Jannasons Company Limited V. Paul N. Uzor & Ors (1991)

LawGlobal-Hub Lead Judgment Report

KAWU, J.S.C. 

The main question for determination in this interlocutory appeal is whether the Court of Appeal was right in its decision, that the order made by Aneke, J. in suit No. 0/178/85 on 30th October, 1986, appointing a receiver was, in the circumstances of the case, erroneously made.

In the substantive suit, the appellant herein, as plaintiff, originally sued the 1st to 3rd respondents. The other defendants on record were later joined as parties by the court’s order made pursuant to an application brought on their behalf.

In the substantive suit, the appellant’s amended writ of summons reads as follows:AMENDED CLAIM

1. The plaintiff is, and was at all times material to this action, the owner in possession of the parcel of land situate at the Onitsha-Owerri Road, Onitsha, and verged pink in the Plan No. SE/AN 13/78.
2. On the 19th day of May, 1982, the 2nd and 3rd defendants in the company of others unknown to the plaintiff broke and entered the above-mentioned parcel of land and when Joseph Azubuko Nnadike, the Managing Director of the plaintiff company, challenged them they threatened to kill him and warned him to ensure that the plaintiff company quit from the said parcel of (land).
3. Despite series of attempts to get the 2nd and 3rd defendants and their collaborators to see reason and to leave the plaintiff’s land alone, the 2nd and 3rd defendants persisted in their threats to the Managing Director of the plaintiff company and maintained that they were going to sell off the plaintiff’s said parcel of land.
4. On the 23rd day of June, 1983, the defendants acting in concert, broke and entered the plaintiff’s said parcel of land and started to dig the foundation of a building on the said land.
5. The plaintiff reported the acts of trespass to the Nigeria Police and despite the fact that the Nigeria Police was investigating the plaintiff’s complaint, the defendants continued day and night to build on the said parcel of land.
6. The defendants intend, unless restrained by an Order of the Court, to continue with their acts of trespass on the plaintiff’s said parcel of land.
7. The plaintiff therefore claims against the defendants jointly and severally for trespass.

(a) N100,000.00 damages for trespass.

(b) An Order of injunction restraining the defendants, their servants and agents and any person claiming through them from entering or remaining on the plaintiff’s said parcel of land verged pink in the Plan No. SE/AN.13/78, or from doing anything thereon or from in any manner whatsoever interfering with the plaintiff’s rights of ownership and possession of the said parcel of land.”

Pleadings were ordered, filed and exchanged. Subsequently the appellant brought a motion on notice “praying the Court for an Order of the Court appointing a Receiver to manage and control the building on the land in dispute and to collect all the rents and profits from the said premises pending the determination of the above case and for such further order or orders as to this Honourable Court may seem just.”

The facts in support of the application on which the order appointing a Receiver was based can be found in the affidavit sworn to by a Mr. Joseph Azubuko Nnadike who claimed to be Chairman and Managing Director of theappellant. The relevant paragraphs of the said affidavit are:-

“4. That the plaintiff-applicant is the owner in possession of the parcel of land which is the subject-matter of this suit.

5. That the plaintiff-applicant acquired the land in dispute in February, 1978, under Onitsha Native Law and Custom from John Chike Agusiobo, the head of John Tiger Oranefo Agusiobo’s family.
6. That the plaintiff-applicant immediately went into possession of the said land and jointly with me built concrete walls round its land as well as my own personal land and installed an iron gate at the entrance of the premises.
7. That on the 19th day of May, 1982, the 2nd and 3rd defendants-respondents and their hirelings broke and entered the land and destroyed the front wall and carried away the iron gate.
8. That on the 23rd day of June, 1983, the defendants-respondents again broke and entered the plaintiff-applicant’s land and started digging foundation of a building.
9. That despite my protests and the investigation by the Nigeria Police to whom I lodged complaints on the matter the defendants-respondents continued night and day to build on the plaintiff-applicant’s said land.
10. That even after the institution of the above suit the defendants-respondents persisted in the erection of the said building.
11. That the said building is now almost completed and the defendants-respondents are arranging to let it to tenants.
12. That the plaintiff-applicant had already filed its statement of claim and plans in the above case and the facts contained therein are true.
13. That at the hearing of this application the plaintiff-applicant will rely on its statement of claim and plans which are hereby specifically referred to as Exhibits.
14. That the rents the defendants-respondents will collect from the building on the plaintiff-applicant’s said land will be lost to the plaintiff-applicant unless a Receiver is appointed to collect same.
15. That any tenants put in the said building will be in danger of being compelled to pay over again any rents they might have paid to any person other than the plaintiff-applicant.
16. That the firm of Akporiaye, Ezukanma & Co. of 93, Upper New Market Road, Onitsha, are reputable estate Manager and are willing to serve as Receivers in respect of the said building.”

