Nigerian National Supply Company Ltd. V. Alhaji Hamajoda Sabana And Company Limited & Ors. (1988)

LawGlobal-Hub Lead Judgment Report

NNAMANI, J.S.C. 

In the main Suit, LD/521/86, pending in the High Court of Lagos, Alhaji Hamajoda Sabana and Company Limited, 1st Respondent herein sued, as Plaintiff, Stratel Ltd., Nigerian National Supply Company Limited (Appellant herein) and Attorney-General of the Federation as defendants claiming the following reliefs:-

”(1) Against all the defendants, a declaration that the entire cargo of 23,000 metric tons of Thailand Rice which is the subject matter of a letter Ref.No.CC/1/S.9/C.T/2 dated 14th November, 1985 and addressed to the Chairman of the Nigerian National Supply Company Limited is the property of the Plaintiff.

(2) Against the 2nd defendants and the Federal Government the return of the said cargo of rice or such portion thereof as have not been disposed of by them or either of them.

(3) Against the 2nd defendant and the Federal Government, an order for inquiry into damages suffered by the plaintiff as a result of the conversion of the cargo of rice or any portion thereof and payment of such damages (including interest thereon) to the Plaintiff.”

The Suit was filed on 6th May, 1986. The second defendant i.e. the appellant herein, entered appearance to that Suit on 5th June, 1986. In May, 1986, the 1st Respondent brought a Motion Ex-parte under Order 39, Rule 3 of the Civil Procedure Rules of the High Court of Lagos claiming the following reliefs:-

(1) that the cargo of rice the subject matter of this action be released forthwith by the second Defendant to the Nigerian Merchant Bank Ltd. for ultimate disposal to the persons from whom money has been received for the purchase of the said rice;

(2) that the sum of N20,700,000, presently held by the said Nigerian Merchant Bank Limited upon the instruction of Plaintiff be lodged in Court or deposited with such reputable Bank as the Court may direct pending the trial of this action or until further order;

(3) an order of injunction restraining the second and third defendants whether by their officers, agents, employers, or otherwise howsoever, selling, disposing of or arranging for the sale or disposal of or taking any steps for the sale or disposal of or taking steps or further steps for the sale or disposal of the cargo of rice (or any portion thereof which is the subject matter of a letter Ref. No. ECC/1/S.9/C./T/2 dated 14th November, 1985 and addressed to the Chairman of the Second defendant company by B.M. Balogun Esq. who signed the same for the Permanent Secretary, Federal Ministry of Trade, Trade Promotion and Supply Division, Ikoyi Lagos until after the hearing and determination of this action.

…………………………..”

Relevant to the matters I shall discuss later in this judgment is paragraph 6 of the affidavit attached to the motion which was sworn by one Jeff Ike on 6th May, 1986. It stated-

“6. The second Defendant has despite frequent representations by myself on behalf of the Plaintiff, refused to release the said cargo to the Plaintiff, and the said cargo remains in the possession of the second Defendant.”

On 8th May, 1986, Oguntade, J. as he then was, granted the third relief in the motion set down above and made an order accordingly.

From the ruling of Oguntade, J. of 23rd June, 1986, it would appear that after making the order of 8th May, 1986, the 1st Respondents were ordered to serve the appellant with the motion papers. This was the motion which was first taken on 19th May and later on 22nd May, 1986. Actually, from page 55 of the bundle of papers. the terms of the motion on notice were the same as the ex-parte motion to which I had made reference. On the 21st May. 1986, learned counsel to the appellant had filed a notice of preliminary objection in these terms:-

“1. The subject matter of this Suit is an Admiralty matter.

