John Okeze V. Nigerian Stock Brokers Limited & Anor (2007)
LawGlobal-Hub Lead Judgment Report
CLARA BATA OGUNBIYI, J.C.A.
Briefly the plaintiff/appellant at the lower court had claimed in his writ of summons against the defendants/respondents jointly and severally the release to him of 1,000 units of Guinness Nigeria Limited, the stocks sold to him, the plaintiff, by the 1st defendant/respondent on 23rd October, 1969 for the sum of E1,284. 10s. 4d against the plaintiff/appellant’s cheque No.364566/172662 of 21st October, 1969 together with all dividends due thereon from 23rd October, 1969. In the alternative, the plaintiff/appellant claimed the sum of Pound 1,284. 10s. 4d from the said defendants/respondents jointly and severally, being money had and received for a consideration which had failed plus interest on the said amount at 21% per annum from 23:10:69 until judgment and thereafter, at 9% until the total judgment debt and costs have been liquidated.
The plaintiff/appellant claimed that the 1st respondent is a limited liability company engaged in Brokerage business, dealing in company shares and stocks while the 2nd respondent is a public liability company engaged in the business of brewery. That the 1st respondent was the agent of the 2nd respondent in respect of the sale of its stock and issuance of share certificates.
By a Notice of preliminary objection dated 4th April, 2001, the 1st defendant/respondent sought a dismissal of the suit on the following two grounds:-
(a) That the plaintiffs claim was statute barred as the cause of action arose in 1969 and
(b) The subject matter of the suit by virtue of section 251(e) of the 1999 Constitution was outside the jurisdiction of the High Court of Lagos State.
By its ruling delivered on the 3rd May, 2002, the learned trial judge saw the dispute as having arisen from the operation of the Companies & Allied Matters Act and held thus:-
“The issue of stocks, share certificates and dividends can be said to be matters that spring from or arise out of the operations of the Companies & Allied Matters Act and this court has no jurisdiction to entertain same……….
Assuming for the purpose of argument that this court has jurisdiction, is this action statute barred for being commenced 31 years after the event complained of?”
The court in response to the question raised concluded and held further and said:-
“The plaintiff had ample opportunity to institute this action against the defendants several years ago and chosen to do nothing. It cannot be in the interest of justice for an aggrieved party to institute an action 31 years after the cause of actionn arose……………..
I have carefully considered the writ of summons, statement of claim, the notice of preliminary objection, and the written submissions of learned counsel and hold that this court lacks jurisdiction to entertain this suit since it falls within those matters exclusively reserved for the Federal High Court. Assuming however, that the court does have jurisdiction, this action will also fail as it is statute barred. The application is dismissed and the suit is hereby struck out.”
Consequent to the courts decision, the plaintiff/appellant was very dissatisfied, and therefore filed notice of appeal containing two grounds which same reproduced without the particulars read as follows:-
“Ground One
The learned trial judge erred in law when she accepted the position of the 1st Defendant/Respondent that the matter falls within the jurisdiction of the Federal High Court pursuant to Section 251(e) of the Constitution of the Federal Republic of Nigeria 1999.
Ground Two
The learned trial judge was in error when she declined to assume jurisdiction because of Section 8(1)(e) of the Limitation Law of 1994, and Section 251(e) of the Constitution 1999.”
The appellant pursuant to a departure order granted on the 9th June, also filed its brief of argument on the 11th July of the same 2003. On the 2nd October, 2007 when the appeal was called up for hearing, the learned appellant’s counsel per Mr. Emeka Ukachi adopted the brief of arguments and urged this court to allow the appeal. The 1st and 2nd respondents counsel Messrs P. U. Nnoli and Olusegun Ibironke also adopted both respondents’ briefs which same were filed on the 11th September, and 21st October, 2003 respectively.
From the two grounds of appeal, the appellant formulated two issues for determination as follows:-
“1. Whether the High Court of Lagos State was right in its conclusion that the matter falls within the jurisdiction of the Federal High Court pursuant to Section 251 (e) of the Constitution of the Federal Republic of Nigeria 1999.
