NIGERIA DEPOSIT INSURANCE CORPORATION v. SIR. S.O. ODIGIE
(2012)LCN/5531(CA)
In The Court of Appeal of Nigeria
On Wednesday, the 4th day of July, 2012
CA/B/101/2008
RATIO
JURISDICTION: MEANING AND NATURE OF JURISDICTION
The term jurisdiction imports and connotes the authority, competence, capacity and legal power which a court of law or tribunal possesses to hear a matter before it and reach a decision on such a matter. Where a court lacks the power and competence, it cannot legally adjudicate over a matter. This is because the competence of a court is an essential element in determining its jurisdiction. Consequently, any defect in competence is fatal and the whole proceedings will amount to a nullity however well conducted and decided. See SULE V. NIGERIAN COTTON BOARD (1985) 2 NWLR (PT. 5) at 36. And a court will be competent to adjudicate over a matter only where:
- it is properly constituted in terms of number and qualification of its members;
- The subject matter of the action is within its jurisdiction in the sense that it has the competence to adjudicate over it;
- The matter is initiated by due process of law and there is no feature therein to rob the court of its jurisdiction;
- All conditions precedent to the exercise of jurisdiction are met.
See MADUKOLU V. NKEMDILIM (1962) All NLR 587; SULE V. NIGERIAN COTTON BOARD Supra PER CHIOMA EGONDU NWOSU-IHEME (Ph. D), J.C.A
JURISDICTION: HOW IS THE COMPETENCE OF A COURT DETERMINED
It is important to re-iterate the settled and now common-place law that in determining whether a court has the competence or jurisdiction to determine a matter, it is the claim and the facts disclosed in the Statement of Claim of a Plaintiff or a Claimant that has to be looked at. It is neither the evidence nor the Statement of Defence. See ABDULHAMID V. AKAR (2006) All FWLR (PT 321) 1191 at 1204. PER CHIOMA EGONDU NWOSU-IHEME (Ph. D), J.C.A
WORDS AND PHRASES: MEANING OF A GENERAL RETAINER AND SPECIAL RETAINER
A general retainer is a retainer for a specific length of time rather than for a specific project, whereas a special retainer is a retainer for a specific project. In either case the retainer is paid a retaining fee which is a fee paid to a lawyer for his legal representation or services. See BLACKS LAW DICTIONARY (7th Edition) Page 1317. PER CHIOMA EGONDU NWOSU-IHEME (Ph. D), J.C.A
JUSTICES
RAPHAEL CHIKWE AGBO Justice of The Court of Appeal of Nigeria
OYEBISI FOLAYEMI OMOLEYE Justice of The Court of Appeal of Nigeria
CHIOMA EGONDU NWOSU-IHEME Justice of The Court of Appeal of Nigeria
Between
NIGERIA DEPOSIT INSURANCE CORPORATION
(Liquidator – Allied Bank of Nig. Plc) Appellant(s)
AND
SIR. S.O. ODIGIE (carrying on Business under the name and style of S.O. ODIGIE & CO.) Respondent(s)
CHIOMA EGONDU NWOSU-IHEME (Ph. D), J.C.A (Delivering the Leading Judgment): The matter, subject of the present appeal was commenced by Writ of Summons at the Federal High Court of the Benin Judicial Division. In his Statement of Claim filed following the Writ of Summons, the Respondent herein as Plaintiff crystallized his claims against the Appellant herein as Defendant in the following terms:
“(i) The sum of N565, 000.00 (Five Hundred and Sixty-Five Thousand Naira) being Plaintiff’s money in the custody of Defendant since 11th November 1998 as per annexures C and D herein.
(ii) 10% interest on the said sum with effect from 11th November 1998 till Judgment and 21% till the total sum of indebtedness is liquidated.”
(Underlining supplied).
The aforementioned Statement of Claim was of 16 paragraphs, the last of which contained the claims set out above. Initially, the Appellant neither filed a memorandum of appearance nor filed a Statement of Defence. Later, however, after the Respondent as Plaintiff had opened and closed his case, the Appellant, by motion dated 15/11/05 and filed same day, sought an order of court extending time within which to enter appearance and to deem the memorandum of appearance exhibited to the motion papers as properly filed and served.
After hearing argument in support of the motion and there being no opposition thereto, the court ordered as prayed and gave the Appellant 14 days to file and serve its Statement of Defence. This was on 2/12/05.
