UNION BANK PLC & ANOR v. VISANA (NIG) LTD & ORS
(2021)LCN/15799(CA)
In the Court of Appeal
(LAGOS JUDICIAL DIVISION)
On Friday, April 16, 2021
CA/L/120/2015
Before Our Lordships:
Joseph Shagbaor Ikyegh Justice of the Court of Appeal
Obietonbara Owupele Daniel-Kalio Justice of the Court of Appeal
Onyekachi Aja Otisi Justice of the Court of Appeal
Between
1. UNION BANK PLC 2. METALLOPLASTICA NIGERIA PLC (IN RECEIVERSHIP) APPELANT(S)
And
1. VISANA NIGERIA LIMITED (QUA ”CREDITOR” OF METALLOPLASTICA NIGERIA PLC (IN RECEIVERSHIP) 2. KPMG PEAT MARWICK ANI OGUNDE & CO. 3. CHIEF R. U. UCHE 4. NIGERIA DEPOSIT INSURANCE CORPORATION (QUA LIQUIDATOR OF CONTINENTAL MERCHANT BANK PLC) 5. PRINCE FIDA AZAR RESPONDENT(S)
RATIO
THE LEGAL CONSEQUENCES OF APPOINTMENT OF A RECIEVER/ MANAGER
The legal consequences of appointment of a receiver/manager are first, the assets which hitherto were available to the company become seised of the control of the receiver/manager and the company can only deal with the assets with the receiver’s consent, second, the receiver/manager is regarded as the agent of the company for the purpose of dealing with the assets in the receivership and may carry out existing contracts in the name of the company for the purpose of its business without incurring any personal liability, but he cannot be held liable for a debt incurred by the company with an unsecured creditor before his appointment vide National Provident Fund v. Midwest Cement Co., Ltd. (1971) 2 NCLR 337. PER IKYEGH, J.C.A.
WHETHER OR NOT THE COURT IS ENTITLED TO LOOK AT THE RECORD COMPILED AND TRANSMITTED FOR AN APPEAL
It is trite that the Court is entitled to look at the record compiled and transmitted for the appeal. See for example, the case of Oji Ada & Ors v. Ossai Uku & Ors (1977) 5 F. C. A., 218 at 227 where the Court (Eboh, Agbaje and Nnaemeka-Agu, JJ.CA) relying on Halsbury’s Laws of England vol. 15, 3rd Edition page 335 paragraph 609 and the old English case of Craven v. Smith (1869) L. R. Exch. 146 held inter alia that the Court is entitled to look at its own record and proceedings in any matter and take notice of their contents although they may not be formally brought before the Court by the parties. PER IKYEGH, J.C.A.
THE MEANING OF THE WORDS (IN RECEIVERSHIP) IN BRACKET
It is trite that the words (“IN RECEIVERSHIP)” in bracket referred to the 2nd appellant as the entity sued as the 7th defendant in receivership. For the word or sign “bracket” is a general name for parenthesis, which is explanatory or qualifying of the open words as in this case where the words “IN RECEIVERSHIP” in bracket qualified, explained and attached to the 2nd appellant as an entity sued in receivership vide Emespo J. Continental Ltd v. Corona Shifah – Trsgesellschaff MBH & Company (THE OWNERS OF “M.V. CONCORDIA) (2006) II NWLR (Pt. 991) 365) at 367-368.
In the light of the fact that the statement of claim supersedes the writ of summons vide Nta & Ors v. Anigbo & Anor (1972) N. S. C. C. 359 at 363 to the effect that a statement of claim with respect to the claim set out therein supersedes the writ, which has the statement of claim as subsequently amended, superseded the writ in this case clearly reflected that the 2nd appellant qua 7th defendant was sued as a legal entity in receivership. The contention of the appellants to the contrary is therefore lacking in substance and is hereby jettisoned. PER IKYEGH, J.C.A.
WHETHER OR NOT REFERENCE TO A DOCUEMENT MAKES THE DOCUMENT PART OF THE PLEADINGS
Reference to a document in a pleading makes the document part of the pleadings vide M. M. A. Inc. v. N. M. A. (2012) 18 NWLR (Pt. 1338) 506 at 536; Sifax Nig. Ltd. v. Migfo (Nig) Ltd. (2018) 9 NWLR (Pt. 1623) 138 at 175. PER IKYEGH, J.C.A.
THE POSITION OF LAW ON THE TORT OF CONSPIRACY
The tort of conspiracy takes the two forms of conspiracy to use unlawful means and conspiracy to injure, only the latter requires a predominant purpose to injure and that mere agreement to act in concert cannot make the act of any one or more wrongful, if it would not be wrongful when done by each alone independently vide the apt English case of Ware and de Freeville v. Motor Trade Union (1921) 3 K.B. 40 at 70 per Scrutton, L. J. The tort of conspiracy therefore, requires an agreement, combination, understanding, or concert to injure involving two or more persons. PER IKYEGH, J.C.A.
JOSEPH SHAGBAOR IKYEGH, J.C.A. (Delivering the Leading Judgment): The appeal is from a decision of the Federal High Court of Justice sitting in Lagos State (the Court below) whereby it held that the debt having been acknowledged by the 2nd Appellant within the six (6) year period of limitation of the action, the contention of the appellants that the action was statute barred was untenable, that the action being on the duties of the 3rd respondent acting for the 4th respondent and the deceased receiver/manager acting for 1st appellant as receiver/manager of the 2nd appellant under Section 393(1) and (2) of the Companies and Allied Matters Act (CAMA), with respect to complaints by the 1st respondent that the receiver/manager did not properly manage the assets of the 2nd appellant as there were enough funds to settle his claim, the action boiled down to whether a receiver manager disbursed funds realized from the sale of assets of a company in receivership in line with preferential treatment as regards priority of payment for secured and unsecured creditors which is a civil cause or matter arising from the operation and management of the company, not a claim on recovery of ordinary or simple debt between the 1st respondent and the 2nd appellant, and thus within the exclusive jurisdiction of the Court below under Section 251(1)(e) of the Constitution of the Federal Republic of Nigeria 1999 (1999 Constitution).
The Court below also held in its judgment, that the appellants’ allegation of illegality or fraud in relation to the transaction or the secured credit between the 1st appellant and the 2nd appellant was not established and thus lacking in merit, the Court below then proceeded to hold, on the merit, that the 1st respondent established that the 2nd appellant was indebted to it in the sum of $8,043,405.02 at 4.25% monthly interest and that as at 22.03.94, the 2nd appellant’s indebtedness to the 1st respondent stood at $8,741,622.85 being the principal sum and accrued interest unpaid for the raw materials supplied to the 2nd appellant by the 1st respondent which the receiver manager did not pay as the 1st respondent was an unsecured creditor.
The Court below further held that the appointment of the 3rd respondent as the receiver of the 2nd appellant was invalid and void in that the 2nd appellant did not seek the consent of the 1st appellant before the debenture was created as it is a mandatory requirement of paragraph 13 of all the assets Debenture dated 02.12.1981 that such consent ought to be sought and obtained before the 2nd appellant obtained a fresh loan and charging the same asset as security for the loan, therefore the unsecured creditor ought not to have received payment before the secured creditor, showing the receiver mismanaged the assets of the 2nd appellant by over 44 million naira and another N6 million of the 2nd appellant’s asset was unaccounted for by the 3rd and 4th respondents and that the surplus would have been sufficient to pay the 2nd appellant’s indebtedness to the 1st respondent as at the material time, therefore the 2nd, 3rd respondents and the 1st appellant breached the duty of care to have managed the assets of the 2nd appellants so as not to cause detriment to the 1st respondent and that if the assets of the 2nd appellant were properly managed, the receiver/manager would have paid all secured creditors and still had funds to settle the 1st respondent which was the only known unsecured creditor.
The Court below also held that as the 1st appellant took steps that were prejudicial to the interest of the 1st respondent in that the payment made to the 4th respondent as a secured creditor is illegal, so also payment made to Pinnacle Merchant Bank by the 4th respondent, which if not made, there would have been enough funds to settle the secured creditor as well as the 1st respondent, upon which the Court below concluded its judgment that the appellants and the 2nd and 3rd respondents were jointly and/or severally liable in the sum of US$7,616,188.94 or its equivalent in naira being the outstanding monies due to the 1st respondent as at 26.01.2000 for goods and materials supplied to the 2nd appellant with pre-judgment compound interest of 4.25% from 26.01.2000 till date and thereafter a post judgment interest of 10% on the judgment sum per annum from the date of judgment till final liquidation of the debt. The Court below also awarded N100,000.00 costs in favour of the 1st respondent against the appellant and the 2nd, 3rd and 4th respondents jointly and/or severally.
