Amalgamated Trustees Limited V. Nigerian Intercontinental Merchant Bank Limited & Anor (2000)
LawGlobal-Hub Lead Judgment Report
OGUNTADE, J.C.A.
The appellant/company as the plaintiff before the Lagos High Court in suit No.LD/18/98 had claimed against the two respondents (as the defendants) the following reliefs:
“(i) A declaration that the 1st defendants are not entitled to sell, alienate or otherwise dispose of, whether by private treaty or public auction or otherwise howsoever, the plaintiff’s property situate at No. 24A Campbell Street, Lagos (also known as the “Rooftop”).
(ii) A declaration that the 1st defendant does not have any enforceable security interest in the plaintiff’s property situate at No. 24A Campbell Street, Lagos (also known as the Rooftop).
(iii) A declaration that any power of sale which may exist by virtue of the Deed of Legal Mortgage dated 13th June, 1991 and registered as No. 37 at page 37 in volume 1920 of the Land Registry Office at Lagos is not available to and cannot be exercised by the 1st defendant.
(iv) A declaration that the auction notices published in the Guardian Newspaper of 1st January, 1996 and the Daily Times Newspaper of 2nd January, 1996 by the 1st and 2nd defendants are unlawful, illegal, null, void and of no effect whatsoever.
(v) An order that a reconciliation be undertaken of the plaintiff’s account with the 1st defendant from inception to date and that any unlawful and incorrect entries therein be reversed.
(vi) An order of perpetual injunction restraining the 1st and 2nd defendants whether by themselves, their agents, privies, successors-in-title, assignees or any other person acting for or on their behalf from selling, disposing or in any other manner alienating the plaintiffs property situate at No. 24A Campbell Street, Lagos (also known as the “Rooftop”) whether by public auction, private treaty or otherwise howsoever”.
It is necessary that I state here that a company called Associated Discount House Limited brought an application and was joined as 3rd defendant to the suit although the plaintiff had not brought any claims against the said company. The said company, hereinafter referred to as Associated Discount House Limited, would appear to have received a measure of support or co-operation from the 1st defendant as will be revealed shortly. Associated Discount House claimed that the plaintiff was also indebted to it. The said Associated Discount House was joined to the suit. The plaintiff filed its statement of claim. The 1st defendant jointly with Associated Discount House filed a statement of defence and counter-claim against the plaintiff.
The plaintiff later brought an application that the counter-claim made against it by Associated Discount House is struck out. The lower court on 12 October, 1998 made an order striking out the counter-claim, once the counter-claim by Associated Discount House was struck out, it ceased to have any relevance in the proceedings. In order to formalise the irrelevance of Associated Discount House in the proceedings and certainly for other purposes, the plaintiff brought an application praying for the following orders:
“(1) Striking out the name of Associated Discount House Limited as a defendant in this suit, consequent upon the order of the Honourable Court made on the 12th October, 1998 striking out the counter-claim of the 3rd defendant.
(2) Directing the 1st defendant to amend its statement of defence and counter-claim consequent upon prayer 1 above and consequent upon the court’s order of 12th October, 1998.
(3) Extension of time within which the plaintiff/applicant herein may file and serve its reply and defence to the 1st defendant’s statement of defence and counter-claim.
(4) Leave to the plaintiff/applicant to file and deposit with the Chief Registrar of the High Court within 30 days from the order of the court, a bank guarantee from a first class bank in Nigeria for the sum claimed in the 1st defendant’s counter-claim with interest to the eventual determination of this suit.
(5) Consequent upon prayer 4 above, an order directing the 1st defendant to execute, register with the Lands Registry and deliver to the plaintiff a deed releasing and discharging the Deed of Legal Mortgage over plaintiffs property situate at No. 24A Campbell Street, Lagos and known as the “Rooftop”.
(6) Stay of further proceedings in this matter pending the final determination of suit No. LD/3298/97 – Amalgamated Trustees Limited & 2 Ors. currently pending at the Lagos High Court before the Honourable Justice S. O. Hunponu Wusu”.
