Advanced Coating Technology Nigeria Ltd & Ors. V. First Bank of Nigeria Plc. (2008)
LawGlobal-Hub Lead Judgment Report
HUSSEIN MUKHTAR, J.C.A.
The six appellants/applicants (hereinafter referred to as “the applicants”) have by two separate applications filed on the 14th June 2006 and 24th November 2006 sought for stay of execution of the ruling of the High Court of Lagos State (Coram Honourable Justice O. O. Oke) delivered on the 24th November 2005 and for stay of further proceedings in suit No. ID/594/2004 pending determination of the appeal against the said ruling respectively.
The court below in its interlocutory decision delivered on the 24th November 2005, which is the subject of the appeal and this present application for stay of execution and stay of proceedings, made the following orders:
- “An order of interlocutory injunction restraining the 1st and 3rd defendants either by themselves, or their directors, servants, agents, employees and privies from withdrawing, tampering with, transferring or howsoever dealing with the funds representing proceeds of Oil and Gas Contract Finance contracts in the 1st defendant’s (domiciliary) accounts with Nigerian International Bank Limited (especially account No. 0111787026) and for any of its bankers pending the final determination of the substantive suit.
- An order of interlocutory injunction restraining the 2nd and 3rd defendants either by themselves, their respective agents and privies from withdrawing, tampering with, transferring or howsoever dealing with funds in the 2nd defendant’s domiciliary account No. 1412900018407 and current account No. 4202010008599 (both with the claimant and any other account that the 2nd defendant may have with the claimant) pending the final determination of the substantive suit.
- An order freezing the accounts of the 1st and 3rd defendants with (their respective banks, especially) Nigeria International Bank Limited for up to the sum of N399,000,000 and in consequence an order of interlocutory injunction restraining the 1st and 3rd defendant either by themselves or their agents, servants, directors, employees, or privies from dealing with funds of up to the sum of N399,000,000 in their respective banks especially Nigeria International Bank Limited pending the final determination of the substantive suit.
- The applicant shall enter into an undertaking as to damages in favour of the respondents should it be found that this order should not have been granted.”
The applicants in their written submission adopted at the consolidated hearing of the two motions on the 30th April, 2008 raised two issues that were germane to the 1st and 2nd applications respectively, i.e.
- Whether a stay of execution should be granted in the circumstances of this case.
- Is it in the interest of justice to stay further proceedings pending the outcome of the substantive appeal.
The learned counsel for the respondent blended the two issues above a singular issue for determination thus:
“whether or not this Honourable Court should, considering the circumstances of this case, grant either or both of an order staying execution of the order of mareva injunction and an order staying further proceeding, pending hearing of the appellants’ appeal dated 29th November, 2005.”
For the purpose of considering, and determining each application distinctively and separately I shall adopt and proceed to consider the two issues raised by the applicants’ counsel siriatm.
On stay of execution, the learned counsel for the applicants submitted that the guiding principles for the grant of an order for stay of execution have been established in a plethora of authorities depending on the peculiar circumstances of each case. Examples cited by the learned counsel for the applicants include C.B.N. VS AHMED (2002) 5 S.C. (Pt. 1) 146; F.I.B. PLC VS CITY EXPRESS BANK LTD (2004) 6 NWLR (pt. 869) 236; VINCENT STANDARD VS XTODEUS (1993) 5 NWLR (pt.296) 675 at 688; JOSIEN HOLDINGS LTD VS LORNAMEAD LTD (1995)1 NWLR (P.371) 254 at 264; VASWANI VS SAVALLAKH (1972) 1 All N.L.R. (pt. 1) 483; KIGO VS HOLMAN BROS (NIG) LTD (1980) NSCC 204; JADESINMI VS OKOTIE-EBOH (1986) 1 WLR (Pt. 16) 2004.
