Jolimair Nigeria Limited & Anor V. Liberty Bank Plc (2016)
LawGlobal-Hub Lead Judgment Report
YARGATA BYENCHIT NIMPAR, J.C.A.
This appeal is against the ruling of the Lagos State High Court delivered by HON. JUSTICE K. O. ALOGBA on the 12th October, 2009 relisting the suit earlier struck out. The Appellant dissatisfied with the ruling filed a Notice of Appeal dated 16th of October, 2009 and filed on the 26/10/2009 setting out 3 grounds of Appeal.
The facts relevant to this appeal are that the Respondent initiated a suit for recovery of debt against the Appellants and sometimes during the proceedings particularly after the close of the case for the Respondent, steps were taken by the parties towards amicable settlement which necessitated the adjournment of the suit to allow parties explore amicable settlement. When no report was made the Court struck out the claim and the Respondent filed several applications which were struck out before the application relevant to this appeal was heard and granted to relist the claim earlier struck out.
The Appellants filed their Appellants Brief dated 14th November, 2013 filed on the same date but deemed on the 3/6/14. Appellant filed a reply Brief dated 24th February,
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2014, filed on the 25th February, 2014 and deemed on the 4th of May, 2015. The Respondent’s Brief was dated 20th November, 2013 filed on the same date and deemed on the 3/6/14. All briefs were adopted at the hearing of the Appeal.
The Appellants distilled 3 issues for determination by the Court as follows:
(i) Whether the learned trial judge was right in holding that the application was competent;
(ii) Whether the learned trial judge was right in relisting the suit when there was no sufficient materials before the Court to justify the grant of the application.
(iii) Whether the learned trial judge was right in his interpretation of the provisions of Order 30 of the High Court Civil Procedure Rules of Lagos State to justify relisting the suit.
The Respondent on its part adopted the 3 issues formulated for determination by the Appellants but rephrased issue 2 as follows:
“Whether there was no sufficient material before the Court to justify the grant of the application.”
The Court shall adopt the 3 issues formulated by the Appellants for determination in this appeal.
ISSUE ONE:
“Whether the learned trial Judge was
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right in holding that the application was competent.”
Here, the Appellants submitted that at the time the action was struck out, the Respondent bank was already in liquidation and as such, it lacked the capacity to bring the application to re-list the suit. Further submitted that pursuant to Section 425 (1) of the Companies and Allied Matters Act, the only competent person to continue the action was the liquidator, that the Respondent was in legal parlance a dead party and can neither institute an action nor continue the action in its name. Further relied on the case of N.D.I.C. V. FMB (1997) 2 NWLR (Pt. 49) 735, REEKIE V. LEITH & EAST COAST SHIPPING CO. LTD (LIQUIDATOR) (1911) S.C. 808. The Appellants submitted that there were contradictions in the findings of the trial Court who first held that the Respondent cannot continue the action in its name but later went ahead to find that the application is competent. That a Court must be consistent in its findings, cited OSOLU & ORS v. OSOLU (1998) 1 NWLR (PT 535) 544. GARBA V. GALADIMA & 3 ORS (1993) 4 NWLR (PT 285) 72 and therefore urged the Court to resolve the issue in their favour.
In
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response, the Respondent agreed that it is the liquidator that has the power to bring an action or any other legal proceeding on behalf of a company under liquidation and that the liquidator has the power to appoint a legal practitioner to assist him in this regard. It therefore submitted that pursuant to this, it was the liquidator appointed to take over the management of the Respondent that appointed a counsel to relist the suit and thereafter continue prosecution of same. According to the Respondent, it is only after the suit has been relisted that an application to substitute the liquidator as the plaintiff can be made.
But in their reply brief, the Appellants insisted that the issue is not whether the liquidator is entitled or not to appoint a liquidator but that the action must continue only in the name of the liquidator.
RESOLUTION:
The issue here is one challenging the competence of the application granted to relist the suit earlier struck out. The challenge here presents a peculiar situation because it is an issue of competence of parties in the middle of a suit that had been struck out for want of diligent prosecution.