The parties filed and exchanged affidavit evidence in support and against the grant of the application. On 5/11/98, the lower court heard the application and on 27/11/98, it delivered the ruling thereon. In the ruling, prayers 1, 2 and 3 of the application were granted. Prayers 4, 5 and 6 were refused. The plaintiff was dissatisfied and has brought this appeal against it.
The appeal filed by the plaintiff against the ruling made by the lower court was filed on 4/1/99. On 5/1/99, the plaintiff brought an application to stay further proceedings Pending the determination of the appeal against the ruling of 27/11/98. On 30/4/99, the defendants brought an application that the plaintiff’s case be dismissed for want of diligent prosecution. The lower court on 21/4/99 dismissed the plaintiff’s case. The plaintiff therefore filed a second appeal against the order dismissing its case. Thus I have for consideration in this judgment two appeals the first against the ruling of 27/11/98 and the other against the dismissal of plaintiffs suit on 21/5/99.
In the appellant’s brief filed against the ruling of 27/11/98, the issues for determination were stated to be the following:
“(1) Whether the court below was correct in refusing to grant leave to the appellant to deposit a bank guarantee in the amount of the amount counter-claimed by the 1st respondent to abide the decision of the trial.
(ii) Whether the court below was correct in refusing to grant an order directing the 1st respondent to execute a deed discharging the legal mortgage over the appellant’s property situate at No. 24A Campbell Street, Lagos.
(iii) Whether the institution of suit No.LD/3298/97 by the appellant constitutes an abuse of process.
(iv) Whether the court below was correct in refusing to stay further proceedings in the suit pending the hearing and determination of suit No.LD/3298/97 also pending before the High Court of Lagos State.”
In respect of the second appeal, the appellant formulated one issue thus:
Whether the court below was correct in dismissing the appellant’s case in all the circumstances of the case.”
The respondents formulated alternative issues for determination but I shall be guided in this judgment by appellant’s issues. Before I proceed to a consideration it is important here to say that the 1st defendant in its amended statement of defence raised a counter-claim for N36,978,398.33 against the plaintiff. As against the claims of the plaintiff one has therefore to consider the counter-claim of the 1st defendant. In particular, it is necessary to bear in mind the item (d) of the counter-claim which reads:
“An order granting leave to the 1st defendant to sell immediately the plaintiff’s property at 24A Campbell Street, Lagos (a.k.a “The Rooftop”) in order to enforce the aforementioned securities and to realize the amount plus all accrued interest therein found to be owed to the 1st defendant respectively by the plaintiff as claimed in paragraphs 37(b) above.”
When the claims of the plaintiff are related to the counter-claim of the 1st defendant, the true picture of the dispute between the parties emerges. It was common ground that the plaintiff had entered into a legal mortgage transaction with the 1st defendant. The plaintiff gave as security for the loan granted it by the 1st defendant its property at 24A Campbell Street, Lagos. A substantial part of the loan had been paid. As at the commencement of this suit, the 1st defendant claimed that there still remained to be paid about thirty seven million naira. The plaintiff on the other hand contended that there had been unlawful and incorrect entries in its account with the 1st defendant. The underlying cause of the dispute therefore was the inability of the parties to agree on the balance remaining to be paid by the 1st defendant.
It is against this background that I approach a determination of the first two issues for determination raised by the appellant. In paragraphs 6, 14, 15, 16 and 17 of the affidavit in support of the application, the plaintiff deposed thus:
“6. The claims of the plaintiff/applicant against the defendant as contained in the statement of claim are for declarations as to the entitlement or otherwise of the 1st defendant to sell or otherwise dispose of the plaintiff’s property situate at 24A Campbell Street, Lagos, pursuant to a deed of legal mortgage dated 13th June, 1991 between the plaintiff and the 1st defendant.