The facts of the case per the version of the appellants, albeit in outline, were that the 1st respondent qua plaintiff at the Court below was at all material times a private limited liability company carrying on business as supplier of assorted industrial and manufacturing raw materials, in the course of business, the 1st respondent sold various goods and raw materials to the 2nd appellant by virtue of which the 2nd appellant allegedly became indebted to the 1st respondent in the sum of US$365,609.32 as at 31.12.1993 with interest at the rate of 4.25% per month, a Deed of Debenture dated 02.12.1981 had been issued by the 2nd appellant in favour of Universal Trust Bank (U.T.B.) subsequently acquired by the 1st appellant which had charged all the assets and properties of the 2nd appellant to the 1st appellant in consideration of credit facilities granted the 2nd appellant and due to the default to settle its indebtedness to the 1st appellant, a Mr. Mogbeyi Sagay, SAN (now of blessed memory) was appointed as receiver/manager of the 2nd appellant by the 1st appellant pursuant to the Deed of Debenture.
It happened that the 2nd appellant also executed another Deed of Debenture dated 24.02.1989 in favour of Continental Merchant Bank Plc which was sued through the 4th respondent in this appeal in its capacity as the liquidator of the said bank which had appointed the 3rd respondent, a partner in the 2nd respondent’s firm of Chartered Accountants as receiver/manager of 2nd appellant and ratified by the 1st appellant showing that at the time the 1st respondent filed the action, the 2nd appellant was in receivership and was being managed by two receivers/managers, Mr. Mogbeyi Sagay, S.A.N., (of blessed memory) and the 3rd respondent and was sued simply in that name and not as “Metalloplastica Nigeria Plc (In receivership), whilst the writ of summons was signed by a law firm vide pages 12 – 14 of the record, likewise the statement of claim and the amended statement of claim contained in pages 15 – 27 and pages 1270 – 1288, respectively, of the record.
The appellants added that notwithstanding the alleged defects in the said processes, the Court below entered judgment granting all the reliefs sought by the 1st respondent, save the relief of general damages.
The appellants being dissatisfied with the judgment of the Court below, filed a notice of appeal containing four (4) grounds contained in pages 1604 – 1609 of the record and another notice of appeal with eleven (11) grounds contained in pages 1611 – 1632 of the record. The appellants withdrew the notice of appeal contained in pages 1604 – 1609 of the record vide page 4 paragraph 2.22 of the appellants’ brief. Accordingly, the notice of appeal contained in pages 1604 – 1609 of the record is withdrawn and struck out at the instance of the appellants.
The appellants filed their brief of argument on 26.06.15 and deemed as properly filed on 12.07.17 in which it was argued that the writ of summons signed for Bankole Aluko SAN by an unidentified person (of blessed memory) of Aluko & Oyebode vide page 14 of the record as well as the amended statement of claim contained in pages 1270 – 1288 of the record which did not indicate the person that signed the process, notwithstanding that numerous names of counsel were listed therein, both processes are grossly incompetent and the decision of the Court below based on said processes was made without jurisdiction vide the cases of Madukolu v. Nkemdilim (1962) 2 SCNLR (pt.1453) 486, SLB Consortium Ltd. v. NNPC (2011) 9 NWLR (pt.1252) 317, Okafor v. Nweke & Ors (2010) 10 NWLR (pt.1043) 521, First Bank of Nigeria Plc v. Maiwada (2013) 5 NWLR (pt.1348) 444, Senator Sekibo v. Governor of Rivers State unreported appeals no. CA/PH/23/2011 delivered on 18.11.2013, Alawiye v. Ogunsanya (2013) 3 NWLR (pt.1348) 570, Abe v. Skye Bank Plc (2015) 4 NWLR (pt.1450) 512 at 535, Tijani v. F.B.N. Plc (2014) 1 NWLR (pt.1387) 57 at 73, MTN (Nig.) Communications Ltd. v. Corporate Communication Investment Ltd. (2015) 7 NWLR (pt.1459) 437 at 465.
The appellants argued that, having not being sued as a company in receivership, when indeed the 1st respondent was in receivership at the time it filed the action, the action was filed in wrong capacity, showing the proper parties were not before the Court below which, according to the contention of the appellant, deprived the Court below of the jurisdiction to have entertained the action citing in support the cases of Intercontractors Nigeria Ltd. v. National Provident Fund Management Board (1988) 2 NWLR (pt.76) 280, Bagwai v. Goda (2011) 7 NWLR (pt.1245) 28, Kadzi International Ltd. v. Kano Tannery Co. Ltd. (2004) 4 NWLR (pt. 864) 545.
The appellants argued that having regard to the fact that there were no facts in the amended statement of claim to support reliefs (i), (ii), (iii) and (v) and paragraphs 16, 17 and 18 of the amended statement of claim thereof vide pages 1277 – 1278 of the record, where the 1st respondent based the case on the Debenture on the averment that it was procured without the prior written consent of the 1st appellant not that the 1st respondent was a party to any of the relevant Deeds of Debenture, therefore the 1st respondent lacked the standing to pursue the said reliefs as it was not a party to the Deed of Debenture which affected the jurisdiction of the Court below, so contended the appellants relying on the cases of UBN Ltd. v. Penny-Mart (1992) 5 NWLR (pt.240) 228, UBN Ltd. v. Soares (2012) 11 NWLR (pt.1312) 550, A.-G., Federation v. A.I.C. Ltd. (2000) 10 NWLR (pt.675) 293, Onnekwusi v. R.T.C.M.Z.C. (2011) 6 NWLR (pt.1234) 341, Febson Fitness Centre v. Cappa H. Ltd. (2015) 6 NWLR (pt.1455) 263, M. M. Ali Co. Ltd. v. Goni (2006) 10 NWLR (pt.987) 88, CBN & Ors. v. Kotoye (1994) 3 NWLR (pt.30) 66, Emezi v. Osuagwu & Ors. (2005) 12 NWLR (pt.939) 340.
The appellants argued that the claim of the 1st respondent determined the issue of the jurisdiction of the Court below and that as the 1st respondent’s amended statement of claim disclosed that the alleged wrongful act of the appellants and the 2nd – 5th respondents which gave the 1st respondent its cause of complaint and the consequent damage was the refusal and/or neglect of the appellants and the 2nd – 5th respondents to pay to the respondents to pay the 1st respondent the outstanding sum of US$7,616,188.94 allegedly due to the 1st respondent for various goods and materials supplied the 2nd appellant before it went into receivership of which the 1st respondent gave notice of the alleged indebtedness to the receivers/managers appointed by the 1st appellant and Continental Merchant Bank Plc.
Consequently, the appellants contended that based on the amended statement of claim particularly paragraph 36(vii) thereof contained in page 1287 of the record, it could not be gainsaid that the 1st respondent’s cause of action at the Court below was based on the alleged indebtedness of the 2nd appellant to the 1st respondent for goods and materials supplied to the 2nd appellant and the alleged refusal of the receivers/managers appointed by the 1st appellant and Continental Merchant Bank Plc to pay the 1st respondent and thus a matter relating to recovery of debt such that the 1st respondent’s action at the Court below related to simple contract, not on the ordinary routine business of a company and that the other reliefs being ancillary to the main relief of simple contract, the Court below lacked the jurisdiction to have entertained the action vide Section 251(1) of the 1999 Constitution read with the cases of Kadzi International Ltd v. Kano Tannery Co. Ltd (supra), Egbe v. Adefarasin (1987) 1 NWLR (pt.47) 1, Adelekan v. Eculine NV (2006) 12 NWLR (pt.993) 33, Onuorah v. K.R.P.C. Ltd. (2005) 6 NWLR (pt.921) 393, Royal Dutch Airlines v. Taher (2014) 2 NWLR (pt.1038) 66, Osun State Government v. Dalami (2007) 9 NWLR (pt.1393) 137, Hallmark Bank v. Obasanjo (2014) 4 NWLR (pt.1397) 209, Babington-Ashaye v. E.M.A.G. Enterprises (Nig.) Ltd (2011) 10 NWLR (pt.1256) 479, Adetona v. Edet (2004) 16 NWLR (pt.899) 338, Tanarewa (Nig.) Ltd v. Plastifarm Ltd. (2003) 14 NWLR (pt.840) 355, NIDB v. Fembo (Nig.) Ltd. (1997) 2 NWLR (pt.489) 543, P.D.P. v. Sylva (2012) 13 NWLR (pt.1316) 85, Tukur v. Government of Gongola State (1989) 4 NWLR (pt.117) 517.
The appellants referred to part of the judgment of the Court below contained in page 1574 of the record where the Court below held that although the 1st respondent’s cause of action initially accrued in October, 1992, a new cause of action was created and accrued on 28.01.1994 when the 2nd appellant acknowledged the debt owed by the 2nd appellant to the 1st respondent to contend that the action being in contract and was filed eight (8) years from 1992 when the cause of action accrued was that the negotiations between the 2nd appellant and the 1st respondent did not revive the statute-barred cause of action as the doctrine of acknowledgement or admission is based on the Common Law Section 8(1) of the Limitation Law of Lagos State prevailed and made the action statute-barred and that the Court below was therefore wrong to hold that the action was revived by acknowledgement of the debt by the 2nd appellant citing in support the cases of A.-G., Adamawa State v. A.-G., Federation (2014) 14 NWLR (pt.1428) 515, Eboigbe v. NNPC (1994) 5 NWLR (pt.349) 649, Ezeani v. Nigerian Railway Corporation (2015) 3 NWLR (pt.1445) 139, SPDCN Ltd. v. Ejebu (2011) 17 NWLR (pt.1276) 324, Egbe v. Adefarasin (1987) 1 NWLR (pt.47) 1, Owners of MV “Arabella” v. N.A.I.C. (2008) 11 NWLR (pt.1097) 182, S.P.D.C. Ltd. v. Nwadiaro (1990) 5 NWLR (pt.150) 322, Patkun Industries Ltd. v. Niger Shores Manufacturing Co. Ltd. (1988) 5 NWLR (pt.93) 138.