2. It is Federal High Court that has jurisdiction to entertain this Suit under Section 7(1) (d) of the Federal High Court Act. 1973 and by virtue of the decision of the Supreme Court in American International Insurance Company vs. Ceekay Insurers Ltd (1981) 1 All N.L..R Part 11 58

Again from the ruling of the 23rd June, 1986 by Oguntade J. it can be gleaned that on 22nd May. 1986, when as stated earlier the motion on notice came up for argument. Chief Fawehinmi for Appellant, agreed that the motion on the issue of jurisdiction be taken together with the motion on notice. The learned trial Judge, however, adjourned argument to 11th June, 1986. It is pertinent in view of the issues I shall discuss later that before argument was taken on 11th June, 1986, the Appellants’ 4 officials swore to a 24 paragraph counter-affidavit to which was attached several documents. The counter-affidavit was sworn 22nd May, 1986. Again on 11th June, 1986, Tokunbo Akomolafe, a Legal Practitioner, in the Chambers of Gani Fawehinmi swore to further counter-affidavit. On the same 11th June, 1986 Jeff Ike, on behalf of the 1st Respondent swore to an 8 paragraph further affidavit. This is of course in addition his earlier affidavit to which, I ought to add, several documents were also attached. All these were before learned trial Judge when he heard argument on 11th June, 1986. The significance of this will appear later.

On 23rd June, 1986, therefore the learned trial judged delivered his Ruling. He made the orders as per the reliefs sought in the motion. At the end of his ruling the learned Judge made the following observation –

“Considering the Magnitude of the amount deposited with the Chief Registrar of the High Court. I think it is desirable that this case be expeditiously tried. I shall be willing to hear the case within two weeks if parties take the necessary procedural steps. This will ensure that the money which is to abide the result of this case is not tied down for a long time”

It is regrettable that the parties were unable to take up this offer and in 1988 we are still concluding the interlocutory part of the Suit. The appellant, being dissatisfied with that ruling appealed to the Court of Appeal, which on 25th March, 1987 dismissed the appeal thus affirming the trial Judge’s ruling. The appellant then appealed. I shall only set down grounds 2 and 3 thereof which in my view raise arguable points. In those two grounds, the appellant’s complaints were as follows:-

“(2) The learned Justices of the Court of Appeal erred in law in dismissing the appellant’s appeal when the order of the High Court appealed against had the effect of granting the 1st and 2nd substantive claims sought by the Plaintiff/1st Respondent on its statement of claim at an interlocutory stage.

PARTICULARS

(a) A Court cannot grant at an interlocutory stage the relief sought in the substantive claim without any evidence in proof thereof

(b) Final judgment of the Court would be rendered nugatory if it turns out to be a dismissal of the plaintiffs claims.

The learned Justices of the Court of Appeal erred in law in confirming the order of the High Court appealed against when there was evidence before the High Court and before the Court of Appeal that the rice in dispute was no longer in existence at the time the plaintiff instituted this action.

PARTICULARS OF ERROR

(a) A Court does not make an order that cannot be enforced.

(b) Paragraph 22 of the 2nd Defendant’s/Appellant’s Counter-affidavit (on page 22 of the record) shows that the rice in dispute had been sold before the Plaintiff/1st Respondent instituted this action.

(c) Even faced with the said paragraph 22 of the Appellant’s counter-affidavit and a contrary statement by 2nd Defendant/Appellant’s counsel on 19th May, 1986 (on page 53 of the record) that the rice in dispute was still in existence, the Court should have conducted an enquiry by visiting the warehouse of the 2nd Defendant/Appellant to ascertain whether or not the rice was still in existence before proceeding to make its order.”

Both the learned Senior Advocate, Chief Williams, for the 1st Respondent, Mr. Adewunmi for 2nd Respondent and Oyetibo for the Appellant filed briefs of argument and offered oral argument which have been most helpful in determining the issues in this case. Mr. Oyetibo in his brief of argument set down 3 issues for determination. As his argument dealt with these 3 issues and his 3 grounds of appeal, I shall deal with them as I consider the issues in this case. The 1st issue was:

1. Whether the Court of Appeal was right in dismissing the appellant’s appeal when the order of the High Court appealed against was made without all the parties particularly the Nigerian Merchant Bank Limited necessary and essential to execute the order of the Court being present before the Court.”