- The claim of the 1st defendant as contained in the counter-claim is essentially monetary and the same is based on fake and fictitious entries in the plaintiff’s account, a fact which forms the basis of the serious dispute as set out in paragraphs 17 and 18 of the statement of claim and will be further amplified in the reply and defence to counter-claim.
- The plaintiff is prepared and willing to pay all and any sums of money which may be found by this Honourable court to be due and owing to the 1st defendant after a thorough reconciliation of accounts.
- The plaintiff is willing and prepared to provide the Chief Registrar of the High Court with a guarantee from a first class bank for the full amount claimed by the 1st defendant by way of counter-claim in this suit with interest to abide the eventual determination of the suit by the court; this is, without prejudice to the fact that the plaintiff’s case is that the 1st defendant does not have any further security interest in the property situate at No.24A Campbell Street and that the said amount is not due to the 1st defendant.
- With the provision of the bank guarantee aforesaid giving full security for the 1st defendant’s best doubtful claim, I verily believe that it will be inequitable for the 1st defendant to continue to hold a charge over the said property pending the determination of the suit.”
The 1st defendant in paragraphs 3 and 4 of its counter-affidavit deposed thus:
“3. That contrary to paragraph 14 of the plaintiff’s affidavit in support, the debt of N36,978,398.33 owed to the 1st defendant by the plaintiff is genuine and the 1st defendant has always kept an open statement of account showing the plaintiffs indebtedness in accordance with all banking practice and ethic.
- That contrary to paragraphs 15, 16 and 17 of the plaintiff’s affidavit in support, the bank guarantee referred to by the plaintiffs insufficient reason to warrant the discharge of the legal mortgage which subsists in favour of the 1st defendant over the plaintiff’s property at 24A Campbell Street, Lagos.”
plaintiff thus:
“There can be no doubt that after examining the plaintiffs claim, particularly claim 2 and the counter-claim any order of this court directing that a Deed of releasing and discharging the Deed of legal mortgage over the property situate at No. 24A Campbell Street may amount to determining at this interlocutory stage an issue or issues meant for the substantive stage. It bothers on prudence and wise counsel that the court refrains from commenting or granting reliefs as this would amount to unwittingly the substantive matter.”
Was the lower court right in its views that an order for the release and discharge of plaintiffs property from mortgage would have compromised the substantive suit? I think not. This is because the dispute was all about the exact sum of money outstanding against the plaintiff. The plaintiff had been willing to provide a bank guarantee from a reputable bank to cover the amount which the 1st defendant alleged that the plaintiff owed. It was never the contention of the 1st defendant at the hearing of the application that it had no confidence or trust in the bank guarantee to be provided by a first class bank. If it had said so, perhaps that would have put the plaintiff in a position to offer cash deposit against the release of the property. In the way the lower court reasoned, it conveyed that it would have made no difference to it even if the plaintiff was offering to deposit in court the N37 million naira which the 1st defendant insisted that the plaintiff was owing it.
It seems to me that the offer to give a bank guarantee was a sensible method to resolve the dispute and it also shows good faith of the plaintiff. What the plaintiff in effect was saying to the 1st defendant is “This is your money or the equivalent of it. If you win, you keep the money. If you lose, I would not have been put through the difficulty of using a property said to be worth over N400 million to secure N37m”. This was a meeting point between law and the practicalities of commerce and a measure of judicial flexibility was needed to do justice between the parties.
In this connection, it is helpful to stress that when the learned counsel for the plaintiff was arguing the motion, the court itself suo motu prevailed on 1st defendant’s counsel to agree to the grant of the prayer. The court notes at page 347 of the record of proceedings read:
Court:- Mr. Ayo Ajayi, I can’t see why you can’t concede relief 4. It is very clear that the bank guarantee shall be given by either Union Bank Plc., 1st Bank or UBA Plc.
Mr. Ajayi: – I concede my Lord.
Court :- Can I hear you on relief 5 now.
