Capt. Tito Omaghoni (Jp) & Ors. V. Nigeria Airways Limited (in Liquidation) & Ors. (2006)
LawGlobal-Hub Lead Judgment Report
RHODES-VIVOUR, J.C.A.
This is an interlocutory appeal from the decision of the Federal High Court, Abuja Division, presided over by the Hon. Justice S. J. Adah.
The facts of this case, which are not in dispute, are briefly as follows:
In suit No. ABJ/PET/2/2004, in the matter of petition for liquidation of Nigeria Airways Ltd. Chikere, J., of the Federal High Court made the following order on 12/8/2004:
“1. That the liquidator to seek the assistance of the Nigeria Police in securing and protecting of the assets, premises and the liquidation process of Nigeria Airways Ltd. in Lagos and any other places where the assets of the company may be found in Nigeria.
- No order as to costs.”
On 26/8/04, the appellants herein as plaintiffs sued the respondents herein as defendants on a writ of summons accompanied by statement of claim, wherein they claimed from the defendants jointly and severally as follows:
“(a) A declaration that the plaintiffs – both serving and retired – are entitled to be paid their terminal benefits by the 1st defendant in accordance with sections 172 and 173 of the Constitution of the Federal Republic of Nigeria, 1999 and that being employed by the Civil Service of the 3rd defendant, they are entitled to be paid to the tune of the full extent of the said entitlements.
(b) A declaration that in addition to the rights conferred upon the plaintiffs by section 173(2) of the Constitution, the plaintiffs are also creditors of the 1st defendant in so far as the said amounts making up their terminal benefits remain unpaid thus entitling them to full payment thereon as provided for in sections 425 and 494 of the Companies and Allied Matters Act, 1990 as well as participate in the asset distribution of the 1st defendant.
(c) A declaration that given the position of the 1st defendant as a parastatal of the 3rd defendant qua the 4th defendant, the 2nd defendant in performing his duties as liquidator of the 1st defendant is obliged to discharge his duties with the utmost level of transparency and accountability and in such manner as would not amount to an infraction on the rights accruing to the plaintiffs, whether under the Constitution of Nigeria or the Companies and Allied Matters Act, 1990.
(4) A declaration that the plaintiffs are entitled to a lien on the 1st defendant’s staff quarters/accommodations presently occupied by them as listed by their names in the schedule to the statement of claim, until the defendants jointly and severally settle the indebtedness of the 1st defendant to the plaintiffs by the payment to them of the full value of their terminal benefits whether accrued or still accruing to them by reason of their employment with the 1st defendant.
(e) A declaration that in the event of the defendants inability and/or failure to settle the indebtedness of the 1st defendant to the plaintiffs, the plaintiffs are entitled to a right of set off against the assessed value of the property.
(f) A declaration against the 3rd, 4th and 5th defendants that all assets belonging to the 1st defendant in its wholly owned subsidiaries to wit:
Skypower Hotel and Catering Services Ltd.;
Skypower Aviation Handling Company Ltd.;
Skypower Properties Ltd.; and
Skypower Printing and Publishing Company Ltd. are assets of the 1st defendant and that any action and/or directive by or on behalf of the 3rd defendant, purportedly having the effect of making them unavailable to the 2nd defendant for purposes of settlement of the plaintiffs and other claims against the 1st defendant is ipso facto illegal, null and void, the said actions and or directives having been done or issued while the petition for winding up in suit FHC/ ABJ/PET/2/2004 was pending and after the 2nd defendant had been appointed by the 5th defendant as provisional liquidator of the 1st defendant.
(g) An order directing the 2nd defendant to proceed to recover the entire assets of the 1st defendant and cause an exhaustive list or inventory of the same, whether liquid or otherwise to be compiled and produced to the plaintiffs before embarking on the sale, transfer, alteration, further advertisement or dealings in any way with the assets of the 1st defendant.
(h) An order directing defendants whether jointly or severally to pay up the outstanding terminal benefits (inclusive of severance pay) owed by the 1st defendant to the plaintiffs to the tune of the full extent of the values thereof and in accordance with their entitlements as contained in the Schedule to the statement of claim.
