no adequate subordinate legislation exists for payment of post allotment interest; therefore no interest is due and payable by the appellants.

That also there is no sustainable claim properly made against the 2nd to 6th appellants since the application monies for which interest is claimed was paid in respect of shares in the 1st appellant’s company and for its benefit and not that any of the 2nd to 6th appellant. While referring to AKILU V FAWEHINMI (NO.2) (1989) 2 NWLR part 102 at 222 he argued that the suit discloses no cause of action against the 2nd to 6th appellants.

This issue requires the consideration of the 1st to 4th respondents’ statement of claim at the lower court and the sustainability of same; and this cannot be properly done in the considered opinion of this court in isolation of the issue of interest, and its likelihood of success.

Even if the appellants’ argument that no interest is due and payable to the 1st to 4th respondents, whose claims are based partly in equity is taken hook line and sinker, that does not preclude them from seeking remedy from a perceived wrong.

This court’s understanding of the 1st to 4th respondents’ claim is that there was a breach by the 2nd to 6th appellants of their duty as issuing houses and receiving banks, as imposed by statute to maintain separate accounts into which proceeds of monies for purchases of securities by their clients is paid; Sections 40, 91 and 95 of the ISA (2007); failing which they are answerable for the breach of this statutory duty; and that in the opinion of this court is the gravamen of the 1st to 4th respondents’ claim, which led to this cause of action; bearing in mind that a cause of action simply put, is the facts which establish or give rise to a right of action. In COOKEY V FOMB (2005) 15 NWLR (Pt. 947) 182, the Supreme Court gave the meaning of cause of action as follows:

“A cause of action is the bundle of aggregate of facts which the law will recognize as giving the plaintiff a substantive right to make the claim for the relief or remedy being sought…”

In NEPA vs. OLAGUNJU (2005) 3 NWLR (Pt. 913) 602, the Supreme Court held:

“A cause of action means:

(a) a cause of complaint;

(b) a civil right or obligation for determination by a court of law; and

A cause of action is indeed a factual situation which enables a person to obtain a remedy from another in court with respect of the injury.

Secondly, a cause of action matures or arises on the date or from the time when a breach of any duty or act occurs which warrants the person thereby injured or the victim who is adversely affected by such breach to take a court action in assertion or prosecution of his legal right that has been breached.”

We agree with learned counsel to the 1st to 4th respondents that nothing in sections 68, 73 of ISA 1999, now in section 91 of ISA (2007) suggests that interest is payable in this case.

The case for a claim based on equity in situations like this was clearly made by section 251(1) (p), (q) and (r):

“provided that nothing in the provisions of paragraph (p), (q) and (r) of this subsection shall prevent a person from seeking redress against the federal government or any of its agencies in an action for damages, injunction or specific performance where the action is based on any enactment, law or EQUITY.”

Paragraphs 15 and 31 of the 1st to 4th respondents’ statement of claim show clearly that their claims are covered by the Constitution; for the avoidance of doubt it reads:

“15. The Plaintiffs aver that the 1st to 3rd Defendants were under a fiduciary duty to the Plaintiffs to ensure that the monies were retained in accounts where interests at prevailing market were obtainable in respect of the application monies”.

“31. The 2nd, 5th, 6th and 7th Defendants were under an equitable obligation not to pay over the 1st Defendant all the application monies but were obliged to retain them in interest bearing accounts at prevailing market rates for the benefit of all the applicants and to pay over to the 1st Defendant only such part of the application monies as is equivalent to the value of shares allotted and returned to the applicants the application monies for the rejected application together with appropriate interest. The 2nd, 5th and 6th Defendant’s defaulted in this duty whereof the Plaintiffs have suffered loss.”

This court is satisfied from the foregoing that the lower court was right in the circumstances to have held that the plaintiffs have a reasonable cause of action and/or locus standi to institute the action; accordingly this issue too is resolved in favour of the 1st to 4th respondents, and against the appellants.

ISSUE THREE:

Whether the learned trial judge was right to hold that failure to obtain the authority of the represented parties to sue in a representative capacity does not vitiate the action as constituted.

It is submitted for the appellants that the learned court judge misapplied the law in DANIYAN V IYAGIN (2002) 7 NWLR part 766 at 376 when he held that a plaintiff is not bound to obtain consent to sue in a representative capacity, once he shares a common interest or grievance and belief with the plaintiffs; learned counsel contended that the case not only called for the interpretation of ORDER 12 RULE 8 of the Federal High Court rules but that it cannot stand in the face of ADEGBITE V LAWAL 12 WACA 389 and AYENI V SOWEMIMO (1982) 5 SC at 87-89.

That it is not in dispute that the plaintiffs/respondents instituted the action in a representative capacity, representing unnamed persons; leave was obtained on the 3rd of March, 2008, under order 13 rule 8 of the Federal High Court Rules of 2000; but the affidavits did not show that the plaintiffs obtained authorization of the unnamed plaintiffs to institute the action as presently constituted; disregarding the requirement in AKANDA V ARAOYE & ANR (1968) 1 ALL NLR at 219, that at least one of the people to be represented should swear to an affidavit.

