GUARANTY TRUST BANK PLC v. STABILINI VISINONI LIMITED & ORS
(2017)LCN/9502(CA)
In The Court of Appeal of Nigeria
On Thursday, the 16th day of February, 2017
CA/L/382/2016
RATIO
JUDGEMENT: DISTINGUISHING INTERLOCUTORY DECISION FROM FINAL DECISION
The difficulty in the classification of decisions into interlocutory or final have long engaged judicial attention. Judges have employed various tests to identify the true nature of a decision. One of such tests employed is that of the effect of the order. An interlocutory order is one issued during proceedings, but which does not terminally determine the rights of the parties. So, if an order does not terminally determine the rights of the parties and can be revisited or reversed by the Court, it is interlocutory. In Fadiora v. Gbadebo (1978) LPELR-1224(S.C.), (1978) ALL NLR 42, the Supreme Court, per Idigbe, JSC, cited with approval the learned authors of Spencer Bower & Turner on the Doctrine of Res Judicata (1969 Ed.) in Art 164, P. 34 as follows:
“A judicial decision is deemed to be final, when it leaves nothing to be judicially determined or ascertained thereafter, in order to render it effective and capable of execution, and is absolute, complete, and certain, and when it is not lawfully subject to subsequent decision, review or modification by the tribunal which pronounced it.”
Similarly, in Ifediora v. Ume (1988) LPELR-1434(SC), the Supreme Court, per Nnaemeka Agu, JSC said:
“…the test as to whether a decision is final or interlocutory which has been preferred by authoritative decisions in this country has been consistently one which looks at the result, id est, which asks the question:
“does the judgment or order, as made, finally dispose of the rights of the parties?”
The noble Lord further said:
“On indisputable attribute of all final orders is that once made the judge making it becomes funtus officio, so that it can only be reversed on appeal. So, if a Court as in this case, before or during the course of the hearing of a case, orders something which he can review or reverse at any time, such order cannot be final.”
In the American case of S.L. T. Warehouse Co. v. Webb, 304 So. 2d 399, 401 (Fla Dist Ct. App. 1981), a final decision was defined in the following terms:
“(T)he test employed by the appellate Court to determine finality of an order, judgment or decree is whether the order in question constitutes an end to the judicial labor in the cause, and nothing further remains to be done by the Court to effectuate a termination of the cause as between the parties.” In Gomez & Anor v. Cherubim and Seraphim Society & Ors. (2009) LPELR-1331 (SC), the Supreme Court, per Oguntade, JSC said:
“However, where the order made finally determines the rights of the parties, as to the particular issues disputed, it is a final order even if it arises from an interlocutory application.”
A final decision is therefore an order which disposes of the entire controversy on the merits, leaving nothing but the enforcement of that which has been determined. A final decision can be made even from an interlocutory application, with respect to particular issues. The determining question to ask is whether the learned trial Judge who made the decision is empowered to review or revisit or reverse that decision to now reach a different conclusion over the matter? If the Court lacks the vires to review or revisit or reverse its decision on an issue, then its decision on the issue is a final decision, even if it arose from an interlocutory application. PER ONYEKACHI AJA OTISI, J.C.A.
WORDS AND PHRASES: CAUSE OF ACTION
The words cause of action simply mean a factual situation, the existence of which entitles one person to obtain a remedy against another person. A cause of action consists of every fact that would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment. In defining what may constitute a cause of action, the Supreme Court per Karibi-Whyte, JSC in Bello v. Attorney General, Oyo State (1986) 5 NWLR (Pt 45) 828 at 876 said
“I think a cause of action is constituted by the bundle or aggregate of facts which the law will recognize as giving the Plaintiff a substantive right to make the claim against the relief or remedy being sought. Thus the factual situation on which the Plaintiff relies to support his claim must be recognized by the law as giving rise to a substantive right capable of being claimed or enforced against the Defendant. In other words the factual situation relied upon must constitute the essential ingredients of an enforceable right or claim.”
See also: Sehindemi v Governor of Lagos State (supra). The cause of action must be revealed in the pleadings of the claimant. The Court would confine itself only to the averments in the Statement of Claim in the assessment of whether or not a claimant has a reasonable cause of action; Shell B.P. Petroleum Development Co. of Nigeria Ltd & Ors. v. Onasanya (1976) 6 S.C 89, 94; Fumudoh & Anor v. Aboro & Anor (1991) 9 NWLR (PT 214) 210 at 231 – 232. PER ONYEKACHI AJA OTISI, J.C.A.
JUSTICES
JUMMAI HANNATU SANKEY Justice of The Court of Appeal of Nigeria
ONYEKACHI AJA OTISI Justice of The Court of Appeal of Nigeria
JOSEPH EYO EKANEM Justice of The Court of Appeal of Nigeria
Between
GUARANTY TRUST BANK PLC Appellant(s)
AND
1. STABILINI VISINONI LIMITED
2. REGISTRAR OF TITLES, LAGOS STATE
3. ATTORNEY GENERAL, LAGOS STATE
4. THE R.E.D. COMPANY LIMITED Respondent(s)
ONYEKACHI AJA OTISI, J.C.A. (Delivering the Leading Judgment): This appeal is against the ruling of the High Court of Lagos State in suit No LD/2278/2010, delivered on March 17, 2016 wherein the lower Court dismissed the application of the Appellant.