The applicants’ counsel noted that the appeal seeks to reverse the interlocutory order of mareva injunction that pre-determined the appellants’ liability at an interlocutory stage. He referred to the notice of appeal dated and filed on the 29th November 2005 exhibit JN 3 for the further and better affidavit whereby all the three grounds of appeal have challenged the propriety of the order of mareva injunction granted by the court below. He further contended that the second notice of appeal exhibit JN5 to the further and better affidavit also dated and filed on 29th November 2005 also raised the propriety of lifting the corporate veil of the 2nd appellant suo motu by the court and submitted further that the grounds of appeal in both notices are very weighty. The learned counsel for the applicants however proceeded to argue on extraneous issues like admission of indebtedness by the defendant, etc touching on merits of the appeal and therefore irrelevant to an application for stay. Arguments on substantive issues to be determined on the merits of the appeal advanced at an interlocutory stage stand to be and are hereby discountenanced. It will be worthless exercise to consider any issue (s) other than those touching directly on the merit of the application for stay.
The applicants’ counsel further argued that the mareva injunction sought to be stayed is only grantable when the defendant:
- Is foreign based with assets within jurisdiction and is about to flee therefrom;
- Has assets within jurisdiction but is dissipating such assets.
The applicants’ counsel further submitted that, the applicant was admittedly in “active business,” and that the mareva injunction ought not have been granted in the circumstances of this case. He further contended that the grounds of appeal are not only arguable but also substantive enough to justify stay of execution. He relied on the authorities in E.S. & E.S. LTD VS N.M.B. LTD (2005) 7 NWLR (Pt 924) 215 at 266 – 267; See also NALSA & TEAM ASSOCIATES VS N.N.P.C. (1996) 3 NWLR (Pt. 439) 621 at 632; VASWANI VS SAVALAKH (supra).
The applicants’ Counsel drew the court’s attention to the peculiar circumstance of this case whereby the respondent after obtaining the mareva orders employed a dilatory approach in the prosecution of the case at the lower court, for example, the respondent applied for trial dates which were fixed on the 16th May 2005, 31st May 2006, 6th July 2007, 11th October 2006 but were either unable to present any witness or were not in court at all. The respondent subsequently applied for an adjournment sine die on the 15th February 2007 to await the outcome of its application to the Chief Judge of Lagos State for consolidation. The appellant’s counsel therefore submitted that the balance of convenience in the circumstances is in the applicants’ favour.
It was further submitted for the applicants that where the request for stay of execution and the subject matter of the appeal have the same substratum, so that the grant of one would dispose of the other, stay should be granted. Learned counsel for the applicants called the aid of the authority in DEDUWA VS OKORODUDU (1974) 1 All NLR (Pt. 272 at 275.
The learned counsel for the applicants adopted his arguments on the show of on the special circumstances and the need to preserve the res in respect of the second issue of stay of proceedings.
The applicants’ counsel urged the court to grant both applications for stay of execution and proceedings.
The learned counsel for the respondent, however, submitted that the grant of an order for stay of execution and proceedings is discretionary which must be exercised by the court judicially and judiciously. See AKILU VS FAWEHINMI (No.2) AKILU VS FAWEHINMI (No.2) (1989) 2 NWLR (Pt. 102) 122; VASWANI TRADING CO. VS SAVALAKH & CO. (1972) 1 All NLR (Pt. 2) 483) and “CALA NIGER” VS LEAD MERCHANT BANK LTD (2004) 5 NWLR (Pt. 867) 575 at 595).
The respondent’s counsel submitted that the facts pleaded in all the affidavits filed by the applicants do not warrant granting an order for stay of execution or stay of proceedings. He submitted that the court in exercising its discretion to grant or refuse a stay must consider whether such special circumstances exist as would necessitate granting the order as well as the competing rights of the parties. He added that special circumstance has been interpreted to mean such circumstance in which the res of the appeal would be destroyed unless the order is granted, or foist upon the court a situation of complete helplessness. Reliance was placed on F.I.B. VS CITY EXPRESS BANK LTD (2004) 6 NWLR (Pt. 869) 226; N.N.P.C. VS BCE CONSULTING ENGINEERS (2004) 2 NWLR (Pt. 858) 484; VASWANI TRADING CO. VS SAVALAKH (supra); FATOYINBO VS. OSADEYI (2002) 11 NWLR (Pt. 778) 384 at 392 – 393.