Learned counsel submitted that the non compliance with the rules was fatal to the plaintiffs/respondents’ case, as the lower court was deprived of jurisdiction; he referred to MALGWI V GADZAMA (2000) 11 NWLR Part 678 at 268.

In response, it is submitted for the 1st to 4th respondents that there is a valid and subsisting order to maintain this action in a representative capacity, that as long as this order is not set aside, submissions of counsel should be disregarded; learned counsel referred to ADUKWU V COMMISSIONER FOR WORKS, ENUGU STATE (1997) 2 NWLR part 489 at 601, and DANIYAN & Anor V IYAGIN & Ors (2002) 7 NWLR part 766 at 376, and MOZIE V MBAMALU (2006) 15 NWLR part 1003 at 495.

That there must be an existing suit before the grant of leave pursuant to order 12 rule 8; leave is not a condition precedent, especially as the use of the word “may” as against “shall” indicates; learned counsel also referred this court to v ATANE (1974) NSCC at 446, and DANIYAN V IYAGIN (2002)7 NWLR part 766 at 376.

It is the considered opinion of this court that the contention of learned counsel to the appellants that, the action is incompetent because nothing shows the authority to sue in a representative capacity cannot hold, because pages 291 to 293 show that there is a valid and subsisting order to maintain the suit in a representative capacity, and that order has not been set aside; the authority of ADUKWU V COMMISSIONER FOR WORKS, ENUGU STATE (1997) 2 NWLR part 489 at 601 is instructive, where it was held:

“…so long as the order of the court approving the authorization remains, the authorization is conclusive. A party who intends to challenge the representation should take steps to set aside the order…”

Indeed the Supreme Court has held that even if no application is made for leave, the action would still be maintained once the capacity in which the action is maintained is so expressed on the writ of summons and statement of claim; MOZIE V MBAMALU (2006) 15 NWLR part 1003 at 495.

This court is also of the considered view that Order 12 Rule 8 of the Federal High Court, Civil Procedure Rules, 2000 intends that before an order of court to defend in a representative capacity can be obtained there must be an existing suit, and so the Order cannot be read to impose a condition precedent for the institution of this or any other suit.

For the avoidance of doubt Order 12 Rule 8 reads:

“Where more persons than one have the same interest in one suit, one or more of them may, with the approval of the court be authorised by the other persons interested to sue or to defend the suit for the benefit of or on behalf of all parties so interested.”

The use of the word “May”, as opposed to the word “Shall” will suggest that the provisions of order 12 Rule 8 are not mandatory.

This court has little or no hesitation in resolving this issue in favour of the 1st to 4th respondents, and against the appellants.

ISSUE FOUR:

Whether the learned trial judge was right in all the circumstances to assume jurisdiction to entertain the action.

Learned counsel to the appellant submitted that it is the claim that determines the jurisdiction of a court; or such jurisdiction is conferred on the court by the Constitution or statute; he referred to ELBANJO V DAWODU (2006) 15 NWLR part 1001 at 151, ADAH V NYSC (2004) 13 NWLR part 891 at 648 and contended that the Federal High Court had no jurisdiction to hear this case.

That also the national Assembly has powers, under section 6(5) (j) of the Constitution, to establish courts or tribunals, such as the Investments and Securities Tribunal, and bestow on them jurisdiction, through the Investment and Securities Act; that with full knowledge of sections 284, 289 and 294 of the ISA the learned trial judge ought to have declined jurisdiction in the circumstances; he referred this court to AGWUNA V A.G. FEDERATION (1995) 5 NWLR part 396 at 437.

In response it is submitted for the 1st to 4th respondents that the Constitutional empowerment of the Federal High Court by section 251(1) of the Constitution to hear matters arising from the operations of the Companies and Allied Matters Act and/or relating to the validity of executing and administrative action of an agency of the Federal Government cannot be taken away by any statute; learned counsel referred to NJIKONYE V. MTN NIG. COMM. LTD (2008) 9 NWLR part 1092 at 366.

That also as both section 251 of the Constitution and 284 of the ISA give exclusive jurisdiction to the Federal High Court and the Investments and Securities Tribunal respectively there is a conflict, in which the Constitutional provision must prevail to the extent of the inconsistency; he referred this court to STABILINI v. FBIR (2009) 13 NWLR part 1157 at 226, SECURITIES & EXCHANGE COMMISSION V KASUNMU supra and OSAKUE v FCE ASBAB (2010) 10 NWLR Part 1201 at 1.

In reply it is submitted for the appellants that section 284 of the ISA 2007 stands on the same pedestal with section 251 of the Constitution on the basis that the provision is Constitutional, as it is derived from the Constitution; learned counsel referred to AKANBI & ORS V ALAO & ORS (1989) part 108 at 136.

