OBOH & ANOR v. NIGERIA FOOTBALL LEAGUE LTD & ORS
(2022)LCN/5039(SC)
In The Supreme Court
On Friday, January 28, 2022
SC.841/2016
Before Our Lordships:
Mary Ukaego Peter-Odili Justice of the Supreme Court of Nigeria
Ejembi Eko Justice of the Supreme Court of Nigeria
Mohammed Lawal Garba Justice of the Supreme Court of Nigeria
Ibrahim Mohammed Musa Saulawa Justice of the Supreme Court of Nigeria
Tijjani Abubakar Justice of the Supreme Court of Nigeria
Between
1. EMMANUEL OBOH 2. EMMANUEL OBOH & ASSOCIATES APPELANT(S)
And
1. NIGERIA FOOTBALL LEAGUE LIMITED 2. LEAGUE MANAGEMENT COMPANY LIMITED 3. FIRST BANK OF NIGERIA PLC RESPONDENT(S)
RATIO:
WHAT IS A GARNISHEE PROCEEDING?
Garnishee proceedings, according to Akintan, JSC in UNION BANK OF NIGERIA PLC v. BONEY MARCUS INDUSTRIES LTD (2005) 13 NWLR (pt. 943) 654 at 666, are a process of enforcing a money judgment by the seizure or attachment of the debts due or accruing to the judgment debtor which form part of his property available in execution. It is a specie of execution of adjudged debt for which ordinary methods of execution are inapplicable. By this process, the Court has power to order a third party to pay direct to the judgment creditor the debt due or accruing from him to the judgment debtor, as much of it as may be sufficient to satisfy the amount of judgment and the costs of the garnishee proceedings.
The judgment creditor first makes the application to the Court for garnishee proceedings. The order of Court then comes in two stages. The first is garnishee order nisi which directs the garnishee to pay the sum covered by the application either to the Court or the judgment creditor within a stated time unless the party (the garnishee), against whom the order is made, shows good cause why the payment should be made. If no sufficient good cause is shown the Court then makes the garnishee order absolute directing the third party (the garnishee) to pay over the amount specified to the judgment creditor or to the Court, whichever is more appropriate. See CHOICE INVESTMENTS LTD v. JEROMNIMON (1981) QB 149 at 154 – 155; UNION BANK PLC v. BONEY MARCUS INDUSTRIES LTD (supra). At the stage of garnishee order nisi the amount standing to the credit of the judgment debtor in the hands of the third party (the garnishee) is, or has been, attached, that is garnished. In SOKOTO STATE GOVERNMENT v. KAMDAX NIG. LTD. (2004) 9 NWLR (pt. 878) 345 at 380, it was stated:
“Where the judgment creditor has garnished the debt standing to the credit of the judgment debtor in the hands of the garnishee, upon service of the order nisi from the Court, the garnishee becomes a custodian of the whole of the judgment debtor’s funds attached.”
See also AZUBUIKE v. DIAMOND BANK PLC (2014) 3 NWLR (pt. 1394) 116 (CA).
In making the order nisi, the trial Court exercises its undoubted judicial discretion – judicially and judiciously. EJEMBI EKO, J.S.C.
EJEMBI EKO, J.S.C. (Delivering the Leading Judgment): On 9th July, 2013, at the suit of the named Appellants (as Claimants) at the High Court of Lagos State (Coram: O. A. Adefope-Okojie, J) “judgment as per the award of the Tax Master given on 28th September, 2012 in the sum of Two Hundred and Thirty-Three Million, Nine Hundred and Fifteen Thousand, Six Hundred and Forty Four Naira (N233,915,644.00) (was entered) in favour of the Claimants” and against the sole defendant, NIGERIA FOOTBALL LEAGUE LIMITED, at the said trial Court.
The records show that, on the said 9th July, 2013, the defendant (now the 1st Respondent in this appeal) was represented by a Counsel, Emmanuel Ochokwunu. The award of the Chief Registrar/Tax Master, affirmed and incorporated into the final decision on the 9th July, 2013 by the trial Court (O. A. Adefope- Okojie, J. (as she then was)] was made on 28th September, 2012.
The Appellants, as judgment creditors, in exercise of their rights and powers under Section 287(3) of the Constitution, providing inter alia that the decision of a High Court shall be enforced in any part of the Federation by all authorities and persons and the Court itself, proceeded by way of garnishee proceedings at the trial High Court to enforce the judgment dated 9th July, 2013. They proceeded against the League Management Company Limited and First Bank of Nigeria Plc, respectively the 2nd and 3rd Respondents in this appeal, as Garnishees. On 18th July, 2013, the trial High Court (G. N. Onyeabo, J.) granted “the garnishee order nisi against the garnishees attaching the sum owing in satisfaction of the judgment entered on 9th July, 2013 in favour of the judgment creditors”. G. N. Onyeabo J. further ordered that at the garnishees shall enter appearances within fourteen (14) days and shall file an affidavit to show cause why the order nisi should not be made absolute, attaching as exhibits – copies of the Statement of Account of the Judgment Debtor held by them”. G. N. Onyeabo, J. further ordered “the garnishees or their representatives shall also appear on the return date here fixed for 8th August, 2013 …”
The 2nd Respondent, as the 1st Garnishee, filed its affidavit to show cause on 7th August, 2013. In paragraph 25 of the affidavit, the 1st Garnishee denied being “indebted to the Judgment Debtor in the sum of N232,912,644.00 (Two Hundred and Thirty-Two Million, Nine Hundred and Twelve Thousand, Six Hundred and Forty-Four Naira) or in any other sum whatsoever and is neither charged with collecting nor is it the custodian of the Defendant/Judgment Debtor for the collection of all or any revenue accruing to the Defendant/Judgment Debtor”. In paragraph 6 of the said affidavit to show cause the 1st Garnishee had also averred:
6. That I know as a fact and can positively confirm that the Defendant/Judgment Debtor, now defunct, was declared illegal and void by the Honourable Justice D. U. Okorowo of the Federal High Court sitting in Abuja on 20th January, 2012 and was ordered to be wound up by the Corporate Affairs Commission in suit no. FHC/ABJ/CS/179/2010. Attached herewith and marked as Exhibit A is a Certified True Copy of the Enrolled Judgment Order of the Federal High Court.
The 2nd Garnishee Bank, on its part, had averred, in its affidavit to show cause, “that upon receipt of the said Order Nisi, the bank conducted a search on its data base to confirm whether the Judgment Debtor maintains any account with the bank”, and it discovered that the Judgment Debtor does not maintain any account with the 2nd Garnishee and further “that the 2nd Garnishee having no fund belonging to the Judgment Debtor to satisfy the judgment sum should be discharged”. The 2nd Garnishee did not furnish the Statement of Account of the 1st Garnishee, nor any further details from its data bank. This prompted the Judgment Creditors/Garnishers to file Further Affidavit in reply to the 2nd Garnishee wherein it is averred that “the 2nd Garnishee has funds of the 1st Garnishee sufficient to satisfy the judgment debt in whole or in part and has purportedly (sic: purposefully) allowed the 1st Garnishee withdraw same”. At the time the Garnishee order nisi was made the Judgment Creditors/Appellants had satisfied the trial Court (Onyeabo. J) that the 2nd Garnishee was warehousing N500,000,000.00 funds of the 1st Garnishee in the account No. 202318545.
The Judgment Debtor’s Counter Affidavit of 22nd August, 2013 appears to suggest that, on 18th July, 2013, it appealed the decision of the trial High Court affirming its liability to pay the adjudged Judgment Debt. The Notice of Appeal and the proposed Amended Notice of Appeal (dated 4th October 2013) were exhibited in the affidavit in support of the motion filed on 4th October, 2013 at the Court of Appeal to show its pending appeal against the decision of 9th July, 2013. The allegedly defunct 1st Respondent, notwithstanding the decision/order of the Federal High Court in suit no. FHC/ABJ/179/2010, continued thereafter to remain active in business.
