Believers Fisheries Dredging & Anor V. U.T.B. Trustees Limited (2010)
LawGlobal-Hub Lead Judgment Report
BODE RHODES-VIVOUR, J.C.A.
The appellants as plaintiffs sued the respondent as defendant on a Writ of Summons and Statement of Claim for:-
- A Declaration that the loan agreement for N2.5m between the 1st plaintiff and the defendant is null and void, illegal and/or unenforceable in that the defendant is neither a Licensed Bank nor a Licensed Financial Institution and thereby committed criminal offences under the Central Bank of Nigeria Decree and the Banking and other Financial Institutions Decree 1991.
- A Declaration that the aftersaid contract being money lending transaction is null and void, illegal and or unenforceable in that the defendant is not a Licensed money lender and thereby committed criminal offences and cannot take securities for the said loan under the money lenders Laws of Lagos State.
- A Declaration that the Deed of Mortgage dated 20th February, 1997 and registered as No: 81/81/91, 2nd plaintiff as Guarantor in furtherance of the aforesaid illegal agreement is illegal, null and void and or unenforceable.
- An order that the Certificate of Occupancy dated 15th March,1990 and registered as No: 53/53/1990 at Ikeja in the Land Registry, Ikeja the subject matter of the Deed of Mortgage between the parties herein be returned to the plaintiffs by the defendant, formerly U.T.B. Securities Ltd.
- An order of Perpetual Injunction against the defendant, its agents, servants and privies from selling, assigning, alienating or dealing with the property situate at 3/9 Moliki Street, Mushin and covered by Certificate of Occupancy registered as 53/53/1990 in the Lands Registry Ikeja the subject matter of the mortgage between the plaintiffs and the defendant.
- N100,000.00K damages for conversion of the Certificate of Occupancy of the said plaintiff.
These originating processes were served on the defendant. Rather than file a Statement of Defence, the defendant filed a Notice of Preliminary Objection to strike out the suit for want of jurisdiction. The grounds being:-
- By Section 231 (d) of the 1979 Constitution as amended by the Constitution (Enforcement and Modification Decree No 107 of 1993, the subject matter of this action falls out of jurisdiction of this Honourable Court.
- By Section 190(2) (3) of the Constitution supra, the plaintiffs are not the proper parties to bring this action.
- The action is premature and against public policy.
The learned trial Judge, Shitta-Bay J. heard submissions from Mr. O. Okereke, learned counsel for the defendant on the 8th of September, 1998. The plaintiffs were absent and unrepresented. On conclusion of counsel submissions the learned trial Judge delivered a Ruling. I shall reproduce it in full.
“Court: I have examined the preliminary objection herein dated the 15th day of August, 1997. I have also considered carefully the submissions of learned counsel for the defendant/applicant.
In view of the authorities cited by the learned counsel, and the fact that the plaintiff/respondents have not filed any counter-affidavit to the application. I am satisfied that the defendants application has merit. The preliminary objection therefore succeeds, and the plaintiffs claim is hereby dismissed accordingly, as this Honourable Court has no jurisdiction to entertain the plaintiffs suit.”
This appeal is against that Ruling. Briefs were filed and exchanged. The appellants brief was deemed duly filed on the 2nd day of June, 2006. The respondents brief was filed on the 3rd of August, 2006, while the appellants filed a reply brief on the 11th of September, 2006. Learned counsel for the appellant formulated two issues. They read:-
ISSUE 1:
Whether on the face of the Writ of Summons and Statement of Claim filed by the appellants, the High Court lacked jurisdiction to determine the declarations and reliefs claimed.
ISSUE 2:
Whether the High Court was right in Law to dismiss the appellants suit when the prayer contained in the Notice of Preliminary Objection prayed the court to strike out the suit for want of jurisdiction.
Learned counsel for the respondent formulated three issues. They are:-
ISSUE 1:
Whether under Section 230 (d) of the Constitution of the Federal Republic of Nigeria 1979 as amended by the Constitution (Suspension and Modification) Decree No: 107 of 1993 the High Court of Lagos State has jurisdiction to adjudicate on matters relating to Banks and Banking.
ISSUE 2:
Whether the appellants in the circumstances of this case have acquired right of action at the time of instituting the action leading to this appeal and ever since.
ISSUE 3:
Whether the High Court of Lagos State was right in dismissing the appellants claims upon the preliminary objection of the respondents herein.