The appellants argued that insofar as the Deed of Debenture, Exhibit D6, was between the 1st appellant and the 2nd appellant, the 1st respondent, who was not a party to it, had nothing to do with it, so the Court below was wrong to hold that the Deed of Debenture dated 2.12.1981 was void or invalid for the reason that the 1st respondent did not consent to it vide Adetona and Ors v. Wema Bank Plc & Ors (2011) LPELR – 2665 (SC), Mikano International Ltd. v. Ehumadu (2014) 1 NWLR (pt.1387) 100.
The appellants argued that as Continental Merchant Bank Plc was a secured creditor of the 2nd appellant by Deed of Debenture dated 24.02.1989, the Court below was wrong to hold that there was conspiracy that denied the 1st respondent priority to be paid first by the receivers/managers when the allegation of conspiracy was not even proved beyond reasonable doubt and when the said holding of the Court below was based on speculation vide Tanko v. Nongha (2005) All NWLR (pt.286) 774, Obasi Brothers Merchant Co. Ltd. v. Merchant Bank of African Securities Ltd. (2005) All FWLR (pt.261) 216, Federal Mortgage Finance Ltd. v. Ekpo (2005) All FWLR (pt.248) 1667 and Section 135(1) and (2) of the Evidence Act, 2011.
The appellants argued that as Continental Merchant Bank Plc was indeed a secured creditor of the 2nd appellant by virtue of the Deed of Debenture dated 24.02.1989 and the issue relating to the alleged payment to Pinnacle Merchant Bank, as an unsecured creditor, was speculative and the 1st appellant never admitted that there was surplus of N6 million, the 1st appellant cannot be validly held accountable for such funds more so, the 1st appellant and the receiver/manager appointed by the 1st appellant cannot be held responsible or liable for the conduct of the 3rd and 4th respondents and that the appellant did not breach any duty of care in the course of management of the assets of the 2nd appellant to the detriment of the 1st respondent contrary to the decision of the Court below contained in page 1590 of the record.
The appellants argued that the sum of US$365,609.32 as at 31.12.1993 was the principal sum claimed by the 1st respondent vide page 1273 of the record containing the said relief in paragraph 7(iv) of the amended statement of claim without the 1st respondent alleging and proving that the sum of the indebtedness was US$7,616,188.94 and that the interest claimed was 4.25% per month, therefore the Court below was wrong to award the sum of US$7,616,188.94 with compound interest of 4.25% compounded from month to month which was radically different from simple interest, so contended the appellants with reliance on the cases of Ishola v. UBN Ltd. (2005) All FWLR (pt.258) 1202, Abuja Trans-National Market v. Abdu (2007) All FWLR (pt.376) 657 upon which the appellants urged that the appeal be allowed and the decision of the Court below set aside as it related to the granting of the reliefs contained in paragraph 36(i), (ii), (iii), (iv), (v), (vi) and (vii) of the amended statement of claim and dismiss the 1st respondent’s suit in toto.
The 1st respondent filed an amended brief of argument on 06.11.2020, but deemed as properly filed on 16.11.20. The 1st respondent referred to the writ of summons contained in page 4 of the record and Order 1 Rule (1) and Order 5 Rule 12(1) of the Federal High Court (Civil Procedure) Rules 1999 read with the case of S.P.D.C.N. v. Gbeneyei (2019) 13 NWLR (pt.1689) 272 at 293 – 294 to contend that only the registrar or Judge of the Court below was authorized to sign a writ of summons, not a legal practitioner and that a legal practitioner was only empowered to apply for a writ of summons to originate the action on writ of summons; consequently, the 1st respondent argued that as there is no necessity or requirement for a writ of summons in the Court below to be signed by a legal practitioner, the appending of a lawyer’s signature on the writ in this particular case is a mere surplusage which cannot invalidate the writ of summons.
The 1st respondent also argued that when the entire record is considered together, particularly the motion ex parte dated 12.02.2001 signed by Rotimi Odusola Esqr., which signature is on the writ of summons, it becomes indisputable that the writ of summons was signed by an identifiable and existing legal practitioner whose name can be traced on the roll of legal practitioners as seen in the affidavit with an extract from the Roll of Legal Practitioners kept at the Supreme Court; consequently, the 1st respondent argued that the writ of summons was signed by an identifiable legal practitioner vide Order 5 Rule 15 of the Rules of the Court below, Section 15 of the Court of Appeal Act on direction and necessary inquiries or account to be made or taken to identify the author of the signature on the writ, Sections 101 and 122(4) of the Evidence Act, Sections 2(1), and 24 of the Legal Practitioners Act (LPA), the cases of All Computers Ltd v. Union Bank of Nigeria Plc unreported appeal no. CA/L/08/2012, INEC v. Oshimole 2009 (1132) 607 at 636 – 637, Ogunsakin v. Ajidora (2008) 6 NWLR (pt.1082) 1 at 25 – 26, Associated Discount House Ltd. v. Amalgamated Trustees Limited (2006) 10 NWLR (pt.989) 635, Bamaiyi v. A.-G., Federation (2001) 12 NWLR (pt.727) 468 at 497, Ogidi v. The State (2005) 5 NWLR (pt.918) 286 at 327, Katto v. CBN (1991) 9 NWLR (pt.214) 126 at 147, Mobil v. LASEPA (2002) 18 NWLR (pt.798) 1.
The 1st respondent argued that since the rules of the Court below were made by decree, they override the LPA and the cases decided thereunder, more so where hardship will be inflicted on a litigant by strict application of the decisions in the cases in question, the Court should lean on the side of substantial justice to save the case which might be caught by statute of limitation if it were to recommence afresh and that in the present case the writ of summons was signed by an identifiable legal practitioner, by a law firm or unidentifiable legal practitioner, likewise the amended statement of claim which distinguishes it from the cases of Okafor v. Nweke (2007) 10 NWLR (pt. 1043) 521, SLB Consortium v. NNPC (2011) 9 NWLR (pt. 1252) 317, A.-G., Anambra State v. A.-G., Federation (1993) NWLR (pt.302) 692, Agwuna v. A.-G., Federation (1995) LPELR 258 (SC), A.-G., Anambra State v. Okafor (2005) 14 NWLR (pt.945) 210, FBN v. Maiwada (2013) 5 NWLR (pt.1348) 444, The Registered Trustees of United African Methodist Church v. Enemuo (2014) LPELR – 24071, Cole v. Martins & Anor (1968) 5 NSCC 120, BOI Ltd v. Awojugbabe Light Industries Ltd (2018) 6 NWLR (pt.1615) 220, S.P.D.C.N. Ltd. v Sam Royal (2016) LPELR – 40062 (SC), Okarika v. Samuel (2013) 7 NWLR (pt.1352) 19, Ministry of Works and Transport, Adamawa State v. Yakubu (2013) 6 NWLR (pt.1351) 481, S.P.D.C.N. Ltd. v. Ekosi (2016) 2 NWLR (pt.1496) 278, GTB Plc v. Innoson Nigeria Limited (2017) 16 NWLR (pt.1591) 181 at 196, Melaye & Anor v. Tajudeen and Ors (2012) 15 NWLR (pt.1323) 315, David v. Jolayemi (2010) 11 NWLR (pt.1258) 320 at 356, Elaigwu v. Tong (2016) 14 NWLR (pt.1532) 165, Din v. A.-G., Federation (1988) 4 NWLR (pt.1987) 147, Ishola v. Ajiboye (1994) 6 NWLR (pt.352) 506, Olarenwaju v. Oyeyemi (2001) 2 NWLR (pt.697) 229, Williams v. Adold/Stamm International (Nig.) Ltd. (2017) 6 NWLR (pt.1560) 1.
