Bureau of Public Enterprises V. Reinsurance Acquisition Group Ltd & Ors. (2008)
LawGlobal-Hub Lead Judgment Report
MARY U. PETER-ODILI, J.C.A.
This is an appeal against the Ruling of the Honourable Justice Adah of the Federal High Court, Abuja delivered on the 30th day of June 2005.
By an Originating Summons dated the 6th day of May, 2004 the Defendants/Respondents sought the following reliefs:-
(a) A declaration that as between the 1st Plaintiff and the 1st Defendant, there is a binding and subsisting agreement dated 11th January, 2003 vesting and transferring 1,297,100 ordinary shares of N200 each in the capital of the 2nd Plaintiff to the 1st Plaintiff.
(b) A declaration that by virtue of the said agreement dated 11th January, 2003, particularly paragraph 2.3 thereof all rights of legal cession to all insurable business in Nigeria hitherto enjoyed by the 2nd plaintiff have been vested in the 1st Plaintiff.
(e) A declaration that the rights vested in the 1st Plaintiff and accruing to its benefit under the said agreement cannot be acquired, tampered with, subsumed or taken away by any of the defendants through the promulgation of the Insurance Act 2003.
(d) A declaration that section 99 of the Insurance Act 2003 which purports to repeal Section 7 of the Nigeria Reinsurance Corporation Act 1977 is preposterous, absurd, mala fide, incongruous, unconstitutional, null and void and of no effect whatsoever.
(e) A declaration that even if Section 99 of the Insurance Act 2003 is valid it cannot retroactively operate to abrogate or take away the 1st Plaintiff’s accrued rights in the 1st Plaintiff under and by virtue of paragraph 2.3 of the agreement dated 11th January 2003 read together with section 7 of the Nigeria Reinsurance Corporation Act; 1977.
(f) An Order of perpetual injunction restraining the defendants either by themselves, agents, privies, servants, staff, proxies or through any person or persons however from preventing or disturbing the 1st Plaintiff from enjoying or repealing the benefit or dividends vested in and accruing to it under and by virtue of the share sale/purchase agreement between it and the 1st defendant dated 11th January, 2003.
(g) An Order directing the 1st Defendant to specifically perform its own part of the said agreement dated 11th January 2003 in favour of the 1st Plaintiff.
(h) Alternatively, an order directing the 1st and/or Defendant (5) to pay to the 1st Plaintiff in full the purchase price together with accrued interests of the 1,297,100 ordinary shares of N200 each acquired in the capital of the 2nd plaintiff forthwith.
By a Notice of Preliminary Objection dated 21st July 2004, the Appellant challenged the action instituted at the trial court on the grounds that no pre-action Notice was served on the Appellant, that the action is statute – barred, that the suit was improperly commenced by Originating Summons; that the 2nd Plaintiff/Respondent lacked the locus standi to institute the action, and that the trial court lacked jurisdiction to entertain the suit.
In the Ruling, Adah J. dismissed the Preliminary Objection.
Dissatisfied with the Ruling the Appellant by the leave of Court filed a Notice of Appeal on March 31, 2006 against the Ruling.
The Appellant filed an Appellant’s Brief on 18/7/06 and a Reply Brief on 30/4/07. The Appellant posed five questions for determination viz:-
- Whether a claim to enforce or invalidate a contract for the sale of shares falls within the jurisdiction of the Federal High Court.
- Whether the court was right when it ruled that proceedings could be commenced by way of Originating Summons.
- Whether the 2nd Plaintiff/Respondent has the locus standi to institute the action.
- Whether by virtue of Section 23 (3) of the Private Enterprises (Privatization and Commercialization) Act 1999, the requirement of pre-action notice extends to the Appellant as a juristic person.
- Whether Section (2) (a) of the Private Enterprises Privatization and Commercialization) Act 1999 in relation to time – bar extends to suits instituted against the Appellant.
The 1st and 2nd Respondents Brief was filed on 22/1/07 and deemed on 24/4/07 and formulated four issues which are as follows:-
- Whether by virtue of Section 251(1) (e) of the Constitution and section 567(1) of the Companies and Allied Matters Act 1990, the Federal High Court has exclusive jurisdiction to hear and determine Suit NO: FHC/ABJ/CS/234/2004 which seeks the interpretation of the terms of a contract relating to the sale and purchase or acquisition of shares in a company.
- Whether the questions for determination and/or the reliefs sought in Suit NO: FHC/ABJ/CS/234/2004 are such that may be properly brought by way of Originating Summons.
- Whether the 2nd Respondent has the locus standi to institute the action.
- Whether Suit NO:FHC/ABJ/CS/234/2004 is caught by the provisions of section 23 of the Public Enterprises (Privatisation and Commercialisation) Act of 1999 on Service of the Pre-action Notice on the Appellant and Statute of Limitation of the action.
The 3rd Respondent filed no brief. I shall for a fuller understanding state a summary of the facts that led to the suit.
FACTS:-
By an agreement dated 11th January, 2003 between the 1st Respondent and the Appellant, the Appellant sold to the 1st Respondent one million, two hundred and ninety seven thousand, one hundred ordinary shares at two hundred naira (N200) each in the capital of the 2nd Respondent. The agreement between the 1st Respondent and the Appellant conferred on the 1st Respondent certain rights, privileges, benefits and dividends including the right of legal cession on all insurance business in Nigeria hitherto enjoyed by the 2nd Respondent.
