UWAKWE VS ODOGWU
(1989) LCN/2385(SC)
In the Supreme Court of Nigeria
Friday, December 15, 1989
Case Number: SC.89/1989
JUSTICES:
ANDREWS OTUTU OBASEKI Justice of The Supreme Court of Nigeria
MUHAMMADU LAWAL UWAIS Justice of The Supreme Court of Nigeria
SAIDU KAWU Justice of The Supreme Court of Nigeria
ABDUL GANIYU OLATUNJI AGBAJE Justice of The Supreme Court of Nigeria
PHILLIP NNAEMEKA-AGU Justice of The Supreme Court of Nigeria
Between
- JOHN UWAKWE
2. ALEXANDER OBIORA MELIE
3. NNANYELUGO ONUA IGWEMMA
4. FABIAN NNOKA
(For themselves and on behalf of other members of Inosi Onira Family of Obeagbu Onitsha) Appellant(s)
AND
- JULIUS AGOM ODOGWU
(For himself and as representing Umuosiga Family of Uruowulu Village, Obosi)
2. CHUKWUNWIKE EJINDU
(For himself and as representing Umunnegbo Family of Uruowulu Village, Obosi)
3. J. N. NWADIOGBU
4. CHIEF DAN ILONZE
5. SIMON NNAOJI
6. CHIEF G. N. AKIGWE
7. CLEMENT NZEKWE
8. FRANCIS OBIAGWU
9. AMBROSE UDEGBOKA
10. CHRISTOPHER OKOYE
11. ERNEST OTUBELU
12. GODWIN ICHU
(For and on behalf of Enekwa-Sumpu
Layout, Obosi Landlords and Occupiers) Respondent(s)
RATIO
NATURE AND APPOINTMENT OF RECEIVERS
“Now, in the Sixteenth Edition of “Kerr On Receivers” at page 5 under the heading “Object of appointment”, the law relating to appointment of receivers is stated as follows:- “A receiver can only be properly appointed for the purpose of getting in and holding or securing funds or other property, which the court at the trial, or in the course of the action, will have the means of distributing amongst, or making over to, the persons or person entitled thereto. The object sought by such appointment is therefore the safeguarding of property for the benefit of those entitled to it. There are two main classes of cases in which the appointment is made: (1) to enable persons who possess rights over property to obtain the benefit of those rights and to preserve the property pending realisation, where ordinary legal remedies are defective; and (2) to preserve property from some danger which threatens it.” In the first class of cases are where the court appoints a receiver at the instance of a mortgagee where principal is immediately payable or whose interest is in arrears; or cases of equitable execution; or cases where a receiver is appointed over the assets of a dissolved partnership. The second class of cases include those in which the appointment is made to preserve property pending litigation to decide the rights of the parties, or prevent a scramble among those entitled, such as an appointment pending a grant of probate or grant of letters of Administration. Within this second class of cases it is necessary, in all cases to allege and prove some peril to the property.” Per Kawu, J.S.C
KAWU, J.S.C. (Delivering The Leading Judgment): The proceedings leading to this interlocutory appeal originated in the Onitsha Judicial Division of the High Court of Anambra State. In that court the appellants herein, as plaintiffs instituted an action in Suit No.0/110/80 against the first set of respondents only claiming as follows:-
“(1) Declaration that the plaintiffs are entitled to a statutory right of occupancy to all that land known and called Ani Nwaokwe.
(2) N40,000.00 general damages.
(3) Perpetual Injunction etc.”
Pleadings were ordered and exchanged. However, as can be gathered from the record of the trial court, on 30th July, ]984, the appellants filed an ex parte motion under Ord.54 1.2 High Court Rules before Justice F.O. Nwokedi (retired) praying the court:
“…..for an order granting (them) leave to seek and use police protection in pursuit of its rights of quiet possession over that piece or parcel of land known as and called” Ani Nwokwo” which is contained in the sketch plan showing the land of Inosi Onira family of Ogbeabu in case No. 168 of 1920 Agba Egwuatu v Gbasuzo Onowu and for such further order/and other orders…”
On the 10th day of January, 1985, their prayer was granted, and consequently the appellants, assisted by the police, moved into the land in dispute demolishing the structures thereon. Subsequently the second set of defendants who claimed to be the landlords and occupiers of the land in dispute applied to the court to discharge the ex parte order of 10th January, 1985 and allow them to be joined as co-defendants. Both prayers were granted.
Then on the 18th day of January, 1985 the appellants filed a motion in the High Court praying for:-
“(1) An order of injunction restraining the defendants/respondents, the co-defendants/respondents, their servants and agents from building or continuing to build on the land in dispute in the above case verged pink in the plan No. SE/AN9/81 or from alienating any portion of the said land pending the determination of the above suit.
(2) An order appointing a receiver to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute verged pink in the Plan No. SE/AN9/81 and for such further order or orders as to this Honourable Court may seem just.”
The appellants’ motion was supported by an affidavit sworn to by John Uwakwe who was the first plaintiff. On behalf of the co-respondents, the 6th co-respondent – Francis Obiagwu filed a counter-affidavit. The application eventually came up for hearing before Aneke, J. on the 11th day of March, 1980 when all counsel representing the parties made their oral submissions. At the conclusion of the hearing, ruling was adjourned to 2nd May, 1986.On that day in his ruling, the learned trial Judge dismissed the first limb of the motion praying the court for an order of injunction but granted the prayer for appointment of a receiver stating as follows:-
“I now turn to the prayer for the appointment of a receiver Paragraph 11 of the applicant’s affidavit deposes
“11. That the rents the defendants/respondents and the co-defendants/respondents and their servants and agents are collecting from the building and structures on the land in dispute will be lost to me, the other plaintiffs/applicants and to the members of my family unless a Receiver is appointed to collect same”.
And at paragraph 19 applicants depose as follows:-
“19. That the firm of Akporiaye, Ezukamma & Co. and Cosmas Ifebi & Associates are reputable estate agents and they have consented to act as receivers in respect of the land in dispute in the above case.”
