Dematic (Nig) Ltd V. Utuk & Anor (2022)
LAWGLOBAL HUB Lead Judgment Report
HELEN MORONKEJI OGUNWUMIJU, J.S.C.
This is an appeal against the decision of the Court of Appeal, Calabar Division delivered by Hon. Justice J. Omokri, N. S, Ngwuta and M. A. Owoade (JJCA) on 17th March, 2009. The Court of Appeal set aside the Ruling of the trial Court delivered on the 5th May, 1995 and ordered the vesting of the custody of the property situate at No. 149 Ikot Epene Road Uyo, on the 2nd Respondent. Dissatisfied with the decision of the Court below, the Appellant (who was the 2nd Respondent at the Court below) has appealed to this Court on two grounds as contained in its 2nd Amended Notice of Appeal dated 13th of September, 2021.
The original Petitioner in this case was the late Okon Udo Utuk. Okon Udo Utuk was the Director/Chief Executive Officer of Utuks Group of Companies consisting of: (1) Utuks Construction & Marketing & Co. Ltd., (2) Utuks Motors Ltd., (3) Utuks Drainage Ltd., (4) Century Transport Ltd.
Upon the demise of Okon Udo Utuk, the trial Court on the 25th September, 1995 substituted him with Ini Okon Udo Utuk, the present 1st Respondent in this appeal and the Appellant at the Court below. The late Okon Udo Utuk had filed a petition for the winding up of Utuks Motors Ltd at the Federal High Court, Calabar on the 11th February, 1993 in Suit No. FHC/CA/M4/93. Premised on the winding up petition of Okon Udo Utuk, the trial Court appointed the Deputy Chief Registrar of the Federal High Court (now the present 2nd Respondent) as Provisional Liquidator on the 21st October, 1994 for the purpose of taking over and managing the property of Utuks Motors Ltd. pending the determination of the main petition for winding up. One of the properties of Utuks Motors Ltd. which the Provisional Liquidator was to take over and manage was the property at No. 149, Ikot Epene Road, Uyo, Akwa Ibom State.
Prior to that, the above property had been mortgaged to First Bank of Nigeria Plc (“the Bank”) as security for loan obtained by Utuks Motors Ltd. Based on the mortgage deed, the Bank appointed the firm of Adetona & Co. Receiver/Manager to foreclose the mortgaged property and realize the indebtedness of Utuks Motors Ltd. The Receiver/Manager sold the property at No. 149, Ikot Epene Road, Uyo to the Appellant (Dematic Nigeria Ltd) on the 1st January 1993.
On the 26th January 1995, the Provisional Liquidator filed a motion pursuant to Sections 424 (1) (a), 425 (1) (a), 413 and 414 of the Companies and Allied Matters Act (herein after referred to as CAMA) at the trial Court seeking an order to void the sale of the property and an order vesting the specific property at No. 149, Ikot Ekpene Road, Uyo in his custody for the purpose of valuation pending the winding up of the company. The trial Court in its Ruling delivered on the 5th May, 1995 held that First Bank validly exercised its right of sale on the property under the Deed of Mortgage. The ruling was in favour of the present Appellant.
The 1st Respondent, not satisfied with the trial Court’s Ruling appealed to the Court below. The Court below in its judgment delivered on the 17th March, 2009 set aside the Ruling of the trial Court and voided the sale of the property to the Appellant. The Court ordered the vesting of the property in the custody of the liquidator for valuation purpose.
It is against the judgment of the Court of Appeal that the Appellant has appealed to this Court on two (2) grounds as contained in the Amended Notice of Appeal dated 13th September, 2021.
The Appellant in the brief settled by Yakubu Maikasuwa Esq. formulated two issues for determination set out below as follows:
- Whether the 1st Respondent had the legal capacity (locus standi) to commence this appeal at the lower Court in view of the provisions of Section 422 (9) of the Companies and Allied Matters Act 1990.
- Whether the learned Justices of the Court of Appeal had jurisdiction to entertain the matter on appeal before them in view of the provision of Section 417 of the Companies and Allied Matters Act 1990.
The 1st Respondent’s brief was settled by Francis Ekanem Esq. and the 2nd Respondent’s brief was settled by Chibuike Ezeokwuora Esq.