After the Agreement was executed and payment in respect of the acquired shares were made to the Appellant by the 1st Respondent, the Insurance Act (NO 1) 2003 was promulgated which repealed Section 7 of the Nigeria Reinsurance Corporation Act 1977 and thereby terminated the 1st Respondent’s right to legal cession on all reinsurance business in Nigeria granted under the Agreement between the Appellant and the 1st Respondent.
There seemed to be a difference in the nature and the value of the shares which were contracted between the parties from that which were delivered to the purchaser without legal cession. Upon a series of correspondences between the Appellant and the 1st and 2nd Respondents and the failure of the issue to be redressed, the 1st and 2nd Respondents as plaintiffs brought the suit before the Federal High Court.
For ease of reference I shall use the issues as framed by the Appellant.
ISSUE ONE
WHETHER A CLAIM TO ENFORCE OR INVALIDATE A CONTRACT FOR THE SALE OF SHARES FALLS WITHIN THE JURISDICTION OF THE FEDERAL HIGH COURT.
Learned counsel for the Appellant stated that the law in this regard is clear and that the jurisdiction of the Federal High Court under Section 251(1) of the Constitution of the Federal Republic of Nigeria 1999 does not extend to contract claims. He cited Onuorah v. Kaduna Refinery and Petrochemical Co. Ltd (2005) 6 NWLR (pt. 921) 393. That that situation is so notwithstanding that the contract in question is for the sale of shares of an incorporated company. He cited Farinre v. Coker (2003) 7 WRN 23.
Learned counsel for the Appellant further stated that the present proceedings arose out of the alleged failure of the Appellants to fulfill their contractual obligations under the Agreement and so the trial court was in error when it held that Section 251 of the 1999 Constitution conferred jurisdiction on the court in this matter that is purely contractual. That it is the State High Court under Section 272 of the 1999 Constitution that have such powers.
That the contract in issue is for the sale of shares does not derogate from it being a simple contract. That the principles guiding contracts for sale of shares are the same as those applicable to other contracts. He cited Gadzama v. Rims Merchant Bank Ltd (1997) 4 NWLR (pt. 498) 234. He said there is nothing in the plaintiff’s originating summons that touches on the operation or interpretation of the Companies and Allied Matters Act 1990 and so there was no need for the Lower Court to interpret the provisions of CAMA 1990 to arrive at a decision as to whether or not the contract between the 1st Respondent and the Appellant had been breached.
Learned counsel for the 1st and 2nd Respondents stated that the matter relating to the sale, purchase, transfer acquisition, allotment etc of shares in a company fall under Part VI of the Companies and Allied Matters Act 1990 (CAMA) and cannot be classified under the term ‘simple contract’ and as such, all claims pertaining to such matters come within the purview of civil causes and matters arising from the operation of CAMA which are within the exclusion jurisdiction of the Federal High Court by virtue of Section 251(1) (e) of the 1999 Constitution. That any contract relating to the nature/value of shares and shareholding are not ordinary items or merchandise, rather they are contracts that touch and concern the running, management and control of companies which are regulated by CAMA and as such under the jurisdiction of the Federal High Court. He referred to Tanarewa (Nig.) Ltd V. Plastifann Ltd (2003) 2 NWLR (pt. 840) 355 at 360.
That where a claim can be decided without reference to the company or its operations, it is just another suit for breach of contract and the State High Court would have jurisdiction. He said assuming without conceding that the instant suit falls within the inherent jurisdiction of the State High Court that having filed in the Federal High Court the proper order for this court to make is an order transferring the suit to the State High Court and not an order striking out the suit as sought by the Appellant. He cited Section 22 (2) of the Federal High Court Act 1990.
The 3rd Respondent in their Brief of Argument which adopted the Issues of the Appellant and their brief was filed on 22/11/06 and deemed on 22/11/06.
Learned counsel for the 3rd Respondent stated that the jurisdiction of the Federal High Court under Section 251(1) of the Constitution of the Federal Republic of Nigeria 1999 and does not extended to contract claims and this notwithstanding that the contract in question is for sale of shares of an incorporated company.
He cited Onuorah v. Kaduna Refinery & Petrochemical Co. Ltd (2005) 6 NWLR (pt. 921) 393; Farinre v. Coker (2003) 7 WLR 23.
That the lower Court would not need to interpret the provisions of CAMA 1990 to arrive at a decision as to whether or not the contract between 1st Respondent and the Appellant have been breached.
That is a summary of the divergent views of counsel and I must state right away that by virtue of Section 251(1) (e) of the 1999 Constitution, notwithstanding anything to the contrary contained in the 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 arising from the operation of the Companies and Allied Matters Act. See Tanarewa (Nig.) Ltd v. Plastifarm Ltd (2003) 14 NWLR (pt. 840) 355.