M. Akani:-
On state of pleadings prayer 5 is a consequential relief. Claim of 1st defendant is fully secured without any recourse to the plaintiff in view of the guarantee, there is no reason legal or otherwise why 1st defendant should continue to hold a mortgage over a property of security for a debt which is being challenged in court and is also fully secured by a guarantee. Affidavit evidence shows within dispute that if prayer 5 is not granted 1st defendant will be overreaching the plaintiff in that this alleged debt would be extremely and unfairly over secured. Property in question was valued at over N400 million in 1998. It is not disputed. 1st defendant also alleges that this debt of less than N37 million is also secured by properties in Victoria Island which in 1995 was valued at over N100 million.
1st defendant would be carrying around security of N500 million in property and N37 million plus interest in bank guarantee in order to secure disputed debt of about N37 million. This is unjust there is nothing on affidavits and pleadings by which 1st defendant can remotely seek to justify thus. They filed counter-affidavit and exhibited Exhibit “A”. It raises issues of debt of N120 million to 3rd party.
In view of prayers 1, 2 and order of this court made on 12/18/98, the combined effect that Associated Discount House is a stranger to these proceedings, they have no business in this suit. Attempt by 1st defendant to introduce Exhibits A and B must be discountenanced as being totally irrelevant. 3rd party is not making claim for debt of N120 million.
1st defendant is limited to its counter-claim filed on 26/6/98 claiming N36,978,398.33 at a certain date together with interest. Whatever the 1st defendant claimed to be entitled to must by necessary implication be limited to his counter- claim. In view of prayers 1 and 2 which are not opposed as well as order of 12/10/98 all references to Associated Discount House in the statement of defence and counter-claim of 1st defendant must necessarily be expunged.”
From the passage reproduced above, it is manifest that the 1st defendant was agreeable to an order being made that the plaintiff deposit in court within 30 days a bank guarantee from a first class bank for the sum claimed in the counter-claim of 1st defendant. The same counsel for 1st defendant strangely however, opposed prayer 5 which was explicitly stated to be consequential upon prayer 4.
1st defendants counsel in its argument at page 350 of the record said:
“By Exhibit ‘A’ 1st defendant has been made aware of terms entered into between plaintiff and Associated Discount House. 1st defendant has been incorporated with its knowledge and consent into the terms agreed upon by the plaintiff and Associated Discount House on N120 million. See Power of Attorney in Exhibit A. Exhibit B is letter written by Associated Discount House to 1st defendant. By the terms of Exhibits A and B 1st defendant is under legal obligation to Associated Discount House, which has been accepted by plaintiff to hold into all charges not just until claims of 1st defendant have settled but as well as until claims of Associated Discount House has also been settled. It is beyond 1st defendant to execute Deed of discharge until 1st defendant is satisfied that debt has been paid or receives instructions from Associated Discount House since the debt owed to Associated Discount House is not covered by Bank guarantee of N36 million it would be unlawful for 1st defendant to execute Deed of discharge in favour of the plaintiff. There are real possibility that if Deed of discharge is executed, Associated Discount House would sue 1st defendant for discharging the security in view of Exhibits A and B.”
From the above, the lower court should have seen that it was not the case of the 1st defendant that executing a Deed of discharge in favour of the plaintiff would compromise the substantive suit. In the substantive suit before the lower court, Associated Discount House was not a party and had no counter-claim. What the 1st defendant was saying in effect was that no matter how the lower court decided the suit and even if the plaintiff paid the whole of the counter-claim, it would not release the plaintiff from the mortgage obligations. To say the least, this was an affront to the authority and power of the lower court.
Guided by what 1st defendant’s counsel said it was clearly apparent that the court’s order even if in favour of the 1st defendant would not be respected. The 1st defendant in effect was fighting a rear guard war for another person who was not a party to the suit and whose counter-claim had been struck out on 12/13/98. The letters which the 1st defendant claimed to be relying upon to protect the interest of Associated Discount House were annexed to the counter-affidavit as Exhibits 4 and 5 read thus:
“22nd March, 1995
The Director,
Amalgamated Trustees Limited,
The Rooftop (5th & 6th Floors),
24B, Campbell Street,
Lagos.
