MABON LTD & ORS v. ACCESS BANK (2021)

MABON LTD & ORS v. ACCESS BANK

(2021)LCN/15082(CA)

In The Court Of Appeal

(LAGOS JUDICIAL DIVISION)

On Thursday, March 04, 2021

CA/LAG/CV/1170/2019

Before Our Lordships:

Hussein Mukhtar Justice of the Court of Appeal

Paul Obi Elechi Justice of the Court of Appeal

Patricia Ajuma Mahmoud Justice of the Court of Appeal

Between

MABON LIMITED 2. MABON ENERGY LIMITED 3. KENROSE LIMITED 4. MABON ESTATES LIMITED 5. MR. BONIFACE MADUBUNYI APPELANT(S)

And

ACCESS BANK PLC RESPONDENT(S)

RATIO

PURPOSE OF A REPLY BRIEF

A reply brief is never a chance to have a second bite at the cherry as it were, which is what most appellants turn it into: to re-argue their appeal and add more flesh to it in a manner of speaking. As the Rule of Court so clearly provides in ORDER 19(5) (1), a reply brief is merely an opportunity given to the appellant to respond to new issues raised in the respondent’s brief. PER PATRICIA AJUMA MAHMOUD, J.C.A.

POSITION OF THE LAW REGARDING DEFENCES OPEN TO A DEFENDANT IN AN ACTION FOR REPAYMENT OF LOAN

… in an action for recovery of loan, the two defences usually open to a defendant who has been dragged to Court for defaulting in repayment of the facility are: (1) That the defendant had refunded the entire loan by the production of receipts, bank tellers or any other document showing that the debt was totally repaid; or (2) That he never borrowed the money in the first place, he never applied for the loan or debt, he never obtained any money and that any purported application for the loan or receipt for the loan issued to him is a forgery. See: OKOLI V MORE CAB FINANCE (2007) AFWLR, PT 369, 1164; AZODO V KAY-KAY CONSTRUCTION LTD (2014) LPELR – 24150 (CA); GREENTEK LTD V ACCESS BANK PLC (2015) LPELR 25999 (CA); GORKEENS LTD V ZENITH BANK PLC (2017) LPELR – 43170 (CA) and ABLEEM PETROLEUM CO (NIG) LTD V AMCON (2020) LPELR – 50334 (CA). PER PATRICIA AJUMA MAHMOUD, J.C.A.

EFFECT OF AN UNAPPEALED THE DECISION OF THE COURT

The law is settled that the decision of the Court not appealed against is deemed accepted by the party against whom it is made and therefore binding. This was the decision of the apex Court in IYOHO V EFFIONG (2007) 11 NWLR, PT 1004, 31 AT 55 PARA B. PER PATRICIA AJUMA MAHMOUD, J.C.A.

DUTY OF INTERMEDIATE APPELLATE COURT TO REFRAIN FROM MAKING POSITIVE PRONOUNCEMENTS TOUCHING ON THE SUBSTANTIVE ISSUE WHILE THEY ARE ONLY ENGAGED IN THE DETERMINATION OF INTERLOCUTORY MATTERS BEFORE THEM

I am well aware that the apex Court has counseled for caution severally, of the need for an intermediate appellate Court like this one to desist from making positive pronouncements touching on the substantive issue while they are only engaged in the determination of interlocutory matters before them. See: UNIVERSITY PRESS LTD V I. K. MARTINS, NIG LTD (2000) 4 NWLR, PT 654, 584; AKINRIMISI V MAERKS NIG LTD & ANOR (2013) LPELR – 20179 (SC); A. G. KWARA STATE & ANOR V LAWAL & ORS (2017) LPELR – 42347 (SC) and UFOEGBUNAM & ORS V FRN (2019) LPELR – 47163 (CA). PER PATRICIA AJUMA MAHMOUD, J.C.A.

PATRICIA AJUMA MAHMOUD, J.C.A. (Delivering the Leading Judgment): The 1st Defendant/Appellant is a customer to the Plaintiff/Respondent and in the course of their relationship, the 1st appellant applied and obtained a facility from the Respondent to augment its working capital. The 2nd – 4th defendants/appellants are sister companies to the 1st appellant who guaranteed the facility availed to the 1st appellant while the 5th Appellant is the Chairman and alter ego of the 1st appellant and also gave his personal guarantee to the facility given to the 1st appellant. The 1st appellant charged some of its properties in favour of the Respondent as security for the facility. At its maturity, the 1st appellant was unable to liquidate the facility. Frustrated by the persistent failure/refusal of the 1st appellant to repay the facility, the Respondent demanded that the 1st appellant charge all its assets in its favour and this led to the execution of an All Assets Debenture dated 16th April, 2018. After several unsuccessful attempts to recover the facility the 1st Appellant, afraid that the Respondent may sue for the recovery of the

debt approached the Respondent for an amicable settlement of the issue to enable the 1st Appellant liquidate the undisputed indebtedness. Consequently, the parties signed a Memorandum of understanding dated 16th December, 2018 in which the outstanding indebtedness of the 1st Appellant to the Respondent was agreed at the sum of USD 7,576,661.27 (Seven Million, Five Hundred and Seventy-Six Thousand, Six Hundred and Sixty-One US Dollars, Twenty-Seven cents). In spite of this admission of its indebtedness to the Respondent, the 1st appellant failed to repay this agreed sum even in the face of repeated demands.

