Chief P.I. Mokelu v. Federal Commissioner for Works and Housing (1976)

LawGlobal-Hub Lead Judgment Report

O. MADARIKAN, J.S.C.

This appeal is a sequel to the ruling of Belgore J given on the 5th of January, 1974 in suit No. FDC/L1M1/1974 in which the present appellant as plaintiff had taken out an originating summons in the Federal Revenue Court, Lagos, against the respondent under section 10 of the Public Lands Acquisition Act for the determination of the following questions:

“The amount of compensation payable to the applicant as compensation for the compulsory acquisition of his right, title and interest in the land measuring approximately 200 acres which was acquired by the Federal Government as per Government Acquisition Notice No.1577 dated 16th July, 1973.”

When the matter came before the lower court on the return date, learned counsel for the defendant raised preliminary objections on three grounds. One of the grounds was that the court had no jurisdiction to entertain the action. After hearing arguments, the learned trial judge gave a considered ruling on the 25th of January, 1974 in which he held that “a question of compensation under section 10 of the Public Lands Acquistion Act is not a cause or matter relating to the revenue of the Government of the Federation” and, after coming to the definite conclusion that he had no jurisdiction to hear and determine the action, he struck out the summons with N10 costs.

The plaintiff has appealed against the ruling on grounds which could be conveniently grouped into two and which appear to us to be in the alternative.

Before us on appeal, the live issue was one of jurisdiction and the appellant’s complaint on this score was directed against the following passage of the ruling:

“To my mind neither in its explicit nor in its implicit meaning can the word ‘Revenue’ embrace compensation paid out or to be paid from the Government coffers. To my understanding the word ‘Revenue’ in section 7(1)(a) of the Federal Revenue Court Decree means money or money-worth coming to the purse of the Federal Government. ”

Reference was made by learned counsel for the appellant, Mr. A.L Balogun, to section 7(1)(a) of the Federal Revenue Court Decree, 1973 which reads as follows:

“7(1) The Federal Revenue Court shall have and exercise jurisdiction in civil causes and matters

(a) relating to the revenue of the Government of the Federation in which the said Government or any organ thereof or a person suing or being sued on behalf of the said Government is a party. ”

It was submitted on behalf of the appellant that the meaning of the word revenue -as used in the sub-section should not be restricted to income but must be taken as embracing income or expenditure of the Government. Counsel more clearly spelt out his argument when he submitted that compensation for compulsory acquisition of land by the Government of the Federation is paid from public funds and that as such expenditure arises out of revenue, any civil cause or matter resulting therefrom ought rightly to be regarded as a civil cause or matter relating to the revenue of the Government of the Federation.

Finally, he submitted that jurisdiction to entertain such action is conferred on the Federal Revenue Court under section 7(1)(a) of the Federal Revenue Court Decree, 1973.

We do not accept nor were we impresseed by the submissions quite ingeniously put forward by Mr. Balogun. We think that the approach of the learned trial judge to the issue of jurisdiction raised before him was quite correct when he said:

“The important issue is, is compensation paid or payable by the Government to an individual a revenue To my mind, neither in its explicit nor in its implicit meaning can the word ‘Revenue’ embrace compensation paid out or to be paid out from the Government coffers. To my understanding the word ‘Revenue’ in section 7(1)(a) of the Federal Revenue Court Decree means money or money-worth coming to the purse of the Federal Government. I am fortified in this my understanding by the definition of Hodges, J. in the case of Stephens versus Abraham (1902) 27 V.L.R. 753 when interpreting section 157 of the Commonwealth of Australia Custom Act of 1901. At page 767 he said:

‘I take “revenue” to be moneys which belong to the Crown, or moneys to which the Crown has a right or which are due to the Crown’ .

The phrase ‘moneys which belong to the Crown or moneys to which the Crown has a right or which are due to the Crown’ in the above quotation are duties payable and they indicate moneys coming to the Crown though they have become Crown property or the Crown have had vested right in them before they come into the treasury.

This definition is more clearly brought out by Lord Tomlin in the House of Lords case of London, Midland and Scottish Railway Company versus Anglo-Scottish Railways Assessment Authority (1933) 150 L.T.361, where the Court was to decide whether compensation paid by the Government to railway Companies was ‘revenue’ for the purpose of section 4(3)(ii)(d) of The Railways (Valuation for Rating) Act, 1939. At page 367 he said:

‘The word “revenue” is a word of somewhat indefinite import but in its ordinary sense in relation to a business undertaking, I think it connotes those incomings of the undertaking which are products of or are incidental to the normal working of the undertaking. The compensation money would not, I think, fall within the compass of the word if so defined.’