I have examined the issues formulated by counsel on both sides, and I am not satisfied with the way they are couched. In view of the fact that the ultimate aim of an Appeal Court is to adopt or formulate and consider issues that would determine the real grievance in an appeal I shall now formulate two issues for determination of this appeal.
See Ikegwuoha V Ohawuchi (1996) 3 N.W.R.L. Pt. 435 p. 146. Aduku V Adejoh (1994) 5 N.W.L.R. Pt. 346 p. 582.
ISSUE 1:
Whether the Lagos State High Court has jurisdiction in this case.
ISSUE 2:
What order should be made when a Judge is satisfied that he does not have jurisdiction to hear a case.
THE FACTS
The brief facts of the case are that the 1st appellant applied for and was given a loan of N2.5m by the respondent. As collateral for the loan, the 2nd appellant deposited his Certificate of Occupancy dated 15th March, 1997 and registered as No: 53/53/1990. A deed of mortgage was executed on the property described in the Certificate of Occupancy and known as No. 3/9 Moliki Street, Mushin, Lagos.
By its letters dated 29th April, 1997, 12th May, 1997 and 11th June, 1997 the respondent demanded payment of the sum of N2.5m plus interest at 40% p.a. from the appellants.
Unable to refund the loan plus interest, the respondent threatened to sell the mortgage property and refused to return the appellants Certificate of Occupancy despite repeated demands. Owing to the respondents refusal to return the appellants Certificate of Occupancy, the appellants have come here seeking Declarations, Injunctions, the return of their Certificate of Occupancy and damages for conversion of the said Certificate of Occupancy.
The question of jurisdiction touches on the competence of the court to try a case. It is a threshold matter and so the court must satisfy itself that it has jurisdiction. Consequently an issue of jurisdiction once raised must be disposed of first before considering the merits or demerits of the case.
See Okoya V Santilli (1990) 2 N.W.L.R. Pt. 131 p. 172 S.C. Madukolu V Nkemdilim (1962) 1 A.N.L.R. Pt. 4 p. 587 Osafile V Odi W (1990) 3 N.W.L.R. Pt. 137 p. 130.
Conversely where the court lacks jurisdiction, any proceedings embarked on by the court would amount to an exercise in futility having no binding effect on the parties and clearly a waste of judicial time.
The issue of jurisdiction is so fundamental and so it can be raised at any stage of the proceeding or on appeal and even for the first time in the Supreme Court.
See Usman Dan Fodio University V Kraus Thompson Organisation Ltd. (2001) 15 N.W.L.R. Pt. 736 p. 305.
The learned trial Judge was right to decide the issue of jurisdiction first. Once a Preliminary Objection is filed in court contending that the court has no jurisdiction or competence to hear the action only averments contained in the Statement of Claim are relevant for determination of the issue but where Statement of Claim had not been filed endorsements on the Writ of Summons shall be considered.
An objection on the ground that the court lacks jurisdiction to hear an action can be raised even before pleadings had been order/filed.
See Ege Shipping Trading Ind. V Tigris Inter. Corp. (1999) 14 N.W.L.R. Pt. 637 p. 70.
Kotoye V Saraki (1994) 7 N.W.L.R. Pt. 357 P. 414. Adeyemi V Opeyori (1976) 9-10 S.C. p. 31.
I shall now consider the issues in this appeal.
At the hearing of this appeal on the 20th of October, 2009 learned counsel for the appellants, Mr. C.O. Uba adopted appellants brief and reply brief filed on 8th March, 2000 and 11th October, 2006 respectively. Learned counsel for the respondent Mr. T.K. Olagoke adopted his brief filed on 3rd August, 2006 and urged that the appeal be dismissed.
On issue No.1 learned counsel for the appellants observed that the respondent is neither a Bank or a moneylender contending that the contract of loan does not come within the provisions of the Banking and other Financial Institutions Acts as amended and so is enforceable against the respondent in the Lagos State High Court.
Reference was made to order 14 rule 19 of the High Court of Lagos State Civil Procedure Rules 1994.
State V Ilori and Ors. (1983) N.S.C.C. p. 69. Ojikutu V A.C.B. Ltd. (1968) N.S.C.C. p. 32.
He urged us to order that the suit be tried by another Judge of the Lagos High Court. Replying learned counsel for the respondent observed that the appellants claims falls within the purview of compliance or non compliance with the Banking measures or Banks measures of the Federal Government and in which the said Government should be a necessary party and so the Federal High Court and not the Lagos State High Court has jurisdiction to hear the appellants suit. Reliance was placed on Section 230 (i) (d) of the 1979 Constitution as amended by the Constitution (Suspension and Modification) Decree No: 107 of 1993.