It is
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trite that a suit or cause of action is pending when any proceedings can be taken in it. So when a matter is struck out, it is still alive and kept in the Court’s general cause list and when an order is made on a matter not heard on the merits, it amounts to striking out simpliciter, see the case of PANALPINA WORLD TRANSPORT (NIG) V. J. B. OLADEEN INTERNATIONAL & ORS (2010) 19 NWLR (Pt. 1226) 1 at 20 where the Court held thus:
“When an order of Court is made in respect of an application not heard on the merits, it amounts to striking out simpliciter. Even where an order of dismissal is made following a hearing which is not based on the merits, such order is still considered in law a mere striking out.
When a matter is struck out in such circumstance there is a liberty to relist. The simple explanation is that while the matter is discontinued as from that date, it is still alive and kept in the Court’s general cause list and can be brought back to the hearing cause list when an application to relist has been granted. In such case, the plaintiff still has another opportunity to re-open the action after rectifying the deficiency that resulted
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in the striking out of the action. This is applicable even where the Court has not included in the order of striking out that the plaintiff has an option to relist. The matter struck out has not left the cause list – as it is still a pending case or pending cause.”
It is necessary to set out what the Courts have settled on the status of a matter that is struck out because the suit herein was also struck out for want of diligent prosecution. The suit here was initiated by the Respondent, a bank which later became part of a consolidation exercise with other bank after which Nigeria Deposit Insurance Corporation was appointed a liquidator to the claimant/Respondent. The legitimacy of the appointment of the liquidator is not in question as admitted by both sides.
The power of a liquidator of companies is statutorily provided for in Section 425(1) of the Companies and Allied Matters Act as follows:
“The liquidator in a winding up by the Court shall have power, with the sanction either of the Court or of the committee of inspection, to ?
(a) bring or defend any action or other legal proceeding in the name and on behalf of the
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company;
(b) carry on the business of the company so far as may be necessary for its beneficial winding up;
(c) appoint a legal practitioner or any other relevant professionals to assist him in the performance of his duties;
(d) pay any classes of creditors in full;
?(e) make any compromise or arrangement with creditors or persons claiming to be creditors, or have or having or alleging themselves to have any claim, present or future, certain, or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable;
(f) compromise all calls and liabilities to calls, debts, and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent or sounding only in damages, subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehended liability to the company, and all questions in anyway relating to or affecting the assets or the winding up of the company, on such call, debt, liability or claim and give a complete discharge in respect thereof.”
The relevant provision here is Section 425(1) (a)
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allowing the liquidator to bring or defend any action or legal proceedings in the name and on behalf of the company.
A liquidator was defined in the case of VICO AGRO ALLIED INDUSTRIES LTD V. ORIENT BANK (1998) 1 FBTLR 11, wherein AGBAJE JSC said:
“A liquidator or receiver performs his functions in relation to the properties of another person other than himself.”
The argument of the Appellants is that the Respondent is technically dead and therefore could not have had the life to revive the suit struck out earlier. The matter was initiated before the consolidation and appointment of the liquidator. This was after the banking license was withdrawn by the Central Bank of Nigeria pursuant to its power under the Banks and Other Financial Institutions Act (BOFIA) and Section 40(1) of the Nigerian Deposit Insurance Corporation Act. It is trite that the withdrawal of the banking license does not extinguish the life of the company, see OREDOLA OKEYA TRADING CO & ANOR V. BANK OF CREDIT & COMMERCE INTERNATIONAL & ANOR IN RE: MR. SIKIRU AMOLEGBE & ANOR (2014) 8 NWLR (PT 1408) 77 where the apex Court held thus:
“Liquidation is
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distinguishable from dissolution which is the end of the legal existence of a company. Liquidation may precede or follow dissolution. Thus, mere revocation of a banking license of a bank, without more, as claimed by the instant applicant cannot bring to an end the juristic life of the bank or corporation. Likewise, where a bank or corporation ceases to operate or closes its business that does not determine the legal existence of such a bank or corporation?.
In the same judgment the Supreme Court said as follows:
“The dissolution of a legal person is analogous to the death of an ordinary person. Now dead men are no longer persons in the eye of the law as they have laid down their legal personality with their lives at death. Also by Section 454(1) & (2) of the Companies and Allied Matters Act Cap. 59, a company ceases to be from the date the Court orders its dissolution. Thus, a company dies on its dissolution.”
The apex Court also made a categorical statement on Section 417 of the Companies and Allied Matters Act when it said:
?S. 417 ?If a winding-up order is made or a provisional liquidator is appointed no
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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.’ My understanding of this Section is that the fact of winding-up of a Company or the appointment of a liquidator does not by itself result in the death of a corporate body thereby removing its legal personality.”