- Whether the High Court of Lagos State was right in declining jurisdiction because of the provisions of Section 8( 1)(a) of the Limitation Law of Lagos State, 1994.”
The 1st and 2nd respondents two Issues needless to reproduce, are substantially the same with those of the appellant both bordering on the jurisdictional competence of the lower court to either entertain the claim or that same is statute barred.
The appellant’s counsel in submitting in favour of the appeal argued the lower court’s error and thereby wrongfully arrived at a decision in favour of the respondents. This he argued is predicated on the provision of Order 23 rule 3 of the High Court of Lagos State 1994. That the rule enables a plaintiff, who had sued on a writ of summons to which the defendant has entered an appearance and filed a defence, to apply that judgment be entered summarily in his favour once he supports his application with a verifying affidavit affirming his belief that, though the defendant has filed a statement of defence, such statement of defence discloses no reasonable answer to the plaintiffs claim. Also in the alternative, that a defendant who has entered appearance to a writ of summons and filed a defence, may apply that the plaintiffs writ of summons discloses no reasonable cause of action against him. Reliance and reference in support was made to the Commercial Litigation-Pre-Emptive Remedies (1987) by Goldrein and Wilkinson at page 281-282. Further reference was also made to the learned author Aguda (of blessed memory) in his book on Practice and Procedure (1980).
Learned counsel re-iterated further that such application will succeed only if the claim is obviously unsustainable. Cited in support is the case of Attorney General of the Duchy of Lancaster vs. London & North Western Railway (1892) 3 Chap.274. Further references were also made to Hubbuck & Wilkinson (1889) 1 Q.B. 86 and Moore vs Lawson (1915) 31 TLR 18.
That so long as the statement of claim discloses some cause of action however, or raises some question of fact or Law fit to be decided by a jury or Judge, then an application to strike out the action cannot succeed on the mere ground that the case is weak and is not likely to succeed. That similarly, if there is a point of law which requires serious argument, the application will fail. Cited in support is again the case of Hubbuck v Wilkinson under reference supra. The learned counsel submitted the serious existence of doubts having arisen on the pleadings of the parties and which he alleges the existence of an element of fraud warranting the learned trial Judge to have inquired into, in a plenary hearing.
That despite the limitation placed upon actions founded on simple contract which action must be brought within six years, the same limitation Law had also provided exemptions in Section 13 of Part 2 in cases of equitable relief. That there is no record of the appellant’s money with the 2nd respondent. That the failure of the 1st respondent to pay appellant’s money to the 2nd respondent (whose agent it is) is fraudulent and consequent to which the 1st respondent is therefore estopped from raising the issue of estoppel having regard to section 13(1) of the Limitation Law Lagos State 1994.
In further submission, the learned counsel argued that where an agent receives money for and on behalf of its principal it could be guilty of the fraud of conversion. That by virtue of section 13(1) of the Limitation Law of Lagos State, the plea that the matter is statute barred will not avail such an agent. That the ruling was anchored on the negative assumption that the phrases “for the release of’ does not amount to “specific performance.” Counsel submitted further that only a plenary hearing could have resolved the issue. That in as much as section 251(1)(e) of the Constitution gave exclusive jurisdiction to the Federal High Court in all matters affecting the operation of the company law, no jurisdiction can be assumed in matters of company shares where not such shares are in existence.
That preliminary objections are predicated on law and not facts. Furthermore that by the nature of the plaintiffs claim, the writ of summons relates to questions of fact and which counsel argued, the plaintiff was bound to establish in evidence. That it was premature therefore for the learned trial Judge to have dismissed the suit without giving the plaintiff the opportunity to prove his case in a plenary hearing. That “equity will not suffer a wrong to be without a remedy.” Counsel urged on the premise that the appeal be allowed and the case be remitted to the Chief Judge for reassignment to another Judge to enable the appellant establish his case by evidence.