In the meantime O. A. Adefope-Okojie, J (as she then was), whose judgment was being enforced, heard the application for garnishee order absolute. On 21st January, 2014, she rendered her ruling, the subject of this appeal. Adefope-Okojie, J, in the said ruling seemed to have imposed on herself the burden and function of reviewing, renouncing, reneging and negating her decision of 9th July, 2013. In her ruling on the application for garnishee order absolute, Adefope-Okojie, J, had therein inter alia considered the Memorandum of Understanding on which the cause of action of the Claimants/Judgment Creditors (now the Appellants) was predicated. She found at page 447 of the record, among others, that “The Judgment Debtor, Nigeria Football League, I note, is not a party or a signatory to this agreement” and that “in addition, by the terms of this Memorandum, it is the League Management Company Limited that a Licence is given to administer football ‘together with all rights appertaining to the Nigeria Premier League’ “on this, she concluded that she was hesitant, in the circumstances, to “hold the 1st Garnishee bound to the Memorandum of Understanding to which it was not a party”. Further in the same ruling, Adefope- Okojie, J observed that Okorowo, J of the Federal High Court in the suit no. FHC/ABJ/CS/179/2010 had on 20th January, 2012 declared that the incorporation of the Nigeria Football League Limited, the Defendant/Respondent, “illegal and void – and also that (it) cannot administer football in all its ramifications”. It was on these bases that she declared/ruled that “an order absolute, as requested, cannot be made in the circumstances disclosed above”. She accordingly discharged the order nisi made by Onyeabo, J on 18th July, 2013.
The Court of Appeal (the lower Court) affirmed the decision of the trial Court (Adefope-Okojie, J) hence this further appeal. The main point of the lower Court’s decision is that the order nisi made by Onyeabo, J on 8th July, 2013 was literally unenforceable by the non-existence of the Defendant/Judgment Debtor, the 1st Respondent herein, and that it (the lower Court) “is reluctant to make pronouncement against non-existent and non-juristic personalities”. Against the decision the Appellants filed their Notice of Appeal on 4th August, 2016, containing 5 grounds of appeal and an amended Notice of Appeal containing 6 grounds of appeal dated 24th February, 2020, but deemed filed on 22nd September, 2020, was subsequently filed upon leave of Court.
Ordinarily, an amended notice of appeal completely obliterates the original notice of appeal amended. It no longer avails the appellant either to formulate his issues for the determination of the appeal therefrom or to argue his appeal on the original notice amended.
The 3rd Respondent’s Notice of Preliminary Objection filed on 14th October, 2020 is predicated on two grounds, namely: that the appeal is incompetent because (i.) it was initiated jointly by a non-juristic person, that is the 2nd Appellant, Emman I. Oboh & Associates, a person unknown to law; and (ii.) the issue formulated and argued in the Appellants’ brief are predicated on two Notices of Appeal – the original Notice of Appeal and the Amended Notice of Appeal.
I agree with the 3rd Respondent that it is the law that an appellant cannot rely on and argue his appeal on more than one notice of appeal because an issue in an appeal cannot be determined on two separate filed notices of appeal. CHUKWU v. THE STATE (2007) All FWLR 1224 at 1240. It also the law that a withdrawn notice of appeal is taken as abandoned.
Upon amendment of the notice of appeal upon leave of Court, the amendment goes to the roots and the amended notice of appeal, superseding the original notice of appeal, has the effect of completely obliterating the original notice of appeal which is taken to have been abandoned. Technically, it no longer avails the appellant to rely on the original notice of appeal, it having been amended and deemed abandoned.
Equity follows the law and does always look at the substance and not the form. The 3rd Respondent on this point of his preliminary objection appears to be blighted by the form, and not the substance. Upon my careful perusal of grounds 1, 2, 3 & 6 of the Amended Notice of Appeal they appear to be substantially the replication of grounds 1, 2 & 3 of the original notice of appeal, grounds 4 in the original notice of appeal and the amended notice of appeal and the amended notice of appeal are identical. Similarly, ground 5 in the original notice of appeal was replicated, in ground 5 of the amended notice of appeal. The two grounds are identical. I do not, therefore, think that the respondents in the appeal have been misled, embarrassed or in any way prejudged by the Appellants merely indicating that their issue 1 has been formulated from original grounds 1, 2 & 3 as well as grounds 1, 2, 3 & 6 in the Amended Notice of Appeal. The Respondents similarly are not misled and prejudiced by the Appellants indicating that issues 2 & 3 are issues the subject of identical grounds 4 & 5 in both the original notice of appeal and the Amended Notice of Appeal respectively. Therefore, using blue pencil rule to discountenance, references, in the Appellants’ issues for determination of the appeal in their brief, to grounds 1, 2, 3, 4 & 5 in the original notice of appeal filed on 9th August, 2016 will, in the peculiar facts of this case, meet the ends of substantial justice. Courts these days strive to doing substantial justice as they now turn away from arcane technicality.
The remaining point or ground for the 3rd Respondent’s preliminary objection: that the 2nd Appellant, being a non-juristic persona cannot jointly initiate this appeal with the 1st Appellant. The contention is roundly defeated by Order 2 Rule 8 of the extant Rules of this Court, enjoining inter alia that Notices of Appeal and other processes prepared in pursuance of the appellate jurisdiction of this Court for filing in accordance with the said rules, shall reflect the same title as that which obtained at the trial Court.
There is no evidence, from the records, that any objection was raised at the lower Court, to the competence of the 2nd Appellant commencing the suit, the substance of this appeal, severally and/or jointly with the 1st Appellant. The 3rd Respondent, as the 2nd Garnishee, did not also raise this objection at the trial Court. He has the right in law to raise the objection, just as he could also compromise it or waive it. See ARIORI v. ELEMO (1983) LPELR – 552 (SC). In LION OF AFRICA INSURANCE CO. LTD v. ESAN (1999) 8 NWLR (pt. 614) 197, the objection that “Mr. & Mrs. Esan” was not a juristic persona was raised timeously at the trial Court, and not at the appellate Court for the first time as a ground of appeal.
The issue: whether “Emman I. Oboh & Associate” is, or is not, a juristic persona is one of facts. He who asserts must prove that the fact, as asserted, exists in order to be entitled to judgment on the facts asserted: Sections 131 & 132 Evidence Act, 2011. The fact that “Emman I. Oboh & Associates” is not, allegedly, a juristic persona is not one established by mere hunch or intuition of the objector. It must be established by empirical evidence. This is what distinguishes this case from, and renders irrelevant and inapposite MAERSK LINE v. ADDIDE INVESTMENT LTD. (2002) 1 NWLR (pt. 778) 317; SLB CONSORTIUM LTD v. NNPC (2011) 9 NWLR (pt. 1252) 317 to the preliminary objection of the 3rd Respondent, which objection is hereby overruled in its entirety.
The 1st Respondent (the allegedly defunct persona) has its own preliminary objection and is founded on the grounds that –
1. Grounds 1 & 3 of the Notice of Appeal are one and the same.
2. Grounds 2 and 6 of the Notice of Appeal are one and the same.
3. Some particulars in support of Grounds 1, 2, 5 and 6 of the Notice of Appeal are not related to the said Grounds; and
4. Issues 1 and 3 formulated by the Appellants are liable to be struck out having been formulated from incompetent grounds of appeal.
The 1st Respondent, not contesting the competence of ground 4 and issue 2 formulated therefrom, by the Appellants appears to concede that the said ground 4 and issue 2 raised therefrom for the determination of the appeal support the appeal. Since the appeal can be heard and determined on ground 4 and Issue 2 therefrom, what the 1st Respondent purports to be a preliminary objection to the hearing of the appeal, under Order 2 Rule 9 of the extant Rules of this Court, does not in actuality constitute or amount to preliminary objection. The main and the only purpose of a preliminary objection is scuttling the hearing of the appeal in limine. See OBASI v. MIKSON ESTABLISHMENT INDUSTRIES LTD (2016) LPELR – 40704 (SC); GALADIMA v. TAMBAI & ORS. (2000) LPELR – 1302 (SC). I will therefore discountenance this purported preliminary objection, which actually is not a preliminary objection within the meaning and context of Order 2 Rule 9(1) of the extant rules of this Court. Even on the merits, it is clearly frivolous.