In determining this appeal, I have crystallised both issues identified by the Appellant and adopted by the Respondents as the sole issue for the determination of this appeal. These issues relate to the grounds of appeal and the Appellant’s case as presented before this Court. It is worthy of note that both issues presented for determination by the Appellants are challenging the jurisdiction of the trial Court and the Court below to determine the issues in controversy between the parties. Thus, this is a new issue of jurisdiction not presented for determination before the Courts below.
SOLE ISSUE
Whether Section 422(9) of Companies and Allied Matters Act 1990 now Section 585(9) of CAMA 2020 and Section 417 now Section 580 endows the 1st Respondent with capacity to appeal to the lower Court and whether the lower Court had jurisdiction to entertain the matter.
On the first leg of this issue dealing with the interpretation of Section 585(9) of CAMA, the Appellant’s counsel argued that by the provisions of Section 422 (9) of the Companies and Allied Matters Act, 1990, where a Provisional Liquidator is appointed for a company, the powers, functions, duties and authority of the Board of Directors ceases and the Board becomes functus officio. Counsel submitted that by the trial Court’s order of 21st October, 1994 the 2nd Respondent was directed to take over and manage the properties of Utuks Motors Ltd. The appointment of a Provisional Liquidator for Utuks Motors Ltd on the 21st October, 1994 therefore puts an end to the powers of the Directors (including the 1st Respondent) in Utuks Motors Ltd.
Counsel further submitted that if the powers of the Directors and Boards of Utuks Motors Ltd had ceased, it is clear that the 1st Respondent lacked the competence to file the Notice of Appeal dated 28th July, 1995 against the ruling of the trial Court to the Court below. Counsel cited Nigeria Deposit Insurance Corporation v. Financial Merchant Bank Ltd. (1997) 4 NWLR Pt. 519 Pg. 529 Para. H, Pg. 530 Paras A-D.
Counsel submitted that the 1st Respondent has no locus standi to initiate and/or commence this appeal at the Court below, without the necessary leave of either the trial Court or the Court below sanctioning his continuous exercise of the powers of the Executive Chairman/ Director in Utuks Motors Ltd. Consequently, the 1st Respondent’s Appeal at the Court below was incompetent and ought to have been struck out by the Court below for want of competence.
On this issue, learned counsel for the 1st Respondent argued that the right to appeal against any judgment enures to all persons who were parties in the case at trial. Counsel cited Ault & Wiborg Nig. Ltd. v. Nibel Ind. Ltd. (2010) 16 NWLR (Pt. 1220) Pg. 486 @ 490; Nigeria AGIP Oil Company Limited v. Chief Gift Nkweke & Anor (2016) LPELR- 26060 (SC) Pgs. 20-21 Paras D-B.
Counsel submitted further that the facts in NDIC v. FMB’s case are different from the one in this appeal. First, the Respondent, in that case, did not initiate the winding up proceedings at the Federal High Court. In this appeal, the petition for the winding up of Utuks Motors Limited was initiated by the 1st Respondent against the company in his personal capacity as Okon Udo Utuk to protect his interest and that of the creditors of the company.
The 2nd Respondent’s counsel argued that at no time was the 1st Respondent’s name struck out or removed from the proceedings, but he was a subsisting party to the proceedings at all relevant times and invariably bound by all decisions or orders made by the Court in the proceedings. What flows from the above is that the said 1st Respondent was a proper party in the suit at the Federal High Court and a proper party in all the motions and applications emanating from the winding up proceedings.
Counsel insisted that the facts in NDIC v. FMB Ltd (Supra) are different from the facts of this case and the Appellant’s reliance on same is misplaced and misconceived. Learned 2nd Respondent’s counsel argued that Section 422(9) now Section 585 (9) target the powers of the Directors or Board of the Company and removes their powers to act on behalf of a company in liquidation.
Counsel argued that the 1st Respondent had a right to appeal from that ruling and did not require leave of the Federal High Court or the Court below to do so.
OPINION
This leg of the issue must be considered within the peculiar circumstances of this case. This appeal is part of the winding up process that was initiated by the 1st Respondent at the Federal High Court, Calabar in Suit No. FHC/CA/M4/93. The Petitioner was at the time Okon Udo Utuk, the father of the 1st Respondent. In the course of the Petition for winding up and still within the proceedings, the 2nd Respondent as Liquidator of the company presented the Motion to set aside the sale of the property of the company during the pendency of the winding up proceedings. The 1st Respondent being the Petitioner in the substantive suit for winding up was a party to that Motion and filed an affidavit in support of the motion.