Following the 1st Appellant’s refusal to repay this facility and in a renewed effort to recover same, the Respondent appointed a Receiver/Manager over the pledged assets of the Appellants. The Receiver/Manager commenced the instant action to seek the protection and direction of the lower Court in the performance of its statutory duties. The action was commenced by an Originating Summons dated and filed the 12th day of April, 2019, seeking the following reliefs:
a. A DECLARATION AND/OR, AN ORDER that MR. ‘KUNLE OGUNBA ESQ. SAN being the

Receiver/Manager appointed by the Plaintiff pursuant to Clause 7(2) of the Deed All Assets Debenture dated the 16th day of April, 2018, is entitled to exercise all his powers and perform all his duties as Receiver/Manager of the entire affairs or assets of the 1st Defendant lying and situated at:
i. No. 29, Sanusi Fafunwa Street, Victoria Island Lagos.
ii. Plot 4A Iller Street, Off Kastina Ala Crescent Maitama, Abuja
iii. Plot 4B Iller Street, Off Kastina Ala Crescent Maitama, Abuja.
iv. Plot 579 (No. 46 Gana Street) Cadastral Zone A05, Maitama District, Abuja.
v. Plot 690 (No. 35 Usama Street) Cadastral Zone A08, Maitama, Abuja.
vi. No. 6, Urban Close, Aso Drive, Asokoro, Abuja.
vii. Any other assets/funds/affairs of the defendant, wherever same may be found or situated.
in line with his Deed of Appointment dated the …day of March, 2019 and the Companies and Allied Matters Act Cap C20, Laws of the Federation of Nigeria, 2004 without any interference, obstruction and/or hindrance in any manner whatsoever by the Defendant or any other person(s) acting under its authority or any person whether a Director or

Shareholder, officer or employee of the Defendant.
b. A DECLARATION AND/OR, AN ORDER that upon the Appointment of Mr. ‘KUNLE OGUNBA ESQ. SAN, as Receiver/Manager over the entire affairs/assets of the 1st Defendant, the 1st Defendant and/or any other Director or Shareholder, officers or employees of the 1st Defendant has no rights, powers or authority to enter into and remain in possession or deal in any manner whatsoever with the assets of the 1st Defendant lying and situate at:
i. No. 29, Sanusi Fafunwa Street, Victoria Island Lagos.
ii. Plot 4A Iller Street, Off Kastina Ala Crescent Maitama, Abuja
iii. Plot 4B Iller Street, Off Kastina Ala Crescent Maitama, Abuja.
iv. Plot 579 (No. 46 Gana Street) Cadastral Zone A05, Maitama District, Abuja.
v. Plot 690 (No. 35 Usama Street) Cadastral Zone A08, Maitama, Abuja.
vi. No. 6, Urban Close, Aso Drive, Asokoro, Abuja.
vii. Any other assets/funds/affairs of the defendant, wherever same may be found or situated.
without recourse to Mr. ‘KUNLE OGUNBA ESQ. SAN the Receiver/Manager over the assets of the 1st Defendant duly appointed by the Plaintiff pursuant to

Clause 7(2) of the Deed of All Assets Debenture dated the 16th day of April, 2018 executed between the Plaintiff and the 1st Defendant.
c. A DECLARATION AND/OR, AN ORDER that by virtue of Clause 7(2) of the Deed of All Assets Debenture dated the 16th day of April, 2018 created by the 1st Defendant in favour of the Plaintiff, Mr. ‘KUNLE OGUNBA ESQ. SAN the Receiver/Manager appointed by the Plaintiff over the entire assets/affairs of the 1st Defendant is entitled to perform all the functions (which includes but not limited to the selling of the 1st Defendant’s asset to offset the outstanding indebtedness) specified in the Deed of Appointment unhindered and unimpeded by the defendants, their agents, cronies or other privies however described and/or called.
d. A DECLARATION AND/OR, AN ORDER of this Honorable Court empowering the Plaintiff or its duly appointed receiver/manager to sell any assets traceable to the 2nd to 5th Defendants, in partial or complete satisfaction of their indebtedness to the Plaintiff as per their respective corporate guarantees.
e. A DECLARATION AND/OR, AN ORDER directing and compelling all the companies,

financial institutions, individuals or however described, with whom any of the Defendants transacted with to avail any funds, shares or assets standing to the credit of any of the defendants, to the Plaintiff or its duly appointed receiver/manager.
f. AN ORDER OF PERPETUAL INJUNCTION restraining the 1st Defendant whether by itself, its agents, servants or privies from disturbing the Receiver/Manager appointed by the Plaintiff in the performance of his lawful and legitimate duties (as specified in his Deed of Appointment and Deed of All Assets Debenture) by tampering with, alienating or disposing any of the 1st defendant’s assets situated at:
i. No. 29, Sanusi Fafunwa Street, Victoria Island Lagos.
ii. Plot 4A Iller Street, Off Kastina Ala Crescent Maitama, Abuja
iii. Plot 4B Iller Street, Off kastina Ala Crescent Maitama, Abuja.
iv. Plot 579 (No. 46 Gana Street) Cadastral Zone A05, Maitama District, Abuja.
v. Plot 690 (No. 35 Usama Street) Cadastral Zone A08, Maitama, Abuja.
vi. No. 6, Urban Close, Aso Drive, Asokoro, Abuja.
vii. Any other assets/funds/affairs of the defendant, wherever same may be found or

situated.
By Virtue of the Receivership Status of the assets/affairs of the defendant.

