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CaseLaw

Abiola V. FCMB (2013) CLR 4(ee) (SC)

Judgement delivered on April 19th 2013

Brief

  • Preliminary objection
  • Incompetent grounds of appeal
  • Jurisdiction

Facts

The 1st plaintiff at the Kwara State High Court of Justice, holden at Offa [trial court] is a limited liability company carrying on the business of manufacture of and dealers in all kinds of soft drinks. The 2nd plaintiff is also a limited liability company carrying on principally the business of building, civil and Electrical Contractors, Saw-Milling industry etc. The 1st defendant is also a limited liability company carrying on the business of banking while the 2nd defendant is a Chartered Accountant. The 3rd defendant, as its name suggests, is a limited liability company incorporated to manufacture or brew 7-Up soft-drinks.

By a deed of debenture [which the plaintiffs termed "purported"], dated 27th November, 1986, between 'the plaintiffs and the 1st defendant, the sum of N3,5000,000 [Three Million, Five Hundred Thousand Naira] was advanced in the form of a term loan overdraft facilities to the 1st plaintiffs to meet their working capital requirement and finances to import raw materials. As the plaintiffs defaulted in repaying the loan, the 1st defendant exercised its powers under clause 11 of the Deed of Debenture and appointed the 2nd defendant as a receiver/manager. In exercise of his powers as such, the 2nd defendant sold off some of the 1st plaintiffs' assets to the 3rd defendants. Not happy with the sale the plaintiffs took out a writ of Summons on 01/07/91, claiming in paragraph 35 of their joint further amended Statement of Claim the following reliefs:

  • i
    A DECLARATION that the purported unstamped DEBENTURE DEED dated the 22nd day of November, 1986 between the 1st and 2nd Plaintiffs as 'the company' AND the 1st Defendant as" the bank" is meaningless, worthless, 'unenforceable, illegal, null and void and of no effect whatsoever,
  • ii
    A DECLARATION that the appointment by the 1st Defendant of the 2nd Defendant as a RECEIVER/MANAGER pursuant to the unstamped DEBENTURE DEEDS dated 27th November, 1986 to take over the physical control and sell off all the assets of the Plaintiffs etc, was/is premature, hasty, illegal, null and void and of no effect whatsoever,
  • iii
    A DECLARATION that even if the unstamped DEBENTURE DEED dated 27th day of November, 1986 is irregular, the 1st Defendant cannot appoint any DEBENTURE DEED to sell off the Plaintiffs' assets or properties without giving adequate notices to each of the plaintiffs and that the appointment by the 1st Defendant of the 2nd Defendant to sell off the plaintiffs' assets/properties without any notice at all being given to the 2nd plaintiff before, during or after the said appointment is irregular, illegal, null and void and of no effect whatsoever;
  • iv
    A DECLARATION that the sale of the 1st Plaintiff's properties situate, lying and being at ASA DAM ROAD, ILORIN and covered by Certificate of Occupancy No. KW3065 and registered as No.6 at page 6 in volume viii [Certificate of Occupancy] of the Land registry at llorin to the 3rd defendant is dishonest, suspicious, illegal, null and void and of no effect whatsoever;
  • v
    A DECLARATION that the sale by the 2nd defendant to the 3rd defendant of the 1st plaintiff's aforementioned properties is in flagrant violation of the provisions of the AUCTIONEERS LAW [Cap. 10] Laws of Northern Nigeria applicable to Kwara State and is therefore null and void and of no effect whatsoever;
  • vi
    A DECLARATION that all the actions, steps and decisions taken so far by the 2nd defendant in respect of the assets of the plaintiffs under the purported unstamped -DEBENTURE DEED dated 27th November, 1986, without due reference or accounting to the Registrar of Companies of the Companies Registry at Lagos or at Abuja are irregular, arbitrary, dishonest, suspicious, illegal, null and void and no 'effect whatsoever;
  • vii
    A DECLARATION that the sale, alienation, transfer or lease of the 1st plaintiff's landed property situate, lying and being at ASA DAM ROAD, ILORIN and covered by Certificate of Occupancy NO.KW3065 dated 16th May, 1979 by the 2nd defendant to the 3rd defendant without the prior consent [or any consent whatever] of the Military Governor of Kwara State is illegal, null and void and of no effect whatsoever;
  • viii
    A DECLARATION that the 1st defendant has no right or power to debit the 1st plaintiff's account for sundry and numerous expenses incurred by it or any of its agent in respect of or in connection with the sale of the 1st plaintiff's properties;
  • ix
    AN ORDER setting aside:
    • a
      The purported unstamped DEBENTURE DEED dated 27th November, 1986 between the plaintiffs and the 1st defendant;
    • b
      The appointment by the 1st defendant of the 2nd defendant as a DEBENTURE DEED to take physical control of the assets and properties of the plaintiff mentioned in the said DEBENTURE DEED of the 2nd defendant's letter of appointment [if any];
    • c
      The sale[s], transfer, alienation etc, of the 1st plaintiff's properties or assets made by the 2nd defendant to the 3rd defendant.
  • x
    AN ORDER setting aside all interest rates excess of the prevailing banking interest rate as at 26th November, 1986 charged by the 1st defendant on the 1stplaintiff's account,
  • xi
    AN ORDER setting aside all debits made against the plaintiffs account by the 1st defendant in respect of all the or any of the expenses incurred by the 1st defendant or any of its agents pursuant to the sale of the 1st plaintiff's properties;
  • xii
    AN ORDER directing the defendants either jointly and/or severally to make full restitution of all the 1st plaintiff's assets and/or properties in the perfect and/or same conditions in which they were before the 2nd defendant purportedly transferred or sold them to the 3rd defendant;
  • xiii
    A sum of N1,872,000 [One million, eight hundred and seventy-two thousand naira] only per month being loss of minimum net profit/ income on the 1st plaintiff's properties and assets taken over by the defendants from the 3rd day of November, 1987 until the day judgment is delivered in this case and thereafter until the defendants deliver possession to the plaintiffs;
  • xiv
    A sum of N10 'million naira [Ten million Naira] being damages for the illegal and arbitrary take-over of the plaintiffs' properties by the defendants and the denial by the defendants of the plaintiff s' right of access or entry to their premises;
  • xv
    AN ORDER of perpetual injunction restraining the defendants either jointly or severally or either by themselves, servants, agents or privies or through any person howsoever from further holding-on-to or seizing or asserting authority and control over any of the plaintiffs' properties covered by the purported unstamped DEBENTURE DEED dated 27th November, 1986"