?The facts leading to this appeal are as follows: Sometime in December, 2009, the 1st Respondent stood as a guarantor in respect of a term loan facility granted to Roygate Properties Limited (RPL) by the Appellant. As part of its obligations under the guarantee, the 1st Respondent executed a Tripartite Legal Mortgage in favour of the Appellant in respect of the property lying and situate at No. 43A, Afribank Street, Victoria Island, Lagos. Following a Loan Purchase and Limited Service Agreement dated April 6, 2011 between the Asset Management Corporation of Nigeria (AMCON) and the Appellant, the Appellant assigned absolutely to AMCON all its rights, powers, titles, interests, benefits, receivables and proceeds arising from, relating to and/or connected with the said Term Loan Facility and the Tripartite Legal Mortgage which collaterised the said facility. The principal debtor, RPL and the 1st
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Respondent were notified of the assignment by notice dated June 15, 2011. In line with the terms of the assignment to AMCON, and the AMCON Act, AMCON wrote to RPL demanding the immediate payment of the outstanding sum of N13,476,897,098.80 due under the loan. Prior to the assignment of the loan to AMCON, the Appellant had commenced action at the Federal High Court, in Suit No: FHC/L/CS/1462/10 – Guaranty Trust Bank Plc v. Stabilini Visinoni Limited & Ors seeking recovery of the loan sum. The 1st Respondent and one of its directors filed an application dated January 31, 2012 praying the lower Court for an order striking out the suit filed by the Appellant on the ground that all the rights, powers and interests of the Appellant in the loan had been transferred/assigned to AMCON thereby depriving the Appellant of locus standi to maintain the action.
In a reserved ruling delivered on October 15, 2012, the lower Court granted the 1st Respondent’s motion and struck out the said suit.
?The 1st Respondent on its part had filed Suit No LD/2278/2010 against the Appellant, which it continued to prosecute. It was the case of the 1st Respondent
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that the 1st Respondent and the Appellant had understood and agreed that the Tripartite Mortgage Agreement was not to be registered as both parties were in the process of concluding alternative arrangements on the security for the transaction involving RPL. While these arrangements were being put in place, action was commenced by the Appellant which alleged that RPL had defaulted on repayment of the loan. The 1st Respondent alleged that the Appellant in bad faith fraudulently approached the 2nd Respondent, without notice to the 1st Respondent, and began and completed the process of perfecting and registering the said Tripartite Mortgage Agreement using a Land Form IC dated, executed and deposed to on September 1, 2010, which contained the forged signatures of a director and the secretary of the 1st Respondent; Dr. B. O. Babalakin, SAN and Mrs. Y. Orororo respectively. Upon these facts, the 1st Respondent instituted Suit No LD/2278/2010 against the Appellant challenging the sale/assignment of interest in the subject property by the Appellant to the 4th Respondent as well as the fraudulent perfection and/or registration of the Tripartite Mortgage
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agreement by the Appellant using the Land Form IC which contained the forged signatures of Dr. B. O. Babalakin, SAN and Mrs. Y. Orororo, being director and secretary of the 1st Respondent. The 1st Respondent sought the following reliefs:
i. A DECLARATION that the Deed of Legal Mortgage registered as Number 56/56/2031 at the Lands Registry office, Alausa, Ikeja in respect of the property known as No. 43A. Afribank Street, Victoria Island, Lagos is illegal, fraudulent, null and void.
ii. A DECLARATION that the purported sale by the 1st Defendant to the 4th Defendant is fraudulent, null and void.
iii. AN ORDER setting aside the Deed of Legal Mortgage registered as Number 56/56/2013 at the Lands Registry office, Alausa, Ikeja in respect of the property known as No. 43A Afribank Street, Victoria Island, Lagos.
iv. AN ORDER directing the 2nd Defendant to de-register the Deed of Legal Mortgage registered as Number 56/56/2013 at the Land Registry office, Alausa, Ikeja in respect of the property known as No. 43A, Afribank Street, Victoria Island, Lagos and/or remove it from its register.
v. AN ORDER setting aside the purported sale of the
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property known as No. 43A,Afribank Street, Victoria Island, Lagos by the 1st defendant to the 4th Defendant and restraining the 4th Defendant or any other person deriving title or authority from it from registering and/or perfecting or continuing with the registration and/or perfection of any interest or title to the Property.
vi. AN ORDER restraining the 2nd Defendant, its assigns, agents or officers or anyone deriving authority from it, from accepting for perfection and/or registration any title document connected with or arising from the transfer of title to anyone by the 1st Defendant in respect of the property known as No. 43A, Afribank Street, Victoria Island, Lagos and in particular any document or instrument purporting to transfer title to the said property by the 1st Defendant to the 4th Defendant.
vii. AN ORDER restraining the 1st and 4th Defendants or anyone deriving title or acting under their authority from taking and/or continuing any step(s) capable of enabling them to gain entry into, or to interrupt the quiet enjoyment of the occupants of the property known as No. 43A, Afribank Street, Victoria Island, Lagos.
?
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The Appellant filed an application dated October 5, 2015, pages 319 to 472 of the Record of Appeal, seeking an order striking out and/or dismissing the suit filed by the 1st Respondent for lack of jurisdiction.
The Appellant contended in the said application, inter alia, that having assigned its interests in the loan facility and the Tripartite Legal Mortgage to AMCON, the 1st Respondent was without locus to continue to maintain the suit before the lower Court against the Appellant. The attention of the lower Court was also drawn to the fact that the decision of the Federal High Court in Suit No. FHC/L/CS/1462/2010 constituted estoppel per rem judicatem in respect of the locus of the 1st Respondent to maintain the action before the lower Court against the Appellant, particularly when the fact of the mortgage over 43A Afribank Street was expressly in issue before the Federal High Court. The 1st Respondent filed a counter affidavit and written address in opposition to the Appellant’s said application. After hearing arguments of respective counsel in respect of the application, the lower Court in a considered ruling delivered on March 17, 2016 dismissed Appellant’s
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application and affirmed its jurisdiction to continue hearing the 1st Respondent’s action. Aggrieved by this ruling, the Appellant lodged this appeal by Notice of Appeal filed on 1/4/2016 and deemed on 7/12/2016 upon six grounds of appeal; pages 581 ? 587 of Vol. II of the Record of Appeal.