Attention: Dr. S. O. Babalakin
Dear Sir,
Re: Consultancy Services- Investment in a Commercial Paper:
Further to our recent discussions and particularly those of yesterday, 21st March, 1995, bothering on need to reduce our level of exposure and to free the Bourdillion Road, Ikoyi collateral to enable you source your additional financial requirements else where, we are pleased to confirm to you the offer of a commercial paper facility arranged on your behalf under the following terms and conditions.
Issuer: Amalgamated Trustees Limited:
Face value: One Hundred and Twenty Million Naira (N120,000,000.00) only Purpose: To refinance working capital requirements of the company and restructure the assets.
Tenure: Ninety (90) days, certain, i.e. without any option of renewal.
Coopen and
Fees: Six million, Two hundred and Thirteen thousand, six hundred and ninety eight Naira, Sixty three kobo (N6,213,698.63) only.
Payment: Upfront by netting off from face value.
Net proceeds: One Hundred and Thirteen million, seven hundred and eighty six thousand, three hundred and one naira, Thirty seven kobo (N113,786,301.37k.) only.
Repayment: At maturity (90) days.
Disbursements: (i) Forty Eight Million Naira (N48,000,000.00) only to Nigerian Intercontinental Merchant Bank Limited.
(ii) Balance will be disbursed to Amalgamated Trustees Limited or to order.
Collateral: Charge over the following property of the Company:
A ten storey office block at 24A, Campbell Street, Lagos of market value of amount Two Hundred Million Naira (N200,000,000.00) and valued on 16th January, 1995 by Knight Frank & Rutley (Nigeria) at One Hundred and Sixty Three Million, Seven Hundred and Fifty Thousand Naira (N163,750,000.00) only.
Guarantees: Joint and several guarantee of the Directors of Amalgamated Trustees Limited for face value of Commercial Paper in the amount of One Hundred and Twenty Million Naira (N120,000,000.00) only. Supported by statement of affairs indicating assets and liabilities (with detailed livings) of the guarantors.
Power of Attorney: As Nigerian Intercontinental Merchant Bank Limited (NIMBL) presently has a charge over asset of Amalgamated Trustees Limited including collateral (a) above, i.e. 24A, Campbell Street, Lagos, NIMBL shall be given a Power of Attorney to act and continue to hold charge for the assets on behalf of Associated Discount House Limited or nominee; until the full discharge of all obligations of Amalgamated Trustees Limited to Associated Discount House Limited. Other documentations: A post-dated cheque of One Hundred and Twenty Million Naira (N120,000,000.00) only.
If above terms and conditions are acceptable to your good self please indicate by signing attached copy of this letter. Your acceptance is expected on or before close of business at Friday, 24th March, 1995.
Yours faithfully,
for: ASSOCIATED DISCOUNT HOUSE LIMITED
(SGD.) (SGD.)
AUTHORISED SIGNATORY AUTHORISED SIGNATORY
……………………..
Accepted for and on behalf of Amalgamated Trustees Limited.
3rd November, 1995
Mr. Erastus B.B. Akinbola,
Managing Director Chief Executive,
Nigerian Intercontinental Merchant Bank Limited,
Plot 999C, Danmole Street,
Victoria Island,
Lagos.
Dear Sir,
Indebtedness of Amalgamated Trustees Limited to Associated Discount House Limited;
Please note that as a consequence of the indebtedness of the above company to ADHL and the collateralization given, i.e. 24A Campbell Street, Lagos, of which we have an equitable mortgaged and your good self a legal mortgage, you may proceed as earlier discussed to dispose of the property to offset the indebtedness of N120 million plus accrued interest.
