African Continental Bank Ltd Vs Jammal Steel Structures Ltd (1973)

LawGlobal-Hub Lead Judgment Report

ELIAS, CJN.

This is an appeal from the ruling of Adefarasin, J., in Suit No. LD/970/73 given in the High Court of Lagos State on October 25, 1973, in which he held, inter alia, that notwithstanding the provisions of the Federal Revenue Court Decree 1973, (in particular Section 7 (1) (b) (iii) thereof) the High Court of Lagos State has jurisdiction in the cause or matter the subject-matter of this appeal .

The plaintiffs/respondents in their writ of summons dated September 17, 1973, claimed inter alia the sum of N641,328.39 (Six Hundred and Forty One Thousand, Three Hundred and Twenty-eight Naira and Thirty-Nine kobo) from the defendants/appellants, being the balance due to the plaintiffs for an over-draft granted by the plaintiffs to the defendants at their Idumota branch, Lagos, in the normal course of their business as bankers to the defendants and for money paid by the plaintiffs to the defendants as banker at the latter’s request, which said sum the defendants have refused and/or neglected to pay in spite of repeated demands.

When the case first came before the High Court of Lagos State on October 15, 1973, Chief F.R.A. Williams, leading counsel for the defendants/appellants sought the leave of the court to argue that the said court has no jurisdiction to deal with the cause or matter having regard to the provisions of the Federal Revenue Court Decree 1973. After hearing arguments from both parties on October 22nd, 1973 on the issue of jurisdiction, the learned Judge gave the ruling three days later as already stated. Dissatisfied with the ruling, the defendants/appellants applied for leave to appeal on the same day, and the learned trial Judge, after hearing arguments of counsel for both sides, granted leave to the appellants to appeal against the ruling. The two grounds of appeal argued before us are as follows: “The learned trial Judge erred in law in failing to observe that the plaintiffs’ action being a claim connected with or pertaining to their business as bankers it clearly falls within the jurisdiction conferred on the Federal Revenue Court under Section 7(1) (b) (iii) of the Federal Revenue Court Decree 1973 Number 13. Accordingly, the High Court of Lagos State has no jurisdiction to entertain the claim. 2. The learned trial Judge erred in law in assuming that the intention of the Federal Revenue Court Decree is to confer on the said court jurisdiction in civil causes and matters in respect of the matters specified under paragraphs (a), (b), (c) and (d) of subsection (1) of Section 7 of the said Decree only in cases where they relate to the revenue of the Government of the Federation Particulars of Error (i) There is no such limitation on the jurisdiction of the Federal Revenue Court except in respect of the matters specified under paragraphs (a) of Section 7 (1); (ii) Section 33 of the Federal Revenue Court makes it clear that the jurisdiction of the Federal Revenue Court is not confined to ‘revenue causes and matters as defined in subsection (2) of the said Section 33.”

In order to deal with the important subject-matter of the appeal fairly expeditiously, we granted the application by the counsel for the defendants/appellants that the appeal be heard and determined on the papers filed in support of the application. It is agreed that the substance of the appeal requires a determination of the scope of the jurisdiction which is vested in the Federal Revenue Court by Section 7(1), (a), (b), (c) and (d) of the Decree.

The relevant provisions as Section 7(1) are as follows: “The Federal Revenue Court shall have and exercise jurisdiction in civil causes and matters- (a) relating to the revenue of the Government of the Federation in which the said Government or any organ thereof or a person suing or being sued on behalf of the said Government is a party; (b) connected with or pertaining to- (i) the taxation of companies and of other bodies established or carrying on business in Nigeria and all other persons subject to Federal taxation, (ii) customs and excise duties (iii) banking, foreign exchange, currency or other fiscal measures; (c) arising from: (i) the operation of the Companies Decree 1968 or any other enactment regulating the operation of companies incorporated under the Companies Decree 1968, (ii) any enactment relating to copyright, patents, designs, trade marks and merchandise marks: (d) of Admiralty jurisdiction.”