There was a counter affidavit sworn to by the 7th defendant/respondent-Chukwuebuka Efobi on behalf of the other defendants, and the counter affidavit reads as follows:-

“I CHUKWUEBUKA EFOBI, Male, Christian, Nigerian citizen, Businessman of Plot 44 Omagba Phase II Obosi doth make oath and says as follows:-

(1) That I am the 7th defendant/respondent in this application.

(2) That I make this affidavit with the knowledge, consent and authority of the other defendants/respondents.

(3) That paragraphs 4,5,6,7,8,9,10 of the affidavit of Jonnasons Company Limited in support of this application are false.

(4) That the plaintiff/applicant is not the owner of the land in dispute and cannot possibly be in possession since we have structure on the land in dispute.

(5) That the plaintiffs never constructed any walls or any structure of any description with or without iron gates and that we never at any time broke down any walls or any building or iron gate on the land.

(6) That the structures on the land in dispute were erected at the normal pace of construction and that the construction of the said building were completed long before the institution of this action.

(7) That we bought our pieces of land and erected the structures thereon in good faith.

(8) That the defendants/respondents have already filed their Statement of Defence and Plan in this matter and the facts contained therein are true and the said Statement of Defence and Plan are hereby specifically referred to as Exhibits.

(9) That the plaintiff/applicant did not at any time lodge a complaint against us to the Nigerian Police but that at a time some of us were invited by the members of the N.S.O. who let us go after a very brief interrogation.

(10) That I respectfully depose that it is not just and convenient in the circumstance to appoint a Receiver.

(11) That I make this affidavit believing same to be true and correct to the best of my knowledge and conscience.”

After hearing arguments and submissions of counsel, the application was granted on the 30th day of October, 1986. In granting the motion the learned trial judge held:

“Learned Counsel for the respondents has argued that the subject matter of this action is land and not the rent accruing from it, and cites the case of Alao v. Omotayo (1979) 3 LRN 314.

I have read this judgment of the Lagos State High Court as per Oshodi, J. but find myself not persuaded by that decision. The learned judge in deciding as he did seemed to have based his reasoning on a passage in Kerr on Receivers (14th Ed.) at p.5 where it is stated:

“A receiver can only be appointed for the purpose of gelling in and holding or securing funds or other property, which the court at the trial, or in the course of the action, will have the means of distributing amongst, or making over to, the persons entitled thereto. The object sought by such appointment is therefore the safeguarding of property for the benefit of those entitled to it. There are two main classes of cases in which the appointment is made: (1) to enable persons who possess rights over property to obtain the benefit of those rights and to preserve the property pending realisation, where ordinary legal remedies are defective; (2) to preserve property from some danger which threatens it.”

And learned judge commented as follows:

“In view of the above statement I do not see to which of the two classes the application before (sic)xxxxxxxxxxxxxxxxxxx and went on to conclude that the applicant was not claiming rents collected but claiming the land in dispute and that “until he is adjudged the rightful claimant there will be nothing to preserve.”

Let me simply say that I am satisfied that this application falls within the first class of the two main classes set out in Kerr on Receiver above.”

Further down in his judgment, he also held as follows:

“Learned Counsel for the respondents had advanced the argument that to have a specific receiver appointed, the applicants need to file an affidavit of suitability of the receiver, showing his experience, what he would do with the money collected, where he would keep the money, his interest, whether he has the capability and qualifications to perform. In this regard the counsel cites the case of Jones Adeyeye v. E.T. Adewoyin & Ors. (1960) 5 FSC 146; (1960) SCNLR 310. To this, applicant’s counsel replies that in the Adeleye case (supra), the suitability or (sic) the receiver was questioned on the body of the affidavit. In the case in hand the applicant in paragraph 16 of his affidavit has deposed that –

“The firm of Akporiaye, Ezukanma & Co. of 93, Upper New Market Road, Onitsha are reputable estate Managers and are willing to serve as receivers of the said building.”

