Ecobank Nigeria Limited V. Honeywell Flour Mills Plc (2018)
LAWGLOBAL HUB Lead Judgment Report
INYANG OKORO, J.S.C.
This is an appeal against the judgment of the Court of Appeal, Lagos Division delivered on 30th March, 2016 in Appeal No CA/L/1247/2015 wherein the Court below set aside the Ruling of the Learned Trial judge of the Federal High Court sitting in Lagos which refused to set aside ex-parte orders made against the Respondent herein. A brief facts of the case giving birth to this appeal may be stated thus:-
The Appellant herein, as plaintiff at the trial Federal High Court filed a petition on the 9th of November, 2015 and sought the following reliefs against the Respondent (as defendant):
“WHEREOF your petitioner therefore humbly prays as follows:-
(a) That HONEYWELL FLOUR MILLS PLC with Registration No. 55495 be WOUND-UP by the Court under the provisions of Sections 409(1) and 410(1) of Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria, 2004.
(b) Or such other Order (s) may be made in the premise as this Honourable Court consider just in circumstances.”
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Contemporaneous with the said petition, the Appellant filed a motion ex-parte on the same 9th November, 2015 seeking five orders against the Respondent and other parties. In a nutshell, the Appellant’s case was that the Oceanic Bank Plc (which it now has acquired with all its liabilities, rights and obligations) entered into an import finance facility/Revolving Product finance Facility and Overdraft facility agreement with the Respondent.
Sequel to the said acquisition, it embarked on a process of recovery of the huge sums of monies said to be owed by the Respondent as a result of the credit facilities. Sometimes in July, 2013, the Respondent, through the Chairman of Honeywell Group Limited, Oba Otudeko, proposed the payment of the sum of N3.5 Billion out of the N5.5 Billion owed by the Respondent and other sister companies under the Honeywell Group Limited.
The proposal by the Chairman of the Group to pay the sum of N3.5 Billion was accepted by the Appellant on certain conditions, part of which was the payment of the sum of N500 million immediately and the balance before the Central Bank of Nigeria (CBN) examiners left the bank on inspection as was clearly stated in the letters exchanged by the parties on the 22nd July, 2013 which
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is based on the in principle agreement.” The Respondent was fully aware that the Central Bank of Nigeria examiners would leave the bank by the end of August, 2013 and on the basis of which the concession to pay the sum of N3.5 Billion was made by the Appellant in order to balance its acquired accounts.
The Respondent subsequently defaulted in the bullet and staggered repayment of the indebtedness as suggested by Oba Otudeko, the Chairman of Honeywell Group Limited on behalf of the defaulting Respondent and other sister companies. This led to a series of correspondences and proposals by the Respondent urging the Appellant to accept the said sum of N3.5 Billion as full payment to settle the indebtedness and which proposal was not agreeable to the Appellant given the failure of the Respondent to honour the “in principle agreement ”
The intervention of the Bankers Committee and the sub-Committee on Ethics and Professionalism did not yield positive results and the Respondent took the option to institute an action in the Federal High Court, Lagos Division in suit No. FHC/L/CS/1219/2015.
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The said suit was filed on 6th August, 2015 wherein the Respondent sought inter alia, specific performance of the “in principle agreement’ of 22nd July, 2015. During the proceedings of the Court presided over by M. B, Idris, J., the learned Trial Judge made an order for the parties to maintain status quo ante bellum.
The Appellant felt that it has been exposed to scrutiny by the Central Bank of Nigeria and other statutory bodies and consequently, filed a petition for winding up of the Respondent on 16th October, 2015 followed with applications for interim/interlocutory reliefs seeking to preserve the assets and funds of the Respondent pending the appointment of a provisional liquidator and the hearing of the petition before the Lower Court.
The Appellant’s petition for winding-up filed on 16th October, 2015 was assigned to J. T. Tsosho, J. who heard the ex-parte application for interim reliefs towards preserving the assets/funds of the Respondent and declined to grant the same but directed that the Respondent put the Appellant on notice and the suit adjourned. The Appellant thereafter filed a notice of discontinuance of the said petition in suit No FHC/L/CP/1569/2015.
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On 9th November, 2015, the Appellant filed a fresh petition for winding-up against the Respondent vide suit No.FHC/L/CP/1689/2015 and contemporaneously with same, it filed another motion ex-parte seeking an interim order for the preservation of the Assets/funds of the Respondent. The suit was assigned to M. N. Yunusa, J., who entertained the motion ex-parte on 18th November, 2015 and granted same.
Upon being notified of the grant of the ex – parte orders in suit No.FHC/L/CS/1689/2015, the Respondent filed a motion on notice on 24th November, 2015 seeking the order of the said Court to discharge the ex- parte orders so granted and dismiss the petition before it on ground of abuse of Court process amongst others.
The Appellant herein filed a counter affidavit to oppose the said motion and also filed a motion on notice seeking the order of Court to dismiss the said motion on notice for being an abuse of process.
The two applications were then taken together and in a Ruling delivered by Yunusa, J., on 4th December, 2015, the Court declined to vacate or discharge all the interim orders made but rather varied them by allowing the Respondent access to withdraw the sum of N15
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million per week for the running/overhead expenses and also suspended the order for advertisement of the petition for winding-up. The trial Court also refused to grant the appellants application to dismiss the Respondent’s motion.
The Respondent was dissatisfied with the said Ruling of 4th December, 2015 and consequently filed a Notice of Appeal with 9 grounds of appeal on 14th December, 2015, The Appellant herein also filed Notice of Cross appeal. The Appellant also filed Notice of preliminary objection to the hearing of the Appeal. Briefs were filed and exchanged by the parties.
On 30th March, 2016, the Court of Appeal in its reserved judgment, allowed the appeal and set aside the ruling of the Trial Count delivered on 4th December, 2015. The Lower Court also set aside the interim order of injunction made by the Trial Court on 18th November, 2015 as a consequential order. The Court of Appeal also struck out the Appellants, Cross-Appeal and ordered the petition in suit No.FHC/L/CP/1689/2015 which is the precursor of the subject Appeal to be transferred to another judge for hearing.