“Learned Counsel for the defendants/ respondents argue that a receiver should not be appointed for the reasons that there is no mention in the affidavit of what rent is to be collected and no evidence of whom this rent will be collected from. He also argues that the applicants are silent as to what should be done about the yams and cassava on the land and what should be done about people who live in their own houses and pay no rent. He argues that an order appointing a receiver would be in vain in the face of these questions. This court however thinks that those questions are more or less of a professional nature and one which the Receivers themselves will resolve or answer when appointed.
I am quite in agreement with the learned counsel for the defendants/respondents that the appointment of a Receiver is an alternative relief which a court can grant instead of an injunction. I have however had due regard to all the circumstances of this case and have arrived at the considered opinion that it is just and convenient to appoint a receiver in this matter. Such a receiver is to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute as shown and verged pink on the plan No. SE/AN9/81.
This application is accordingly granted in part. The application for an interim injunction is hereby dismissed and the application for an order for the appointment of a Receiver is hereby granted.”
Being dissatisfied with this ruling, the defendants appealed to the Court of Appeal, Enugu Division, on a number of grounds. The appeal came before the Court of Appeal in Enugu (Coram: Abai Ikwechegh, Katsina-Alu and Macaulay, JJ.C.A.). In the lead Ruling delivered by Abai Ikwechegh, J.C.A. allowing the appeal, which Ruling was concurred in by Katsina-Alu and Macaulay, JJ.C.A., the learned Justice of the Court of Appeal said, inter alia:
“Under the Heading, Grounds of Appointment, paragraph 827, page 418, Vol. 39, Halsbury’s Laws, supra, the learned editors have shown that preservation of property is a just cause for appointing a receiver in cases where the benefit of persons who have interest in it clash: Taylor vs. Eckersley (1876) 2 Ch.D. 302, C.A. It is shown also that a receiver may be appointed pending
an action for the rents and profits of land vested in joint tenant Porter vs. Lopes (1877) 7 Ch. D. 358. A receiver may be appointed to protect a plaintiff who has right to be paid out of a particular fund, so as the receiver may protect the particular fund from being dissipated. Young vs. Buckett (1882) 51 L.H. Ch. 504. The circumstances of this application seem to exclude the above matters. Where the law requires that the court will, where it is “just and convenient” make the appointment, it seems to me that the conduct of the application; the clash of the interests of the parties; and the risk of dissipation or wastages, are matters which spell out the consideration of “just and convenient”, and these questions are all absent in the present case; so that in effect it was not “just and convenient” to have made the order.”
It is against this ruling of the Court of Appeal delivered on 12th day of April, 1988 that the appellants have filed a Notice of Appeal to the Supreme Court on 5 grounds of appeal which grounds (without their particulars) are as follows:-
“(1) That the Court of Appeal misdirected itself in law in the following passage of its judgment:
“It would seem that the plaintiffs suffered the defendants and the co-defendants to fully erect the buildings and let them out on rents without employing the useful weapon of ‘interim injunction’ at the appropriate time to prevent the erecting of the buildings in the first place. The plaintiffs endured the defendants and co-defendants to have expended large sums of money to raise the buildings on the land. And they are now seeking to have the people who built the houses with the plaintiffs’ connivance and acquiescence stopped from gathering in accruing rents. It is well known that delay defeats equity. And the appointment of a Receiver in doing equity; and equity does not assist the tardy man.”
(2) That the Court of Appeal erred in law in the following passage of its judgment:
“If a party lets the other side expend income to build houses on land in dispute, to my mind such party shall be content with his final victory, which, when he wins the land in dispute gives him also all structures upon it by operation of the maxim, quidquid planatatur solo, solo cedit; but it would seem “unjust and inconvenient” in my view to allow him to stop the other party from realising his investments when the rights of the parties are not yet resolved.”
(3) That the Court of Appeal erred in law in the following passage of its judgment:
“Nwokedi, J., did not ever make any Order that dealt with rents that the appellants had all the time enjoyed. The need for the control of the rents did not crop up only in June, 1985, or thereafter. If the respondents had suffered the appellants to collect and enjoy the rents from 1980 to 1985, what then had brought about the change in the circumstances It was not alleged that the appellants had grown penurious and were dissipating the funds to which the plaintiffs/respondents were entitled. It is a fact that the respondents have no common interest with the appellants in the rents, so as to preserve them for the two sides to share in due course.”
(4) That the Court of Appeal misdirected itself in law in holding that “it is a further agreed point that the appellants are in present possession.”
(5) That the Court of Appeal erred in law In setting aside the Order of the learned trial Judge appointing Receivers in respect of the land in dispute.”
Briefs of argument were filed by the appellants and the respondents in this appeal which were adopted at the hearing. In this appeal, the appellants, who were plaintiffs in the High Court and respondents in the Court below will simply be called the appellants, while the 1st set of respondents and the second set of respondents, who were respectively the 1st set of appellants and the second set of appellants in the Court below, will be called the respondents.
In his brief of argument, the appellants’ counsel formulated questions for determination as follows:-
(a)(i) In a case for declaration of title, damages for trespass and injunction, has the Court jurisdiction to appoint a Receiver to manage, control and collect rents from the buildings, structures erected by one of the parties on the land in dispute pending the determination of the case
(ii) Is it the law that in a case for declaration of title, damages for trespass and injunction, a receiver should not be appointed to manage, control and collect rents from the buildings and structures erected on the land in dispute by the defendant pending the determination of the case on the ground that if the plaintiff succeeded in the case he would be amply compensated with the said buildings and structures which would pass to him with the land
(b)(ii) Was the Court of Appeal right to have set aside the Order of the High Court appointing Receivers in the above case when it was not shown that the High Court acted on wrong principles of law or had taken into consideration matters it would not have considered or had omitted to consider matters which it should have considered or that the order had occasioned a miscarriage of justice.