We thank you for your usual co-operation.
Yours faithfully,
Associated Discount House Limited
(SGD.)
Authorized Signatory Authorised Signatory
It is an elementary principle of the law of contract that only parties to a contract are bound by the terms of the contract and can sue under it. See Niger Progress Limited v. N.EL Corp. (1989) 3 NWLR (Pt.107) 68 S.C.
There is therefore no legal obligation of any kind on the 1st respondent to enforce against the plaintiff the contract between the plaintiff and Associated Discount House to which the 1st defendant was not a party.
The only reason canvassed by the 1st defendant for its unwillingness to execute a Deed of release in favour of the plaintiff is most untenable, puerile and irrelevant to the issues. If Associated Discount House conceives that it has a right of action against the plaintiff to enforce an equitable mortgage, it was up to Associated Discount House to pursue its rights. The lower court was also wrong to have concluded that an order for the execution of a Deed of release would have the effect of compromising the suit before it, an approach which the 1st respondent never urged on the court. It was only a question of exchanging a Deed of mortgage for the bank guarantee and had nothing to do with whether or not the plaintiff owed N37 million or less. I therefore decide issues 1 and 2 in favour of the plaintiff.
I intend to take issues 3 and four together. The issues relate to whether or not the institution of suit No. LD/3298/97 by the plaintiff/appellant constituted an abuse of the process and whether the lower court was right in refusing to stay further proceedings in this suit pending the determination of proceedings in LD/3298/97.
In paragraphs 18, 19, 20 and 21 of the affidavit in support of the application, the plaintiff attempted a description of the link between the issues up for decision in LD/3298/97 and those in the current case. The depositions read:
“18. The debt alleged to be owing to the 1st defendant by the plaintiff forms an integral part of the debt which the court is being called upon to determine in suit No. LD/3298/97 currently pending before the Honourable Justice Hunponu Wusu sitting at court No.8 Lagos and the liability or otherwise of the plaintiff to pay any sum to the 1st defendant is one of the issues which the court will be called upon to determine.
- In the aforesaid suit, the 1st defendant alleges that it has realised a part of the security provided by the plaintiff for the credit facilities which is in issue before the two courts by purportedly selling two houses belonging to the plaintiff at No. 28 Molade Okoya Thomas Street, Victoria Island, Lagos.
- The alleged sale is being seriously contested by the plaintiff and Demola Folarin further informs me and I verily believe him that the eventual result of the said suit will have a direct impact on the decision of the court as to the exact amount (if any) due to the 1st defendant from the plaintiff.
- I am informed by Demola Folarin Esq. and I verily believe him that it is imperative therefore for further proceedings in this action to be stayed pending the determination of suit No. LD/3298/97 for the following reasons:
(a) The action in suit No. LD/3298/97 predates the counter claim of the 1st defendant in this suit.
(b) Unless a stay is granted, there is the likelihood of the two actions resulting in two conflicting decisions of the Lagos High Court on the same subject matter and issues relating to the same parties, i.e. the exact amount (if any)due from the plaintiff to the 1st defendant.
(c) The determination of the issue in suit No. LD/3298/97 will have the effect of finally disposing the issues which have been placed before this court in this case and thus avoid multiplicity of suits.
(d) I verily believe that there is no possibility of prejudice being suffered by the 1st defendant having regard to the plaintiffs offer to provide a suitable bank guarantee for the entire claim of the 1st defendant herein”.
In the above depositions, the plaintiff did not set out the claims made in suit No.LD/3298/97. Neither was the writ of summons issued in the case filed. Further the pleadings filed in LD/3298/97 were not placed before the lower court to enable it identify the issues and to compare same with those in the current case so that the court could decide how the decision on judgment in LD/3298/97 will affect the decision in the current case. All we have is a bland statement that the debt alleged by the 1st defendant to be still owed by the plaintiff formed an integral part of what was to be decided in LD/3298/97; and that the sale of plaintiff’s houses at 28 Molade Okoya Thomas Street, Victoria Island, Lagos was being contested in LD/3298/97.