Thereafter, the Appellant filed its defence on 13/5/05 in which, in paragraph 13 thereof, it raised the issue of the jurisdiction of the court to entertain the Suit. On the same 13/5/05, Appellant also filed a motion for the issue of jurisdiction raised in the aforesaid paragraph 13 to be set down for hearing.
It does appear, from the records, that in the interim the court proceeded to take the evidence of the defence in the matter on 16/6/06 from which date further hearing was adjourned to 5th and 14th days of July 2006 without anything said about the motion challenging jurisdiction.
However, by motion dated 12/7/06 and filed 13/7/06, the Respondent sought leave to amend its Statement of Claim and to deem the amended Statement of Claim exhibited thereto as properly filed and served. The reliefs sought in the said motion were ordered as prayed by the trial court on 14/6/07. Thereafter and on the same day, the court proceeded with the case of the defence through the evidence of DW2 at the end of which it adjourned the matter to 13th July 2007, in his words:
“For the adoption of written addresses and Judgment.”
The court further ordered that written addresses of the counsel on both sides were to be exchanged “by the 6th of July, 2007. The Respondent’s (Plaintiff’s counsel) filed an address on 6/7/07 and a Supplementary address” on the 10/7/07. By a motion dated 13/7/07 and filed same day, the Respondent sought an order of court for extension of time within which to file its written address and an order deeming the address exhibited to the main motion as properly filed and served. It is worthy to note that in that address which was exhibited to the motion as Exhibit 1, the Appellant raised the issue of jurisdiction.
Against the foregoing background, the learned trial Judge proceeded to give Judgment in the Suit wherein he found for the Respondent and made the orders contained at pages 165 – 166 of the Record of Appeal.
The Appellants have now appealed against that Judgment on six (6) grounds which without their particulars, read:
”GROUND NO 1
The learned trial Judge erred in law in refusing to fix and determine the Defendant/Appellant/Applicant’s motion for extension of time within which to file his written Address (ordered by the learned trial Judge) and in proceeding to deliver Judgment in this suit.
GROUND NO.2
The learned trial Judge erred in law in assuming jurisdiction over the matter and determining the same when the court lacked the jurisdiction to entertain it by virtue of section 251 (1) of the constitution of the Federal Republic of Nigeria, 1999.
GROUND NO.3
The learned trial Judge erred in law in striking out processes filed after the 6th of July, 2007, without sighting or seeing such processes.
GROUND NO.4
The learned trial Judge misdirected himself on the evidence led in holding that the Plaintiff was a Depositor in the face of the overwhelming evidence to the contrary showing that the Plaintiff was a Creditor.
GROUND NO. 5
The learned trial Judge erred in law when he suo moto struck out paragraph 11 of the Statement of Defence without inviting any of the parties to the suit especially the Defendant who filed the affected process to address the Court on it.
GROUND NO.6
The learned trial Judge erred in law when he failed to give full effect to the provisions of the Banks and other Financial Institutions Act, which stipulates that Depositors of Failed Banks shall be given priority over creditors, in the settlement of their claims.”
Three issues were identified by the Appellants as arising from the above grounds with which the Respondents agree. They read:
“(1) whether the trial court had the jurisdiction to hear and determine this matter having regards to the provisions of section 251 (1) of the 1999 Constitution of the Federal Republic of Nigeria.
(2) whether or not the learned trial Judge carried out a proper evaluation of the evidence before coming to the conclusion that the Respondent was a depositor and was therefore entitled to his claims in this suit in accordance with the provisions of the Banks and other Financial Institutions Act.
(3) Whether or not the Appellant’s right to fair hearing guaranteed under Section 36 (1) of the Constitution of the Federal Republic of Nigeria 1999, was not breached by the learned trial Judge when he:
(i) Refused to fix the Appellant’s motion for extension of time to file his written address which contained an order to deem the said written address as duly filed and served, for hearing and determination.
(ii) Struck out all the processes filed after the 6th of July, 2007 including the said motion for extension of time without first giving the Appellant an opportunity to move the said motion.
(iii) Struck out paragraph 11 of the Statement of Defence suo moto without first giving an opportunity to the parties to this suit to address him on propriety of doing so. ”
Because of the cardinal and threshold nature of the first Issue in this appeal which deals with jurisdiction, I propose to deal with that issue first. That issue relates to Ground 2 (two) of the Grounds of Appeal. The main complaint on this issue is that the lower court had no jurisdiction to determine the matter in view of the provisions of Section 251 (1) of the 1999 Constitution.