The Appellant and the 1st Respondent exchanged Briefs of Argument. The Appellant’s Brief, filed on 20/4/2016 but deemed properly filed and served on 7/12/2016 and the Reply Brief filed on 20/5/2016 but deemed on 7/12/2016 were adopted on 7/12/2016 by Olabode Olanipekun, Esq. with Bolarinwa Awujola, Esq., Ms. Faith Adarighofua, Ms. Alimah Yishawu and Yomi Adejuyigbe, Esq. The 1st Respondent’s Brief filed on 3/5/2016 but deemed properly filed and served on 7/12/2016, in which a Preliminary Objection was raised, was adopted by Oluseun Awonuga, Esq. with Miss E.M. Oliko and Miss B.T. Salau on 7/12/2016. The 2nd and 3rd Respondents, who were represented by Mrs. A.A. Popoola, and the 4th Respondent, who was represented by A. Aluko, Esq., filed no Briefs of Argument.
As is customary, the merits of the preliminary objection shall first be considered; Efet v INEC (2011) LPELR-8109(SC);
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First Bank of Nigeria Plc. v. T.S.A. Industries Ltd (2010) LPELR-1283(SC).
The 1st Respondent objected to the competence of the Appellant’s Notice of Appeal dated 1st April 2016, on the ground that leave of Court was not sought and obtained before the filing of same in accordance with the provisions of the Constitution of the Federal Republic of Nigeria (CFRN) 1999. It was contended that by a combined reading of Section 241 and Section 242(1) CFRN 1999 and Section 14 (1) of the Court of Appeal Act, appeals against interlocutory decisions of the lower Court mandatorily require the leave of the lower Court or of this Court to be first sought and obtained before filing the Notice of Appeal in so far as the grounds of appeal are not based on grounds of law alone. The 1st Respondent submitted that the decision of the lower Court on appeal was delivered in an interlocutory appeal against an interlocutory decision of the lower Court as same did not determine the 1st Respondent’s suit on the merit and the grounds of appeal are grounds of fact or at best of mixed law and facts, hence leave of the lower Court or of this Court ought to have been sought and
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obtained before filing same. No leave was sought for and obtained from either the lower Court or this Court by the Appellant before the Notice of Appeal was filed. The Appellant’s Notice of Appeal was for this reason incompetent, a nullity and liable to be struck out. Learned Counsel cited and relied, inter alia, on the case of Ogbechie & Ors. v. Onochie & Ors. (1986) 2 NWLR (Pt. 32) 484 at 491; Garuba & 8 Ors vs. Omokhodion & 13 Ors (2011) 6 NWLR 143 at 165.
In reply, learned Counsel for the Appellant relied on the application filed on 18/10/2016 and granted by this Court on 7/12/2016, praying inter alia for orders to regularize the Notice of Appeal. The Court had granted an order deeming the Notice of Appeal properly filed and served. The objection taken as to the competence of the Notice of Appeal after it was regularized was belated. Reliance was placed on Idris v Agumagu (2015) 13 NWLR (PT 1477) 441 at 477- 478; Agagu v Mimiko (2009) 7 NWLR (Pt. 1140) 342 at 385 – 386; Ikpeazu v. Otti (2015) 18 NWLR (PT 1490) 47 at 61. The Court was urged to dismiss the preliminary objection.
The right of appeal is constitutionally
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The right of appeal is constitutionally guaranteed. Section 241 (1) (a) and (b) of the 1999 Constitution, as amended, provide that:
(1) An appeal shall lie from decisions of the Federal High Court or a High Court to the Court of Appeal as of right in the following cases-
(a) final decisions in any civil or criminal proceedings before the Federal High Court or a High Court sitting at first instance;
(b) where the ground of appeal involves questions of law alone, decisions in any civil or criminal proceedings;
Section 242(1) provides:
(1) Subject to the provisions of Section 241 of this Constitution, an appeal shall lie from decisions of the Federal High Court or a High Court to the Court of Appeal with the leave of the Federal High Court or that High Court or the Court of Appeal.
By virtue of the provisions of Section 241(1)(a), an appellant’s right of appeal from the final decision of a trial Court sitting at first instance, lies as of right to this Court. Where the ground of appeal involves questions of law alone, as provided for under Section 241(1)(b) an Appellant’s appeal would also be as of right. Other appeals from the decision of the trial High Court shall
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be by leave of either the trial or appellate Court. This provision covers interlocutory decisions. It is well settled that leave of Court, where it is required, is a condition precedent to the exercise of the right of appeal. Therefore, failure to obtain leave where it is required renders any appeal filed incompetent as no jurisdiction can be conferred on the appellate Court; Mohammed v. Olawunmi (1990) 4 S.C. 40; Ekulo Farms Ltd v. UBN Plc (2006) 4 S.C. (PT.II) 1. However, if the decision of the lower Court is a final decision, there would be no requirement for leave of Court.
Learned Counsel for the Appellant had filed an application on 18/10/2016 in which it sought the following orders:
1. An Order granting extension of time within which the applicant may seek leave to appeal against the ruling of the lower Court delivered on 17th day of March, 2016 as per grounds 1,3,4,5 and 6 of its Notice of Appeal dated 1st April, 2016.