The 1st respondent argued that since its case at the Court below was that, but for the misappropriation or misapplication of the funds from the sale of the assets of the 2nd appellant, the debt owed the 1st respondent by the 2nd appellant would have been settled, which translated from the realm of a simple recovery of debt claim to one in which the Court below was invited to consider the way and manner the 1st appellant and the 2nd – 5th respondent conducted the receivership of the 2nd appellant to the detriment of the 1st respondent and that, in other words, the questions (supra) clearly touch on the operation of a company in receivership, the conduct of the receiver/managers and the rights of secured and unsecured creditors which are matters within the exclusive jurisdiction of the Court below vide Adeboyega v. Awu (1992) 7 NWLR (pt.255) 576 at 589, Yalaju-Amaye v. A.R.E.C. Ltd (1990) 4 NWLR (pt.145) 422, C.C.B. v. Onyekwelu (1999) 10 NWLR (pt.623) 452, Ceramic Manufacturing Nig. Ltd. v. N.I.D.B. (1999) 11 NWLR (pt.627) 383, Fagbola v. K.C.C.I.M.A. (2006) 6 NWLR (pt.977) 433 at 450 – 451, Tanarewa (Nig.) Ltd. v. Plastifarm Ltd. (2003) 14 NWLR (pt.840) 355, Babington-Ashaye v. E.M.A.G. Ent. (Nig.) Ltd. (2011) 10 NWLR (pt.1256) 479, Kadzi Int’l Ltd. v. Kano Tannery Co. Ltd. (2004) 4 NWLR (pt.864) 574, Akinbobola & Sons v. Plisson Fisko Ltd. (1986) 4 NWLR (pt.37) 621 read with Section 251(e) of the 1999 Constitution and Section 7(1)(c)(i) of the Federal High Court Act, 2004.
The 1st respondent referred to the writ of summons and the statement of claim contained in page 7 of the record where the 2nd appellant is sued in receivership likewise paragraphs 7, 10, 11, 12, 13, 17, 18, 19, 20, 22, 23, 24, 26, 35 and 37 of the statement of claim to argue that the suit was initiated in the proper name of the 2nd appellant and that, at any rate, by Section 392(1) of the CAMA, the appointment of receiver does not require notation of Court processes or documents issued by persons other than the company in receivership or its receiver/manager or liquidator but is limited to documents like invoices, order for goods or business letters issues by or on behalf of the company or receiver/manager and that while the receiver/manager becomes the repository of a company’s assets once in receivership, the company still maintains its legal personality and can be sued in its own name in respect of actions which properly lie vide Intercontractors v. N.P.F.M.N. (1988) 2 NWLR (pt.76) 280.
The 1st respondent argued that the debenture being a charge under Section 197 of CAMA, the 1st respondent, who is affected by the terms of the debenture, had a right to bring an action and to be heard on it vide Centre for Oil Pollution Watch v. NNPC (2013) LPELR – 20075 (CA), Adesanya v. President of the Federal Republic of Nigeria (1981) 2 SCNLR 358.
The 1st respondent relied on Section 38(1) of the Limitation Law of Lagos State and the letter by the 2nd appellant dated 28.01.1994 admitting the debt and the interest rate from 4.25% to 5% per month on the outstanding sum, Exhibit C4 contained in page 999 of the record, to argue that the acknowledgement of the debt in Exhibit C4 revived the action vide Thadant & Anor v. National Bank & Anor. (1972) N.S.C.C. 28, McCallum v. Country Residences (1965) 2 All ER (no pagination), Abey v. Alex (1999) 14 NWLR (pt.637) 148, Savage v. Uwaechia (1972) 3 SC 225 at 232, Nduka v. Ogbonna (2011) 1 NWLR (pt.1227) 153, Akibu v. Oduntan (2000) 13 NWLR (pt.685) 446, Faroly Establishment v. NNPC (2011) 5 NWLR (pt.1241) 457, Kolo v. FBN Plc (2003) 3 NWLR (pt.806) 216, Dantata v. Mohammed (2000) 7 NWLR (pt.664) 176.
The 1st respondent argued that by virtue of Clause 13(f) of the All Asset Debenture dated 02.12.1981, the 2nd appellant was precluded from creating another All Asset Debenture without seeking the prior written consent of the 1st appellant and that the subsequent mortgage and debenture created on 28.02.1989 in favour of the 4th respondent without the written consent of the 1st respondent was therefore void and that the 1st appellant and its agent, the late Mogbeyi Sagay SAN ought to have ensured that the assets of the 2nd appellant were neither mismanaged nor dissipated to the detriment of known creditors to the 2nd appellant including the 1st respondent vide Roy Goode on Commercial Law, 3rd Edition 577, Section 197 of CAMA, and the cases of Unibiz (Nig.) Ltd. v. C.B.C.L. Ltd. (2003) 6 NWLR (pt.816) 402 at 424, Intermarket (Nig.) Ltd. v. Aderounmi (1998) 12 NWLR (pt.576) 131 at 146, Royal English Bank v. Turquand (1856) All ER 435 and that, in the alternative, once the 1st appellant had satisfied its debt, it ought to have equitably distributed what was left to all unsecured creditors whose interest ought necessarily to rank pari-pesu.
The 1st respondent argued that it led evidence to show gross mismanagement of the assets of the 2nd appellant which resulted in the non-settlement of the 2nd appellant’s indebtedness to the 1st respondent vide Exhibits D11, D12, D18 are that when Exhibit D11 and D12 are placed side by side with Exhibit D1, D2 and D3 also provided evidence of conspiracy and impropriety in the manner in which the assets of the 2nd appellant were appropriated and dissipated.
The 1st respondent also relied on the evidence of sole witness of 1st-2nd appellants under cross-examination contained in pages1242-1243 and 1320-1322 of the record where the witness prevaricated whether the 2nd appellant repaid the loan facility and fraud on the part of the 1st respondent, that the Court below was right to hold that the evidence of the witness was caught by the inconsistency rules and that in addition, the testimony of the witness “highlights a glaring breach of fiduciary duties” owed by receiver manager to a company in receivership vide the case Tanarewa (Nig.) Ltd v. Arzai (2005) 5 NWLR (Pt. 919) 593 and that having regard to the unchallenged evidence of the 1st respondent’s sole witness based on his knowledge derived from his role as a consultant of the 2nd appellant within the period stated in Exhibit C8, that the 2nd appellant had sufficient assets to meet its financial liabilities to its creditors including the 1st respondent, the 1st appellant should not have dissipated the assets of the 2nd defendant to the detriment of the 1st respondent and that having failed to act in good faith in its fiduciary duty especially given that the 1st respondent was the only known valid unsecured creditor of the 2nd appellant vide Gaji v. Paye (2003) 8 NWLR (Pt. 823) 583 at 605 to the effect that the failure to cross-examine a witness upon a particular matter is tacit acceptance of the truth of the evidence of the witness.
The 1st respondent referred to its amended statement of claim dated 28.01.2014 where it claimed the sum of US$7,616,188.94 representing outstanding monies due to the 1st respondent as at 26.01.2000 for goods and materials supplied to the 2nd appellant and interest thereon at the agreed rate of 4.25% per month compounded from months to month from 26.01.2000 to the date of judgment and thereafter at a rate stipulated by the Court, and Exhibit C4 and the evidence for the 1st respondent contained in page 1322 that it is part of the normal practice for compound interest to be charged on transactions to argue that the 1st respondent established its case and that the Court below was right to enter judgment based on the amended statement of claim and the evidence adduced in the case vide Unity Bank Plc v. Nwadike (2009) 4 NWLR (Pt. 1131) 352; Veepee Ind. Ltd. v. Cocoa Ind. Ltd (2008) 13 NWLR (Pt. 1105) 486 at 509-510; A.C.B. Plc. v. Ndoma-Egba (2000) 8 NWLR (Pt. 669) 389; Ekwunife v. Wayne (West Africa) Ltd. (1989) 5 NWLR (Pt. 122) 422; Garba v. Shehu Intl. (Nig.) Ltd (2002) 1 NWLR (Pt. 372) at 396-397 upon which the 1st respondent urged “Your Lordships to uphold the decision of the trial Court.”
The appellants filed a reply brief on 13.11.2020. It was argued in the reply brief that Section 2(1) and 24 of the Legal Practitioners Act (LPA) override the rules of the Court below; that the relevant rules of the Court below are expected to be read together and in conjunction with Section 2(1) and 24 of the LPA vide Uwazurike v. Nwachukwu and Ors. (2012) LPELR-1535(CA); SPDC v. Isaiah (1997) 6 NWLR (Pt. 508) 236 at 246; that as page 14 of the record indicated that the writ was issued by Bankole Aluko, SAN of Aluko & Oyebode No. 35 Moloney Street, Lagos without identifying the person that signed the process or on his behalf, therefore the originating process ought to be treated as incurably defective and that David v. Jolayemi (supra) is distinguishable in that it did not consider Section 2(1) and 24 of LPA vide Raji v. Unilorin (2018) 15 NWLR (Pt. 1642) 220; JVC P. P. (UK) Ltd. v. Famuyide (2020) 13 NWLR (Pt. 1744) 334 at 348.
The appellants in the reply brief, added that having appealed against the ruling refusing leave to adduce additional evidence which the 1st respondent withdrew at the Supreme Court, it will be wrong for the 1st respondent to urge the same issue in the present appeal vide Comp. Gen., Customs v. Gusau (2017) 18 NWLR (Pt. 1598) 353 at 379; that the process alone should be looked at to ascertain, whether it was signed by an identifiable legal practitioner, not by examining affidavit evidence vide Raji v. Unilorin (2018) 15 NWLR (Pt. 1642) 220 at 236 and that facts not stated in the record is not valid for consideration vide N. S. E. v. Katchy (2017) 7 NWLR (Pt. 1564) 278 at 310 and that the matter before the Court below relates to simple contract upon which the appellants urged that the appeal be allowed.