My Lords, the Appellants’ three issues for the determination of this appeal read thus, that is –
1. Whether the Court of Appeal was right when they relied on the judgment in FHC/ABJ/CS/179/2010 of Honourable Justice D. U. Okorowo to hold that the 2nd and 3rd Respondents (League Management Company Limited and First Bank of Nigeria Plc) garnishees are not liable to comply with the order nisi because the 1st Respondent (Nigeria Football League Limited) judgment has ceased to exist in the eyes of the law?
2. Whether the learned Justices of the Court of Appeal were right when they held that the power to lift the corporate veil of a company belong to the exclusive jurisdiction of the Federal High Court?
3. Whether the learned Justices of the Court of Appeal were right when they held that the money judgment in this appeal can only be enforced by means of an action for winding up of the Judgment Debtor and not by garnishee proceedings? The totality of these three issues for the determination of the appeal, as formulated by the appeals, is whether the lower Court was right in affirming the decision of Adefope-Okejie, J refusing to enforce her own judgment which determined the liability of the 1st Respondent to pay contractual debt in favour of the Appellants. It is not in any doubt that on 9th July, 2013, the trial High Court (Adefope-Okejie, J) entered judgment against the 1st Respondent in the sum of N232,915,644.00 in favour of the Appellants. The judgment subsists and remains binding on the parties until set aside; and it took immediate effect from the date it was pronounced. Section 287(3) of the Constitution enjoins the said trial Court to enforce its own judgment.
Garnishee proceedings, according to Akintan, JSC in UNION BANK OF NIGERIA PLC v. BONEY MARCUS INDUSTRIES LTD (2005) 13 NWLR (pt. 943) 654 at 666, are a process of enforcing a money judgment by the seizure or attachment of the debts due or accruing to the judgment debtor which form part of his property available in execution. It is a specie of execution of adjudged debt for which ordinary methods of execution are inapplicable. By this process, the Court has power to order a third party to pay direct to the judgment creditor the debt due or accruing from him to the judgment debtor, as much of it as may be sufficient to satisfy the amount of judgment and the costs of the garnishee proceedings.
The judgment creditor first makes the application to the Court for garnishee proceedings. The order of Court then comes in two stages. The first is garnishee order nisi which directs the garnishee to pay the sum covered by the application either to the Court or the judgment creditor within a stated time unless the party (the garnishee), against whom the order is made, shows good cause why the payment should be made. If no sufficient good cause is shown the Court then makes the garnishee order absolute directing the third party (the garnishee) to pay over the amount specified to the judgment creditor or to the Court, whichever is more appropriate. See CHOICE INVESTMENTS LTD v. JEROMNIMON (1981) QB 149 at 154 – 155; UNION BANK PLC v. BONEY MARCUS INDUSTRIES LTD (supra). At the stage of garnishee order nisi the amount standing to the credit of the judgment debtor in the hands of the third party (the garnishee) is, or has been, attached, that is garnished. In SOKOTO STATE GOVERNMENT v. KAMDAX NIG. LTD. (2004) 9 NWLR (pt. 878) 345 at 380, it was stated:
“Where the judgment creditor has garnished the debt standing to the credit of the judgment debtor in the hands of the garnishee, upon service of the order nisi from the Court, the garnishee becomes a custodian of the whole of the judgment debtor’s funds attached.”
See also AZUBUIKE v. DIAMOND BANK PLC (2014) 3 NWLR (pt. 1394) 116 (CA).
In making the order nisi, the trial Court exercises its undoubted judicial discretion – judicially and judiciously.
When the trial Court (per Onyeabo, J) made the garnishee order nisi upon the affidavit (Form 25) of Oyetuga Olugbenga Joseph (on behalf of the Judgment Creditors) filed on 16th July, 2013, I should take it, on the presumption of regularity (Section 168(1) of Evidence Act, 2011), that the trial Court (Onyeabo, J.) made the order nisi having been satisfied by the averments that the amounts of the debts due and owing or accruing for the 1st garnishee to the Judgment Debtor are lodged in bank accounts, one of which is with the 2nd Garnishee” and “that the 2nd Garnishee, First Bank Plc of No. 35, Marina Lagos State are bankers to the 1st Garnishee who maintains Accounts No. 2023185845 at 2nd Garnishee’s Central Business District Abuja Branch where the title sponsorship fees to the tune of over N500,000,000 accruing to the Judgment Debtor in respect of the 2012/2013 Nigeria Premier Football League season – was deposited” and further “that the said account is still in credit to the tune of about N160,000,000.00. On 18th July, 2013 Onyeabo, J made Order Nisi against both “garnishees attaching the sum in satisfaction of the judgment entered on 9th July, 2013 in favour of the Judgment Creditor. The 2nd Garnishee, the 3rd Respondent, had been consistently dubious and dodgy on the fact averred, and accepted by Onyeabo, J, that at the time the order nisi was made it had in favour of the 1st Garnishee N500,000,000.00 lodged with it. Adefope-Okojie, J did not address the fact like the lower Court.
I do not think any power or jurisdiction enures to the Court before which application for garnishee absolute is pending to constitute itself into an appellate Court to review the money judgment being enforced. Both Onyeabo, J who made the order nisi and Adefope-Okojie, J who entered the judgment being enforced and who refused the order absolute were all Judges of Lagos State High Court exercising co-ordinate jurisdiction. Adefope-Okojie, J was, of course, functus officio and totally lacked any power or jurisdiction to review the final judgment she delivered on 9th July, 2013 and rendering it unenforceable upon any fresh evidence, albeit extraneous facts, not available to her on or before 9th July, 2013 under the guise of exercising the judicial discretion to grant or not to grant the garnishee order absolutely sought. My firm view of the ruling of Adefope-Okojie, J at pages 443 – 448 of the record is that the learned trial judge had erroneously arrogated to her Court appellate jurisdiction to review the judgment entered on 9th July, 2013. The power or function of the trial Court at this stage is neither to conduct a fresh trial nor appellate hearing to the review the judgment being enforced to see whether it was rightly or wrongly decided and therefore enforceable or not enforceable. Section 287(3) of the Constitution makes it mandatory that the final decision of the High Court subsisting and not set aside by a Court of competent jurisdiction, shall be enforced by all authorities and persons, and by the Court itself or by Court of subordinate jurisdiction. The appellate jurisdiction conferred on the Court of Appeal by Section 241(1) of the Constitution to review final decisions of the High Court is not there to be whimsically usurped by the High Court under the guise of judgment enforcement proceedings.
The lower Court, at page 543 of the records, did not seem to be in full and firm grip of the issue before it when it held-
Therefore, the garnishee order nisi made by the (Lagos) State High Court presided by Honourable Justice G. N. Onyeabo on the 18th July, 2013 was literally unenforceable by virtue of the non-existence of the 1st Respondent, the reason for this suit. The trial Court presided by Honourable O. A. Adefope-Okojie was thus right when on 21st January, 2014, it refused to grant garnishee order absolute but instead discharged the order nisi against the 1st Respondent. This is simply because Courts only make enforceable orders and do not act in vain. Making an order whose enforcement cannot be secured amount to acting in vain.
By this dictum the lower Court has validated the act of the trial Court (Adefope-Okojie, J) revisiting and reviewing its final decision rendered on 9th July, 2013 subsequently on 21st January, 2014 and coming to its decision not to enforce its earlier final judgment upon finding the 1st Respondent liable to pay the Appellants adjudged contract sum. It predicated its decision of 21st January, 2014 on the facts that the judgment Debtor (1st Respondent at the lower Court and here) was not a party to the Memorandum of Understanding between the League Management Limited Globacom and Total Productions Ltd, that it would not “hold the 1st Garnishee bound to a memorandum of understanding to which it was not a party” and that Okorowo, J of the Federal High Court in the suit No, FHC/ABJ/CS/179/2010 had on 20th January, 2010 had declared the incorporation of the 1st Defendant/1st Respondent, the Judgment Debtor illegal and void. This decision refusing to make garnishee order absolute has no doubt been actuated overwhelmingly by matters extraneous to the final money judgment being enforced.
The lower Court had confused itself on the status of the 1st Respondent, the Judgment Debtor. It erroneously held it out as a garnishee against whom an order nisi was made. The 1st Respondent is the principal judgment debtor, and not a garnishee against whom an order nisi was made. This error has the fundamental effect on its affirming that the decision of Okorowo, J in FHC/ABJ/CS/179/2010 had declared its incorporation as illegal and void.
