John Uwakwe & Ors V. Julius Agom Odogwu & Ors (1989)

LawGlobal-Hub Lead Judgment Report

KAWU, J.S.C. 

The proceedings leading to this interlocutory appeal originated in the Onitsha Judicial Division of the High Court of Anambra State. In that court the appellants herein, as plaintiffs instituted an action in Suit No.0/110/80 against the first set of respondents only claiming as follows:-

“(1) Declaration that the plaintiffs are entitled to a statutory right of occupancy to all that land known and called Ani Nwaokwe.

(2) N40,000.00 general damages.

(3) Perpetual Injunction etc.”

Pleadings were ordered and exchanged. However, as can be gathered from the record of the trial court, on 30th July, ]984, the appellants filed an ex parte motion under Ord.54 1.2 High Court Rules before Justice F.O. Nwokedi (retired) praying the court:

“…..for an order granting (them) leave to seek and use police protection in pursuit of its rights of quiet possession over that piece or parcel of land known as and called” Ani Nwokwo” which is contained in the sketch plan showing the land of Inosi Onira family of Ogbeabu in case No. 168 of 1920 Agba Egwuatu v Gbasuzo Onowu and for such further order/and other orders…”

On the 10th day of January, 1985, their prayer was granted, and consequently the appellants, assisted by the police, moved into the land in dispute demolishing the structures thereon. Subsequently the second set of defendants who claimed to be the landlords and occupiers of the land in dispute applied to the court to discharge the ex parte order of 10th January, 1985 and allow them to be joined as co-defendants. Both prayers were granted.

Then on the 18th day of January, 1985 the appellants filed a motion in the High Court praying for:-

“(1) An order of injunction restraining the defendants/respondents, the co-defendants/respondents, their servants and agents from building or continuing to build on the land in dispute in the above case verged pink in the plan No. SE/AN9/81 or from alienating any portion of the said land pending the determination of the above suit.

(2) An order appointing a receiver to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute verged pink in the Plan No. SE/AN9/81 and for such further order or orders as to this Honourable Court may seem just.”

The appellants’ motion was supported by an affidavit sworn to by John Uwakwe who was the first plaintiff. On behalf of the co-respondents, the 6th co-respondent – Francis Obiagwu filed a counter-affidavit. The application eventually came up for hearing before Aneke, J. on the 11th day of March, 1980 when all counsel representing the parties made their oral submissions. At the conclusion of the hearing, ruling was adjourned to 2nd May, 1986.On that day in his ruling, the learned trial Judge dismissed the first limb of the motion praying the court for an order of injunction but granted the prayer for appointment of a receiver stating as follows:-

“I now turn to the prayer for the appointment of a receiver Paragraph 11 of the applicant’s affidavit deposes

“11. That the rents the defendants/respondents and the co-defendants/respondents and their servants and agents are collecting from the building and structures on the land in dispute will be lost to me, the other plaintiffs/applicants and to the members of my family unless a Receiver is appointed to collect same”.

And at paragraph 19 applicants depose as follows:-

“19. That the firm of Akporiaye, Ezukamma & Co. and Cosmas Ifebi & Associates are reputable estate agents and they have consented to act as receivers in respect of the land in dispute in the above case.”

“Learned Counsel for the defendants/ respondents argue that a receiver should not be appointed for the reasons that there is no mention in the affidavit of what rent is to be collected and no evidence of whom this rent will be collected from. He also argues that the applicants are silent as to what should be done about the yams and cassava on the land and what should be done about people who live in their own houses and pay no rent. He argues that an order appointing a receiver would be in vain in the face of these questions. This court however thinks that those questions are more or less of a professional nature and one which the Receivers themselves will resolve or answer when appointed.

I am quite in agreement with the learned counsel for the defendants/respondents that the appointment of a Receiver is an alternative relief which a court can grant instead of an injunction. I have however had due regard to all the circumstances of this case and have arrived at the considered opinion that it is just and convenient to appoint a receiver in this matter. Such a receiver is to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute as shown and verged pink on the plan No. SE/AN9/81.

This application is accordingly granted in part. The application for an interim injunction is hereby dismissed and the application for an order for the appointment of a Receiver is hereby granted.”