Page 14 of the record has a “pp” sign before the signature on top of the name of Bankole Aluko, S.A.N., indicating the writ was issued by the person that so signed it for Bankole Aluko, S. A. N. The sign “p.p” used by the side or in front of a person’s name signifies that somebody signed a correspondence or business letter on behalf of another person vide Oxford Advanced Learner’s Dictionary (New 9th Edition) page 1203. Or it signifies that the document was signed by proxy.
A string of cases including Aromire and Ors. v. Ajomagberin & Ors. (2011) ALL FWLR (Pt. 586) 540 at 557-558; GTB Plc. v. Innoson Nigeria Limited (2017) 16 NWLR (Pt. 1591) 181 at 207, Arueze v. Nwaukoni (2019) 5 NWLR (Pt. 1666) 469 and the cases (supra) cited by the parties are at one, that any person signing a Court process on behalf of a principal in chambers, must state his name and designation to show that he is a legal practitioner whose name can be traced on the roll of legal practitioners kept at the Supreme Court of Nigeria. The requirement (supra), is in tandem with Sections 2(1) and 24 of the LPA and it is to ensure that only legal practitioners whose names are in the roll of Legal Practitioners kept at the Supreme Court sign Court process for accountability and responsibility and to eliminate the infiltration of the practice of the Legal Profession by non-legal practitioners.
The provisions of Sections 2(1) and 24 of the LPA affect the jurisdiction of the Court as a matter of substantive law. The rules of the Court below which the 1st respondent lavishly elevated to a decree when the decree that made it called it the rules of the Court below cannot be a decree but a procedural law which does not override Sections 2(1) and 24 of the LPA. In the event of any inconsistency between the two, the latter would prevail to the extent of the inconsistency.
The 1st respondent referred to affidavit evidence to the effect that it disclosed the identity of the person that signed the application for writ of summons. I agree with the appellants that, the affidavit evidence is of vain value to determine the identity of the author of the said signature vide Raji v. Unilorin (supra) cited by the appellants.
The 1st respondent had brought a motion to adduce additional evidence on the issue of identity of the person that signed the application for a writ of summons. The motion was refused. The 1st respondent appealed to the Supreme Court on the refusal but withdrew the appeal at the Supreme Court, so the attempt by the 1st respondent to reintroduce the same additional evidence by affidavit evidence, which the 1st respondent is estopped by the subsisting decisions of the Court on the issue, is an abuse of the process of the Court and is hereby rejected.
It is trite that the Court is entitled to look at the record compiled and transmitted for the appeal. See for example, the case of Oji Ada & Ors v. Ossai Uku & Ors (1977) 5 F. C. A., 218 at 227 where the Court (Eboh, Agbaje and Nnaemeka-Agu, JJ.CA) relying on Halsbury’s Laws of England vol. 15, 3rd Edition page 335 paragraph 609 and the old English case of Craven v. Smith (1869) L. R. Exch. 146 held inter alia that the Court is entitled to look at its own record and proceedings in any matter and take notice of their contents although they may not be formally brought before the Court by the parties.
Having drawn attention to the ex-parte application dated 12.02.2001 vide page 31 of the record showing it was signed by Rotimi Odusola, Esq., whose signature is endorsed on top of his printed name which is directly above the name and address of the 1st respondent’s Legal Practitioner’s Law Firm and the same signature of Rotimi Odusola, Esq., and likewise the motion on notice for judgment in default of appearance contained in page 14 of the record vis-à-vis the signature on top of the name of Bankole Aluko, S.A.N., in the application for the writ of summons contained particularly in page 6 of the record, it is no gainsaying it that having seen these three processes with their signatures under Section 101 of the Evidence Act, I form the considered opinion that the signature on the application for a writ of summons is similar to the signature on the said ex-parte motion and the motion for judgment bearing the name of Rotimi Odusola, Esq., showing the said three processes were signed by the same Rotimi Odusola, Esq.
Consequently, I am satisfied that the application for a writ of summons was signed for and on behalf of a principal in Chambers, Bankole Aluko, S. A. N., an animate personality, by Rotimi Odusola, Esq., whose identity has been discovered/revealed by the other processes – motion ex-parte and motion for judgment in default of appearance from which it becomes clear that the name Rotimi Odusola, Esq., can be traced in the roll of Legal Practitioners kept at the Supreme Court.
In analogous circumstances, the Court (Iyizoba, J.C.A. (now retired), Oseji, J. C. A. (now J. S. C.) and Tukur, J.C.A.) held in the case of Allcomp Computers Ltd & Anor v. Union Bank of Nigeria, Plc unreported appeal no: CA/L/08/2012 delivered on 12.07.2016 thus: –
“Now, looking at the objection of the merits, the learned senior counsel for the Appellant has argued that the basis of the decision of the Supreme Court in OKAFOR V. NWEKE (SUPRA) AND SLB CONSORTIUM V. NNPC (SUPRA) is that by the provisions of the Legal Practitioners Act and the relevant rules of Court, a Court process must be signed by an identifiable legal practitioner and not by a law firm. I agree.
He further traced the author of the signatures in issue in this case to CALLISTUS KAYODE ALABI a legal practitioner in the firm representing the Appellants in this case. I have looked at pages 112 to 142 of the records of appeal in this matter and I can see that indeed both the statement of defence and counter-claim and the counter-affidavit to the said Respondent’s motion for summary judgment were filed out of time by the Appellant and were regularized by two motions for extension of time. In these two motions and the affidavits and the written addresses in their support, the said statement of defence and counter-claim and the counter-affidavit all bear the same signature, and that is the signature of CALLISTUS KAYODE ALABI. In the circumstance and in the interest of justice, it cannot be said that, these signatures cannot be identified as that of a known legal practitioner from the records.
Having resolved that the signature in contention is that of CALLISTUS KAYODE ALABI, as aforesaid, I hold that since the object of a Court of law is to adjudicate the dispute between parties before it with the aim of doing substantial justice and not merely hinging on technicality, I hold that going by the facts of this, the said processes are not incompetent and as such would not be struck out as they were indeed signed by an identifiable legal practitioner.”
The decision (supra) is binding on the Court vide the Supreme Court case of Honeywell Flour Mills Plc. v. Ecobank Nigeria Ltd. (2019) 2 NWLR (Pt. 1655) 35 at 51 following Usman v. Umaru (1992) 7 NWLR (pt. 254) 377 at 399 to the effect that under the doctrine of stare decisis, the Court (Court of Appeal, Nigeria) as an intermediate Court between the Court below and the Supreme Court as the final appellate Court, is bound by its own decisions.
The appellants did not raise objection to the alleged defectiveness of the statement of claim at the Court below and are, on that score, deemed to have waived the alleged procedural jurisdictional defect and would not be allowed to ventilate the issue for the first time on appeal vide Heritage Bank Ltd. v. Bentworth Finance (Nig.) Ltd. (2018) 9 NWLR (Pt. 1625) 420 to the effect that signing legal process (like statement of claim in that case) other than originating process in a manner that the identity of the person that signed the process cannot be ascertained and traced in the roll of Legal Practitioners kept at the Supreme Court, if not raised at the trial stage of the case at the Court below, is deemed waived and cannot be raised for the first time on appeal.
There is also the case of Sonuga and Ors. v. Anadein & Ors. (1967)1 ALL NLR 91 at 93-94 on the effect of improper endorsement on a writ of summons where the Supreme Court (Ademola, C.J. N, Coker and Lewis, JJ.S.C.) held, inter alia, that it is too late to raise an objection to a procedural irregularity for the first time on appeal, as it would not be right for a defendant to take advantage of an irregularity he had himself accepted or led the plaintiff to believe he had accepted and acted upon it without showing any harm done to him, relying on the old English case of Dickson v. Law and Davidson (1895) 2 Ch. D. 62 where an amended writ served out of jurisdiction did not bear the endorsement prescribed by an appendix to the rules of Court, for a writ to be served out of jurisdiction, it was held that the defendant is not entitled to take advantage of an irregularity occasioned by a slip which has been made by the plaintiff and which had done no harm to the defendant.
The contention of the appellants on the alleged defective statement of claim and amended statement of claim for being a product or defective originating process (the writ of summons), accordingly, fails with the outcome (supra) of the resolution of the alleged defective writ of summons and the said objection to both the writ of summons, statement of claim and amended statement of claim, therefore lacks merit and is hereby rejected.