The Respondent had along with the Originating Summons also filed an ex parte application and a motion on notice both dated the same day and seeking to preserve the res. The application ex parte was heard and the orders sought therein were granted on the 8th May, 2019. Upon being served with the said order of Court and the Motion on Notice, the Appellants not only entered appearance but also filed a Motion on notice on the 24th June, 2019, seeking an order of Court discharging this interim order of Court granted on the 8th May, 2019.

After hearing both parties and in a considered ruling delivered by Hon. Justice M. S. Hassan of the Lagos Division of the Federal High Court, on the 5th July, 2019, his lordship refused the Appellants’ application to set aside the ex parte order but granted the Respondent’s interlocutory application as prayed. The Appellants are by this appeal challenging this decision of the lower Court. The Notice of Appeal is dated and filed on the 8th July, 2019 and contains four grounds of appeal with their particulars as

follows:
GROUND ONE
The Lower Court erred in law when it held that the pre-action notice served on the Respondent did not impose upon it an implied, constructive and imputed obligation not to commence action against the Appellants before the expiration thereof and without response thereto.
PARTICULARS OF ERROR IN LAW
a. Failing to acknowledge that under the principle of EQUALITY IS EQUITY, a corresponding obligation is imposed on the other party not to commence any action in respect of the same subject matter, to wit, indebtedness of the Appellants to the Respondent, without giving due notice of such action.
b. Because an interlocutory injunction is an equitable relief, the Respondent’s action violates the principle that “He who seeks equity must do equity”, and thereby is null and void.
GROUND TWO
The Lower Court erred in law when it held that concealment of the Pre-action notice served on the Respondent was not concealment of a material fact.
PARTICULARS OF ERROR IN LAW
1. The subject matter of this dispute is the indebtedness of the Appellants to the Respondent in a transaction predicated upon

an offer letter (Exhibit BCO-A) which prescribes specifically for a 90-days pre-action notice to be given by the Appellant to the Respondent before commencement of action.
2. The pre-action notice details, set out the proposed claim against the Respondent, which would have settled any alleged indebtedness by the Appellants to the Respondent.
3. Indeed, the claim set out in the pre-action notice would have formed a counterclaim against the Respondent in any amount over and above the alleged indebtedness of the appellant.
4. The Lower Court ignored, indeed failed to consider at all, the case of Statoil (Nig) Limited v. NNPC (2013 14 NWLR (PT. 1373) 1 at page 13 paragraph H to page 14 paragraph F, where the concealment of a counterclaim in excess of USD 1 BILLION was considered such a material fact to set aside the injunctive relief.
GROUND THREE
The Lower Court erred in law when it held that the balance of convenience was not in favour of the Appellants.
PARTICULARS OF ERROR
Having rightly held that an injunctive relief is “negative and restrictive” the lower Court failed to acknowledge that a situation in which the

Appellants’ premises are sealed and the Appellants are prevented from enjoying ingress and egress of those premises, is more inequitable than the mere delay in the Respondent recovering the indebtedness allegedly due to it, which can be adequately covered by damages as the indebtedness was still accruing interests.
GROUND FOUR
The Lower Court erred in law when it assumed jurisdiction of the Plaintiff’s originating summons over a matter involving highly contentious issues of fact which can only be decided by oral evidence.
PARTICULARS OF ERROR
1. The plaintiff’s originating summons, the basis upon which the interlocutory order was made, is for appointment of a receiver to carry out the task of recovering alleged indebtedness of the 1st defendant/appellant to the plaintiff which is disputed.
2. Indeed the defendants/applicants had served a pre-action notice on the plaintiff setting out details of their proposed claim which would have settled the entire indebtedness the subject matter of the action and would form the basis of a counter claim to the plaintiff/respondent’s claim.
3. Such disputes can only be

resolved by oral evidence when pleadings are ordered which will give the parties the right to cross examine the witnesses.
4. The defendants at the lower Court have filed a memorandum of conditional appearance and had indicated to the lower Court in the course of the proceedings that they intend to file an application pursuant to Order 29 of the Rules of the Federal High Court to challenge the Court’s assumption of jurisdiction.

In prosecuting this appeal, parties in compliance with the Rules of Court filed their pleadings. The Appellants brief was settled by MR. G. N. UWECHUE, SAN and filed on the 21st November, 2019 and deemed on the 8th December, 2020. The appellants also filed a reply brief on the 8th of October, 2020 and same was also deemed on the 8th December, 2020.

The Respondent’s brief was settled by MR. O. A. DIVINE on the 7th August, 2020 and deemed properly filed and served on the 8th December, 2020.

At the hearing of the appeal on the 8th December, 2020, MR. G. N. UWECHUE, SAN, of counsel for the appellants adopted both their brief of argument and their reply brief as their legal arguments in support of their

appeal. In the brief the learned senior advocate distilled four issues for the determination of the Court thus:
3.1 ISSUE 1: Whether the Lower Court was right to hold that the pre-action notice served on the Respondent did not impose upon the Respondent an implied, constructive and imputed obligation not to commence action against the Appellants before the expiration thereof and without response thereto.
3.2 ISSUE 2: Whether the Lower Court was right to hold that the Respondent had not concealed a material fact in bringing its motion ex parte and motion on notice before the Lower Court.
3.3 ISSUE 3: Whether the Lower Court was right to hold that the balance of convenience was not in favour of the Appellants.
3.4 ISSUE 4: Whether the Lower Court should have assumed jurisdiction of the respondent’s originating summons over a matter involving highly contentious issues of facts that can only be resolved by oral evidence.