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The Appellant being dissatisfied with the entire judgment of the Court below filed two notices of appeal on 31st March, 2016 and 13th April, 2016. At the hearing of the appeal on 23rd April, 2018, the learned counsel for the appellant abandoned the earlier notice of appeal and informed the Court that the Appeal is anchored on the Notice of appeal dated 13th April, 2016.
At the hearing of this appeal on 23rd April, 2018, the learned counsel for the Appellant G. C. Duru, Esq., who settled the Appellant’s brief adopted same and urged the Court to allow the Appeal. Five issues are distilled for the determination of this appeal as follows:-
- Whether the grounds as contained in the Respondent’s Notice of Appeal against an interlocutory decision of the Trial Court dated the 4th day of December, 2015 were competent to warrant the hearing of the entire APPEAL filed by the Respondent on the merit as done by the Lower Court, the Court of Appeal
- Whether the APPEAL filed by the Respondent at the Lower Court was against the ex -parte order of the Lower Court made on the 27th day of October, 2015 which order was varied by the Trial Court pursuant to its ruling of 4th December, 2015 and consequently, ceased to be in existence
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Whether by a community reading of the Companies Winding – up Rules 2001, Section 411(1) of the Companies and Allied Matters Act, 2004, the extant Constitution of the Federal Republic of Nigeria 1999 (as amended) and the Supreme Court’s decision in Provisional Liquidator Tapp Industries v. Tapp Industries Ltd (1995) 5 NWLR (Pt. 393) page 9, ex – parte orders are permissible under the Companies Winding – up Rules, 2001
- Whether the Court of Appeal by virtue of Section 15 of the Court of Appeal Act Cap C 36 Laws of the Federation of Nigeria, 2004 is not bound to hear, determine and make pronouncement on the issue of abuse of Court process validly submitted to it by the parties herein
- Whether the Court of Appeal was right to strike out the appellant’s Cross Appeal solely on the grounds that the granting of prayer 1 of the Respondent’s Motion on Notice at the Lower Court dated the 23rd day of November, 2015 by the Court of Appeal made the sole issue submitted in the Cross-Appeal a moot point.Also, the learned counsel for the Respondent Olabode Olanipekun Esq., adopted the Respondent’s brief of
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argument filed on 29th September, 2016 but deemed properly filed on 15th November, 2017. Three issues are formulated for the determination of this appeal thus:-
- Considering the nature and grounds of the appeal filed at the Lower Court against the decision of the trial Court which refused to discharge the ex parte orders of injunction, whether the respondent herein, as appellant before the Lower Court, was required to obtain leave.
- Considering the entire facts and circumstances of this appeal, particularly the applicable laws to winding up proceedings, whether the Lower Court was right to have given judgment in the manner, it so did with respect to the ex – parte orders granted by the trial Court and the trial Court’s decision on the application to discharge the said ex – parte orders.
3.Whether the Lower Court’s decision on the issue of abuse of Court process and appellant’s cross-appeal before that Court warrants the setting aside of the Lower Court’s decision.
Before I commence the resolution of the issues submitted by both parties for the determination of this appeal, I wish to observe that the appellant herein has filed a 36 page reply brief in this appeal.
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He had earlier filed a 39 page appellant’s brief of argument. The 36 page reply brief is in response to Respondent’s 30 page brief of argument. I need to emphasize that the function of a reply brief is to answer the arguments in the respondent’s brief which were not taken in the appellants’ brief. It is not meant to be a repetition of the arguments in the Appellants’ brief. It is not an opportunity to re-emphasize the arguments in the Appellants’ brief. The reply brief filed by the Appellant in this appeal does not seem to deal with fresh issues raised in the Respondent’s brief but a repetition of argument already contained in the Appellants brief. This is not the purpose of a reply brief. See Abdullahi v Military Administrator, Kaduna State & Ors (2009) 15 NWLR (Pt. 1165) 417, (2009) LPELR – 27 (SC) Oguanuhu & Ors v Chiegboka (2013) 6 NWLR (Pt. 1351) 558, (2013) LPELR 19980 (SC), Onwudiwe v Federal Republic of Nigeria (2006) 10 NWLR (Pt.988) 382, (2006) LPELR – 2715 (SC).
Be that as it may, I shall only refer to the reply brief where there is a response to a new issue or argument in the Respondent’s brief.
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Counsel should avoid a situation where the reply brief has more pages than the respondent’s brief or even the main appellant’s brief of argument.
I shall determine this appeal based on the five issues submitted by the Appellant. Issue one shall be determined separately while issues two and three shall be determined together.
ISSUE ONE:
It is the contention of the learned counsel for the Appellant that the Court of Appeal lacked the jurisdiction to adjudicate the appeal brought to it by the respondent pursuant to the notice of appeal filed on 14/12/15.
According to him, the judgment delivered on 30/3/16 was done without jurisdiction and is liable to be set aside. He stressed that the Respondent’s appeal to the Lower Court was against the interlocutory ruling delivered on 4/12/15 by the Trial Court pursuant to the Respondent’s application for the discharge of the ex – parte order dated 23/11/15.
Referring to Sections 241(1)(b) and Section 242(1) and (2) of the Constitution of the Federal Republic of Nigeria 1999 [as amended], learned counsel submitted that appeals are as of right in situations that fall squarely under Section 241(1)(b) but
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where the grounds as endorsed on the notice of appeal involves questions of facts, appellant must first seek and obtain leave of the trial Court or the Court of Appeal before filing the Notice of Appeal; relying on the cases of Garuba v Omokhodion (2011) 15 NWLR (Pt. 1269) 145 and Mrs. R. U. Ajibade & anor vs Madam Theodora Pedro & Anor (1992) NWLR (Pt. 241) 257. At the Court below, the appellant contended that all the nine (9) grounds of appeal are of mixed law and fact but the Court of Appeal upheld that argument in respect of grounds 4, 5 and 6 only. Grounds 1, 2, 3, 7, 8 and 9 were adjudged to be of law alone. Learned counsel submitted that the Court below was in error in holding that grounds 1, 2, 3, 7, 8 and 9 are grounds of law alone to which there was no need to obtain the leave of Court.
