Competence of Action Filed by Liquidator Without Appropriate Sanction

In the Supreme Court of Nigeria

Holden at Abuja

On Friday, the 12th day of January, 2024

Before Their Lordships

Uwani Musa Abba Aji

Ibrahim Mohammed Musa Saulawa

Adamu Jauro

Tijjani Abubakar

Emmanuel Akomaye Agim

Justices, Supreme Court

SC. 185/2018

Between

THE REGISTERED TRUSTEES OF MISSION HOUSE       APPELLANT

And

1. ALL STATES TRUST BANK PLC.

   (IN LIQUIDATION BY NIGERIA DEPOSIT

   INSURANCE CORPORATION)                                                   RESPONDENTS

  2. PAUL TYOAPINE TSEGBA

3. CAD DEVELOPMENT (NIG.) LTD

(Lead Judgement delivered by Honourable Ibrahim Mohammed Musa Saulawa, JSC)

Facts

The Appellant, vide an amended writ of summons and statement of claim, filed an action in trespass against the Respondents at the High Court of Benue State. The Appellant sought against the Respondents, special and general damages for their invasion of the Appellant’s premises on 11th May, 2001 and 12th June, 2001. At the conclusion of trial, the trial court delivered its judgement wherein it held that the Appellant proved its claim for special damages in the sum of N10,448,830.00. The trial court thereby ordered the Respondents jointly and severally, to pay the said sum to the Appellant as special damages. The trial court also awarded against the Respondents jointly and severally, in favour of the Appellant, the sum of N1 million as general damages for the invasions of the Appellant’s premises; and costs in the sum of N10 million.

Aggrieved, the 2nd and 3rd Respondent appealed to the Court of Appeal vide Appeal No. CA/J/214/2009. The 1st Respondent equally filed an appeal vide Appeal No. CA/J/214A/2009. The 1st Respondent’s appeal in CA/J/214A/2009 was however, struck out subsequently, upon a successful challenge to its competence by the Appellant. The 1st Respondent was later granted extension of time to file a fresh appeal, and the same was eventually filed and entered as Appeal No. CA/MK/159/2015.

On 25th January, 2018, the court below delivered judgement in Appeal No. CA/J/214/2009; while it delivered judgement in Appeal No. CA/MK/159/2015 on 2nd February, 2018. In its judgements in the sister appeals, the court below set aside the award of special damages made by the trial court in favour of the Appellant, on the ground that the Appellant’s claim to the same was rooted in hearsay evidence. It however, upheld the remainder of the trial court’s decision.

Dissatisfied, the Appellant filed Appeal No. SC. 324/2018 before the Supreme Court challenging the decision of the court below in Appeal No. CA/J/214/2009. The Appellant also filed the instant appeal, to challenge the decision of the court below in the 1st Respondent’s appeal in Appeal No. CA/MK/159/2015. The Appellant’s Notice of Appeal was filed on 5th February, 2018 and the record of appeal was transmitted to the Apex Court on 6th March, 2018. On 7th March, 2018, the Appellant was also granted leave by the court below to appeal the court’s judgement, whereupon the Appellant filed a Notice of Appeal on 13th March 2018 which was regularised on 06/01/2020. On the same 7th March 2018, the 1st Respondent was granted leave to file a cross-appeal.

The parties filed and exchanged their respective briefs of argument. In its amended brief of argument, the 1st Respondent raised a preliminary objection challenging the jurisdiction of the Apex Court to entertain the appeal.

Issue for Determination in 1st Respondent’s Preliminary Objection

Whether the Appellant’s reliance on the second Notice of Appeal dated 13th March, 2018 filed after the transmission of the record of appeal to the Supreme Court on 6th March, 2018 and the absence of any leave granted previously on the first Notice of Appeal filed on 6th February, 2018, did not render the appeal incompetent and rob the Apex Court of jurisdiction to adjudicate on the same.  

Arguments 

Counsel for the 1st Respondent argued that the instant appeal is by the Notice of Appeal filed on 5th February, 2018 and upon entry of the appeal on 6th March, 2018, there was no concurrent jurisdiction between the Apex Court and the Court of Appeal over the res and the Appellant’s appeal from the said date, hence, the leave granted to the Respondent by the court below on 7th March, 2018 was a nullity.

He argued further that the entry of the appeal on 6th March, 2018 is incompetent, and all the defects therein cannot be cured by the further reliefs (leave, amendment etc) subsequently granted to the Appellant. He cited MACFOY v UAC LTD (1962) AC 152 and EZEOKAFOR v EZEILO (1999) 9 NWLR (PT. 619) 519 AT 524, PARAS. E-F, and urged the Apex Court to dismiss the appeal for being an abuse of court process. 

In reaction, Counsel for the Appellant argued that the 1st Respondent cannot, by preliminary objection, challenge the order of the court below granting leave to the Appellant to appeal, and so long as there is no appeal filed by the 1st Appellant to challenge the said order, the same is valid and subsisting. He contended that as at 6th March, 2018, the record transmitted to the Apex Court was only incomplete for the purpose of entering the appeal and for the Court to be completely seised of the subject matter of the appeal, it could not therefore, be said that the appeal had been entered as at then. He relied on OLORUNYEMI v AKHAGBE (2010) 8 NWLR (PT. 1195) 48 AT 61-62 PAR. G-B.

