Kadzi International Ltd. V. Kano Tannery Company Ltd. & Ors (2003)
LawGlobal-Hub Lead Judgment Report
ISA AYO SALAMI, J.C.A.
This is an appeal brought against the decision of the Kano State High Court of Justice setting aside its own judgment delivered against the first defendant for want of jurisdiction but affirming the same judgment against the second defendant, the receiver or manager of the first defendant. The second defendant has also cross appealed against the judgment, with leave of this court granted on the 27th March, 2000 and the notice of appeal duly filed in the registry of the trial court on 5th April, 2000, within the time extended by this Court, and same accordingly served on the appellant.
The plaintiff commenced this action, under undefended list, claiming against the defendants jointly and severally the sum of N3,548,535.43 being the money advanced to the first defendant together with the agreed profit entered into with first defendant. The defendants did not file their notice of intention to defend the action as demanded of them by the provisions of Order 23 rule 3(1) of the Kano State High Court (Civil Procedure) Rules notwithstanding of appearance of counsel for both of them up till judgment. The court below, therefore, entered judgment against the two defendants in the sum of N3,548,535.43 jointly and severally and accordingly issued writ of execution which was duly executed. Thereafter the defendants, in conjunction with another party, applied to the trial court for the judgment to be set aside as well as writ of fifa, amongst other reliefs, on account of lack of jurisdiction. The third applicant was the custodian of the goods in respect of which executions were levied.
The plaintiff allegedly gave a notice of preliminary objection challenging the competence of the lower court to entertain the application and that the applicant lack ‘locus standi”. Learned trial Judge, notwithstanding the notice of preliminary objection duly served, discountenanced the preliminary objection and proceeded to entertain argument for and against defendant’s application. He subsequently delivered his ruling wherein he concluded thus:
“Lastly, the submission of Mr. Olatunji as to fact that the 1st defendant is under receivership is relevant and valid. I am therefore of the opinion that I have no jurisdiction to hear and determine the suit against the defendant. The judgment of this court of 5th March, 1997 against the 1st defendant is set aside for want of jurisdiction. Finally, Mr. Olatunji asked for an order directing the plaintiff, Alhaji Sani, Deputy Director (Litigation), High Court, Miller road and the bailiffs of this court to produce the whole properties attached and carried not to court premises but to an unknown place forthwith. I am granting the order as prayed. I am further ordering that this order be complied with within 48 hours of this ruling. This order is to be served on all parties and the Deputy Director Litigations, Alhaji Sani. The writ of attachment against the 1st defendant Kano Tannery limited is set aside.” (Italics mine)
The plaintiff was dissatisfied with the decision of the learned trial Judge and appealed to this Court on five grounds of appeal from which he formulated these three issues:
“1. Whether the appellant’s claim as disclosed in the writ of summons raises any issue of receivership to warrant the learned trial Judge setting aside his judgment delivered against the 1st respondent in favour of the appellant for Jack of jurisdiction.
2. Whether the learned trial Judge was right in setting aside the writ of attachment issued and executed against the 1st respondent in this suit.
3. Whether the learned trial Judge was right in refusing to hear and determine the appellants objection validly raised against the 1st respondents applications dated the 10th and 13th day of March, 1997.”
The first and second defendants (hereinafter referred to as first and second respondents) formulated the following issues:
“1. Whether or not the High Court, Kano had the jurisdiction to entertain this suit arising from the alleged breach of Tanning Contract against the 1st respondent in receivership under the 2nd respondent, the receiver/manager when it is a matter and incident flowing from the operation of the Companies and Allied Matters Act, Cap. 59, Laws of the Federation of Nigeria, 1990.
2. Whether or not the lower court was wrong in setting aside the writ of fifa irregularly issued less than 24 hours after judgment contrary to Order IV rule 1(2) Sheriffs and Civil Process Judgment Enforcement Rules, Cap. 123, Laws of Northern Nigeria, 1963 applicable to Kano State.
3. Whether or not there was any miscarriage of justice in the consideration of the appellant’s case by the lower court and whether issue 3 of the appellant is competent.”
The third respondent adopted the three issues framed by the appellant in its brief as it considers them as all encompassing. It merely reproduced the three formulations for purposes of clarity or avoidance of doubt.
The 2nd respondent was not happy with the ruling of the learned trial Judge and cross-appealed with leave of the court on 2 original and one additional grounds of appeal. The cross-appellant framed these issues from the three grounds of appeal:
“1. Whether or not in the circumstances of this case the lower court was not in error in refusing to set aside the judgment entered against the 2nd respondent after setting aside judgment against the 1st respondent.
2. Whether or not the appellant has locus standi to institute this suit against the respondents.”
The cross-respondent in its cross-respondent brief formulated the following issues:
“1. Whether or not the lower court was wrong in refusing to set aside its judgment against the 2nd respondent.
2. Whether the ground contained in the cross-appeal ground three and issue No. are competent grounds 2 (sic) of the cross-appeal are competent before the court.”
The third respondent-cross-respondent again filed a cross-respondent brief to the cross-appeal in which brief he framed only one issue.