In his argument on this issue, learned counsel for the Appellants, Mr. Orbih (now SAN) contended that the Respondent’s claim of N565, 000.00 was one of services rendered by him to the defunct Allied Bank of Nigeria Limited which were not paid by the said bank before its liquidation.
Therefore, he argued, oh this score the claim became one for breach of contract outside the purview of Section 251 of the 1999 Constitution.
Counsel submitted that to determine jurisdiction, it is the Statement of Claim that has to be looked at. Looking at the Claim and the Statement of Claim, he argued the facts reveal a contractual relationship between the Respondent and Allied Bank. The learned trial Judge, he submitted, was, therefore, in error to have held as he did at pages 161 – 162 of the Record that the Respondent’s claim pertained to the administration and management of the Appellant when there was nothing remotely connected with the administration and management of the Appellant, moreso because at the time the cause of action arose the Appellant was not in charge of the affairs of the defunct bank.
In his reply on this issue, learned counsel for the Respondent, Mr. Odigie, contended that Appellant was a public institution with public duties as an agency of the Federal Government. Therefore, its administrative decision, policy or consideration fell under Section 251 (r) of the 1999 Constitution. The claim before the court, he argued was not one in simple contract or breach thereof but one challenging the administrative action or decision of the Appellant on when or how to settle its admitted indebtedness.
I have carefully considered the arguments of counsel on both sides of this appeal as expoused in their respective briefs of argument with painstaking attention and conscious examination. The term jurisdiction imports and connotes the authority, competence, capacity and legal power which a court of law or tribunal possesses to hear a matter before it and reach a decision on such a matter. Where a court lacks the power and competence, it cannot legally adjudicate over a matter. This is because the competence of a court is an essential element in determining its jurisdiction. Consequently, any defect in competence is fatal and the whole proceedings will amount to a nullity however well conducted and decided. See SULE V. NIGERIAN COTTON BOARD (1985) 2 NWLR (PT. 5) at 36. And a court will be competent to adjudicate over a matter only where:
1. it is properly constituted in terms of number and qualification of its members;
2. The subject matter of the action is within its jurisdiction in the sense that it has the competence to adjudicate over it;
3. The matter is initiated by due process of law and there is no feature therein to rob the court of its jurisdiction;
4. All conditions precedent to the exercise of jurisdiction are met.
See MADUKOLU V. NKEMDILIM (1962) All NLR 587; SULE V. NIGERIAN COTTON BOARD Supra
It is important to re-iterate the settled and now common-place law that in determining whether a court has the competence or jurisdiction to determine a matter, it is the claim and the facts disclosed in the Statement of Claim of a Plaintiff or a Claimant that has to be looked at. It is neither the evidence nor the Statement of Defence. See ABDULHAMID V. AKAR (2006) All FWLR (PT 321) 1191 at 1204.
Now let me take an excursion into the Statement of Claim filed in this matter that is now on appeal here. The Respondent filed a 16 paragraph Statement of Claim. The most germane portions thereof relative to the issue under consideration are paragraphs 2, 4, 5, 6, 7, 8, 9, 10 and 14.
They read:
“(2) The Plaintiff was external legal retainer to defunct Allied Bank of Nigeria Plc in its Benin City Branch from 1983 till when it went off business about 1998.
(4) Consequent upon the takeover of all assets and liabilities of the liquidated Allied Bank of Nig. Plc. the Plaintiff forwarded to the Defendant its claims for legal services rendered to Allied Bank Plc. in its Benin City Branch whilst it operated before liquidation.
(5) Whilst an external legal retainer of the Allied Bank Plc. the Plaintiff was instructed to immediately open an account with the said bank as a customer in the name of S.O. ODIGIE & CO such that all fees/payments due and payable to the Plaintiff including for services rendered to it would be deposited in the said account by crediting same in the said account.
(6) The Plaintiff avers that on liquidation of the Allied Bank Plc and consequent take over by the Defendant, Plaintiff forwarded to Defendant, a detailed list of payments which were or ought to have been to the credit of Plaintiff in its said account named S.O. ODIGIE E CO. Having earned the monies for legal services rendered, such fees transformed to the status of deposit before credit.
(7) The Defendant subsequently forwarded a Claims Form (Proof of Claim) for the services rendered wherein the claims were itemized and approved for payment to the tune of N565,000.00 only. This document was deposed to before a Commissioner for Oaths at the High Court Registry Benin City on 17th September 1998 by Helen Adesuwa Courage-Ogbebor (Mrs.) a partner in the Firm at the time (Vide Annexure B, B1, B2).