The only issue in the proceedings for garnishee absolute is whether the sum indebted to the judgment debtor found prima facie to be held by the garnishee, which sums in the order nisi had been already attached by Court order, should be finally paid over to the Judgment Creditor. The indebtedness of the judgment debtor to the judgment creditor is no longer an issue like the judgment debtor’s capacity to be sued for owing the adjudged debt.
So much fuss was made, in the ruling declining to make absolute the order nisi and the lower Court’s decision affirming the said ruling, about the juristic personality of the 1st Respondent, the Judgment Debtor. The final decision of the trial High Court (Adefope-Okojie, J) dated 9th July, 2013 has not been set aside, notwithstanding the hyped principle (on the authority of REGISTERED TRUSTEES OF THE AIRLINE OPERATORS v. NAMA (2014) LPELR 22372 (SC) NIGERIAN NURSES ASSOCIATION v. A.G. FEDERATION (1981) 11 – 12 SC; ADMINISTRATORS/EXECUTORS, ESTATE OF ABACHA v. EKE-SPIFF (2009) LPELR – 3152; UNITED TIPPER DRIVERS ASSOCIATION v. REGISTERED TRUSTEES OF RCCG & ANOR (2016) LPELR – 40161 (CA), etc) that a non-juristic personality cannot be sued nor can it sue. The 1st Respondent, Judgment Debtor, was not directly and personally a party in the garnishee action.
The law still remains that the trial High Court (Adefope-Okojie, J) having on 9th July, 2013 delivered its final judgment was functus officio and was totally bereft of any competence or authority in law to revisit it and render the said judgment nugatory and unenforceable in disobedience of Sections 241 and 287(3) of the Constitution. The decision of the trial High Court affirmed by the lower Court, now the subject of this appeal runs as counter-force against the authoritatively established judicial precedent on the principle when a judgment or Court becomes functus officio upon its judicial duty or function wholly accomplished and thereby lacking further judicial authority or legal competence to revisit and review same, not being an appellate body over its own final decision. There is no dearth of binding authorities on this. They include ALOR & ANOR v. CHRISTOPHER NGENE & ORS (2007) 17 NWLR (pt. 1062) 163; DINGYADI & ANOR v. INEC (2011) LPELR – 950 (SC); UKACHUKWU v. UBA (2005) 18 NWLR (pt. 956) 1; ANYAEGBUNAM v. AG, ANAMBRA STATE (2001) 6 NWLR (pt. 710) 532; MOHAMMED v. HUSSEINI (1998) 14 NWLR (pt. 584) 108.
The Respondents, particularly the Garnishees in collaboration with the Judgment Debtor, have profusely harped on the alleged non-juristic personality of the 1st Respondent, the Judgment Debtor, to avoid enforcement. The two Courts below have unfortunately fallen into the snare, a fraudulently contrived artifice designed to render the final decision of the trial High Court (Adefope-Okojie, J) nugatory and unenforceable. The very adumbrated judgment of Okorowo, J in FCH/ABJ/CS.179/2010, claimed by the Respondents to have declared the incorporation of the 1st Respondent illegal and void was executory, as it clearly placed a further duty on a third party, the Corporate Affair Commission, to wind up the 1st Respondent. There is no evidence that, at all times material to the decision appealed, the winding up order had been carried out on duly executed.
The fresh and additional evidence, the bundle of documents (comprising the various Union Bank of Nigeria Plc Cheques) filed in this appeal by the Appellants on the orders of this Court made on 18th December, 2020, clearly shows that inspite of the decision of Justice Okorowo and the order made in the suit No FHC/ABJ/CS/179/2010 on 20th January, 2012, the 1st Respondent was very much around and on ground transacting businesses, as reflected by the 50 cheques by which various sums of money were paid into its account no. 0321530771 held at the Union Bank of Nigeria Plc.
This is a Court of Justice. Equity acting in personam will not lend its support to any conduct that smacks of fraud, and which is conscienceless. The belated affidavits of the 2nd and 3rd Respondents, post the garnishee order nisi, denying their indebtedness to the 1st Respondent for the purpose of thwarting the making of the garnishee order absolute are opaque and less than truthful. In the said belated affidavits they had adumbrated the fact of the 1st Respondent’s incorporation having been declared illegal and void which inter alia swayed the trial High Court to revisit and review its own final decision rendered on 9th July, 2013, even though functus officio, to come up subsequently with the decision appealed.
The lower Court erred in law in affirming the subsequent decision of the trial High Court, the intent and effect of which were deliberately to render its earlier final judgment and order of 9th July, 2013 nugatory and unenforceable.
The summary of my foregoing stance is that the two Courts below were in error in respectively refusing, and affirming the refusal, to grant the garnishee order absolute. Consequently, I allow the appeal. The decision of the lower Court delivered on 24th June, 2016 in appeal no. CA/L/274/2014 is hereby set aside. The ruling and/orders of the trial High Court delivered on 21st January, 2014 in the suit no. M/145/2012 are also hereby set aside. In their place, an order granting the garnishee order absolute against the 2nd and 3rd Respondents, as the 1st and 2nd Garnishees, is hereby entered and that shall be the order of the trial High Court in the suit no. M/145/2012.
Appeal allowed. Costs at N3,000,000.00 are hereby awarded in favour of the Appellants and against each Respondent.
MARY UKAEGO PETER-ODILI, J.S.C.: I am in total agreement with the judgment just delivered by my learned brother, Ejembi Eko, JSC and to register the support I have in the reasonings from which the decision came about, I shall make some comments.
This is an appeal against the decision of the Court of Appeal, Lagos Division or lower Court or Court below delivered on the 24th day of June, 2016, Coram: S.D.Bage JCA (as he then was), O.A. Obaseki-Adejumo and J. Y. Tukur JJCA, affirming the decision of the High Court of Lagos State.
FACTS BRIEFLY STATED
By a Motion Ex Parte the Appellants/Judgment Creditors commenced Garnishee proceedings praying the Court for:
1. An order attaching the sum of N232,915,644 due and owing or accruing for the Garnishees or any one of them to the Judgment Debtor or so much thereof as will satisfy the judgment debt due under the judgment dated 9th July, 2013 entered in favour of the Judgment Creditors/Garnishors.
2. An order directing the Garnishees to pay the Judgment Creditors/Garnishors or the registrar of this Courf, the amount of such debts within 8 days of the service of this summons or show cause why an order should not be made upon the Garnishees or any of them for the payment to the Judgment Creditors of the amount of the debt due and owing or accruing for the garnishees or anyone of them to the said Judgment Debtor and the costs on the garnishee proceedings.
See pages 47- 96 of the record.
The Motion Ex Parte for garnishee order nisi was granted by Honourable Justice G.N. Onyeabo. See pages 106 – 107 of the record.
Honourable Justice O.A. Adefope-Okojie (Mrs) discharged the garnishee order nisi. See pages 443 – 448 of the record.
The appellants/judgment Creditors being dissatisfied with the ruling of the learned trial judge dated 21st January, 2014 filed a Notice of appeal on 5th February, 2014. The Court of Appeal affirmed the decision of the trial Court.
The appellants again dissatisfied have come before the apex Court to ventilate their grievances. On the 22nd day of November, 2021, date of hearing, learned counsel for the appellants, P.O. Jimoh Lasisi SAN adopted the brief of argument filed on 2/5/2018 and deemed filed on 22/9/2020 in which were nominated three issues for determination, viz:-
1. Whether the Court of Appeal was right when they relied on the judgment in FHC/ABJ/CS/179/2010 of Honourable D. U. Okorowo to hold that the 2nd and 3rd Respondents (League Management Company Limited and First Bank of Nigeria Plc) garnishees are not liable to comply with the garnishee order nisi because the 1st Respondent (Nigeria Football League Limited) Judgment Debtor has ceased to exist in the eyes of the law. Grounds 1, 2 and 3 of the Notice of Appeal dated 4th August 2016. Grounds 1,2, 3 and 6 of the Amended Notice of Appeal.
2. Whether the learned Justices of the Court of Appeal were right when they held that the power to lift the corporate veil of a company belong to the exclusive jurisdiction of the Federal High Court.
