IDEAL FINANCE AND INVESTMENT COMPANY LIMITED & ANOR v. FINANCIAL OPPORTUNITY CENTRE LIMITED & ORS
(2015)LCN/7857(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 5th day of May, 2015
CA/L/52/2001
RATIO
PRACTICE AND PROCEDURE: AUCTION; PROPER NOTICE REQUIRED BEFORE A VALID AUCTION CAN BE HELD
To my mind, the challenge is whether there was proper notice? The Supreme Court in the case of TAIWO V ADEGBORO (2011) LPELR 3133 (SC) in considering the relevancy of notice held that:
“It is clear that before an auction can be held to be valid there must be 7 days’ Notice before the auction is held.”
The Notice pasted on the 25/10/1995 remained valid and satisfies the requirement of Section 19(1) of the Auction Law of Lagos State. The essence of notice has been held not to be to the benefit or protection of the judgment debtor but in order to make the sale one conducted in good faith, see OKONKWO v. CCB (NIG) PLC (2003) 8 NWLR (Pt.822) 347 at 386 which held as follows:”It is not a notice intended to be given to the mortgagor, it is to ensure that a true public auction, where everyone interested in the property may have the opportunity to bid for it, is conducted for a fair deal, devoid of unconscionable bargain though connivance or collusion.
This is therefore not a notice which can be waived by the mortgagor. Actually, it does not lie with him to do so as it is not meant for him.” per. YARGATA BYENCHIT NIMPAR, J.C.A.
THE MEANING OF WORD: AUCTION; THE MEANING OF AUCTION
Auction is defined as: “A mann Ger of seeking or letting property by bids at a place open to the general public, usually to the highest bidder by public competition. The process which the public are asked to pay are the highest which those who bid can be tempted to offer by the skill and fact of the auctioneer under excitement of open competition.” See OKONKWO v C.C.B (NIG) (2003) 8 NWLR (Pt 822) 352. This process was duly conducted in this case. per. YARGATA BYENCHIT NIMPAR, J.C.A.
PRACTICE AND PROCEDURE: IRREGULARITY; THE CONDITIONS FOR IRREGULARITY TO HAVE EFFECT
On lack of denial by the 3rd Respondent, I agree that facts not denied are deemed admitted as decided in the case of ODOGWU V. ODOGWU (1992) 7 NWLR (Pt 253) 344 at 347. The fact also remains that facts admitted must satisfy legal requirements. The defect comes when the facts though admitted have not satisfied the legal requirements. As the case is here, the facts whether deemed admitted or established by the appellants have not satisfied the law. It falls short of what is required to set aside the auction sale. For irregularity to have effect it must cause irreparable injury to the claimant. It is a double edged sword. The two must go together. The two conditions are: (i) Material irregularity (ii) Substantial injury per. YARGATA BYENCHIT NIMPAR, J.C.A.
PRACTICE AND PROCEDURE: DUTY OF PARTIES; THE DUTY OF A PARTY TO PLEAD ADEQUATELY AND PROVE WHAT HE ALLEGES AND THE DEFINITION OF COLLUSION
Like all criminal allegations in civil suits, the appellants are expected to plead adequately, supply particulars and prove same beyond reasonable doubt. The apex court held as follows: “It is also settled that a party who intends to prove charges of fraud or charges of criminal malversation or felony must do so beyond reasonable doubt. And that before he can be allowed to prove them, he must have set them down specifically in his pleadings.”
See AKPUNONU V. BEAKART OVERSEAS (1995) NWLR (Pt.393) 46.This was not done. It is not enough to allege, a party is duty bound to also prove. Was there collusion? Collusion is defined by Black’s Law Dictionary 9th edition as follows:
“An Agreement to defraud another or to do or obtain something forbidden by law.” per. YARGATA BYENCHIT NIMPAR, J.C.A.