Both in his brief of argument and in his oral argument before this Court, Mr. Oyetibo contended that the trial Court ought not to have made the order it made when the Nigeria Merchant Bank was not a party to the proceedings. In his view the judicial power of the Court cannot be exercised in the way it was clone to affect the Bank. He claimed that his clients acquired the status or locus to complain when they were ordered to hand over the rice to Merchant Bank. He referred to Section 6(6) (b) of the 1979 Constitution and to Adesanya v Republic of Nigeria (1981) 5 S.C. 112 at 163 and Bronik Motors Ltd. v. Wema Bank (1983) 1 S.C.N.L.R. 296 at 336-337. I do not myself consider this first issue a substantial one that should be dealt with in any detail. Indeed, Chief Williams was not called upon to reply to this aspect of the appeal. It seems to me that learned counsel to the appellant was pushing the interpretation of Section 6(6) (b) of the Constitution and the decision of this Court in

Adesanya’s case too far. The jurisdiction of the Court as granted by Section 6(6)(b) of the Constitution-

“shall extend to all matters between government or authority and any person in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person.”

The Nigerian Merchant Bank was not a party to the proceedings nor was the determination of any question relating to its civil rights in issue. But then one should look at Order 39, Rule 3 of the Civil Procedure Rules of Lagos State under which the application was brought and the Order subsequently made.

That order reads-

“(3). It should be lawful for the Court or a Judge in chambers, on the application of any party, to make any order for the sale, by any person or persons named in such order, and in such manner, and on such terms as the Court or Judge in chambers may think desirable, of any goods. wares, or merchandise which may be of a perishable nature or likely to injure from keeping, or which for any other just and sufficient reason it may be desirable to have sold at once”

(italics mine)

Mr. Oyetibo argues that a person mentioned in such an order must be a person conceived in Section 6(6)(b) of the Constitution, i.e. a person whose civil rights are to be determined. Such an interpretation would severely restrict the discretion which has been given to the trial Judge in that order. If Mr. Oyetibo is right, then it means that the Court can only appoint one of the Parties in the Suit. It would also mean that the Court cannot appoint receivers, arbitrators, or, in this case, a “person” it considers suitable to sell the commodity, for in all such cases the party appointed by the Court in its discretion is not usually a party to the action. Such appointments are made in the exercise of the discretion of the Court in the course of its exercise of its judicial power. Mr. Oyetibo cannot press the issue without in fact raising the issue of constitutionality of such provisions as order 39 Rule 3 for, if he is right, and person in that order was not intended to be a person conceived by Section 6(6)(b) of the Constitution, the order would be void for inconsistency. I am not so sure that he would have pressed his argument that far. In any case, if be did he would not be right. The judicial power of the Court in this Suit was properly invoked. The appointment of a person to effect the sales, was in my view a necessary adjunct to the exercise of the Court’s judicial power. In any case the Nigeria Merchant Bank is not complaining, why must the appellant complain for it I accept the reply in his brief by Chief Williams that it is only a party affected by an order in an action in which he is not a party who can complain and that nobody else can complain on his behalf. Durayappah v. Fernando (1967) 2 A.C. 337 at 352-355.

The second issue for determination was in these terms:-

“Is it right in law for a Court to grant at an interlocutory stage the relief sought in the substantive claim without any evidence in proof thereof as the trial Judge had done in this case and confirmed by the Court of Appeal”

In his oral argument on this issue, Mr. Oyetibo submitted that once the Border of the trial Judge is executed then the success of the Appellant’s appeal and also the final judgment of the trial Court if it is dismissal of the Plaintiff/1st Respondent’s claim will be rendered nugatory. He contended that the customers to whom the Judge ordered the rice was to be disposed if handed over to the Nigerian Merchant Bank are customers of the 1st Respondent.

He submitted that if the rice was released to them there was nothing left to try. He further submitted that the 1st respondent did not make out a prima facie case to entitle it to the order of the Court. Whereas the 1st Respondent relied on the title of 2nd Respondent, he said that there was not an iota of evidence as to the title of 2nd Respondent. Finally, he submitted that if the order of the learned trial Judge was sustained, it would compromise the substantive suit. He referred to Locabel International Finance Limited v Agro Export and Anor (1988) 1 W.L.R. 657 at 663-664; Shepherd Homes Ltd. v Sandharn (1971) CH 340 at 351; Ojukwu v Governor of Lagos State (1986) 3 N.W.L.R. (pt.26) 39 at 45. In his reply, Chief Williams referred to the terms of Order 39, Rule 3 and argued that it was no more than an order to preserve perishable goods. Title to the goods was not in issue. He argued that the rice could be sold to the Plaintiff/1st Respondent, and if the 2nd Defendant/Appellant had wanted it sold for N30 Million the 1st Respondent would have agreed. He submitted that an order for the preservation of property by sale does not in any way compromise the title of either party to the goods even if the sale was made to one of the parties or his nominee.