Where the dispute does not involve the control or administration of company and deals with ordinary routine business of a company, a State High Court, and not the Federal High Court, has jurisdiction to entertain and determine the matter that can be decided without recourse to either the Companies and Allied Matters Act or any enactment regulating operation of companies under the said Act belongs to a State High Court. Tanarewa (Nig.) Ltd v. Plastifarm Ltd (2003) 14 NWLR (pt. 840) 355 at 375 – 376; NIDB v. Fembo (Nig.) Ltd (1997) 2 NWLR (pt. 489) 543 Bi- Zee Bee Hotels Ltd v. Allied Bank of Nigeria Ltd (1996) 8 NWLR (pt. 465) 176.
The simple fact that a company or a body is registered under the companies and Allied Matters Act does not qualify every action brought by or against it as a matter arising from the operations of Companies and Allied Matters Act as contemplated by the provisions of Section 251(1) (e) of the 1999 Constitution. Neither is it the law that a consideration of the parties is required before vesting the Federal High Court with jurisdiction. See Tanarewa (Nig.) Ltd. V. Plastifarm Ltd (2003) 14 NWLR(pt. 840) 355 at 374; Skenconsult v. Ukey (1981) 1 SC 6; Akinbobola &. Sons v. Plisson Fisko (Nig.) Ltd (1986) 4 NWLR(pt. 37) 621.
Section 251(1) (e) of the 1999 Constitution is a re-enactment of Section 7(1) (c) (i) of the Federal High Court Act, 1990 and both legislations are in pari material.
In determining the jurisdiction of the Federal High Court under Section 251(1) (e) of the 1999 Constitution, what the court should consider is the reliefs claimed rather than the status of a party. This is because Section 251(1) (e) does not vest jurisdiction over person and does not provide for the manner or class of persons subject to the jurisdiction of the court. What the court should concern itself with mainly is whether the cause of action is triable or not. See Tanarewa (Nig.) Ltd v. Plastifarm Ltd (2003) 14 NWLR (pt. 840) 355 at 373.
The Ruling of the learned trial Judge of the Federal High Court subject matter of this appeal was delivered on 27/9/05 and for the purpose of this Issue I shall restate the necessary portion which is:-
“The claim here no doubt is contractual Ordinarily, this Court has no jurisdiction over cases of contract. This was the decision of the Supreme Court in Onuorah v. KRPC Ltd (2005) 6 NWLR(pt. 921) 393. This decision makes it abundantly clear that this court (Federal High Court) has no jurisdiction over disputes founded on simple contracts. The contract in the instant case has to do with purchase of shares under Companies and Allied Matters Act LFN 1990. Under Section 251(1) (e) of the 1999 Constitution this Court has jurisdiction exclusively over causes and matters.
”Arising from the operation of the Companies and Allied Matters Act LFN or any other enactment replacing that Act or regulating the operation of companies incorporated under the Companies and Allied Matters Act”. The learned trial Judge continued.
“Since the contract in the instant case has to do with matters of shares of a company registered under the CAMA, this therefore is not a matter of simple contract for which this court’s jurisdiction has been excluded. On the basis of that I hold that this matters squarely within the jurisdiction of this court”.
Having considered the conclusion and decision of the learned trial Judge on the issue of jurisdiction and having regard to the relevant laws it is not difficult to flow along with his reasoning. This is so as it would be near impossible to consider the matter of the sale of the shares without recourse to the Companies and Allied Matters Act. Differently put what the Appellant is asking the Court to do in determining the matter of the sale of the shares is to utilise a microscope in order to properly dissect and remove from the general body the restricted sale without having to touch any part of the company that would in any way relate to CAMA. That in my humble view would be a task that was never intended either by the lawmakers nor can it be in the interest of Society to dissipate such energy and time in such an exploratory venture and all to what purpose.
It is clear to me therefore that the learned trial Judge was right as that the matter is not simply that of a mere contract as to get to the justice of the matter a wholistic approach was necessary and so CAMA cannot be wished away and the only available solution can only be found within the scope of the Federal High Court as the trial Judge found. I refer to Tanarewa (Nig.) Ltd v. Plastifarm Ltd (2003) 14 NWLR (pt. 840) 355; NIDB v. Fembo (Nig) Ltd (1997) 2 NWLR (pt. 489) 543; Akinbobola &. Sons v. Plisson Fisk. (Nig) Ltd (1986) 4 NWLR (pt. 37) 621.
It is in the light of the foregoing that I resolve this issue in favour of the 1st and 2nd Respondents and positively that the matter in issue is within the exclusive jurisdiction of the Federal High Court.
ISSUE TWO
WHETHER THE COURT WAS RIGHT WHEN IT RULED THAT THE PROCEEDINGS COULD BE COMMENCED BY WAY OF ORIGINATING SUMMONS?
Learned counsel submitted that the trial Judge was in error when he held that there was no dispute of fact apparent on the face of the processes filed that will make this matter not to be heard on originating process. He referred to relevant paragraphs in the counter affidavit of the 1st Defendant/Appellant. That Originating Summons procedure is not applicable where there is a dispute on questions of fact or the likelihood of such dispute. He cited Doherty v. Doherty (1968) 1 NMLR 241; Alegbe v. Oloyo (1983) NSCC 315; National Bank of Nigeria v. Alakija (19780 All NLR 231.
Mr. Onuobia of counsel for the Appellant said that where there are disputed facts in a suit commenced by way of Originating Summons the proper Order to make is an order striking out the suit. He cited Ajagungbade III v. Adeyelu II (2001) 16 NWLR (pt. 738) 126 at 198.