(i) In the alternative to prayer (h) above, an order granting to the plaintiffs first purchase options of the respective staff quarters/accommodations occupied by them and listed by their names in the schedule attached to the statement of claim in the event that the assets of 1st defendant are resolved by the 2nd defendant to be put up for sale whether by public auction or private treaty.
(j) An order restraining the defendants whether by themselves or through the 2nd defendant, his agents or proxies from forcibly ejecting the plaintiffs from the staff quarters presently occupied by them except by due process of law and/or from carrying out any sale and/or transfer of the assets of the 1st defendant without first settling the outstanding obligation of the 1st defendant to the plaintiffs by paying to them their terminal benefits to the full value extent of the amounts respectively due to the plaintiffs as guaranteed to them by Constitution of the Federal Republic of Nigeria.
(k) In alternative to (j) above an order permitting the plaintiffs to set off against the assessed value of the property, so as to:
- Acquire their respective staff quarters in lieu of their entitlements where their entitlements equal the value of the property; or
- Where the entitlements exceed the value of the property occupied, to acquire the property while being paid by the defendants the difference in value; or
- Where the entitlement is less than the value of the property, acquire the same by paying the difference in value of the property and their terminal benefits to the defendants through the 2nd defendant.”
This case is suit No. FHC/ABJ/CS/365/2005, and it came before S.J. Adah, J. By an application dated 15/8/2005 the appellants/plaintiffs prayed the court below for the following orders:
“1. An order of this Honourable Court restraining the defendants, particularly the 2nd defendant whether by himself or through his agents, proxies howsoever called from taking further steps to execute the orders of the Federal High Court, Abuja Coram Chikere, J. made on 12 August, 2004 in suit No. FHC/ABJ/PET/2/2004 at least in so far as the same is interpreted by the 2nd defendant to permit the eviction/ejection of the applicants from 1st defendants staff quarters occupied by the applicants in Government Reservation Area (G.R.A.), Ikeja, Lagos.
- An order directing the Inspector General of Police and/or the respective Zonal, State Area Commands and/or stations operatives of the Nigeria Police Force under whose operational jurisdiction the Government Reservation Area in Ikeja, Lagos falls, to refrain from lending further assistance to the defendants particularly the 2nd defendant his agents, proxies howsoever called in effecting the ejection/eviction of the applicants from the 1st defendants staff quarters occupied by them, save and except upon due compliance by them with the law regarding the recovery of premises.
- An order of mandatory injunction permitting/empowering such of the applicants as have been or are being ejected from the respective Nigeria Airways Staff Quarters occupied by them to re-enter the said staff quarters and continue in occupation thereof until their respective right to continue thereon has been effectually determined and brought to an end in accordance with the Law regarding the recovery of premises.
- Such further order(s) of this Hon. Court may consider fit to make in the circumstances of this case.”
The application was supported by affidavit.
The learned trial Judge Hon. Justice S. J. Adah, heard both sides, examined affidavits and in a considered ruling delivered on 16/11/05, dismissed the application.
Dissatisfied with the ruling dismissing their application, the appellants filed two notices of appeal containing seven grounds of appeal.
In accordance with Order 6 rules 2 and 4 of the Court of Appeal Rules, briefs of argument were duly filed and exchanged.
Learned counsel for the appellant identified four issues for determination of this appeal. They are:
“(i) Whether the learned trial Judge was right in refusing prayer 1 of the appellants application on the ground that the same had the splendour and intolerable quotient of an abuse of process;
(ii) Whether having regard to the relevant Laws and procedure for recovery of premises, the forceful ejection(s) of the appellants from the 1st respondents Staff Quarters in G.R.A., Ikeja is lawful;
(iii) Whether the learned trial Judge was right to have discharged the order for maintenance of status quo and conclude that the grant of a mandatory injunction in this case will result in the grant of the substantive suit;
(iv) Whether having regard to the facts resulting in the appellant’s application, non-joinder of the Nigeria Police Force or its operatives as party on the substantive suit precluded the lower court from issuing out directive orders to the Police.”