My Lords, the Appellant relied on Section 422 (9) of CAMA 1990 now Section 585(9) of CAMA 2020 to insist that the 1st Respondent had no locus.
Section 422 (9) of Companies and Allied Matters Act 1990 is in pari materia with Section 585 (9) of CAMA 2020 which provides as follows:
“If a Liquidator is appointed under this section, all powers of the Directors shall cease, except so far as the Court may by order sanction the continuance thereof.”
The words of the Statute are clear. It is apparent that what will cease upon the said appointment of a Liquidator is the powers of the Directors or Board who ordinarily act for and in the name of the company. This covers all formal acts, authorizations and steps by the Directors acting on behalf and in the name of the company including briefing, deciding on, and institution of proceedings in the name of the company etc. Nothing precludes an action taken out in the personal capacity or corporate personality of an individual, creditor or contributor to protect his/its personal interest in the said company or its affairs. What the law expressly prohibits is the institution of proceedings in the name of the company, which is a power usually exercised by or at the instance of the Directors of the company who run the affairs of the company. Thus, only the Liquidator of the company can exercise powers to sue in the company’s name during the process of winding up. The only rider to this is that a company i.e the Directors may appeal the winding up order before liquidation. See CCB V. Onwuchekwa (2000) 3 NWLR Pt. 647 Pg. 65 and Section 619 of CAMA; Progress Bank v. OK Contact Point Ltd. (2007) LPELR-9033 (CA). In UBA Trustees v. Niger Grob Ceramics where the Supreme Court held that a company (Directors in receivership) can maintain an action for the purpose of challenging the receivership. I think SBN V. NDIC is consistent with UBA Trustees v. Niger Grob Ceramics. The law is trite that clear and unambiguous provisions of a statute must be given their ordinary grammatical meaning. Where the Court is faced with such clear and unambiguous provisions, the duty of the Court is not to interpret per se, but to apply the statutory provision. See Sanwo-Olu v Awamaridi (2020) 11 NWLR (PO 458,480, Gana v SDP (2019) 11 NWLR (Pt 1684) 510, 551. Section 585 (9) above deals with the powers of a company’s directors, upon the appointment of a liquidator. By the clear wording of the section, such powers are in abeyance once a liquidator is appointed. Now, what are the powers of a Director? The answer to this question can be found in Section 305 of CAMA which deals with the functions, duties and powers of a Director. It does not appear that any of these powers is in question in this case. The proceeding at the trial Court was instituted by the petitioner not in the capacity of a director but in the capacity of a contributor/creditor. The rights of contributories/creditors to present winding-up petitions are clearly articulated in Section 573 (1) (d) and (4) of CAMA. These rights are distinct from and run parallel to the powers of directors under Section 305 of CAMA. As such, Section 585(9) of CAMA does not encumber the rights of a contributory/creditor to continue to prosecute a winding-up petition after the appointment of a liquidator.
It is important to note that the 1st Respondent filed the affidavit to support 2nd Respondent’s Motion in his personal capacity, and not on behalf of the company but as a contributor to the company and the Petitioner in the winding up proceedings. He had a personal interest which interest was affected by the ruling of the learned Judge of the Federal High Court which was the reason for the appeal from that ruling to the Court below.
The right to appeal is a statutory right provided for by Section 241 (a) of the 1999 Constitution (As Altered).
In the first instance, as a general principle, no legislation can take away the right of appeal. A subsidiary legislation to the Constitution may regulate the exercise of the right of appeal, but the right cannot be overtly quashed.
I agree with both Respondents’ counsel that an appeal is a continuation of the suit from which the appeal emanated. See Dr. Mgo Iweka v. SCOA Ltd (2000) LPELR -1563(SC).
I agree with the opinion of the learned 2nd Respondent’s counsel that the general position of the law is that the right of appeal enures to all parties at trial as of right against a final decision. See Elelu Habeeb v. Attorney General of the Federation (2012) 13 NWLR Pt. 1318 Pg. 423 at 465- 46; First Bank v. TSA Industries Ltd. (2010) LPELR- 1283 (SC) 42; Osuji v. Ekeocha (2009) 16 NWLR Pt. 1166 Pg. 8.