Bronik Motors Ltd. and anor. v. Wema Bank Ltd. (1983) 14 N.S.C.C. p. 226.
Concluding learned counsel submitted that the State High Court has no jurisdiction to inquire into the Bank status of the respondent but the Federal High Court can inquire into money lending transactions as an auxiliary claim, contending that the learned trial Judge was right in declining jurisdiction to entertain the claims of the appellant.
The argument put forward by the respondent at the court below and here is that having admitted the averments in the appellants pleadings the Lagos State High Court lacks jurisdiction to hear and determine the appellant’s claims. The learned trial Judge agreed and dismissed the suit.
Section 230 (d) of the 1979 Constitution as amended by Decree No: 107 of 1993 is in pari materia with Section 251 (i) (d) of the 1999 Constitution. It states that:-
251(i) Notwithstanding anything 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 nothing in the provisions of paragraphs (p) (q) and (r) of this subsection shall prevent a person from seeking redress against the Federal Government or any of its agencies in an action for damages, injunction or specific performance where the action is based on any enactment, Law or equity.
In Jammal Steel Structures ltd. V A.C.B. Ltd. (1973) 11 S.C. p. 77. The Supreme Court explained the above provisions. It was then Section 7 (i) (b) (iii) of the Decree supra. The court interpreted “Banking as meaning “Banking measures” and these Banking measures are in (d) above. The Federal Revenue court, now the Federal High Court has exclusive jurisdiction over such matters. The interpretation excluded Banker and individual customer relationship. Matters and causes that remain under the jurisdiction of the State High Court.
See: – N.D.L.C. V Okem Ent. Ltd. (2004) 4 S.C. Pt. 11 p. 77. The explanation of the provisions of Section 251 (a)-(s) and that includes (d) above is that notwithstanding what any other Section of the Constitution may provide the Federal High Court has exclusive jurisdiction to entertain matters specified in the said Section 251(a)-(s). See: – Ali V C.B.N. (1997) 4 N.W.L.R. Pt. 498 p. 192.
University of Abuja v. Olage (1996) 4 N.W.L.R. Pt. 445 p. 706.
All the appellants’ claims arise from a contract of loan. They are connected with allegations of illegal contract, return of documents, injunction, damages for conversion, criminal allegations. These claims arose from the relationship between the appellant (customer) and his Bank, a relationship that is now alleged to have given rise to an illegal contract.
The State High Court has jurisdiction to entertain claims arising from breach of contract, illegal contracts and all the claims, orders the appellants seek since the said claims were instituted by a customer against his Bank.
See: U.B.A. Plc. V B.T.L Industries ltd. (2006) 19 N.W.L.R. Pt. 1013 .77, N.D.I.C. V F.M.B. Ltd. (1997) 2 N.W.LR. Pt. 490 .735., quo Vadis Hotel V N.M.S. Ltd. (1992) 6 N.W.LR. Pt. 250 p. 653, Oilfield Supply Centre V Johnson (1987) 2 N.W.LR. Pt. 58. 625.
Since the appellants main claim is within the ordinary routine business of Banks (contract of loan between the individual customer and his Bank) the State High Court and not the Federal High Court has jurisdiction to entertain and determine the matter. Order 14 rule 19 of the High Court of Lagos Civil Procedure Rules 2004 is explicit on the point of law that misjoinder of necessary parties would not defeat an action otherwise properly constituted.
See: – Babayeju V Ashamu (1998) 9 N.W.LR. Pt. 567 p. 546, Coker V Adejumo (1968) N.M.LR. p. 323.
The rationale for a person to be a party in an action is that he should be bound by the result of the action. It follows naturally that the question to be settled in the action must be one which cannot be effectually and completely settled unless he is a party, and so the court retains at all times all the necessary powers with respect to granting amendments so that necessary or correct parties are before the court to enable the effectual adjudication to be made on the matter in dispute.
See: – Onayemi V Okumibi and anor (1966) N.M.L.R. p. 50, Ideal Films ltd. V Richards (1927) I.K.B. p. 374, Norbury V Griffiths (1918) 2 K.B. p. 369, A.G. v. Ponty Pridd Waterworks Co. (1908) 1 Ch. p. 388.