JUSTICES
AMINA ADAMU AUGIE Justice of The Court of Appeal of Nigeria
YARGATA BYENCHIT NIMPAR Justice of The Court of Appeal of Nigeria
JAMILU YAMMAMA TUKUR Justice of The Court of Appeal of Nigeria
Between
1. IDEAL FINANCE AND INVESTMENT CO. LIMITED
2. OTUNBA ADEBAYO A. OSHIYOYE Appellant(s)
AND
1. FINANCIAL OPPORTUNITY CENTRE LIMITED
2. PRINCE OLUMUYIWA ADEWUNMI ASHAYE
3. DEPUTY SHERIFF, HIGH COURT OF LAGOS. Respondent(s)
YARGATA BYENCHIT NIMPAR, J.C.A. (Delivering the Leading Judgment): This appeal is against the ruling of the Lagos State High Court delivered on the 2nd day of November, 2000 by HON. JUSTICE MONI FAFIADE (MRS) wherein the appellants’ application to set aside sale of the property situate at No. 16, Abiola Street, Alapere Ketu, Lagos and for which possession had been given to the 2nd Respondent. The appellant dissatisfied with the said ruling filed an Amended Notice of Appeal dated 23rd June, 2003 filed on the 24/6/2003 setting out 4 grounds of appeal.
FACTS:
The brief facts of the case are that the Appellants were judgment debtors/applicants at the Lower Court. The 1st Respondent was Plaintiff. The 1st Appellant applied for a loan from the 1st Respondent while the appellants gave corporate and personal guarantee for N1,000,000.00 (One Million Naira) at 10.5% per month interest for 90 (Ninety) days to the 1st Respondent.
Appellant’s effort at repayment issued Eko International Bank Plc cheque which failed, the cheque was dishonoured. The 1st Respondent took out a writ of summons against the appellants which was contested and subsequently withdrawn. Thereafter the 1st Respondent (Plaintiff) filed a summons under Order 10 Rules 1 & 2 of the Lagos State High Court Rules 1972 and judgment was entered on the 24/2/1994. The appellants applied for instalmental payment and stay of execution by way of motions which were struck out for want of diligent prosecution. The 1st Respondent thereafter applied for a writ of fifa against the judgment debtors and same was executed and moveable items attached were sold by public auction early October, 1994. The sum of N42,292.00 (Forty Two Thousand, Two Hundred and Ninety Two Naira) Only was realized.
An attempt to relist the appellants’ motion for installment payments was also struck out. Then the Respondent as judgment creditor caused a writ of fifa to be issued against the immovable property of the 2nd Appellant within the court’s jurisdiction at No. 16 Abiola Street, Alapere, Ketu. Further efforts at repaying the debt through the offer of some plots of land at Iba was rejected. The Appellants later applied to set aside the writ of fifa issued against the 2nd appellanf/judgment debtor’s immovable property at 16 Abiola Street, Alapere, Ketu on the ground that there was no valid notice of the auction.
The Public Notice in question is dated 27/9/95 for auction on 25/10/95 at 11.30am but the sale finally took place on 23/10/97 after another Public Notice for the sale was pasted same day and auction sale conducted at 1.30pm. An application to set aside the sale was made on the 28/10/97 while the Chief Judge of Lagos State issued the Certificate of purchase in favour of the 2nd respondent on the 24/4/1998. The application to set aside the auction was refused thus this appeal. The court granted leave to hear appeal on Appellants’ and 2nd Respondent’s briefs only.
The Appellants brief of Arguments dated 2nd May, 2006 was filed on same day and a reply on points of law filed on the 17th January, 2007 and deemed filed on the 5/2/2015. The 2nd Respondent’s brief dated 3/10/06 filed on 26/10/06 was deemed filed on the 9/11/10. The 1st and 3rd Respondent did not file any brief.
The appellant formulated 4 issues for determination as follows:
2.01 1. Whether the Public Auction sale of the properties at 16, Abiola Street, Alapere Ketu, Lagos State was on the Public Notice posted on the property in October 1995 or the notice issued and posted in October 1997.
2. Whether part payment of N300,000.00 (see page 81 records of 13th March, 1997) in 1997 was an acceptance of installment payment of the judgment debt.
3. Whether the Deputy Sheriff whose material irregularity in the conduct of the sale of the properties on 23/10/97 refusal to deny the allegations is an admission of the allegations against him. If the answer is in the affirmative whether the sale ought to be set aside.
4. If the Public Auction sale was found to be on the Public Notice posted in October 1997, whether there was material irregularity in the conduct of the sale which occasioned injury to the 2nd appellant.
The 2nd Respondent also formulated 4 issues for determination namely:
1. Whether the sale of property carried out on 23rd October, 1997 was properly done in accordance with the relevant law governing Public Auction in force?
2. Whether part payment of the judgment debt vitiates auction done on 23rd October, 1997 when there was no subsisting agreement between the parties or a court order to that effect for liquidation of the judgment debt by instalmental payment?