The reliefs sought by the 1st respondent against the appellants are contained in paragraph 36 of the amended statement of claim in pages 652-654 as follows: –
“36. Based upon all the foregoing, which shall be proved at the trial of this suit, the Plaintiff claims against all the 1st, 2nd, 3rd and 4th Defendants jointly and/or severally as follows: –
(i) A declaration that the only valid debenture over the mortgaged property, assets and undertakings of Metalloplastica (Nigeria) Plc that lawfully came into existence with valid and enforceable legal consequences and effect [from about 1981 onwards to 1994, inclusive, and thereafter], is that registered Deed of Mortgage Debenture made on 2nd December; 1981 by Metalloplastica (Nigeria) Plc (as mortgagor) in favour of the 4th Defendant (then Universal Trust Bank of Nigeria Limited prior to its acquisition) [as Mortgagee-in-Subrogation, such status acquired by supplementary agreement, and by agreement respectively dated and made on 29th December, 1993 and 3rd March, 1994 by/between metalloplastica (Nigeria) Plc. Union Bank of Nigeria Plc and Universal Trust Bank Limited in their respective capacities therein stated, all the same having been duly registered in fulfillment of the law].
(ii) A declaration that upon the true and proper Constitution of the contractual terms of 2nd December, 1981 deed of mortgage Debenture aforesaid, the purported creation by Metalloplastica (Nigeria) Plc of any subsequent mortgage or charge, either in priority to, or to rank in pari passu with that deed, including, specifically, that instrument which purports to be a deed of mortgage debenture dated 24th February, 1989, and professedly given by Metalloplastica (Nigeria) Plc to Continental Merchant Bank Plc, is ultra vires, and accordingly null, void and of no legal consequence whatsoever.
(iii) A consequential declaration pronouncing all acts and things made and done in pursuance [including, but not limited to the purported appointment, by Deed of Appointment dated 15th February, 1994] of one Chief R. U. Uche, Chartered Accountant, as Receiver/Manager of Metalloplastica (Nigeria) Plc, and all his acts of inter-meddlesomeness with all, or any of the mortgaged property, assets, and undertakings Metalloplastica (Nigeria) Plc null and void, or alternatively, voidable, at the suit of Visana Nigeria Limited, and of no legal effect whatsoever.
(iv) A declaration that the compromise-arrangement purportedly made about May 1994 by Universal Trust Bank Limited (now Union Bank of Nigeria Plc by virtue of the Acquisition) [qua the only true Mortgagee lawfully entitled to appoint a receiver/manager over the mortgage property, assets and undertakings of Metalloplastica (Nigeria) Plc with Continental Merchant Bank Plc for the sharing of the mortgaged property aforesaid upon the instruction/at the bidding of Mogbeyi Sagay, Esq., and Chief R. U. uche to the exclusion, and fraud of its other unsecured creditors, such as Visana Nigeria Limited, said compromise-arrangement having so been made by Universal Trust Bank Limited, continental Merchant Plc, Mogbeyi Sagay, Esq., and Chief R. U. Uche, all acting in unlawful conspiracy/collusion/concert with each other, to the detriment of Visana Nigeria Limited, is illegal, null, void and of no legal effect or consequence whatsoever.
(v) A declaration that in virtue of the appointment conferred upon Mogbeyi Sagay, Esq., [Legal and Insolvency Practitioner] to the office of receiver/manager of Metalloplastica (Nigeria) Plc made by Deed of Appointment dated 15th February, 1994, and so made in pursuance of powers conferred upon Universal Trust Bank Limited (now Union Bank of Nigeria Plc), as Mortgagee, all the same having derived from those deeds/agreements mentioned in (i) above, and by accepting, assuming and entering upon the contractual and statutory duties of the aforesaid office, the said Mogbeyi Sagay, Esq., become deemed by law to be a Trustee of all surplus proceeds realized from the Mortgaged property, assets and undertakings whatsoever that came to/pass through his hands for the benefit of –
“ … all persons entitled to the mortgaged property”.
of whom he received due written notice, including Visana Nigeria Limited, qua creditor of Metalloplastica (Nigeria) Plc.
(vi) An account of all monies that ought to have come into Mogbeyi Sagay, Esq’s hand [as trustee of the mortgaged property, assets and undertakings of Metalloplastica (Nigeria) Plc, and, a fortiori, as trustee of the proceeds of all such sale(s), or received by any other person or persons on behalf of, or to the account of Mogbeyi Sagay, Esq., in the aforesaid office, and that all necessary and proper inquiries and directions be taken and made.
(vii) The sum of US$7,616,188.94 (Seven Million, Six Hundred and Sixteen Thousand, One Hundred and Eighty-eight United States Dollars, Ninety-four cents) or its naira equivalent, representing outstanding monies due to Visana Nigeria Limited [as at 26th January, 2000] for goods and materials supplied to Metalloplastica (Nigeria) Plc by Visana Nigeria Limited and interest thereon at the agreed rate of 4.25% per month from 26th January, 2000 to the date of judgment and thereafter at a rate stipulated by the Court.
(viii) General damages for the injuries and loss suffered by the Plaintiff’s company as may be assessed by the Court.
(ix) Costs.” Paragraph 24 of the statement of claim for example, is instructive and is couched thus –
“24. The Plaintiff averts that in breach of the duty imposed on the 4th and 5th Defendants towards the Plaintiff and other creditors of Metalloplastica Nigeria Plc as pleaded above, the 4th Defendant proceeded to enter into an “agreement” with Continental Merchant Bank Plc which agreement was published in a Newspaper Publication in Guardian Newspaper dated May 10, 1994, by which the 4th Defendant and the said Continental Merchant Bank Plc purported to have agreed as follows:
PUBLIC NOTICE
METALLOPLASTICA NIGERIA PLC
(IN RECEIVERSHIP)
CONTINENTAL MERCHANT BANK NIGERIA PLC and UNIVERSAL TRUST BANK OF NIGERIA LIMITED hereby notify the creditors, customers and bankers of Metolloplastica Nigeria Plc that the dispute between our Banks and Metalloplastica Nigeria Plc receivership has been resolved as follows:
(a) Chief R. U. Uche will take charge of all the assets of Metalloplastica Nigeria Plc in Lagos with powers to manage and or sell the said assets to settle the outstandings of the company to creditors.
(b) Mr. O. M. Sagay will take charge of all the assets of Metalloplastica Nigeria Pic in Port Harcourt with powers to manage and or sell the said assets to settle the outstandings of the company to creditors.
(c) Any creditor of Metalloplastica Nigeria Plc can file his claim with either Chief R. U. Uche or Mr. O. M. Sagay.
(SIGNED)
OSARETINGIWA-OSAGIE
LEGAL ADVISER
CONTINENTAL MERCHANT
BANK NIGERIA PLC
(SIGNED)
REMI OGUNMEFUN
LEGAL ADVISER
COMPANY SECRETARY
UNIVERSAL TRUST BANK OF NIGERIA LIMITED.”
It is settled that it is the claim of the plaintiff that determines the jurisdiction of the Court vide Elelu-Habeeb and Anor v. A.-G., Federation and Ors (2012) 13 NWLR (pt.1318) 423, Izenkwe and Ors. v. Nnadozie (1953) 14 WACA 361, Adeyemi v. Opeyori (1976) 9 – 10 SC 51, Western Steel Works v. Iron and Steel Workers Union (1987) 1 NWLR (pt.49) 284, Essi v. Nigeria Ports Plc (2018) 2 NWLR (pt.1604) 361.
Undoubtedly, the Court below is a superior Court of record and its jurisdiction is bound by statute in which case it cannot encroach or enlarge its jurisdiction because by so doing, the Court will be usurping the functions of the legislature as nothing shall be intended to be out of the jurisdiction of the superior Court, but that which specifically appears to be so and that, although the Courts have great powers, yet these powers are not unlimited but are bound by some lines of demarcation as creatures of statutes and the jurisdiction of each Court is therefore confined, limited and circumscribed by the statute creating it, more so, the Court is not hungry after jurisdiction as the duty at the Court is to expound its jurisdiction, but not to expand it by giving itself jurisdiction by misconstruing a statute vide the Supreme Court case of African Newspapers (Nig.) Ltd. v. F.R.N. (1985) 2 NWLR (pt.6) 137 at 159-160.
There is also the proposition that no cause of action is deemed to be beyond the jurisdiction of a superior Court unless specifically expressed vide Musaconi Ltd v. Aspinall (2013) 14 NWLR (pt.1375) 435 at 464 following Anakwenze v. Aneke (1985) 6 S.C. 41.
The legal consequences of appointment of a receiver/manager are first, the assets which hitherto were available to the company become seised of the control of the receiver/manager and the company can only deal with the assets with the receiver’s consent, second, the receiver/manager is regarded as the agent of the company for the purpose of dealing with the assets in the receivership and may carry out existing contracts in the name of the company for the purpose of its business without incurring any personal liability, but he cannot be held liable for a debt incurred by the company with an unsecured creditor before his appointment vide National Provident Fund v. Midwest Cement Co., Ltd. (1971) 2 NCLR 337.
Third, the assets, though in the possession of the receiver/manager, are not vested in the receiver/manager as owner, as ownership resides with the company thus entitling the company to sue to protect the assets, in deserving cases vide Union Bank of Nigeria Ltd v. Tropics Foods Ltd (1992) 3 NWLR (Pt. 228) 231 and Section 390 (1) of CAMA which establishes a fiduciary relationship between the receiver/manager and the company to the extent that the former is charged to observe the utmost good faith towards the later in any transaction, preserve its assets, further its business and discharge the duty of care and skill towards it.