Its sole identification of issue reads as follows:
“Issue 2 formulated by the cross-appellants adopted by the 3rd respondent.
2. Whether or not the appellant has locus standi to institute this suit.”
The first and second respondents took objection to the competence of the appellant’s ground 4 from which its issue 3 was formulated. Similarly, the appellant took objection to second respondent’s additional ground 3 which was filed with the leave of court after the notice of appeal had been filed along with 2 grounds of appeal. I propose to deal with the objections seriatim beginning with ground 4 of the appellant’s notice of appeal.
Appellant’s ground 4, as contained in the notice of appeal, according to the first and second respondent did not give rise to the appellant’s issue 3. The respondents contended that the ground in question complained of the failure of the learned trial Judge to rule on the objection raised in the course of argument in opposition to the respondent’s motion dated 10th March, 1997 for failure of the respondents to first seek and obtain leave of court before filing the motion. I do not think that the ground of appeal alleged that the learned trial Judge failed to make a ruling upon objection made in the course of the argument. Ground 4 of the grounds of appeal is complaining about the failure of the learned trial Judge to first entertain its preliminary objection which would have had the effect of defeating first and second respondents’ application in limine.
Ground 4 and its particulars read as follows:
“4. The learned trial Judge erred in law in failing to first determine the appellant’s notice of preliminary objection filed against the 1st respondent’s motion dated 10/3/97 which error has occasioned a miscarriage of justice.
Particulars of error
(a) The appellant filed a notice of preliminary objection dated 10/4/97 to the effect that the court lacks jurisdiction to entertain and determine the 1st respondent’s motion of 10/3/97. The motion of the preliminary objection was not heard at all inspite of the appellant’s counsel insistence of being heard first in order to determine whether or not the 1st respondent’s application was competent before the court.
(b) The learned trial Judge failed to first entertain and determine the notice of preliminary objection filed by the appellant which objection duly challenged the jurisdiction of the lower court to hear and determine the 1st respondent’s application dated 10/3/97 which application was first heard and erroneously granted in part.
(c) Had the learned trial Judge first heard and determined the notice of preliminary objection filed by the appellant he would not have heard and determine the 1st respondent’s application dated 10/3/97 let alone granting the incompetent prayers contained therein.
(d) The learned trial Judge failed to first determine the issue of his jurisdiction to entertain the 1st respondent’s application dated 10/3/97 and instead proceeded to hear and determine irrelevant and secondary issues which failure had greatly occasioned a miscarriage of justice.” (Italics mine)
Clearly, the ground is not only guilty of verbosity but is also repetitious and argumentative.
A ground of appeal must be concise and succinct and must be directed against the ratio decidendi of the learned trial Judge not even against his obiter dictum. A ground of appeal that does not relate to the decision and a challenge to the validity of the ratio decidendi in the judgment on appeal is not competent. Egbe v. Alhaji (1990) 1 NWLR (Pt. 128) 546, 590 and Saude v. Abdullahi (1989) 4 NWLR (Pt. 116) 387, 408. Since the appellant conceded in the ground that the notice of “preliminary objection was not heard at all” it follows that the issue does not belong to this appeal because the ground is not challenging the validity of the ratio decidendi in the judgment or ruling presently on appeal before this court.
Moreover, the notice of preliminary objection to which the court is directed at pages 79 and 80 of the record of proceedings in the appellant’s brief is expressly directed against an application filed by one New Devco Nominees Limited and not the first and second respondents whose application can be found at pages 106-107 of the record of appeal. The learned trial Judge rightly, in my view, discountenanced the notice of preliminary objection since it had nothing to do with these respondents.
I agree with the learned counsel for first and second respondents that the whole tenor of the argument canvassed in appellant’s brief under this issue is contrary to the issue capable or arising from ground 4 of the grounds of appeal. Learned counsel in effect, under the issue, is canvassing the argument which would have been entertained by the court below. This court is not a court of first instance. It is as its name suggest an appellate court which is set up to review decision of the courts whose decision are liable on appeal to it. It is, therefore, not to hear matters, on which opinion of the court below had not been expressed as if it were a court of first instance itself. Generally there must be opinion of the trial court on which it could act: Kabaka v. A.-G., Uganda (1965) 3 WLR 512.
Finally, in my respectful opinion, an adroit counsel, assuming, without so deciding, when denied opportunity to formally take the preliminary objection, would still have canvassed all those grounds of objection when called upon to reply to the submissions of learned counsel for applicants now first and second respondents. This opportunity to oppose the application on the grounds contained in the preliminary objection was not seized upon. Nor is it the appellant’s case, before this court, that it was not allowed to respond to the application before it was adjourned for ruling. I am unable to see any shred of miscarriage of justice in the circumstance of this appeal.
In any case, issue 3 is incompetent having derived from an incompetent ground 4 of the grounds of appeal.
Issue not deriving from a competent ground of appeal must be struck out. Both the ground and the issue deriving from it are struck out. See Tukur v. Governor of Taraba State (1997) 6 NWLR (Pt.510) 549, 569; Ceekay Traders Ltd. v. General Motors Co. Ltd. (1992) 2 NWLR (Pt. 222) 132; Chinweze v. Masi (1989) 1 NWLR (Pt. 97) 254; Western Steel Works v. Iron Steel Workers Union (1987) 1 NWLR (Pt. 49) 284; (1987) 2 SC 11. In relating issues to the grounds of appeal, learned counsel for appellant stated as follows:
“3.01 Marriage of Issue to the grounds of appeal Issue number one relates to grounds one and two while issue number two relates to covers (sic) while issue number three relates to grounds 4 and 5” (Italics mine) The appellant, having related to an issue viz issue 3 a competent ground and an incompetent ground, and argued them together renders the other ground incompetent. It is not the duty of the court to separate argument in respect of the good ground from those of the bad one. See Nwadike v. Ibekwe (1987) 4 NWLR (Pt.67) 718, Bereyin v. Gbobo (1989) 1 NWLR (Pt. 97) 372, 380; Korede v. Adedokun (2001) 15 NWLR (Pt.736) 483. By the same token ground 5 of the grounds of appeal related along with ground 4 to issue 3 is equally incompetent and is hereby struck out.
The appellant gave notice of preliminary objection to ground 2 of the grounds of cross-appeal from which issue 2 of the cross-appeal was derived. In my respectful opinion, I do not think that the appellant is required to give a written notice of intention, in the circumstance of this case, to rely on a preliminary objection. A notice of intention to rely on a preliminary objection is only required under Order 3 rule 15(1) of the Court of Appeal Rules, 2002 where, if the objection is sustained, it is capable of disposing of the cross-appeal. Order 3 rule 15 reads as follows:
“15(1) A respondent intending to rely upon a preliminary objection to the hearing of the appeal shall give the appellant three clear days notice thereof before the hearing, setting out the grounds of objection and shall file such notice together… ” (Italics mine)
But, in the instant appeal, whichever way the objection is decided the cross-appeal still has an outstanding issue to be considered and determined. Since the objection is not to the hearing of the appeal no formal notice was required.
Be that as it may, the appellant in its cross-respondent’s brief submitted that the issue of locus standi being raised in issue 2 of the cross-appeal is incompetent for reasons that it did not arise in the trial court and, therefore, leave of this court was required to give it potency. Learned counsel relied on a number of cases such as Iweka v. SCOA (2000) 7 NWLR (Pt. 664) 325, (2000) 3 SC 31; Oredoyin & others v. Arowolo & Others (1989) 4 NWLR (Pt.114) 172,211; Lipede v. Sonekan (1995) 1 NWLR (Pt. 374) 668, (1995) 1 SCNJ 184; Egbunike v. African Continental Bank Limited (1995) 2 NWLR (Pt. 375) 34, (1995) 2 SCNJ 58.
An appeal, being a fresh suit, is generally limited to consideration of the issue canvassed in the trial court with a view to determining whether if a careful consideration was given to the material placed before the trial court, it arrived at correct decision on the issue. An appellate court is not a place to adduce fresh testimony nor to canvass new issues at large. Unimpeded or untrammeled argument is not permissible on appeal. To enable a party raise a fresh issue, on appeal, specific leave of this court must first be sought and obtained before such point could be canvassed or argued.
The issue of locus standi derived from cross-appellants ground 3 was never raised nor agued at the trial court. I admit a matter of substantial point of law, substantive or procedural can be raised at any state, even on appeal to the Supreme Court, but it is not on untrammeled or unimpeded practice of procedure. See Akaaer Jov v. Kutuku Dom (2001) FWLR 2026, 2033-2034, (1999) 9 NWLR (Pt. 620) 538 where Belgore, J.S.C. said:
“This is so in order to avail the other side every opportunity to advert to that issue. But to contend that issue of law or the constitution can be raised at any time and do nothing more than to raise in argument is like laying a disrupting ambush for the opponent. This is not the spirit of our practice of adjudication of holding the even balance. Proper application must be made so that the other side will know clearly what he has to meet.” (Italics mine)
See also Djukpan v. Orovuyovbe & Another (1967) NMLR 287,289; Akpene v. Barclays Bank DCO (1977) 2 SC 47 and Uor v. Loko (1988) 2 NWLR (Pt.77) 430, 437 and Eze v. A.-G., Rivers (2001) 18 NWLR (Pt. 746) 524, 558 where Supreme Court per Karibi-Whyte, JSC said:
“Generally, the Court of Appeal will not allow points which were not taken in the trial court to be taken for the first time before it. This is because the appellate court would not have had the benefit of the opinion of the trial court on the issue: see Kabaka’s Government v. A.-G., Uganda (1965) 3 WLR 512. This is especially so where the new point raised involves consideration of matters of fact with which the court below were in a more advantageous position to deal with and which they had in fact dealt with: see Ejofodomi v. Okonkwo (1982) 11 SC 74, John Dweye & others v. Joseph Iyomahan & others (1983) 8 SC 76. In very exceptional circumstances, the point may be allowed. See United Marketing Co. v. Kara (1963) 1 WLR 5.
The Supreme Court has granted an application to raise and argue a point raised for the first time in the appellate court where it was a mere omission to state and argue a legal proposition which did not require any underlying facts or hypothesis than those already admitted or proved in the court below: see Akpene v. Barclays Bank of Nigeria & Another (1977) 1 SC 47; Djukpan v. Orovuyevbe & Another (1967) 1 All NLR 134, Etowang Enang & Ors. v. Fidelis Okoromadu (1981) 11-12 SC 25; Mabiaku Onotaire & others v. Binite Onokpasa & Anor. (1984) 12 SC 19.” (Italics mine) I also agree with the learned counsel for cross-respondent that the defect is not cured by merely applying for leave to appeal or leave to file and argue additional grounds of appeal.
A party seeking leave to raise a fresh point on appeal must in addition to seeking leave to appeal or leave to file and argue additional ground, expressly or specifically ask for leave to raise on appeal a fresh issue that was not canvassed in the court below before it can be argued. The reason being that the considerations are different. In addition to showing that the fresh point involves a substantial point of law, substantive or procedural, the applicant must satisfy the court that the hearing of the issue would not require adducing fresh evidence. See Ajuwon v. Adeoti (1990) 2 NWLR (Pt. 132)271,296; Adio v. State (1986) 2 NWLR (Pt.24) 581; Yusuf v. Union Bank of Nigeria Limited (1996) 6 SCNJ 203, (1996) 6 NWLR (Pt.457) 632 and Obioha v. Duru (1994) 8 NWLR (Pt. 365) 631, (1994) 10 SCNJ 48, 64.
It was submitted that leave is equally a condition precedent which could not be waived notwithstanding the substantiality of the ground of appeal merit or demerit of the ground or issue is immaterial Okenwa v. Military Governor of Imo State & others (1996) 6 SCNJ 221; (1996) 6 NWLR (Pt.455) 394.
I am, however, unable to pinpoint the relevant portion of the Supreme Court judgment which stated that irrespective of the merit of the new issue sought to be raised leave to raise a fresh point is condition precedent to canvassing such point in the case Okenwa v. Military Governor, Imo State & others (1996) 6 SCNJ 221 cited in the cross-respondent’s brief. What I read in the judgment Okenwa v. Military Governor, Imo State (supra) (1996) 6 NWLR (Pt.455) 394 is to the effect that the quality of argument to be canvassed should not dissuade the court from favourably considering the application to raise a fresh issue on appeal. At page 408 of the report Iguh, J.S.C. stated thus:
“Whether or not the appellant’s proposed arguments to be adduced before the court below in the appeal if his application in issue were to be granted are meritorious or otherwise puerile, ridiculous or misconceived is entirely a different matter.”
Having carefully analysed all the authorities, it seems to me respectfully, that leave must first be sought before a new point that was not taken before the trial court on substantial point of law, substantive or procedural, could be canvassed or argued on appeal before this court, notwithstanding that leave to file and argue the ground as additional ground of appeal was sought and obtained.
Learned counsel for cross-appellant failed to seek such leave. I am not unaware that the rule is not inflexible and that such application can be made even on appeal. But, in the circumstance of this case, where learned counsel for cross-appellant has failed, refused or neglected to make one, inspite of the notice given by the cross respondent of its intention to rely on a preliminary objection the discretion cannot be exercised in his favour.
The cross-appellant has not sought leave, written or otherwise, to canvass the new point on appeal. Its attitude, it appears to me, that the court, at the appropriate stage (if any), with or without such application, would descend into the arena on its side. The court respectfully cannot do that especially, in the circumstance of this case, where the cross-respondent has placed all its eggs into one basket by refusing to proffer an answer to the issue. Its only answer to the issue was predicated upon the preliminary objection. It was prepared to swim or sink on the preliminary objection. The same having succeeded the court would not, however, gingerly step into the arena to rescue the cross-appellant from the quagmire it let itself into. If the court does so, it would be left without the cross-respondent answer to the cross-appellant’s issue 2.
The court having heard the appeal and reserved it for its judgment could not possibly be heard to reopen the case and call for cross-respondent’s brief to be amended to accommodate argument on issue arising from the cross-appeal.
This would deal a more serious blow to the essence of fidelity in law than the principle of substantial justice it sets out to protect. It would be a dangerous precedent. As I observe earlier the learned counsel for cross-appellant, having been put on notice should have acted even if it were excautela abudanti and put in application for the necessary leave. He has neglected to do so to the peril of his client’s case.
The preliminary objection succeeds and it is sustained otherwise the court would be sending wrong signal to the cross-respondent that it was aligned with the other party. The notice of preliminary objection dated 8th day of February, 2002 was filed on the same day. The appeal was heard on 14th day of April, 2003 more than one year after the filing of the notice. The learned counsel for appellant had more than ample time to bring an application asking for leave to raise fresh point which was not taken at the trial court if he had not taken this court for granted.
Consequently, ground 3 of the grounds of cross-appeal is hereby declared incompetent and struck out. Cross-appellant’s issue 2 which derives from the said ground of appeal is equally incompetent. It is settled that where a ground of appeal from which an issue is formulated is found incompetent the issue arising therefrom is equally bad ab initio. See the cases Okelola v. Boyle (1998) 2 NWLR (Pt.539) 533, 546; Mark Kele & others v. Okomo Nwerebere & Others (1998) 3 NWLR (Pt.543) 515, 521 and J.E.A. Shuaibu v. Nigeria Arab Bank Limited (1998)4 SCNJ 109, (1998) 5 NWLR (Pt. 551) 582.
I have disposed of all the preliminary issues raised in the respective briefs of argument. Consequent upon which each appeal lost an issue. The appeal has only two issues left, the third issue upon a successful objection by the respondents was struck out.
Similarly, the second issue in the cross-appeal had just been struck out. I am now to focus attention on the two appeals in the manner indicated above.
It is proposed to commence the determination of this case by starting with the appeal and thereafter go over to consider the outstanding issue in the cross-appeal if need be.
It was submitted, in this connection, by the learned counsel for appellant, that in determining the jurisdiction of the trial court to hear a claim, brought before it, in a civil action, it is the claim of the plaintiff as endorsed on the writ of summons and the statement of claim that needs to be considered. Learned counsel for appellant, after referring to the endorsement on the writ of summons, contended further that the court erroneously set aside its judgment on account of want of jurisdiction when the appellant’s action was not challenging the propriety of the first respondent’s receivership nor appointment of second respondent as a receiver. Learned counsel contended further that the action was also not on priority of creditors before submitting that learned trial Judge erred seriously and which error has occasioned a miscarriage of justice.
In his reply, learned counsel for first and second respondents conceded rightly, in my view, that it was the plaintiff’s claim that determines the jurisdiction of the court and it was necessary to examine the plaintiff’s claim as contained in the writ of summons supported by the affidavit since the action was brought under undefended list.
Learned counsel for those respondents contended that reading together of paragraphs 3a-f of the affidavit in support of the writ reveals that the contract, including sharing of profit, was entered into with the first respondent under receivership and signed on its behalf by the second respondent. The receiver/manager acting also as its Managing Director hence it is crystal clear that this is a claim flowing from the incidents of receivership regulated by sections 387-400 of the Companies and Allied Matters Act, Cap. 59 of the Laws of the Federation of Nigeria. Learned counsel contended that section 650 defines the court in relation to companies as Federal High Court and not state High Courts. By virtue of S. 230(1)(e) of 1979 Constitution as amended by Decree No. 107 of 1993, relevant to the determination of this appeal, it was clearly stated that it was only Federal High Court that could entertain civil causes and matters arising from the operation of any Act or Decree relating to Companies and Allied Matters Act and Any Other Common Law regulating the operations of companies. On this issue, learned counsel for third respondent who is supportive of the appellant made submissions in the same line on this issue.
I agree entirely with all the counsel in this appeal that to determine whether a trial court, in a civil matter of this nature, has jurisdiction, it is trite that the first consideration is the claim as endorsed on the writ of summons, statement of claim and, where the writ is filed along with particulars, the particulars and not the statement of defence. The court need not look into the statement of defence to ascertain whether or not it is clothed with jurisdiction to entertain the suit. Because it is the nature of the plaintiff’s claim otherwise known as the “cause of action” that will determine whether or not a court is clothed with authority to entertain a suit. A cause of action consisted the bundled or aggregate of facts or circumstances in relationship between the parties which the court below should recognize as enabling the plaintiff to make a claim against the defendant. In Savage & others v. Uwaechia (1972) 3 SC 214, 221, the Supreme Court per Fatayi-Williams, J.S.C. (as he then was) in defining the term “cause of action” said:
“A cause of action is defined in Stroud’s Judicial Dictionary as the entire set of circumstances giving rise to an enforceable claim. To our mind, it is, in effect the fact or combination of facts which give rise to a right to sue and it consists of two elements; the wrongful act of the defendant which gives the plaintiff his cause of complaint and the consequent damage. As Lord Baker said in Cooke v. Gill (1873) LR 8 CP 107 and later in Read v. Brown (1889) 22 QBD 128 (CA), it is every fact that it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. See also Kusada v. Sokoto Native Authority SC 131/68 delivered on 13th December, 1968, where the definition in Read v. Brown (supra) was referred to with approval.”
These facts or circumstances that enabled the plaintiff to make a claim against the defendant can only be garnered, as the learned counsel have rightly, in my view, agreed, from the plaintiffs writ of summons, particulars of claim or statement of claim and clearly not from the statement of defence. See Fadare v. Attorney-General, Oyo State (1982) NSCC 52, 60, (1982) 4 SC 1; Thomas v. Olufosoye (1986) 1 NWLR (Pt.18) 669, (1986) 2 SC 325 and Amao & Another v. A-G., North-Central State & Another (1973) NNLR 118 and Chief Numagun Sam Adeyemi & Others v. Emmanuel Opeyori (1976) 1 FNLR 149, 158 and in Anya v. Iyayi (1993) 7 NWLR (Pt. 305) 290, (1993) 9 SCNJ 53, 66-67 Supreme Court said:
“It is well settled that the jurisdiction of the court is determined not only by the nature of the claim before the court, but also by other considerations in the absence of which there can be no jurisdiction. Hence the first consideration in its determination is the claim as endorsed on the writ of summons and the statement of claim; see Enwezor v. Onyejekwe (1964) 1 All NLR 14; see also Adejumo v. Military Governor, Lagos State (1972) 1 All NLR 159; Ndaeyo v. Ogunnaya (1977) 1 SC 11. Thus, where the claim endorsed on the writ of summons and statement of claim discloses a cause of action and the subject matter of the action is within the jurisdiction of the court and the plaintiff … ” (Italics mine)
It is therefore, apt on these authorities to look at the writ of summons and statement of claim. The action here was brought under Order 23 of the Kano State High Court (Civil Procedure) Rules in other words the action is brought under the undefended list. Resort may have to be made to the affidavit deposed to in support of the writ of summons instead of the statement of claim. The writ of summons headed as follows:
“Between KADZI INTERNATIONAL LTD PLAINTIFF
AND
1. KANO TANNERY COMPANY LTD. 2. AMINU MOHAMMED 3. NEW AFRICA MERCHANT BANK LTD. 4. HIMMA FREIGHT (NIG.) LTD. was endorsed:
“Statement of claim
The plaintiff’s claim the defendants jointly and generally is the sum of US $30,940.00 or in the alternative of naira equivalent N2,475,200.00 (Two million, four hundred and seventy-five thousand, two hundred naira only) for the first ninety days. That is to say the total amount due from the defendants to the plaintiff as at January, 1997 is N3,548,535,43 (Three million, five hundred and forty-eight thousand, five hundred and thirty-five naira forty-three kobo).
Particulars of claim
1. Money advance to the defendant N2,000,000.00
2. Profit margin for the first ninety days N475,200.00
3. Re-investment for another Ninety days from
August 8th, 1996 – November 8th, 1997 N588,107.52
4. Re-investment for another ninety days
from November 8th, 1996- January 8th, 1997 N485,227.91
Total N3,548,535,43”
Paragraphs 3a-f of the affidavit in support of the writ of summons marked undefended list to which the court is referred by the learned counsel for first and second respondents read as follows:
“3. That Alhaji Ahmed, the Managing Director of the plaintiff company informed me in our office at No.1 Beirut Road, Kano, at about 4.00pm on the 13th of January, 1997 of the following facts and I verily believe him to be true as follows:
(a) That sometime in the month of May, 1996 the 1st defendant approached the plaintiff for some
money to be used for the purchase of hide and skin and the sum of N2,000,000.00 was advanced to the 1st defendant and an agreement entered to that effect. A copy of the agreement is hereby attached and marked as exhibit ‘A’
(b) That both the 1st defendant and the plaintiff duly executed the said agreement which was to be for 90 days and the 1st defendant was expected to return the money together with the profit margin for the Ninety days calculated at US$30,940.00 of which the naira equivalent is Two million four hundred and seventy five thousand, two hundred naira only (N2,475,200.00).
(c) That the plaintiff issued the 1st defendant with an Intercity Bank cheque for the sum of Two million naira only of which the 2nd defendant being the Managing Director of the 1st defendant and appointed receiver/manager for the 3rd defendant acknowledges. A copy of the cheques was shown to me and it’s hereby attached and marked as exhibit ‘B’.
(d) That after the expiration of the 1st 90 days the 1st defendant by its Managing Director wrote a letter to the plaintiff asking for more time to be allowed to pay the contract sum and the profit margin. The said letter dated the 30th August, 1996 was shown to me and a copy is herewith attached and marked as exhibit ‘C’.
(e) That the said money have remained long over due in that the money should have been going through another reinvestment.
(f) That the 3rd defendant is in receivership of the 1st defendant company.” (Italics mine)
The writ of summons as well as the three documents exhibited to affidavit in support of the writ of summons do not disclose the question of receivership. But the affidavit in support of the claim particularly sub-paragraphs 3(c) and (f) clearly shows that appellant on its own showing agreed that first defendant the present first respondent was in receivership of the third defendant who appointed the second respondent as the receiver or manager. The agreement was entered into by the receiver, even though, he signed as the Managing Director of the company. He equally signed exhibit C pleading for enlargement of time within which to pay the capital and the profit at the expiration of the first 90 days.
Clearly, the transaction is one of loan granted to the first respondent under receivership which had defaulted to pay the loan at maturity. I, therefore, disagree with the learned counsel for third respondent that the issue later raised by the first and second respondents as to the receivership and receiver manager was an after thought. The appellant averred or raised the issue of receivership in the affidavit in support of its claim which learned counsel to all the parties conceded should be examined. The question of receivership was, therefore, on the front burner right from the inception of the case.
The appellant, in its affidavit in support of the claim under the undefendant list, as observed earlier, averred to the receivership status of the first respondent and substantiated the averment by producing exhibit B. The appellant cannot, at this stage, be heard to contend otherwise.
There is also no substance, in the contention of the learned counsel for third respondent that the issue of receivership is remotely connected to the tanning contract and the question of receivership could not thereby rob the court of its jurisdiction which appellant’s claim clearly conferred on the court. The contention is ingenious but not candid. It is not candid because the learned trial Judge in his ruling shot his own foot by raising the issue when he stated as follows:
“In view of the above quoted document I am of the opinion that I have jurisdiction to entertain the suit against the 2nd defendant (Aminu Mohammed). The 2nd defendant in the above quoted contract agreement chose to enter into contract in his personal capacity and not as receiver/manager. The provisions of section 394(1) of the Companies and Allied Matters Act, Cap. 59 is therefore applicable it reads:
‘A receiver or manager of any property or undertaking of a company shall be personally liable on any contract entered into by him except in so far as the contract otherwise expressly provides’.”
Aminu Mohammed did not enter into the contract, contrary to the findings of the learned trial Judge in his personal capacity, the parties to the agreement, exhibit A, read by the learned trial Judge in his ruling, are Kano Tannery Company Limited on one part and Kadzi Investment Limited on the other. The second respondent who described himself as the Managing Director of the first respondent in exhibit A was merely acting as the eye, hand and mouth of the other respondent which had no hand and eye of its own to execute the contract. A corporation is a mere abstraction whose action may be directed by somebody who is really the directing mind and will of the corporation. See Lennards Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. (1915) AC 705, 712; Bolton Engineering Co. Ltd. v. Graham & Sons (1957) 1QB 159, 172-173. The principle in Graham & Sons case was adopted by the Supreme Court in Trenco Nigeria Ltd. v. African Real Estate & Investment Co. Ltd. (1978) 4 SC 9, (1978) 1LRN 146. See also Leventis Tech. Ltd. v. Petrojessica Ent. Ltd. (1992) 2 NWLR (Pt. 224) 459.
He is, therefore, not a contracting party and could not be sued on the contract.
Be that as it may, the learned trial Judge predicated his finding that the second respondent was liable on the provisions of section 394(1) of Companies and Allied Matters Act, Cap. 59 of the Laws of the Federation of Nigeria, 1990. Once the learned trial Judge made his finding that the second respondent was liable by virtue of section 394(1) of the Companies and Allied Matters Act, Cap. 59, it could no longer be validly contended that the question of receivership is remotely connected. The finding or in the alternative the recognition of the learned trial Judge that the first respondent was a company under receivership and, therefore, his court had no jurisdiction to entertain the action takes the matter out of his court.
Each of the reasonings of the learned trial Judge, contrary to the contention of the learned counsel for appellant and the third, respondent robs that court of its jurisdiction. On either view learned trial Judge respectfully found that the suit directly flows from and relates to and arises from the operations of the Companies and Allied Matters Act, in respect of which matter, jurisdiction is exclusively reserved in the Federal High Court.
I also agree with the learned counsel for first and second respondents that learned trial Judge, with respect, cannot approbate and reprobate. He is not entitled, in the circumstance of this suit, in which the parties are sued jointly, to find that he has no jurisdiction to try the claim in respect of one of the parties and then turn round to say he is competent to entertain the same suit in respect of the second person. Generally, where there is a joint cause of action against two or more persons, a discharge as against one of them operates as a discharge of all. The cause of action being one, having been discharged all persons otherwise liable are consequently released.
In Duck v. Maven (1899) 2 QB 511, 513 AL Smith, L. J. said:
“It is, we think, clear law that a release granted to one joint tortfeasor or to one joint debtor, operates as a discharge of the other joint tortfeasor, or the other joint debtor the reason being that the cause of action which is one and indivisible, having been released, all persons otherwise liable thereto are consequently released. The case of Coke v. Jennor is distinct upon the point and there are many subsequent cases to the same effect.” (Italics mine)
The learned trial Judge having found that the first respondent was a company under receivership and could therefore not try the action he ceased to have jurisdiction on the same suit and was not competent to find the “joint debtor” liable. I therefore agree with the learned counsel for the first and second respondents that it is contradiction in terms for the learned trial Judge to decline jurisdiction in view of the receivership status of the first respondent and to hold that it had competence over the receiver or manager because without a receiver there might be no receivership.
The whole tanning contract, furthermore, involving advancing money and sharing of profit, entered into with the first respondent, under receivership and signed on its behalf by the second respondent as its receiver or manager is a matter relating or arising from incidents of receivership, notwithstanding the first respondent did not disclose its receivership status in the agreement and the second respondent purportedly signed the agreement as the Managing Director of the former respondent. The appellant was not prejudiced for nondisclosure of the respective status of the first and second respondents.
The appellant was apparently aware of the respondents’ status hence the averment in sub-paragraph 3(c) and (d) of the affidavit in support of the writ of summons caused to be issued under the undefended list.
The joining of the second respondent to the suit raised the stake higher because there could not be receivership without the appointment of a receiver or manager for his appointment and taking over of the assets of the first respondent that makes the first respondent to be under receivership or vest it with receivership status. Moreover, the first respondent under receivership would most probably involve the issue of the priority of the money owed amongst the other debts or loans of the first respondent. The transaction is, therefore, covered by the provisions of sections 387-400 of Companies and Allied Matters Act, Cap.59.
It is crystally clear that by virtue of section 230(1)(e) of the Constitution of the Federal Republic of Nigeria 1979 as amended by Constitution (Suspension and Modification Decree No. 107 of 1993 it is the Federal High Court that can entertain the suit. Paragraph (e) of subsection (1) of section 230 of the Constitution provides as follows:
“230(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction of the exclusion to any other court in civil causes and matters arising from –
(e) the operation of any Act or Decree relating to companies and allied matters and any other common law regulating the operation of companies.”
In my respectful opinion, this is not a case of ordinary debt or breach of contract. It is a civil matter or cause arising from operation of an Act regulating the operation of as well as management of assets of a company, a matter in which a State High Court has no jurisdiction to entertain. I find support for this view from the decision of this court in the case F A. Akinbobola & Sons v. Plisson Fisko Ltd. and others (1986) 4 NWLR (Pt.37) 621, (1986) 5 C.A. (Pt. 11) 60 per Akpata, J.C.A. (as he then was) cited in first and second respondent’s brief of argument. His Lordship at pp. 70-71 of the report said:
“In my view the action as between the respondent and the 1st appellant may be described as an action for money had and received or purely an action based on a breach of contract. But, by joining the second and third appellants, the respondent unwittingly enlarged the scope of his action. He has raised the issue by implication if not expressly, whether the third appellant as a receiver has a right to manage the assets of the first appellant and dispose of such assets to the detriment of the respondent …
The way I see it is this ‘the appointment of a receiver either by the court or by the debenture holders is an exercise pursuant to the Companies Act 1968 … See Kasofsky v. Kreegeers (Phillips Claimant) (1937) 4 All ER 374. At page 317 (of Kerr on receivers by R. Walton) it is stated by the learned author that “the obligation of a receiver to discharge the preferential debt out of the property subject to a floating charge in priority to claims of the debenture holders is the same as the case of receiver appointed by the court.”’ (Bracket and contents mine)
His Lordship went on at p. 71 of the report to recite from Kerr on receiver by R. Walton 15th Edition, p.207:
“Where a receiver is appointed on behalf of the holders of any debentures of a company registered in England which are secured by a floating charge, or possession is taken by or on behalf of such debenture holders then if the company is not being wound up, the debts which relating to preferential payment are to be paid in priority to all other debts shall be paid out of the assets coming to the hands of a receiver or other person taking possession in priority to the principal or interest in respect of the debentures.”
The ordering of priority by receiver as to which debts are to be paid from the assets of the first respondent by its nature is not a matter for an ordinary debt or breach of contract which could be entertained by a State High Court. See also the unreported judgment of this court in Tanarewa Nigeria Ltd. & Another v. Plastifarm Limited (2003) 14 NWLR (Pt. 840) 355.
I respectfully find that the Kano State High Court has no competence to adjudicate or entertain the suit and the appellant’s entire action ought to have been struck out. The answer to appellant’s issue 1 is positive and grounds 1 and 2 of the appellant’s grounds of appeal related to this issue fail and are dismissed by me.
Having resolved appellant’s issue 1 against it, it is no longer necessary to consider its remaining issue 2 which becomes academic or superfluous. It is particularly so because the lower court or any other court for that matter has competence to set its own decision aside if it is affected by a fundamental vice such as want of jurisdiction. A judgment delivered by a tribunal that lacks jurisdiction is a nullity and exnihilo nihil fit. See Obayiuwana v. Ede (1998) 1 NWLR (Pt. 535) 670, 679; Elebute v. Faleke (1995) 2 NWLR (Pt.375) 82, 103 and Ogbu v. Orum (1981) 4 SC 1.
The appeal fails and is dismissed by me.
In view of the position I have taken about the appeal, there is equally no basis for consideration of the cross-appeal which is for the reason of its becoming academic is struck out because appellate courts are established to determine real issues of fact place before the trial court and not speculative ones. Akeredolu v. Akinremi (1986) 2 NWLR (Pt. 25) 710, 725 where the Supreme Court said:
“It has long been established that this court will not render an advisory opinion nor will it deal with a matter which is speculative or academic. The court deals with live issues.”
And in Eperokun v. University of Lagos (1986) 4 NWLR (Pt. 34) 162 at 179. Obaseki, J.S.C. expressed the same opinion on the matter when he stated thus:
“This court has held repeatedly that it is not part of its function to entertain and decide hypothetical and academic questions, i.e. questions not arising from the facts of the case.”
In the circumstances, the cross-appeal too is struck out having become a mere fanciful or speculative or hypothetical issue.
The appeal fails and it is dismissed and as the appellant’s claim in the court below is found incompetent it is struck out. The order of the court below setting aside the writ of fifa improperly issued and executed on 7th March, 1997 is hereby affirmed. The order of production and return of the 40 pellets of goat and sheep skins the subject of the said writ of execution made by the lower court pursuance of the order of setting aside of the writ of execution as well as the execution is also affirmed.
The order as to costs of the trial court is set aside in its place there is order as to costs assessed, in the trial court, at N3,500.00 and, in this court at N6,000.00 in favour of the first and second respondents. There is no order as to costs to the third respondent who had been supportive of the appellant.
Other Citations: (2003)LCN/1418(CA)
