Diamond Bank Limited V Prince Alfred Amobi Ugochukwu (2016)

LAWGLOBAL HUB Lead Judgment Report

WALTER SAMUEL NKANU ONNOGHEN, JSC

This is an appeal against the judgment of the Court of Appeal, Holden at Port Harcourt in appeal No. CA/PH/329/2005 delivered on the 28th day of March, 2007 in which the court dismissed the appeal of the present appellant. The facts of the case include the following Appellant is a commercial bank while the respondent opened and operated two accounts with appellant; one of which was a current account in the name of AL-CLEMENT with two signatories thereto. It was account No. 0712555017. The signatories were Prince Alfred Amaobi Ugochukwu and Uzoma Onuoha (also known as Unachukwu Ugochukwu), a then Special Assistant to the Military Administrator of Imo State. Exhibit W is the specimen signature card for the account. Respondent also opened a fixed deposit account with appellant. Both accounts were for the purpose of lodging funds realized from contracts between the respondent and Imo State Secondary Education Management Board and the Primary Education Board for the production of students’ identity cards. Some cheques were issued and lodged in the two accounts while cheques for withdrawals were signed by the signatories to the account. Later on, a dispute arose between the two signatories over the operation of the account resulting in the respondent writing exhibit JD’ to appellant in which he dropped the signature of Uzoma Onuoha. Efforts by DW1, the manager of appellant to resolve the dispute was unsuccessful. Respondent issued exhibits E.F.G. and H to some people for payment but were dishonoured and marked “incomplete mandate” as the cheques were signed by respondent alone. The accounts of the respondent were later frozen on the orders of Imo State Task Force for the Recovery of Public Property and Funds headed by a High Court Judge. It was alleged that respondent used the contract to defraud the Imo State Government and paid the proceeds into the said accounts with the appellant. Appellant was ordered to transfer the funds in the accounts to the account of Imo State Government with Afribank Plc. The Orders are exhibits ‘S’ and T. The initial reluctance of appellant to comply with exhibits ‘S’ and T resulted in a threat by the Task Force on DW1r a manager of appellant with Imprisonment as per exhibit ‘LT. Appellant consequently complied with the order of transfer of the funds in the account. Respondent was aggrieved by the refusal of appellant to honour the cheques on grounds of incomplete mandate and the orders of the Task Force freezing and transferring the funds in the accounts and consequently instituted two suits namely HON/208/97 in the High Court of Imo State, Holden at Owerri and FHC/PH/262/97 in the Federal High Court, Holden at Port Harcourt – see exhibits W and JU’ respectively. While the two suits, supra, were pending, respondent instituted the suit resulting in the instant appeal. In the course of the trial, appellant sought leave to further amend its amended Statement of Defence to piead a standard banking practice but the court struck out the motion. At the conclusion of trial, the trial court entered judgment for the respondent, which judgment was affirmed by the lower court on appeal, resulting in the instant further appeal, the issues for the determination of which have been identified by learned Counsel for appellant, Louis M. Alozie Esq in the appellant’s brief filed on the 19th day of October, 2010 as follows: “(a) Whether the Appellant was wrong to have dishonoured the four cheques (Exhibits E, F, G and H) Grounds 1 and 2. (b) Whether the Defendant/Appellant was wrong to have complied with the orders of the Imo State Task Force for Recovery of Government Property and Funds by transferring the funds in the Respondent’s accounts to the Account of Imo State Government at Afribank Plc. Grounds (sic) 3. (c) Whether the jurisdiction of the trial court was not ousted by section 18(1) of the Recovery of Public Funds and Property (Special Provisions) Edict, 1995 of Imo State -Ground 4. (d) Whether the court below was right in law in affirming the decision of the trial court refusing the Appellant’s application for amendment having regard to the evidence already on record.” In view of the fact that it is now settled law that an issue of jurisdiction is a thresh-hold issue which is fundamental to adjudication, it is important to consider and resolve same, (issue C) first before proceeding any further with the consideration of the merits of the substantive appeal. The above position is also advised by the principle of law that a decision of a court without the requisite jurisdiction is null and void, however well, the trial or proceeding leading thereto was conducted. It is the submission of learned Counsel for appellant that by the provisions of section 18(1) of the Recovery of Public Funds and Property (Special Provisions) Edict, 1985 of Imo State, the jurisdiction of the that court to hear and determine the matter was ousted; that by section 12 of the said Edict, the Task Force has the power to enquire into the accounts of the respondent which it did before issuing exhibits ‘S’ and T; that the funds in the said accounts of the respondent were paid by parastatals or boards under the State Government for contracts that were abandoned by the respondent; that the Task Force traced the sums paid to respondent for contracts not executed to the accounts of the respondent with appellant, which it has the power to do. It is the further submission of learned Counsel for appellant that the lower court was in error in holding that failure of appellant to produce the Government White Paper showing the name of the respondent as one of