3. Whether the receipt of part payment by a judgment creditor after pasting of Public Notice on the premises to sell amounts to withdrawal of the Public Notice?
4. Under what circumstances will the Deputy Sheriff become a necessary party as would be required to the counter affidavit after an auction sale had been carried out pursuant to his official duty and it would be proper for the court to declare the sale as irregular?
There are a total of 8 issues formulated by both sides and that is unwieldy. The issues are basically the same though constructed differently. The issues formulated by the 2nd Respondent are succinct and better couched so they shall be adopted as issues for determination in this appeal, all taken together to avoid repetition.
Proffering arguments on the issues for determination, the appellants submitted under issue one and two that the Lower Court relied on the fact that the earlier notice issued on 25th October, 1995 for auction sale was not withdrawn and therefore there was no need to issue a fresh notice of sale, this the appellants contended did not take into account facts deposed to in the supporting affidavit by the applicants at the Lower Court. That the earlier notice was for sale on the 25/10/95 at 11.30am and thereafter the sum of N300,000.00 was paid which was to influence the withdrawal of the auction Notice. Furthermore, that the auction Notice of 23rd October, 1997 is a new notice and not the one posted in 1995 and therefore it should have given 7 day’s Notice before the sale. The appellants contended that the withdrawal of the auction notice was by conduct and relied on JOHN KHALIL KHANAM TRADING CO. v. J. T. CHAMRAI & CO LTD (1954) NWLR 51 to submit that the agreement for instalmental payment and actual payment of N300,000.00 paved way for the withdrawal of the 1995 public notice and thus its replacement by the notice of 23rd October, 1997 and consequently the Respondent is estopped by conduct. They relied on S. NASSAU & SONS (NIG) LTD v. LAGOS EXECUTIVE DEVELOPMENT BOARD (1959) 4 F.S.C. 242 (2) and CAROLINE MORAYO v. OKIADE & ORS (1942) 8 WACA 46 to argue that the trial Judge was wrong to find that the Notice of 1995 subsisted for the sale in 1997.
The appellant questioned the Lower Court’s appreciation of the facts in this case as contrasted with those in the case of AKPUNONU V. BEAKERT OVERSEAS & OTHERS (1995) 5 NWLR 393 where only one Notice was posted. They submitted that the auction was pursuant to the 1997 Notice not the one posted in October 1995 and therefore the ruling occasioned a miscarriage of justice.
ISSUE THREE:
The appellant under this issue submitted that the auction must comply with the Auction Law, Laws of Lagos State 1994, Cap 173 and the Sheriffs and Civil Process Act and that any irregularity should invalidate the said auction. That the auction sale of 23rd October, 1997 failed to observe statutory regulations and relied on AKPUNONU V BEAKERT OVERSEAS (1995) NWLR (Pt 393) at 46, on the effect of notice and advertisement on a right of sale.
Furthermore, the appellants argued that Section 19 (1) of Auction Law, Lagos State 1994 Cap 173 was not complied with and relied on OMIDIJI v. FEDERAL MORTGAGE BANK (2002) FWLR (Pt 103) 393 at 398. And that 7 day’s Notice is a compulsory requirement citing AMADI V. NNPC (2000) 6 SCNJ 1 at 4 and OBA JACOB OYEDIPO v. CHIEF J. O. OYINLOYE (1987) 2 SCNJ 53 at 55 on the meaning of the word “shall”. Appellants submitted that the 3rd Respondent did not deny depositions in the affidavit and the facts should be admitted and taken as established; relied on ODOGWU v ODOGWU (1992) 7 NWLR (Pt.253) at 344.
Another vitiating element as contended by the appellants is that there was no publication before the sale, citing OMIDIJI V. FEDERAL MORTGAGE BANK (SUPRA). Appellant urged the court to find for appellants under this issue.