Having said the above, I also observe that the 1st defendant had in paragraph 12 of its counter-affidavit only deposed thus:
“That the reason adduced for stay of proceedings in this action in paragraphs 18 and 21 of the plaintiff’s affidavit in support are wrong, puerile and insufficient”.
Now a stay of proceedings is not to be lightly granted without strong reasons.
See Jadesimi v. Okotie-Eboh (1986) 1 NWLR (Pt.16) 264 S.C.; Akilu v. Fawehinmi (No.2) (1989) 2 NWLR (Pt.102) 122 S.C. The plaintiff woefully failed to establish that the lower court would be unable to proceed with the current suit unless LD/3298/97 was first disposed of. What I have found insufficient are not the reasons for asking for the stay but rather the information provided to the lower court by which to reach its conclusion. Although the lower court described the proceedings in LD/3298/97 as an abuse of the process of the court, I would only simply affirm the decision of the lower court to refuse the application. I do so for the reason that the material placed before the lower court to enable it reach a decision in the matter was grossly insufficient.
I now consider the appeal against the dismissal of plaintiff’s suit by the lower court on 21/5/99. Mr. Ayo Ajayi had asked that this appeal be first decided before a consideration of the appeal on the ruling of 27/11/97. I however see the practical advantage of taking the appeal against the order of 27/11/98 before that of 21/5/98. This is because it is easy to follow and understand the sequence of events on that basis.
Following the orders made by the lower court on 27/11/98, the plaintiff decided to appeal, On 5/1/98, it filed an application for stay of proceedings pending the determination of appeal at the Court of Appeal against the ruling of 27/11/98. Meanwhile, the 1st defendant on 30/4/99 brought an application for the dismissal of plaintiff’s suit for want of diligent prosecution. On 14/5/99 the lower court made a ruling on the application for stay of proceedings. It dismissed it. On the same date it called for arguments on the application to dismiss plaintiff’s suit. 1st defendant’s counsel argued the application to dismiss and the matter was adjourned to 21/5/99 to enable plaintiff’s counsel make his reply. On 21/5/99 plaintiff’s counsel came to court and was recorded as saying:
“We filed an application of Court of appeal seeking for stay of further proceedings. The application as well as other applications has been set down for Monday the 24th of May, 1999. I filed affidavit stating these reasons before my Lord. With the pendency of an application at the Court of Appeal asking for stay of all further proceedings the proper cause is to at least adjourning (sic) the matter on a date after Monday so as not to deprive the Court of Appeal of the opportunity of determining the application before it. See Mohammed v. Olawunmi (1993) 4 NWLR (pt.287) 254; Nigeria Arab Bank Ltd. v. Comex Ltd. Suit No. CA/L/130M/1995 delivered on 3/5/99.
No prejudice would be occasioned on either the defendant or court if this matter is adjourned so as not to foist on the Court of Appeal a situation of helplessness. I urge my Lord to adjourn the matter”.
In spite of what learned counsel said above the lower court insisted he had to make a reply to the arguments of 1st defendant’s counsel on the motion to dismiss. Counsel insisted, he could not go on and the lower court proceeded to dismiss plaintiff’s case. The affidavit which plaintiff’s counsel told the lower court that he had filed was filed on 21/5/99 and paragraphs 4, 5, 6, 7, 8, 9, 10, 11 and 12 thereof read thus:
“4. That this Honourable court delivered a ruling in respect of the above mentioned application on 27th November, 1999, and the plaintiff being dissatisfied with the said ruling appealed to the Court of Appeal.
- That further to paragraph 4 above the plaintiff filed an application to stay further proceedings in this matter pending the determination of the above mentioned appeal.
- That in a ruling delivered on 14th May, 1999, this Honourable court dismissed the plaintiff’s application to stay further proceedings in this matter.