?2. An Order granting the applicant leave to appeal against the ruling of the lower Court delivered on 17th day of March, 2016 on grounds of mixed law and facts as per grounds
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1,3,4,5 and 6 of its Notice of Appeal dated 1st April, 2016.
3. An Order deeming the already filed and served Notice of Appeal dated 1st April, 2016 as properly filed and served.
4. And for such further or other orders as this Honourable Court may deem fit to make in the circumstances of this case.
?This application was heard and granted on 7/12/2016, without opposition from none of the respective learned Counsel for the 1st, 2nd, 3rd, and 4th Respondents. I find I am persuaded by the argument of learned Counsel for the Appellant. By the orders granted by this Court on 7/12/2016, the Notice of Appeal was regularized, with leave to appeal granted. The 1st Respondent had waived its right to raise the
Preliminary Objection.
In my considered opinion, it would also be important to deliberate on whether the decision of the lower Court was actually an interlocutory decision in the circumstance in which it was made. The difficulty in the classification of decisions into interlocutory or final have long engaged judicial attention. Judges have employed various tests to identify the true nature of a decision. One of such tests employed is that of the effect of the
12
order. An interlocutory order is one issued during
proceedings, but which does not terminally determine the rights of the parties. So, if an order does not terminally determine the rights of the parties and can be revisited or reversed by the Court, it is interlocutory. In Fadiora v. Gbadebo (1978) LPELR-1224(S.C.), (1978) ALL NLR 42, the Supreme Court, per Idigbe, JSC, cited with approval the learned authors of Spencer Bower & Turner on the Doctrine of Res Judicata (1969 Ed.) in Art 164, P. 34 as follows:
“A judicial decision is deemed to be final, when it leaves nothing to be judicially determined or ascertained thereafter, in order to render it effective and capable of execution, and is absolute, complete, and certain, and when it is not lawfully subject to subsequent decision, review or modification by the tribunal which pronounced it.”
Similarly, in Ifediora v. Ume (1988) LPELR-1434(SC), the Supreme Court, per Nnaemeka Agu, JSC said:
?”…the test as to whether a decision is final or interlocutory which has been preferred by authoritative decisions in this country has been consistently one which looks at the result, id est, which asks the question:
13
“does the judgment or order, as made, finally dispose of the rights of the parties?”
The noble Lord further said:
“On indisputable attribute of all final orders is that once made the judge making it becomes funtus officio, so that it can only be reversed on appeal. So, if a Court as in this case, before or during the course of the hearing of a case, orders something which he can review or reverse at any time, such order cannot be final.”
In the American case of S.L. T. Warehouse Co. v. Webb, 304 So. 2d 399, 401 (Fla Dist Ct. App. 1981), a final decision was defined in the following terms:
“(T)he test employed by the appellate Court to determine finality of an order, judgment or decree is whether the order in question constitutes an end to the judicial labor in the cause, and nothing further remains to be done by the Court to effectuate a termination of the cause as between the parties.”
In Gomez & Anor v. Cherubim and Seraphim Society & Ors. (2009) LPELR-1331 (SC), the Supreme Court, per Oguntade, JSC said:
“However, where the order made finally determines the rights of the parties, as to the particular
14
issues disputed, it is a final order even if it arises from an interlocutory application.”
A final decision is therefore an order which disposes of the entire controversy on the merits, leaving nothing but the enforcement of that which has been determined. A final decision can be made even from an interlocutory application, with respect to particular issues. The determining question to ask is whether the learned trial Judge who made the decision is empowered to review or revisit or reverse that decision to now reach a different conclusion over the matter? If the Court lacks the vires to review or revisit or reverse its decision on an issue, then its decision on the issue is a final decision, even if it arose from an interlocutory application.
In the case of the instant appeal, the conclusion of the learned trial Judge in respect of the application of the Appellant was that the case leading to this appeal, Suit No LD/2278/2010 was different in character and content from Suit No FHC/L/CS/1462/10 and as a result the 1st Respondent had the locus to maintain the suit. Was there any other part of the application that remained
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for adjudication or could the learned trial Judge subsequently review or reverse or revisit his decision? The unequivocal answer to this query would be in the negative. Therefore, in respect of the identified issues submitted to the trial Judge for adjudication by the application of the Appellant, his decision thereon was final. The Appellant consequently had a right of appeal, guaranteed by Section 241(1) (a) of the 1999 Constitution, as amended.
Notwithstanding, the point had earlier been made that the objection of the 1st Respondent was belated. The Preliminary Objection is accordingly hereby dismissed.
The Appellant formulated the following issues for determination:
1. Having regard to the pleadings of parties and findings of the lower Court on the assignment of the subject loan facility to Asset Management Corporation of Nigeria (AMCON) vis–vis Section 34 of the AMCON Act, whether the lower Court was not wrong when it dismissed the Appellant’s application dated 5th October, 2015 and assumed jurisdiction to continue to entertain the claim of the 1st Respondent. –
Grounds 1, 2 and 6 of the Notice of Appeal.
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2. Having regard to the lower Court’s failure to consider the Appellant’s further affidavit of 19th January, 2016, and the entire circumstances of the case, vis-a-vis the Respondent’s statement of claim in determining the Appellant’s application dated 5th October, 20I5, whether the lower Court did not fall into error and breach the Appellant’s right to fair hearing when it held that the issues/facts in and the decision of the Federal High Court in SUIT NO: FHC/L/CS/1462/10 – GUARANTY TRUST BANK PLC v. STABILINI VISINONI LTD & ORS are not the same with those before it.
?Grounds 3, 4, 5 of the Notice of Appeal.
For the 1st Respondent, similar issues for determination were framed this way:
1. Having regard to the facts of the suit at the lower Court, whether the lower Court rightly dismissed the Appellant’s application dated 5th October 2015 and assumed jurisdiction to continue to entertain the claim of the 1st Respondent?