ISSUE FOUR:
Under this issue the appellants contended that advertisement is to prevent fraud and give adequate notice to the public as decided in the case of OKONKWO V. CCB (NIG) PLC (2003) 8 NWLR (Pt 815) and the fundamental aspect is that notice is to the public for the auction and meant to attract the highest bidder but that the 2nd Respondent who purportedly bought the property had insider knowledge of the price being sought and therefore the sale was tainted with illegality, collusion and connivance, they relied on OMIDIJI V. FEDERAL MORTGAGE BANK (SUPRA). They argued that the agreement which led to the judgment was between 1st Appellant and 1st Respondent and after the judgment, efforts were made towards settlement of the debt through a letter of 13th March, 1997 and acceptance of N300,000.00 was towards instalmental payments but that the Respondent later denied, hinging it on lack of court order for instalmental payments; the appellants relied on BEY V ALEX (1999) 12 SCNJ 234 at 238 to argue that until full payment, the judgment could be compromised and the execution of the writ of execution with less than one quarter of judgment debt outstanding is in bad faith and this court has the power to set aside the sale tainted with irregularities as held in the case of AKPUNONU V BEAKERT OVERSEAS (SUPRA). Furthermore that the 2nd Respondent has a remedy under Section 49 of the Sheriff and Civil Process Act if the sale is set aside. They finally urged the court to find for the appellants and allow the appeal.
The 2nd Respondent in arguing the issues formulated in his 2nd Respondents brief submitted that due process was followed in conducting the sale and that Order VII Rule 4 of the Sheriff and Civil Process Act, the Deputy Sheriff/3rd Respondent pasted the Notice in 1995 and 1997 as required, he relied on AKWARA V IBWA LTD (2001) 7 NWLR (Pt 711) 133 at 136 and MUOJEKWU v. EJIKEME (2000) 5 NWLR (Pt 657) 402.
The 2nd Respondent referred to the finding of the court that the earlier Notice remained valid, subsisting and there was no need to issue a fresh notice of sale, he relied on BELLO V EMEKA (1981) 1 SC 101; SEISMOGRAPH SERVICES (NIG) LTD V EFUAFE (1976) 9 – 10 SC 135 and MOTUNWASE v SORUNGBE (1988) 5 NWLR (Pt 92) 90.
The 2nd Respondent argued that there is no statutory requirement for a fresh notice of sale since the first one subsist, he referred to page 176 of the record of appeal to support the view that adequate notice was given and the sale properly conducted under Order VII Rule 7 (1) of the Sheriff and Civil Process Act (Cap 407) and urged the court to discountenance the arguments of the appellants.
The 2nd Respondent referred to the Auction Law of Lagos State which prescribes a fine of N40,000.00 (Forty Thousand Naira) to be paid by the Deputy Sheriff in the case of his failing to act properly and not a bona fide purchaser and referred to EMEDETAN V OGWERI (1997) 8 NWLR (Pt.516) 323 to argue that lack of notice does not nullify a valid sale to a bonafide purchaser for value. Furthermore, he referred to UNEGBU V WOLI (1997) 2 NWLR (Pt 496) 194 and Section 48 and 50 of the Sheriffs and Civil Process Act which requires a complaint for wrongful sale to be made within 21 days after which it becomes absolute and submitted that the complaint here was not made within 21 days. He contended that the sale was on the 18/11/97 and the appellants became aware of the Public Notice on 28/2/99 after the sale had crystallized. He urged the court to find for the 2nd Respondent under issue one.
On the second issue, the 2nd Respondent submitted that there was no subsisting agreement on instalmental payments and therefore the acceptance of part payment of the judgment sum cannot vitiate the public auction carried out on the 23/10/97 and that the writ of fifa issued on the 28/6/94 remained valid. He submitted that the appellant had 2 years before the execution of the writ but was only able to pay N76,000.00 (Seventy Six Thousand Naira) out of the N1,000,000.00 (One Million Naira) outstanding which is an indication of unwillingness to repay the debt. He submitted that to stop execution there must be full repayment or a positive order of court which was lacking in this case.
On estoppel, the 2nd Respondent submitted that it can only be used as a defence and not a sword because negotiations without more cannot suspend the judgment.
The 2nd Respondent under issue three submitted that the law requires notice of sale which was given on 5th October, 1995 and part payment will not without more amount to withdrawal of the public notice already given. That in the absence of an agreement to stay the execution of the judgment, the sale was valid. That the burden of proving the existence of an agreement rest with the appellants.
On the offer of six plots, the 2nd Respondent contended that it was not accepted by the 1st Respondent and therefore it is not part of any binding agreement, he relied on DPM LTD V LARME (2000) 5 NWLR
(Pt 655) 138 CA. He urged the court to find for the 2nd Respondent.