That this suit being one consisting of facts that are mainly disputed by the parties ought to have been commenced by Writ Summons.
Learned counsel for the 1st and 2nd Respondents stated that the purported “disputes” lightly cited by the Appellant on page 3 of its Brief of Argument are merely semantic and not substantial enough to be termed “dispute of facts” and could not by any stretch of advocacy affect the determination of the questions raised on the Originating Summons. He referred to order 2 rule 2(b) of the Federal High Court (Civil Procedure) Rules 2000; Jimoh v. Olawoye (2003) 10 NWLR (pt. 828) 307 at 320; Habib (Nig.) Bank Ltd v. Ochate (2001) 8 NWLR (pt. 699) 114 at 117.
Learned counsel for the Respondents 1st and 2nd said that the questions for determination and the reliefs sought at the Lower Court are such that may be properly determined under the Originating Summons. That the question relate to the construction of the agreement of 11th January 2003 entered into between the 1st Respondent and the Appellant, interpretation of subsequent laws which affect the said agreement while the reliefs sought seek to declare the rights of the parties under the agreement. That the interpretation of the Insurance Act 2003 and the Nigeria Reinsurance Corporation Act 1977 came into question and these questions are properly to be answered under the Originating Summons in line with Order 2 Rule 2(a) of the Federal High Court (Civil Procedure) Rules 2000. He cited F.G.N. v. Zebra Energy Ltd (2002) 3 NWLR (pt.754) 471 at 477.
The learned counsel for the 3rd Respondent argued along the same lines as the 1st and 2nd Respondents counsel.
That is a summary of the arguments for the consideration of this Issue 2 on the process of commencement of the suit.
Originating Summons could only be applicable in such circumstances as where there is no dispute on questions of fact or the likelihood of such dispute. Where there are obvious questions or disputes which could be raised then pleadings should be ordered.
See National Bank of Nigeria v. Alakija (1978) All NLR 231.
The Appellant’s case on disputed facts upon which they contend this matter should not have been initiated by Originating Summons are found in Appellant’s counter -affidavit in the court below dated 21st July 2004 and are as follows:-
“1. Plaintiff/Respondent was not “Convinced” to enter into the aforementioned contract on the strength of any term in the contract as stated in the Plaintiff/Respondent’s affidavit in support of the originating summons.
- (By “Legal Cession” is meant the statutory guarantee of at least 20% of all reinsurance business in Nigeria that the 2nd plaintiff had Section 7 Nigerians Reinsurance Corporation Act 1977. It was repealed by Section 99 of the Insurance Act 2003) Legal Cession rights do not constitute 40% of the revenue of the 2nd Plaintiff/Respondents as contended by the 1st Plaintiff/Respondent.
- Contrary to the 1st Plaintiff/Respondents contention, it had always been a way that the right to Legal Cession would be extinguished. The Information Memorandum Circulated to the 1st Respondent prior to the signing of the Agreement contained clauses stating the possibility of the abolition of the legal cession.
- It had at all material times prior to the execution of the contract in issue been of the view that the existence or otherwise of the right of legal cession has hardly any significance to it in business terms.
- The loss of legal cession rights has not affected the performance of the company”.
Where the initiating process of a suit is procedurally irregular and the defendant has not or will not suffer any detriment as a result of the defect or irregularity, the irregularity or defect could be cured by necessary amendments. Anatogu v. Anatogu 1997) 9m NWLR (pt. 519) 49; Labaran v. Okoye (1995) 4 NWLR (pt.389) 303; Maiwa v. Abdu (1986) 1 NWLR (pt. 17) 437; Surakatu v. Nigerian Housing Development Society (1981) 4 SC 26; Vulcan Gases Ltd v. Okunlola (1993) 2 NWLR (pt. 274) 139.
Rules of court are made to help the courts achieve their primary objective of doing justice with dispatch as justice delayed is justice denied. They are made for the convenience and orderly hearing of causes in court. They are made to help the cause of justice and not to defeat justice. The rules are therefore aids to the court and not masters of the court. Therefore, for courts to read rules in the absolute without recourse to the justice of the cause, will be making the courts slavish to the rules. This certainly is not the raison d’etre of rules of court. See Anatogu v. Anatogu (1997) 9 NWLR(pt. 519) 49 at 67 – 68 per Ubaezonu JCA; U.T.C. (Nig) Ltd v. Pamotei (1989) 2 NWLR (pt. 103) 244; Nishizawa v. Jethwani (1984) 12 SC 234.
I would like to refer to Order 2 rule 2(b) of the Federal High Court (Civil procedure) Rules 2000 which provides that a Plaintiff may Commence an action by Originating Summons where there is unlikely to be any substantial (unlining mine dispute of fact.
The learned trial Judge had held:-
“There is no dispute of fact apparent on the face of the processes filed that will make this matter not to be heard on Originating Process”.
I have gone through the affidavit supporting the Originating Summons and the counter-affidavit part of which I quoted above and I am inclined to the views of the learned trial Judge that nothing has made it mandatory that the process should have been other than Originating.