the debtors means that it would not favour appellant if it were to have been produced thereby invoking the provisions of section 149(d) of the Evidence Act against appellant; that the above holding results from a misconception of the provisions of section 6(a) and (b) of the Imo State Recovery of Public Funds and Property (Special Provisions) Edict, 1985 and section 149(d) of the Evidence Act; that it was not the duty of appellant who did not plead a White Paper, nor was in possession of same to produce the White Paper, thereby making the provisions of section 149(d) of the Evidence Act, inapplicable; that the Task Force ought to have been made a party in the proceedings and failure to do so is fatal to the competence of the suit. Finally, learned Counsel urged the court to resolve the issue in favour of appellant. On his part, learned Counsel for respondent, KEVIN UGWU ESQ in the respondent brief filed on 10/1/11 referred to the decision of this Court in the case of Madukolu vs Nkemdilim (1962) All NLR 587 and submitted that the decision contains the instance in which the “jurisdiction of a court can only be ousted/’ and that it is the plaintiffs claim that determines the jurisdiction of the court, referring to Anya vs Yayi (1993) 7 NWLR (pt. 305) 290; A-G Kwara State vs Warah (1995) 7 NWLR (pt 405) 121; Onuorah vs Okeke (2005) 10 NWLR (pt. 932) 47; that the case of the respondent as contained in his pleading being a claim for N126,796,500.00 general and special damages for dishonouring of his cheques and conversion and unlawful freezing of the plaintiffs accounts with the defendant; that the cause of action arose in 1997 based on a contract between a banker and its customer under section 230(1) of Decree 107 of 1993; that the provisions of sections 14 and 18(1) of the Edict in question did not divest the High Court of Imo State of its jurisdiction to hear the suit and urged the court to resolve the issue against appellant. It is not in dispute that the issue of jurisdiction of the trial court to hear and determine the matter having regard to the provisions of section 18(1) of the Recovery of Public Funds and Property (Special Provisions) Edict, 1985 was pleaded by appellant and argued before the lower courts. Also not disputed is the fact that Imo State Government, at the time, set up a Task Force on Recovery of Government Property and Funds under Edict No. 7 of 1985 and that by exhibits ‘S’ and T, which are orders issued by the said Task Force, the funds standing to the credit of the respondent with appellant were frozen and appellant ordered to transfer same to Imo State Government account with another bank, which appellant reluctantly complied with after duly informing the respondent. Also not in dispute is the fact that the funds in the said accounts of the respondent with appellant were proceeds of contracts with Imo State Government Parastatals which the respondent failed to execute. It is also in evidence that the respondent was declared wanted by the Task Force on account of the failed contracts he had with Imo State Primary Education Board and the Secondary Education Board, both under the State Ministry of Education. Respondent admitted that the moneys in the two accounts operated with appellant were payments he received from the contracts which he failed to perform. It is also not in dispute that by the provision of section 12 of the Recovery of Public Funds and Property (Special Provisions) Edict No. 7 of 1985, the Task Force has the power to fill bank order forms and to inquire from any bank the financial position in that bank of a person named in the bank order form and freeze the account of the person named etc, etc. It was in compliance with the above provision that the Task Force issued the order freezing the accounts of the respondent with appellant as evidenced in exhibits ‘S’ and T. Now section 18(1) of the said Edict No. 7 of 1985 provides as follows:- No action shall lie or be maintained in any court of law in respect of any action taken or anything done or omitted to be done in respect of any matter under the Edict.” It is not in doubt whatsoever, that the freezing of the accounts and transfer of the funds as ordered in exhibits ‘S’ and T are actions taken or things done “under the Edict.” What did the lower courts hold in respect of the issue under consideration. The trial Judge held that the case before the court relates simply to banker – customer relationship and that the Task Force was a third party; that exhibits *S, ‘T and ‘U are extraneous to the relationship between the plaintiff and defendant; that “even though the exhibits were signed by Hon Justice A.O H. Ukachukwu, he signed same not as a High Court Judge but as Chairman. These exhibits do not show any exercise of judicial powers to warrant defendant to breach its duty to its customer….” What did the lower court say on exhibits ‘S1 and T and the provisions of sections 14 and 18(1) of Edict No. 7 of 1985? At page 227 of the record, the lower court found and held thus: “Exhibits ‘S’ and ‘T’ show beyond doubt that it was the Task Force that ordered the appellant’s Bank to freeze and transfer the funds in the respondent’s account to Afhbank and exhibit V shows clearly that the appellant’s Manager refused to comply with the orders in Exhibits ‘S’ and ‘T hence the summons.” After the above finding/holding, the lower court then proceeded to examine the provisions of sections 6, 7 and 12 of Edict No. 7 of 1985 and stated, at page 228 of the record as follows:- “The interpretation of sections 6 and 7 supra and the purpose of the legislation in question is to give powers to the Task Force to recover monies from persons indebted to the Government. These persons are named either in the