Equitorial Trust Bank Ltd V. Akkad Tanning Company Ltd. & Ors (2008)

LawGlobal-Hub Lead Judgment Report

JOHN INYANG OKORO, J.C.A

This appeal is against the Ruling of the High Court of Kano State presided over by N. S. Umar J in which it refused and dismissed the Appellant’s application to strike out and/or dismiss the Respondents’ claim and with it the order of interlocutory injunction earlier granted by the said Court. The said Ruling was delivered on 10th April, 2003.

The Respondents, who were plaintiffs at the Court below had by a writ of summons dated 9th July, 2002 claimed against the Appellant who was the defendant as follows:-

1. An order directing a thorough reconciliation of the 1st and 2nd plaintiffs’ account with the defendant by a reputable firm of Chartered Accountants to be appointed by the Court.
2. A declaration that the Defendant is not entitled to charge compound interest on the 1st and 2nd plaintiffs account contrary to the agreement of the parties.
3. An order setting aside all over charges either by way of interest, commission on turn over (COT) unauthorized dealing on the accounts and all other, unauthorized or unlawful and illegal transactions by whatever name so described by the defendant respecting the 1st and 2nd Plaintiffs’ said current Account as being illegal, unlawful, null and void.
4. A declaration that the Defendant cannot cause to be advertised, sell, eject, possess or realize in any manner the landed properties or exercise any powers at all conferred on it by virtue of the perfected deed of Legal Mortgage, Fixed or Floating Asset Debenture respecting the said properties or any property used to secure the transaction between the plaintiffs and the Defendant until the due determination of this suit.
5. An order of perpetual injunction restraining the Defendant either by itself, agents, servants, assigns, and privies or by whatsoever name called from doing any or all of the following:

(a) From taking any steps and / or actions that are capable of embarrassing, harassing, molesting, ridiculing and / or disorganizing any or all the plaintiffs in their suit or any of their staff, agents, representatives etc on account of the disputed accounts between the plaintiffs and Defendant.

6. From Publishing to any person(s) natural or corporate including public and private media authorities etc any allegation of indebtedness by the plaintiffs to the defendant respecting the disputed accounts between the 1st and 2nd Plaintiffs and defendant.
7. A declaration that the Defendants are in breach of their contractual relationship with the 1st and 2nd plaintiffs and a consequence of which the plaintiffs incurred damages.
8. General damages in the sum of N1 Billion for breach of contract, illegal debiting, and mental stress caused to the plaintiffs particularly the plaintiff.
9. Legal cost and the cost of filling and prosecuting this action.

On the same date, and pursuant to the above claims, the Respondents filled a motion ex – parte and on notice seeking among other things reliefs of injunctive orders from the Court to restrain the Appellant from enforcing or implementing any of the instruments executed by any of the Respondents in relation to the transaction the subject matter of this suit pending the determination of the main suit. The learned trial judge first granted the ex – parte motion on 11th July, 2002 and on 27th September, 2002 granted the motion on Notice.

On 13th February, 2003, the Appellant filed a motion on Notice asking the Court to strike out and/or dismiss the suit on the ground that the trial Court lacked jurisdiction. After hearing both parties on the application, the Court below on 10th April, 2003 refused and dismissed the application. Aggrieved by the ruling of the trial Court, the Appellant has appealed to this Court. Notice of appeal is dated 21st April, 2003 and filed on 24th April 2003 and contains three grounds of appeal out of which the Learned Senior Counsel for the Appellant has distilled three issues for determination as follows:-

1. Whether the trial Court was right to hold that it had jurisdiction to entertain the Respondents’ claim being one that in the main and in substance deals with the enforcement of rights under, debentures and legal mortgages. (Arising from Ground 1).
2. Whether the trial Court was right to grant orders of injunction ex – parte and interlocutory in respect of properties in Lagos, outside its jurisdiction. (Arising from ground 2).
3. Whether the trial Court was right to grant an injunction ex- parte or on notice against the exercise of the Appellants’ lawful and legitimate rights under the Deed of mortgage and personal Guarantee much moreso when the said orders or injunctions ex-parte or interlocutory were unrelated and unconnected with or to the claim before the Court and the reliefs sought, and were against persons not parties to the claim? (Arising from ground 3.)