Fourth, the receiver/manager is entitled to possession of the assets subject to all specific charges validly created in priority to the floating charge vide Section 179 of CAMA, and subject to all rights of set off acquired by debtors to the company in respect of dealings with it and the title of the receiver prevails over those of unconcluded creditors vide Intercontractors Nigeria Ltd. v. UAC of Nigeria Ltd (1988) 2 NWLR (Pt. 76) 303 and fifth, by Section 393 (3) of CAMA read with item 5 of Schedule II to the Act, the receiver/manager can bring and defend actions in the name of the company without the need to seek the leave of the Court.
The provisions of CAMA (Sections 393, 396, 398 and 399) which control the conduct of a receiver and any claim arising from a breach thereof or enforcing right thereunder, will qualify as an action arising from the operation of the CAMA and its regulations. That is to say any matter that cannot be decided without recourse to either the CAMA or any enactment regulating operation of companies under the CAMA belongs to the Federal High Court.
I find considerable support in the case of Kadzi International Ltd v. Kano Tannery Co. Ltd and Ors (2004) 4 NWLR (Pt. 864) 545 at 576- 577 where the Court (Salami, Ba’aba and Umoren, JJ.CA) held per the lead judgment prepared by the erudite Jurist, His Lordship, Salami, J.C.A., (later P.C.A., as he then was) that: –
“Moreover, the first respondent under receivership would most probably involve the issue of the priority of the money owed amongst the other debts or loans of the first respondent. The transaction is therefore covered by the provisions of Sections 387-400 of Companies and Allied Matters Act, Cap. 59. It is crystally clear that by virtue of Section 230(1)(e) of the Constitution of the Federal Republic of Nigeria 1979 as amended by Constitution (Suspension and Modification Decree No.107 of 1993), it is the Federal High Court that can entertain the suit. Paragraph (e) of Subsection (1) of Section 230.
“230(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction of the exclusion to any other Court in civil causes and matters arising from –
(e) the operation of any act or decree relating to companies and allied matters and any other common law regulating the operation of companies ”the way I see it is this ‘the appointment of a receiver either by the Court or by the debenture holders is an exercise pursuant to the Companies Act 1968… See Kasofsky v. Kreegeers (Phillips Claimant) (1937) 4 All ER 374 at page 317 (of Kerr on receivers by R. Walton), it is stated by the learned author that “the obligation of a receiver to discharge the preferential debt out of the property subject to a floating charge in priority to claims of the debenture holders is the same as the case of receiver appointed by the Court.” (Bracket and contents mine) His Lordship went on at P. 71 of the report to recite from Kerr on Receiver by R. Walton 15th Edition, p.207:
“Where a receiver is appointed on behalf of the holders of any debentures of a company registered in England which are secured by a floating charge, or possession is taken by or on behalf of such debenture holders then if the company is not being wound up, the debts which relating to preferential payment are to be paid in priority to all other debts shall be paid out of the assets coming to the hands of a receiver or other person taking possession in priority to the principal or interest in respect of the debentures.”
The ordering of priority by receiver as to which debts are to be paid from the assets of the first respondent by its nature is not a matter for an ordinary debt or breach of contract which could be entertained by a State High Court. See also the unreported judgment of this Court in Tanarewa Nigeria Ltd & Anor v. Plastifarm Limited (2003) 14 NWLR (pt. 840) 355.”
See also Fagbola v. K.C.I.M.A. (2006) 6 NWLR (Pt. 977) 433 at 450-451.
I think a dispassionate and sober look at the reliefs sought in the action (supra) indicated the receiver would have to work within the framework of the relevant provisions of the CAMA to realize the consequential objective of the award emanating from the exercise, would appear to be a civil cause and matter arising from the operation of the CAMA with respect to the receivership within the ambit of Section 251(e) of the 1999 Constitution vesting exclusive jurisdiction in that regard in the Court below. Accordingly, I find no substance in the objection to the jurisdiction of the Court below over the action and hereby most respectfully reject it.
The 2nd appellant was sued below as the 7th defendant in the name of Metalloplastica Nigeria Plc vide page 12 of the record, the 1st respondent qua plaintiff at the Court below sued in the name of Visana Nigeria Limited qua “creditor” of Metalloplastica Nigeria Plc (In Receivership), the statement of claim attached to the application for a writ of summons contained in pages 15-27 of the record with particular reference to page 15 thereof indicated the description in bracket of the 2nd appellant qua 7th defendant at the Court below as being (“IN RECEIVERSHIP”). Likewise, the amended statement of claim contained in pages 1270-1287 of the record with particular reference to page 1277 thereof.
It is trite that the words (“IN RECEIVERSHIP)” in bracket referred to the 2nd appellant as the entity sued as the 7th defendant in receivership. For the word or sign “bracket” is a general name for parenthesis, which is explanatory or qualifying of the open words as in this case where the words “IN RECEIVERSHIP” in bracket qualified, explained and attached to the 2nd appellant as an entity sued in receivership vide Emespo J. Continental Ltd v. Corona Shifah – Trsgesellschaff MBH & Company (THE OWNERS OF “M.V. CONCORDIA) (2006) II NWLR (Pt. 991) 365) at 367-368.
In the light of the fact that the statement of claim supersedes the writ of summons vide Nta & Ors v. Anigbo & Anor (1972) N. S. C. C. 359 at 363 to the effect that a statement of claim with respect to the claim set out therein supersedes the writ, which has the statement of claim as subsequently amended, superseded the writ in this case clearly reflected that the 2nd appellant qua 7th defendant was sued as a legal entity in receivership. The contention of the appellants to the contrary is therefore lacking in substance and is hereby jettisoned.
Reliefs (i), (ii), (iii) and (v) of the amended statement of claim (supra) revolve round and/or pertain to the debenture, a document, pleaded ubiquitously in the amended statement of claim. Facts or information contained in documents need not be pleaded. The document(s) once sufficiently pleaded to have nexus with the claim, as in this case, sufficed and having regard to the fact that the documents, particularly the debenture, affected by the complaint was admitted in evidence as an Exhibit, it was available for interpretation of its contents without adding to, contradicting or departing from it, therefore the contention of the appellants that there was no evidence in support of reliefs 36(i), (ii) and (v) of the amended statement of claim is untenable and is hereby rejected.
Likewise, paragraphs 16, 17 and 18 of the amended statement of claim on the Deed of Mortgage Debenture dated 24.02.1989 pursuant to which Continental Merchant Bank (later inherited by the 1st appellant) appointed the 3rd respondent receiver/manager of the 2nd appellant are contained in the Deed of Mortgage Debenture tendered and admitted in evidence as an Exhibit showing there is evidence in respect of the said facts pleaded in paragraphs 16, 17 and 18 of the amended statement of claim.
Reference to a document in a pleading makes the document part of the pleadings vide M. M. A. Inc. v. N. M. A. (2012) 18 NWLR (Pt. 1338) 506 at 536; Sifax Nig. Ltd. v. Migfo (Nig) Ltd. (2018) 9 NWLR (Pt. 1623) 138 at 175. I would conclude on the issue that as the documents relating to reliefs 36(i), (ii), (iii) and (v) and paragraphs 16, 17 and 18 of the amended statement of claim were admitted in evidence as Exhibits, the said documents became documentary evidence in the case at the disposal of the parties and the Court below with respect to the time and the construction to place on them within the four walls of the documents.
Consequently, the contention of the appellant that no evidence was tendered towards proof of the reliefs claimed paragraph 31(i) (ii) (iii) and (v) of the amended statement of claim (supra) as well as paragraphs 16, 17 and 18 thereof is, with deference, untenable and is hereby not countenanced.
The pecuniary interest of the 1st respondent appeared to be affected by the subsequent All Debenture Deed made in 1989, because of the prior debenture deed made by the 1st respondent in 1981, therefore the 1st respondent had the standing to question the validity of the subsequent debenture deed of 1989 over the same assets of the 2nd appellant covered by both debenture deeds vide Abusomwan v. Mercantile Bank of Nigeria Ltd (1987) 6 S.C. 303 at 333-334 to the effect that where a person is injured from a transaction arising from the contract of two persons, the third party is not precluded from bringing action on the grounds that he was not a party to the contract (privity of contract) the mis-performance or non-performance of which has resulted in the damage.
And, further that the duty imposed here (Abusomwan v. M.B.N. Ltd) is not because there was a contract but because the 2nd appellant who was expected to know of the existence of the debenture deed of 1981 as same is registered as a public document (open to the public) had impliedly undertaken not to injure the plaintiff (in this case the 1st respondent), because the obligation towards the contracting party extended to all such persons who are likely to be injured by the acts or omissions of the defendant.