In my opinion the words “reputable estate managers” are sufficient to describe and emphasize the suitability, experience, capability and qualification of the receiver so nominated. And in that case what the said Receiver will do with money collected and where he will keep it must be seen as taken for granted unless the respondent raises the issue in his counter-affidavit. The defendants/respondents have not raised any such issue, neither did they question the truth of paragraph 16 of the affidavit. I hold that the plaintiff/applicant has done all that is required of him with regards to the nomination of a suitable receiver.

For the above reasons i will grant this application. This firm of Akporiaye, Ezukanma & Co. of 93, Upper New Market Road, Onitsha are hereby appointed as Receivers to manage and control the building on the land in dispute and to collect all the rents and profits from the said building pending the determination of this suit. The remuneration of the said Receivers, their mode of operation and other consequential matters are to be handled by the Asst. Chief Registrar of this Court in accordance with normal usages.

Application granted.”

Being dissatisfied with the Ruling of the learned trial judge, the Respondents in this appeal, appealed to the Court of Appeal, Enugu Judicial Division, and that Court, having considered all the principles and the relevant authorities relating to the appointment of Receiver by Courts, allowed the appeal and reversed the Ruling of Aneke, J. In the lead judgment of Uwaifo, J.C.A. with which Macaulay and Oguntade JJCA, agreed, the Court came to the conclusion that “the order for a receiver was erroneously made in circumstances which were not just and convenient.” This appeal is from that decision.

Four grounds of appeal were filed and, without their particulars, they are as follows:

1. That the Court of Appeal misdirected itself in law in holding that an order for the appointment of a Receiver in the present case could not be made on ground that the plaintiff-applicant-respondent-appellant had not established at the time of the application his interest in the rents and profits accruing from the land in dispute.
2. That that Court of Appeal misdirected itself in law in holding that an Order for the appointment of a Receiver could not be made in the present case on the ground that “there was nothing to preserve for the plaintiff pending the determination of the case.”
3. That the Court of Appeal misdirected itself in law in holding that even if the plaintiff-applicant-respondent-appellant succeeded in the present action it would not be entitled to the rents and profits accruing from the land in dispute up to the determination of the suit.
4. That the Court of Appeal erred in law in setting aside the Order of the High Court appointing a Receiver in respect of the building erected on the land in dispute.

The issues arising from the grounds of appeal for determination, as formulated by appellant’s counsel in his brief of argument, are as follows:

“(a) Is it a condition precedent to the appointment of a Receiver that the applicant applying for the appointment of a Receiver must first obtain a declaration that he is the owner of the property in respect of which an application for the appointment of a Receiver was made before the application for the appointment of the Receiver could be granted

(b) Has a plaintiff who has sued for damages for trespass and injunction based on his claim as the owner in possession of the land in dispute not the right to have the rents and profits accruing from a building the defendant has erected on the land in dispute preserved until the determination of the suit for payment over to the successful party

(c) Is it only from the date a plaintiff is found to be the owner of a land in dispute would he be entitled to the rents and profits accruing from the building the defendant has erected on the land in dispute preserved until the determination of the suit for payment over to the successful party

(d) Was the Court of Appeal right in setting aside the Order of the High Court appointing a Receiver in this case

In his own brief of argument, learned counsel for the Respondents formulated two issues for determination as follows:

“(1) Whether a plaintiff in an action for damages for trespass and injunction is entitled to have a receiver appointed at his instance to manage and collect rents from buildings erected by the defendants on the land in dispute when, on account of the nature of the case (and the issues joined in the Pleadings), the court will be without power to make any valid final order for the disbursement of the said rent

(2) Whether, on the peculiar facts and circumstances of this case, it is proper, just and convenient to appoint a receiver.”