Being dissatisfied with this ruling, the defendants appealed to the Court of Appeal, Enugu Division, on a number of grounds. The appeal came before the Court of Appeal in Enugu (Coram: Abai Ikwechegh, Katsina-Alu and Macaulay, JJ.C.A.). In the lead Ruling delivered by Abai Ikwechegh, J.C.A. allowing the appeal, which Ruling was concurred in by Katsina-Alu and Macaulay, JJ.C.A., the learned Justice of the Court of Appeal said, inter alia:

“Under the Heading, Grounds of Appointment, paragraph 827, page 418, Vol. 39, Halsbury’s Laws, supra, the learned editors have shown that preservation of property is a just cause for appointing a receiver in cases where the benefit of persons who have interest in it clash: Taylor vs. Eckersley (1876) 2 Ch.D. 302, C.A. It is shown also that a receiver may be appointed pending

an action for the rents and profits of land vested in joint tenant Porter vs. Lopes (1877) 7 Ch. D. 358. A receiver may be appointed to protect a plaintiff who has right to be paid out of a particular fund, so as the receiver may protect the particular fund from being dissipated. Young vs. Buckett (1882) 51 L.H. Ch. 504. The circumstances of this application seem to exclude the above matters.

Where the law requires that the court will, where it is “just and convenient” make the appointment, it seems to me that the conduct of the application; the clash of the interests of the parties; and the risk of dissipation or wastages, are matters which spell out the consideration of “just and convenient”, and these questions are all absent in the present case; so that in effect it was not “just and convenient” to have made the order.”

It is against this ruling of the Court of Appeal delivered on 12th day of April, 1988 that the appellants have filed a Notice of Appeal to the Supreme Court on 5 grounds of appeal which grounds (without their particulars) are as follows:-

“(1) That the Court of Appeal misdirected itself in law in the following passage of its judgment:

“It would seem that the plaintiffs suffered the defendants and the co-defendants to fully erect the buildings and let them out on rents without employing the useful weapon of ‘interim injunction’ at the appropriate time to prevent the erecting of the buildings in the first place. The plaintiffs endured the defendants and co-defendants to have expended large sums of money to raise the buildings on the land. And they are now seeking to have the people who built the houses with the plaintiffs’ connivance and acquiescence stopped from gathering in accruing rents. It is well known that delay defeats equity. And the appointment of a Receiver in doing equity; and equity does not assist the tardy man.”

(2) That the Court of Appeal erred in law in the following passage of its judgment:

“If a party lets the other side expend income to build houses on land in dispute, to my mind such party shall be content with his final victory, which, when he wins the land in dispute gives him also all structures upon it by operation of the maxim, quidquid planatatur solo, solo cedit; but it would seem “unjust and inconvenient” in my view to allow him to stop the other party from realising his investments when the rights of the parties are not yet resolved.”

(3) That the Court of Appeal erred in law in the following passage of its judgment:

“Nwokedi, J., did not ever make any Order that dealt with rents that the appellants had all the time enjoyed. The need for the control of the rents did not crop up only in June, 1985, or thereafter. If the respondents had suffered the appellants to collect and enjoy the rents from 1980 to 1985, what then had brought about the change in the circumstances It was not alleged that the appellants had grown penurious and were dissipating the funds to which the plaintiffs/respondents were entitled. It is a fact that the respondents have no common interest with the appellants in the rents, so as to preserve them for the two sides to share in due course.”

(4) That the Court of Appeal misdirected itself in law in holding that “it is a further agreed point that the appellants are in present possession.”

(5) That the Court of Appeal erred in law In setting aside the Order of the learned trial Judge appointing Receivers in respect of the land in dispute.”

Briefs of argument were filed by the appellants and the respondents in this appeal which were adopted at the hearing. In this appeal, the appellants, who were plaintiffs in the High Court and respondents in the Court below will simply be called the appellants, while the 1st set of respondents and the second set of respondents, who were respectively the 1st set of appellants and the second set of appellants in the Court below, will be called the respondents.

In his brief of argument, the appellants’ counsel formulated questions for determination as follows:-

(a)(i) In a case for declaration of title, damages for trespass and injunction, has the Court jurisdiction to appoint a Receiver to manage, control and collect rents from the buildings, structures erected by one of the parties on the land in dispute pending the determination of the case

(ii) Is it the law that in a case for declaration of title, damages for trespass and injunction, a receiver should not be appointed to manage, control and collect rents from the buildings and structures erected on the land in dispute by the defendant pending the determination of the case on the ground that if the plaintiff succeeded in the case he would be amply compensated with the said buildings and structures which would pass to him with the land

(b)(ii) Was the Court of Appeal right to have set aside the Order of the High Court appointing Receivers in the above case when it was not shown that the High Court acted on wrong principles of law or had taken into consideration matters it would not have considered or had omitted to consider matters which it should have considered or that the order had occasioned a miscarriage of justice.