(ii) Was the Court of Appeal right to import into the appeal before it, matters which were not established by evidence and to speculate on issues which were either not raised or established and to rely thereon in coming to its decision in the appeal
(iii) Was the Court of Appeal right in its decision that the defendants/respondents/appellants/respondents and the co-defendants/respondents/appellants/respondents should be allowed, to the detriment of the plaintiffs/appellants/respondents/appellants, to be benefiting from the land in dispute while the above case is pending”
It is quite clear to me that questions (a)(i) and (ii), as formulated by the appellants’ counsel, raise the issue of the competence and jurisdiction of the court to appoint a receiver in a case for declaration of title to land and damages for trespass, and both questions should be treated together. In his submission on the point in his brief, Mr. Egonu, SAN, for the appellants made reference to several passages of the judgment of the Court of Appeal where the court dealt with the cases and circumstances in which a Receiver could be appointed. He then referred to the conclusion of the Court at page 163 lines 14-24 where the Court stated as follows:-
“The circumstances of this application seem to exclude the above matters. Where the law requires that the court will, where it is “just and convenient” make the appointment, it seems to me that the conduct of the applicant; the clash of the interests of the parties; and the risk of dissipation or wastages, are matters which spell out the consideration of “just and convenient”, and these questions are all absent in the present case; so that in effect it was not “just and convenient” to have made the order.”
He then submitted at page 5 of his brief that
“the sum of the judgment of the Court of Appeal in the passages of its judgment mentioned therein is that a Receiver could not be appointed in a case for declaration of title, damages for trespass and injunction.”
I have carefully gone through the judgment of the Court below and have not been able to find anywhere in that judgment where it is stated either expressly or impliedly, that a receiver could not be appointed in a case for declaration of title. In fact at p.159 of the record, the Court, correctly in my view, set out the various circumstances in which it would be proper to appoint receivers and made specific mention of the statutory jurisdiction of the court to do so under Section 25(1) of the High Court Law, Cap. 61 Laws of Eastern Nigeria, 1963 which is applicable to Anambra State. That Section does not limit the jurisdiction of the court to appoint receivers to a particular class of cases. It reads as follows:-
“25(1) The Court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the Court to be just or convenient so to do.” (underlining supplied by
me for emphasis).
In my view, there is no substance whatsoever in this complaint.
With regard to question (ii) in which it has been alleged that the Court of Appeal imported into the appeal before it matters which were not raised or established, I do not think the criticism in justified. The fact that the respondents erected buildings on the land in dispute was certainly in evidence before the trial court as paragraph 7 of the affidavit of John Uwakwe sworn to on 22/7/85 so clearly stated. It says:-
“7. That despite the institution of the above case the defendants/respondents and the co-defendants/respondents and their servants and agents have erected and are still erecting buildings and structures on the land in dispute.”
Again I see no substance in this complaint
The remaining two questions for determination – (i) and (iii) both raise the most crucial issue in this appeal as to whether or not in the circumstances of this case the Court of Appeal was right in setting aside the ruling of the High Court appointing receivers.
Now, in the Sixteenth Edition of “Kerr On Receivers” at page 5 under the heading “Object of appointment”, the law relating to appointment of receivers is stated as follows:-
“A receiver can only be properly appointed for the purpose of getting in and holding or securing funds or other property, which the court at the trial, or in the course of the action, will have the means of distributing amongst, or making over to, the persons or person entitled thereto. The object sought by such appointment is therefore the safeguarding of property for the benefit of those entitled to it. There are two main classes of cases in which the appointment is made: (1) to enable persons who possess rights over property to obtain the benefit of those rights and to preserve the property pending realisation, where ordinary legal remedies are defective; and (2) to preserve property from some danger which threatens it.”
In the first class of cases are where the court appoints a receiver at the instance of a mortgagee where principal is immediately payable or whose interest is in arrears; or cases of equitable execution; or cases where a receiver is appointed over the assets of a dissolved partnership.
The second class of cases include those in which the appointment is made to preserve property pending litigation to decide the rights of the parties, or prevent a scramble among those entitled, such as an appointment pending a grant of probate or grant of letters of Administration. Within this second class of cases it is necessary, in all cases to allege and prove some peril to the property.
Now considering all the materials before the trial court, can it be rightly said that the appellant’s case came under any of the above instances Would it be “just and convenient” to appoint receivers in the circumstances of this case My answer is firmly in the negative.
The Court of Appeal was, in my view, right in its conclusion “that no property on the land in dispute nor the rents, is shown to be in danger of wasting, or risk of alienation, or dissipation, to justify the order made, and such order was not therefore shown to be “just and convenient” as between the parties to the litigation, and it was for these reasons unfair to the appellants, and invalid at law and falls to be discharged.” In my judgment there is no merit in this appeal whatsoever and it is accordingly dismissed with N500.00 costs awarded to each set of respondents.
OBASEKI, J.S.C.: I have had the advantage of reading in advance the judgment just delivered by my learned brother, Kawu, J.S.C. His opinions on all the issues raised in this appeal accord with mine and I too would and I hereby dismiss the appeal against the decision of the Court of Appeal which set aside the decision of the High Court which appointed receivers to manage the property in dispute pending the hearing and determination of the claim. The claim of the plaintiffs/appellants endorsed on the writ of summons is for
1. declaration that the plaintiffs are entitled to a statutory right of occupancy to all that land known and called Ani Nwaokwe;
2. N40,000.00 general damages;
3. Perpetual injunction.
The action was filed in 1980. Trial is yet to commence although pleadings have been filed and exchanged. This appeal concerns the order made in the interlocutory application before the High Court. The application was for appointment of a Receiver to manage the property built by the respondents on the land. The High Court granted the application but on appeal, the Court of Appeal set aside the order. The application made by the plaintiff in the High Court was for
“(1) An order of injunction restraining the defendants/respondents, the co-defendants/respondents, their servants and agents from building or continuing to build on the land in dispute in the above case verged PINK in the Plan No. SE/AN9/81 or from alienating any portion of the said land pending the determination of the above suit;
(2) An order appointing a receiver to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute verged PINK in the Plan No. SE/AN9/81 and for such further order or orders as to this Honourable Court may seem just.”