Stated differently I would say there has been no substantial areas of dispute for which pleadings under a writ of summons procedure should have been the only way. I would like to refer to the Supreme Court case of Mobil Producing Unlimited v. LASEPA (2002) 18 NWLR (pt. 798) 1 where Ayoola JSC stated:-
“An irregularity in the exercise of jurisdiction should not be confused with a total lack of jurisdiction. The procedure for invoking the jurisdiction of the court should not be confused with the authority of the court to decide matters which on the face of the proceedings have been properly presented in the formal way for its decision and which are within its jurisdiction”.
This Issue 2, I resolve with a capital Yes and in favour of the Respondents.
ISSUE THREE
WHETHER THE 2ND PLAINTIFF/RESPONDENT HAS THE LOCUSSTANDI TO INSIIIUTE THE ACTION?
Learned counsel for the Appellant stated that a person who is not a party to a contract cannot sue or be sued under the contract.
He cited J.E. Oshevire Ltd v. Tripoli Motors (1995) 5 NWLR (pt. 503) 1. That this is even so when the third party suing or sought to be sued had derived benefits or assumed liabilities under the contract. He referred to UBA Plc v. BTL Industries Ltd (2004) 18 NWLR (pt. 904) 180.
Mr. Onuobia of counsel said the 2nd Plaintiff has no interest in the proceedings that can constitute it into a plaintiff in this matter as it is not a party to the contract in issue and claims no rights or relief under it in respect of it. That no cause of action exists in this case.
He said a plaintiff must raise questions as to its civil rights and obligations in its pleading and where such is not shown the originating process must be struck out and the suit dismissed. He cited Ogbuehi v. Governor Imo State (1995) 9 NWLR (pt.417) 53; UBA Plc v. BTL Industries Ltd.
Learned counsel for the Appellant stated that the 2nd Plaintiff has no interest or rights which were being violated under the plaintiff’s claim nor can it be said that the subject matter of the proceedings cannot effectively be dealt with or without them. He cited Green v. Green (1987) 3 NWLR 480.
That the 2nd plaintiff having not shown any interest in the suit or cause of action against the Appellants, the 2nd Plaintiff ought to be struck out from the suit.
Learned counsel for the 1st and 2nd Respondents stated that to determine this issue, regard must be had to the Originating Summons filed by the 1st and 2nd Respondents at the Court below, the affidavit in support thereof and the exhibits attached. That the subject of dispute between the parties are the shares of the 2nd Respondent and so the 2nd Respondent had locus standi having sufficient interest in the matter as the entirety of the agreement between the 1st Respondent and the Appellant revolves around the acquisition of the shares of the 2nd Respondent. He cited Lawal v. Salami (2002) 2 NWLR (pt. 752) 687 at 356.
Learned counsel for the 3rd Respondent said a person who is not a party to a contract can sue or be sued under the contract, He cited J.E. Oshevire Ltd v. Tripoli Motors (1995) 5 NWLR (pt.503)1.
That the 2nd Plaintiff having not shown any interest in the suit or cause of action against the appellants, the 2nd Plaintiff ought to be struck out from the suit.
The question raised in this issue is a curious one since the shares subject matter of the dispute is that the same 2nd Plaintiff/2nd Respondent I would like to explore some judicial authority and principles before arriving at a decision.
The principle of estoppel by conduct is that where one party has, by his words or conduct made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted upon accordingly, then, once the other party had taken him at his word and acted on it, then the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance had been made by him. He must accept their legal relations as modified by himself even though it is not supported in point of law by any consideration but only by his word or conduct. See Ude v. Osuji (1998) 13 NWLR (pt.580) 1 at 8 per Ogwuegbu JSC.
The only qualification to the principle of estoppel by words or conduct is that it can only be invoked by a defendant and cannot stand alone as giving a cause of action or action in itself. It cannot therefore do away with the necessity of consideration when that is an essential part of a plaintiff’s cause of action. See Ude v. Osuji (1998) 13 NWLR (pt. 580) 1 at 8; Tika Tore Press Ltd v. Abina (1973) All NLR887.
It is better to allow a party to go to court and to be heard than to refuse him access to the court. This is so because Nigerian courts have inherent powers to deal with vexatious litigations or frivolous claims. Justice should not be rationed. Ogbuehi v. Governor of Imo State (1995) 9 NWLR (pt. 417) 53; Adesanya v. President of the Federal Republic of Nigeria (1981) 2 NCLR 358.
Having considered the arguments and the principles enunciated by even the Supreme Court I am satisfied that the locus standi of the 2nd Respondent being questioned is an act in futility as it has the right to be part of the process in other that whatever the outcome he would have had its input before to satisfy itself that its rights or obligations were not compromised or put in jeopardy. 2nd Respondent is certainly from the facts available an interested party and it was necessary for the effectual determination of the dispute that he be a party.
The question raised in this Issue 3 is in favour of the 1st and 2nd Respondent and answered positively.
ISSUE FOUR
WHETHER BY VIRTUE OF SECTION 23(3) OF THE PRIVATE ENTERPRISES (PRIVATISATION AND REQUIREMENT OF PREACTION NOTICE EXTENDS TO THE APPELLANT AS A JURISTIC PERSON?