In his own brief, learned counsel for the 1st, 2nd and 5th respondents identified four issues for determination of this appeal. They are:
“(a) Whether or not the appellants can challenge in this suit, an order made in another suit well before the instant suit was filed.
(b) Whether or not the order for status quo pending the hearing of the substantive motion amounts to the grant of the substantive motion.
(c) Whether or not the appellants ought to have joined the Nigeria Police in their motion seeking to restrain the Nigeria Police.
(d) Whether or not the injunction sought on the basis of an order in a different suit are interlocutory injunctions, particularly since the injunctions are not couched as interim or interlocutory nor were they expressly stated to be sought pending the determination of the suit.”
Included in the brief is a preliminary objection and arguments thereon.
The 3rd, 4th and 6th respondents did not file briefs of argument and were not represented by counsel at the hearing of this appeal on the 17th May, 2006.
On 17/5/2006, learned counsel for the 1st, 2nd, 5th respondents Mr. D. D. Dodo, SAN moved a motion on notice filed on the same day seeking the following:
“(a) An order striking out this appeal on the grounds that appellants counsel (Professor A. B. Kasumu) or any other counsel acting in his name or on his behalf or purporting to represent the appellants lacks the authority and mandate of the appellants to maintain and prosecute this appeal; or
(b) An order striking out this appeal on the grounds that without the authority and mandate of the appellants, there is no valid appeal to be pursued, argued or prosecuted before this Honourable Court.
(c) And for such further or other orders as this Honourable Court may deem fit to make in the circumstances.”
The application is supported by a 4-paragraph affidavit deposed to by Jibrin Habu, the Litigation Secretary in chambers of learned counsel for the 1st, 2nd and 5th respondents. Annexed thereto are documents marked exhibits JH1 – JH31.
At the hearing of the motion, learned counsel for the 1st, 2nd and 5th respondents, Mr. D. D. Dodo, SAN urged us to strike out the appeal in view of unchallenged depositions in the affidavit in support indicating that counsel no longer has the authority of the appellants to act for them. Reliance was placed on Order 3 rule 18 of the Court of Appeal Rules, and exhibits JH1 – JH31.
Replying, learned counsel for the appellants, Mr. Seyi Ojo observed that it is wrong to say that all the appellants have withdrawn from the appeal as 31 persons cannot sign out the rights of 136 or more persons. Reference was made to: Otapo v. Sunmonu (1987) 2 NSCC p 667, (1987) 2 NWLR (Pt. 58) 587.
Pages 18 – 21 of Vol. 1 of the record of appeal
He urged us to find that this application is incompetent and dismiss it.
Paragraph 3(a) and (b) of the affidavit in support are instructive.
They read:
“3(a) That the appellants herein have expressed their decision to withdraw from further prosecuting this appeal.
(b) That the aforesaid decision to withdraw from further prosecuting this appeal is contained in their individual letters now shown to me and herein marked exhibits JH1 – JH31 respectively.”
In this appeal, seven appellants filed this appeal for themselves and on behalf of the league of retired and serving staff of Nigeria Airways Limited and its subsidiaries resident in Nigeria Airways Limited Staff Quarters in Government Reservation Area, G.R.A., Ikeja, Lagos.
Pages 18 to 23 of Vol. 1 of the record of appeal is Schedule 1.
It is titled:
“League of retired and serving staff of Nigeria Airways Limited and its subsidiaries resident in G.R.A., Ikeja.”
A quick perusal of Schedule 1 reveals that well over one hundred and thirty persons make up the league of retired and serving staff of Nigeria Airways Ltd.
My Lords, exhibits JH1- JH31 are 31 letters written by members of the league of retired and serving staff of Nigeria Airways to their counsel, Prof. A. B. Kasumu, SAN informing him that they are no longer interested in the appeal, and withdrawing from the suit. Well over 90 persons in the league of retired and serving staff of Nigeria Airways have not signified similar intention to withdraw from the appeal.
Accordingly the appeal is saved and can proceed with the over 90 appellants still willing to see the appeal argued.
Application filed on 17/5/2006 is hereby dismissed.
I now turn to the preliminary objection in learned counsel for the 1st, 2nd and 5th respondents’ briefs.