The Appellant cited and relied on the authority of Nigeria Deposit Insurance Corporation v. Financial Merchant Bank Limited (supra) which is also reported in (1997) LPELR-2001 (SC) in contending that the 1st Respondent had no locus standi to institute the appeal at the lower Court. The facts in the NDIC v. FMB case are different from the one in this appeal. First, the Respondent in that case did not initiate the winding up proceedings at the Federal High Court.
Secondly, the Respondent in the NDIC v. FMB case, (apparently via the exercise of the powers of the Directors thereof) took out the proceedings in the name of, and on behalf of the Directors of the company in respect of whom a Liquidator had been appointed. This is what Section 585(9) of Companies and Allied Matters Act prohibits. However, in this appeal, the petition for the winding up of Utuks Motors Ltd. was initiated by the 1st Respondent against the company in his personal capacity as Okon Udo Utuk to protect his interest and that of the creditors of the company and for protection of the company’s assets. The affidavit that he filed in support of the application of the 2nd Respondent to set aside the sale of the company property at the Federal High Court was in his personal capacity as a contributor to protect the assets of the company and not on behalf of or pursuant to the powers of the Directors of the company. As the petitioner in the winding up proceedings, he had a personal interest which interest was affected by the ruling of the learned judge of the Federal High Court which was the reason for the appeal from that ruling to the Court below. Thus, the fact that the 1st Respondent happened to be a Director of the company did not take away his personal rights to take out a proceedings to protect his personal interests in the company as a contributor or creditor or for protection of the assets of the company.
Thus, Nigeria Deposit Insurance Corporation v. Financial Merchant Bank Limited (supra) does not avail the Appellant in his contention that the 1st Respondent had no locus standi to initiate the appeal in the Court below.
There is no want of locus standi in the 1st Respondent to initiate the action in his personal capacity, no want of the said 1st Respondent to file an appeal against the judgment of the trial Court. I resolve the first leg of this issue against the Appellant.
On the 2nd leg of this issue, my Lords, Section 417 of CAMA 1990 is now Section 580 of CAMA 2020. The provisions have not changed. On this issue, learned Appellant’s counsel submitted that the Court below was wrong to have proceeded to hear the 1st Respondent’s appeal because it had no jurisdiction to do so. Counsel argued that pursuant to Section 417 of the Companies and Allied Matters Act, once a winding-up order is made or a Provisional Liquidator is appointed, then no action may be commenced against the company except with the leave of the Court. Counsel cited Alex O. Onwuchekwa v. NDIC (Liquidator of Co-operative and Commerce Bank Nigeria Ltd. (2002) 5 NWLR Pt. 760 Pg. 371.
Counsel submitted that the word “proceedings” as used in Section 580 of CAMA refers to both the proceedings begun by the motion as well as the subsequent appeal therefrom. Therefore, the 2nd Respondent’s motion dated 28th January, 1995 amounts to an “action or proceedings against” Utuks Motors Ltd. The Motion in question was filed after the appointment of the Provisional Liquidator for Utuks Motors Ltd on the 21st October, 1994. Counsel argued that there is no evidence on the face of the motion or in the Record of Appeal that the 2nd Respondent sought and obtained leave of Court to proceed against Utuks Motors Ltd before filing the said motion on notice dated 26th January, 1995. It was the proceedings from the 2nd Respondent’s Motion that eventually gave rise to the 1st Respondent’s appeal to the Court below.
Counsel submitted that it is trite that the effect of lack of jurisdiction is that both judgments of the lower Courts are null and void and of no effect.
In reply to this issue, learned 1st Respondent’s counsel argued that a Liquidator can sue and be sued in his own name in the course of performing his duties. This is so because the Liquidator is a legal entity created by statute with rights and corresponding duties. Counsel urged this Coult to approve the decision of the Court of Appeal in SBN PLC v. NDIC (2006) 9 NWLR (Pt. 986) Pg. 424 at 449 where the Court of Appeal relied on the authority of NDIC v. FMB (supra) in holding that the Liquidator is capable of suing in his own name. If the Liquidator can sue in his name as Liquidator, then he can also be sued in his own name qua Liquidator.