It is clear from above excerpts from the judgment of the Supreme Court that the mere appointment of a liquidator for a bank does not mean the bank is dead legally speaking. The contention of the Appellants that the Respondent is dead is flawed and not supported by law. A company ceases to exist the day the Court orders its dissolution. Until such an event, the company cannot be considered dead.
Furthermore, even the said Section 425 (1) (a) of CAMA relied upon by the Appellant used the following words:
“Bring or defend any action or other legal proceedings in the name and on behalf of the company….”
“In the name” and “on behalf of the company” cannot by any stretch of imagination mean that the name of the company cannot be used. Thus, the authority of NDIC V. FMB (1997) 2 NWLR
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(PT. 49) 735 at 756 – 757 relied upon by the Appellants does not help them because the holding of ACHOLONU JCA (as he then was) did not say what the Appellants are imputing to him.
Now, it is agreed that the Nigerian Deposit Insurance Company Act, 2006 (NDIC Act), is by law an automatic liquidator when the banking license of a bank is revoked by the Central Bank of Nigeria. The NDIC Act provides thus:
“S. 40(1). Whenever the license of an insured institution is revoked by the Central Bank of Nigeria, the Corporation shall act as Liquidator of such failed insured institution with the powers conferred on a liquidator under the Companies and Allied Matters Act, 1990 and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for the purposes of that Act.”
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However, the suit was pending in the name of the Respondent though struck out for want of diligent prosecution occasioned by the consolidation of bank exercise. The same bank under liquidation but before an order of dissolution applied at the instance of its liquidator to relist the suit to enable the liquidator take over the prosecution of the claim. The
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Appellants challenged this on the ground that the application to relist must be made in the name of the liquidator, yet, all their authorities cited refer to Section 425 (1) (a) of CAMA which did not say so. It is wrong for the Appellants to say that the Respondent who is not yet “dead” cannot make an application in its name. Besides, even if the liquidator now has the powers to initiate proceedings in its name, or take over the case, the substantive suit herein was alive and subsisting before the appointment of a liquidator and until the liquidator takes over pursuant to order of the Court, it is only the Respondent that can apply to relist the suit which can be by way of motion. Substitution can only take place after the suit has been relisted. A party not before the Court cannot apply to relist a matter struck out in this circumstance. I see no merit in the arguments of the Appellants and consequently, this issue is resolved against the Appellants and in favour of the Respondent.
ISSUE TWO:
Whether the learned trial judge was right in relisting the suit when there was no sufficient materials before the Court to justify the grant of the
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application.
Under this issue, the Appellants complaint is on the discretionary power of the trial Court granting the application to relist the suit.
According to them, the application to relist a case struck out was filed almost two and half years after the case was struck out instead of the 6 days allowed by Order 30 Rule 4 (3) of the High Court Civil Procedure Rules of Lagos State. That the Respondent did not place before the Court sufficient materials or cogent reasons to justify the Court’s exercise of its discretionary power in respect of enlargement of time to bring the application and as such the Court ought not to have exercised discretion in favour of the Respondent. The Appellants relied on the case of WILLIAMS V. HOPE RISING VOLUNTARY SOCIETY ALL NLR 1 @ 6, UDE V. UDE (1996) 7 NWLR (PT 461) 379, ZEEK OIL NIG LTD & ANOR V. NDIC & ANOR (2009) 7 NWLR (PT 1141) 561, BANK OF BARODA & ANOR V. MERCANTILE BANK NIG LTD (1987) 18 NSCC (PT 11) 89. The Appellants went further to submit that it was wrong for the trial Court to find that the Respondent was most tardy in filing its application to relist the suit, and yet exercise discretion
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in its favour.
Submitted that the discretion of the trial Court was not exercised judicially and judiciously and therefore urged this Court to interfere with the discretion of the trial Court.