On issue (1), the learned senior advocate relying on the principle of “Equality is Equity” submitted that the Respondent had an implied, constructive and imputed obligation not to commence action against

the appellants before the expiration of the 90 days pre-action notice period imposed upon the Respondent. That any other outcome will be inequitable, manifestly unfair and unconscionable and will occasion a miscarriage of justice against the appellants.

On issue (2), the learned senior counsel submitted that by failing to disclose that the appellant had served it a pre-action notice, the Respondent concealed a material fact from the Court below. That based on the principle on “he who comes to equity must come with clean hands”, and the case of OKECHUKWU V OKECHUKWU (1989) 3 NWLR, PT 108, 234 the ex parte injunction granted ought to have been discharged ex debitio justitiae’ by the Court. Counsel also referred to the case of ADEWALE BELLO CONSTRUCTION CO. LTD V IBWA (1991) 7 NWLR, PT 204, 498 to contend that the trial should not have exercised its discretion to grant an equitable injunction to the Respondent who had concealed material facts. Counsel also contended that the holding of the trial Court discountenancing the materiality of the pre-action letter and the implication of its concealment occasioned a miscarriage of justice to the

Appellants.

In submitting on issue (3), the senior counsel referred to the cases of CCB & ANOR V OZOBU (1998) 3 NWLR, PT 541, 290 and ILECHUKWU V IWUGO (1989) 2 NWLR, PT 101, 99 to argue that the question of where the balance of convenience lies is very germane to a just determination of an application for an equitable remedy or injunction. Counsel further submitted that from the affidavit evidence of the parties, which clearly show the extreme hardship foisted on the appellants by the interim order which sealed the premises of the appellants preventing their lawful tenants from enjoying the rights of ingress and egress, weighed agaist the mere delay of the respondents in recovering its indebtedness, the balance of convenience ought to have been resolved in favour of the appellants.

On issue 4, the learned senior counsel submitted that the reliefs sought by the Respondent in the lower Court show that the action being a claim for the recovery of debt and not just one for the interpretation of a document ought to have been brought by way of a writ of summons and not by an originating summons as was done. Counsel referred to the cases of

OBASANYA V BABAFEMI (2002) 15 NWLR, PT 689, 1 AT 17; NAJEGA V SALIHU (2018) LPELR – 46603 (CA); NIG BREWERIES PLC V L. S. I. R. B. and ORDER 3 (6) – (8) of the Federal High Court Rules, 2009 and ‘CIVIL PROCEDURE IN NIGERIA’ (1ST Edition) by FIDELIS NWADIALO (SAN), Pages 193 – 194, to submit that the trial lower Court having commenced this action by a wrong procedure lacks jurisdiction to entertain the action. That the rights of the appellants having already been adversely affected by the orders so far made by the lower Court acting without jurisdiction makes the entire suit and the orders granted by the lower Court liable to be set aside. Counsel urged the Court to set aside the orders of injunction granted by the lower Court.

MR. O. A. Divine, of counsel for the Respondent adopted their brief of argument as their legal arguments in opposition to the appeal. In it counsel raised a preliminary objection. However, the Respondent’s counsel did not seek the leave of Court to argue the preliminary objection first before the appeal was argued. A preliminary objection, even if raised in the Respondent’s brief cannot be deemed

argued along with his brief pursuant to ORDER 19 (9) (4) of the Rules of Court, 2016 in the absence of the Respondent from Court. This was the clear and unambiguous position of the apex Court in the case of NDP V INEC (2012) 12 SC, PT IV, 24 AT 45 where it held as follows:
“It is pertinent to refer to the notice of preliminary objection given by the respondent on page 4 of its brief of argument. It is equally apposite to say that the said preliminary objection was not moved before this Court though argued, hence same was deemed abandoned and liable to be discountenanced. It should be noted that the preliminary objection raised by the respondent in its brief of argument cannot be deemed argued along with the brief. This is because the Respondent is require to specifically seek leave of Court and obtain same when the appeal is being heard to move its objection. Therefore the Respondent not having been available to seek leave and obtain same to argue its preliminary objection, same is of no moment, it is deemed abandoned and liable to be struck out – See CHIEF NSIRIM v. NSIRIM (1990) 5 SC (PTII) 94; ONOCHIE & ORS v. ODOGWU & ORS (2006) 2

SC (PT.11) 153, ATTORNEY GENERAL – RIVERS v. UDE & ORS (2006) 7 SC (PT 11) 133. Accordingly, the notice of preliminary objection, incorporated in the Respondent’s brief of argument is hearing discountenanced and struck out.”
See also The REGISTERED TRUSTEES OF THE AIRLINE OPERATORS OF NIGERIA V NIGERIA (2014) 8 NWLR, PT 1408, 1; NIGERIAN LAB CORP & ANOR V PACIFIC MERCHANT BANK LTD (2012) 15 NWLR, PT 1324,505; SYSTEM METAL INDUSTRIES LTD V EHIZO (2003) 7 NWLR, PT 820, 460 and OGBEBOR V ONOJAKPOR & ORS (2019) LPELR – 47176 (CA).
The point must be made that in the instant case, it does not make a difference that the respondent’s counsel was in Court. The law remains the same, that is, that a preliminary objection not moved before the hearing of an appeal is deemed abandoned and should be struck out. Consequently, the notice of preliminary objection incorporated in the Respondent’s brief of argument, specifically page 4 paragraph 2.1 to page 8 paragraph 2.20 is hereby deemed abandoned and therefore struck out. Consequentially, the appellants’ reply brief which responds to this preliminary objection,

particularly page 3, paragraph 3.1 to page 6, paragraph 3.7 is also struck out.