This was as long as the proceeds of sale, were kept in custodia legis. He contended that at no stage of the argument did the appellant suggest that the price was ridiculous nor did they put forward an alternative order. On the issue of title he referred to a letter from the Permanent Secretary, Ministry of Trade to the Chairman of the Appellant Company informing him that 1st Respondent was the owner of the rice. It is clear that both the High Court and the Court of Appeal agreed with the submissions of Chief Williams on this aspect of the case.

The Court of Appeal, per Ademola, J.C.A. said on it-

“As to the contention that the order made has had the effect of preempting the claims before the Court in favour of the Respondents, I can only say that this submission was again based upon the misunderstanding of the intent and purposes of Order 39, Rule 3. The making of the Order at this stage does not determine the question of the ownership of the cargo of rice. So in my view, the question of title being in one person as against another, does not arise. The proceeds of the sale are always available in the hands of the Bank under the direction of the Court for whoever the court shall declare to be the rightful owner of the consignment of rice.”

I had previously set down the terms of the summons which the first Respondent filed against the Appellant. The first relief claimed is a declaration that the 1st Respondent is the owner of the Rice in dispute. Title is very much in issue in the substantive suit. Ordinarily, an order under Order 39, Rule 3 ought to be one merely to save the goods from perishing. It should be so drawn as to leave the issue of title open and the balance should be held evenly and fairly between the parties. In such cases an order will only be made on such terms as safeguard the interest of the defendant as far as possible and which narrows the relief so far it may otherwise cause harm to the defendant: See EMI Ltd and Ors v Pandit (1975) 1 W.L.R. 302; 1975 1 All E.R. 418. This was what the learned trial Judge believed he did when he made the order being challenged. In his ruling he pointedly said-

“It is not disputed that the consignment in this case is rice and that it is perishable or likely to injure from keeping. It is important to note that none of the parties wishes to eat the rice. They all wish to sell it. The 2nd defendant says in paragraph 5 and 6 of its counter-affidavit that the rice is worth N5,621.816.57, applicant says that it is worth N20,700,000.00 and is willing to deposit the money into Court. If at the end of the day the 2nd defendant wins, more money than it paid or expected from rice will be available for it to claim. If the plaintiff wins, it will take back its money. The alternative to that is to allow the rice rot away in the warehouses of the 2nd defendant.”

If the trial Judge believed, as he obviously did, that price at which the rice could he sold was what was most important to both parties, then he could not have made the order he made for he thereby tilted the issue of title to one side. In my view ability to determine the price at which one sells to one’s customers is an incidence of title.

As it was, the order made by the trial Judge was that the Appellant should hand over the rice to the Nigerian Merchant Bank which will dispose of it by sale to the customers of the 1st Respondent who had deposited money for the commodity with the Bank. Was it not presumptuous of the trial Judge to assume that the 2nd Defendant/Appellant could be satisfied with N20 Million it if won Did he consider that it may not wish to sell at all There is another aspect of this matter which ought to have occurred to the trial Judge.

By Exhibit 31/1 attached to the affidavit of Jeff Ike of 6th May, 1986, N20.7 Million represents the total value of the rice at N45 per 50 kg hag. No document indicated the price at which the Nigeria Merchant Bank was to dispose the rice to the customers of the 1st Respondent who had deposited money for same. It has to be remembered that the issue of title to this rice is being contested by both parties to this Suit. It is not disputed that it was the Appellant which in the first place placed order for the rice and paid N5.6 Million, for it.

The 1st Respondent’s claim to title was through this 2nd Respondent from whom it bought as per the Agreement Exhibit 31/1. What then was the title of the 2nd Respondent In paragraphs 3,4, 7, 8 and 9 of a Counter-affidavit sworn to by Adebisi Adebola MacGregor, Chairman/Managing Director of 1st Defendant/Respondent, 2nd Respondent in this appeal, it was deposed as follows:-

“3. That the vessel M.V. Eastern Maid first arrival in Nigeria was recorded about the 10th day of July, 1985 under the command of Captain Clark Colm.