Learned counsel for the Appellant said where a statute provides that pre-action notices must be given, failure to do so will render an action incompetent. He cited Mobil v. LASEPA (2002) 18 NWLR (pt.798) 1. That Section 23(3) of the Public Enterprises (Privatisation and Commercialisation) Act of 1999 expressly provides that pre-action must be given to the Bureau of Public Enterprises before an action is instituted against it. That if Section 23 of the Statute is read as a whole, it is clear that the Section is arrived at protecting the Appellant from undue litigation. That subsection 1 to 3 specifically mention the Director-General of the Bureau acting on behalf of the Bureau. He stated that the contract which is the subject-matter of the Respondents’ suit before the lower court was entered into by the Director-General on behalf of the Appellants. He stated on that based on various judicial interpretation of the Public Officers (Protection) Act 19 (POPA), it cannot be the intention of the law to protect the Director-General where he acts in his personal capacity rather it is to protect him in carrying out his duties on behalf of the Appellant as has occurred in this case.
Learned counsel for the Appellant said no pre-action notice was given by the Respondents to the Appellant and that being a condition precedent which non-compliance had ousted the jurisdiction of the lower court to adjudicate in the Respondents’ claims and the lower court ought to have struck out the action.
Mr. Onuobia of counsel further stated that the marginal notes to Section 23 of the Privatisation Act is captioned “Limitation of Suits against the Bureau, etc”. That though marginal notes do not generally afford legitimate aid to the construction of a statute, they are permissible to consider the general purpose of a Section and the mischief at which it is aimed with the marginal notes in mind. He cited Alegbe v. Oloyo (supra) at 327 – 328; Yabugbe v. CUP (1992) 4 NWLR (pt. 234) 152 at 171. He said the side notes to Section 23 of the Privatisation Act clearly intends the Section to extend to the Appellant notwithstanding that it is a corporate entity.
In response, learned counsel for 1st and 2nd Respondents said that this suit was instituted on 17th May 2004, a date when Section 23(3) of the Public Enterprises (Privatisation and Commercialisation) Act 1999 which provides for the requirement of pre-action Notice had been deleted/abrogated. That it is trite that the relevant law which governs as action is that which is in existence when the action is instituted and in this instance, the Public Enterprises (Privatisation and Commercialisation) Act 2004. That Appellant’s objection on issue of non service of pre-action Notice is based on a dead law and must be condemned. That assuming without conceding that the Public Enterprises (Privatisation and Commercialisation) Act 1999 was still in existence at the time the action was instituted and so the requirement of service of pre-action Notice under Section 23(3) of that Act will still not avail the Appellant because of Section 23(3).
That Act affords protection to an officer or employee of the Appellant and not the Appellant itself.
That Section 12 of the Public Enterprises Act 1999 establishes the Appellant as a body corporate, capable of suing and being sued.
That inspite of the marginal note to section 23(3) of the Act of 1999 which mentions Bureau, the law is that the marginal note to a Section cannot control the language used in the Section. He cited Attorney-General Federation v. ANPP (2003) 15 NWLR (pt. 844) 600 at 614; Onu v. Atanda (2000) 5 NWLR (pt. 656) 244 at 259.
Learned counsel for the Respondents 1st and 2nd further contended that service of the Pre-action Notice does not apply to cases of breach of contract, recovery of land or claims for work or labour. He cited FGN v. Zebra Energy Ltd (2002) 18 NWLR (pt. 798) 162 at 175. That the issue of time issue or time limit relates only to any member of council, the Director- General or any other officer or employee of the Bureau and not the Bureau ie Appellant itself which is body corporate, capable of suing and being sued. That there is no provision in the said Act limiting action against the Appellant as a body but against the staff of the Act intends to protect the staff against tortuous liability only, especially negligence. He referred to Section 23(1) of the Act 1999. That the protection afforded by the Public Enterprises (Privatisation and Commercialisation) Act 1999, like the Public Officer Protection Act, is limited to tortuous liability and does not extend to actions for recovery of debt, breach of contract, claims for work and labour done. He cited NPA v. Construzioni Generali Parsure Congefarspa &. anor (1994) 12 SC 81; Okeke v. Baba (2000) 3 NWLR (pt. 650) 644.
Learned counsel for the 3rd Respondent submitted that no pre-action was given by the 1st and 2nd Respondents herein to the Appellant. That a condition precedent to the competency of the suit has not been satisfied and so the jurisdiction of the lower court was ousted to adjudicate the Respondents’ claims.
In reply on points of law, the learned counsel for the Appellant stated that Pre-action notices like the one stipulated in Section 23(3) of the Act, 1999 have been severally held by the Supreme Court to be constitutional and valid. He cited Amadi v. NNPC (2000) 10 NWLR (pt. 674) 76; Eze v. Okechukwu (2002) 18 NWLR (pt.799) 348. That the making of the order by the President repealing sub-Section 3 of Section 23 of the Act of 1999 is unconstitutional.
That the court should strike down the purported repeal by the President of Section 23(3) of the Act 1999 purportedly made pursuant to the Public Enterprises (Privatisation and Commercialisation) Order 2001 on the ground of unconstitutionality and a wrong exercise of the power granted under Section 315 (2) of the 1999 Constitution. That the failure to serve the Appellant with the pre-action notice rendered the suit incompetent. He cited Nnonye v. Anyichie (2005) 2 NWLR (pt. 910) 623.