With regard to the first issue for determination, it is certainly not the law that before a Receiver could be appointed at the instance of a party applying, the applicant must, as a condition precedent, show that he is the owner of the property in respect of which the application is sought to be made; and having carefully read the judgment of the Court of Appeal, I have been unable to find anywhere in that judgment in which such a proposition was made. What Uwaifo, J.C.A. said in this regard in his judgment can be found at p. 140 of the record. After the learned Justice of Appeal had reviewed and considered relevant authorities on the matter, he observed as follows:

“None of the cases considered above deals with a case where trespass is alleged against the person in occupation who himself is claiming to have lawfully entered the land. The cases either deal with inheritance where both parties claim to be beneficiaries, or mortgages or leases all of which have some interests or benefits that may be legally protected, known as existing rights, and to which the applicant for a receiver may be entitled. There is no doubt that the Court has the jurisdiction to appoint a receiver since the Judicature Act in all cases where it is just and convenient to do so. But the exercise of that jurisdiction needs utmost care. It is impossible to enumerate all the circumstances in which that jurisdiction will be exercised but it will not be exercised in a case like this where the applicant cannot show that his interest in the rents and profits exists at the time of the application.”

In my view the above passage is the correct statement of the law.

Similar views on the subject have been expressed by Kerr thus:

“The Court of Chancery would not, at the instance of a person alleging a mere legal title against another party who was in possession of real estate, and who also claimed to hold a legal title, disturb that possession by appointing a receiver. There being open to the plaintiff a full and adequate remedy at common law, he had no equity to come to the Court of Chancery for relief. The court would not interfere with a legal title, unless there was some equity by which it could affect the conscience of the party in possession…..as a general rule, where one person was in possession of the rents and profits of an estate, claiming to be the holder by a legal title, and another person also claimed to hold by a legal title, the former could not be ousted in the Court of Chancery until the true ownership of the legal title had been finally determined by law.”

See Kerr On Receivers: 16th Edition p.72/73.

As to whether a plaintiff, who has sued for damages for trespass and injunction, has a right to have the rents and profits accruing from the building the defendant has erected on the land in dispute preserved until the determination of the case, it seems to me there is a misconception of the principles which the courts follow in appointing receivers. It must be stated that a receiver is not an agent of either of the parties once he is appointed by the court. By his appointment, he becomes an impartial officer of the court whose primary duty is to protect an existing right. His appointment is entirely at the discretion of the court which must be satisfied that it is just and convenient to do so. The learned authors of Halsbury’s Laws of England, 3rd Edition, in Volume 32 at page 394 para. 633 state the grounds for appointment of a receiver as follows:

“Apart from appointments by way of equitable execution, or to enforce a charge, the general ground on which the court appoints a receiver is ultimately in every case the protection or preservation of property for the benefit of persons who have interest in it.”

And in the case of disputed title to land as we have in this case, the learned authors state the law in the same volume at page 395 para. 634 as follows:

“In cases of disputed title to land, the former rule was that the court would not interfere with the party in possession unless his title was obviously defective or was affected by some equity, or the rents were in danger of being lost or the property was in danger of destruction. Now. however, an interlocutory application for a receiver by a person asserting a purely legal title will be entertained, and a receiver may be appointed if the court thinks that the plaintiff will probably succeed at the hearing and that, in all the circumstances of the case, the appointment is just and convenient. In an action for recovery of land, the jurisdiction is exercised with great caution, and if the defendant is in occupation a receiver will only be appointed in special circumstances, as otherwise the substantial issue may in effect be determined by evidence only admissible on interlocutory application; and a defendant in such an action may be deprived of the privilege of not disclosing his title.”

Now, what is in dispute between the parties in this case is title to land. That issue is yet to be resolved. But on the facts before the Court, it is clear that the respondents, who have erected buildings on the land are in possession. Would it, in the circumstances, be just and convenient to appoint a receiver at the instance of the appellant who alleges a mere legal right to the disputed land Having regard to the legal principles set down above, my answer is definitely in the negative. Having come to this decision, it is no longer necessary, to give any further consideration to the third issue raised which, in my view, is purely academic.

In my opinion the Court of Appeal was right in setting aside the appointment made by the trial Judge. The appeal therefore fails and it is hereby dismissed with N500.00 costs awarded to the Respondents.

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SC.115/1989