In response to the submission the learned 1st respondent’s counsel argued the inapplicability of order 23 of the High Court of Lagos (Civil Procedure) Rules 1994 to the matter at hand. That the appellant’s claim was obviously unsustainable for being statute barred and also that the subject matter could not be competently maintained before the Lagos High Court by virtue of the provisions of Section 251(e) of the Constitution of the Federal Republic of Nigeria 1999. That for purpose of any application in lieu of demurrer under order 23 of the High Court, Lagos State, the facts as alleged by the appellant in the statement of claim would be deemed proven and correct. That with the appellant’s transaction having been contracted 31 years ago, he is deemed to have slept over his right in the absence of any diligence on his part asserting his right and entitlements allegedly denied him. That by virtue of Section 8(1)(a) of the Limitation Law 1994, the appellant’s cause of action is not maintainable both in law and equity. That same is statute barred since it was not instituted within six years from the time the cause of action arose in 1969. That the aim of the statute of Limitation is to put an end to litigation. The appellant’s right, counsel argued, has become extinguished under the circumstance. That the use of the word shall in section 8(1)(a) of the Limitation Law 1994 signifies its mandatory nature.
In his further submission, the said learned counsel argued that the authority of Moore v. Lawson cited by the appellant supra was not decided based on the present ratio where the case is clearly statute barred. That even the recognized exceptions are not available to the appellant. That the claim is further statute barred by virtue of the provisions of Section 83(5) of the Companies and Allied Matters Act (CAMA) Cap. 59 Law of the Federation of Nigeria 1990. That a successful plea of a statute of Limitation is a complete answer to the appellant’s action as it is like a plea of res judicata. Cited in support are the cases of:-
Idowu Lamina v Ikeja Local Government (1993) 8 NWLR (Pt.314) 771; Ishola v Societe General Bank of Nigeria Ltd. (1997) 1 SC QR 261; Humbe v Attorney General (Benue State) (2000) 3 NWLR (Pt.649) 419; Adekoya v Federal Housing Authority (2000) 4 NWLR (Pt.652) 215; and Texaco Panama Inc. v Shell Petroleum Dev. Corp. (2000) 4 NWLR (Pt.653) 480.
That the appellant is bound by his claim “for 1,000 units of Guiness Stock” and the reason which the claim for “specific performance” sought for cannot therefore avail him, as it is an afterthought and belated. That parties are bound by their pleadings. Learned counsel further buttressed his arguments with the case of Bullen & Leake: Precedent of Pleadings 12th Edition, 1975, p.63; Cargill v Bower (1878) 10 Ch.D. 502 at 508; and Lewis & Lewis v Durnford (1907) 24 T.L.R. 64. That the equitable doctrine of “Delay defeats equity” or “equity aids the vigilant and not the indolent” is applicable to this case to extinguish the appellant’s claim. Further reference in support is the case of Habib Bank Ltd. v Habib Bank A. G. Zurich (1981) 1 W.L.R. 1265 at 1284, 1285.
That since the issue of fraud was not raised at the lower court, same cannot now be raised at this stage as a subterfuge to foist a retrial of the suit.
Learned counsel sought to re-iterate the trite law that fraud, by the rules of pleadings, must be specifically pleaded with the same requiring a very high standard of proof.
On the 2nd issue raised, the learned counsel submitted that the subject matter of the appellant’s claim falls within the exclusive jurisdiction of the Federal High Court by virtue of Section 251 (e) of the 1999 Constitution, and consequent to which the Lagos State High Court lacks the requisite jurisdiction to therefore adjudicate on the matter, which counsel argued is governed by the Companies and Allied Matters Act. Furthermore, that the appellant must stand or fall on his claim, and cannot resort to the 2nd respondent’s statement of defence to substitute a new claim. More so that the statement of claim has superceded that endorsed on the writ. Learned counsel submitted in conclusion the incurable defect of this suit and which the lower court lacked the jurisdiction to entertain same. That the appeal should in the circumstance therefore be dismissed.