The Respondent adopted the four issues distilled for resolution by the Appellants. On issue (1) MR. Divine submitted that on the authorities of HILARY FARMS LTD V M/V MAHTRA (2007) 14 NWLR, PT 1054, 210 and EVBUOMWAN & 3 ORS V ELEMA & 2 ORS (1994) 6 NWLR, PT 353, 638, parties are bound by the terms of their contract. That while the offer letter by clause 5 thereof creates an obligation on the appellants to issue a pre-action notice before filing an action against the Respondent, the reverse is not the case. Counsel submitted, relying on the case of AGUOCHA V AGUOCHA (2005) 1 NWLR, PT 906, 105, that the Court cannot import its own interpretation into the clear terms of a contract. Counsel also contended that there is no term of the contract between the parties imbuing the Respondent with any ‘implied, constructive and/or imputed obligation’ not to commence an action against the Appellants before the expiration of the pre-action notice issued by the Appellants. That the principle of “equity is equality” as argued by the appellants in the

circumstances of this case is misconceived and would amount to an attempt to re-write the agreement between the parties. Counsel referred to the cases of UBN LTD V SAX (NIG) LTD (1994) 8 NWLR, PT 361, 150 and OYENUGA V PROVISIONAL COUNCIL of THE UNIVERSITY OF IFE (1965) NMLR, 9.

Counsel contended that none of the grounds of appeal filed by the appellants challenges the findings of the lower Court to the effect that the issue regarding the issuance of pre-action notice has been taken over by the Memorandum of Understanding executed by the parties and the said issue has no bearing with the receivership action. Counsel maintained that contrary to appellants’ submissions, the ruling of the lower Court was decided on the principle of law that parties are bound by their contract and on the equitable consideration that the Appellants who are indebted to the Respondent in the sum of over USD 7,576,661.27 should repay their indebtedness. Counsel urged the Court to resolve issue 1 in favour of the Respondent.

On issue (2), counsel submitted that the Memorandum of Understanding has taken over the issues regarding the issuance of pre-action notice. That

the argument of the Appellants that the Respondent concealed the issue of the alleged issuance of the pre-action notice from the Hon. Court is of no moment as the Court found in its unappealed decision that the said issue ‘has no bearing with the receivership action,” having been overtaken by the Memorandum of Understanding executed by the parties. Counsel contended that there being no clause or covenant for the issuance of a pre-action notice in the memorandum of understanding, the issuance or otherwise of the said pre-action notice by the Appellants have no bearing with the receivership action filed by the appellants and upon which this appeal is predicated. Counsel submitted on the authority of ODUMEGWU OJUKWU V YAR’ ADUA & ORS (2008) 4 NWLR, PT 1078, that the issue relating to the issuance of pre-action notice by the Appellants’ counsel is not a material fact essential for the determination of the application ex parte or the receivership action itself as rightly held by the lower Court.

On concealment of facts, counsel conceded that the law is that an applicant for an order of injunction must make full disclosure of all

relevant and material facts and that failure to do so may lead to the granted order of injunction being set aside. The rider to this according to counsel, is that the concealed or suppressed facts must be relevant to the grant of the application and indeed influenced it. Counsel referred to the case of R. BENKAY (NIG) LTD V CADBURY (NIG) LTD (2006) 6 NWLR, PT 976, 338. Counsel submitted that by the very nature of this suit which is a receiver action commenced pursuant to the Deed of All Assets Debenture, the assets charged in favour of the Respondent are legally enjoined to be in control and custody of the receiver/manager who is now the alter ego of the company in receivership. Counsel referred to SECTION 393 (4) of COMPANIES AND ALLIED MATTERS ACT (CAMA). Counsel urged the Court to also resolve this issue in favour of the Respondent.

In arguing issue (3), counsel contended that parties are ad idem that by the Memorandum of understanding dated 16th December, 2018, the parties duly agreed that the 1st Appellant’s indebtedness to the Respondent as at 1st December, 2018 stood at USD7, 576,661.27. That this made it imperative for the Court to preserve

the res, the charged property. That there is no better reason for the Court to find that the balance of convenience was in favour of the Respondent. That the finding of the balance of convenience was premised on the consideration of the facts of this case which guided the Court in granting this preservative order of injunction. Counsel relied on the case of STATE V EMINE (1992) NWLR, PT 256, 658 to submit that this Hon. Court will not normally disturb the finding of facts of a trial Court except where such findings are not supported by the evidence on record. Counsel urged the Court to resolve this issue in favour of the Respondent.

Issue (4) deals with whether the lower Court should have assumed jurisdiction over the originating summons considering the contentious issues of fact which can only be resolved by oral evidence. In arguing on this issue, counsel submitted that the ground of appeal from which this issue is derived does not arise or emanate from any aspect of the decision of the lower Court appealed against and is therefore rendered incompetent. That it follows that an issue cannot be grounded on an incompetent ground of appeal as both the

ground and the issue derived therefrom are liable to be struck out. Counsel urged the Court to struck them out.