(ii) Was the Court of Appeal right to import into the appeal before it, matters which were not established by evidence and to speculate on issues which were either not raised or established and to rely thereon in coming to its decision in the appeal

(iii) Was the Court of Appeal right in its decision that the defendants/respondents/appellants/respondents and the co-defendants/respondents/appellants/respondents should be allowed, to the detriment of the plaintiffs/appellants/respondents/appellants, to be benefiting from the land in dispute while the above case is pending”

It is quite clear to me that questions (a)(i) and (ii), as formulated by the appellants’ counsel, raise the issue of the competence and jurisdiction of the court to appoint a receiver in a case for declaration of title to land and damages for trespass, and both questions should be treated together. In his submission on the point in his brief, Mr. Egonu, SAN, for the appellants made reference to several passages of the judgment of the Court of Appeal where the court dealt with the cases and circumstances in which a Receiver could be appointed. He then referred to the conclusion of the Court at page 163 lines 14-24 where the Court stated as follows:-

“The circumstances of this application seem to exclude the above matters. Where the law requires that the court will, where it is “just and convenient” make the appointment, it seems to me that the conduct of the applicant; the clash of the interests of the parties; and the risk of dissipation or wastages, are matters which spell out the consideration of “just and convenient”, and these questions are all absent in the present case; so that in effect it was not “just and convenient” to have made the order.”

He then submitted at page 5 of his brief that

“the sum of the judgment of the Court of Appeal in the passages of its judgment mentioned therein is that a Receiver could not be appointed in a case for declaration of title, damages for trespass and injunction.”

I have carefully gone through the judgment of the Court below and have not been able to find anywhere in that judgment where it is stated either expressly or impliedly, that a receiver could not be appointed in a case for declaration of title. In fact at p.159 of the record, the Court, correctly in my view, set out the various circumstances in which it would be proper to appoint receivers and made specific mention of the statutory jurisdiction of the court to do so under Section 25(1) of the High Court Law, Cap. 61 Laws of Eastern Nigeria, 1963 which is applicable to Anambra State. That Section does not limit the jurisdiction of the court to appoint receivers to a particular class of cases. It reads as follows:-

“25(1) The Court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the Court to be just or convenient so to do.” (underlining supplied by

me for emphasis).

In my view, there is no substance whatsoever in this complaint.

With regard to question (ii) in which it has been alleged that the Court of Appeal imported into the appeal before it matters which were not raised or established, I do not think the criticism in justified. The fact that the respondents erected buildings on the land in dispute was certainly in evidence before the trial court as paragraph 7 of the affidavit of John Uwakwe sworn to on 22/7/85 so clearly stated. It says:-

“7. That despite the institution of the above case the defendants/respondents and the co-defendants/respondents and their servants and agents have erected and are still erecting buildings and structures on the land in dispute.”

Again I see no substance in this complaint

The remaining two questions for determination – (i) and (iii) both raise the most crucial issue in this appeal as to whether or not in the circumstances of this case the Court of Appeal was right in setting aside the ruling of the High Court appointing receivers.

Now, in the Sixteenth Edition of “Kerr On Receivers” at page 5 under the heading “Object of appointment”, the law relating to appointment of receivers is stated as follows:-

“A receiver can only be properly appointed for the purpose of getting 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 or person 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; and (2) to preserve property from some danger which threatens it.”

In the first class of cases are where the court appoints a receiver at the instance of a mortgagee where principal is immediately payable or whose interest is in arrears; or cases of equitable execution; or cases where a receiver is appointed over the assets of a dissolved partnership.

The second class of cases include those in which the appointment is made to preserve property pending litigation to decide the rights of the parties, or prevent a scramble among those entitled, such as an appointment pending a grant of probate or grant of letters of Administration. Within this second class of cases it is necessary, in all cases to allege and prove some peril to the property.

Now considering all the materials before the trial court, can it be rightly said that the appellant’s case came under any of the above instances Would it be “just and convenient” to appoint receivers in the circumstances of this case My answer is firmly in the negative.