3. Whether the learned Justices of the Court of appeal were right when they held that the money judgment in this appeal can only be enforced by means of action for winding up of the Judgment Debtor and not by garnishee proceedings. Ground 5 of the Notice of Appeal dated 4th August, 2016 filed on 9th August, 2016. Ground 5 of the Amended Notice of Appeal.
1st respondent was absent though served on 28/10/2021 and so the brief of argument settled by A.O. Mustapha SAN and filed on 10/11/2020 was taken as argued.
He argued a Preliminary Objection to the competence of the appeal but adopted the issues formulated by the appellants in the event that the Preliminary Objection failed.
Learned counsel for the 2nd respondent, Dero Daniels adopted the brief of argument settled by George Abu, filed on 19/1/2018 and raised a Preliminary Objection on the ground that 2nd appellant is not a juristic person and so lacks the legal capacity to institute this action.
Lawal Ijaodola, learned counsel for the 3rd respondent adopted the brief of argument filed on 15/10/2020 and also therein argued a Preliminary Objection and formulated two issues for determination in the event that the objection did not succeed. The issues are thus:-
“Was the Court below not right when it held that the Garnishee Order Nisi of the High Court of Lagos State dated July 18, 2013 was unenforceable by virtue of the judgment of Okorowo J. in suit No. FHC/ABJ/CS/179/2010 delivered on January 20, 2012, which declared the incorporation of the 1st Respondent illegal and void? (This issue is distilled from Grounds 1, 2, 3 and 6 of the Amended Notice of Appeal).
Was the Court below not right when it held that the High Court of Lagos State lacked the jurisdiction to lift the veil of incorporation of the 1st Respondent in a garnishee proceedings or at all by virtue of Section 251(1) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended and the Companies and Allied Matters Act, 1990) (This issue is distilled from Ground 4 of the Amended Notice of Appeal).
Learned Senior Advocate for the appellants also adopted the reply briefs to the briefs of 1st, 2nd and 3rd Respondents filed on 16/3/2021 and 27/11/2020 respectively.
I shall not dwell on the Preliminary Objection since there is enough in ground 4 of the appeal being one of law can be anchored and so I shall go straight to the questions raised in the determination of the appeal. I however choose to make use of the issues crafted by the 3rd respondent.
ISSUES 1 & 2
Was the Court below not right when it held that the Garnishee Order Nisi of the High Court of Lagos State dated July 18, 2013 was unenforceable by virtue of the judgment of Okorowo J. in suit no. FHC/ABJ/CS/179/2010 delivered on January 20, 2021, which declared the incorporation of the 1st Respondent illegal and void? (This issue is distilled from grounds 1, 2, 3 and 6 of the Amended Notice of Appeal).
Was the Court below not right when it held that the High Court of Lagos State lacked the jurisdiction to lift the veil of incorporation of the 1st Respondent in a garnishee proceedings or at all by virtue of Section 251(1)(e) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and the Companies and Allied Matters Act, 1990? (This issue is distilled from Ground 4 of the Amended Notice of Appeal).
Learned Senior Counsel for the appellants canvassed his arguments along the lines hereunder stated as follows:-
1. Because the declaratory order of Okorowo J., in Suit No. FHC/ABJ/CS/179/2010 relied on by the Court of Appeal is unenforceable and canr10t render Nigeria Football League Limited (Judgment Debtor) non-existent as a legal entity.
2. Because the reliance placed on the judgment of Okorowo J., in FHC/ABJ/CS/179/2010 is unenforceable until subsequent proceedings have been taken it before a declaratory judgment of Okorowo J., in Suit No. FHC/ABJ/CS/179/2010 by the Court of appeal is a serious misdirection in law and ought to be set aside.
3. Because a company will cease to exist as a legal entity when a dissolution order is made pursuant to the provisions of Section 454 (1) of Companies and Allied Matters Act.
4. Because the judgment of Okorowo J., in suit no. FHC/ABJ/CS/179/2010 is not a dissolution order. Because Nigeria Football League Limited is still an existing company.
5. Because the doctrine of lifting the veil of incorporation is used by the Court of Justice where it becomes expedient to expose the individual hiding behind the corporate entity for the purpose of doing justice.
6. Because the application of the doctrine of lifting the veil of incorporation is not exclusive to the jurisdiction of Federal High Court.
7. Because by virtue of Section 93 of Companies and Allied Matters Act, a company carrying on business without having at least two members does not render the company non-existent or illegal. He cited the cases: Okoya v Santili (1990)2 NWLR (pt 131) 172, Progress Bank of Nigeria Plc v O.K. Contact Point Holding Limited (2008) 1 NWLR (pt. 1069) 514 (CA), Alade v Alic (Nig) Ltd (2012) All FWLR (pt.563) 1849.
Learned counsel for the 1st respondent contended that the appeal should be dismissed because a company that is void neither existed in law and can neither be sued or sue, let alone have execution levied against it via garnishee proceedings.
Also that by virtue of Section 251 (1)(e) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), only the Federal High Court has jurisdiction to lift the veil of incorporation. He relied on Adefulu v Okulaja (1996) LPELR 90 (SC) 34; A.G. Anambra State v A.G. FRN (2005) LPELR 13 SC pp.18-19.
Learned counsel for the 2nd respondent contended that judgment of the Federal High Court declaring 1st respondent illegal and void is the valid and subsisting judgment.
Learned counsel for the 3rd respondent submitted along the following lines:-
The 2nd appellant is a non-juristic person incapable of maintaining an action in Court. This appeal was jointly instituted by a non-juristic person. This defect divests the honourable Court of the jurisdiction to determine this appeal. The appeal should be struck out. As a consequence, the Garnishee Proceedings at the High Court which led to this appeal should also be struck out as the Court below and the High Court lack jurisdiction to determine actions instituted and prosecuted by non-juristic persons.
The issues raised and argued in the Appellants’ brief should be discountenanced and struck out for being incompetent having been predicted on two Notices of Appeal: a Notice of Appeal and an Amended Notice of Appeal.
On the basis of the Nullification Order, the 1st Respondent was not a legal person when the main suit and the Garnishee proceedings were commenced. The Order Nisi obtained to attach the debts/funds of a non-existent person, the 1st Respondent, was impotent and unenforceable. The Court below was right when it held that the 1st Respondent was no longer in existence and that the 3rd Respondent did not act in contempt of the Order Nisi as a result of the Nullification Order.
Learned counsel for the 3rd respondent stated on that the doctrine of lifting the veil of incorporation of a company to determine the persons responsible for the running, management and control of the company so as to make such persons liable for the liabilities of the company has been codified in several sections of CAMA. It is a matter arising from the operation of CAMA, which is within the exclusive jurisdiction of the Federal High Court. The Court below was right when it held that the High Court lacked the jurisdiction to dabble into such matters. Garnishee proceedings are straightforward, not complicated and do not envisage or admit procedures such as lifting the veil of incorporation. Pursuing the doctrine of lifting the veil of incorporation of the 1st Respondent clearly shows that the proceedings have left the precincts of a garnishee proceeding.
The 3rd Respondent is neither indebted to the 1st Respondent nor does it have custody of the funds of the 1st Respondent. There was/is no relationship at all between the 3rd Respondent and the 1st Respondent against whom the Appellants sought to enforce the underlying judgment. The 3rd Respondent is neither a member nor an officer of the 1st Respondent. The 3rd Respondent has been unnecessarily and maliciously dragged up to this Court for no apparent legal reasons.
The Court below was right in affirming the ruling of the High Court. The Appellants have not shown why the concurrent decisions of the two lower Courts should be set aside by this Court.
That there are other reasons not contested in this appeal why the High Court refused to make the Order Nisi absolute but discharged same. The Appellants are not entitled to an order of this Honourable Court making the Order Nisi absolute or any of the reliefs sought before this Honourable Court.