The defendants counter-claimed as follows:

  • 1
    Declaration that the plaintiffs' claim concerning the management, dealing with disposal of the 1st plaintiff's property in the hands of the receiver/manager is a matter arising from the operation of the Company's [sic] Act and the High Court of Justice of Kwara State lacks jurisdiction.
  • 2
    An order striking out all the plaintiffs', claim relating to the sale, transfer and disposal of the 1st plaintiff's property by the 2nd defendant/counter-claimer.

    • The learned trial judge granted the 1st plaintiff’s claims except the relief on sub-paragraph [ii], which was abandoned and struck out. In respect of the 2nd plaintiff, the learned trial judge declined to award anything as loss of profits/income as there was no claim for it by the 2nd plaintiff.

    The learned trial judge dismissed the defendants' counter claim in its entirety.

    Dissatisfied, the defendants appealed to the Court of Appeal, llorin Division [court below]. There was a preliminary objection filed by the plaintiffs/respondents at the court below. The preliminary objection was taken by way of motion on notice. It was moved accordingly. The court below over-ruled the objection. The court below then went into the merit of the appeal. It was however confronted with the issue of jurisdiction of the trial court that the subject matter of the plaintiffs' action involved a civil cause or matter pertaining to the operation of the Companies and Allied Matters Act. The court below found merit in that issue which it resolved in favour of the defendants as appellants before it. The court below added a rider in the following words:



    "Ordinarily this would have been the end of the matter. But then, this is not the Final Court. In the event that the Supreme Court finds that I am wrong in my view on the issue of jurisdiction they ought to have my views on the other issues canvassed so that a rehearing on them by this court would not be rendered necessary."

    The court below, per IKONGBE, JCA [as he then was but now late], went on to discuss extensively the remaining issues which he found in favour of the defendants/appellants and allowed the appeal by setting aside the decision of the trial court and dismissing the plaintiffs' action in its entirety.

    Dissatisfied, the plaintiffs/respondents and now appellants appealed to this court.

Issues

Whether in the circumstance if this case, the learned Justices of the...

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