4. That due to accumulated demurrage which had reached unbearable level on M.V. Eastern Maid and other vessels chartered by the Federal Government of Nigeria, the vessel owners withdrew M.V. Eastern Maid and offered her cargo of rice for sale.
5. Eventually Mandjo Sarl one of the associates of APSIMEX authorized Stratel the 1st Defendant to sell the cargo of rice.
6. The 1st Defendant sold 23,000 metric tons of the rice to the Plaintiff for a total price of N20.7 million by an agreement in writing dated 26th day of August, 1985.
7. That authority to sell the rice emanated from the ship owners and not the Thailand government.”

Significantly, no documents were attached to support the claims in paragraphs 7 and 9 above.

The 2nd Respondent on the issue of title also relied on a letter dated 14th November, 1985 written by the Permanent Secretary, Federal Ministry of Commerce and Industries to the Executive Chairman of the Nigerian National Supply Company. It ended by saying-

“consequently, the Ministry has now decided that the Cargo should be released to the owner Alhaji Namajoda Sabana and Co. Ltd.”

But the effect of this letter was surely neutralised by another letter dated 20th February, 1986 written by Secretary to a Panel in the Federal Ministry of Industries to the Executive Chairman of the Appellant Company. Paragraph 1 of that stated as follows:-

“I wish to inform you that the above Administrative Panel was inaugurated on the 17th February, 1986 by the Honourable Minister of Trade, Major-General N.G. Nasko to enquire into the ownership of the consignment of rice aboard the ship “Eastern Maid.”

I am of course not trying the substantive issue of title, but am only concerned with the question whether the order in question has compromised that issue still for trial. In my view, a colour of title as dim as that presented by the 1st defendant, ought to have made the learned trial Judge wary of making an order the terms of which put the disputed rice into the hands of one of the disputants – the 1st Respondents. Prudence would have dictated that even if the rice was to be handed to the Nigerian Merchant Bank, sale should have been open to the customers of both parties. Chief Williams has made the pertinent point that at no stage did the Appellant’s Solicitors attack the price of N45 as being ridiculous or suggest that an alternative order be made. I have looked through the bundle of papers being used for this appeal and I cannot see any record of the proceedings of the High Court on 11th June, 1986. From the Ruling of 23rd June, 1986, I can see the following passage. It reads -.

“Chief Fawehinmi vehemently opposed the application. The substance of his submission is that the circumstances surrounding the sale of the rice by the 1st defendant to the applicant was dubious and fraudulent.”

In Ojukwu v Governor of Lagos State (1986) 3 N.W.L.R. (Pt.26) 39 at 45, the Court of Appeal per Nnaemeka-Agu, JCA (as he then was) made remarks which were quite apposite to the issues being considered. He said-

“It is quite correct to say that the learned trial Judge in her ruling made far reaching findings of fact on the conflicting affidavit evidence before her and without calling oral evidence. She found-

(1) that the 1st Appellant is not the owner of the property in dispute

………………………..

…………………………….

Admittedly, these findings were not necessary for the issue of interlocutory injunction before her and should never have been made at that stage of the proceedings. I cannot over emphasise the need for trial Judges in interlocutory rulings desisting from making any findings which may prejudice the substantive case. It is true that if the above findings were rightly made and allowed to stand, they have completely knocked the bottom out of the substantive Suit.”

Similar opinions as to the need in interlocutory proceedings to avoid doing anything that would compromise the substantive issue were impliedly expressed by this Court in Fawehinmi v Akilu (1987) 4 N.W.L.R. 797 at pages 818, 850 and 855.

From all have said, I am of the view that the terms of the order made by the learned trial Judge went beyond what was needed to preserve the perishable goods and very much compromised the keenly contested issue of title which was yet to be considered and decided upon.