The 3rd Respondent stated further that this Court should dismiss the appeal and affirm the judgment of the Court below and also award substantial costs against the Appellants and in favour of the 3rd Respondent. He relied on the following cases among others:-
1. K. Akpane v Barclays bank of Nigeria Ltd (1977) LPELR — 386 (SC).
2. Otu v ACB International bank Plc & Anor (2008) LPELR – 2827 (SC)
3. Olalomi Industries Ltd v NIDB Ltd (2002) 17 NWLR (pt.795) 58 at 84-85.
4. Oni v Cadbury Nig. Plc (2016) 9 NWLR (pt.1516) 80 at 104.
RESOLUTION OF THE ISSUES
Leading to this appeal is the decision of the Court of Appeal which had held at page 543 of the Record thus:-
“Therefore, the garnishee order nisi made by the State High Court presided over by Honourable Justice G.N. Onyeabo on the 8th day of July, 2013 was literally unenforceable by virtue of the non-existence of the 1st Respondent, the reason for this suit. The trial Court presided over by Honourable Justice O.A. Adefope-Okojie was thus right when on the 21st January, 2014, it refused to grant garnishee order absolute but instead discharged the garnishee order nisi against the 1st Respondent. This is simply because Courts only make enforceable orders and do not act in vain making an order whose enforcement cannot be secured amount to acting in vain.”
At page 544 lines 6 – 11 of the record, the learned Justices of the Court of Appeal said:
“This Court is reluctant to make pronouncements against non-existent and non-juristic personalities. The law is trite judgment against non-existent person is not enforceable in law since a non-existence person cannot sue or be sued.”
The Court of Appeal relied on the declaratory judgment of Honourable Justice D.U. Okorowo in Suit No: FHC/ABJ/CS/179/2010 dated 20th January, 2012 to hold that the 2nd and 3rd respondents (League management Company Limited and First Bank of Nigeria Plc) are not liable to comply with the garnishee order nisi because the 1st respondent (Nigeria Football League Limited) judgment debtor had ceased to exist in the eyes of the law. The declaratory order of Okorowo J in the suit above referred is set out thus:-
The Court below stated on page 338 of the record:
“3. That the incorporation of the 1st Defendant as a company with the 1st and 2nd Defendant as the only subscribers to its Memorandum and Articles of Association is tantamount to incorporation by only one person and thus illegal and void in so far as the 1st Defendant was not a legal person at the time of the subscription to the Memorandum and Articles of Association.”
Page 389 of the record:
“7. That the 5th Defendant is hereby mandatorily directed to immediately commence steps for winding up of the 1st Defendant for infraction of the provisions of Companies and Allied Matters Act.
The Appellants are not parties in Suit No: FHC/ABJ/CS/179/2010 and therefore the said orders made by Okorowo J., are not binding on the Appellants.
The order of the learned trial judge being a declaratory judgment is not enforceable and cannot render Nigeria Football League Limited (Judgment Debtor) a non-legal entity.”
I am persuaded to rely on the case of Okoya v Santili (1990) 2 NWLR (pt. 131) 172, firstly Odunowo J., of the Federal High Court which held thus:
“l am satisfied that the following decision must be made:
1) The document described as Memorandum and Articles of Association of Albion Construction Company Limited dated 16/9/76 and admitted in evidence in this action as Exhibit B and to which the first and second Plaintiffs were subscribers is the only true Memorandum and Articles of Association of the third Plaintiff company.
2) The nominal share capital of the third Plaintiff company is N200,000.00 divided into 200,000 shares of N1.00 each, and not 500,000 as alleged by the Defendants.
3) All the parties to this action are shareholders of the third Plaintiff company: namely (1) Chief R.A. Okoya – 50% or 100,000 shares; (2) Mrs. K. Okoya – 1% or 2,000 shares; (3) Mr. S. Santilli – 20% or 40,000 shares; (4) Mr. A. Davanzo – 20% or 40,000 shares; and (5) Prince D.A Ademiluyi – 9% or 18,000 shares.
4) The third Defendant is hereby directed to execute an instrument of transfer in respect of 51% or 102,000 shares, which he holds on trust, in favour of the first Plaintiff.
5) The first, second and the third Defendants and/or any other person or persons acting with or on their direction or authority are hereby restrained from conducting the affairs of the third Plaintiff company and in particular from operating the account of the said company in any bank whatsoever on the basis of and Memorandum and Articles of Association other than that mentioned in paragraph (1) above.”
The Defendants/Respondents appealed to the Court of Appeal against the judgment of Odunowo J., for stay of execution of the judgment which Odunowo J. dismissed.
The Defendants filed a further application to the Court of Appeal which granted the application.
On appeal to the Supreme Court, per Agbaje JSC who said:
“It appears to me that the starting point in this regard is the consensus not only among academic centres but judicial decisions that a declaratory judgment may be the ground of subsequent proceedings in which the right having been violated receives enforcement but in meantime there is no enforcement nor any claim to it. So until subsequent proceedings having been taken on a declaratory judgment receives enforcement or is given legal sanction for its violation, there cannot be, on the clear authorities a stay of execution of the declaratory judgment”.
Karibi-Whyte JSC at page 228 said:
“It seems to me correct to postulate that a declaratory order or judgment remains a dormant right. Hence a declaratory order or judgment remains a dormant right until subsequent proceedings have been taken to protect the threat or violation of the rights so declared in the judgment or order. Until this is done there cannot be on the authorities as they stand, a stay of execution of the declaratory judgment.”
I agree with learned counsel for appellants that the reliance placed on the judgment of Okorowo J., in Suit No: FHC/ABJ/CS/179/2010 to hold that the 1st Respondent (Nigeria Football League Limited) has ceased to exist as legal entity is a serious misdirection in law and occasioned a miscarriage of justice in this case. (Underlining mine)
The decision of the Court of Appeal that the 1st Respondent (Nigeria Football League Limited) has ceased to exist in the eyes of law by virtue of the declaratory judgment of Okorowo in Suit No: FHC/ABJ/CS/179/2010 is erroneous in law and ought to be set aside. (Underlining mine)
It follows that the garnishees 2nd and 3rd respondents (League Management Company Limited and First Bank of Nigeria PLC) are liable to pay the judgment sum of N232,915,644 to the appellants/judgment Creditors and also entitled to the garnishee order absolute.
It is curious that after the judgment of the Court below on 24th June, 2016, the 1st respondent received bank drafts to the time of N244,000,000 (Two Hundred and Forty-Four Million Naira) issued by Total Promotions Nigeria Limited which it took value in and subsequently transferred same to club owners.
Of note is that the judgment of Okorowo J., is not a dissolution order within the purview of the provisions of Section 454(1) of the Company and Allied Matters Act.(CAMA). Section 454 of the Companies and Allied Matter Act provides:
1) If the affairs of a company have fully wound up, liquidator makes application in that behalf the Court shall order the dissolution of the company and company shall be dissolved accordingly from the date of the order.
2) A copy of the order shall within fourteen (14) days from the date when made by forwarded by the liquidator to the commission who shall make in its books a minute of the dissolution of the company.
In Progress Bank of Nigeria Plc. V.O.K. Contact Point Holdings Limited (CA 3) (2008) 1 NWLR (Pt. 1069) 514, the Respondent obtained judgment against the appellant (a wound-up bank). The Appellant sought to appeal the decision but the Respondent filed an objection to the capacity of the Appellant to file a Notice of Appeal on the ground that, it was dead and that only its liquidator could file such appeal on its behalf.
The Court of Appeal held thus:-
“l must say straight away that, there is a world of difference between the winding-up of a company and the dissolution of a company. Under the provisions of Section 454 (1) and (2) of the Companies and Allied Matters Act, 1990, a company dies once the Court orders the dissolution of the company. The revocation of the company/bank and order of Court winding – up same does not indicate its death. The appointment of a liquidator is for the purpose of ensuring the smooth burial of the company. See Nzom v. Jinadu (1987) 1 NWLR (Pt. 51) 553; CCB (Nig.) Ltd V. Onwuchekwa (2000) 3 NWLR (Pt. 647) 65. There is nothing before us to show that Progress Bank of Nigeria Plc has been dissolved. It is so clear that the said bank is under a winding-up proceedings. In such a state, the bank is seriously ill, but not dead. That is the support of Section 417 of the Companies and Allied Matters Act, 1990. My Lords, a company/bank is certified dead on its dissolution, but where the bank as in this case is under winding up proceeding it has not died. It is gravely ill, it can sue and maintain an action in Court, but no action or proceeding can be brought against it except with the leave of the Court.