On issue 4, the 2nd Respondent questioned whether the 3rd Respondent is under a duty to file a counter affidavit after conducting a sale in his official capacity. The 2nd Respondent asserted that the 3rd Respondent was not served with processes to expect a response, he relied on MAKERI CO LTD v ACCESS BANK (NIG) PLC (2002) 7 NWLR (Pt.766) on the importance of service of processes as failure can vitiate a trial.
On conditions to be satisfied before a sale can be set aside, the 2nd Respondent listed 2 namely:
(a) That there is a material irregularity i.e. Notice was never pasted.
(b) He has sustained injury by reason of such irregularity.
He referred to AKPUNONU V BEAKERT OVERSEAS & OTHERS (2000) 12 NWLR (Pt 682) 555. The 2nd Respondent argued that it is the date of sale that is relevant not the date the notice was pasted and that the trial Judge found that the notice was issued in 1995 and it was not withdrawn while the sale took place on 23/10/97 after all pending application in the case file had been disposed off.
On the second ingredient, the 2nd Respondent submitted that he paid N2,766,000.00 (Two Million, Seven Hundred and Sixty Six Thousand Naira) and the contention that the money came from a bank loan is of no moment. He argued that there is no injury occasioned or established, therefore the appellants sustained no injury to warrant allowing the appeal.
Furthermore, that the reliance on OKONKWO V CCB (NIG) PLC (2003) 8 NWLR (Pt 815) 347 at 354 – 355 is inappropriate and not binding on this court while the authority of AKPUNONU V BEAKERT OVERSEAS & OTHER is binding. On the allegation of collusion and fraud, the 2nd Respondent submitted that no particulars were given and it was not established by evidence as required as no evidence was proffered in support of the allegation. He urged the court to dismiss the appeal.
The appellants in their reply on points of law submitted that the 2nd Respondent missed the point in arguing that appellants did not protest the sale within 21 days. He referred to the findings of the Lower Court at page 64 of the record of appeal where the Lower Court found that it was erroneous to contend that the appellants did not protest the sale within 21 days. They submitted that their application is dated 28th October, 1997.
On the issue raised by the 2nd Respondent that processes were not served on the 3rd Respondent, the appellant contended that the issue was being raised for the first time in this court without leave to do so and that there was nothing on record to that effect. They relied on INCAR NIGERIA PLC & ANOR V BOLEX ENTERPRISES (NIG) (2001) 5 SCNJ 460 to submit that failure to seek leave will make the issue to fail. They urged the court to find for the appellant, allow the appeal and set aside the ruling of the Lower Court and the sale conducted by auction.
RESOLUTION:
The first issue questions whether the public auction conformed to relevant laws governing Public Auction. Sale of immovable property by public auction is covered by the Lagos State Auction Law, Laws of Lagos State, 1973 particularly Section 19 (1) which provides as follows:
“No sale by auction of any land shall take place until after at least seven days public notice thereof made at the principal town of the district in which the land is situate and also at the place of the intended sale. The Notice shall be made not only by printed or written documents, but also by beat of drum or such other method intelligible to uneducated persons as may be prescribed by the divisional officer of the district where such sale is to take place may direct, and shall state the name and place of residence of the seller.”
Valid notice is fundamental to a sale of landed property by auction. Here, the Deputy Sheriff acting under the writ of execution which attached the property in question pasted a Notice for sale on 25/10/95 but the sale did not take place that day. The sale finally took place on 23/10/97. There were intervening processes which stalled the sale of the property.
Another legislation relevant to sale by public auction is the Sheriff and Civil Process Act, Cap 407 particularly Order VII Rule 4, it states:
“Where any advertisement of sale of any property is required to be made, it may, subject to the Newspaper published in Nigeria, or by means of posters or placards or otherwise as the Sheriff shall think fit having regard to the value of the property and the other circumstances of the case.”
The first Notice pasted was in 1995, nothing happened until 1997 when the sale took place after another notice was pasted on the 23/10/97 to name a new date and sale conducted thereafter. The contention is whether the notice of 1995 remained valid to give basis to the sale or the sale was conducted under the 1997 Notice? The Lower Court found that the second notice was a surplussage because the first notice remained valid since it was not set aside by Order of court nor any act such as full repayment of the judgment sum. It is a fact that the 2nd appellant made effort at settling the judgment debt amicably but no agreement was reached. Several attempts at applying for instalmental payments did not see the light of day due to lack of diligent prosecution. There was no agreement and the debt was not fully settled. The appellants submitted that the notice was withdrawn by conduct. The question is whose conduct? The alleged arrangement toward settlement was with the judgment creditor while the notice was pasted by the Deputy Sheriff/3rd respondent who played no role nor was it established that he was on notice of all efforts at settling the judgment debt, so how could he be said to have withdrawn the Notice? Can the payment of N300,000.00 (Three Hundred Thousand Naira) toward settlement of the judgment debt suspend the process initiated by the Deputy Sheriff? The answer is NO.