[Distilled from Grounds 1, 2, 3 and 4 of the Notice of Appeal]
2. Whether the lower Court in determining the application dated 5th October 2015, breached the Appellant’s right to fair hearing?
[Distilled from Grounds 5 and 6 of the
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Notice of Appeal]
These issues shall now be considered.
Issue 1
The crux of the Appellant’s objection at the lower Court, as can be gleaned from the application in issue, was that, in view of the pleadings before the Court and in particular, the assignment of the Appellant’s interests in the Tripartite Legal Mortgage executed by the 1st Respondent, which forms the plank of the 1st Respondent’s action, the lower Court was divested of jurisdiction to countenance the 1st Respondent’s action against the Appellant. This issue was argued along three areas:
(i) The claim of the 1st Respondent, consequent upon the assignment, failed to disclose any reasonable cause of action against the Appellant.
(ii) The 1st Respondent lacks the locus standi to continue maintaining the action at the lower Court against the Appellant.
(iii) The decision of the Federal High Court in Suit No: FHC/L/CS/1462/10 constitutes res judicata against the 1st Respondent’s locus standi to maintain the suit before the lower Court against the Appellant.
It was contended that the action filed by the 1st Respondent before the lower Court was not
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maintainable against the Appellant and ought to have been struck out and/or dismissed by the lower Court. Every action brought before the Court must disclose a reasonable cause of action against the parties sued by the claimant. Any action that does not disclose any reasonable cause of action against any party is liable to be dismissed by the Court. On what would constitute a reasonable cause of action, learned Counsel cited and relied on the case of Sehindemi v. Governor of Lagos State (2006) 10 NWLR (Pt. 957) 1 at 37 – 38. The claim of the 1st Respondent was founded on the Tripartite Mortgage Agreement executed by the 1st Respondent. Its complaint lay in the execution and perfection of the said tripartite legal mortgage. In challenging the jurisdiction of the lower Court to entertain the 1st Respondent’s action, the Appellant drew the attention of the Court to the fact that it had, to the knowledge of the 1st Respondent, absolutely assigned its rights, interests, claim and obligations under the Term Loan facility as well as the Tripartite Mortgage Agreement for which the loan facility was collaterised to AMCOM and that the claims of the 1st
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Respondent cannot granted against the Appellant. It was submitted that the absolute assignment of the Appellant’s right in the said Tripartite Mortgage Agreement go to further show that the 1st Respondent no longer had any reasonable cause of action against the Appellant. In all transactions involving an absolute assignment of a chose in action, the legal rights and liabilities in the legal object in action is completely vested in the assignee. An example of a chose in action is a contractual right such as a debt. The Appellant, having assigned its legal rights and obligations on the Tripartite Mortgage Agreement, cannot be held liable in any action commenced by either the debtor or guarantor in relation to same. Reliance was placed on the provisions of Section 34 of the AMCON Act and on the decision of this Court in Ecobank v Navy Commodore Harry Ngonadi (Unreported) CA/L/1133/2014 delivered on March 30, 2016. The implication of the assignment of the mortgage agreement and all the rights, powers and interests accruable thereon to AMCON was that the 1st Respondent had no locus standi to continue to maintain the action against the Appellant, impacting on
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the juridiction of the Court to entertain the matter at all. In the absence of jurisdiction, the matter ought to be terminated.
Reliance was placed inter alia on Oloriode v Oyebi (1984) 5 SC 1.
For the 1st Respondent, it was submitted that the challenge to the competence of the suit at the lower Court and arguments in support of the contention were misplaced and lack any legal basis. A claimant who conceives that he has a cause of action against a particular defendant is entitled to pursue his claim or remedy against that defendant only and cannot be compelled to proceed against other persons whom he has no desire and or intention to sue; relying on Mc Cheane vs. Gyles No 2 (1902) I Ch. D 911 at 917 which was cited with approval in Dollfus Miea et Compagnie SA vs. Bank of England (1950) 2 All ER 605 at 608 per Wynn Parry J. The term locus standi refers to the legal capacity to institute an action in a Court of law; relying on Ugwunze v Adeleke [2008] 2 NWLR (Pt. 1070) 148 at 171.
One of the parameters by which a claimant’s locus standi is ascertained in a matter is a determination of whether the subject matter of the suit touches on the
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civil rights of the claimant; relying on Usman Jibrin Wowo & Anor v. Isa Aliyu Ndako & Ors (2008) 1 SCLR (Pt 1) 201.
?A perusal of the 1st Respondent’s writ of summons and statement of claim would show that the grievance of the 1st Respondent was that the Appellant forged the signatures of a director and the secretary of the 1st Respondent i.e. – Dr. B. O. Babalakin, SAN and Mrs. Y. Orororo respectively on the Land Form IC dated, executed and deposed to on September 1, 2010 and the Appellant in bad faith surreptitiously and fraudulently approached the 2nd Respondent without notice to the 1st Respondent, and began and completed the process of perfecting and or registering the Tripartite Mortgage Agreement using the said Land Form IC, hence the filing of this suit. A cursory look at the relief sought in the action before the lower Court will reveal that the 1st Respondent had sufficient interest to which it seeks to ventilate its grievance against the Appellant. It was further submitted that a consideration of the issues in Suit No. FHC/L/CS/1462/2010 would reveal that the said action was solely instituted for the recovery of the Term Loan Facility which was assigned for value by the
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Applicant to AMCON under the Loan Purchase Agreement. A reading of the judgment of the Federal High Court will also reveal that what the Court decided was that the Appellant had lost its locus to maintain Suit No.FHC/L/CS/1462/2010 against the 1st Respondent. It was submitted that the Applicant’s contention that the 1st Respondent’s locus standi to maintain the instant suit has been extinguished or affected by the Loan Purchase Agreement between the Applicant and AMCON, is extremely outlandish and has no legal basis whatsoever. The 1st Respondent further submitted that the issues in Suit No. FHC/L/CS/1462/2010 and the action before the lower Court are completely different as this suit has nothing to do with the alleged indebtedness of RPL. The basis of the action before the lower Court is that the Appellant forged the signatures of a director and secretary of the 1st Respondent and also fraudulently registered the Tripartite Mortgage Agreement in respect of the subject property; which is not the same or similar to the issue decided by the Federal High Court in Suit No. FHC/L/CS/1462/2010.