It is however the contention of the Learned Counsel for the Respondents those two issues only are necessary for the determination of this appeal. The issues are:-

1. Whether the trial Court was right to hold that it had jurisdiction to entertain the Respondents’ claim against the Appellant.
2. Whether the trial Court was right to have granted orders of injunction ex-parte and on notice in respect of the Respondents claim against the Appellant.

It seems to me that the two issues formulated by the Respondents are more apt and lucid for the determination of this appeal and I intend to determine this appeal based on these two issues. This is much more so as the third issue of the appellant has imported matters which cannot be traced to any ground of appeal. For example the issue which relates to the grant “of injunction against persons who are not parties to the suit cannot be traced to ground 3 purportedly alluded to. It is trite that an issue must of necessity be formulated from one or more grounds of appeal. It cannot emanate from the blues. See Okpala & Anor V. Ibeme & Ors (1989) 2 N.W.L.R. (Pt. 102) 208. General Oil Ltd. V. Chief Ogunyade (1997) 4 N.W.L.R. (Pt. 501) 613. Moreso, where an issue contains matters which cannot be traced to any ground of appeal, such an issue is liable to be struck out. It is not the place of the Court to pick and choose. It follows also that arguments made in support of such issues are of no consequence. Accordingly, the 3rd issue in the appellant’s brief is hereby discountenanced. See Madumere V. Okafor (1996) 4

N.W.L.R. (Pt. 445) 637, Gaamstac Engineering Ltd. V.F.C.D.A. (1988) 4 N.W.L.R. (Pt. 88) 296.

On the first issue, the Learned silk for the Appellant submitted that an examination of the Respondents’ claim before the Lower Court reveals that it is one that in the main and in substance deals with the enforcement of rights under debentures and legal mortgages. That it is not simpliciter a dispute between an individual customer and his bank in respect of the transactions between them. Thus, that by virtue of Section 251 (1) (e) of the Constitution of the Federal Republic of Nigeria 1999, a debenture between the parties is a matter within the exclusive jurisdiction of the Federal High Court, and not the Kano State High Court. That issue of debentures and mortgages are ones arising from the operation of the Companies and Allied Matters Act, 1990 and that the suit as formulated is not just a dispute between an individual customer and his bank.

Furthermore, that claims 1, 2 and 3 are subsidiary, ancillary or incidental to the main claim to wit enforcement or non enforcement of rights under the debenture, personal Guarantees between the appellant and Respondents. He urged this Court to strike out the suit relying on these cases:-

Wema Bank PLC & Anor V. Chrisrock Laboratories & Ors (2002) 8 N.W.L.R. (Pt. 770) 614 at 631 – 633, Ceramic Manufacturers Nigeria PLC V. Nigeria Industrial Development Bank (1999) 11 N.W.L.R. (Pt. 627) 383, Dr. Achebe & Anor V. Chief Nwosu & Anor (2003) 7 N.W.L.R. (Pt. 818) 103, Ejike V. Afeadi (1998) 8 N.W.L.R. (p. 561) 322.

In his reply, the learned Counsel for the Respondents submitted that an ordinary look at the claims of the Respondents leaves no doubt the fact that the subject of dispute between the parties is reconciliation of account and for the Court to ascertain the extent of duty or liability if any upon the disputed accounts. That by sections 272 (1) and 251 (1) (d) of 1999 Constitution, the provisions thereof show that the State High Court has jurisdiction over matters that pertain to dispute between an individual customer and his bank as in this case. He referred to the case of Bronick Motors Ltd V. Wema Bank Ltd (1983) 6 S.C. 158 at 263 – 264, Bizee Bee Hotels Ltd V. Allied Bank (Nig) Ltd (1996) 8 N.W.L.R. (Pt. 405) 76, Nigeria Deposit Insurance Corporation V. Oken Enterprises Ltd & 1 Or. (2004) 18 N.S.C.Q.R. 42. Learned Counsel then urged, this Court to resolve this issue against the appellants.