The appellants did not present evidence of any agreement subsequent to the pasting of the first Notice staying the execution of the judgment of the court. The Lower Court relied heavily on the case of AKPUNONU V. BEAKERT OVERSEAS & OTHERS (SUPRA). Therein, a similar case, the Supreme Court in considering whether an earlier notice suspended to allow the court determine applications was voided to demand a fresh Notice held thus:
“The facts again show that the properties had been advertised for sale on 17/12/91 and that it was because of the Appellant’s motion for a stay of execution that the sale was suspended until the motion was disposed on 8/1/92, and the sale conducted on 9/1/92. That was the right thing to do. The Notice of sale was never withdrawn or cancelled by anyone. There was therefore no need to have issued a fresh notice of sale when the Appellant’s motion was finally disposed of.”
To my mind, the challenge is whether there was proper notice? The Supreme Court in the case of TAIWO V ADEGBORO (2011) LPELR 3133 (SC) in considering the relevancy of notice held that:
“It is clear that before an auction can be held to be valid there must be 7 days’ Notice before the auction is held.”
The Notice pasted on the 25/10/1995 remained valid and satisfies the requirement of Section 19(1) of the Auction Law of Lagos State. The essence of notice has been held not to be to the benefit or protection of the judgment debtor but in order to make the sale one conducted in good faith, see OKONKWO v. CCB (NIG) PLC (2003) 8 NWLR (Pt.822) 347 at 386 which held as follows:
“It is not a notice intended to be given to the mortgagor, it is to ensure that a true public auction, where everyone interested in the property may have the opportunity to bid for it, is conducted for a fair deal, devoid of unconscionable bargain though connivance or collusion.
This is therefore not a notice which can be waived by the mortgagor. Actually, it does not lie with him to do so as it is not meant for him.”
Furthermore, Section 21 of the Conveyancing Act (Statute of General Application) 1881 protects the buyer of an auctioned property it states thus:
“Where a conveyance is made in professed exercise of the power of sale conferred by this Act the title of the purchaser shall not be impeached on the ground that no case has arisen to authorize the sale, or that due notice was not given or that the power was otherwise improperly or irregularly exercised, but any person damnified by an unauthorized or improper or irregular exercise of the power shall have his remedy in damages against the person exercising the power.”
This provision takes effect when title has passed. In TAIWO V. ADEGBORO (SUPRA), title had not passed so failure to give required notice had a dire consequence of having the auction set aside. The situation here is that title had passed on to the 2nd Respondent. Being a court conducted auction, the law requires a receipt for money paid issued to the purchaser and a certificate to show title vested in the highest bidder. These steps have taken place and therefore title has passed and therefore Section 21 of the Conveyancing Act shall apply. In doing so, the failure to give adequate notice cannot impeach the auction i.e. the purchaser is protected and the only remedy open to the appellants is in damages. In any case, there was no deficiency in the notice given which is to the benefit of the public and not the appellants. I agree with the Lower Court that the notice given in October, 1995 remained valid to support the auction in 1997. The second notice was merely to name date and time for the sale. There was no deficiency in the Notice and therefore the auction was conducted according to law. Auction is defined as:
“A manner of seeking or letting property by bids at a place open to the general public, usually to the highest bidder by public competition. The process which the public are asked to pay are the highest which those who bid can be tempted to offer by the skill and fact of the auctioneer under excitement of open competition.”
See OKONKWO v C.C.B (NIG) (2003) 8 NWLR (Pt 822) 352. This process was duly conducted in this case.
I agree with the appellant that where there are irregularities in the conduct of auction and if proved the said auction could be vitiated. Section 47 of the Auction Law requires that a complaint be made within 21 days of the sale. The 2nd Respondent argued that the appellants did not make any application within the said 21 days. I have perused the record and I find an application by way of motion dated 28/10/97 to set aside the sale. That is a few days after the sale, on this score; I agree with the Lower Court that the appellants made an application within the time required.