?It was submitted that the lower Court was right to have
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held that what was before it was not a loan but rather an allegation of forgery in the perfection and registration of the subject property and in that regard, the 1st Respondent is not a busy body as far as the action before it was concerned. The Court was urged to uphold the finding made by the lower Court.
On the contention by the Appellant that the 1st Respondent’s action before the lower Court was caught by the doctrine of issue estoppel, it was submitted that issue estoppel operates to prevent a party from re-litigating the same issue which has been raised and distinctly resolved against him either in the same or previous proceedings involving the same parties; relying on Ladega & Ors. Vs. Durosimi & Ors. (1978) N. S. C. C. 175 at 179; Oyerogba vs. Olaopa (1998) 13 NWLR (pt 583). The conditions for the operation of issue estoppel in a case which are: that the parties must be the same, the issues must be the same and the issue must have been resolved in the previous case in favour of one of the parties, do not exist in this case. The Court was urged disregard the arguments of the Appellant in this regard.
The words cause of action simply
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mean a factual situation, the existence of which entitles one person to obtain a remedy against another person. A cause of action consists of every fact that would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment. In defining what may constitute a cause of action, the Supreme Court per Karibi-Whyte, JSC in Bello v. Attorney General, Oyo State (1986) 5 NWLR (Pt 45) 828 at 876 said
“I think a cause of action is constituted by the bundle or aggregate of facts which the law will recognize as giving the Plaintiff a substantive right to make the claim against the relief or remedy being sought. Thus the factual situation on which the Plaintiff relies to support his claim must be recognized by the law as giving rise to a substantive right capable of being claimed or enforced against the Defendant. In other words the factual situation relied upon must constitute the essential ingredients of an enforceable right or claim.”
See also: Sehindemi v Governor of Lagos State (supra).
The cause of action must be revealed in the pleadings of the claimant. The Court would confine itself only to
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the averments in the Statement of Claim in the assessment of whether or not a claimant has a reasonable cause of action; Shell B.P. Petroleum Development Co. of Nigeria Ltd & Ors. v. Onasanya (1976) 6 S.C 89, 94; Fumudoh & Anor v. Aboro & Anor (1991) 9 NWLR (PT 214) 210 at 231 – 232.
The 1st Respondent in its pleadings acknowledged that there was a banking transaction between RPL and the Appellant wherein a loan was granted to RPL that required it to stand as surety/guarantor. It executed a Tripartite Mortgage Agreement in furtherance of this role. It also pleaded that the parties had an understanding and agreed that the Tripartite Mortgage Agreement was not to be registered as both parties were in the process of concluding alternative arrangements on the security for the transaction involving RPL. Unfortunately, while these arrangements were ongoing, the Appellant alleged RPL defaulted on the transaction and commenced action in Court. The 1st Respondent further averred that the Appellant in bad faith and surreptitiously and without notice to it, commenced and completed the process of perfecting and registering the Tripartite Mortgage Agreement. This
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was achieved by the fraudulent forgery of the signatures of its director and secretary on a Land Form IC purportedly dated, executed and deposed to on September 1, 2010. See the Statement of Claim at pages 3 – 8 of the Record of Appeal, Vol. 1, particularly paragraphs 7 – 14 thereof.
The reliefs sought declarations and a setting aside of the Tripartite Mortgage Agreement as having been procured by fraud. The facts revealed the cause of action upon which the 1st Respondent brought its claims. It is important to note that the loan granted to the RPL for which the 1st Respondent stood as guarantor was not in issue and was not denied. What was being challenged was the authenticity of the Tripartite Mortgage Agreement which grounded the loan.
?The Appellant contended that by virtue of the Loan Purchase Agreement by which the Appellant sold the loan in issue to AMCON, the 1st Respondent no longer had any cause of action against it. A copy of the Loan Purchase Agreement was reproduced at pages 209 -233 of the Record of Appeal Vol. 1. The said Agreement states in paragraph 18.3, page 231 of the Record of Appeal Vol 1:
“It is the intention of the parties that
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the Corporation is purchasing and the Bank is selling, the Loans and not a debt instrument of the Bank or another security. Accordingly, the parties hereto each intend to treat the transaction as a sale by the Bank and a purchase by the Corporation of the Loans.”
In paragraph 4.2 of the said Agreement, page 216 of the Record of Appeal, Vol 1. the Appellant gave an undertaking to AMCON that
“…the information contained in the Loan Schedule has been provided to the Corporation with all due diligence and in utmost good faith by the Bank.”
The Appellant had by a Notice of Assignment, page 325 of the Record of Appeal, Vol 11, notified RPL of the assignment to AMCON:
“…absolutely all its rights, title, interest, benefits, receivables and proceeds arising from and in connection with the Term Loan facility…all security interests pertaining to the Contract (the Collateral)…and all rights, title, interest, benefits, receivables and proceeds arising from and in connection with the Mortgage Debenture…; Tripartite Legal Mortgage over property located at 43A, Afribank Street, Victoria Island, Lagos…pledged under the Term Loan facility,
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(the Collateral Document) connected therewith but excluding for the avoidance of doubt any obligation or liability of the Bank under the Loan Agreement or the Collateral Document.