The learned counsel went on a long journey to explain the purport of each of the six grounds adjudged to be grounds of law alone and urged this Court to hold that they are all of mixed law and fact. He also urged the Court to resolve this issue in favour of the appellant.
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In response, the learned counsel for the respondent submitted that the right to litigate before any superior Court of record is a constitutional one. He opined that the applicable provisions of the 1999 Constitution is Section 241 thereof, particularly Section 241(1)(b) and (f)(ii). He submitted that the subject matter of this appeal to the Lower Court relates to the grant of an injunction and the refusal to set same aside, which makes this appeal fall squarely within the precincts of Section 241(1)(f)(ii) of the Constitution. He then asked if it can be argued under any guise that the appeal to the Lower Court was not in respect of a decision given by the Federal High Court on the grant of an injunction and refusal to set same aside, as envisaged in Section 241(1)(f) of the Constitution. In addition to the said section, learned counsel cited the case of Attamah v Anglican Bishops of the Niger (1999) 12 NWLR (Pt. 633) 6. He stressed that once an appeal comes within the contemplation and cover of any of the subsections of Section 241(1) of the Constitution, it qualifies as an appeal as of right.
Apart from the above argument, learned counsel submitted that the appellant’s grounds of appeal (at the Court below)
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can be safely located within the provisions of Section 241(1)(b) of the Constitution. Referring to some decisions of this Court, he urged this Court to hold that those grounds of appeal were grounds of law alone. See FBN v. TSA Industries Ltd (2010) 15 NWLR (Pt.1216) 247 at 291 – 292, Comex Ltd v NAB Ltd (1997) 3 NWLR (Pt. 496) 643 at 656 – 657, Calabar Central Co-operative Thrift & Credit Society Ltd & 2 Ors v Ekpo (2008) 1- 2 SC 229 at 273 – 275. Learned counsel urged the Court to resolve this issue against the appellant.
RESOLUTION OF ISSUE ONE
The law is trite that the right to appeal against the judgment or decision/order of a Court is constitutional and/or regulated by some statute. It is therefore within the province of the law that the exercise of such right must be within the bounds of the enabling law. That right is not exercised at large. A constitutional right of appeal must be exercised within the bounds of the Constitution.
The appeal in focus in this issue relates to the decision of the Federal High Court Lagos, refusing to set aside an ex-parte order against the respondent herein. Under Section 240 of the Constitution of the Federal
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Republic of Nigeria 1999 [as amended] such an appeal goes to the Court of Appeal. However, appeal as of right from the Federal High Court or High Court of the State or FCT is provided for in Section 241(1) of the Constitution while appeal with the leave of Court is provided for in Section 242(1) of the said Constitution. In view of the relevance of Section 241(1) of the Constitution to this appeal, I shall reproduce same for ease of reference.
“241(1) An appeal Federal shall lie from the decision of the Federal High Court or a High Court to the Court of Appeal as of right in the following cases:-
(a) Final decision in any civil or criminal proceedings before the Federal High Court or a High Court sitting at first instance;
(b) Where the ground of appeal involves questions of law alone, decisions in any civil criminal proceedings.
(c)
(d)
(e)
(f) Decision made or given by the Federal High Court or a High Court:..
<br< p=””
</br<
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(i) ..
(ii) Where an injunction or the appointment of a receiver is concerned
(iii)
(iv)
(v) ..
Section 241(1) of the 1999 Constitution reproduced above provides circumstances in which an appeal shall lie as of right from decisions of the Federal High Court or a High Court to the Court of Appeal. Such instances include (1) final decision in any civil or criminal proceedings before the Federal High Court or a High Court sitting at first instance; (2) where the ground of appeal involves questions of law alone, decisions in any civil or criminal proceedings (3) decisions in any civil or criminal proceedings on questions as to the interpretation or application of the Constitution (4) where an injunction or the appointment of a receiver is granted or refused amongst others.
There is no doubt that the provision in Section 241(1) of the Constitution is clear and unambiguous. The first relief sought by the Respondent herein at the trial Court vide his motion
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on notice was for “An order discharging and/or vacating the interim orders of injunction granted by this honourable Court in favour of the petitioner/respondent on 18th November, 2015. The learned trial Judge refused to vacate the said orders. Rather, he opted to vary it. On appeal, the Court below made the following findings and conclusion.
“On the whole, this appeal succeeds and it is accordingly allowed. The ruling of the Federal High Court delivered by M. N. Yunusa J., on the 4th day of December, 2015 is hereby set aside. Consequently, it is ordered that the interim orders of injunction granted by the Lower Court on 18/11/2015 be and is hereby set aside.”
Although the learned counsel for the appellant has argued in his reply brief that issue of injunction was not involved in this matter and that the case of Attamah v. Anglican Bishops of the Niger (supra) relied upon by the Respondent does not apply, the truth is that issue of injunction took centre stage in this matter. Apart from the fact that the first relief sought by the Respondent was to set aside the orders of injunction made by the trial Court, the Court below made an order setting aside the said injunctive orders.
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Thus, I agree with the submission of the learned counsel for the Respondent that the appeal before the Lower Court came squarely under Section 241(1)(f)(ii) of the Constitution. Moreover, the case of Attamah v Anglican Bishops of the Niger (supra) is on all fours with this case.