The Court of Appeal was, in my view, right in its conclusion “that no property on the land in dispute nor the rents, is shown to be in danger of wasting, or risk of alienation, or dissipation, to justify the order made, and such order was not therefore shown to be “just and convenient” as between the parties to the litigation, and it was for these reasons unfair to the appellants, and invalid at law and falls to be discharged.” In my judgment there is no merit in this appeal whatsoever and it is accordingly dismissed with N500.00 costs awarded to each set of respondents.

OBASEKI, J.S.C.: I have had the advantage of reading in advance the judgment just delivered by my learned brother, Kawu, J.S.C. His opinions on all the issues raised in this appeal accord with mine and I too would and I hereby dismiss the appeal against the decision of the Court of Appeal which set aside the decision of the High Court which appointed receivers to manage the property in dispute pending the hearing and determination of the claim. The claim of the plaintiffs/appellants endorsed on the writ of summons is for

1. declaration that the plaintiffs are entitled to a statutory right of occupancy to all that land known and called Ani Nwaokwe;
2. N40,000.00 general damages;
3. Perpetual injunction.

The action was filed in 1980. Trial is yet to commence although pleadings have been filed and exchanged. This appeal concerns the order made in the interlocutory application before the High Court. The application was for appointment of a Receiver to manage the property built by the respondents on the land. The High Court granted the application but on appeal, the Court of Appeal set aside the order. The application made by the plaintiff in the High Court was for

“(1) An order of injunction restraining the defendants/respondents, the co-defendants/respondents, their servants and agents from building or continuing to build on the land in dispute in the above case verged PINK in the Plan No. SE/AN9/81 or from alienating any portion of the said land pending the determination of the above suit;

(2) An order appointing a receiver to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute verged PINK in the Plan No. SE/AN9/81 and for such further order or orders as to this Honourable Court may seem just.”

It appears the facts in support of the application on which the learned trial Judge based his decision to make the order appointing the Receiver can be found in paragraphs 11 and 19 of the affidavit sworn to by John Uwakwe which read:

“11. That the rents the defendants/respondents and the co-defendants/respondents and their servants and agents are collecting from the buildings and structures on the land will be lost to me, the other plaintiffs/applicants and to the members of my family unless a receiver is appointed to collect same.

19. That the firm of Akporiaye, Ezukamma & Co and Cosmas Ifebi & Associates are reputable estate agents and they have consented to act as receivers in respect of the land in dispute in the above case.”

In granting the order, the learned trial Judge held:

“I am quite in agreement with the learned Counsel for the defendants/respondents that the appointment of a receiver is an alternative relief which a court can grant instead of an injunction. I have however had due regard to all the circumstances of this case and have arrived at the considered opinion that it is just and convenient to appoint a receiver in this matter. Such a receiver is to manage, control and collect rents from the buildings and structures which the defendants, the co-defendants and their servants and agents have erected or are erecting on the land in dispute as shown and verged pink on the plan No. SE/AN9/81.

This application is accordingly granted in part. The application for an interim injunction is hereby dismissed and the application for an order for the appointment of a Receiver is hereby granted.”

It is significant to observe that the fact that the buildings and structures were erected by the defendants and co-defendants did not strike a chord of caution in the ears and mindsofthe learned trial Judge. The appellants made no secret of that fact which at the stage of the proceedings would have disentitled the plaintiffs/appellants to that order. Neither the morals nor the law nor justice was on the side of the plaintiffs/appellants to secure that order at that stage when issues as to title have been joined, the respondents erected the buildings and were in possession.

However, dissatisfied, the defendants appealed to the Court of Appeal and won. The order was set aside and the existing rights of the defendants to possession of the land and rent restored. The plaintiffs were dissatisfied with the decision of the Court of Appeal and have now appealed to this Court against that decision.

Five grounds of appeal were filed. The 1st and 4th grounds complained of misdirection in law while the 2nd, 3rd and 5th grounds complained of errors in law. These 5 grounds have been set out fully in the judgment of my learned brother, Kawu, J.S.C. and I need not set them out here but the issues raised in them are, according to the formulation in the brief of the appellants as follows:

“a(i) In a case for declaration of title, damages for trespass and injunction, has the court jurisdiction to appoint a Receiver to manage, control and collect rents from buildings, and structures erected by one of the parties on the land in dispute pending the determination of the case