The general principle is that when a party seeks to file and argue on appeal in the Court of Appeal or Supreme Court any fresh issue that was not argued in the court below, leave to file and argue the fresh issue must be had and obtained first. See: Owena Bank Plc. v. Olatunji (2002) 12 NWLR (Pt. 781) p. 259; Amusa v. State (2002) 2 NWLR (Pt. 750) p. 73; S.P.D.C. (Nig.) Ltd. v. Tiebo VII (2005) 9 NWLR (Pt. 931) p. 439; Agbeotu v. Brisibe (2005) 10 NWLR (Pt. 932) p. 1.
But where the fresh issue to be raised relates to the issue of jurisdiction, it can properly be filed and argued with or without the leave of court even if it is being raised for the first time. See: Obiakor v. State (2002) 6 S.C. (Pt. 11) p. 23, (2002) 10 NWLR (Pt. 776) 612.
In this preliminary objection, the fresh issue is jurisdiction. Learned counsel for the 1st, 2nd and 5th respondents is thus in order.
Order 3 rule 15 of the Court of Appeal Rules allows a respondent to rely on preliminary objection to the hearing of the appeal. The purpose being to contend that the appeal is incompetent or fundamentally defective.
Arguments on the preliminary objection can be incorporated in the brief as was done in this appeal thereby obviating the necessity of filing a separate notice of preliminary objection. See: Sanni v. Ademiluyi (2003) 3 NWLR (Pt. 807) p. 381; Ajide v. Kelani (1985) 3 NWLR (Pt. 12) p. 248.
In his brief learned counsel for the 1st, 2nd and 5th respondents. Mr. D. D. Dodo, SAN observed that the suit is incompetent since leave was neither sought nor obtained before it was filed.
He submitted that this court lacks the competence or jurisdiction to consider the reliefs sought since the court below also did not have jurisdiction. He referred to:
Section 417 of the Companies and Allied Matters Act, 1990; Nwabueze v. Obi Okoye (1988) 4 NWLR (Pt. 91) p. 664; Gaji v. Paye (2003) 8 NWLR (Pt. 823) p. 583.
In response, learned counsel for the appellants Mr. Seyilayo Ojo observed that this court would have to call for the entire case file to ascertain whether or not there was an order granting leave as the record of appeal contains only those documents considered relevant for the purposes of the appeal and not the totality of the court’s file.
Concluding he contended that leave of court was not only sought for but also obtained. He urged us to discountenance the preliminary objection.
Section 417 of the Companies and Allied Matters Act, Cap. 59, Laws of the Federation of Nigeria, 1990 states that:
“417. If a winding up order is made or a provisional liquidator is appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court given on such terms as the court may impose.”
Obtaining leave before the appellants filed their suit in the court below is thus mandatory in view of the fact that the suit was filed after an order winding up the affairs of Nigeria Airways Ltd. was made.
The sole issue for determination is whether the appellants obtained leave of the court before filing their suit in the court below. If they did not obtain leave before filing their suit in the court below, then the court below and this court had/have no jurisdiction to hear their suit or any application arising from the suit.
On the 9th of July, 2004 Chikere, J. made an order winding up the Nigeria Airways and appointed Mr. Ade Babington Ashaye as the liquidator of the petitioner.
On the 26th day of August, 2004 the appellants as plaintiffs instituted an action against the respondents as defendants seeking:
(a) Declaratory reliefs which include the right to participate in the assets distribution of Nigeria Airways.
(b) A lien on the Nigeria Airways Staff Quarters and right to set off against the assessed value of the property of Nigeria Airways.
(c) Right of first purchase option in the event that the said quarters are put up for sale and an injunction against the defendants from selling or transferring the assets of Nigeria Airways without first settling the outstanding obligation of Nigeria Airways to the plaintiffs by paying their terminal benefits.
The object of winding up provisions is to put all unsecured creditors upon an equality and to pay them pari passu. See Re Oak Pits Colliery Co. (1882) 21 CH. D p. 329.