- That further to paragraph 6 above the plaintiff filed an application dated 19th May, 1999, at the Court of Appeal, praying the court for an order staying further proceedings in this matter pending the hearing and determination of our application inter alia for leave to appeal against the above mentioned ruling. Shown to me and marked “Exhibit 001 & 1A” are copies of the said application which has been duly served on the defendants and the filing fee receipt issued by the Court of Appeal.
- That the plaintiff has also filed another application dated 20th May, 1999, at the Court of Appeal, praying the court for an order staying further proceedings in this matter pending the hearing and determination of the substantive appeal. Shown to me and marked “Exhibit 002” is a copy of the said application which has been duly served on the defendants.
- That the hearing of the above mentioned applications is scheduled to come up for hearing at the Court of Appeal, Lagos shown to me and marked “Exhibit 003″ is a copy of the hearing notice issued by the Court of Appeal in respect of the same.
- That William Sackey the litigation clerk working on this matter informs me and I verily believe him; that the above mentioned hearing notice has been served on the defendants.
- That I verily believe that it is expedient in the interest of justice that proceedings in this matter be kept in abeyance pending the determination of the above mentioned applications at the Court of Appeal, otherwise the decision of the Court of Appeal may be prejudiced or rendered nugatory.
- That I verily believe that the defendants will not be prejudiced if the proceedings in this matter is kept in abeyance pending the determination of the above mentioned applications at the Court of Appeal”.
There could be no doubt that the lower court had before it the information that there was at the time the motion to dismiss plaintiff’s suit was being “argued, an application at the Court of Appeal by the plaintiff for a stay of proceedings pending at the Court of Appeal. In that circumstance, the lower court should have adjourned the hearing of the motion to dismiss plaintiff’s suit pending the hearing of the application at the Court of Appeal.
In Mohammed v. Olawunmi (1993) 4 NWLR (Pt. 287) 254 S.C. at 277 – 278 where the Supreme Court per Olatawura JSC said:
“This unfortunate attitude in disregarding the process of the Court of Appeal borders on judicial impertinence. It is an affront to the authority of the Court of Appeal. All the courts established under our Constitution derive their powers and authority from the Constitution. The hierarchy of courts shows the limit and powers of each court. To defy the authority and powers of a higher court appears to me undesirable and distasteful. Even without the ratio of the Vaswani’s case, the best and reasonable course of action was to have adjourned the matter before him pending the determination of the application before the Court of Appeal.”
See also the decision of this court in Nigeria – Arab Bank Limited v. Comex (1999) 6 NWLR (Pt. 608) 648.
The result is that the lower court was wrong to have heard the motion to dismiss on 21/5/99 and to have proceeded to dismiss plaintiff’s suit. The order dismissing plaintiff’s suit is unjustifiable and must be set aside.
In the final conclusion, I make the following orders:
(1) Prayers 4 and 5 on plaintiff’s application filed on 21/10/98 are granted; and
(a) plaintiff is to file and deposit with the Chief Registrar of the-High Court within 30 days of this order a bank guarantee from a first class bank in Nigeria for the sum of Thirty Seven million Naira claimed in the 1st defendant’s counter-claim to abide the eventual determination of the suit.
(b) 1st defendant is to execute, register with the Lands Registry and deliver to the plaintiff a deed releasing and discharging the Deed of Legal Mortgage over the plaintiff’s property situate at No. 24A Campbell Street, Lagos and known as the “Rooftop”; and this shall be done only as at when the plaintiff complies with the order in paragraph 1(a) above.
(2) I affirm the order of the lower court refusing to stay proceedings in the suit pending the hearing of suit No.LD/3298/97.
(3) I set aside the order of the lower court dismissing plaintiff’s suit; and in its place I make an order that the suit be continued by another Judge of the Lagos State High Court, Lagos other than the Judge who made the orders appealed against.
(4) I make no orders as to costs.
Other Citations: (2000)LCN/0812(CA)