It appears the facts in support of the application on which the learned trial Judge based his decision to make the order appointing the Receiver can be found in paragraphs 11 and 19 of the affidavit sworn to by John Uwakwe which read:
“11. That the rents the defendants/respondents and the co-defendants/respondents and their servants and agents are collecting from the buildings and structures on the land will be lost to me, the other plaintiffs/applicants and to the members of my family unless a receiver is appointed to collect same.
19. That the firm of Akporiaye, Ezukamma & Co and Cosmas Ifebi & Associates are reputable estate agents and they have consented to act as receivers in respect of the land in dispute in the above case.”
In granting the order, the learned trial Judge held:
“I am quite in agreement with the learned Counsel for the defendants/respondents that the appointment of a receiver is an alternative relief which a court can grant instead of an injunction. I have however had due regard to all the circumstances of this case and have arrived at the considered opinion that it is just and convenient to appoint a receiver in this matter. Such a receiver is to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute as shown and verged pink on the plan No. SE/AN9/81.
This application is accordingly granted in part. The application for an interim injunction is hereby dismissed and the application for an order for the appointment of a Receiver is hereby granted.”
It is significant to observe that the fact that the buildings and structures were erected by the defendants and co-defendants did not strike a chord of caution in the ears and mindsofthe learned trial Judge. The appellants made no secret of that fact which at the stage of the proceedings would have disentitled the plaintiffs/appellants to that order. Neither the morals nor the law nor justice was on the side of the plaintiffs/appellants to secure that order at that stage when issues as to title have been joined, the respondents erected the buildings and were in possession.
However, dissatisfied, the defendants appealed to the Court of Appeal and won. The order was set aside and the existing rights of the defendants to possession of the land and rent restored. The plaintiffs were dissatisfied with the decision of the Court of Appeal and have now appealed to this Court against that decision.
Five grounds of appeal were filed. The 1st and 4th grounds complained of misdirection in law while the 2nd, 3rd and 5th grounds complained of errors in law. These 5 grounds have been set out fully in the judgment of my learned brother, Kawu, J.S.C. and I need not set them out here but the issues raised in them are, according to the formulation in the brief of the appellants as follows:
“a(i) In a case for declaration of title, damages for trespass and injunction, has the court jurisdiction to appoint a Receiver to manage, control and collect rents from buildings, and structures erected by one of the parties on the land in dispute pending the determination of the case
(ii) Is it the law that in a case for declaration of title, damages for trespass and injunction, a Receiver should not be appointed to manage, control and collect rents from the buildings and structures erected on the land in dispute by the defendant pending the determination of the case on the ground that if the plaintiff succeeded in the case, he would be amply compensated with the said buildings and structures which would pass to him with the land
b(i) Was the Court of Appeal right to have set aside the order of the High Court appointing Receivers in the above case when it was not shown that the High Court acted on wrong principles of law or had taken into consideration matters it would not have considered or had omitted to consider matters which it should have considered or that the order had occasioned a miscarriage of justice
b(ii) Was the Court of Appeal right to import into the appeal before it matters which were not established by evidence and to speculate on issues which were either not raised or established and to rely thereon in coming to its decision in the appeal (iii) Was the Court of Appeal right in its decision that the defendants/respondents/appellants/respondents and co-defendants/respondents/appellants/respondents should be allowed to the detriments of plaintiffs/appellants/respondents/appellants, to be benefiting from the land
My learned brother, Kawu, J.S.C. treated each of these issues fully.
Who are Receivers And in what circumstances must they be appointed This being an appeal originating from the High Court of Anambra State, the statutory jurisdiction to appoint receivers is to be found expressly stated in the provisions of section 25(1) of the High Court Law Cap. 61 Laws of Eastern Nigeria 1963 which read:
“The Court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which-it appears to the court to be just or convenient so to do.”
In other words, the overriding considerations must be justice in that it must be just and convenient so to do. If it will not be just to appoint a receiver, the appointment should not be made. The nature of the case and the facts and circumstances on which the application is based must be considered critically to see where the balance of convenience lies.
By the nature of the office, a receiver is an impartial person appointed by the court to manage, collect and receive pending the proceedings, rents, issues and profits of land or personal estate which it does not seem reasonable to the court that either party should collect or receive or for the same to be distributed among the persons entitled.
The main complaint of the appellants before the High Court is contained in paragraph 7 of the affidavit of John Uwakwe which is –
“that despite the institution of the above case, the defendants/respondents and their servants and agents have erected and are still erecting buildings and structures on the land in dispute.”
This is not a valid ground for the appointment of a Receiver, if a person who claims title to land spends money to develop the land and a third party claims title to the same land as the appellant has done in this case, it is not the law that control and management of the land together with receipt of rents and profits from the land be removed from the person in possession by the appointment of a Receiver unit the issue of title is finally determined. To do so cannot be regarded as ‘just’ and ‘convenient’. Until the third party is able to disturb the party in possession and prevent him howsoever temporarily from enjoying the rents and profits issuing from his investment on the land. The balance of convenience does not favour such a course [See Kerr on Receivers page 72, 16th Edition]
Appointment of Receivers being an equitable relief, the appellants have no equity to come to the Court of Chancery for relief since they had adequate remedy at common law to contest their legal title. The Court of Chancery would not at the instance of a person alleging a mere legal title against another party who was in possession of real estate and who claims to hold a legal title disturb that possession by appointing a receiver. The true ownership of the legal title put in issue has to be finally determined before invoking the equitable jurisdiction of the court in the matter. See Earl Talbot v. Hope Scott (1858) 4 K & J. 96; Carrow v. Ferrior (1868) 3 Ch. App. 719.
Costs to the respondents is fixed at N500.00.
UWAIS, J.S.C.: I have read in advance the judgment read by my learned, brother Kawu, J.S.C. and I am in complete agreement with him that the appeal lacks merit and that it should be dismissed.
The power of the High Court of Anambra State to appoint a receiver is statutory and it applies to all manner of cases. Section 25 subsection (1) of the High Court Law, Cap.61 of the Laws of Eastern Nigeria, 1963 which is applicable to Anambra State provides:-
“(1) The Court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the Court to be just or convenient so to do.”