The 3rd issue for determination is whether the Court of Appeal was right in law in confirming the order of the High Court appealed against when there was evidence before the Courts that the rice in dispute was no longer in existence at the time the Plaintiff instituted this action. There is no doubt in my mind that this is the most important issue for determination in this appeal. The first and second reliefs prayed for in the application which were granted were an order of injunction and an order to handover the rice. Since Courts do not make order in vain, was the rice in existence when the learned trial Judge made his orders On this issue, Mr. Oyetibo argued that there was no rice when the action was instituted. He referred to the undertaking of Mr. Odetoyinbo which I shall deal with fuller below and submitted that this undertaking was followed by a counter-affidavit by 4 officials of the Appellant Company. He submitted that the question whether the rice was still in existence at the time the application was being heard i.e. on 11th June 1986 was a fact in issue. Being a fact in issue, he argued, counsel cannot give evidence from the Bar in proof or disproof of it. The High Court, he argued, should have made a finding of fact on the existence of the rice or not before proceeding to make its orders including a mandatory injunction. He referred to Seismograph Service (Nig.) Ltd. v. Akporuovo (1974) 6 S.C. 119 at 128 and Seismograph Service (Nig.) Ltd. v. Ogbeni (1976) 1 All N.L.R. 198, 217-218. As to the undertaking given by Mr. Odetoyinbo, learned counsel argued that the guiding principle on the scope of counsel to bind his client is whether the act of the counsel in question involves the exercise of his skill or professional discretion. Once these are not involved, the client is not bound. He referred to Adewunmi v. Plastex Ltd. (1986) 3 N.W.L.R. (Pt.32), 767 at 786; 792 – 3; Marsden v. Marsden (1972) All E.R. 1162 at 1165. Chief Williams in his argument concentrated on the undertaking given by Mr. Odetoyinbo on 19th May, 1986 that the rice was still in existence. He contended that when an issue has been admitted, it was no more a fact in issue. Mr. Odetoyinbo never came forward to say that he made a mistake. He ought to have sworn to an affidavit to state the new situation. He thought that the Court of Appeal and the trial Court were right in deciding this matter on the undertaking of Odetoyinbo. He pointed out that the trial Court granted an adjournment based on that undertaking. He submitted that there has been no attempt to set aside the trial Judge’s order and impossibility of performance due to the alleged non-existence of the rice would have been a defence.

There is no doubt that both the trial Court and the Court of Appeal decided this issue of the existence or non-existence of the rice on the undertaking given by Mr. Odetoyinbo to the Court on 19th May, 1986. To start with the trial Court, it would be useful to set down,as the learned trial Judge did, the proceedings before him on the 19th May, 1986. It ran thus:-

”Mr. Odetoyinbo: I shall be asking for an adjournment for two days to enable me receive instructions from the 2nd defendant. I only had an advance copy of the application this morning.

Mr. Ogundipe: The 2nd defendant was served on 9th May, 1986. If they chose not to instruct counsel earlier, then they cannot hold us to ransom.

Chief Adedipe: I agree with Mr. Ogundipe. There is a chance that the goods will be sold if the matter is further adjourned.

Court to Odetoyinbo: Does the 2nd defendant still have the consignment of rice

Mr. Odetoyinbo: Yes, it does.

Court to Odetoyinbo: Do you give an undertaking that nothing will happen to the consignment of rice before next date.

Mr. Odetoyinbo: Yes. Court: I think the crucial thing really is to ensure that the cargoes of rice are not disposed of before the next hearing date. Mr. Odetoyinbo has so undertaken. I would wish to give 2nd defendant’s counsel another opportunity to get his instructions straightened out.”

(Italics mine)

Incensed no doubt by subsequent submission that the rice had been sold before the institution of the Suit, the learned trial Judge had this to say in his ruling –

”I have set out above the full procedure at the Court on 19th May, 1986. Mr. H.A. Odetoyinbo in the presence of Mrs. Ige who represented the 2nd defendant solemnly told the Court from the Bar that the 2nd defendant still had the consignment of rice. He (sic) made an undertaking that the rice would not be disposed of. I then made an order extending the duration of the injunction earlier granted. On 22nd May, 1986, I similarly extended the duration of the order of injunction. The undertaking given by Mr. H. A. Odetoyinbo on 19th May, 1986 is binding on the 2nd defendant. The continued existence of the rice was therefore never an issue. It was assumed by all persons concerned that the rice was still existing. The deposition that the rice had been sold is simply a non-issue. It must be discountenanced. I see that someone is trying to toy with the Court and make the administration of justice look like the pastime of amateurs and novices. If the cargoes of rice that were in existence on 19th May, 1986 on the representation of counsel disappeared on 22nd May, 1986 when the counter-affidavit was worn to, then someone will have to come forward to explain the situation and this Court should want to ensured the integrity of the Court orders and punish resolutely those who would irreverently treat the Court and the judicial system, an institution for which there is yet no substitute,…………. In so far as this Court is concerned, the cargoes of rice must still exist somewhere.”