Consequently if a court has jurisdiction to hear a case, misjoinder cannot oust that jurisdiction, and so if the learned trial Judge was of the view, as it seems to be, that the respondent was not a proper party, the court should have heard the claim on the merits there being time for amendment if the need arises to reflect the proper party.
See: – Bolingbroker V Townsend 29 I.T. p. 430.
Issues as to whether the respondent is a licensed Bank can only be resolved at trial after pleadings are settled.
I am of the view that the learned trial Judge was wrong to decline jurisdiction to hear the appellants claims. The Lagos State High Court is the proper court to hear and determine the appellants claims.
On Issue No.2 learned counsel for the appellant observed that a court has no jurisdiction to grant an order in excess of the order sought, or grant an order not asked for. Reliance was placed on.
Pavex Inter. Comm. (Nig.) Ltd. V. Int. Bank (2000) 2 S.C. Q.R. p. 224. V. Olurotimi V Mrs. F. M. Ige (1993) 10 S.C.N.J. p. 1.
Contending that the order dismissing the suit ought to be set aside because the learned trial Judge had no jurisdiction to make such an order.
In reply learned counsel for the respondent observed that the learned trial Judge was correct to dismiss the suit because the State High Court lacked jurisdiction to hear the appellants claim contending that the claim was an abuse of process.
The Notice of Preliminary Objection reads:-
“Take Notice that at the hearing of this suit the defendant shall raise preliminary objection and will pray this Honourable Court to:-
Strike out this suit for lack of jurisdiction,
GROUNDS OF OBJECTION
(1) By Section 230 (d) of the Constitution of the Federal Republic of Nigeria 1979 as amended by the Constitution (Suspension and Modification) Decree No: 107 of 1993 the subject matter of this action falls out of the jurisdictional competence of this Honourable Court.
(2) By Section 190 (1) (2) (3) of the Constitution of the Federal Republic of Nigeria 1979 as amended by the Constitution (suspension and Modification) Decree No: 107 of 1993 the plaintiffs are not the proper parties to bring this action.
(3) This action is premature and against public policy in that the requirement of the protection of public interest has not been complied with.”
In the short ruling delivered on the 8th of September 1998 the learned trial Judge said inter – alia:-
“The preliminary objection succeeds and the plaintiffs claim is hereby dismissed accordingly, as this Honourable Court has no jurisdiction to entertain the plaintiffs suit.”
When a Judge of the Federal High Court finds out that he has no jurisdiction to entertain a suit the correct order to make is to transfer it to the court with jurisdiction to try the case. A Judge of the Federal High Court derives this power from Section 22 (2) of the Federal High Court Act, Cap. 134 which reads as follows:-
(2) No cause or matter shall be struck out by the court merely on the ground that such cause or matter was taken on the court instead of the High Court of a state or of the Federal Capital Territory, Abuja in which it ought to have been brought, and the Judge of the court before whom such cause or matter is brought may cause such cause or matter to be transferred to the appropriate High Court of a State or of the Federal Capital Territory, Abuja.”
There is no such provision in the High Court of Lagos State (Civil Procedure) Rules 1994 and so a Judge of the State High Court in a situation where he has no jurisdiction to try a case ought to strike out the suit so as to afford the plaintiff another opportunity of coming again before the court with the jurisdiction to try his case.
See Sadiku v. A.G. Lagos State 19947 N.W.L.R. Pt. 355 p. 235, Ibeanu v. Ogbeide (1994) 7 N.W.L.R. Pt. 359 p. 697.,
Gombe v. P.W. (Nig) Ltd. (1995) 6 N.W.L.R. Pt. 402 p. 402, Okoye v. NCFCO (1991) 6 N.W.L.R. Pt. 199 p. 501
When a trial Judge dismisses the plaintiffs claim it means that the trial court heard the matter on the merits. There can be no hearing of the matter on the merit when the trial Judge ruled that there was no jurisdiction to adjudicate. The learned trial Judge was wrong to dismiss the claim. The order of dismissal was wrong. An order striking out the suit should have been made since the suit was before the State High Court or an order transferring the suit to the appropriate High Court if the suit was before the Federal High Court.
In the final analysis the appeal succeeds. The Lagos High Court has jurisdiction to hear the appellants claims. Accordingly the Chief Judge of the Lagos State High Court shall assign the appellants case for hearing before another Judge of the Lagos State High Court.
There shall be no order on costs.
Other Citations: (2010)LCN/3529(CA)