On the other hand, the Respondent was of the opinion that it gave sufficient reasons for the delay in filing for extension of time, i.e. negligence of counsel and consolidation exercise in the banking sector which affected the Respondent. That these reasons were considered by the trial Court along with other surrounding circumstances such as the nature of the case and as such the Court was in order to grant the application; that the case of WILLIAMS V. HOPE RISING VOLUNTARY SOCIETY (SUPRA) is not on all fours with the fact of the case. Further submitted that what constitutes sufficient materials is within the discretion of the Court and that the Appellants cannot make reference to a supporting affidavit in an earlier application which the trial Court had struck out, citing the case of UME V. NIGERIA RENOWNED TRAD. CO. LTD (1997) 8 NWLR (PT. 516) 344.
However, the Appellants in their reply insisted that the case of WILLIAMS v. HOPE RISING VOLUNTARY
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SOCIETY (SUPRA) is applicable in this case and contented that the affidavit in the earlier application of the Respondent struck out by the trial Court were merely exhibits in the current application and can properly be relied upon to show the inconsistencies manifested in the application and that negligence of counsel cannot avail the Respondent in this case.
RESOLUTION:
The Appellant under issue two challenged the exercise of discretion by the trial Court in granting the order relisting the suit. They contended that there were no materials before the Court sufficient enough to ground the application. The exercise of discretion is strictly within the confines of a Court so empowered. An application to relist a matter struck out is given to the High Court under Order 30 Rule 4 (3) of the Lagos State High Court Civil Procedure Rules which states as follows:
“An application to relist a cause struck out or set aside a Judgment shall be made within 6 days after the order or Judgment or such longer period as the Judge may allow.”
In other words, the applicant ought to have applied to have the suit relisted within 6 days and if this is not
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done, get an order of the Court enlarging the time within which it can bring such application. While it is certain that the grant of the application for extension of time is not automatic but based on the discretion of the Court, such discretion must be exercised judicially and judiciously. In the instant case, the Respondent indeed filed a motion dated 22nd January, 2009 seeking an order of the Court granting it extension of time to file its application to relist the suit and this was granted. From the affidavit in support of the Respondent’s application deposed to by one Emeka Ndukwu at the lower Court, the reason given for the delay is the consolidation exercise in the banking sector in 2005. However, the Appellants are of the opinion that this reason is not sufficient and directed this Court to contradictions in the affidavit in support of the Respondent’s earlier application struck out by the Court. Let me first of all say that documents tendered before a Court at the trial of a case become part and parcel of the evidence to be considered in the determination of issues before the Court. Consequently, since the earlier application struck out by the trial
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Court and relied upon by the Appellants was tendered as an exhibit at the trial Court, it can be examined by this Court in the determination of the case before it. That being said, I still do not see any material contradictions in the earlier affidavit to warrant an interference with the exercise of the Court’s discretion. While the Respondent had earlier stated that its counsel had failed to follow up with the matter, it now posits that the reason for the delay is the consolidation exercise that was carried out in the banking sector which affected the Respondent. Indeed, the Respondent was affected by the consolidation exercise, its banking license was revoked and a liquidator was appointed to oversee the management of its affairs. Consequently, internal reshufflings must have been underway and this affected the continuation of the matter at the trial Court. More so, the Appellants have not in any way denied the reasons adduced by the Respondent in the application allowed by the trial Court for the delay in filing its application.
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Furthermore, the Court of Appeal is always wary of interfering with the exercise of discretion by a trial Court unless it
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appears that the result of the order will occasion injustice or defeat the right of the party’s altogether, see the case of U.C.C.N. V. DANGOTE IND. LTD [2006] 6 NWLR (PT. 980) PG. 616. By giving room for the matter to be decided on the merits, I do not see how any of the party’s rights will be defeated or the injustice occasioned. The parties had already gone a considerable distance in the determination of the case and to shut them out when there are sufficient reasons to re – list the case will be tantamount to meting out injustice on the parties. I see no need to interfere with the discretion of the trial Court and I hold as such. The issue is resolved in favour of the Respondent.
ISSUE THREE:
Whether the learned trial judge was right in his interpretation of the provisions of Order 30 of the High Court Civil Procedure Rules of Lagos State to justify relisting the suit.
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It was contended by the Appellants that the order of the trial Court striking out the suit in the circumstances ought to have been construed as an order of dismissal which cannot be relisted. That Order 30 Rule 1 of the Lagos State High Court Civil Procedure Rules is not
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relevant here because the case is a part heard matter but it is Order 30 (2) that is applicable.