(Italics mine)

It is clear that the question of whether the rice was existent or not on 23rd June, 1986, when he was giving his ruling was decided by the learned trial Judge on the undertaking given by Mr. Odetoyinbo on 19th May, 1986. It was exactly in this same way the Court of Appeal saw the issue. Ademola, J.C.A., approving the conclusions reached by the learned trial Judge, observed as follows:-

“Reading the affidavit and the counter-affidavit and the proceedings relating to this aspect of the matter in the court below, I am in complete agreement with the submission of Chief Williams, learned counsel for the respondent that to accede to the contention of the appellant’s counsel in this court would be laying down a dangerous precedent which is destructive of a well laid down principle, on how much the Court should rely upon statements, admissions and undertakings made by counsel in course of proceedings before it.”

I find no difficulty in agreeing with the two lower courts that solemn undertakings, compromises etc., by counsel at the Bar on behalf of their clients have become a cherished and dignified manner of sorting out issues between parties in the course of a trial. The binding nature of such undertakings ought not be treated lightly. But that is not to say that in all circumstances and in all cases such an undertaking must bind the client. Before expressing my opinion on this issue, I would wish to indicate my total revulsion of Mr. Odetoyinbo’s conduct in this matter. The complications we are unraveling now may never have arisen if he had discharged what I conceive to be his duty to the Court in a matter such as this. First, can it be said in the circumstances of this case that Mr. Odetoyinbo’s undertaking that the rice was in existence on 19th May, 1986 and would not be disposed of was binding on his clients Secondly, in the absence of any explanation by Mr. Odetoyinbo, and faced with all the affidavit evidence on the existence or otherwise of the rice, was there any alternative open to the learned trial Judge The first issue raises the whole question of the scope of counsel conducting a case to bind his client. There is no doubt that when counsel is instructed to conduct a case he is master of it. The central issue is, however, instructions for if he has no instructions in a case he cannot bind his client. In Adewunmi v Plastex Ltd (1986) 3 N. W.L.R. 767 where this Court recently considered this matter, it was agreed that the basis of the authority of counsel conducting a case is the instruction given to him by his client. If he is given instructions, which are not limited in any way, he will be free in the course of his conduct of the case to take such action as he considers in the best interest of his client. Eso, J.S.C. put it quite clearly at page 784. He said:”

”Once a counsel appears in court in a case, and announces his appearance, the Court assumes he has authority of his client for the conduct of the case……………………………..It is not for the court to start an enquiry into his authority and the court never does. Now, once he is so instructed, and his appearance and announcement in court, that he is so instructed, raises a presumption of his authority, he assumes full control of the conduct of his client’s case. He is to accept and he must adhere to his instructions. But once he is within the scope of his instructions, counsel has responsibility as to the manner he would carry out these instructions.”

In Halsbury’s Laws of England 4th Edition Vol. 3 paragraph 1184, the learned authors have set down the principles of law applicable as follows:-

”The statements of counsel, if made on the trial of an action or in the course of any interlocutory proceeding in the presence of the client or his Solicitor or someone authorised to represent the solicitor, and not repudiated at the time, bind the client and may be used as evidence against him………………… The court will not accept an undertaking given without authority by counsel on behalf of his client (See Marsden v Marsden (1972) 1 All E.R. 934 C.A.), but an undertaking given by counsel in court and accepted by the court and the parties ought to be scrupulously observed as if embodied in an order of the court. Pennell v Roy (1853) 20 L.T. O.S.269.”