Counsel argued that indeed, the two Notices of Appeal were filed on 5th February, 2018 and 13th March, 2018 and leave to appeal on grounds of fact was granted to the Appellant by the court below on 7th March, 2018; however, as the judgement was delivered on 2nd February, 2018, the leave granted was still within the 90 days period allowed for the Appellant to file an appeal. 

Court’s Finding 

The Court held that the invalidity of a subsisting order of a court of competent jurisdiction cannot be presumed by either the appellate court or a Respondent, 2and such order subsists until it is set aside. The Court held that in the instant case, leave was granted on 7th March 2018 to enable the Appellant to appeal against the judgement of the court below and the 1st Respondent file any appeal against the leave granted to the Appellant; hence in the absence of any such appeal, the leave granted to the Appellant subsists. 

The Court held that an application by way of preliminary objection for the striking out of an appeal in limine may be on points of law and where there are no facts in dispute to determine such objection; however, where facts are in dispute as in the instant case, the application ought to be by way of a motion on notice with supporting affidavit and not preliminary objection incorporated in the brief of argument with no supporting facts as done by the 1st Respondent. On this basis, the Court dismissed the preliminary objection and proceeded to determine the appeal on the merits.

Issues for Determination in Substantive Appeal

The Apex Court considered the three issues raised by the Appellant in its determination of the appeal to wit:

(i) Whether the court below acted without jurisdiction when it extended time for the 1st Respondent to appeal the decision of the trial court, and subsequently heard and determined its appeal.

(ii) Whether the court below was right in refusing to strike out Ground 2 of the Notice of Appeal and the 1st Respondent’s issue 2 distilled therefrom.

(iii) Whether the court below was wrong when it made a finding that Exhibit 2 is documentary hearsay and relied on that finding to set aside the award of special damages made by the trial court.

Arguments 

Counsel for the Appellant argued on the first issue that the court below lacked jurisdiction to hear and determine the 1st Respondent’s application for extension of time to appeal and the subsequent appeal on the ground that (a) the Nigerian Deposit Insurance Corporation (NDIC), being the Liquidator of the 1st Respondent failed to obtain the sanction of the court or that of the committee of inspection before filing the said application; (c) at the time the 1st Respondent filed its appeal in February 2006, it had ceased to be a juristic person; and (d) NDIC was never a party to the suit at the trial court. 

In reaction, Counsel for the 1st Respondent submitted that Section 588(1) of the Companies and Allied Matters Act 2020 did not stipulate that leave of court or the committee of inspection was required, but, only provides that the liquidator can maintain an action with the sanction of either the court or the committee of inspection. 

On the second issue, Counsel for the Appellant argued that the 1st Respondent’s Ground 2 and Issue 2 distilled therefrom are incompetent, because they introduced an entirely new issue as to the admissibility of Exhibit 2, for which leave of court ought to have been first sought and obtained. 

Responding, the 1st Respondent’s Counsel argued that the Appellant’s submission amounted to the Appellant approbating and reprobating on an issue it initially raised, but, subsequently, withdrew voluntarily.

On the third issue, Counsel for the Appellant submitted that question of whether the valuation report (Exhibit 2) was documentary hearsay was never raised and argued before the trial court, and the court below raised the issue suo motu without affording the parties an opportunity to address it.

Counsel for the 1st Respondent argued conversely that the said issue was raised and argued by the Appellant and Respondents in the sister appeals, who are also parties in the instant appeal.

Court’s Judgement and Rationale

In determining the 1st issue, the Apex Court held that Section 425 of the CAMA 1990 (now Section 588(1) CAMA 2020) as applicable at the time of the appeal to the Court of Appeal, was unequivocal as to the requirement for a liquidator in a winding-up by the court, to obtain the sanction of the court or committee of inspection before bringing or defending any action on behalf of the company in liquidation. The Court held that where a statute lays down a procedure for doing a thing, that procedure ought to be strictly complied with. His Lordship held that the NDIC, having failed to obtain the necessary sanction as required by section 425 of CAMA 1990, its application and appeal before the court below were incompetent, and the court below lacked the jurisdiction to entertain and determine the same. 

On the 2nd issue, the Apex Court held that a ground of appeal and the issues for determination derived therefrom must relate to the decision appealed against, as well as challenge to the validity of the ration decidendi. The Court agreed with the Appellant that the question of the admissibility or otherwise of Exhibit 2 as a document made during the pendency of the suit was never raised on trial, and it was an entirely new issue raised on appeal which required the leave of court. 

On the 3rd issue, the Apex Court held that it is most desirable that where a court, as in the present case, after hearing argument of Counsel, deems it expedient that the matter before it can in fact, be decided on a sheer technical point upon which it has not been addressed, then it behooves the court to invite the Counsel to address it thereupon. The Court held that the court below was wrong to have determined Exhibit 2 to be documentary hearsay and set aside the trial court’s award of special damages, without inviting parties especially the Appellant, to address it on the said point which was raised suo motu by the court below.

Appeal Allowed. Judgement of the Court of Appeal set aside. Judgement of the trial court restored. The Court ordered that the sister Appeal No. SC/324/2018, shall abide the judgement in the instant appeal.

Representation

J. S. Okutepa, SAN and others for Appellant/Cross Respondent.

Ogechi Ogbonna and another for the 1st Respondent/Cross Appellant.

Okechukwu Ajunwa and others for the 2nd and 3rd Respondent.

Reported by Optimum Publishers Limited, Publishers of the Nigerian Monthly Law Reports (NMLR)An Affiliate of Babalakin & Co.