The learned 2nd respondent’s counsel Mr. Ibironke in his submission relied heavily on the provision of section 8(1)(a) and (b) of the Limitation Law of Lagos State 1994 and substantially associated himself with the 1st respondent that actions founded on simple contract shall not be brought after the expiration of six years from when the cause of action arose. That with the transaction being purely contractual, any action arising therefrom must be brought within six years, the failure which would be detrimental and fatal to the appellant’s case. Furthermore counsel denied any record of the transaction allegedly entered into by the appellant with the 1st respondent. That no money for the purchase of the alleged stocks of the 2nd respondent was ever received by the registrar of the 2nd respondent. That the appellant’s action of an injury that happened 31 years past is against the public policy and therefore not maintainable both in law and equity.
Relying also on section 251(e) of the Constitution learned counsel reiterated the exclusive jurisdiction in the Federal High Court to the exclusion of the State High Court over matters relating to companies and their stocks together with the accrued dividends.
Finally, that the transaction at hand was purely between the appellant and 1st respondent to the exclusion of the 2nd, whom the counsel argued was never a party. He therefore urged us to also dismiss the appeal as lacking in merit.
For the determination of issue No. 1, it is a fundamental and cardinal principle of law that the plaintiffs claim determines the jurisdiction of a court. See the authorities in the cases of Enwezor v Onyejekwe (1964) 1 All NLR 14; Adejana v Military Governor of Lagos State (1972) 1 All NLR 159; Arija v Iyayi (1993) 7 NWLR (Pt.305) 290 at 309 and Shell B.P. Petroleum Development Co. v Onasanya (1976) 6S.C. 89 at 94. The provision of Section 251 (e) of the Constitution of the Federal Republic of Nigeria 1999 reproduced states as follows:-
“25 1(1)…………….
the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters –
(e) arising from the operation of the Companies and Allied Matters Act of any other enactment replacing that Act or regulating the operation of companies incorporated under the Companies and Allied Matters Act.”
Deducing from the plaintiff/appellant’s claim at page 3 of the record, same against the defendants/respondents jointly and severally is in respect of 1,000 units of Guiness Nigeria Plc shares/stocks, issuance of share certificate and accruing dividends therefrom; the alternative claim is the sum of ?1,284: 10s:4d as money had and received for a consideration which has failed.
The 1st defendant/respondent at paragraph 7 of its statement of defence in response to the plaintiff/appellant’s claim averred that the shares purchased were clearly lodged with Barclays Bank of Nigeria Ltd.
In its own defence at paragraph 5 at pages 23 and 24 of the record, the 2nd defendant/respondent totally and out rightly denied either the knowledge or existence of the 1,000 units of shares, the subject of the plaintiff/appellant’s claim.
It is pertinent to pose a question at this juncture as to the nature of the claim in the issue at hand. By the provision of section 251 (e) of the 1999 Constitution supra, all matters coming there within, are the exclusive jurisdictional prerogative of the Federal High Court. It is obvious that the said section 251 (e) is clear cut on dispute/controversies relating to Companies and their stocks. In other words exclusive jurisdiction is vested in the Federal High Court to the exclusion of State High Courts over matters relating to companies and their stocks with the accrued dividends. However, and as rightly submitted and argued by the learned appellant’s counsel, as penultimate to the assumption of exclusive jurisdiction under section 251 (e) supra, the shares must actually be in existence. From the pleadings of parties at the lower court, there is no indication of such stocks being in existence, as it were. This is especially with the 2nd respondent denying issuing any shares to the appellant in the absence of the receipt of payment, received from the 1st respondent, for on behalf of the appellant. The issue in the matter at hand in my view and contrary to the findings by the lower court falls squarely within its jurisdiction and consequent to which its decision in declining jurisdiction was therefore erroneous. Issue no. 1 is herewith resolved in favour of the appellant. A relevant authority in support is the case of Onourah v Kaduna Refining & Petrochemical Co. Ltd (2005) 2 SC (Pt.11) 1 at 7 wherein the apex court in considering a similar provision under the 1979 constitution held that disputes founded on contracts are not within the contemplation of the additional jurisdiction conferred on the Federal High Court. Further related authorities are the cases of Seven Up Bottling Co. Ltd. v Abiola & Sons Bottling Co. Ltd. (2001) 6 SC 73 also Trade Bank Plc v Banilux Nig. Ltd. (2003) 5 SC 1;
With the determination of issue no. 1 vesting jurisdiction in the lower court, the next question is whether the court was right to have decided the plaintiff/appellant’s suit at the time it did. One is certainly very mindful of the provision of order 23 rule 3 of the High Court of Lagos State Civil Procedure Rules 1994 which same reproduced state:-
“If in the opinion of the court or judge in Chambers, the decision on such point of law substantially disposes of the whole action or of any distinct cause of action, grounds or defence, set off, counter claim, or reply therein, the court or judge in Chambers may dismiss the action or make such other order therein as may be just.”