From the foregoing provisions, it is quite clear that a trial Judge has the power to appoint a receiver by an interlocutory order. However in making the appointment, the trial Judge is enjoined to take into consideration whether the justice of the case or the balance of convenience demands the appointment. This is a matter of discretion, the exercise of which must always be judicial as well as judicious.
There is no doubt that the balance of convenience in the case in hand was not in favour of the appellants when they inter alia applied for the appointment of a receiver to collect rent on the buildings and structures erected by the respondents on the land in dispute. Learned trial Judge did not therefore, exercise his discretion properly and was thereby in error when he acceded to the application by the appellants to appoint a receiver. In my opinion, the Court of Appeal was right in setting aside the appointment made by the learned trial Judge.
Accordingly, I see no merit in this appeal and it fails. The decision of the Court of Appeal is affirmed with N500.00 costs to each set of respondents.
AGBAJE, J.S.C.: I have the opportunity of reading in draft the lead judgment of my learned brother Kawu, J.S.C. I agree entirely with him that this appeal lacks merit and that it should be dismissed.
It appears that the appellants claims against the respondents in an Onitsha High Court are as follows:-
“(1) Declaration that the plaintiffs are entitled to statutory right of occupancy to all that land known and called Ani Nwokwe.
(2) N40,000.00 general damages.
(3) Perpetual Injunction etc.”
The claim was filed sometime in 1980. Then the respondents were not parties to the action. Pursuant to an application by them, the respondents were joined as co-defendant, in January, 1985. In the application to be joined as co-defendant, the respondents maintained that they were landlords and occupier of the land in dispute.
Then on 18th January, 1985, the present plaintiffs/appellants filed in the Onitsha High Court the following application against all the defendants to the action including the co-defendants:-
“(I) An Order of injunction restraining the defendants/respondents, the co-defendants/respondents, their servants and agents from building or continuing to build on the land in dispute in the above case verged pink in the Plan No.. SE/AN9/81 or from alienating any portion of the said land pending the determination of the above suit.
(2) An Order appointing a receiver to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute.”
The material parts of the affidavit of the 1st plaintiff in respect of the application for the appointment of a receiver are:-
“6. That despite the institution of the above case the defendants/respondents have alienated portions of the land in dispute to the co-defendants/respondents and both the defendants/respondents and the co-defendants/respondents threaten to continue alienating portion of the land in dispute to other persons.
7. That despite the institution of the above case the defendants/respondents and the co-defendants/respondents and their servants and agents have erected and are still erecting buildings and structures on the land in dispute.
8. That the defendants/respondents and the co-defendants/respondents and their servants and agents are collecting enormous rents from the tenants they have let the buildings and structures on the land in dispute.
9. That since the 12th day of June, 1985, after the Court had discharged the ex-parte Order which the plaintiffs/applicants were previously granted in the above case, the defendants/respondents and the co-defendants/respondents and their servants and agents have invaded the land in dispute and have embarked on massive construction and erection of buildings and structures on the land in dispute.
10. That I and the other plaintiffs/applicants and the members of my family are not interested in the type of buildings and structures the defendants/respondents and the co-den fend ants/respondents and their servants and agents are erecting on the land in dispute.
11. That the rents the defendants/respondents and the co-defendants/respondents and their servants and agents are collecting from the building and structure on the land in dispute will be lost to me, the other plaintiffs/applicants and the members of my family unless a Receiver appointed to collect the same.
13. That if the defendants/respondents and the co-defendants/respondents and their servants and agents continue to build on the land in dispute I and the other plaintiffs/applicants and the members of my family will be put to great difficulty and expense in removing the structures and buildings they are erecting on the land in dispute.
17. That no damages whatsoever will really compensate me and the other plaintiffs/applicants and the members of my family for the damage the defendants/respondents and the co-defendants/respondents and their servants and agents are causing on our-land now in dispute.”
The application was heard by Aneke, J. In his ruling on it given on 2/3/86 he refused the application for an injunction holding in doing so as follows:-
“Since it would be impracticable to remove the buildings already put up and keeping in mind the maxim quid quid plantatur solo solo cedit, I am of the opinion that the balance of inconvenience is in favour of the respondents and that the order for injunction should not be made.
I do not therefore think that it is convenient or just to all concerned to make an order of interim injunction in such terms as is prayed for.”
The learned trial Judge however granted the application for the appointment of a receiver holding in this regard as follows:-
“I am quite in agreement with the learned Counsel for the defendants/respondents that the appointment of a Receiver is an alternative relief which a court can grant instead of an injunction. I have however had due regard to all the circumstances of this case and have arrived at the considered opinion that it is just and convenient to appoint a receiver in this matter.”
Following the appeal of the co-defendants against the order for the appointment of a receiver made by Aneke, J. to the Court of Appeal Enugu Division, that Court set aside the order. holding, in the main, as per the lead judgment of Ikwechegh, J .C.A. in which Katsina-Alu and Macaulay, JJ.C.A. concurred that on the facts and circumstances of this case it was not just and convenient to make the order for the appointment of a receiver which the learned trial Judge made.
There is no doubt that under the provisions of section 25(1) of the high Court Law of the former Eastern Nigeria, Cap. 61 Laws of Eastern Nigeria 1963, now applicable in Anambra State, which say:-
“25(1) The Court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the Court to be just or convenient so to do.” (underlining mine) there is a statutory jurisdiction in an High Court of Anambra State to appoint a receiver by an interlocutory order in all cases, including the present case now on appeal before us, in which it appears to the court to be just or convenient to do so. So in my judgment the jurisdiction of the trial court, an Onitsha High Court of Anambra State to appoint a receiver by an interlocutory order in this case cannot be in doubt.
The bone of contention appears to me in this appeal to centre on the propriety or otherwise of the exercise of the undoubted jurisdiction which the trial court has to appoint a receiver in this case. In other words, the dispute is as to whether or not the Court of Appeal is right in saying that it could not have appeared to this case to the trial court to be just or convenient to appoint a receiver.