The next issue is whether the appellants established material irregularities in the manner the auction was conducted. The irregularity referred to by the appellants is the alleged inadequacy or lack of notice and the fact that the 3rd Respondent – the Deputy Sheriff did not file a counter affidavit to deny the depositions of the appellants. There is no legal requirement on a party to join issues with the opponent. The ideal situation is that a party would controvert assertions made against such a party. The choice however, rest with such a party. There is no compulsion to defend a suit or claim. The court joined the 3rd Respondent as a Respondent to the motion at the Lower Court and the said party upon service with processes has a choice to defend the action or not to defend. The 3rd Respondent did not file a counter affidavit. The burden still rest with the claimant to prove its claim. The question here is whether the appellants proved any material irregularities. See AKPUNONU V BEAKERT (SUPRA) where the court held thus:
“Moreover for the sale to be set aside the appellant must not only prove that there was material irregularity in the conduct of the sale but also that he sustained substantial injury by reason of such irregularity.”
See also Section 46 of the Sheriff and Civil Process Act.
I have dealt with the issue of notice as required by law above.
On lack of denial by the 3rd Respondent, I agree that facts not denied are deemed admitted as decided in the case of ODOGWU V. ODOGWU (1992) 7 NWLR (Pt 253) 344 at 347. The fact also remains that facts admitted must satisfy legal requirements. The defect comes when the facts though admitted have not satisfied the legal requirements. As the case is here, the facts whether deemed admitted or established by the appellants have not satisfied the law. It falls short of what is required to set aside the auction sale.
For irregularity to have effect it must cause irreparable injury to the claimant. It is a double edged sword. The two must go together. The two conditions are:
(i) Material irregularity
(ii) Substantial injury
The existence of these two conditions requires evidence. There is no such evidence in this case. Under Section 21 (1) of Conveyancing Act, 1881 applicable to Lagos State (statute of general application), the title of a buyer at an auction cannot be defeated by irregularity in the auction sale, see A.C.B V IHEKWOABA (2003) 16 NWLR (Pt 846) 249 in the same vein undervalue cannot also defeat the interest of a purchaser at an auction. The Supreme Court in the case cited above had this to say on undervalue, it held thus:
“Undervalue alone is not enough to vitiate the exercise of a mortgagee’s power of sale. It must be shown that the sale was made at a fraudulent or gross undervalue.”
Furthermore, the burden of establishing fraud, collusion and connivance rest squarely on the appellants. Like all criminal allegations in civil suits, the appellants are expected to plead adequately, supply particulars and prove same beyond reasonable doubt. The apex court held as follows:
“It is also settled that a party who intends to prove charges of fraud or charges of criminal malversation or felony must do so beyond reasonable doubt. And that before he can be allowed to prove them, he must have set them down specifically in his pleadings.”
See AKPUNONU V. BEAKART OVERSEAS (1995) NWLR (Pt.393) 46.This was not done. It is not enough to allege, a party is duty bound to also prove. Was there collusion? Collusion is defined by Black’s Law Dictionary 9th edition as follows:
“An Agreement to defraud another or to do or obtain something forbidden by law.”
There is no such evidence from which to infer that the 1st Respondent colluded with the 3rd Respondent or some other person in the conduct of the auction sale.
In the case of an auction sale, and the consequences of a sale by court, was held as follows:
“The consequence of a sale by auction ordered by a court of law is that there is a presumption that such judicial act is regular and valid where no fraud or other vitiating circumstances are shown. Again, the security given by law to a purchaser of property in a court ordered sale is a statutory one which can defeat the title of the real owner who did not protest the sale.”
The appellants protested the sale within the time allowed by law but failed to establish the necessary grounds to set aside the sale. The sale being one conducted under the authority of the court attracts presumption of regularity as provided in the Evidence Act. In this wise the title of the purchaser is valid and cannot be impeached as the appellants failed to satisfy the legal requirements for setting aside sale of the immovable property by auction. In the case of OSIDELE & ORS v. SOKUNBI (2012) LPELR -9278 (SC) the apex court said thus:
The law is clear that in auction sale which has not been successfully challenged by anyone, the purchaser takes a good and valid title. Section 50 of the Sheriff and Civil Process Act, Cap 407, Laws of the Federation of Nigeria 1990, under which Exhibit P5 was issued provides as follows:
“The court shall grant a certificate to the person who may have been declared the purchaser at such sale, to the effect that he has purchased the right title and interest of the judgment debtor in the property sold and that certificate shall be taken and deemed to be valid transfer of such right title and interest.”