Counsel argued further that in this case, the 1st Respondent did not sue the Liquidator Utuks Motors Limited. The 1st Respondent only exercised his constitutional right to appeal from the ruling of the Federal High Court Calabar in the motion of the 2nd Respondent to set aside the sale of the property at No. 149 Ikot Epene Road, Uyo during the pendency of the winding up proceedings. In the circumstance, the 1st Respondent did not need the leave of Court to appeal against the ruling.
Counsel submitted that the appeal at the Court below is not void since it is a continuation of the case at first instance and that in the circumstances, the 1st Respondent being a party in the originating suit did not need leave to appeal from the ruling of the Federal High Court.
Learned 2nd Respondent’s counsel argued that Section 417 does not operate retrospectively to require leave to be obtained for the continuation or validity of the very same proceeding (winding up) wherein the Provisional Liquidator was appointed. Section 417 only operates with respect to independent suits or actions or proceedings commenced or proceeded with against the company in issue.
Counsel argued that there was no need for the 1st Respondent to seek leave to appeal against a ruling in the same proceedings for winding up. Counsel submitted that it is not within the contemplation of Section 417 of the Companies and Allied Matters Act that interlocutory applications which invariably engender sub-proceedings in the main winding up proceeding must be with the leave of Court.
Counsel argued that the original motion was not against the company but against the illegal sale of company property by third parties. Counsel cited A.A.D. Ent. Ltd. v. MV Northern Reefer (2009) 12 NWLR (Pt. 1155) Pg. 255.
OPINION
My Lords, on the 2nd leg of this issue, Section 417 now Section 580 of Companies and Allied Matters Act (CAMA) provides as follows:
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.
The thrust of the Appellant’s argument on this issue is that upon the appointment of the Provisional Liquidator, the 1st Respondent who took out the winding up proceedings which was the substantive Suit, ought to obtain the leave of the Court in order to “proceed” with the said proceedings or for validity to be ascribed to any proceeding(s) or appeal emanating therefrom. Thus, the Appellant’s appeal is directed against the failure of the 1st Respondent to obtain the leave of the lower Courts in order to proceed with the proceedings at the trial Court and failure of the 1st Respondent to obtain leave before filing the appeal at the Court below. It must be noted that the proceedings taken out by the said Respondent was the one that gave birth to the appointment of the said Provisional Liquidator.
The issue in the context of this provision is whether the appointment of a provisional liquidator precludes the petitioner at the trial Court from taking further steps in the proceedings, including exercising the right of appeal. It is pertinent to state that the application of this provision will be straight forward, if it was being considered within the context of proceedings separate from the one in which the provisional liquidator was appointed. The canon of interpretation that appears relevant is that which says that the Court ought to avoid an interpretation that will lead to an absurd result. See: INEC v Yusuf (2020) 4 NWLR (Pt 1766) 374, 410, GCM Ltd v Travellers Palace Hotel(2019) 6 NWLR (Pt. 1669) 507, 530. Absurd results are presumed not to be intended by the draftsman.
Now the draftsman conferred a right of action on a contributory/creditor in Section 573 (1) (d) and (4) of CAMA. The appointment of a provisional liquidator is incidental to this right of action. See Sections 585 – 593 of CAMA. In other words, the appointment of a provisional liquidator is to give effect to the winding-up action. Could it be that the implication of Section 580 of CAMA is to take with one hand a right of action given by the other hand? Certainly, this would be an absurd and unintended consequence that the Court should avoid. The decision of the Court of Appeal in NDIC v SBN Plc (2006) 9 NWLR (Pt.986) 424, 444-445 provides useful persuasion on this point. In distinguishing NDIC v FMB Ltd Plc (1997) 4 NWLR (Pt 501) 519, the Court of Appeal stated:
“The lower Court at pages 132 and 133 of the record of proceedings reasoned on point thus: “it was also submitted that since under Section 422(9) of the Companies Act upon the appointment of a provisional liquidator, all the powers of the directors of the Company shall cease, the directors are therefore paralysed and that if the Court sets aside the order, there will be nobody to take care of the assets. With due respect to the learned SAN, he appears to have overlooked the exception to the same sub-section to the effect that notwithstanding the appointment of the liquidator, the Court is empowered to allow the directors to continue to exercise some of their powers. There is no reason why the directors cannot for example challenge the appointment of the provisional liquidator and ask the Court that the appointment be discharged in so far as they sought and obtained leave of Court to do so. See the case of N.D.I.C. V F.M.B. Ltd SC155/1995 judgment of 2/5/97. This motion was however not filed by the directors but by the Company itself. That distinguished this case from that of NDIV v FMB Ltd. I hold therefore that this motion is competent.” Was the lower Court wrong? I think not. In the NDIC V F.M.B. (supra), the respondent before the Supreme Court had not contended that the appointment of the provisional liquidator was invalidly done. It was generally assumed that the provisional liquidator was validly appointed. The issue in contest was whether the provisional liquidator was right to sue in its own name or should have sued in the name of the company. The Supreme Court decided that the provisional liquidator could sue in its name. That case is clearly distinguishable from the facts of this case. The provisional liquidator has properly brought the application ex-parte in its own name and got the order it sought. The respondent who never conceded that the provisional liquidator was validly appointed by the ex-parte order was right to challenge the order in its name. In N.D.I.C. v F.M.B. (supra) the provisional liquidator was appointed pursuant to Section 38(3) of BOFIA No. 25 of 1991 earlier reproduced. It is my view that the lower Court was right to have held that the appellant’s application was competent and distinguishable from the position in N.D.I.C. v. F.M.B.”