In determining the question raised in this issue I would refer to the case of:-
Nnonye v. Anyichie (2005) 2 NWLR (pt. 910) 623 per Akintan JSC “Non-compliance with the requirement of a pre-action notice does not abrogate the right of a plaintiff to approach the court or defeat his cause of action. If the subject matter is within the jurisdiction of the court, failure on the part of a plaintiff to serve a pre-action notice on the defendant gives the defendant a private right to insist on such notice before the plaintiff may approach the court. In effect non-service of a pre-action notice merely puts the jurisdiction of a court on hold pending compliance with the pre-condition”.
Barclays Bank Ltd v. CBN (1976) 6 SC 175; Okane-Eboh v. Okotie-Eboh (1986) 1 NWLR (pt.16) 264; Ijebu-Ode Local Government v. Adedeji Balogun & Co Ltd (1991) 1 NWLR (pt. 166) 136; Eze v. Ikechukwu (2002) 18 NWLR (pt. 799) 348.
The effect of non-service of a pre-action notice, where it is required by statute, is only an irregularity which renders an action incompetent. It follows therefore that the irregularity can be waived by a defendant who fails to raise it either by motion or plead it in the statement of defence. However, if a defendant refuses to waive it and he raises it, then the issue becomes a condition precedent which must be met before the court could exercise its jurisdiction. Katsina Local Authority v. Makudawa (1971) 1 NMLR 100; Madukolu v. Nkemdilim (1962) 2 SCNLR 341.
Once a defence of non-service of a pre-action notice is raised and it is shown that there has been non-service of a pre-action notice, the court is bound to hold that the plaintiff has not fulfilled a pre-condition for instituting his action and that the action is incompetent. Nnonye v. Anyichie (2005) 2 NWLR (pt. 910) 623 at 649 per Kalgo JSC; Madukolu v. Nkemdilim (1962) 2 SCNLR 341; Provisional Council, Ogun State University v. Makinde (1991) 2 NWLR (pt. 175) 613; Ademola II v. Thomas (1946) 12 WACA 31; Katsina Local Authority v. Madukawa (1971) 1 NMLR 100; Eze v. Ikechukwu (2002) 18 NWLR(pt. 799) 348.
Where pleadings are filed and it is intended to rely on a condition precedent then that condition precedent must be pleaded. For, if such condition precedent is not pleaded, the defendant would by the simple rules of pleading be taken to have waived whatever rights he possesses in the subject-matter. In other words a party who challenges the competence of a court on the basis of certain facts but fails to put in issue those facts stands the risk of being precluded at a later stage when the proceedings have been brought to a final conclusion from re- opening that issue of fact. Mobil Producing (Nig.) Unlimited Y. LASEPA (2002) 18 NWLR (pt.798) 1.
Service of a pre-action notice on the party intended to be sued pursuant to a statute is, at best, a procedural requirement and not an issue of substantive law on which the rights of the plaintiff depend.
It is not an integral part of the process of initiating proceedings. A party who has served a pre-action notice is not obligated to commence proceedings at all or, barring any limitation period, to commence one within any time after the time prescribed for pre-action notices. Mobil Producing (Nig.) Unlimited v. LASEPA (2002) 18 NWLR (pt. 798) 1 at 33.
A suit commenced in default of service of a pre-action notice is incompetent as against the party who ought to have been served with the pre-action notice, provided such party challenges the competence of the suit. Gambari Y. Emir of Ilorin, Alhaji Sulu Gambari (1990) 5 NWLR (pt.152) 572; Fumudoh v. Aboro (1991) 9 NWLR (pt. 214) 210; Umukoro v. NPA (1997) 4 NWLR (pt. 502) 656; NAA v. Ntiero (1998) 6 NWLR (pt. 555) 640.
Regulations of the right of access to the court abound in the rules of procedure and are legitimate. Thus, such regulations like the requirement of pre-action notice are recognition procedural provisions. However, where the particular requirement constitutes an infringement of the exercise of judicial power by the courts or abridges the citizen’s right of access to the court, it will be inconsistent with the Constitution. See Amadi v. N.N.P.C (2000) 10 NWLR (pt. 674) 76; Atolagbe v. Awuni (1997) 9 NWLR (pt. 522) 536.
From all that has been stated above it can safely be said that the absence of the pre-action notice not only has been abrogated by the 2001 law viz Public Enterprises (Privatisation and Commercialisation); Order 2001, it was too late to raise the issue at the time Appellant did. Therefore even if the law had provided for it the Appellant by conduct waived the advantage and rendered it of no effect. This issue is resolved against the Appellant.
ISSUE FIVE
WHETHER SECTION 23(2) (A) OF THE PRIVATE NTERPRISES (PRIVATISATION AND COMMERCIALISATION) ACT 1999 IN RELATIONS TO TIME-BAR EXTENDS TO SUITS INSTITUTED AGAINST THE APPELLANT.
Learned counsel submitted that the law is that where a statute provided for time within which an action may be instituted, failure to commence action within the time stipulated renders such an action incompetent as the plaintiff loses his right to enforce the cause of action. He cited Eboigbe v. NNPC (1994) 5 NWLR (pt. 347) 649.