(8) The Plaintiff further avers that following receipt of the Proof of Claim the then Assistant Liquidator in charge together with the Claims Officer (Messrs Adeleke & Eluwa respectively of Allied Bank Plc in liquidation) approved and jointly signed and forwarded to Plaintiff as per letter NDIC/R&L/ABN/OPS/Vol.2/199 dated 11th November 1998 a Creditors’ Liquidators Certificate Claim ABN/0020 for N565, 000 (five hundred and sixty-five thousand Naira) only (Vide Annexure C). A copy of the said Certificate shall be tendered in evidence at trial.
(Annexure D).
(9) The Plaintiff shall state at trial that as per his letter SOD/18/84/Vol.3/145 dated 4th January 2002 (Vide Annexure E) he demanded from the Defendant payment of this indebtedness. The Defendant replied as per its letter NDIC/R & L/LCC/Vol. 1/2002 dated 15th January 2002 (Vide Annexure F). Appealing to Plaintiff to exercise patience. Both letters are hereby pleaded and shall be tendered at trial.
(10) The Plaintiff states that when it appeared to it that the plea for patience had no particular time frame, he was constrained to write another letter SOD/18 84/Vol.3/151 dated 1st September 2002 (Annexure G), demanding the settlement of the indebtedness within one month and also notice of its intention to sue if the Defendant failed to perform. The letter was dispatched by hand and signed for. Although there is no formal written response to it since then, Plaintiff and his representative have however discussed the letter on telephone with some management staff of Defendant including one Mr. Nwankwo. A copy of the said unreplied letter (Annexure G) shall be tendered in evidence.
(14) The Plaintiff shall state that in order to fulfill all righteousness by complying with the provision of S. 16 of the Legal Practitioners Act Laws of the Federation 1990, he formally forwarded to the Defendant Notice of Intention to sue after 7 month as per letter SOD/24/2004/1 dated 14th July, 2004 copy of which shall be tendered at trial.(Vide Annexure H) to which there is no response till date.
It is on the basis of the foregoing pleaded facts that the claims in paragraph 16 of the Statement of Claim were crystallized.
A thorough examination of the facts pleaded in the above paragraphs of the Statement of Claim reveals that the relationship between the Respondent and the defunct Allied Bank was one of general retainership contract. A general retainer is a retainer for a specific length of time rather than for a specific project, whereas a special retainer is a retainer for a specific project. In either case the retainer is paid a retaining fee which is a fee paid to a lawyer for his legal representation or services. See BLACKS LAW DICTIONARY (7th Edition) Page 1317. The relationship is one of contract for services and any payment either made or to be made is payment in respect of the contract of services.Annexures B, B1 and B2 referred to in paragraph 7 of the Statement of Claim and attached to that Statement of Claim thereby forming part of it clearly show that the Respondent’s claim of N565,000.00 related to services rendered to the Allied Bank which had not been paid for.
To underscore the point here, in Annexure B2 at page 15 of the Records and which forms part of the content of a document that started from page 14 as Annexure B1 made on oath, the Respondent swore therein inter alia as follows:
“Deponent further states and he/she makes this claim on behalf of S.O. Odigie and states that no part of the debt has been paid, that no endorsement or assignment of the same or part thereof has been given and that there is no set-off, counterclaim, legal or equitable defence to the said claim or any part thereof.”
(Underlining supplied)
Annexure B1 at page 14 of the Records titled “Proof of Claim” also shows that the Respondent was claiming in debt owed it when it stated on oath therein inter alia thus:
“… that the Allied Bank Plc now in liquidation is justly indebted to the said S.O. Odigie & Co. in the sum of N565,000.00 (five hundred and sixty-five thousand naira)….”
and then proceeded to itemize in the same document the various services rendered and the amount claimed for each service all totaling N565,000.00.
Again, more instructive is Annexure H referred to in paragraph 14 of the Statement of Claim already reproduced above. That annexure is a “Notice of Intention to sue for recovery of charges in compliance with Legal practitioners Act, Re Allied Bank (Nig) Plc” as it is titled. For ease of reference and in adumbration of the point being made, relevant portions of it are herein set out. They read:
“As retainers to the defunct Allied Bank Plc, we forwarded to you several bills of Charges for our services of which you reviewed and finally approved the sum of N565,000.00 (five hundred and sixty-five thousand naira) as our legitimate claim.”
2. ……………….