The operative word in that passage, to my mind, is ‘incoming’. He went on to say:

‘Revenue therefore in my view is not given any special meaning by the Act. It bears in the Act its ordinary meaning. It is not necessary to say how wide the ordinary meaning is. It is enough to say whether it is or is not wide enough to include the compensation moneys received by the appellants from the Government in the circumstances which have been mentioned. I am satisfied that it is not.’

A compensation already paid out is no more Government fund nor has Governmment any further right in it and a compensation to be paid out is an ‘out-going’ fund to the Government. In other words, compensation paid out is Government expenditure rather than revenue. Neither in its ordinary meaning nor in its usage can compensation paid out or to be paid out by the Government be called ‘revenue’ of the Government without overstraining the meaning of the word.”

We uphold the conclusions reached by the learned trial judge:

(1) that “a question of compensation under section 10 of the Public Lands Acquisition Act is not a cause or matter relating to the revenue of the Government of the Federation”; and

(2) that the Federal Revenue Court had no jurisdiction to hear and determine the action.

Indeed, to hold otherwise would be doing violence to the meaning of the word ‘revenue’ which in the con ought to be construed in its ordinary signification.

It only remains for us to consider the alternative argument urged upon the court by Mr. Balogun. It relates to the construction of section 22(2) of the Federal Revenue Court Act, 1973. It reads:

“(2) No cause or matter shall be struck out by the Federal Revenue Court merely on the ground that such cause or matter was taken in the Federal Revenue Court instead of the High Court of a State in which it ought to have been brought, and the judge of the Federal Revenue 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 in accordance with rules of court to be made under section 43 of this Decree”.

We think that Mr. Balogun was on firm ground when he submitted that where an action is instituted in the Federal Revenue Court instead of the High Court in which it ought to have been brought, section 22(2) enjoins the Federal Revenue Court not to strike out the action merely on that ground. In the expression-“no cause or matter shall be struck out by the Federal Revenue Court”-we are of the view that the word “shall” must be given its natural and proper meaning which is that a mandate is enjoined.

Having so construed the word “shall”, we will now proceed to consider what interpretation to give to the word “may” appearing in the following portion of the sub-section:

“the Judge of the Federal Revenue 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… ”

“May” is an enabling or permissive word. In that sense, it imposes or gives a discretionary or enabling power. But where the object of the power is to effectuate a legal right, “may” has been construed as compulsory or as imposing an obligatory duty.

The principle to be drawn from decided cases on the construction of the word “may” appears to be quite clear. The word “may” gives a power, and the important question is in what cases, where a judge has a power given by the word “may”, it becomes his duty to exercise it. When a statute confers a power or authority on a judge to act in a certain case, it is imperative on him to exercise the power or authority when the case arises and its exercise is duly called for. (See MacDougall v. Patterson (1851) 138 E.R.672)

We have carefully considered the wording of section 22(2) of the Federal Revenue Court Decree, 1973 and we are convinced that for a true and correct meaning to be given to the word “may”, it must be construed as imposing an obligatory duty. Absurdity or repugnancy would follow from holding that a discretion was given; because where a judge of the Federal Revenue Court holds that he has no jurisdiction and then refuses to order a transfer, he can neither strike out the case nor dispose of it in any other manner. In our view, the learned trial judge, having rightly held that he had no jurisdiction, was clearly in error when he ordered that the case be struck out as this is contrary to the provisions of section 22(2) of the Federal Revenue Court Decree. The proper order in the circumstances was to transfer the case to the appropriate High Court in pursuance of the provisions of section 22(2).

For the foregoing reasons, this appeal will be allowed. The order of the Federal Revenue Court dated the 25th of January, 1974 striking out this case together with the order for costs is hereby set aside and we hereby remit the case to the Federal Revenue Court with a direction that that Court shall transfer the said cause to the appropriate High Court in pursuance of the provisions of section 22(2) of the Federal Revenue Court Decree, 1973.

The plaintiff/appellant is entitled to the costs of this appeal assessed at N146 in this Court and N10 in the court below.

Other Citation: (1976) LCN/2357(SC)