On the meaning of “just or convenient” in the con of an application for an injunction or a receiver the learned authors of Halsbury Laws of England third edition Volume 21 say at page 348 para. 730:-
“730. Meaning of just or convenient. The words “just or convenient” in the statutory provision (k) must be read “just as well as convenient” (1). They do not mean that the Court can grant an injunction simply because the Court thinks it convenient, but mean that the Court should grant an injunction for the protection of rights or the prevention of injury according to legal principles (m). They confer no arbitrary nor unregulated discretion on the Court, and do not authorise it to invent new modes of enforcing judgments in substitution for the ordinary modes (o).”
As to the grounds for the appointment of a receiver the learned authors of the same work in Volume 32 page 394 para. 633 say-
“Apart from appointments by way of equitable execution (e), or to enforce a charge (f). the general ground on which the court appoints a receiver is ultimately in every case the protection or preservation of property for the benefit of persons who have an interest in it (g).”
In cases of disputed title like it is here, the same work says in the same volume at page 395 para. 634:-
“In cases of disputed title to land, the former rule was that the court would not interfere with the party in possession unless his title was obviously defective (z) or was affected by some equity (a). or the rents were in danger of being lost (b) or the property was in danger of destruction (c). Now, however, an interlocutory application for a receiver by a person asserting a purely legal title will be entertained, and a receiver may be appointed if the court thinks that the plaintiff will probably succeed at the hearing and that, in all the circumstances of the case, the appointment is just and convenient (d). In an action for recovery of land, the jurisdiction is exercised with great caution, and if the defendant is in occupation a receiver will only be appointed in special circumstances, as otherwise the substantial issue may in effect he determined by evidence only admissible on interlocutory application (e); and a defendant in such an action may be deprived of the privilege of not disclosing his title (f) The length of the defendant’s possession (g) and the position of the tenants, who might be called upon to pay their rents over again if the party in possession were not solvent (h), will receive consideration. Similarly, a landlord suing to recover possession of demised premises for breach of covenant may obtain a receiver of the rents and profits pending trial, if he shows a probability of success at the hearing and that the appointment is necessary to preserve the property, as for example where there are licences which are endangered (i).”
It appears clear to me from paragraph 10 of the affidavit in support of the application for the appointment of a receiver that the plaintiffs/appellants are not interested in the buildings on the land in dispute which the defendants/ respondents, undoubtedly put there. And from paragraph 13 of the same affidavit which says:-
“13. That if the defendants/respondents and the co-defendants/respondents and their servants and agents continue to build on the land in dispute I and the other plaintiffs/applicants and the members of my family will be put to great difficulty and expense in removing the structures and buildings they are erecting on the land in dispute.”
it can hardly be said that the plaintiffs/appellants are interested in the preservation of the buildings on the land in dispute.
When these two circumstances are taken along with the undisputed fact that the defendants/respondents are by themselves and their tenants in possession of the buildings on the land in dispute in respect of which the application for the appointment of a receiver was made, it cannot, in my judgment, be rightly said by any reasonable tribunal having regard to the legal principles I set down above that it appears just or convenient to it to appoint a receiver in this case. So, in my judgment, the Court of Appeal, the lower court, was right in setting aside the interlocutory order of the trial court appointing a receiver.
In the result, I too dismiss the appellants’ appeal with N500.00 costs to each set of respondents.
NNAEMEKA-AGU, J.S.C.: This is a straight appeal against the decision of the Court of Appeal, Enugu Division, which had set aside an order of an Onitsha High Court per Aneke, J., appointing a receiver in a claim for declaration of title.
The appellants as plaintiffs, had in 1980 claimed against the defendants/respondents for a declaration that they were entitled to a statutory right of occupancy to the land called “Ani Nwokwe”, N40,000.00 damages for trespass, and perpetual injunction.
My learned brother, Kawu, J.S.C., has fully stated the facts. I need not repeat them here.
The learned Senior Advocates on all sides framed the issues for determination differently. Having due regard to those issues, their elaboration by my learned brother in the lead judgment and the argument of counsel on all sides, I shall limit myself in this my contribution to only the following questions, namely:
(i) In view of the nature of the claim before the court, is this a case in which the learned trial Judge should have appointed a receiver at all
(ii) Assuming that it is, should he have done so on the peculiar facts of this case and
(iii) If the above two questions can be answered in the affirmative, did he observe all the necessary rules for such an appointment
Both Mr. Akpamgbo, for the respondents, and Chief Ikeazor, for the co-respondents, while conceding it that the court of trial had jurisdiction to appoint a receiver under Section 25(1) of the High Court Law of Eastern Nigeria, applicable in Anambra State, submitted that on the peculiar facts of this case a receiver ought not to have been appointed at all.
Now the claim before the court, as I have stated, was for a declaration that the appellants as plaintiffs, are entitled to a statutory right of occupancy to land known as Ani Nwokwe, N40,000.00 damages for trespass and injunction. The endorsement on the writ of summons as well as the appellants’ pleading conceded it that the respondents and the co-respondents erected all the buildings on the land in dispute, installed rent paying tenants in them and have been collecting rents from them. So, from the appellants’ own showing the respondents and the co-respondents were, at all material times, in possession. The appellants’ claim to the land in dispute was based on a Native Court Suit of 1920 between “Egwuatu of Onitsha and Gbasuzo of Onitsha”, said to have ended in their favour. Indeed the quantum and extent of the land comprised in that case were only shown by means of a sketch, and not a surveyed plan, before the learned trial Judge in this application. This being an interlocutory appeal, I would express no opinion as to whether a case between two Onitsha people could found a right or create an estoppel in the instant case which was initially between Onitsha people and Obosi people. I should, however, take notice of the fact that from an earlier ruling of the High Court, per Olike, J., in the same suit on the 12th of June, 1985, it appears that another family of Onitsha, namely Umu-Chimukwu Family of o Ogbeabu Village, Onitsha, were also claiming to be the successful party in the 1920 case, as against the appellants who are from Inasi Onira Family of Ogbeabu. Strikingly no attempt was made by the appellants to execute the 1920 Native Court suit until 1984 when, inspite of the pendency of this suit since 1980, they obtained in an ex parte motion before F.O. Nwokedi, J., leave to use the police to enforce their rights over the land, based on the 1920 Native Court suit. This ex parte order was set aside by Olike, J., on the 12th day of June, 1985; hence the application for injunction and receivership on the 18th of July, 1985. As against the appellants’ claims are those of the respondents who asserted that they inherited the land in dispute from their fore-fathers and made it into a layout; and those of the co-respondents who deposed that they variously purchased various plots of land in the layout since 1978 and commenced buildings on them. It is from the above background facts that I shall now attempt to answer the above questions.