(ii) Is it the law that in a case for declaration of title, damages for trespass and injunction, a Receiver should not be appointed to manage, control and collect rents from the buildings and structures erected on the land in dispute by the defendant pending the determination of the case on the ground that if the plaintiff succeeded in the case, he would be amply compensated with the said buildings and structures which would pass to him with the land

b(i) Was the Court of Appeal right to have set aside the order of the High Court appointing Receivers in the above case when it was not shown that the High Court acted on wrong principles of law or had taken into consideration matters it would not have considered or had omitted to consider matters which it should have considered or that the order had occasioned a miscarriage of justice

b(ii) Was the Court of Appeal right to import into the appeal before it matters which were not established by evidence and to speculate on issues which were either not raised or established and to rely thereon in coming to its decision in the appeal (iii) Was the Court of Appeal right in its decision that the defendants/respondents/appellants/respondents and co-defendants/respondents/appellants/respondents should be allowed to the detriments of plaintiffs/appellants/respondents/appellants, to be benefiting from the land

My learned brother, Kawu, J.S.C. treated each of these issues fully.

Who are Receivers And in what circumstances must they be appointed This being an appeal originating from the High Court of Anambra State, the statutory jurisdiction to appoint receivers is to be found expressly stated in the provisions of section 25(1) of the High Court Law Cap. 61 Laws of Eastern Nigeria 1963 which read:

“The Court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which-it appears to the court to be just or convenient so to do.”

In other words, the overriding considerations must be justice in that it must be just and convenient so to do. If it will not be just to appoint a receiver, the appointment should not be made. The nature of the case and the facts and circumstances on which the application is based must be considered critically to see where the balance of convenience lies.

By the nature of the office, a receiver is an impartial person appointed by the court to manage, collect and receive pending the proceedings, rents, issues and profits of land or personal estate which it does not seem reasonable to the court that either party should collect or receive or for the same to be distributed among the persons entitled.

The main complaint of the appellants before the High Court is contained in paragraph 7 of the affidavit of John Uwakwe which is –

“that despite the institution of the above case, the defendants/respondents and their servants and agents have erected and are still erecting buildings and structures on the land in dispute.”

This is not a valid ground for the appointment of a Receiver, if a person who claims title to land spends money to develop the land and a third party claims title to the same land as the appellant has done in this case, it is not the law that control and management of the land together with receipt of rents and profits from the land be removed from the person in possession by the appointment of a Receiver unit the issue of title is finally determined. To do so cannot be regarded as ‘just’ and ‘convenient’. Until the third party is able to disturb the party in possession and prevent him howsoever temporarily from enjoying the rents and profits issuing from his investment on the land. The balance of convenience does not favour such a course [See Kerr on Receivers page 72, 16th Edition]

Appointment of Receivers being an equitable relief, the appellants have no equity to come to the Court of Chancery for relief since they had adequate remedy at common law to contest their legal title. 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 claims to hold a legal title disturb that possession by appointing a receiver. The true ownership of the legal title put in issue has to be finally determined before invoking the equitable jurisdiction of the court in the matter. See Earl Talbot v. Hope Scott (1858) 4 K & J. 96; Carrow v. Ferrior (1868) 3 Ch. App. 719.

Costs to the respondents is fixed at N500.00.

UWAIS, J.S.C.: I have read in advance the judgment read by my learned, brother Kawu, J.S.C. and I am in complete agreement with him that the appeal lacks merit and that it should be dismissed.

The power of the High Court of Anambra State to appoint a receiver is statutory and it applies to all manner of cases. Section 25 subsection (1) of the High Court Law, Cap.61 of the Laws of Eastern Nigeria, 1963 which is applicable to Anambra State provides:-

“(1) The Court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the Court to be just or convenient so to do.”

From the foregoing provisions, it is quite clear that a trial Judge has the power to appoint a receiver by an interlocutory order. However in making the appointment, the trial Judge is enjoined to take into consideration whether the justice of the case or the balance of convenience demands the appointment. This is a matter of discretion, the exercise of which must always be judicial as well as judicious.

There is no doubt that the balance of convenience in the case in hand was not in favour of the appellants when they inter alia applied for the appointment of a receiver to collect rent on the buildings and structures erected by the respondents on the land in dispute. Learned trial Judge did not therefore, exercise his discretion properly and was thereby in error when he acceded to the application by the appellants to appoint a receiver. In my opinion, the Court of Appeal was right in setting aside the appointment made by the learned trial Judge.

Accordingly, I see no merit in this appeal and it fails. The decision of the Court of Appeal is affirmed with N500.00 costs to each set of respondents.

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SC.89/1989