The foregoing is persuasive enough on the point that the provisions of Section 580 of CAMA are not absolute. There are exceptions to the said provisions, particularly as in this case where the appointment of the provisional liquidator was made in the course of the same winding-up proceedings. The provisions of Sections 585 (9) and 580 of CAMA are akin to those of Section 556(3) & (4) of CAMA stating:
(3) without prejudice to Subsection (1) or (2), where a receiver or manager is appointed for the whole or substantially the whole of a company’s property, the powers conferred on him by the debentures by virtue of which he was appointed are deemed to include (except they are inconsistent with any of the provisions of those debentures) the powers specified in the Eleventh Schedule to this Act.
(4) from the date of appointment of a receiver or manager, the powers of the directors or liquidators in a members’ voluntary winding-up to deal with the property or undertaking over which he is appointed, shall cease, unless the receiver or manager is discharged or the security is realised.
See Intercontractors v U.A.C. (1988) 2 NWLR (Pt 76) 303, Dagazau v Bokir Int’l Co. Ltd. (2011) 14 NWLR 261, 310, Pharmatek Industrial Projects Limited v. Trade Bank (Nig.) Plc (1997) 7 NWLR (Pt 514) 639. In UBA Trustees Ltd v Nigergrob Ceramic Ltd (1987) 3 NWLR (Pt. 62) 600, 614, the Court of Appeal considered the foregoing provisions in determining a similar question. The Court stated:
“It is the law that although on the appointment of a receiver by a debenture-holder, the management of the company in receivership becomes vested in the receiver, the board of the company can still validly act in a number of matters, outside ordinary management. In the instant case in which the substantive action is challenging the validity of the appointment of the receiver, it would be invidious to suggest that the board could not authorise the action and that it is only the receiver who alone can authorise an action to challenge its own appointment.”
From the foregoing, it is easy to conclude that Sections 580 and 585(9) of CAMA do not encumber parties in the proceedings in which the appointment of the liquidator was made.
My Lords, the intendment of Section 580 of the Companies and Allied Matters Act is to offer protection to a company which is being wound up to protect its assets from being plundered through various litigations by spurious creditors. That Section is not designed to protect the Liquidator from litigation. Within the general context of the issues raised as to Sections 585(9) and 580 of CAMA, the pertinent question is whether the petitioner was competent at the time of instituting the petition. If the answer is yes, then the petitioner ought to be competent to file applications in the course of the proceedings. The position of the law is that the jurisdiction to determine interlocutory applications is derived from the jurisdiction to entertain the substantive suit. See Agbomagbo v Okpogo (2005) All FWLR (Pt. 291) 1606, 1623 – 1625, Adamu v Bashiru (1997) 10 NWLR (Pt 523) 81, 94.Another ground the Appellant is seeking to have this Court allow his appeal is that for the Court of Appeal to have jurisdiction to entertain the appeal (decision on which forms the basis of the appeal before this Court), leave of the Court of Appeal must have been first sought and obtained by the provision of Section 580 of Companies and Allied Matters Act.My Lords, going by the plain language of Section 580 of the Companies and Allied Matters Act, for that Section to be applicable, the following three conditions must exist:
1) A Winding up order must have been made or a Provisional Liquidator appointed.