I would like to begin by adverting to some basic principles for appointment of a receiver by court. The receiver, when appointed by a court, is not an agent of either party to the litigation. He is an officer of court. By his appointment, the Court in effect assumes and undertakes the management of the property in litigation by itself: see Gardner v. London Chatham & Dover Rly. (1867) 2 Ch. App. 201, at p.211. When appointed over land or real property, he de jure takes over possession. His appointment operates as a general injunction against all the parties to the litigation. Any interference by any of them with his performance of his duties will be punishable as contempt of court: See Helmore v. Smith (No.2) (1886) 35 Ch.D. 449. It is for the peculiar position that a receiver, once appointed, assumes, that the courts have long taken the stand that a receiver will not be appointed except in aid of an existing right: See Philips v. Jones (1884) 28 S.J. 360. It is not enough for the applicant to show that there is an issue to be tried. He must show a strong prima facie right which deserves protection by the court and that that right is in danger of devastation.
Applying the above principles to the instant case, it appears to me that this was not a case in which the learned trial Judge should have appointed a receiver at all. This is because what the appellants claim is a bare title based on a 1920 case between parties, none of whom is alleged to be a privy of the respondent. After all, it is a well-known principle of law that a decision in a case of declaration of title is based on the relative strengths of the cases of, and settles the issue between, the parties in court and their privies but does not necessarily bind others:
See Anukanti v Ekwonyeaso (1980) 1 L.N.R. 346 at p.351.
Arase v Arase (1981) 5 S.C. 33 at p.35.
Ocean Estates Ltd. v. Norman Pinder (1969) 2 A.C. 19, atpp. 24-25.
Above all, as the respondents who claim to be bona fide purchasers for value are conceded to be in possession and in receipt of rents from their tenants in the houses they built on the land, it was against all known principles of law to have wrested the possession from them at the instance of the appellants by installing a receiver appointed by the court. Even though I am not prepared to decide, as a general proposition of law that there cannot be a few limited cases in which a receiver can be properly appointed in a claim for declaration of title followed by consequential reliefs of damages and injunction, those cases must be relatively few, particularly in a case like the instant, where the defendant is conceded to be in possession. For one thing – in this country at least – once it is conceded that a person is in possession of land, the onus of proving that he is not the owner is, by statute, on a person who asserts that he is not the owner. There is a presumption of ownership in favour of such a person in possession: section 145 of the Evidence Act; see also Da Costa v. Ikomi (1968) 1 All N.L.R. 394. Although the presumption is rebuttable, it appears to me that if a court of trial, without trying the issues to find out whether the presumption could be rebutted, simply wrests that possession which placed him in a position of advantage from him by appointing a receiver over the property, great injustice shall have resulted. The situation is worse in the instant case in which the uncontradicted affidavit evidence before the court shows that the houses over which the receiver was appointed were built by the respondents and co-respondents at their own expenses. What was open to the appellants was to have resorted to their remedies at common law by seeking an early hearing. The position I have taken in this matter is not different from that in England. Kerr summarized the position thus:
“The Court of Chancery would not, at the instance of a person alleging a mere legal title against another party who was in possession of real estate, and who also claimed to hold a legal title, disturb that possession by appointing a receiver. There being open to the plaintiff a full and adequate remedy at common law, he had no equity to come to the Court of Chancery for relief—–as a general rule, where one person was in possession of the rents and profits of an estate, claiming to be the holder by a legal title, and another person also claimed to hold by a legal title the former could not be ousted in the Court of Chancery until the true ownership of the legal title had been finally determined by law.”
See Kerr: On Receivers (16th edn.) p.72.
See further: Earl of Talbot v. Hope Scott (1858) 4 K. &J. 96; also
Carrow v. Ferrior (1868) 3 Ch. App. 719.
So, the law in Nigeria is at least the same. It is significant that in this case, the application for receivership by way of an interlocutory relief was for appointment of-
“——a receiver to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute——”
On the face of these vital admissions, there can be no equity in favour of the appellants for which a Court of Chancery would have intervened. I agree with Chief Ikeazor, for the co-respondents that the fusion of law and equity by the Judicature Acts in 1873 did not extend the principles, scope or circumstances within which a receiver could be appointed by a court. It simply enabled the courts of common law in proper cases, to exercise those powers and apply those practices which were the exclusive preserve of the court of equity. Ikwechegh, J.C.A., with whose opinion Katsina-Alu and Macaulay, JJ.C.A., concurred, was therefore correct when he held that this was not a proper case for the appointment of a receiver. I must therefore resolve the first question above against the appellants.
It appears to me also that the Court of Appeal was right when it held further that the conduct of the appellants did not entitle them to the equitable relief of receivership, assuming that it was a proper case for such an order. In addition to what I have said about the 1920 Native Court case, no attempt has been made to explain why it was not executed for 65 years before this application. The co-respondents deposed that they had been in possession since 1978 and started developing their plots in the land in dispute before the substantive suit was instituted in 1980. Even so, it is not on record that any attempt has been made to stop the development by seeking an appropriate order of injunction. This application was filed in July, 1985. Whereas it is true that the resolution of the issue of laches and acquiescence will have to await oral evidence as to when the buildings were actually started, whether before or after the institution of the action, it cannot be doubted that looking at the appellants’ conduct as a whole, they were not entitled to the discretion of the Court. Delay defeats equity, it has been said. It does appear, as observed by the Court of Appeal, that the appellants slept over what ever right they had as a result of the 1920 case, then suffered the respondents and co-respondents to expend their money to develop their respective plots in the land in dispute and later moved in to take over by applying for receivership. In my judgment, before a court decides to appoint a receiver on the application of a plaintiff, it ought to scrutinize the party’s conduct, and must refuse to interfere unless the party’s conduct is free from blame. Acquiescence as well as delay in making the application is always a good ground for its refusal. I am satisfied that in the instant case, the appellants’ conduct does not entitle them to any favourable discretion by a court of equity.