As the learned Attorney-General asked for and was granted permission to make his comments on Section 7 of the Federal Revenue Court Decree before going on to the Federal Executive Council Meeting soon afterwards, we may record his argument as follows. After submitting that the learned trial Judge referred to drafting errors without specifying them and that he wrongly concluded that the legislative intention has not been properly brought out by the phraseology employed in the drafting, he submitted that the learned trial Judge was in error when he held that, if the legislative intention had been properly expressed in Section 7, it would have been clear that not all banking transactions were intended to be subject to the jurisdiction of the Federal Revenue Court.

He submitted that the learned trial Judge’s observations are merely speculative and his interpretation is highly idealistic; the learned trial Judge’s appraisal of Section 7 has resulted from his lumping together all the subsections instead of taking then separately. It is his submission that the various subsections under (a), (b), (c) and (d) are not necessarily inter-related and that each of them stands on its own. He pointed out that if the legislative intention is only to protect Federal Government revenue, as the learned trial Judge would appear to have assumed, the reference in (d) to Admiralty cases is not apt. He further submitted that “banking” has a strong revenue element since the Federal Military Government now has financial participation in three commercial banks and even the African Continental Bank Ltd., is being propped up with a 2-million Naira loan from the Federal Government. The learned Attorney-General conceded to the trial Judge that, in paragraph 3 of the Explanatory Note, the use of the word “such” might be considered ambiguous, but he contended that, if one looks at Section 33(1) (i), the seeming ambiguity disappears and it becomes clear that the Federal Revenue Court is required to deal with two types of Matters – revenue and other matters.

He finally submitted that the learned trial Judge might have been misled by the title of the Decree when he held that only revenue cases come within the jurisdiction of the Federal Revenue Court; and that priority applies only in revenue cases, the court being endowed with power to deal with cases other than revenue ones. Before leaving the court, the learned Attorney-General’s final submission is that ‘all banking transactions” are included within Section 7(1) (b) (iii) of the Decree.

The result of this submission is that the Lagos State High Court has no jurisdiction in the case which is the subject-matter of this appeal, and that all disputes of whatever nature relating to “banking” must go to the Federal Revenue Court. Chief Williams began by adopting the arguments of the learned Attorney-General and said that he would only concern himself with the question of the kind of order which this court should make on the determination of this appeal. He contended that Section 8 (1) and (2) of the Decree, which ousts the jurisdiction of the State High Court, takes effect from April 13, 1973 when the Decree came into force (see Section 5(1), (3) and (4) of Decree No. 1 of (1966) so that the jurisdiction of the High Court of Lagos State ceased from that date. The saving clause is Section 8(3) of the Decree which must be read with the phrase “part-heard” in the light of the recent Amending Federal Revenue Court Decree 1973 in place of “pending” cases. The date of assumption of function by the Federal Revenue Court is August 1, 1973, by virtue of Legal Notice 61/73, Section 2. Chief Williams submitted that although the jurisdiction of the High Court ceased on April 13, 1973, the Decree enables the court to continue to exercise the jurisdiction in respect of a cause or matter which was part-heard on August 1, 1973; the result is that all revenue cases filed since August 1, 1973 and all other cases filed since April 1, 1973 are outside the jurisdiction of the High Court. The recent amendment to the Federal Revenue Court Decree therefore has the effect of nullifying the exercise of jurisdiction by a State High Court between April 13, 1973 and August 1, 1973.

Learned counsel filed before the jurisdiction was conferred on the Federal Revenue Court and cases filed after such conferment; cases filed before should be deemed to be within the jurisdiction, while those completed since the Federal Revenue Court in fact began to function are clearly outside its jurisdiction. PAGE| 5 He contended that, in the instant case, the action was filed on September 17, 1973, after the Federal Revenue Court has started work and the High Court no longer has any jurisdiction.

His final submission at this stage of the proceedings is that it is up to the Federal Military Government to put the position right by further statutory amendment of the Amended Federal Revenue Court Decree, 1973; and that, in the meantime, the Supreme Court should make an order striking out the action before the High Court on the ground that it has no jurisdiction. Mr. Enwerem, learned co

Other Citation: (1973) LCN/1661(SC)