White Paper or in documents produced by Government Ministers or Parastatals. Where the Task Force is satisfied that a person named in the White Paper or in document produced by Government Ministries or Parastatals it has power under section 12 (supra) to give orders to the Bank in which such a person has an account to freeze same and thereafter withdraw the amount to clear the indebtedness.” However, after making the above findings/holdings the court then stated immediately thereafter that: “The issue for determination is on what basis did the Task Force order appellant to freeze the account of the respondent” and went on to hold at page 229 that no White Paper was tendered in evidence to justify the directive of the Task Force in exhibits ‘S’ and T thereby invoking the provisions of section 149(d) of the Evidence Act against appellant. I am of the considered view that the lower court was in error in holding that the issue for determination was the basis for the order of the Task Force to freeze the account of the respondent after having found as a fact that exhibits ‘S’ and T were duly issued by that body to appellant and that appellant duly acted on them, though upon threat as evidenced in exhibit ‘U’. I am equally of the considered view that the invocation of the provisions of section 149(d) of the Evidence Act against appellant in respect of the non-production of the While Paper was in error as appellant never pleaded same nor was it claimed that the said document was in its possession etc. To me, the lower court, having made the findings earlier referred to in relation to exhibits ‘S1 and T, the next question to be considered is what effect(s) those findings have on the jurisdiction of the trial court having regard to the provisions of section 18(1) of Edict No. 7 of 1985. The lower court in holding that the provision of section 18(1) of Edict No. 7 of 1985 did not apply based its decision, like the trial court, on the fact that the action as constituted was on banker customer relationship which is governed by section 230(1) (d) of Decree No. 107 of 1993. It is true that jurisdiction of the court is determined by the claim of the plaintiff. However, in considering the claim of the plaintiff, the defence must also be considered when the issue is that of the jurisdiction of the court to hear and determine the matter. From the findings/holdings of the lower court in relation to exhibits ‘S1 and T earlier reproduced in this judgment, it is clear that the case goes beyond ordinary banker/customer relationship. Once the lower courts found that appellant acted in accordance with exhibits ‘S’ and T issued by the Task Force acting within the provisions of Edict No. 7 of 1985, the question to be answered is whether in the circumstance the jurisdiction of the court is not ousted in view of the provisions of section 18(1} supra. The cause of action in relation to the jurisdiction of the court complained of is the freezing of the account of the respondent and transferring the proceeds therein to Imo State Government account in another bank. In interpreting a similar provision in section 6(3) of Decree No. 10 of 1976 in the case of A-G Federation vs Sode (1990) 1 NWLR (pt. 128) 500 at 505, this Court held, inter alia, as follows:- “The prohibition contained in section 6(3) of Decree No. 10 of 1976 was absolute in that no civil proceedings will lie to be instituted in any Court on account of or in respect of any act, matter or thing done under the Decree. In the instant case, the matter or thing done, under the Decree was forfeiture and in respect thereof no civil proceeding could lie or be instituted. The exclusion of jurisdiction related both to acts done, and those purported to be done under the Decree.” A court is only competent or has jurisdiction to hear and determine a matter when: “1. it is properly constituted with respect to the number and qualifications of its members; 2. The subject-matter is within its jurisdiction. 3. The action is initiated by the due process of law; and 4. The condition precedent to the exercise of jurisdiction has been satisfied.” – see Madukolu and ors vs Nkemdilim and ors (1962)1 All NLR (pt.4) 587. It is clear that failure to satisfy any of the above preconditions is fatal to the court’s exercise of jurisdiction or adjudication. It should however be pointed out that jurisdiction may be ousted by Statute or Decree or Edict – such as section 18(1) of Edict No. 7 of 1985 supra. Once again, let me repeat that the freezing of the account of the respondent and subsequent transfer of the funds therein to Afribank were acts and things done under Edict No. 7 of 1985, as found by the lower court thereby constituting part of the cause of action and are consequently not subject to litigation. It is also unconscionable for the respondent to be allowed to exploit/manipulate the law to his advantage having regard to the circumstances in which he got the funds lodged in those accounts, as revealed in evidence on record. In the circumstance and having regard to the facts and applicable law, I resolve the issue in favour of appellant. I find no reason to consider the other issues raised for determination as they have become irrelevant- Consequently, I allow the appeal and set aside the judgments of the Court of Appeal in appeal No. CA/PH/329/2005 delivered on the 28,h day of March, 2007 affirming the decision of the High Court of Imo State, Holden at Owerri in suit No. HOW/346/97 delivered on the 19Ih day of July, 2002 which is also hereby set aside. In their place, it is hereby ordered that the said suit No. HOW/346/97 be and is hereby struck out for want of jurisdiction. It is further ordered that parties bear their costs. Appeal allowed.

SC.223/2009