The respondent’s counsel further submitted that the mareva order of injunction sought to be stayed by this application was executed on the 2nd March 2006. He submitted that the order of interim attachment having been fully executed can no longer be stayed. He said the only way of returning the parties to status quo ante is by vacating the mareva order after considering and determining the applicants’ appeal on the merit.
It was further contended for the respondent that refusal of stay will not cause any hardship to the applicants but will rather enhance the preservation of the res, which stands to increase by the day due to accruable interest. The respondent’s counsel further submitted, that poverty or financial hardship does not constitute such special circumstance as would justify stay of execution. He relied on the Supreme Court decisions in FATOYINBO VS OSADEYI (supra) at p. 395 and AJOMALE VS YADUAT (No.2) (1991) 5 N.W.L.R. (Pt. 191) 266 at 285.
It was further submitted by the respondent’s counsel that the depositions in paragraphs 18, 20, 21 and 24 of the applicants’ supporting affidavit and paragraphs 8 to 11 of the affidavit of urgency, both dated and. flied 14th June 2006, do not constitute special circumstances to warrant the grant of a stay.
On the application for stay of proceedings, the respondents counsel submitted that the applicants have no right to dictate which judge should bear their case, and that continuing with the trial of the case cannot hinder their right to fair hearing. He said that stay of proceedings which is merely a ruse of delay for the trial of the case will have no impact on the applicants’ money attached by mareva injunction. Granting a stay of proceedings, therefore, will merely protract the determination of the suit. See AMADI VS N.N.P.C. (2000) 10 NWLR (Pt.674) 76; P.D.P. VS ALH. ATIKU ABUBAKAR (2007) 2 NWLR (Pt. 1018) 303 at 316.
The respondent’s counsel also alleged that the application for stay of proceedings amounted to an abuse of process of the court but without showing how the motion tantamount to such an abuse. A party alleging that any process constitutes an abuse has a duty to prove that allegation and then move the court to dismiss the offending process. The respondent’s counsel did not only fail to show any abuse, but the issue has not been raised for determination, and is therefore a non starter. It is therefore hereby discountenanced.
The respondent’s counsel fully submitted that the balance of convenience weighs in favour of the respondent but did not defend that submission. He however cited the cases of AKIBU VS FAWEHINMI (No.2) (supra); ODOGWU VS ODOGWU (1990) 4 NWLR (Pt. 143) 224 and OROJOYE VS U.B.A. LTD (1986) 2 NWLR (Pt. 20) 101. He finally urged the court to refuse the application.
In his reply the learned counsel for the applicants submitted that the authorities relied by the respondent’s counsel, in his submission that the mareva order of injunction had been executed, do not apply to the facts and circumstances of the present application. He relied on the case of OLA VS WILLIAMS (2003) 5 NWLR (Pt. 812) 48 at p. 63 paras C-F earlier cited by the respondent’s counsel where my learned brother Adamu, JCA made the following observation:
“An application for stay is an equitable remedy and it is granted at the discretion of the court which is to be exercised judiciously and judicially. Consequently, every application for stay is to be decided on its peculiar facts and circumstances as well as on its own merits and decided cases or previous authorities do not constitute binding precedents but merely serve as guides in the exercise of such discretion. In other words, no one case can be authority for another in matters of discretion otherwise that would in effect be putting an end to the discretion. Thus the present case must be decided under its peculiar circumstances and on its merit not withstanding the decision of the Court of Appeal in THE REGENCY COUNCIL OF OLOTA VS SHODEINDE.”