It appears to be the case that the 1st respondent subsequently ratified the existence of the debenture deed of the 1989, Exhibit D6, by the All Debenture Deed of 1990, which dispensed with the issue of consent in the debenture deed of 1981 and cured it of whatever leprous affliction it might have suffered before the ratification vide the Supreme Court case of Quo Vadis Ltd. v. Commissioner of Lands Mid-West State & Ors (1973) N.S.C.C 417 at 430 to the effect that the word ‘consent’ to have any meaningful import must in its connotation include an approval or an agreement or concurrence to a transaction either before or after its execution or institution.
Moreover, Section 166 of the CAMA stipulates without qualification or stricture that a company may borrow money for the purpose of its business or objects and may mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the company or of any third party.
So, for the 1st respondent to have placed a hurdle in the path of the operation of Section 166 of the CAMA by clause 13(l) of the Debenture Deed of 1981 requiring its written consent before the 2nd appellant would make subsequent debenture deed over its own assets would appear to subject Section 166 of the CAMA to the shifting circumstances of the parties which should not be the way an enactment ought to be treated, as that which purports to be a law is a law according as the truth of the fact may be and not according to the whims or shifting circumstances of the parties vide A.-G., Bendel State v. A.-G., Federation and Ors (1981) N.S.C.C. 314 at 396.
Accordingly, the Court below was wrong to hold that the subsequent debenture deed of 1989 was illegal for offending Clause 13(l) of the Debenture Deed of 1981. However, I agree that the interest of the 1st respondent as unsecured creditor should have ran pari pasu with the other unsecured creditors in terms of priority and appropriation of the assets of the 2nd appellant after the 1st appellant had satisfied its debts.
Clerk and Lindsell on Torts (Seventeenth Edition) aptly put it in page 1280 paragraphs 23-84 that since a party to the conspiracy can be liable even if he is not a party to the contract as in Rookes v. Barnard (1964) A. C. 1129, he could be liable even if it was not possible to establish that he had procured any breach of it, but where he had merely combined, with a common design, together with the parties committing the breach.
The tort of conspiracy takes the two forms of conspiracy to use unlawful means and conspiracy to injure, only the latter requires a predominant purpose to injure and that mere agreement to act in concert cannot make the act of any one or more wrongful, if it would not be wrongful when done by each alone independently vide the apt English case of Ware and de Freeville v. Motor Trade Union (1921) 3 K.B. 40 at 70 per Scrutton, L. J. The tort of conspiracy therefore, requires an agreement, combination, understanding, or concert to injure involving two or more persons.
Conspiracy in this context is an economic tort of procuring breach of contract. As aptly stated by Fox, L. J., in the case of Midland Bank Trust Co. Ltd. v. Green (No. 3) (1982) Ch. 529 at 541-542 the tort of conspiracy and the crime of conspiracy have grown far apart, so the burden of proof, in my modest view, of the tort of conspiracy will be on the preponderance of evidence, not proof beyond reasonable doubt. To the extent that the appellants contended that the tort of conspiracy ought to be proved beyond reasonable doubt, I would, with respect, reject the said contention based on the apt English case of Midland Bank Trust Co. Ltd. v. Green (No. 3) (supra).
The evidence put together was more of an accusation of conspiracy without proof as the quantum of the evidence on the issue had a bearing on the failure to render account as and when due and as to illegal payment on the debenture deed of 1989 which I found was not tainted with illegality thus sweeping the issue of illegality under its feet, (so to speak).
Page 768 of the record contains the following correspondence from the 2nd appellant to the 1st respondent –
“The Managing Director, Date: 28/01/1994
Visana Nig. Ltd.,
Plot 55F Adebisi Omotola Close,
Victoria Island Annex,
Lagos.
SUB: OUTSTANDING DUES ON OLD L.P.O & MATERIAL SUPPLIES
Dear Sir,
Further to our various discussions on the above matter, kindly amend your records to reflect a monthly interest of 4.25% instead of the earlier agreed 5%.
With the above change in your computations, the amount outstanding due to you should be the counter value of US$365,609.32 as at 31/12/1993. Not over US$400,000 as suggested by you in your letter of 07/01/1994. At the prevailing exchange rate of N22.00/US$, this is equivalent to Naira 8,043,405.02.
We use this medium to reassure you that arrangements have been made with our bankers – Savannah Bank of Nig. PLC., for a facility of Naira 40 Million, which we will utilize to obtain the necessary foreign exchange to settle the above outstanding invoices due to you, with interest.
Kindly therefore continue to supply us with the balance goods ordered by us, to enable us meet up with our customers demand for PVC Compound.
Thank you for your cooperation.
Yours faithfully,
Metalloplastica Nig. PLC.,
Mr. Robert faddoul
(Authorized Signatory).”
The above letter was admitted in evidence as Exhibit C4. The correspondence (supra) read literally together acknowledged the indebtedness contained therein. Exhibit C4 therefore revived the limitation period and removed the action outside the cat’s-paw or dragnet of the Limitation Law and I respectfully so hold.
The 1st respondent also built its case on Exhibit C4. Exhibit C4 contained in page 678 of the record and copied (supra) defined, circumscribed and identified the cause of action revived by it vide Abey v. Alex (1999) 14 NWLR (Pt. 637) 148.
The 1st respondent alleged the indebtedness of US$7,616,188.94 in paragraph 36 (vii) of the amended statement of claim (supra). The 1st respondent oblivious that it had conceded the sum US$365,609.32 as the quantum of the indebtedness contained in Exhibit C4, enlarged the claim when it had accepted the sum contained in Exhibit C4 as the sum due. The 1st respondent cannot be allowed to approbate and reprobate at the same time.
The Court below should have confined itself to the sum of money and the interest rate contained in Exhibit C4 (supra). The 2nd appellant having admitted the indebtedness contained therein and accepted the interest rate of 4.5% per month without objection or protest by the 1st respondent same should have regulated the interest on the admitted sum of money contained in Exhibit C4. Accordingly, I hold that the 1st respondent is entitled to the sum of US$365,609.32 contained in Exhibit C4 that revived the action.
Compound interest means interest that is paid both on the original amount of money borrowed or saved and on the interest that has been added to it vide Oxford Advanced Learner’s Dictionary (9th Edition) 310. None of the documents pleaded and tendered in evidence bore the description or appellation of ‘compound’ interest as the interest agreed to as terms of the loan transaction therefore the parties are bound by their pleadings vide Emegokwue v. Okadigbo (1973) N.M.L.R. 192 at 195.
Inasmuch as banks or lending institutions are entitled to charge simple interest on loans without agreement reached thereto with the borrower vide Faagol Investment Ltd v. N. B. N. Ltd. (1993) 1 NWLR (Pt. 271) 586 at 593-594, an agreement must be clinched with a borrower on charge of compound interest on the money borrowed before a claim for compound interest may be appropriate vide Barclays Bank of Nigeria Ltd. v. Maiwada Abubakar (1977) 10 S. C. 13 at 23-25.
Compound interest is therefore chargeable only where the person charged has agreed to it, or where he is shown or must be taken to have acquiesced in the account being kept on that basis which was not the case here vide Rickett v. B. W. A. Ltd. (1960) 5 F. S. C. 113.
In the absence of an agreement to that effect and lack of sufficient proof that it is customary in mercantile transactions to automatically/unilaterally charge compound interest on transactions, or that there is statutory provision to that effect, I agree with the appellants and hold that the claim and award of compound interest on the judgment debt is inappropriate and hereby modify or alter it to simple interest at the rate of 4.25% per month agreed to by the parties vide Exhibit C4.
In the result, the appeal fails and is dismissed only to the extent aforestated in the judgment and the judgment of the Court below is affirmed with respect to relief 36(vi) (supra) while the judgment debt is varied from US$7,616,188.94 to US$365,605.32 with 4.25% simple interest month by month thereon from 31.12.1993 to the date of judgment at the Court below and at the rate of 10% per annum from the date of judgment at the Court below until final liquidation of the judgment debt against the appellants in favour of the 1st respondent.
Parties are to bear their costs.
OBIETONBARA OWUPELE DANIEL-KALIO, J.C.A.: I have read the draft judgment of my learned brother Joseph Shagbaor Ikyegh, JCA. My learned brother has exhaustively considered all the issues in this appeal and I agree with the reasoning and the conclusions arrived at. I find no need to belabor the judicial points made in the lead judgment and I therefore abide by my lord’s affirmation of the judgment of the Court below in part and also my lord’s variation of the said judgment of the Court below as ordered.
ONYEKACHI AJA OTISI, J.C.A.: I read in advance a draft copy of the judgment of my learned brother, Joseph Shagbaor Ikyegh, JCA, which was made available to me. I am in agreement with the reasoning and conclusions therein, and adopt the same as mine. I abide by the orders made by my learned brother.
Appearances:
Chief F. O. Fagbohungbe, SAN, with him, Mr. A. A. Adeniran For Appellant(s)
Mr. A. Lamina – for 2nd – 3rd Respondents
Mr. M. S. Umar – for 4th Respondent
Mr. E. Uwa, SAN, with him, Mr. K. Kalu – for 1st Respondent
The 5th Respondent was served hearing notice but was unrepresented For Respondent(s)