In CCB (Nig) Ltd v. Onwuchekwa (2000) 3 NWLR (Pt. 647) page 65 at 75 the Court of Appeal said:
“A company under winding up proceedings has not died. It is still alive but perhaps sick.”
I adopt those Court of Appeal decisions in the resolution of this appeal.
To be clear is that the 1st Respondent (Nigeria Football League Limited) Judgment Debtor will only cease to exist as a legal entity when the company is dissolved pursuant to Section 454 (1) of the Companies and Allied Matters Act. (Underlining mine)
The doctrine of lifting the corporate veil has been utilised by the Courts when it becomes necessary to expose the individual hiding behind the corporate entity for the purpose of doing justice. The application of the doctrine is not exclusive to the jurisdiction of the Federal High Court. See Alade Vs Alic (Nigeria) Limited (2012) All FWLR (Part 563) 1849, Adeyemi Vs Lan & Baker Nigeria Limited (2000) 7 NWLR (Part 663) Oyebanji vs The State (2015) All FWLR (Part 800).
In Alade v. Alic (Nig) Ltd (2012) All FWLR (Pt. 563) 1849, the action commenced in the High Court of Oyo State with the claimant claiming about Three Million Naira as damages for fraud committed against him by the 1st defendant – a limited liability company and plaintiff’s business partner, and the 2nd defendant – Managing Director of the 1st Defendant. The defendants opposed the action. The trial judge entered judgment for plaintiff against the defendants jointly and severely by lifting the veil of the 1st defendant. The defendants’ appeal to the Court of Appeal was successful. However, the plaintiff appealed to the Supreme Court and one of the issues for determination was whether the defendants/respondents could be held jointly and severally liable for damages occasioned as a result of a fraudulent breach of partnership agreement between the appellant and 1st respondent. In agreeing with the trial judge that the defendants should be jointly and severally liable for the fraudulent breach of the partnership agreement, the Supreme Court held that the Oyo High Court Judge rightly applied the principle of lifting the veil. His Lordship, Galadima JSC held at page 1862-1863E-B thus:
“…One of the occasions when the veil of incorporation will be lifted is when the company is liable for fraud as in the instant case. In FDB Financial SERVICES Ltd v. Adesola (2002) NWLR (pt. 668) 170 at 173, this Court considering the power of Court to lift the veil of incorporation held thus:
“The consequence of recognising the separate personality of a company is to draw a veil of incorporation over the company. One is therefore generally not entitled to go behind or lift this veil. However, since a statute will not be allowed to be used as an excuse to justify illegality or fraud, it is a quest to avoid the normal consequence of the statute which may result in grave injustice that the Court as occasion demands have to look behind and pierce the corporate veil.”
Also, in Adeyemi v. Lan & Baker (Nig) Ltd (2000) 7 NWLR (Pt. 663) 33, it was held as follows:-
“A party should not be allowed to benefit from its own wrong.
This is encapsulated in the Latin maxim “Nullis commodium capere potest de injuria sua pria.” It is abundantly clear that the 2nd respondent was responsible for the management of the 1st respondent company and on him fell squarely the responsibility of rendering proper accounts of the partnership business on behalf of the said 1st respondent. It was as a result of this that the trial Court rightly looked beneath the facade and lifted the veil of incorporation to discover the thread that ties the 1st respondent and the 2nd respondent together as parties in conspiracy to commit fraud and committing that fraud. The 2nd respondent is therefore jointly and severally liable with the 1st respondent to make good all sums improperly paid out or accrued due to his failure to exercise the care necessary in the running of the 1st respondent.” (Underlining supplied).
In Oyebanji v. State (2015) All FWLR (Pt. 800) 1256, the criminal trial commenced at the Oyo State High Court, where the appellant was charged for stealing a sum of money contrary to and punishable under Section 390(9) of the Criminal Code, Laws of Oyo State 1978. The money alleged to be stolen by the appellant was received by him in his capacity as managing director of Baminco Nigeria Ltd and the money was the property of Associated Commodities and Foodstuffs Nigeria Ltd that was engaged in a venture with Baminco Nigeria Ltd. The money was meant for the importation of certain goods, which Baminco Nigeria Ltd failed to purchase and the money was unaccounted for. The appellant was tried and convicted for stealing the money as the trial Court reasoned that the facts of the case required lifting the veil of Baminco Nigeria Ltd to reveal the appellant as the real fraudster. The appellant’s appeal to the Court of Appeal and the Supreme Court failed. Rhodes-Vivour JSC at pages 1279 1280 of the judgment stated as follows:
“My Lords, after lifting the veil of incorporation of Baminco (Nig) Ltd, both Courts below were able to see that the appellant is the alter ego of Baminco (Nig) Ltd. He collected the sum off N1,180,593.75 (one million, one hundred and eighty thousand, five hundred and ninety-three Naira, seventy-five kobo) from Associated Commodities and Foodstuffs (Nig) Ltd to import tyres, tube and granulated sugar on the company’s behalf. The Courts further found that the sums collected by the appellant were not paid into Baminco Nig) Ltd’s account, neither was a letter of credit for the importation of the goods in the name of Baminco (Nig) Ltd. It becomes clear that the appellant never imported the goods or returned the money despite repeated demands. The appellant acted in his own interest and not on behalf of the company. The appellant’s acts amount to fraudulent conversion of N1,180,593.75 (one million, one hundred and eighty thousand, five hundred and ninety-three naira, seventy-five kobo).
A clear case of stealing.”
In the same judgment, Ogunbiyi JSC supported the application of the principle of lifting the veil of incorporation and said at page 1283 of the report, inter alia, as follows:
“….The principle of ‘lifting the veil of incorporation’ is where it becomes expedient to expose the individual hiding behind the corporate entity, for the purpose of doing justice. The case is issued, especially with reference to the evidence of PW2, who described the appellant affirmatively as the ‘all in all’ of the company, gives the reason why the appellant should be exposed. The act against the company is fraudulent and depicts evidence of manipulation and deceit. In the absence of any evidence of a separate bank account in the name of Messrs Baminco (Nig) Ltd, the appellant’s dealings with the Associated Commodities was in his own person and capacity. He cannot now pretend and seek to wriggle out of it…”
With respect to the question whether the Court below was right to hold that the money judgment in this appeal can only be enforced by means of action for winding up of the judgment debtor and not by garnishee proceedings. The Court of Appeal had held as follows:-
“Let me just mention that by the tenor of Section 93 of CAMA and the basis of the judgment of the Federal High Court, the right cause of action for the Appellants is to activate a winding-up proceeding of the 1st respondent whereupon all debts which the trial Court presided over by Adesope-Okojie, J, has found to the tune of N232,915,644 is owed to the Appellants. But to garnishee the account of the 1st respondent who is non-existent is certainly not the correct procedure after the legal demise of the company.”
It is not correct that a company carrying a business without having at least two members would have the company taken non-existent or illegal. See Section 93 of CAMA.
Section 93 of CAMA provides:
“If a company carries on business without having at least two members and does not for more than 6 months, every director or officer of the company during the time it so carries on business with only one or two member shall be liable jointly and severally with the company for the debts of the company contracted during that period.”
The salient points brought out clearly are that the Court below relied on the declaratory order made by Okorowo J. in Suit Noe FHC/ABJ/CS/179 2010 on the premise that the 1st respondent had ceased to exist as a juristic person in the eyes of the law, which was evidently a misconception of the law in the light of Section 454 of CAMA.
To be clear, only a dissolution order under the provisions of Section 454 of CAMA will render a company incorporated under CAMA non-existent. I place reliance on the case of Progress Bank of Nigeria Plc. V. O.K. Contact Point Holdings Limited (CA) (2008) 1 NWLR (Pt. 1069) 514.