The applicants’ counsel contended that the application for stay was already pending in the court below since 29th and 30th November 2005 but failed to specify the dates of filing the application for stay, on the one hand and the date of execution of the mareva order of injunction sought to be stayed to show that the application for stay was pending before the commencement or completion of the execution.
The submissions of the applicants’ counsel regarding the irregularity of the order of mareva injunction or how it was executed are issues to be considered in the main appeal. The germane issue to be considered here is whether the applicants have made out a case for stay of execution and/or stay of proceedings to warrant the exercise of this court’s discretion in their favour. The Supreme Court in VASWANI TRADING CO VS. SAVALAKH & CO. (supra) has laid down a very concise guiding principle for grant of stay of execution thus:
- “A Court of Appeal should not grant a stay of execution unless there are special or strong circumstances for doing so, meaning some collateral circumstances and perhaps in some cases inherent matters which may, unless the order for stay is granted, destroy the subject matter of the proceedings or foist upon the court, especially the Court of Appeal, a situation of complete helplessness or render nugatory any order or orders of the Court of Appeal or paralyse, in one way or the other, the exercise by the litigant of his constitutional right of appeal or generally provide a situation in which whatever happens to the case, and in particular even if the appellant succeeds in the Court of Appeal, there could be no return to the status quo. ”
Considering the relevant averments in the various affidavits supporting the application for stay of execution and applying those depositions to the parameters set out in the above case, one hardly sees such special or, compelling circumstances that could necessitate granting an order for stay of execution. The depositions in paragraphs 8 to 11 of the applicants’ affidavit of urgency and paragraphs 10 to 24 of the supporting affidavit both dated and filed on the 14th June 2006 deal with issues relating to the merit of the substantive appeal. What is required of the applicant, in an application for stay, is to show such extra ordinary or special reasons that aggressively threaten the res of the appeal and dictating a compelling necessity to grant an order for stay, so as to prevent foisting a situation of complete helplessness on the appellate court in the event of success of the appeal. In the instant case the circumstances urged upon the court are not hostile or threatening to the res to necessitate the exercise of the court’s discretion in favour of the applicants. In F.I.B. PLC VS CITY EXPRESS BANK LTD (supra) at p. 243 paras A-B my learned brother Galadima, JCA aptly observed as follows”
“The primary emphasis of the appellate court in granting stay of execution of judgment is to preserve the res of the suit so that it is not destroyed to the prejudice of the applicant in the event that his appeal succeeds. In effect, stay of execution is granted for the maintenance of the status quo between the parties.”
My lord Galadima, JCA further in the case of NNPC VS BCE CONSULTING ENGINEERS (supra) at p. 497 expressed the following views;
“When it is stated that the circumstance or condition for granting a stay should be special or strong, it is taken as involving a consideration of some collateral circumstances and, perhaps in some cases, inherent matters which may, unless the order for stay is granted, destroy the subject matter of the proceedings, or foist upon the court, especially the Court of Appeal, a situation of complete helplessness or render nugatory any order or orders of the Court of Appeal or paralyse in one way or the other the exercise by the litigant of his constitutional right of appeal or generally provide a situation in which whatever happens to the case, and in particular even if the appellant succeeds in the Court of Appeal, there could be no return to status quo.”
The special circumstances that could necessitate an order for stay are such that would, if stay is refused, the appellant would ultimately be left with an irreversibly empty or worthless victory in the event of the success of the appeal. It is therefore a redemption device meant to ensure that the res of the appeal is adequately preserved so that in the event of success of the appeal, the parties will not be hopelessly non-plussed by being placed in a non-returnable position occasioned by the execution of the lower court’s judgment. In NNPC VS BCE CONSULTING ENGINEERS (supra) at p. 497 paras F – H (supra) the court further held that:
“For a ground to constitute a special circumstance, it must arise in a type of decision where a stay can be granted and, in relation to the facts and circumstances of the particular case, be such that if it is decided in favour of the applicant some substantial injustice or some irreversible circumstances shall have resulted which would have made it more appropriate had a stay been granted.”