Finally, the order made was nebulous and the manner in which it was made left so much to be desired, for a number of reasons. First, the learned Judge appeared to have appointed the receiver simply because he believed that it was just and convenient to do so, without specifying reasons. I cannot over-emphasize the need for a court of trial giving its reasons why it has decided to exercise its discretion one way or the other. I believe that the rule, in sum, is that there must be no attempt on appeal to interfere with the manner a trial Judge exercised his discretion with respect to the trial, provided he exercised it judicially and judiciously, even if the appellate court might have exercised it the other way. See Sackville West v. Attorney-General 128 L. Times Journ. 265; Maxwell v. Keun (1928) 1 K.B. 645; Evans v. Bartlam (1937) A.C. 473; N.A. Williams v. Voluntary Funds Society (1982) 1-2 S.C. 145. In the instant case, it is not clear whether the learned Judge decided on the appointment simply as a preservative order; but there was no evidence that the property and the rents accruing therefrom were in any danger of devast at ion or waste. Worse, the particulars of the buildings covered by the receivership order were not specified any where. Good practice demands that an order appointing a receiver over several built-up houses should either on the face of it, particularize the buildings over which the appointment is made (see Crow v. Wood 13 Beav 271) orat least refeno some pleading or claim or other document in the proceedings which specifies the property. See Seton: Equitable Remedies (7th Edn.) p.738. The order made was also defective in that it did not even direct the receiver to submit an account to anybody. Also in view of the nature of the buildings as revealed by unchallenged affidavit evidence before the court, there ought to have been a direction as to whether the respondents or co-respondents who were in possession should deliver up possession or atone tenancy to the receiver (see Kerr: On Receivers (16th Edn.) p.113). There should also have been a direction as to the repairs and other outgoings on the buildings as well as the receiver’s remuneration. Above all, the learned trial Judge did not appear to have investigated the
suitability of the receiver who was nominated solely by the appellants. And there was no affidavit of suitability, as required by law. See on these: Jones Adeyeye v. E. T. Adewoyin & Ors. (1960) 5 F.S.C. 146. at p. 148; [1960] SCNLR 310. Furthermore, no question of what security should be given by the receiver was considered or ordered. I believe it to be the law that a receiver appointed by court has no authority to act until he has given proper security that he will truly account for what he receives in the execution of his function of receivership. See Edwards v. Edwards (1876) Ch. 291. Also, in view of the nature of the property involved, the period of receivership should have been limited and specified, otherwise it would be tantamount to handing over the property in dispute to the receiver nominated by the appellants almost indefinitely. Not less relevant is the fact that although an order for joinder of the co-respondents, some of whom were admitted to be in possession, was made some fifteen months before the application for appointment of a receiver was granted and it was ordered that all the processes be served on them, they had not been served with the claim and the statement of claim. The argument of Chief Ikeazor that the whole show was a deliberate attempt by the appellants to get their relief through the back door and at the same time prevent the case from ripening for hearing is eminently palpable.
From all I have stated above, I entirely agree with the learned Counsel for the respondents and co-respondents as well as the learned Justices of the Court of Appeal, that if the learned trial Judge had adverted to the true nature of an order for a receiver against the material facts of this case the order ought not to have been made. I also agree that in any event the order as made did not take into account all the necessary safeguards and directions it ought to have contained. I entirely agree with Mr. Akpamgbo, for the respondents, that on a correct view of the law and the peculiar facts of this case, the correct order to have made was one for a dismissal or at most accelerated hearing, as the learned trial Judge had found that the balance of convenience was in favour of the respondents and that, as the building had been completed, there was no status quo to be maintained. This would have enabled the court explore the rights of the parties at common law. If the appellants succeeded, they could have taken advantage of the maxim: quic quid plantatur solo solo cedit. There was no ground for equitable intervention.
Finally, I have my grave doubts as to whether, assuming that this was a proper case for appointment of a receiver and the learned Judge adverted to all the relevant principles and practice on the point, what could have been appointed was a receiver simpliciter or a receiver and manager. This is because the buildings on the land in dispute were let, and rents were accruing therefrom. They were in the nature of a going concern. A receiver as such has no authority to carryon a going concern. His duty is to stop the business, collect the debts and realise the assets: see Re Manchester & Milford Railway (1880) 14 Ch. D. 645, at p. 653. A manager on the other hand, has powers to continue a business or any going concern. So, unless it was the intention to determine all the tenancies of the houses on the land in dispute a receiver and manager, and not just a receiver, ought to have been appointed so that he would have the power to receive the rents, maintain the houses and disburse money for all other necessary outgoings: see Taylor v Neate (1888) 39 Ch. D. 538; also Re Newgate Colliery Limited (1912) 1 Ch. 468. It follows from all these that no matter from whatever angle one looks at it, the appointment of a receiver by the learned trial Judge on the facts and circumstances of this case was wrong. The learned Justices of the Court of Appeal were right to have so held.
For the above reasons and the fuller reasons contained in the judgment of my learned brother, Kawu, J.S.C., which I adopt as my own, the appeal fails and is hereby dismissed. I subscribe to the order for costs as made in the lead judgment.
Appeal dismissed.
Appearances
G.R.I. Egonu, S.A.N. (with him, P.G.O. Nwagbogu) For Appellant
AND
C.O. Akpamgbo, S.A.N. (with him, A. Harris-Eze)
Chief Chimezie Ikeazor, S.A.N. (with him, Obi Akpudo) For Respondent