Notwithstanding such assignment, the Bank will remain liable to perform all its obligations under the contract and the Corporation shall have no liability whatsoever in respect thereof.”
(Emphasis mine).
The terms of the Loan Purchase Agreement as well as the Notice of Assignment make it clear that the Appellant took responsibility for the veracity of the documentation presented to AMCON. If there was any liability under the Loan Agreement, the Appellant took responsibility. If the veracity of the said documentation, which had been undertaken to be genuine by the Appellant was being challenged, it is the Appellant which can answer to the challenge. AMCON would not be the proper party to be sued. The terms of the Loan Purchase Agreement as well the Notice of Assignment make clear that AMCON cannot answer to any issues raised in challenge to the veracity of the collateral documents. The 1st Respondent therefore had no cause of action against AMCON but against
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the Appellant. The provisions of Section 34 of the AMCON Act were not contravened. What is in issue here is an allegation of fraud regarding the documentation presented to AMCON.
The term locus standi, simply put, denotes the legal capacity to institute proceedings in a tribunal or Court of law. It is the right of appearance in a Court of justice to litigate an issue; to either to establish a right or to defend that right against any injury actual or threatened. The Supreme Court in Dada vs. Ogunsanya (1992) 3 NWLR (Pt.232) 754 held:
“It is settled law that locus standi is the legal capacity to institute an action in a Court of law – Thomas v Olufosoye (1986) 1 NWLR (pt.l8) 669, and if a person had no legal standing to institute an action, the Court will have no jurisdiction to entertain his claims ? See Madukolu v Nkemdilim (1962) I All NLR 587 at 595, (1962) 2 SCNLR 341.”
See also: Owodunni v. Regd. Trustees of CCC (2000) 10 NWLR (Pt. 675) 325, (2000) 6 S.C. (PART III) 60.
?Locus standi is always a threshold issue because when the locus standi of the plaintiff is attacked, it is a challenge to the jurisdiction of the
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Court. If a claimant lacks locus standi to institute the action ab initio then the Court is itself bereft of jurisdiction to entertain the suit at all; NDIC VS CBN (2002) 4 MJSC 66; Arjay VS AMSL (2003) 5 MJSC 1; Danjuma vs. Kanoma (2004) 44 WRN 135 at 157. The main test or major determinant of locus standi is whether the claimant who has initiated the proceedings has sufficient interest in the subject matter of the suit. The claimant is said to have locus standi, if he has shown sufficient interest in the action and that his civil rights and obligations, have been or are in danger of being infringed. The onus of proof is on the party. The test of sufficient interest in the subject matter of the suit by the claimant is determined by a close examination of the statement of claim. If the interest of the claimant is satisfactorily established, then he is entitled to be heard; Inakoju vs. Adeleke (2007) 4 NWLR (PT 1025) 427 at 601 – 602; Amadi v Essien (1994) 7 NWLR (PT 354) 91; Adesanya v. The President of the Federal Republic of Nigeria (1981) 5 5.C.112 at 151 and 152.
?There are two situations that need to be made clear in
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this appeal.Suit No.FHC/L/CS/1462/2010 was terminated upon the lower Court finding that the Appellant herein, who was the claimant therein, had no locus to continue to maintain the action therein in its own name having assigned its interests in the loan to AMCON and AMCON having made demands for recovery of the said loan. The action in FHC/L/CS/1462/2010 sought to recover the loan which had already been assigned to AMCON. Certainly, in that circumstance, the Appellant no longer had the locus to maintain the action. This decision of the lower Court is subsisting.
Suit No LD/2278/2010, leading to this appeal, was an action instituted by the 1st Respondent challenging the perfection and registration of the Tripartite Mortgage Agreement by the Appellant on the grounds that the signatures of a director and secretary of the 1st Respondent were forged thereon and that the Appellant had also fraudulently registered the Tripartite Mortgage Agreement in respect of the collaterised property. Suit No LD/2278/2010 did not challenge the validity of the loan granted RPL or the assignment of the loan to AMCON by the Loan and Purchase Agreement. The fact
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that the hearing of the matter was adjourned on occasions on the application of the 1st Respondent’s Counsel for settlement with AMCON is irrelevant herein. Suit No LD/2278/2010 did not challenge the authenticity of the loan itself. On the contrary, Suit No LD/2278/2010 challenged the authenticity of the documentation grounding the loan.
The 1st Respondent was the party which alleged that the signatures of its principal officers were fraudulently forged on the documentation grounding the Tripartite Legal Mortgage as well as its subsequent registration before presentation to AMCON. The 1st Respondent is the party that would have its rights and obligations affected or infringed by the alleged fraudulent act. The 1st Respondent therefore had sufficient locus standi to maintain Suit No LD/2278/2010. The assignment of the loan to AMCON did not affect its locus to maintain action alleging a fraud in the documentation presented to AMCON. The said allegation did not affect the existence of the loan sold to AMCON. which was not denied by the 1st Respondent.
The pre-conditions to a valid plea of estoppel inter partes or per rem judicatam are: (1) the same question must
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be for decision in both proceedings (which means that the question for decision in the current suit must have been decided in the earlier proceeding); (2) the decision relied upon to support the plea of estoppel must be final; (3) the parties must be the same (which means that parties involved in both proceedings must be the same, per se or by their privies);Ito v. Ekpe (2000) 3 NWLR (Pt.650) 678; Ajiboye v. Ishola (2006) 11 MJSC 192. Once these ingredients are established, the previous judgment estops a claimant from making any claim contrary to the decision in the previous case; Ezeanya v. Okeke (1995) NWLR (Pt.388) 142; Dokubo v. Omoni (1999) 8 NWLR (Pt. 616) 647; Nkanu v. Onun (1977) 5 S.C 11.