The Respondent obtained judgment against the appellant (a wound-up bank). The Appellant sought to appeal the decision but the Respondent filed an objection to the capacity of the Appellant to file the Notice of Appeal on the ground that, it was dead and that only its liquidator could file such appeal on its behalf. Rhodes-Vivour JCA (as he then was) said:-
“l must say straight away that, there is a world of difference between the winding-up of a company and the dissolution of a company. Under the provisions ofSection 454 (1) and (2) of the Companies and Allied Matters Act, 1990, a company dies once the Court orders the dissolution of the company. The revocation of the licence of the company/bank and order of Court winding up same does not indicate its death. The appointment of a liquidator is for the purpose of ensuring the smooth burial of the company. See Nzom v. Jinadu (1987) 1 NWLR (Pt. 51) 553; CCB (Nig) Ltd. V. Onwuchekwa (2000) 3 NWLR (Pt. 647) 65. There is nothing before us to show that Progress Bank of Nigeria Plc has been dissolved. It is so clear that the said bank is under a winding-up proceedings. In such a state, the bank is seriously ill, but not dead. That is the purport of Section 417 of the Companies and Allied Matters Act, 1990.
My Lords, a company/bank is certified dead on its dissolution, but where the bank as in this case is under winding-up proceeding it has not died. It is gravely ill. It can sue and maintain an action in Court, but no action or proceeding can be brought against it except with the leave of the Court.”
The doctrine of lifting a corporate veil has its origin in common law and it has been used for the cause of justice by the Court where it becomes expedient to expose individuals hiding behind corporate entity.
In Littlewoods Stores Ltd v. I.B.C. (1969)1 W.L.R. 1241 Lord Denning M.R. said:
“The doctrine laid down in Salomon’s case has to be watched very carefully. It has been supposed to cast a veil over the personality of a limited liability company through which the Court cannot see. But that is not true. The Court can and often do draw aside the veil. They can and often do pull the mask. They look to see what really lies behind. The legislature has shown the way in group accounts and the rest. And the Court would follow suit.”
The English case of Jones v. Lipman (1962)1 WLR 832 exemplifies the situations in which the corporate veil will be lifted when a company is used as a mere facade concealing the true facts, which essentially means it is formed to avoid pre-existing legal obligations.
In the instant case, the 2nd Respondent was formed to take over the assets of the 1st Respondent/Judgment Debtor and enable the 1st Respondent evade pre-existing debts.
The 2nd respondent was incorporated on 6th March, 2013 as the certificate of incorporation exhibited shows.
A perusal of the Record of Appeal brings to light the following facts:
i. The judgment which forms the premise of the garnishee proceedings was entered on 9th July, 2013 (pages 3A of the record of appeal).
ii. Nigerian Football Association (NFA) is a shareholder of the 1st Respondent/Judgment Debtor (page 74 of the record of appeal)
iii. The 2nd Respondent Garnishee (League Management Company Limited) was incorporated on 1st March, 2013 (page 137 of the record).
The Appellant made out a case for lifting the veil of the 2nd Respondent.
In Jones v. Lipman (1962) 1 WLR 832, a UK Company law case concerning the piercing of the corporate veil exemplifies the principal case in which veil will be lifted that is, when a company is used as a “mere facade concealing the true facts” which essentially means it is formed to avoid a pre-existing obligation.
Mr. Lipman contracted to sell a house to Mr. Jones for E5,250. He changed his mind and refused to complete, to try and avoid a specific performance order, he conveyed it to a company formed for that purpose alone which he alone owned and controlled. The Court ordered specific performance against Mr. Lipman and the company and held “the Defendant company is the creature of the first defendant, a devise and a sham, a mask which he held before his face in attempt to avoid recognition by the eye of equity.”
It has to be stated that it is not the role of the garnishee to fight a proxy war against the judgment creditor on behalf of a judgment debtor and my learned brother, Ejembi Eko captured it well in the case of GTB Plc VS Innoson Nigeria Limited (2017) 5 SC (Part 1) 68 at 93 where he said:
“It is not for a garnishee to fight the cause of a judgment debtor who either accepts the judgment against him and does nothing about it, or who may be indolent to fight his cause. No power in law inheres in the garnishee to make himself a busy body and proceed like Don Quixote the Knight errant, to fight the cause of the judgment debtor who is his customer. A judgment debtor whose money or property is seized or attached through garnishee proceedings in excess of the judgment sum has several options in law to deploy to forestall such unwarranted seizure or attachment.”
In CBN v. Interstella Communications Ltd & 3 Ors (2018) All FWLR (Pt.930) page 442 at 529 Ogunbiyi JSC said:
“The role of a garnishee in any garnishee proceedings is delimited. As rightly argued by the Counsel for the 1st and 2nd Respondents, it is not envisaged after a judgment creditor has gone through the rigours to establish his rights through the legal system, that the garnishee, who is asked to surrender the judgment debtor’s money in its possession should engage the judgment creditor in another bout of legal battle. See Order VIII, Part II of the Judgment (Enforcement) Rules.”
Indeed, there is no need to further belabour the fact clearly shown that a miscarriage of justice had taken place against the appellants and the necessity for the intervention of this Court is to be made. The appeal is meritorious and I allow it.
I abide by the consequential orders made.
Appeal Allowed.
MOHAMMED LAWAL GARBA, J.S.C.: My learned brother, E. Eko, JSC, availed of a draft of the lead judgment written by him in this appeal and, as usual, His lordship has incisively and succinctly considered and resolved the crucial issue which called for decision by the Court in the appeal.
The simple question that requires determination is whether the trial Court and the lower Court were right in law, to have refused to enforce an extant judgment of the Court of competent jurisdiction on ground of the alleged non-existence of a judgment debtor, in garnishee proceedings to which it was not a party.
I completely agree with the elaborate exposition of the law on the nature of garnishee proceedings as contained in the lead judgment and wish to emphasize that such proceedings are merely conducted for the sole purpose of the enforcement of money debt validly determined by a competent Court in a judgment delivered on the merit in a case between the judgment creditor/s and judgment debtor/s. Garnishee proceedings are not meant to and do not admit a challenge or attack on the validity of the judgment in respect of which it was initiated by the judgment creditor/s against the Garnishees who held, at the material time, money or other property due to the judgment debtor/s.
The validity of the judgment and the debt determined therein, cannot be challenged or questioned in garnishee proceedings for its enforcement and the Court conducting such proceedings, as ably demonstrated in the lead judgment, lacks the requisite judicial power and authority to re-open and review the validity of such judgment, not being an appellate Court. It is only a competent appellate Court that is seized of the necessary authority and power to validly review such a judgment by a way of an appeal.
See Fidelity Bank Plc v. Okwuowulu (2012) All FWLR (pt. 644) 151, (2013) 6 NWLR (pt. 1349) 197, Nig. Breweries, Plc v. Bumuje (2015) 35 WRN, 42.
The two (2) lower Courts, “took their eyes off the ball” when they veered off the proceedings which sought to enforce the judgment in question, to venture into the question or issue of the validity or competence of the judgment on the ground of a purported non-existence of the adjudged judgment debtor.
In the above circumstances and for all the reasons stated in the lead judgment, this appeal is meritorious and deserves to be allowed.
I join in allowing the appeal in terms of the lead judgment.
IBRAHIM MOHAMMED MUSA SAULAWA, J.S.C.: I wholeheartedly concur with the reasoning expressed in the judgment just delivered by my learned brother, the Hon. Justice Ejembi Eko, JSC, to the conclusive effect that the instant appeal is meritorious.
Hence having adopted the said reasoning and conclusion as mine, I too hereby allow the appeal and abide by the consequential orders made therein.
TIJJANI ABUBAKAR, J.S.C.: My Lord and learned brother, EJEMBI EKO, JSC granted me the privilege of reading in draft the comprehensive leading Judgment prepared and rendered in this appeal. I am in total agreement with the reasoning and conclusion and adopt the judgment as my own, I have nothing extra to add.
I endorse all consequential orders made therein including the order on costs.
Appearances:
P. O. Lasisi-Jimoh, SAN, with him, S, A. Mustapha, Esq. For Appellant(s)
Dero Daniels, Esq. – for 2nd Respondent
Lawal Ijaodola, Esq. – for 3rd Respondent
1st Respondent absent but served on 28/10/2021.For Respondent(s)
Appearances:
P. O. Lasisi-Jimoh, SAN, with him, S, A. Mustapha, Esq. For Appellant(s)
Dero Daniels, Esq. – for 2nd Respondent
Lawal Ijaodola, Esq. – for 3rd Respondent
1st Respondent absent but served on 28/10/2021.For Respondent(s)