In Attamah’s case (supra), the Plaintiffs in the High Court of Anambra State holden at Nsukka, instituted the action against the defendants for several declaratory reliefs. The suit was filed on 22/6/92 and on the following day, 23/6/92, the plaintiff filed a motion ex – parte before the Court seeking for an order of interim injunction against the defendants pending the hearing and determination of the plaintiffs application for interlocutory injunction. The Court granted the ex – parte application on 25/6/92. On being served with the orders of the Court, the defendants on 7/7/92 filed a motion on notice praying the Court to discharge the orders. The Court in its ruling refused the application and refused to discharge the ex – parte orders. Dissatisfied with the ruling of the trial Court, the defendants appealed to the Court of Appeal which allowed the appeal and
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vacated the order of interim injunction made by the trial Court with costs. On a further appeal to the Supreme Court, the Plaintiff contended that all the five grounds of appeal filed by the defendants to the Court of Appeal raised questions of mixed law and facts and that the defendant ought to have obtained leave of the Court before filing the Notice of Appeal as stipulated under Section 220(1) of the 1979 Constitution, now Section 241(1) of the 1999 Constitution.
In resolving the matter, this Court considered the provisions of both Section 220(1) and Section 220(1) (g) (ii) of the 1979 Constitution now [and] in (pari materia with) Sections 241 (1) and 241(1)(f) (ii) of the 1999 Constitution (as amended). At page 12, paragraphs B – F, of the law report, this Court held as follows:-
“So that as in this case an appeal shall lie as of right where an injunction is granted or refused. The High Court made an interim order of injunction on 25/6/92 which it refused to discharge or vacate on 12/8/92. By refusing to vacate or discharge its order, it seems clear to me that the High Court had once again confirmed the order of interim injunction made
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earlier on, the effect being that the order of injunction remained in force and binding on the defendants until vacated or otherwise ordered.
Considering the submission of counsel for the Plaintiff/Respondents on the applicability of Section 220(1) (g) (ii) above, the Court of Appeal in its lead judgment observed –
“I admire the ingenuity of the learned counsel for the respondent in the attempt to play with words in contending that refusal to discharge the order of injunction made on 25/6/92 is not the same with refusal to grant injunction just because the particular words “refusal to grant injunction” were used in under Section 220(1)(g) (ii) of the 1979 Constitution. In my view, the position here does not call for all linguistic refinery.
The position simply put is that the trial Court refused to discharge or vacate an interim order of injunction it made on 25/8/92, which is the subject of this appeal. In my view, the situation is adequately covered by Section 220(1)(g)(ii) of the 1979 Constitution.”
I agree.”
I also agree with the decision of this Court in Attamah’s case (supra) discussed above, I agree entirely with the
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submission of learned counsel for the respondent that once an appeal comes within the contemplation and cover of any of the sub-sections of Section 241(1) of the Constitution, it qualifies as an appeal as of right. The Respondent’s appeal at the Lower Court was against the refusal of the learned trial judge to vacate or set aside ex – parte order of injunction it entered against the respondent herein. That appeal, for all intent and purposes comes squarely within Section 241(1) (f) (ii) of the 1999 Constitution and is an appeal as of right. The respondent herein (as appellant there) was therefore under no obligation to seek and/or obtain leave of Court before filing the appeal.
Having agreed that the appeal of the Respondent at the Court below was as of right, it becomes superfluous to consider the grounds of appeal whether they were of mixed law and fact or of law alone. Be that as it may, and for the avoidance of doubt, I shall look into the matter, albeit briefly.
By Section 241(1)(b) of the 1999 Constitution, appeals lie from the Federal High Court or a High Court to the Court of Appeal as of right where the ground of appeal involves
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questions of law alone, decisions in any civil or criminal proceedings.
In determining whether a ground of appeal raises question of law alone or of mixed law and facts, the Court is required to examine thoroughly the ground of appeal together with its particulars, in order to see whether the ground reveals a misunderstanding of the law by the Lower Court or a misapplication of the law to the facts already proved or admitted, in which case it would be a question of law. Where, however, the ground is such that would require questioning the evaluation of facts by the Lower Court before the application of the law, that would amount to question of mixed law and fact. A ground of appeal which raises facts, which needed to be determined either way, is a ground of fact. For me, a ground of appeal, that a trial Court failed to consider the issues raised in the pleadings before it is certainly a complaint involving questions of law alone. A complaint in a ground of appeal in this Court of a failure of the Court of Appeal to discharge a judicial duty of considering and pronouncing on the issues raised before it, involves a question of law.
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See generally Nwadike v Ibekwe (1987) 4 NWLR (Pt. 67) 718, Obatoyinbo & Anor v. Oshatoba & Anor (1996) 5 NWLR (Pt. 450) 531, Ogbechie v Onochie (1986) 2 NWLR (Pt. 23) 484, Njemanze v. Njemanze (2013) 8 NWLR (Pt. 1356) 376, FBN v TSA Industries Ltd (2010) 15 NWLR (Pt. 1216) 247, Comex Ltd v NAB Ltd (1997) 3 NWLR (Pt. 496) 643.
A careful perusal of grounds 1, 2, 3, 7, 8 and 9 of the grounds of appeal at the Court below together with their particulars, clearly shows that they are all grounds of law alone. The Court below did a good job when it examined all the nine grounds of appeal and decided that only grounds 4, 5 and 6 are grounds of mixed law and fact for which leave needed to be sought and obtained. I agree with the Court below that, having regard to the roadmap developed by this Court over a long period of time, on how to identify types of grounds of appeal, grounds 1, 2, 3, 5, 7, 8 and 9 are grounds of law alone and were appropriately ventilated under Section 241(1) (b) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), What this means is that the appeal could be and was filed as of right. There was no need to seek leave before filing the Notice of Appeal.
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My Lords, the final take on this issue is that either by Section 241(1)(f)(ii) or Section 241(1) (b) of the Constitution, the appeal of the Respondent herein at the Court below, was as of right and there was no need to obtain leave. Accordingly, issue one is hereby resolved against the appellant.
ISSUES 2 & 3 (B and C)
The second issue is “whether the appeal filed by the Respondent at the Lower Court was against the ex-parte order of the Lower Court made on the 27th day of October, 2015 which orders were varied by the Trial Court pursuant to its ruling of 4th of December, 2015 and ceased to be in existence.”