The contention of the appellants that there was a compromise is untenable and reliance on BEY V ALEX (1999) 12 SCNJ 234 is out of the question because judgment had been entered, there was nothing still pending, the power to compromise can only be activated by clear agreement. The said authority acknowledged the efficacy of a judgment and in this case, there was no consensuses between the parties on appellants offer to settle the judgment debt by other means or instalmental payments. For an agreement to be binding there must be a consensus between the parties. That is lacking and therefore compromise cannot be invoked. The appellants contended that the payment of N300,000.00 (Three Hundred Thousand Naira) after pasting of the auction notice had the effect of suspending the auction. Being a court attachment, only the court can discharge it. There is no evidence to that effect and because the payment was accepted by the judgment creditor cannot translate to an agreement by conduct such that estoppels can be invoked. Estoppel by conduct was described in the case of IGA v. AMAKIRI (1976) 11 SC 1 at 12-13 in the following words:
“Where a man by word or conduct willfully made a representation of a state of facts to another and thereby induced the other to believe that the state of things were as represented by that person and that other took him by his words and acted upon that representation, then that person who made the representation either by himself or his representatives in interest cannot later turn around to say or behave as if the state of things were not as he represented them.”
The 1st respondent was shown to have made any representation that can be used against him in estoppel. Money was due to the 1st Respondent and he was paid part of the money. There was no reason for him to reject the money. The 2nd appellant could not extract a firm compromise from the 1st Respondent and there is therefore nothing to presume as compromise by conduct. Furthermore, there was no order of court authorizing instalmental payments and the decision to pay N300,000.00 (Three Hundred Thousand Naira) was solely the choice of the 2nd appellant and cannot be used against the 1st Respondent.
Flowing from above therefore the appeal lacks merit and is hereby dismissed. The Ruling of HON. JUSTICE MONI FAFIADE delivered on the 2nd day of November, 2000 is hereby affirmed.
Each party to bear its cost.
AMINA A. AUGIE, J.C.A.: I read in draft the lead Judgment just delivered by my learned brother, Nimpar, JCA, and I agree with his reasoning and conclusion. He addressed all the issues canvassed by the Parties, and I have nothing useful to add except to say that the Appellants seem to have focused their grievance on the 3rd Respondent, who is the Deputy Sheriff of the Lagos State High Court, and mandated by law to conduct Public Auction Sales. They accused him of “fraud and collusion in the exercise of the Auction Sale”, which are allegations of a criminal nature, and the law is sacrosanct that if the commission of a crime by a party to a civil suit is directly in issue, the party must prove it beyond reasonable doubt – see Akinkugbe V. Ewulum Holdings Ltd. & Anor (2008) 4 SC 125 and Yakubu V. Jauroyel & Ors (2014) LPELR-SC.154/2005, where Fabiyi, JSC, observed that –
“Allegation of fraud must be proved beyond reasonable doubt. Such must not leave room for speculation. It is proof in the realm of possibility and not fantastic possibility that is required.- – Standard of proof for commission of crime in civil cases – is the same as in criminal cases – — Fraud requires a higher degree of probability in its proof. It must be pleaded with particulars adequately supplied – – A party alleging fraud must discharge the onus of proof to the satisfaction of the Court”.
In this case, the Appellants accused the 3rd Respondent of fraud that requires a higher degree of probability in its proof, and must be pleaded with particulars adequately supplied, but as far I can see, they did not supply any particulars of the alleged fraud and have adduced no evidence whatsoever to prove same.
It is for this and the other reasons so well set out in the Lead Judgment that I also dismiss the appeal for lacking in merit. I abide by the consequential orders in the lead Judgment including that parties are to bear their own costs.
JAMILU YAMMAMA TUKUR, J.C.A.: I read before today a draft of the lead judgment just delivered by my learned brother Yargata Byenchit Nimpar JCA, and I agree that the appeal lacks merit and should be dismissed.
I dismiss same and I abide by the consequential orders made therein including that as to costs.
Appearances
T. O. S. Fadahunsi with Angela Eze (MS), Amara Akin John (MS)For Appellant
AND
A. B. Adedipe with O. O. Ahaye (Miss) – for 2nd RespondentsFor Respondent