The Appellants further submitted that the case of ALOR V NGENE (2007) 2 SC 1 relied upon by the trial Court in relisting the suit is not applicable to this case and urged the Court to interpret the provisions of Order 30 in a manner that will reflect the intendment of the Statute, cited the following cases: MATARI v. DANGALADIMA (1993) 3 NLR (PT 281) 266, UNIVERSITY OF IBADAN V. ADAMOLEKUN (1967) 1 ALL NLR 213, DANTOSHO V. MOHAMMED (2003) 6 NWLR (PT 817) 457.
In response, the Respondent posited that Order 30 Rule 1 applies to all matters before the Court whether it is part heard or a fresh matter. The Respondent further stated that Order 30 Rule 2 relied upon by the Appellants cannot apply because both parties including the Defendant were absent from the Court on the date the matter was struck out. That the provisions of the law with respect to Order 30 Rule 1 of the Rules is clear and as such should be given their plain and literal meaning, citing N.E.W. LTD V. DENAP LTD & ANOR (1997) 10 NWLR (PT 526) 481, ODU’S INVESTMENT CO. LTD V. TALABI (1997) 10
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NWLR (PT 523) 1. The Respondent further submitted that the trial Court could not be called upon to dismiss the suit where the Respondent had already closed its case and it was left for the Appellants to open its case. That until a Court has decided a matter on its merits, it retains the inherent power to reverse itself or set aside any order that it has made during the pendency of the suit. The Respondent went ahead to submit that in some cases, an order of dismissal will be treated as that of a mere striking out especially in cases where the dismissal was not based on the determination of the merits of the case but on certain actions or inactions such as a want of diligent prosecution, citing IVBIYARO V. FRANCIS (2002) 1 NWLR (PT. 747) 33 in support.
RESOLUTION:
The Appellants contention here is that the trial Court was wrong to have based its decision relisting the suit on Order 30 Rule 1 of the Lagos State High Court Rules. The provision states as follows:
“When a cause on the weekly cause list has been called for hearing and neither party appears, the Judge shall, unless he sees good reason to the contrary, strike the case out.”
The
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above provision applies to all causes on the weekly cause list whether fresh or part heard. I do not agree with the submissions of the Appellants that the above provision only applies to a situation where a new cause on the list is mentioned. If the draftsmen intended for the provision to apply to only fresh matters, it would have expressly drafted it to be so.
Besides, it is only logical that the above provision will also apply to both fresh and part heard matters because while a party ought to be sanctioned for not diligently prosecuting or pursuing its matter, a party who has justifiable reasons for its absence should not be completely shut out from approaching the Court to ventilate its grievances. What is more, it is only fair that a matter which has been part heard such as the instant case should be concluded and determined on its merit.
I also agree with the submissions of the Respondent that Order 30 Rule 2 of the Lagos State High Court Civil Procedure Rules is not applicable in this case. The Provision states:
“When a cause is called for hearing if the defendant appears and the claimant does not appear, the Defendant, if he has no
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counter – claim, shall be entitled to Judgment dismissing the action, but if he has a counter-claim, then he may prove such Counter – claim, so far as the burden of proof lies upon him.”
This provision can only be invoked where it is only the claimant that is not in Court but the defendant is in Court and has applied to the Court for judgment dismissing the action. Here, both parties including the Appellants (Defendants at the lower Court) were absent in Court on the day the matter was called and struck out. Appellant cannot claim benefit under this provision when it was absent from Court.
Besides, even if this provision is applicable, the judgment of dismissal pursuant to the said Order 30 Rule 2 is a default judgment and can still be set aside by the trial Court subject however to certain conditions. The law is clear that unless and until the Court pronounces a judgment on merit or by consent, it retains the power to set aside its own default judgment, see the case of MOHAMMED V. HUSSEINI (1998) 11 – 12 SC 135, TENO ENG. LTD. V. ADISA (2005) 10 NWLR (PT. 933) 346.
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In essence, I see reason with the trial Court’s reliance on Order 30 Rule 1 in
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relisting the suit. The issue is resolved against the Appellants.
In the face of the above findings, this appeal is unmeritorious and it is hereby dismissed. I affirm the ruling of HON. JUSTICE K. O. ALOGBA of the High Court of Lagos State delivered on the 12th day of October, 2009.
N50,000 costs is awarded in favour of the Respondent.
Other Citations: (2016)LCN/8775(CA)