Learned counsel for the appellant submitted that the Court of Appeal in its judgment of 30th March, 2016 which is the subject of this appeal was in agreement with the position of the Appellant that the Appeal before it was not against the interim order of the Trial Court made on 8th November, 2015 but against the ruling of 4th December, 2015, wherein the trial Court ordered a variation thereof of the then order of Court hitherto made ex-parte. According to him, the Court of appeal, rather than dwell on the ruling of the Trial Court of 4th December, 2015, delved into a great error to re-visit the ex – parte order made by the Trial Court preserving the res of the petition before it and the issues
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raised therein which were decided upon by the Lower Court in its ruling of 4th December, 2015.
Learned counsel further submitted that the complaint of the Respondent that an ex – parte order was made against him in a petition is otiose as the said order lasted till the 30th day of November, 2015 when the Court heard the Respondent on its application for the discharge of the order and the subsequent varied order made on 4th December, 2015, the fulcrum of the appeal. It is counsel’s contention that the Court of appeal was wrong to place reliance on the provision of Rule 4 of the Winding Up Rules 2011 which for all intents and purposes, was not applicable to the appeal filed before it. It is his further submission that Rule 4 of the Winding Up Rules 2011 and the applicability thereof only come into play when ex – parte orders are involved which is not the case in the subject appeal. He urged the Court to resolve this issue in favour of the Appellant.
On the third issue (issue C) which is: whether by a community reading of the Companies Winding Up Rules 2001, Section 411(1) of the Companies and Allied Matters Act, 2004, the extant Constitution of the
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Federal Republic of Nigeria, 1999 [as amended] and the Supreme Court decision in Provisional Liquidator Tapp Industries v Tapp Industries Ltd (1995) 5 NWLR (Pt. 393) page 9, ex – parte orders are permissible under the Companies Winding Up Rules, 2001″
The main thrust of the argument of the learned counsel for the appellant in this issue is that the Court below did not embark on a community reading of the relevant statutory provisions brought to her attention in determining the applicability or otherwise of ex – parte applications in a Winding Up proceedings. In paragraphs 5.7 of appellant’s brief, the learned counsel for the appellant admits that Rule 4 of the Winding Up Rules seem to expressly prohibit ex – parte application but that Rule 183 incorporates the Civil Procedure Rules of the Court which makes adequate provision for the entertainment and grant of ex parte applications, referring to Order 26 Rule 7 of the Federal High Court [Civil Procedure] Rules 2009. On the power of Court to preserve the res in a litigation, he referred to the cases of Kigo v Holman (1980) 3 – 4 SC 60 at 70, 7-Up Bottling Company v Abiola & Sons Ltd (1995) 3 NWLR [Pt.50] 356.
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Learned counsel opined that the ex – parte order granted by the trial Court only breached the provision of Rule 4 of Winding Up Rules 2011 but did not breach Section 6 of the 1999 Constitution nor Section 411(1) of the Companies and Allied Matters Act. He stressed that the orders made by the trial Court were in total compliance with the above provisions and the case of Provisional Liquidator of Tapp Ltd v Tapp Industry Ltd (supra). He also urged this Court to resolve this issue in favour of the appellant.
In response, the learned counsel for the Respondent responded on the two issues together. On issue 2 (B), he submitted that the appellant’s appeal to this Court defeats the purpose of the arguments it has made that the ex parte orders of 18th November, 2015 are no longer alive. He wondered why the appellant whilst arguing on the one hand that the ex – parte orders have been spent to deny the respondent a right to legitimately protest its grievance against the said orders, it is on the other hand seeking in this Court a full restoration of those ex – parte orders. Learned counsel stressed that litigation cannot be a game of
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hide and seek and that this Court compels consistency in argument of parties, relying on Ajide v Kelani (1985) 3 NWLR (Pt. 12) 248 at 269.
On the argument that the delivery of the ruling on 4th December, 2015 after argument inter partes took issues beyond the realm of the ex – parte orders is non sequitur just as the variation of some of the said orders does not validate the grant of the orders ex – parte and refusal to discharge them. He submitted that an appeal being an invitation to a higher Court to review the decision of a Lower Court in order to find out whether, on a proper consideration of the facts placed before it and the applicable law, the Lower Court arrived at the right decision, the Court below, after a review of the facts and the law, set aside the orders of the trial Court relying on Oba v Egberongbe (1999) 8 NWLR (Pt. 615) 485, Econet Wireless Nigeria Limited v Econet Wireless & Anor (2014) 7 NWLR (Pt. 1405) Nigerian Navy v. Labinjo (2012) 17 NWLR (Pt. 1328) 58.
Learned counsel contended that at the Court below, both parties were ad idem that the issue at stake before that Court was the failure of the trial Court to discharge the
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ex-parte orders in its judgment of 4th December, 2015. He opined that all arguments under issue B should be discountenanced. If the appellant’s arguments are correct, that the interim orders ‘ceased to exist by the subsequent order made on 4/12/2015’, he asked, why then is the appellant praying in this appeal for a reinstatement of those orders According to learned counsel, what is in issue should be the appropriateness or otherwise of the decision of the Lower Court which found that the ex – parte orders were improperly granted and, as such, without any legitimate basis on 18th November, 2015 and therefore should have been discharged on the 4th of December, 2015.
Arguing on issue 3 (i.e. C) learned counsel submitted that the applicable procedural rules specific to the Winding Up proceedings at the trial Court are the Winding Up Rules embedded and incorporated into the Companies and Allied Matters Act (CAMA), Cap C20 Laws of the Federation of Nigeria, 2010. Referring to Rule 4 thereof, he submitted that the use of the word “shall” with respect to giving of notice to the adverse party while seeking an order from the Court, is mandatory.
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He relied on the cases of Ogidi v State (2005) 5 NWLR (Pt. 918) 286 at 327; Ugwu v Ararume (2007) All FWLR (Pt. 377) 807 at 857.