In the event that the Court disagrees and refuses to uphold this submission of the respondent’s counsel, counsel proceeded to respond to the issues as argued. Counsel submitted that assuming without conceding that the facts of the suit are disputed and the parties require the procedure of a Writ of Summons as opposed to an Originating Summons to ventilate their grievances, the law permits the parties to apply for a conversion of the suit from Originating Summons to Writ of Summons. All that the trial Court requires to do upon an application by a party is to order pleading. That the appellants who failed to take advantage of this provision cannot be heard to complain. Besides, counsel contended that this suit which is an action for receivership merely seeks the construction of the Deed of All Assets Debenture executed by the parties pursuant to which a receiver/manager was appointed. Counsel referred to ORDER 3 (6) of the Federal High Court (Civil Procedure) Rules 2009, to submit that Originating Summons is one of the available modes of

commencing an action in the lower Court for the determination of any question of construction arising under a deed, will, enactment or other within instrument and for a declaration of the rights of the persons interested therein. Counsel also referred to the cases of FAMFA OIL LTD V AGF (2003) 18 NWLR, PT 852, 453 and EZEIGWE V NWAWULU (2010) 4 NWLR, PT 1183, 159. Counsel referred to the case of BARR. (MRS) AMANDA PETERS PAM & ANOR V NASIR MOHAMMED & ANOR (2008) 16 NWLR, PT 1112, to state the settled position of the law, that a party challenging the mode of commencing a suit on the grounds that facts are disputed must show that the disputes are not only substantial and material but affect the live issues in the matter. Counsel submitted that this appeal is only academic, incompetent, unmeritorious and should be dismissed.

The Appellants filed a reply brief which they also adopted. I have already struck out pages 3, paragraph 3 – page 6 paragraph 3.7 which answer to the preliminary objection, which has also been struck out for being abandoned. I have carefully looked at the reply to the Respondent’s brief as contained therein. I find

that this reply brief is offensive to ORDER 19 (5) (1) of the RULES of COURT, 2016 which provides as follows:
“19 (5) (1) The appellant may also, if necessary, within fourteen days of the service on him of the Respondent’s brief, file and serve or cause to be served on the Respondent a reply brief WHICH SHALL DEAL WITH ALL NEW POINTS ARISING FROM THE RESPONDENT’S BRIEF.” (Emphasis mine).
A reply brief is never a chance to have a second bite at the cherry as it were, which is what most appellants turn it into: to re-argue their appeal and add more flesh to it in a manner of speaking. As the Rule of Court so clearly provides in ORDER 19(5) (1), a reply brief is merely an opportunity given to the appellant to respond to new issues raised in the respondent’s brief. The instant appellants’ reply brief runs foul of this requirement. It is purely a re-argument of their brief. It is therefore discountenanced.

In resolving issue (1) it is pertinent to reproduce the provision in the agreement that deals with the pre-action notice. This is contained in the offer letter in clause 5 thereof thus:

“5. No legal action shall be instituted however, instigated and/or sustained by the borrower against the lender jointly or severally without first giving the Lender a ninety (90) days prior written pre-action notice of the Borrower’s intention to so proceed against the Lender, such notice to be served at the Lender’s registered office address.”
It is very clear from the wordings of this clause that this pre-action notice binds only the defendants/applicants and places no burden on the plaintiff/respondent who is the Lender. This is how it should be. To do otherwise in my view will be preposterous. This will amount to asking a Lender to give notice to its debtor before suing him to recover a debt owed which the debtor has refused to pay. It is the legal right of a borrower to take every legal step to recover its money. It is indeed unconscionable for a borrower to sue the lender. Is it to say that he did not borrow the money/loan or that he has refunded it? This is what informs the principle of law that in an action for recovery of loan, the two defences usually open to a defendant who has been dragged to Court for defaulting in repayment of the

facility are:
(1) That the defendant had refunded the entire loan by the production of receipts, bank tellers or any other document showing that the debt was totally repaid; or
(2) That he never borrowed the money in the first place, he never applied for the loan or debt, he never obtained any money and that any purported application for the loan or receipt for the loan issued to him is a forgery.
See: OKOLI V MORE CAB FINANCE (2007) AFWLR, PT 369, 1164; AZODO V KAY-KAY CONSTRUCTION LTD (2014) LPELR – 24150 (CA); GREENTEK LTD V ACCESS BANK PLC (2015) LPELR 25999 (CA); GORKEENS LTD V ZENITH BANK PLC (2017) LPELR – 43170 (CA) and ABLEEM PETROLEUM CO (NIG) LTD V AMCON (2020) LPELR – 50334 (CA).
The analogy with these cases which are instances of defences open to a defendant in an action for repayment of loan is important for many reasons. Firstly, it brings to the fore the fact that a borrower where he does not contest the loan or the facility as in this case has neither a legal nor a moral right to challenge the borrower in an action in Court. This perhaps informs the wisdom in the requirement for pre-action notices to the

lender by the borrower. What if I may ask would a borrower be possibly suing its lender for? The only ready answer is that it is to forestall the realization of the facility itself, the security or even the foreclosure of a mortgaged property in respect of the loan/facility. In recent memory in this country, the financial landscape was rife with borrowers who had brought economic activity to a halt in the financial sector. They would borrow huge sums which they would refuse to pay. Worse still is that they also clogged the Courts with all sorts of frivolous suits aimed only at stopping or forestalling the realization of these facilities from them by the Lenders or financial institutions. I find that the instant case is akin to this practice in intent and tactics. The appellants do not dispute that they are indebted to the respondent, even if there is no agreement as to the exact amount. They have not put up any proposal with which they plan to work with towards offsetting whatever amount they admit to owe to the Respondents. The appellants in my view are not in any position to talk about equity in this case. Equity is not an abstract term; neither is it a one