He said that in the instant appeal, the Respondents had instituted the action before the lower court about one year after the injury complained of occurred. That the Insurance Act of 2003 which the Respondents claim infringed on their rights under the Share Sale Agreement was promulgated in 2002 and came into force on 27th May, 2003. That the Federal Ministry of Justice wrote to the Respondents on 13th August, 2003 that its request for amendment of the Insurance Bill was impossible since the arguments were not weighty enough and any amendment will affect the stake holders and the suit in the lower court was instituted on 17th May, 2004. He said the courts have decided variously that Federal Government agencies such as the Appellant are included in the definition of Public Officers.
He cited Offoboche v. Ogoja Local Government (2001) 16 NWLR (pt. 739) 458; Ibrahim v. Judicial Service Commission Kaduna State (1998) 14 NWLR (pt. 584) 1; Kolo v. Attorney-General Federation (2003) 10 NWLR (pt 829) 602.
Learned counsel for the 3rd Respondent put up submissions in tandem with those of the Appellant saying Appellant was within the definition of Public Officers and so protected by the Public Officers Protection Act and so the suit instituted beyond three mouths was statute barred.
I would like to state that when dealing with a limitation statute, it is necessary to determine the precise date upon which the cause of action arose because time will start to run from when the cause of action arose and it is the defendant who should plead and prove that an action is statute barred. See G & C Lives V. Olalaye (2000) 10 NWLR (pt. 676) 613.
The persons whom the provisions of the Public Officer Protection Act would not cover are persons who are independent contractors for the provision of services for a public of services body or authority by virtue of contract.
The words “Public Officer” or “any person for the purpose of the Public Officers Protection Act and as stipulated in Section 2 of the Public Officers Protection Law not only refer to natural persons or persons sued in their personal names. They extend to public bodies, initial persons, institutions or persons sued by their official names or titles. see F.G.N. v. Zebra Energy Ltd (2002) 18 NWLR(pt. (798) 162 at 195; Ibrahim v. J.S.C. Kaduna State (1998) 14 NWLR (pt. 584) 1; Permanent Secretary Ministry of Works etc. v. Balogun (1975) 5 SC 57.
The intention of the Legislature in the Public Officers (Protection) Law is to provide protection for public officer, corporate or incorporated bodies in the discharge of their public assignment. Offoboche v. Ogoja Local Government (2001) 16 NWLR (pt.739) 458.
The provisions of the Public Officers Protection Law are not absolute. The provisions do not apply in actions for recovery of land, breaches of contract, claims for work and labour done. See Okeke v. Baba (2000) 3 Soule v. L.E.D.B. (1965) LIR 118; Salako v. L.E.D.B. (1953) 20 NLR 169.
The Public Officers Protection Act was not intended by the Legislature to apply to contract. The law does not apply in cases of recovery of land, breaches of contract or for claims for work and labour done. FGN v. Zebra Energy Ltd. (2002) 18 NWLR (pt.798) 162 at 196 per Mohammed JSC.
The defence of the Public Officers Protection Law can avail public officers who act in execution of their duty without malice.
Thus motive on the part of the public officer is relevant but the mala fide of the public officer must be made an issue. Okeke v. Baba (2000) 3 NWLR (pt. 798) 644 at 652; Eboigbe v. NNPC (1994) 5 NWLR (pt. 347) 649; Sanda v. Kwkawa Local Government (1991) 2 NWLR (pt. 174) 379; Olaosika v. Williams (1996) 5 NWLR(pt. 449) 437.
In Offoboche v. Ogoja Local Government &. Anor (2001) 16 NWLR (pt. 739) 458, the Supreme Court held:-
The Public Officers (protection) law is designed to protect the officer who acts in good faith and does not apply to acts done in abuse of office and with no semblance of legal justification. Thus the law will not apply if it is established that the defendant had abused his position for the purpose of acting maliciously. In that case he is not acting within the terms of the statutory or other legal authority.
In such state of facts he has abused his position for the purpose of doing wrong, and the protection of the law would never apply to such a case. Nwankwere v. Adewunmi (1966) 1 All NLR 129; Lagos City Council v. Ogunbiyi (1969) 1 All NLR 297.
The object of the public officers protection law is to afford protection to public officers in respect of anything done in the execution of or carrying out their duty. The protection comes into play after the expiration of 3 months from the date of the commission of the act or acts which give raise to the cause of action.
Per Uwais JSC (as he then was) in Yabugbe v. COP (1992) 4 NWLR (pt. 234) 152 at 176; Egbe v. Adefarasin (1985) 1 NWLR (pt.3) 549, Egbe v. Alhaji (1990) 1 NWLR (pt. 128) 546; Ekeogu v. Ahiri (1991) 3 NWLR(pt. 179) 258.
From the authorities above stated it is easy to see that the arguments and submissions of counsel for the Appellant though beautifully couched and presented have fallen flat in the face of the law that is the Public Officers Protection Act which does not avail the public officer in matters of contract such as the matter in hand.
From this and what had earlier transpired I do not hesitate in dismissing this appeal as lacking in merit. I uphold the decision of the court below.
I award N20,000.00 to the Respondents 1st and 2nd to be paid by the Appellant.
Other Citations: (2008)LCN/2674(CA)