That even if the claim comes within the provision of section 251 of the Constitution since the matter is covered by ISA specifically, the specific should prevail over the general provision; he referred to JACK V UNAM (2004) 5 NWLR part 865 at 208; and argued that a general enactment is voided by an express provision in a subsequent enactment.

It is trite that jurisdiction is determined by the plaintiff’s claim; it is also trite that the main source of any court’s jurisdiction is the Constitution; this position of the law was aptly put in BEWAJI V OBASANJO (2008) 9 NWLR Part 540 at 572, where it was held that:

“the extent of the jurisdiction of courts is expressly defined by the Constitution or the statutes establishing them, which statutes must not conflict but be in tune with the Constitution, the supreme law.”

The contention of the appellants is that since the tribunal was set up by an Act of the National Assembly, and the National Assembly was constitutionally empowered to make laws, the Federal High Court should have declined jurisdiction in view of section 284 (1) ISA; but this court holds the contrary view that the jurisdiction of the Federal High Court cannot be taken away by any statute, especially not in the manner contended by the appellants. This view is supported by the authority of NJIKONYE V MTN NIG. COMM. LTD supra, where it was held:

“…courts would disregard any statute that seeks to regulate and obliterate the judicial powers conferred on them expressly by the constitution…powers vested in the various courts created by the constitution are constantly unassailable. An enactment will be considered opposed to the Constitutional provisions vesting judicial powers in a court if it has provided for the sharing of the judicial powers with any other body other than the court in which it is vested by the Constitution or it has purported to remove judicial powers vested in the court or redefined it in a way as to whittle it or limit the extent of the power vested or conferred on the court by the Constitution.”

The conflict between section 251 of the Constitution and section 284 of the ISA, with either section giving exclusive jurisdiction to the Federal High Court and the Investment and Securities Tribunal respectively ought to be resolved in favour of section 251 of the Constitution; section 284 is clearly void to the extent of the inconsistency. It is with this kind of situation in mind this court held in STABILINI V FBR (2009) 13 NWLR part 1157 at 226:

“Where the Constitution of the Federal Republic of Nigeria has vested jurisdiction in a court of law, it cannot be lightly divested. Where it is intended to be divested it must be done by clear, express and unambiguous words, and by a competent amendment of the constitution. Thus the courts do frown at any attempt to erode or relegate the power of the court and or the supremacy of the constitution…thus no authority, act or person can, without due amendment, alter, curtail or seek to restrict the jurisdiction of the Federal High Court.”

It seems to me too that to construe section 284 of the ISA as conferring exclusive jurisdiction to Investment and Securities Tribunal over and above the Federal High Court would do a great violence to the provision of Section 251 of the 1999 Constitution. It would in my view take a more specific provision or more particularly an amendment to have such a far reaching effect which overrides the clear provisions of Section 251 (1) of the Constitution. Any statute which is in conflict with the provisions of the 1999 Constitution must be pronounced void to the extent of such inconsistency.

The lower court was right in the opinion of this court to have assumed jurisdiction to entertain the action, in the circumstances; accordingly this issue too is resolved in favour of the 1st to 4th respondents, and against the appellants.

Having resolved all the issues for determination against the appellants this appeal is accordingly dismissed, the decision of the lower court assuming jurisdiction is affirmed, with N20,000 costs against the appellants.

ABUBAKAR DATTI YAHAYA, J.C.A.: I had the privilege of reading in advance, the lead judgment of my learned brother Mustapha JCA just delivered. I agree with his reasoning and the conclusion reached therein. The allegation by the respondents as plaintiffs is that the appellants failed to observe the duty imposed on them by statute, and as a result, they have suffered. Whether the appellants have indeed failed to observe the statutory duty, if any, imposed on them or not, and whether the respondents have suffered a wrong or not, are the issues that would be determined by the trial court, at the conclusion of the case. It is most in appropriate to delve into these at this stage. The fact which remains is that an allegation for the breach of duty, leading to a wrong suffered by the plaintiffs/respondents, has been made and it is a cause of action that entitles the respondents as plaintiffs to bring an action. There is a party who can sue and another that can be sued, and all facts exist, to enable a trial to be conducted. That has given the respondents a cause of action. The appeal is dismissed as it lacks merit. I abide by the Order as to costs.

JOSEPH E. EKANEM, J.C.A: I had the privilege of reading in advance the judgment delivered by my learned brother, Mohammed Mustapha, JCA, I agree with the reasoning and conclusion therein and I adopt the same as mine.

Appearances

Kola Awodein, SAN, with O. AdemolaFor Appellant

AND

Etigwe Uwa, SAN, with Munachiso Michael for 1st-4th Respondents

J.O. Agboni for the 5th Respondent

O.U. Ulasi for the ApplicantFor Respondent