It is now trite that issue of jurisdiction is a threshold issue and whenever it is raised, the Court must consider it first because where a Court has no jurisdiction, the whole proceedings become a nullity no matter how well conducted. See, Madukolu V. Nkemdilim (1962) 2 S.C.N.L.R., 341, Akeem V. University of Ibadan (2003) 10 N.W.L.R. (Pt. 829) 584, Ayman Enterprises Ltd V. Akume Ind. Ltd, (2003) 13 N.W.L.R. (Pt. 836) 22, F.R.N. V. Ifegwu (2003) 15 N.W.L.R. (Pt. 842) 113. Having said that, how does a Court determine whether it has jurisdiction or not? It is a cardinal principle of our jurisprudence that the jurisdiction of a Court is determined by the claim of the plaintiff before the Court. Thus it is the writ of summons and the statement of claim that determine the issue of jurisdiction of a Court. See Akinfolarin V. Akinnola (1994) 3 N.W.L.R. (Pt. 335) 659.

In order to determine whether the Lower Court had jurisdiction to hear the suit before it, recourse has to be had to the claim before that Court. A cursory look at the claims before the Court below which I had earlier reproduced, will certainly disclose that the Respondents are calling on the Lower Court to compel the Appellant to reconcile the account they operate with it and to determine the extent of duty or ability upon the disputed account. The first leg of the claim, by way of emphasis reads:-

“An order directing a thorough reconciliation of the 1st and 2nd Plaintiffs’ account with the Defendant by a reputable firm of Chartered Accountants to be appointed by the Court.”

This clearly shows what the Plaintiffs (now Respondents ) are asking the Court below to do. It concerns and relates to the fiduciary relationships between them. It is a banker – customer relationship. The 2nd, 3rd, 5th, 6th, 7th and 8th legs of the claim directly concern this relationship. However” the 4th paragraph of the claim which mentions the “Fixed or Floating Asset Debenture” is in my opinion not the core claim before the Court. In other words, the claim does not show that there is a dispute as to the validity of the mortgage or debenture. There is also no issue as to the legality of the mortgage or debenture or whether the mortgage is due or not. These are completely outside the claim before the Court. There is, as it were, no dispute regarding the validity of the mortgage. The issue which is central in the Plaintiffs/Respondents’ claim is the dispute as to the correct state of the account and they are calling for reconciliation before the Appellant can exercise its right under the mortgage. The Learned Senior Counsel for the Appellant had argued in his brief that the issue of reconciliation of account is ancillary to the claim. I do not think so. I hold the view that it is the other way round. It is the principal claim that determines the jurisdiction of the Court. See Ceramic Manufacturing (Nig). PLC. V. NIDB (1999) 11 N.W.L.R. (Pt. 627) 383 at 392 paragraphs D – E.

From the submissions of both counsel in this matter, particularly that of the Appellant, it seems that the issue as to which Court had jurisdiction would not have arisen if the Learned Senior Counsel for the Appellant had appreciated the fact that the claim before the Lower Court concerns reconciliation of account between an individual customer and the bank. This is so in view of the express and unambiguous provision in section 251 (d) of the 1999 Constitution of the Federal Republic of Nigeria. It provides:-

“251 (1) Notwithstanding any thing to the contrary contained in this constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other Court in civil causes and matters-

(d) Connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures; Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” (Italics mine for emphasis)

The claim before the Kano State High Court in this case is clearly within the competence of that Court since it is a “dispute between an individual customer and his bank.” See Associated Discount House Ltd. V. Amalgamated Trustees Ltd. (2006) 26 N.S.C.Q.R, 1240. It has been settled and there is no dispute about it that “individual customer of a bank” includes both natural and artificial persons. The respondents are well covered here. See Bizee Bee Hotels Ltd. V. Allied Bank (Nig.) Ltd. (Supra). The jurisdiction of State High Courts in Bank- customer relationship, apart from the Constitutional provision has been pronounced upon by the Apex Court. In Nigeria Deposit Insurance Corporation V. Okem Enterprises Ltd. & 1or (2004) 18 N.S.C.Q.R. 42 at 94 per Uwaifo JSC, it was held as follows:-

“The proper view of the provision in Section 251 (1) (d) of the 1999 Constitution is that the main provision having used the language of exclusive jurisdiction, the provision then relaxes that exclusiveness given to the Federal High Court therein in a situation in which the issue is a dispute between an individual customer and his bank in respect of transactions between the individual and the bank. In that regard a State High Court will also have to continue to exercise jurisdiction and this it does concurrently with the Federal High Court.

There should be no difficulty in appreciating this.”