The consequential effect of the order is to obtain a summary judgment or dismissal by the plaintiff or defendant as the case may be.
The determination of the 2nd issue therefore is boarded on Section 8(1)(a) of the Limitation Law of Lagos State and order 23 High Court of Lagos State 1994. Section 8(1)(a) of the said Limitation Law relied upon by the 1st respondent states as follows:-
“S.8(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued:-
(a) Action founded on simple contract.”
Both respondents counsel argued vehemently that with the action being commenced 31 years after the event, same is caught up by the statute of limitation. It is however noteworthy to restate also that the said same limitation law had made exemptive provisions in Section 13 of part 2 in cases of equitable relief. The reproduction of the section for ease of reference states as follows:-
“13(1) Sections 8, 9 and 11 shall not apply to any claim for specific performance of a contract or for an injunction or other equitable relief.”
The thrust of the plaintiff/appellant’s claim per his writ of summons at the lower court is “for the release to him of his 1,000 units of Guiness Nigeria Ltd. stocks.” The claim for money refund is in the alternative. The consequential implication of section 8(1)(a) of the limitation Law is that actions founded on simple contract shall not be brought after a period of six years.
However and taking together the sections 8 and 13 of the limitation Law reference supra, the deductive effect of the latter serves a curative hard line measure to ameliorate the effectual close door water tight and draconian effect of section 8, the earlier provision. In other words, the comprehensive nature of the law should not only serve to bar limitation of actions but also make appropriate exemptive provisional measures in cases of equitable relief as provided for in section 13( 1) under reference.
In further expatiation, I am of the considered humble opinion that it is not equitable as contemplated by the respondents that section 8(1)(a)(b) of the Limitation Law should supercede S.13 part 2 of the same law. I therefore completely agree with the submission by the learned appellant’s counsel that the determination of the case at the stage by the lower court without having heard the entire evidence was very premature. This I hold especially having regard to the pleadings of the parties particularly the defence of the 1st and 2nd respondents wherein the latter denied the receipt of the money paid by the appellant to the 1st respondent on behalf of the 2nd. The plaintiff/appellant’s claim from all ramifications is for an equitable relief and which the lower court has jurisdiction to hear and determine. For the operational invocation of Companies and Allied Matters Act (1990) there ought to have been stocks in existence and in respect of which there was no such evidence. With the greatest respect to the learned trial judge therefore, the application of order 23 rule 3 of the High Court of Lagos State and thus disposing of the entire case was erroneous and indeed premature. Again and as rightly submitted by the learned appellant’s counsel, the lower court was certainly in grievous error to have dismissed the suit when the plaintiffs pleadings disclosed facts which are in dispute.
On the said issue no. 2 same is also resolved in favour of the appellant. In the final result, the appeal succeeds and I make an order remitting the case to the Chief Judge Lagos State for re-assignment, and hearing on the merit.
The appeal succeeds and I make an order of N20,000 in favour of the appellant against the two respondents jointly and severally.
Other Citations: (2007)LCN/2584(CA)