What constitutes special circumstances for the purpose of stay is very wide and each case is treated according to its peculiar facts and circumstances. Existence of arguable grounds of appeal especially on fundamental issues like jurisdiction may also constitute such special circumstance as would warrant a stay. In F.I.B. PLC VS CITY EXPRESS BANK LTD (supra) the court further observed thus:
“What constitute special circumstances for the purpose of determining whether or not a court should grant stay of execution is very wide in scope. It however includes the balance of convenience between the parties and the existence of grounds of appeal which raise substantial and arguable issues such as an issue challenging the competency or jurisdiction of the court which gave the judgment sought to be stayed”
See also MARTINS VS NICANNAR FOODS CO. LTD (1988) 2 NWLR (Pt. 74) 75; ABDULKADIRI VS ALI (1999) 1 NWLR (Pt. 584) 61 ODEDEYI VS ODEDEYI (2000) 3 NWLR (Pt. 650) 655.
In the instant case the order of mareva injunction sought to be stayed was granted on the 24th November 2005 and executed on the 2nd March 2006. The applicants applied for leave to appeal on the 14th March 2006 while this motion for stay was filed on the 14th June 2006 after the execution of the mareva order of injunction which is sought to be stayed. The mareva order cannot be stayed after it has been lawfully executed. The only remedy left for the applicants is to have it vacated or set aside and that is precisely what the main appeal is all about. In THE REGENCY COUNCIL OF OLOTA VS SODEINDE (supra) at p. 77 paras D-E my learned brother Adamu, JCA aptly stated thus:
“The Court of Appeal cannot make an order of stay of execution in a case where execution had already been lawfully carried out. In the instant case, the res had been destroyed as new chiefs had already been appointed by the respondents in place of the applicants. The Court of Appeal cannot therefore stay execution of the trial court’s order as it may lead to chaos and ill will amongst the chiefs. (p. 77, paras D – E).
The learned Jurist Adamu, JCA in much later case of OLA VS WILLIAMS (supra) at p. 62 paras C-E similarly observed thus:
“Where execution of judgment has already been carried out, there is nothing left to be stayed. In the instant case, the judgment sought to be stayed was delivered on 22nd July 1999 and execution was levied on 12th January 2000 before the application before the Court of Appeal was filed on 24th March 2001. In the circumstance, it could be said that there was nothing left to be stayed.”
See also THE REGENCY COUNCIL OF OLOTA VS SODEINDE (1998) 6 NWLR (Pt. 552) 72; LONG-JOHN VS BLAKK (1998) 6 NWLR (Pt. 555) 524; ODUSOTE VS ODUSOTE (1971) 1 All NLR 219; VASWANI VS SAVALAKH (supra).
In the circumstances of this case the mareva order having been lawfully executed leaves nothing more to be stayed. It is like stopping an aircraft which is already air borne from taking off. The application for stay of execution cannot be granted and accordingly fails perforce.
The second application for stay of proceedings is also dependant on the existence of special or exceptional circumstances compelling enough to bring the proceedings before the lower court to a halt. The appeal herein challenges the propriety of the interim order of mareva injunction made by the lower court which has absolutely nothing to do with the proceedings thereat. Staying proceedings in the circumstances will, at best, achieve protracted delay in the trial proceedings which will be against the interest of both parties especially the applicant on whose neck an order of interim mareva injunction is hanging. The earlier the matter is determined the better for the parties. Neither party stands to gain any advantage from stay of proceedings but rather both parties will fall into the unfortunate disadvantage of undue and unreasonable delay. See AKILU VS FAWEHINMI (No.2) (supra). In the circumstances therefore the application for stay of proceedings is frivolous and is similarly refused.
The two applications for both stay of execution and stay of proceedings having failed deserve no other fate than dismissal, and are accordingly hereby dismissed for lacking in merit.
Cost assessed at N20,000.00 is awarded to the respondent against the applicants.
Other Citations: (2008)LCN/2847(CA)