3. We recall that we expressed our anxiety in the delay in settling this indebtedness in our letter SOD/18/84/Vol. 3/145 dated January, 2002 and you replied as per letter NDIC/RL/LCC/Vol. 1/2002 dated 15 January 2002 appealing for exercise of patience and understanding but stated therein that we have to wait until all depositors have been satisfied.
4………………
5. It is our strong view that we do not have to wait for the settlement of depositors claims before our authenticated claim for legal services rendered are settled.
(Underlining supplied)
The totality of the facts averred in the aforementioned paragraphs of the Statement of Claim and the annexures referred to therein and attached thereto and forming part of the Statement of Claim come to this: that at all material time, the sum of N565, 000.00 being claimed by the Respondent as his retainership professional fee had not been lodged into any account of the Respondent with the defunct Allied Bank in payment for Respondent’s professional services. That sum was only a debt which the Appellant by the tenor of annexure H made by the Respondent reviewed and finally approved for payment.
The sum was, therefore, not in the account of the Respondent for purposes of crystallizing into a deposit with the defunct bank. It was, therefore, a debt arising from a simple contract of retainership between the Respondent and Allied Bank which the Appellant only inherited. That inheritance did not remove it from its nature of simple contract.
The Legal Practitioners Act Cap 207 Vol. xi Laws of the Federation 1990 made provision for the manner in which a Legal Practitioner shall be entitled to recover professional fees owed him. Section 16 of the said Act is relevant for the purpose. It states inter alia as follows:
“16 (1) subject to the Provisions of this Act, a Legal Practitioner shall be entitled to recover his charges by action in any court of competence jurisdiction.
(2) Subject as aforesaid, a Legal Practitioner shall not be entitled to begin an action to recover his charges unless –
(a) a bill for the charges containing particulars of the principal items included in the bill and signed by him, or in the case of a firm by one of the partners or in the name of the firm has been served on the client personally or left for him at his last address as known to the practitioner or sent by post addressed to the client at that address; and
(b) the period of one month beginning with the date of delivery of the bill has expired.
Since the Appellant stood in place of the defunct Allied Bank Plc, Annexure B1 which itemized the principal items of Respondent’s bill and annexure H which gave notice of intention to sue would appear to me to have met the conditions stipulated in Section 16 above.
But the problem that arises in the Respondent’s case is the competent court to sue. This is because the Act talks of court of competent jurisdiction not just any court. This brings into play the jurisdiction of the Federal High Court Benin. As I had said elsewhere in this Judgment, the situation in the instant case is one of simple contract for services, a retainership contract for services and a debt arising from that contract. The jurisdiction of the Federal High Court of this country is prescribed by Section 251 (1) of the Constitution of the Federal Republic of Nigeria 1999.
That Section itemizes in its sub-sections (a) – (s) the subject matters over which the Federal High Court has exclusive jurisdiction. None of those items or subject matter relates to actions in simple contracts for the recovery of debts or professional fees owed a person, body or authority. On the other hand, Section 272(1) of the same constitution provides that subject to Section 251 reserving exclusive jurisdiction in matters mentioned therein (Section 251) the High Court of a State shall have jurisdiction to hear and determine any civil proceeding in which the existence or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue. Having held that the instant case relates to a simple contract involving recovery of a debt, nay, professional fees as borne out by the facts averred in the Statement of Claim, it follows that the appropriate forum for the ventilation of that claim is the state High Court and not the Federal High Court. The Federal High Court sitting in Benin which is the lower court that heard the present case had no jurisdiction to entertain it being one founded on simple contract. See ONUORA V. KRPC (2005) 6 NWLR (PT. 921) 393.
The argument of learned counsel for the Respondent that the case was one founded on the administrative action or decision of the Appellant has no foundation either on the pleading of the Respondent or on the law relating to it. It is preposterous.
In the result, Issue No 1 is resolved in favour of the Appellant against the Respondent. Ground 2 of the Grounds of Appeal, therefore, succeeds.
The success of this Ground of Appeal makes an incursion and discussion on the other issues unnecessary.
In the premise, this appeal succeeds. The Judgment of the lower court is set aside for want of jurisdiction. The case of the Respondent at the lower court is hereby struck out. I make no order as to costs.
R.C. AGBO, J.C.A.: I agree.
OYEBISI FOLAYEMI OMOLEYE, J.C.A.: I have read in draft the judgment just delivered by my learned brother, Nwosu-Iheme, JCA. I agree that this appeal has merit. I also allow it.
Appearances
W.W. UCHEFor Appellant
AND
B.O. SAIKIFor Respondent