2) A subsequent independent action must have been taken out or a pre- existing independent action sought to be continued.
3) The action sought to be taken out or continued must be one directed AGAINST the interest of the company.
The motion of the 2nd Respondent/Liquidator filed on 26/1/95 which led to this appeal, rather than being against the interest of the company, was one targeted at protecting the company’s property which had been sold to the Appellant. The trial Court had by its order of appointment of the Provisional Liquidator, placed the custody of all the company’s properties and management thereof, on the 2nd Respondent. The Application was brought by the Liquidator, in the interest of the company, placed in its custody, and NOT AGAINST it.
My Lords, no doubt, by the combined provision of Sections 585(9), 586, 587 and 588 of the Companies and Allied Matters Act, a Court appointed Liquidator (the 2nd Respondent) steps into the shoes of the company, and is empowered to bring and defend any action or proceeding in the name and on behalf of the Company. This being the case, it would amount to putting logic on its head to argue that a company (now represented by the Liquidator) would sue or proceed against itself or would need leave to proceed against third parties, as in this case, in order to set aside the sale of the Company’s property which it regards as illegal and to recover same. See A.A.D. Ent. Ltd. v. MV Northern Reefer (2009) 12 NWLR Pt. 1155 Pg. 255.
In the same vein, if the petitioner was competent to institute the winding-up proceedings and to file the application, then the petitioner ought to be competent to exercise a right of appeal. It is the law that the jurisdiction of an appellate Court is derived from that of the trial Court, in the sense that the originating processes at the trial Court is the jurisdictional source of the appellate Court. See AG Anambra v Okeke (2002) 12 NWLR (Pt 783) 575, 590, Lagga v Sarhuna (2008) 16 NWLR (Pt 1114) 427, 482- 483. Also relevant is the principle that an appeal is not necessarily distinct from but is a continuation of hearing of the suit at the trial Court. See F.U.T. Minna v Olutayo (2018) 7 NWLR (Pt.1617) 176, 194, Adeokin Records v MSCN (Ltd/Gte) (2018) 15 NWLR (Pt 1643) 550, 567. Hence, parties on appeal must reflect parties at the trial Court. See: Obi v Etiaba (2015) 6 NWLR Pt 1455 377 at 389-390,399, Sanusi v Modu (1994) 5 NWLR Pt 347, 732 at 739, PPA v INEC (2012) 13 NWLR Pt 1317, 215 at 236-237, 242-246, 251.
This must be considered against the backdrop or the primacy of the right of appeal, which is considered as sacrosanct. See Abubakar v Yaradua (2008) 4 NWLR Pt 1078, 465, 496, Edjekpo v Osia (2007) 29 NSCLQR 842, 866, Yekini Afosi v State (2008) 33 NSCQLR 1445, 1448, Bello v Attorney General of Oyo State (1986) 5 NWLR (Pt 45) 828, 848. FBN PLC v Agbara (2020) 15 NWLR (Pt 1748) 537, 551, APC v Karfi (2018) 6 NWLR (Pt 1616) 479, 506. The right of appeal is a constitutionally guaranteed right, albeit regulated by statute. It is not a right that is easily divested. This Court should be reluctant to find against the exercise of this right in the absence of clear and unambiguous statutory provisions. The Court attaches the same primacy to the related rights of access to Court and fair hearing. See Transnav P.N. Ltd v Velcan E.H.D. Ltd (2020) 7 NWLR (Pt 1723) 293, 316-317, Tyonex (Nig) Ltd v Pfizer Ltd (2020) 1 NWLR (Pt 1704) 125 166.
Section 580 of the Companies and Allied Matters Act is not a bar to proceedings in this case as the trial Court had the jurisdiction to proceed with the winding up proceedings, entertain any matter or application arising therein, including the Motion of 26/01/1995, and to dispose of same. The failure of the 1st Respondent to obtain leave to proceed within the proceedings at the trial Court and the Court below does not contravene Section 580 of Companies and Allied Matters Act.
I find no merit in favour of the appellant on this sole issue and it is resolved against the Appellant. In the circumstances, this appeal has no merit, it is hereby dismissed. Cost of One Million Naira (N1,000,000.00) in favour of the Respondents jointly against the Appellant.
SC.277/2009