The settled issues that gave rise to the respective decisions in Suit No. FHC/L/CS/1462/2010 and in Suit No LD/2278/2010, which led to this appeal, have been given above. The issues were by no means similar. It is correct that on ground in both matters was the Tripartite Legal Mortgage. But, while in FHC/L/CS/1462/2010 it was part of the documentation presented to AMCON in the sale of the loan, which was not in issue, in LD/2278/2010 the veracity of the signatures on part of
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the documentation used to register the Tripartite Legal Mortgage was being challenged as having been fraudulently forged and registered. These are different issues. The existence of the loan covered by the Tripartite Legal Mortgage was not in issue in both suits. But the issue of an alleged fraudulent forgery and registration separates the character of both suits.
The decision reached in both suits were not the same. The Appellant lost its locus to enforce the loan agreement with RPL in Suit No FHC/L/CS/1462/2010 because it had sold the loan to AMCON which in turn had made demand for repayment of the loan from RPL. The Appellant therefore lost its locus to maintain the action. This decision did not affect the live issues in LD/2278/2010, in which the veracity of the signatures in and registration of the Tripartite Legal Mortgage were challenged.
The parties were also not the same in both suits. The Appellant and the 1st Respondent were parties in both suits. But that is where the similarity ends. The 2nd, 3rd or 4th Respondents in Suit No LD/2278/2010 leading to the instant appeal, were not parties to Suit No FHC/L/CS/1462/2010 and they were
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not directly concerned with the extant issues therein. The 1st Respondent cannot accurately or otherwise be described as privy or agent or representative of the 2nd, 3rd or 4th Respondents herein. The parties were different.
There were therefore no prevailing circumstances to support a plea of issue estoppel. The arguments of the Appellant in this regard are non-sequitur.Issue 1 is thus resolved against the Appellant.
Issue 2
Fair hearing according to our law envisages that both parties to a case are given opportunity to present their respective cases without let or hindrance from the beginning to the end. Basic attributes of fair hearing include that: the Court shall hear both sides in all material issues in the case before reaching a decision which may be prejudicial to any party in the case, each party has a right to be heard at every material stage of the proceedings; and having regard to all circumstances, in every material decision in the case, justice must not only be done but must manifestly and undoubtedly be seen to have been done; Baba v. Nigerian Civil Aviation (1991) 7 SCNJ 1; Kotoye v. Central Bank of Nigeria (1989)
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I NWLR (PT.98) 419; Agbahomovo v. Eduyegbe (1999) 3 NWLR (PT 594) 170. Fair hearing lies in the procedure followed in the determination of the case, and not in the correctness of the decision; Victino Fixed Odds Ltd v Ojo (2010) 8 NWLR (PT 1197) 486. The burden is on the party alleging breach of fair hearing in a case to prove the breach; and he must do so in the light of the facts of the case. Only the facts of the case will show non-compliance with the principle of fair hearing; Maikyo v Itodo (2007) 5 MJSC 60; Bill Construction Ltd v Imani Ltd (2007) 3 MJSC 217.
The facts of the instant appeal reveal that the Appellant was given adequate opportunity to present its case and was heard on all issues raised. The fact that the conclusion reached by the learned trial Judge a differed from the expectation of the Appellant did not amount to a lack of fair hearing. Issue 2 is resolved against the Appellant.
?I see no merit in this appeal. The Issues distilled for determination in this appeal have all been resolved against the Appellant. The appeal accordingly fails and is hereby dismissed. The ruling of the High Court of
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Lagos State in Suit No:LD/2278/2010, delivered on March 17, 2016 is hereby affirmed.
The Appellant shall pay costs of N50, 000.00 in favour of the 1st Respondent.
JUMMAI HANNATU SANKEY, J.C.A.: I had the privilege to read in draft the lead Judgment just delivered by my learned brother, Otisi, JCA.
My learned brother has exhaustively dealt with all the issues raised in the Appeal. I am in agreement with her reasoning and conclusions reached.
I also dismiss the Appeal and abide by the orders made therein.
JOSEPH EYO EKANEM, J.C.A.: I had the privilege of reading before now the judgment which has just been delivered by my learned brother, OTISI, JCA. I agree with reasoning and conclusion therein which I adopt as mine. I also dismiss the appeal for being unmeritorious.
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Appearances:
Olabode Olanipekun, Esq. with him, Bolarinwa Awujola, Esq., Ms. Faith Adarighofua, Ms. Alimah Yishawu and Yomi Adejuyigbe, Esq.For Appellant(s)
Oluseun Awonuga, Esq. with him, Miss E.M. Oliko and Miss B.T. Salau for the 1st Respondent.
Mrs. A.A. Popoola for 2nd and 3rd Respondents.
A. Aluko, Esq. for 4th RespondentFor Respondent(s)
Appearances
Olabode Olanipekun, Esq. with him, Bolarinwa Awujola, Esq., Ms. Faith Adarighofua, Ms. Alimah Yishawu and Yomi Adejuyigbe, Esq.For Appellant
AND
Oluseun Awonuga, Esq. with him, Miss E.M. Oliko and Miss B.T. Salau for the 1st Respondent.
Mrs. A.A. Popoola for 2nd and 3rd Respondents.
A. Aluko, Esq. for 4th RespondentFor Respondent