way traffic. Like the old age adage, “he who comes to equity should come with clean hands.” The appellants cannot come with soiled hands and seek to invoke equitable principles in their favour. They are not deserving of any such indulgence. What is more, the appellants have woefully failed to make any connection between the legal principles they have dwelled so heavily on and their case. It is of no moment to espouse legal principles in vacuum. That will amount to only an academic exercise which does no good to anyone. The justice or equity of this case sways in favour of the Respondent who is only struggling to recover depositors’ funds which the appellants do not appear to have any immediate or indeed long term plan of repaying. I hereby hold that the principles of equity raised by the appellants are in way applicable in the circumstances of this case, in the face of the clear terms of contract between the parties. These terms have been rightly interpreted by the learned trial judge to mean that the requirement of pre-action notice of 90 days is applicable to only the borrower, in this case the appellants. There is no other agreement or

document shown or exhibited by the appellants from which it can be implied that the Respondent has an obligation to issue a 90 days pre-action notice to the appellants or to wait for the expiration of the 90 days notice given by the appellants before they can commence an action.

Moreover, this issue was sealed firmly by the specific finding of the learned trial Judge thus:
“Moreso, as rightly submitted by Learned Senior Counsel for the plaintiff/Respondent that issuance of pre-action notice has been taken over by the Memorandum of Understanding (see Exhibit 1 attached to paragraph 4 (d) of the plaintiff’s counter affidavit) has no bearing with the receivership action.”

It is significant that none of the four grounds of appeal contained in the appellants Notice of Appeal challenges this finding of the lower Court to the effect that the issue regarding the issuance of pre-action notice has been taken over by the Memorandum of Understanding executed by the parties and the said issue of issuance of pre-action notice has no bearing with the receivership action. The law is settled that the decision of the Court not appealed against is

deemed accepted by the party against whom it is made and therefore binding. This was the decision of the apex Court in IYOHO V EFFIONG (2007) 11 NWLR, PT 1004, 31 AT 55 PARA B. It follows therefore that the Appellants not having appealed against this specific finding of the Court below, that, the issue of pre-action notice has been over taken by the Memorandum of Understanding and has no bearing with the receivership action are bound by the said decision. This issue is resolved against the appellant.

In resolving issue (2), I have soberly considered the submissions of both counsel in respect of same. The premise of counsel’s contention under this issue is primarily the pre-action notice which the appellants allege that the respondent concealed. Having found earlier in this judgment that there is no concealment because the finding of the lower Court, that the issuance of pre-action notice has no bearing with the receivership has not been appealed against, the argument on issue 2 should rightly be dismissed with a wave of hand. This notwithstanding it is conceded and the law is clear that the general principle of law is that where a party seeking and

obtaining an injunction fails to disclose some facts, makes some misrepresentation or conceals some facts in the course of the grant of the injunction, such an injunction on the realization of the non-disclosure or misrepresentations, concealment, etc has to be discharged: R-BENKAY NIGERIA LTD V CADBURY (SUPRA) (2012) 9 NWLR, PT 1306, 596; UTB LTD V DOLMETSCH PHARMACY (NIG) LTD (2007) 16 NWLR, PT 1061, 520 and GALLAHER LTD & ANOR V B.A.T. (NIG) LTD & ORS (2015) 13 NWLR, PT 1476, 325.
My major problem with the submissions of the appellants is that they seem to be made at large. The legal principles are not tied to the facts of the case and so it becomes more of an academic exercise than a legal submission as observed previously. The point must however be made that where a party relies on suppression, concealment or misrepresentation as a ground to set aside an ex parte injunction, it has to be shown that the suppression is of a material fact which influenced or propelled the Court in granting the application. Where the concealment is not material and of a nature which precipitated the grant of the injunction, then it cannot cause the discharge of

the injunctive remedy. See: R-BENKAY NIG LTD V CADBURY NIG LTD (SUPRA). In the instant case, what was suppressed, concealed or not disclosed was not stated nor its importance thereof in propelling the Court to grant the order. In the circumstances, it is safe to agree with the view of the trial Court that all material facts were disclosed to it by the Respondent before the grant of the preservative orders.

Before concluding on this issue, it is necessary to draw attention to the fact that the suit against which this appeal is brought is a receivership action commenced pursuant to a DEED OF ALL ASSETS debenture created by the 1st Appellant in favour of the Respondent charging its assets as security for facilities granted it by the Respondent. This means the assets charged are legally enjoined to be in the control and custody of the receiver/manager who is the new alter ego of the 1st Appellant Company in receivership, the power of the director of the Appellants having been suspended by the appointment of the receiver/manager. This is affirmed by SECTION 393 (4) of CAMA which provides thus:
“As from the date of appointment of a receiver or

manager, the powers of the directors or liquidators in a members’ voluntary winding up to deal with the property or undertaking over which he is appointed shall cease unless and until the receive or manager is discharged.”

On the strength of this provision there is perhaps some wisdom in the decision of the lower Court to grant these preservative orders to preserve the res of the suit while the parties determine their responsibilities and obligations to each other under the contract. From all the foregoing, it is easy to agree with the learned trial judge that there was no concealment of material facts on the part of the plaintiff/respondent while obtaining the ex parte order of injunction. Logically therefore I resolve this issue against the appellants and in favour of the respondent.