Referring to the case of Provisional Liquidator, Tapp industry Ltd v Tapp Industry Ltd [supra] and submitted that though this Court allowed the exparte applications in the said case, it made it clear the nature of such allowed ex-parte application which are not targeted against third parties. That it had to do with extention of time and not injunctions as envisaged in Rule 4 aforementioned.
Learned counsel also submitted that Section 411 of Companies and Allied Matters Act does not relate to interlocutory applications but clearly refers to when the substantive winding up petition is being heard. Learned counsel also submitted that appellant’s counsel admitted in paragraph 5.25 page 23 of its brief that the ex-parte application grated by the trial Court only breached the provisions of Rule 4 of the Winding Up Rules. It is his view that by this admission, the appellant’s case must collapse. That the excuse that it did not breach any constitutional provision is non sequitur as Rule 4 of the Winding Up Rules does not conflict with any constitutional provision to invalidate same or avoid compliance with it.
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Finally, learned counsel submitted that the appellants appeal is totally academic for the reason that its limited challenge to the decision of the Lower Court based on the Court’s application of the Winding Up Rules is unmeritorious. He urged the Court to resolve issues 2 and 3 [B & C) against the appellant.
RESOLUTION OF ISSUES 2 & 3(B & C)
The most convenient place to start is to make reference to the observation of the Court below at page 1255 of the record of appeal wherein the said Court observed thus:-
“Given the nature of this appeal, I will start with the emphasis that the said APPEAL is against the ruling of the Lower Court delivered on 4th day of December, 2015 as shown in the Notice of Appeal filed on 14th day of December, 2015 and also confirmed in the Appellant’s brief of argument wherein paragraph 1.1 of page 1, the introduction reads thus:-
‘This brief of argument is presented in respect of the notice of appeal dated the 14th day of December, 2015 against the ruling of the Federal High Court, caram: Yunusa, J, delivered on the 4th day of December, 2015.
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At page 16 of Appellant’s brief, paragraph 4.15 thereof, the learned counsel for the appellant opined that the Court below derogated from the above observation. He states:-
4.15 Regrettably though, the Court of Appeal rather than dwell on the ruling of the Trial Court of 4th December, 2015, delved into a great error (with all due respect) to re-visit the ex parte order made by the Trial Court preserving the res of the petition before it and the issues raised therein which were decided upon by the Lower Court in its ruling of 4th day of December, 2015.”
Honestly, I have tried to understand the complaint of the appellant in this issue but it appears to be the more you look, the less you see. Appellant’s argument is that the Court below was without jurisdiction to discharge the ex parte orders made by the trial Court on 18th November, 2015 since there was no appeal against the orders of the said date and also that issues relating to the ex – parte orders were academic and no longer alive since a subsequent ruling was delivered by the trial Court on 4th December, 2015, I seem to agree with the learned
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counsel for the Respondent that this present appeal by the appellant defeats his argument because in its Notice of Appeal, appellant seeks the following reliefs:-
“B, An order striking out in its entirety the respondent’s application dated the 23rd day of November, 2015 filed at the registry of the Federal High Court
C. An order restoring all the interim orders made by the Lower Court on the 27th day of October, 2015 (sic).
Although the appellant has consistently referred to the date which the ex – parte orders were granted as 27th October, 2015, the actual date is 18th November, 2015. The appellant whilst arguing that the ex – parte orders have been spent to deny the respondent a right to protest its grievance against the said orders, on the other hand is seeking in this Court a full restoration of those ex-parte orders.
The law is trite that appeals to appellate Courts are by way of rehearing and in hearing an appeal, the appellate Court should consider the materials before the trial Court and should not hesitate to overrule his decision even on facts where, after giving due regards to the advantage which the
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trial Court has of seeking the witness, it is clear the decision is wrong. See Ihunwo v Ihunwo & Ors (2013) 8 NWLR (Pt. 1357) 550, Registered Trustees of Airline Operators of Nigeria v Nigeria Airspace Management Agency (2014) 8 NWLR (Pt.1408) 1.
As I have said, an appeal is a continuation of the case from the Court below and it does not initiate a fresh case. This present appeal has its root from the grant of ex- parte injunctions against the Respondent on 18th November, 2015 by the Trial Court. The respondent herein filed a motion on notice seeking the vacation of those orders. The learned trial Judge refused to vacate those orders but however varied same on 4th December, 2015. The refusal to vacate those orders informed the appeal to the Court below by the Respondent herein. After hearing the appeal, the Court below adjudged the appeal meritorious and set aside the ruling of the trial Court and vacated those ex – parte orders. The Appellants herein, not being satisfied with the vacation of those ex – parte orders, has appealed to this Court.
From the facts as set out above, I am unable to appreciate the argument of the Appellant that the ruling of 18th
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November, 2015 had abated at the delivery of the ruling of 4th December, 2015. I agree with the view expressed by the learned counsel for the respondent that this argument is academic. If the ex – parte orders had ceased to exist as at 4th December, 2015, why was there an appeal to the Court below Why did the Court below set those orders aside Issue 2 (B) is thus resolved against the appellant.
The grouse of the appellant in the other issue is that the Court below relied on Rule 4 of the Companies Winding Up Rules alone to void the ex – parte orders granted by the trial Court without considering other relevant laws and decisions. If the appellant understands the resolution of issue 2(B) just determined, there would be no need to go into this issue. This is what the appellant says in paragraphs 4.29, 4.30 and 4.31, at page 18 of his brief of argument.
4.29 The Appeal filed by the Respondent being clearly identified by the Court of Appeal as Appeal against the ruling of the Trial Court of 4th day of December, 2015 has nothing to do with Rule 4 of the Winding Up Rules.
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4.30 The issue of Rule 4 would have been relevant if the appeal is against the Interim Orders of the Court made on the 18th day of November, 2015
4.31 The said Interim Orders having been varied and more importantly, not being an appeal, we state that the provision of Rule 4 of the Winding Up Rules 2011 became irrelevant and ought not to have been relied upon by the Court of Appeal in its judgment on the Respondent’s appeal.
The above argument of the learned counsel for the Appellant to say the least, is off the mark. He even made a summersault at page 23, paragraph 5.25 of his brief when he said as follows:-
“5.25. The said ex – parte application only breached the provision of Rule 4 of the Winding Up Rules 2011 but (with due respect to the learned Justice of the Lower Court) did not breach any Constitutional provision or statute.
There is no doubt that the applicable procedural rules specific to the winding up proceedings at the trial Court are the Winding Up Rules. Now the said Rule 4 states:-
“4. Motions
Every application in Court other than a petition shall be made by motion, notice of which shall be served on every person against whom an order is sought not less
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than five clear days before the day named in the notice for hearing the motion.”
The above provision is clear and unambiguous. It does not require any canon of interpretation. The law is well settled that in interpreting statutes, the Courts should always give them their ordinary meaning. Where it is clear, unambiguous and direct to the point any addition or subtraction will be sequel to introducing an illegal back door amendment. See Skye Bank Plc v Victor Anaeman Iwu (2017) LPELR – 42595 [SC], Onyema & Ors v Oputa & Anor (1987) LPELR – 2736 (SC), Board of Customs & Excise v. Barau (1982) 10 SC 48, (1982) LPELR – 786 (SC).
Rule 4 of the Winding Up Rules states clearly that motions can be filed in winding up petitions. However, where a Motion in winding up petition seeks an order against any person such motion must be served on the named party at least five clear days before the hearing. The reason is not far fetched. The Court below made it so clear and I shall reproduce it here –
“To my mind, the grant of interim order of injunction by the Lower Court particularly orders No (1) and No (3) (whether varied or not) without any notice to the
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Appellant thereby affording it the opportunity to be heard on a matter that seeks to paralyze and immobilize a functional and ongoing corporate organization, is an exercise of discretion too extreme and injudicious to be allowed to subsist given the negative socioeconomic impact it will have not only on the Appellant but also on its employees and society at large, Such a scenario no doubt demands that application on notice must be the only plausible option to enable the Appellant react and present its own side of the story before the Court will decide which way the pendulum of discretion will swing. See LEEDO PRESIDENTIAL MOTEL LTD V BANK OF THE NORTH LTD (supra).”
I agree. May I add that even if there was no Rule 4 of the Winding Up Rules prohibiting the grant of ex – parte orders against parties without being put on notice, a Court to which such order is sought ought to be discrete and reserved in granting such far reaching orders. The economic and social implication which such an order will have is enormous. Apart from the sudden collapse of the business, many families depending on the company for their livelihood may dislocate.
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Courts are not agents of destruction and as such we must resist at all times any attempt to be used for destruction or vendetta. The Court must hear both parties before making up its mind to grant such orders. It must not be done ex – parte particularly where injunctive reliefs are sought.
The Appellant herein, relying on the case of Provisional Liquidator Tapp Industry Ltd v Tapp Industry Ltd (supra) had argued that ex – parte orders can be granted in winding up proceedings. This sweeping submission is dangerous. In that case, this Court made it very clear that although ex – parte applications may be allowed in winding up proceedings, it stressed that where an order is being sought against any person, in which case, such a person will have to be put on notice of the motion. This decision is in tandem with Rule 4 of the Winding Up Rules, The word “shall” used in Rule 4 connotes mandatoriness and does not leave room for permissiveness. It is trite that where the word “shall” is used in a statute, there is no room for adjustment. It must be done and obeyed. See Ugwu v. Ararume (2007) All FWLR (Pt. 377) 807 at 857; Ogidi v. State (2005) 5 NWLR (Pt. 918) 286 at 327.
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I need to point out here that the ex – parte application in Tapp’s case (supra) was for extension of time within which to complete the assignment by the Provisional Liquidator and another motion to take possession of certain properties belonging to the respondent. This Court held that those applications did not raise any contentious issues that would affect the civil, rights and obligations of the parties to the winding up proceedings. May I state it without equivocation that application for orders of injunction affecting the rights and obligations of parties cannot be moved ex-parte in winding up proceedings. Parties must be put on notice.
The learned counsel for the appellant also argued that by Section 411(1) of the Companies and Allied Matters Act and Order 183 of the Companies Winding Up Rules 2010, ex-parte orders can be made as was done at the Trial Court. This is far from the truth. Section 411(1) of Companies and Allied Matters Act provides:-
“On hearing a winding up petition, the Court may dismiss it or adjourn the hearing conditionally or unconditionally, or make any interim order, or any other that it thinks fit, but the Court shall not refuse to
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make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.”
Clearly, the above provision has not permitted the making of orders ex-parte. Although interim orders can be made, it must be made in accordance with Rule 4 of the winding up Rules. As was observed by the Court below, this provision i.e. Section 411(1) simply provides a guide as to what the Court before which a petition for winding – up is brought should do depending on the circumstance and issues presented to it by the parties. I agree with the Court below that the ex-parte motion filed by the appellant on 9/11/15 which culminated in the ex-parte orders of injunction on 18/11/15 was a clear breach of the provisions of Rule 4 of the Companies Winding-Up Rules.
Now Order 183 of the Companies Winding Up Rules provides:-
“In any proceedings in or before the Court, where no provision is made by these Rules, the Court’s (Civil Procedure) Rules shall apply.”
With due respect to the learned counsel for the appellant, I do not see how Order 183 of the Winding Up Rules
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could be of help to their case. This provision is to the effect that where no provision is made by the Companies Winding Up Rules, the trial Court’s (Civil Procedure) Rules shall apply. But in this case, the Companies Winding Up Rules in Rule 4 has made adequate provisions on how application should be made. There was no need therefore to have recourse to the Federal High Court [Civil Procedure) Rules. Companies winding up proceedings are specialized and unique. The term often use for this and similar types of actions, is that they are sui generis. It therefore needs to be emphasized that a Company Winding Up action is governed by the provisions of the Companies and Allied Matters Act [CAMA] and the Companies Winding Up Rules, made pursuant thereto. Expectedly, all the relevant procedural guidelines and steps are exhaustively and generously provided in the enactments. These specialized guidelines and procedures have their own implications for the Court and the parties. For instance, once a law has presented a particular method of exercising a statutory power, any other method of exercise is excluded.