I agree there is no difficulty in appreciating this provision. In view of my decision on this issue, Section 251 (1) (e) of the 1999 Constitution does not apply in the circumstance. Also the cases cited by the Senior Counsel for the Appellant do not also find rhythm in this case. For example in the case of Wema Bank PLC & Anor V. Chrisrock Laboratories & Ors (Supra) which was relied upon by the Appellant, the graverment of the averments in the statement of claim was that the terms of the mortgage debenture between the parties were unfair and prejudicial, and the plaintiff had claimed injunctive orders before the Lagos State High Court. This Court held that these are matters regulated by the companies and Allied matters Act 1990 and consequently that the Federal High Court has exclusive jurisdiction to hear and determine the suit. This is not the situation here. Accordingly, this issue is resolved against the appellant as I hold that the Kano State High Court has the jurisdiction to entertain this suit.

The second issue in this appeal is whether the trial Court was right to grant orders of injunction ex-parte and interlocutory in respect of the claim before it. It was the contention of the Learned Senior Counsel for the Appellants that the claim of the Respondents is not within the territorial jurisdiction of the Kano State High Court. That the suit and order of injunction sought and granted related to and covered not only properties in Kano but also properties in Lagos. Also that where a dispute arises as to which State High Court has jurisdiction in a matter, reference will be made to the Constitution to resolve that dispute. That the jurisdiction conferred on a State High Court is not extra territorial. He referred to Section 270 (1) and 272 (1) & (2) of the Constitution of the Federal Republic of Nigeria 1999 and the case of Wema Bank PLC & Anor V. Chrisrock Laboratories & Ors (Supra)

Learned Counsel for the Respondents submitted in reply that all the issues made in the interlocutory injunction are related to the determination of the substantive suit. That both the ex-parte order and the one granted on the motion on notice were granted after due consideration of the Respondents’ application which the Appellant did not oppose. He urged the Court to resolve this issue against the appellant.

The main purpose of the grant of an injunction be it ex-parte or on notice, is to maintain the status quo and preserve the res in the litigation from being wasted, damaged or frittered away with the results that if the suit or appeal succeeds, the result will be nugatory in that the successful party would reap an empty judgment. See Oyeyemi & 7ors V. Irewole Local Government (1993) 1 N.W.L.R. (Pt. 270) 462 at 476. Nigeria Civil Service Union & Anor V. G.G. Essien & Anor (1985) 3 N.W.L.R. (Pt. 12) 306 at 323 paragraph D – E; Order 33 Rule I – Kano State High Court (Civil Procedure) Rules 1988. The argument of the Learned Silk for the Appellants seems to centre on the properties located in Lagos and not those in Kano State. I agree with the Learned Senior Counsel that no State High Court has extra territorial jurisdiction. There is nothing in Section 272 (1) of the 1999 Constitution of the Federal Republic of Nigeria to suggest that a State High Court can exercise jurisdiction over a claim which is outside its territorial jurisdiction. The Learned Trial Judge had observed in his Ruling that both the Appellant and the Respondents are within his territorial jurisdiction and the transaction which gave rise to this suit also took place within the State. Therefore, he exercised jurisdiction over the matter. I think he was right. But was he right in making an order of injunction which affected properties not only in Kano but also in Lagos quite outside its jurisdiction? My quick answer is that he was. The reason is that although he has no extra territorial jurisdiction to entertain a claim which emanates from another State, he can hoverer while hearing a suit which is within his jurisdiction make ancillary orders which affect properties relating to the main suit through they may be located outside his jurisdiction. If this is not so, it means that the injunction granted is meaningless. And if this is not so, can it be said that the plaintiff should go to each State which his property is located to file a suit in order to protect it? I think this will not be in the interest of justice. This will be a cumbersome and tortuous road to seek justice.

In sum, it is my well considered opinion that the Kano State High Court has the territorial jurisdiction and right to have made the orders of injunction to maintain the status quo and preserve the res pending the determination of the substantive suit which is the reconciliation of the account of the Respondents with the Appellant irrespective of the location of the properties. I resolve this issue against the appellant also.

On the whole, I hold that there is no merit in this appeal. It is hereby dismissed by me. I award costs assessed at N20, 000.00 in favour of the Respondents.

Other Citations: (2008)LCN/3075(CA)