Issue (3) is on balance of convenience. This is not an abstract term but it can be quite subjective because what constitutes balance of convenience in one situation may not be so in another. In other words, the determination by a Court of where the balance of convenience rests in a case is a question of fact, not law. This exercise of discretion implies

weighing from the evidence before the Court, the degree of hardship or inconvenience which each party is likely to suffer according to whether the order is granted or refused. Arguing from the Appellants’ perspective all that learned counsel stated of note is –
“… the lower Court failed to acknowledge that a situation in which the Appellants’ premises are sealed and the Appellants and Appellants’ lawful tenants are prevented from enjoying ingress and egress of those premises, is more inequitable than the mere delay in the Respondent recovering the indebtedness allegedly due to it.”

This coming from a debtor owing over USD 7 Million of depositors’ funds borrowed from the Respondent cannot be evidence of balance of convenience in favour of the appellants. What of the Respondent who stands the risk of losing its banking license if facilities like these are not recovered? Moreover, I must emphasise that already a receiver/manager had been appointed. All he seeks from the Court is judicial protection to effectively carry out his duty as a receiver manager. At this point and legally speaking the receiver/manager the

appellants’ charged assets are in the control and custody of the receiver/manager. It is all these facts and circumstances which informed the lower Court into resolving that the balance was in favour of the Respondent. I have read the averments of both parties. I have come to the ultimate conclusion that the trial Court was right in finding in favour of the Respondent. There is strong evidence that a very huge sum of depositors’ funds/monies trusted to the Respondent had been borrowed by the Appellants to advance their business, which funds they now seek to indirectly/perpetually retain. As a result, the Respondent in an effort to recover some of these funds has appointed a receiver to manage and where necessary sell off the assets of the 1st Appellant to recover these funds. The Appellants in all of this have not made a single overture to pay one cent out of this money. I am therefore satisfied that the trial Court exercised its discretion judicially and judiciously in refusing the application of the appellants to set aside the interim injunction and for granting the interlocutory injunction. This Court would be loathe to interfere with a trial

Court’s exercise of discretion especially since same has not been shown to have led to a miscarriage of justice to the parties. I resolve this issue also against the appellants and in favour of the Respondent.

The Respondent had filed and argued a preliminary objection in respect of this issue in their brief of argument. I have already in this judgment found that the preliminary objection was abandoned and struck same out. It is however within my powers to look at the grounds of appeal and determine whether the ground upon which this issue is founded constitutes a life issue in this appeal. I will resist the temptation to go on either of this route. It is not in doubt that this is an interlocutory appeal. It is concerned with the refusal of the trial Court to set aside its interim injunction and for granting the respondent’s interlocutory injunction. The Respondent went before the Court below on an originating summons. The interim and interlocutory applications that were granted by the lower Court were filed simultaneously with the originating process. In other words, only the two applications were taken before the appellants filed this

appeal. It appears to me that this issue is an invitation, a tempting one no doubt, to make pronouncements on the substantive matter before the trial Court in this interlocutory appeal. I am well aware that the apex Court has counseled for caution severally, of the need for an intermediate appellate Court like this one to desist from making positive pronouncements touching on the substantive issue while they are only engaged in the determination of interlocutory matters before them. See: UNIVERSITY PRESS LTD V I. K. MARTINS, NIG LTD (2000) 4 NWLR, PT 654, 584; AKINRIMISI V MAERKS NIG LTD & ANOR (2013) LPELR – 20179 (SC); A. G. KWARA STATE & ANOR V LAWAL & ORS (2017) LPELR – 42347 (SC) and UFOEGBUNAM & ORS V FRN (2019) LPELR – 47163 (CA). For this reason and the fact that this is not a life issue in this appeal, I refuse to delve into this issue. I discountenance it. The parties are free to ventilate those issues before the trial Court. The Court not having ruled on the issue, it cannot become a matter of appeal. An appeal is a challenge to the decision of a lower Court. This Court has no original jurisdiction in this matter so

it cannot be a Court of first instance on this issue.

On the whole and from my findings in this judgment, this appeal lacks merit. It fails and I hereby dismiss it. Parties should go back to the trial Court to ventilate their claims/counter claims there. This delay tactics of going on appeal at every turn to buy time does nobody any good. A determination of this application will no doubt impact the economy significantly considering the amount at stake in the suit. Parties should therefore endavour to resolve their disputes if not amicably, then judicially but not stall them as they affect the economy and therefore the entire populace. Ordinarily, costs follow events and I would award punitive costs in this type of case to deter frivolous appeals. I have however considered the plight of the 1st Appellant in receivership. I assess costs at only N100,000 against the respondents.

HUSSEIN MUKHTAR, J.C.A.: I have had the honour to read in draft, the judgment of my learned brother Patricia Ajuma Mahmoud, JCA. I am in agreement with the reasons therein and the conclusion that the appeal lacks merit.

I hereby dismiss the appeal for lacking in merit and subscribe to all the consequential orders made in the judgment.

PAUL OBI ELECHI, J.C.A.: I have read in draft the lead judgment of my learned brother Patricia Ajuma Mahmoud JCA just delivered.
I agree with him completely and have nothing to add.
The appeal lacks merit and therefore I agree with him that it be dismissed.
I also abide by the order as to costs.
Appeal Dismissed.

Appearances: