N.A.B. Kotoye V. Mrs. F.m. Saraki & Anor (1994)

LawGlobal-Hub Lead Judgment Report

KUTIGI, J.S.C.

In the consolidated suits Nos. LD/845/87 and LD/938/87 the plaintiffs together and the 2nd plaintiff alone respectively claimed against the defendant as follows:-

“LD845/87

(1) A declaration that the 2,400,000 shares and the Bonus, Scripts and other shares attached thereto standing in the name of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in trust for the plaintiffs (or alternatively) for the 2nd plaintiff;

(2) An order directing an Inquiry into the amount of any dividends which may have been received by the defendant as holder of the afore-mentioned shares up to the date of the judgment herein;

(3) An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities.

(4) An order for rectification of the Registrar of Shares to give effect to any judgment, delivered herein.”

“LD/938/87

1. A declaration that the 4,579,460 shares standing in the name of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in trust for the plaintiff.
2. An order directing an inquiry into the amount of any dividends which may have been received by the defendant as holder of the aforementioned shares up to the date of the judgment herein.
3. An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities.
4. An order for rectification of the Register of Shares to give effect to any judgment delivered herein.
5. An order for the refund of the sum of N70,000.00 being balance of the N800,000.00 held by the defendant on the plaintiff’s behalf.

The defendant counter-claimed against the plaintiffs in the consolidated suits thus”

LD/845/87

(1) Whereupon the defendant by way of Counter-claim claims against the 2nd plaintiff the sum of N730,000.00 being money advanced to the 2nd plaintiff or to his order at his request.

(2) The defendant also claims interest thereon at the rate of 15% per annum from the 15th day of May, 1986 until payment.”

“LD/938/87

(1) A declaration that of the 6,876,840 shares standing in the name of the plaintiff in the Register of Members of Societe Generale Bank Nigeria Limited 2,783,483 thereof are not held by the plaintiff beneficially but upon trust for the plaintiff and the defendant for disposal as they shall both agree to deserving Nigerians of their choice.

(2) An injunction restraining the plaintiff from dealing with the said shares as if he were sole beneficial owner.”

The hearing of the consolidated suits was still in progress when the defendant filed a Motion on Notice to strike out the suits on the ground that the court had no jurisdiction to continue to entertain same and or allow the proceedings to be maintained. The motion was supported by a 4-paragraph affidavit sworn to by one Oluwole Koya, a legal practitioner in the Chambers of Ayanlaja, Adesanya & Co. who are counsel with Chief G. O. K. Ajayi, S.A.N. for the defendant/applicant. Paragraphs 2 & 3 of the affidavit merely recited plaintiffs’ claims in suits Nos. LD/845/87 and LD/938/87 reproduced above. The remaining para. 4 which I consider vital to the motion reads:

“4. That it is common ground both in the pleadings filed and the evidence adduced so far before this Honourable court by both parties to the proceedings in the two consolidated cases aforesaid that, the shares in dispute are registered in the name of the defendant in the books of Societe Generale Bank (Nigeria) Limited as holder thereof.”

The motion was filed pursuant to the promulgation of Banks and other Financial Institutions Decree No.25 of 1991. The commencement date was 20th June 1991. Section 11 of the said Decree reads-

“11. Notwithstanding anything contained in any law or in any contract or instrument, no suit or other proceeding shall be maintained against any person registered as the holder of a share in a bank on the ground that the title to the said shares vests in any person other than the registered holder.

Provided that nothing in this section shall bar a suit or other proceedings on behalf of a minor or person suffering from any mental illness on the ground that the registered holder holds the share on behalf of the minor or person suffering from the mental illness.”

(Italics are mine for emphasis only).

In a considered ruling delivered on the 27th day of November 1992 the learned trial Judge dismissed the motion or application. On page 54 of the record he said:-

“It is not in dispute as far as the claims go that the titles to the shares held by the defendant in S.G.B.N. vest in him. I do not find that Section 11 bars this suit or other proceeding based on the claims in the first four paragraphs of the consolidated suits from being maintained against the defendant. The question of whether or not there is a trust concerning the shares held in the name of the defendant in S.G.B.N. is far from being determined and cannot be until the whole evidence is taken. The learned defence counsel had pointed out in his reply that the fifth claim in Suit LD/938/87 is unaffected in any way by this motion. This is a relief for refund of the balance of certain sum allegedly held by the defendant in the plaintiff’s behalf therein. I agree with him.”

Dissatisfied with the ruling above, the defendant appealed to the Court of Appeal, Lagos. He formulated eight issues for determination while the plaintiffs formulated only one as follows:-

“Whether the jurisdiction of the court to continue the hearing of this action has been ousted by the provision of section 11 of the banking and other Financial Institution Decree 1991 No.25.”

The Court of Appeal agreed with the plaintiffs when it said in its judgment on page 100 of the record that:-

“The issue before this court is the correct interpretation of section 11 of the Banking and other Financial institutions Decree No. 25 of 1991 and applying the said interpretation to the claims in this case so as to determine whether the court below has the jurisdiction to continue the case or not.”

It then considered the issue and arrived at the conclusion that the High Court had jurisdiction to continue the consolidated suits and dismissed defendant’s appeal with costs.

Aggrieved by the decision of the Court of Appeal the defendant has now appealed to the Supreme Court. Five issues were identified for determination in his brief. The plaintiffs on their part set out only one issue for determination in their brief. It reads:-

“Whether the claims contained in the Statement of Claim in this action (or any of them) can strictly regarded, be described or categorized as a claim by the plaintiffs or either of them that the title to the shares registered in the name of the defendant vests in them or either of them than in the said defendant.”

I agree entirely. The issue above was the same issue before the trial High Court and the Court of Appeal even though worded differently. In fact we are to consider whether the claims of the plaintiffs are caught by the provision of section 11 of Decree 25 of 1991 which is reproduced here again:-

“11. Notwithstanding anything contained in any law or in any contract or instrument, no suit or other proceeding shall be maintained against any person registered as the holder of a share in a bank on the ground that the title to the said shares vests in any person other than the registered holder. Provided that nothing in this section shall bar a suit or other proceedings on behalf of a minor or person suffering from any mental illness on the ground that the registered holder holds the share on behalf of the minor or person suffering from the mental illness.”

The provisions can be conveniently broken down as follows:-

A. No suit or other proceedings shall be maintained against a registered holder of shares in a bank on the ground that the title to the said shares vests in any person other than the registered holder.

B. A suit or other proceedings on behalf of a minor or person suffering from any mental illness against a registered holder of shares in bank on the ground that the registered holder holds the share on behalf of the minor or person suffering from mental illness is maintainable.

(See the proviso above).

I must say at once that the opening clause that

“Notwithstanding anything contained in any law or in any contract or instrument”

ought to be restricted to a provision in any law or contract or instrument which allows a litigant to maintain the suit against a registered holder on the ground that the title in the shares vests in any other person other than the registered holder. We have not been referred to any law or contract or instrument which provides as such. I venture to say that the clause cannot be read to cover cases of trusts more so as the suit herein is not being maintained because there is a trust, rather it is because of lack of it.

It is a settled cardinal principle of statutory interpretation that where in their ordinary meaning the provisions are clear and unambiguous effect should be given to them without resorting to external aid.

The duty of the court is to interpret the words of the statute as used. Those words may be ambiguous, but even if they are the power and duty of the court to travel outside them on a voyage of discovery are strictly limited (see for example Attorney-General of Bendel State v. Attorney-General of the Federation (1981) 10 S.C. 1; Abioye v. Yakubu (1991) 5 NWLR (Pt. 190) 130, Lawal v. G.B. Ollivant (1972) 2 S.C. 124, Aya v. Henshaw (1972) 5 S.C. 87;

There is no doubt at all that the plaintiffs do not come under my classification (B) above. They are neither minors nor persons suffering any mental illness. We are therefore left with classification (A) only. The task now will be to examine the plaintiffs’ claims or reliefs one by one to see whether any of them is covered thereunder. It should be noted at once that the only ground for disqualification provided under (A) above and in fact under section 11 of Decree 25 of 1991 is “that the title to the said shares vests in any other person than the registered holder”.

So that unless the plaintiffs specifically claim that title in the shares vests in them or in any person other than the defendant registered holder, it would be difficult to bring them under section 11 of the Decree. It is common ground as stated in para A of the affidavit in support of the motion above, that the shares in dispute are registered in the name of the defendant in the books of Societe Generale Bank Ltd as holder thereof. The consolidated suits in no way sought to challenge or deny that the defendant is the registered holder of the shares in question or that the shares are vested in him. I think therefore that Chief Williams S.A.N. was right when he said that the plaintiffs are not challenging the fact that the defendant is the registered owner of the shares, but that the defendant is a trustee of those shares for the plaintiff as the beneficial owners. That in my view is the plain and ordinary meaning of the plaintiffs claims in this case. I appreciate that there might be problems in respect of the claim for rectification depending on what turns out to be rectified after the trial. Definitely it could not be the rectification of the name of the defendant as a registered holder of the shares which section 11 (ibid) forbids, but it could even be the number of shares or any other error as may be revealed during the trial. But once the defendant is declared a trustee of any of the shares for the plaintiffs, the question of rectifying the Register of Shareholders to reflect their names would no more arise because defendant cannot be a trustee unless he holds the shares in his name to enable him exercise control over them.

There is no doubt at all that section 1I (ibid) sought to oust the jurisdiction of the court to entertain matters in respect of registered shareholders in banks. Therefore being an ouster clause, the provision will have to be construed strictly and very strictly too (see Barclays Bank v. C.BN (1976) 1 All NLR 409. Ouster clauses must not be construed liberally, or loosely or wantonly. And that is what I have endeavoured to do in this case. We must not forget that a constructive trust, as in this case, is imposed by equity on the ground of conscience and it is not based on the prior or presumed intention of the parties. I would like to believe that the parties herein are conscionable people. A constructive trust is a trust to be made out of the circumstances.

The trial High Court was therefore right when it said:-

“The question of whether or not there is a trust concerning the shares held in the name of the defendant in S.G.B.N. is far from being determined and cannot be until the whole evidence is taken.”

The Court of Appeal was equally right when it held as per Ubaezonu J.C.A., who read the lead judgment, that:-

“The present suit does not challenge or deny that the appellant is the registered holder of the shares in question or that the shares are vested in him. No. What I understand him to be saying is:-

I concede that the shares are vested in you but, you hold it in trust for me.”

I think that if as a result of the plaintiffs’ claims, the defendant is successfully pronounced to be a trustee of any of the shares thereof, he the defendant will still remain the registered legal owner of the shares while the plaintiffs will become the beneficial owners only, a trust relationship being equitable generally. It is of no consequence whatsoever that the defendant though a registered holder is a mere notional or nominal owner of the shares while the plaintiffs are the real beneficial owners. That is exactly what the law of trust is all about. It is not the function of any court to change the law and Decree 25 of 1991 has not changed it. It is none of the business of the court to read into the section 11 other meanings simply because the court does not like the natural and direct result of its application which does not lead to any absurdity.

I must observe that this being an interlocutory application, I must avoid making any observation in the judgment which might appear to prejudge the main issues in the proceedings relative to the interlocutory application (see for example Egbe v. Onogun (1972) 1 All NLR (Pt.!) 95; Ojukwu v. Governor of Lagos State (1986) 3 NWLR (Pt.26) 39. It was therefore necessary for me to have restricted myself to the single issue identified by the” plaintiffs and the lower courts for determination as above.

In conclusion this appeal fails and it is hereby dismissed. I hold that the two lower courts, the trial High Court and the Court of Appeal, were right when they respectively came to the conclusion that the High Court has the jurisdiction to continue with the consolidated suits herein. The plaintiffs are awarded costs assessed at one thousand (N1,000) naira against the defendant.

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SC.147/1993