After an order winding up a company is made some safeguards are put in place to prevent a scramble for the assets of the company. For example section 412 of the Companies and Allied Matters Act gives the court power to stay or restrain proceeding against the company where a winding up petition had been presented and to also refer the case to the court hearing the winding up petition.
By section 417 of the Companies and Allies Matters Act, no action can be proceeded or commenced against Nigeria Airways Ltd. except by leave of the court.
Submissions of learned counsel for the appellants makes interesting reading and I must say new learning to me. Learned counsel argued that leave was infact obtained. He did not say when, and in the same breath says that if we are in doubt we should call for the case file since the record of appeal contains only documents relevant for the purposes of the appeal. The record of proceedings is the only indication of what took place in court. It is the final reference of events, step by step, that took place in court. See: Fawehinmi Construction Co. Ltd. v. Obafemi Awolowo University (1998) 5 S.C. p. 48, (1998) 6 NWLR (Pt. 553) 195.
Record of proceedings and the notice of appeal after compilation become the record of appeal. The Court of Appeal is bound by the record of appeal.
The record of appeal is presumed to be correct unless shown by affidavit evidence to be otherwise and in the absence of any complaint an appellate court and the parties are bound by it. The appeal court has no jurisdiction to go outside the record and if it does go outside the record and comes to a conclusion not borne out from the record, such a conclusion or finding would be held to be perverse by the Supreme Court.
The two volumes of the record of appeal represent what transpired in the court below. See: Agbeotu v. Brisibe (2005) 10 NWLR (Pt. 932) p. 1; Julius Berger (Nig.) Ltd. v. Femi (1993) 5 NWLR (Pt. 295) p. 612.
The appellants’ suit was against the Nigeria Airways & Ors., a company that an order had earlier been made winding up its affairs. The appellants must obtain leave before they file their suit. Both volumes of the record of appeal reveal that the appellants as plaintiffs did not obtain leave before filing their suit in the court below.
A court is competent when:
(1) it is properly constituted as regards numbers and qualifications of the members of the bench, and no member is disqualified for one reason or another; and
(2) the subject matter of the case is within jurisdiction, and there is no feature in the case which prevents the court from exercising its jurisdiction; and
(3) the case comes before the court initiated by due process of law; and upon fulfilment of any condition precedent to the exercise of jurisdiction. See: Madukolu & Ors. v. Nkemdilim (1962) 2 SCNLR p. 341; Sea Trucks Ltd. v. Anigboro (2001) 1 S.C. (Pt. 1) p. 56, (2001) 2 NWLR (Pt. 696) 159.
Leave means permission. The effect of the third condition is that if obtaining leave is a statutory precondition before a party can institute a suit against a company which an order winding up its affairs has been made, as in this case, then it must be obtained. If it is not obtained the suit will be thrown out as the court would have no jurisdiction to entertain the suit.
By virtue of Order 1 rule 20 of the Court of Appeal Rules and section 16 of the Court of Appeal Act, 1976 this court has jurisdiction over the whole proceeding before it as if the proceeding had been instituted in this court as a court of first instance and in that regard, this court can make any order which the court below ought to have made. See: Ajayi v. Military Administrator, Ondo State (1997) 5 NWLR (Pt. 504) p. 237: Nteogwuija v. Ikuru (1998) 10 NWLR (Pt.569) p. 267; Union Bank of Nigeria Plc. v. Sparkling Breweries Ltd. (1997) 3 NWLR (Pt. 491) p. 29; Asaboro v. Aruwaji (1974) 1 NMLR p. 414, (1974) 4 SC 119.
My Lords the purpose of this preliminary objection is to contend that the appeal is incompetent or fundamentally defective since leave was not obtained before the appellants’ suit in the court below was filed.
The provisions of section 417 of the Companies and Allied Matters Act are mandatory. In view of the fact that there was non-compliance with the provision of section 417 supra the court below and this court had/have no jurisdiction to hear the appellants’ suit or any application arising from the suit.
The suit was filed without due process of law and accordingly its originating processes, the writ of summons ought to have been set aside for being null and void.
I hereby so order.
Preliminary objection is sustained.
Appeal is hereby struck out.
There shall be no order as to costs.
Other Citations: (2006)LCN/2060(CA)