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Rule 4, having prescribed the method of applying for injunctive orders against parties, no other method is permissible. See Eguamwense v. Amaghizemwen (1993) 11 SCNJ, 27, Orubu v NEC (1988) 12 SC (Pt. 3) 1. This issue is also resolved against the Appellant.
ISSUE 4 (D)
Issue 4 is whether the Court of Appeal by virtue of Section 15 of the Court of Appeal Act Cap C 36 Laws of the Federation of Nigeria, 2004 is not bound to hear, determine and make pronouncement on the issue of abuse of Court process validly submitted to it by the parties herein. The complaint of the appellant in this issue is against one paragraph statement of the Court below on page 1269 of the record of appeal which states:-
“Issue 3 was raised but not addressed by the Lower Court and being a fundamental issue associated with the various suits by the parties, it will best be considered first by the Lower Court hearing the petition in suit No.FHC/L/CP/1689/2015.”
I note that the petition filed before the trial Court is still pending and the issue which gave birth to this appeal has to do with the ex-parte orders granted by the learned trial judge and his refusal to set aside same.
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However, the Court below did set aside those ex-parte orders, and the parties are set to return to the trial Court to ventilate their grievances in the main petition. I do not intend to say anything in respect of the various suits filed at the trial Court. As the Court below had rightly decided, issues associated with the various suits at the trial Court will best be considered and determined first by the trial Court hearing the petition suit No FHC/L/CP/1689/2015. I need not say more on this for even if it is fully determined, it will not change the fortune or otherwise of this appeal.
ISSUE 5 (E)
Appellant’s complaint in this issue is whether the Court of Appeal was right to strike out the Appellant’s cross-appeal solely on the ground that the granting of prayer 1 of the Respondents’ Motion on Notice at the Lower Court dated the 23rd day of November, 2015 by the Court of Appeal made the sole issue submitted in the Cross Appeal “Mute Point.”
In its judgment of 30th March, 2018, the Court of Appeal set aside the ruling of the Trial Court dated 4th December, 2015 in the following words:-
“On the whole, this appeal succeeds and it is accordingly allowed. The ruling of the Federal High
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Court delivered by M. N. Yunusa, J., on the 4th day of December, 2015 is hereby set aside. Consequently, it is ordered that the Interim Order of injunction granted by the Lower Court on the 18th day of November, 2015 be and is hereby set aside.”
See page 1269 of the record of appeal.
The sole issue the appellant herein submitted for determination in the Cross appeal before the Court of Appeal was:-
“Whether the Lower Court was right to have dismissed cross appellants’ Notice of Preliminary objection without resolving issue of abuse raised therein and inspite of the existence of Form 49 filed in FHC/L/CS/1219/2015 brought to its attention.”
In response, the Cross – Respondent also formulated a sole issue for determination as follows:-
“Whether the Lower Court was correct to have struck out Respondent’s motion dated 26th November, 2015.
On pages 26 – 27 of the additional record are contained the ruling of the learned trial judge on the motion of the Cross Appellant dated 23/11/15 and delivered on 4/12/15. It states:-
It is important to point out that the said Suit No FHC/L/CS/1219/15 was not filed in this Court and
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the said Form 49 was also not filed before the Court. The issues are not properly placed before the Court. The duty of the Court is to hear matters on merit. The said motion is an incompetent process and is hereby struck out.”
With all the above scenario, the Court below made the following conclusion on the cross – appeal on pages 1276 – 1277 of the record of appeal:-
“As much as I agree with the learned Senior counsel for the Cross appellant that the said Ruling was very sketchy vis-a-vis the affidavit evidence written and address presented before the Court, it still remains the decision of the Court which is no doubt appealable. But given that the issue in contention is the cross Respondents motion dated 23-11-15 which issue has been fully addressed in the main appeal and prayer one therein granted by this Court after setting aside the ruling of the Lower Court, a further discourse on the efficacy of same will no doubt amount to an exercise in futility because it has become a moot point. In the circumstance, the cross appeal is hereby struck out.
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I agree entirely with the decision of the Court below on the issue. Having resolved the main issue in controversy in the appeal and the ex-parte orders granted by the trial Court set aside, there was nothing left to be said again in the appeal except to engage in an academic exercise. Courts are not set up to engage its precious judicial time in academic exercise.
In Salik v Idris & Ors (2014) 15 NWLR (Pt.1429) 36, (2014) LPELR – 22909 (SC) at pages 39 – 40 paragraphs F – C, this Court made it clear that:-
“When a Judge restrains himself from deciding issues in a case or the whole case because his effort would amount to an academic exercise, all that his Lordship is saying is that if he decides the suit it would end with a hallow victory. A victory with no value whatsoever. A victory that cannot be enforced. That explains why in a plethora of cases it has been said that Courts should not engage in academic exercise, rather, Courts should restrict judicial time to determine live issues.”
See also Oyeneye v Odugbesan (1972) 4 SC 244, Adelaja & Ors v Alade & Anor (1999) 6 NWLR (Pt. 608) 544, Bhojwani v Bhojwani (1996) 6 NWLR (Pt. 457) 663, Bamgboye v Unilorin (1999) 10 NWLR (Pt. 622) 290.
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In summary therefore, since the main issue was decided, the lone issue in the cross-appeal could not add to or subtract from the decision in the main appeal. I agree that the Court below was right in the circumstance to strike out the cross-appeal. This issue is accordingly resolved against the appellant.
Having resolved all the five issues against the appellant, I hold that this appeal lacks merit and is hereby dismissed. I affirm the decision of the Court of Appeal delivered on 30th March, 2016. I award costs of N500,000 in favour of the Respondent.
Appeal Dismissed.
SC.402/2016