In Harvey v Croydon Union Rural Sanitary Authority (1884) 26 CH. 249, the English Court of Appeal decided, within the facts of that case, that where counsel by the authority of their clients consent to an order, the clients cannot arbitrarily withdraw such consent. This was followed in Lewis v Lewis (1890) 45 CH. 281, at 283. How do these authorities relate to the present case The first thing that strikes me from the proceedings of 19th May, 1986 was that Mr. Odetoyinbo had not received any instructions from his clients – Appellants herein – before he appeared in Court that morning. In fact, he did say that he received a copy of the motion that morning. The instructions he had not received must relate to the prayers in the motion which included an order that the rice in dispute was to be handed over to the Nigerian Merchant Bank Ltd. for disposal. The undertaking he gave was, in my view, given without authority. It cannot be taken to be within his apparent authority as counsel who appears for a party in a case for he had received no instructions in this matter. The undertaking that the rice was still in existence must he taken in the same way. The fact that that assurance was given in the presence of Mrs. Ige is in my view neither here nor there as we do not know her status in the Appellant’s Company.

But this is not the end of the matter. I now go to the second issue. As in my judgment the undertaking given by Mr. Odetoyinbo was not binding on the Appellant, the learned trial Judge and Court of Appeal which resolved the issue only by reference to the undertaking were clearly in error.

Was there nothing before the learned trial Judge on which the conflict as to the existence of the rice could have been resolved There was. I had earlier referred to paragraph 6 of the affidavit sworn to on 6th May, 1986 in which Jeff Ike deposed ”that the cargo of rice remains in the possession of the second defendant.” Then on 22nd May, 1986 4 senior officials of the Appellant company, Mrs Oyeyemi Aduni Ajayi, Procurement Manager, Stephen Ansa Mante, Manager, Commodities Section, Francis Oyebisi Jokotoye, Shipping Manager and Charles Ndemukafia Osaele, Stores Officer, Stores Control of the Marketing Department deposed to a 23 – paragraph counter-affidavit. I set down only paragraphs 1, 2, 4, 6, 8, 9, 10, 12, 13, 15, 19 and 22. These were as follows:-

1. That the Rice involved in the Suit belonged to the Federal Government of Nigeria.
2. That the contract for the sale of the rice was made by the Federal Government of Nigeria and the Government of Thailand.
3. That an invoice was issued by the Government of Thailand through its Department of Foreign Trade Ministry of Commerce to the Federal Government of Nigeria, through the Permanent Secretary, Federal Ministry of Commerce and Industry. A copy of the Invoice dated May 11, 1985 bearing the stamp of the Government of Thailand and that of the Central Bank of Nigeria, Lagos is attached herewith and marked Exhibit ‘A’.
4. The rice cargo on the vessel Eastern Maid which sailed from Thailand was insured for N78,304.22 by the Federal Ministry of Commerce with the National Insurance Corporation of Nigeria. A copy of the certificate of Insurance No.170447 is attached herewith and marked Exhibit ‘C’.
5. The total value of the rice cargo on board M. V. Eastern Maid was N5,621,816.57 made up of the cost of the rice N5,543,512.35; and Marine Insurance of N78,304.22.
6. The M. V. Eastern Maid was one of the 22 vessels handed over to the Nigerian National Supply Company by the Federal Ministry of Commerce. A copy of the list of the vessels is attached herewith, and marked Exhibit ‘E’.
7. That the cargoes in all these vessels were duly handed over to the Nigerian National Supply Company and the latter was debited to the sum of N197,626,171.51. The rice cargo in M.V. Eastern Maid was part of this large consignment. A letter from the Federal Ministry of Commerce and Essential Commodities Committee Division dated the 22nd of November, 1985 ref. ECC/1/S.1./C/7/187 adverting to this sum of N107,625,171.51 is attached herewith and marked Exhibit ‘F’.
8. That the M.V. Eastern Maid berthed on the 22nd of October, 1985 at Tin Can Island Port Berth No.4. She commenced discharge on the 28th of October, 1985 and completed the discharge of her cargo on the 30/12/85 and sailed immediately the same day at about 15.00 hours.
9. That the clearing and haulage of the rice from the vessel to the different warehouses of the different warehouses of the Nigeria National Supply Company in all the states were handled by Government Coastal Agency the clearing agent of the 2nd defendant/respondent.
10. That the breakdown of our deliveries as per daily delivery Record is as follows:-

S/No. Station Quantity Delivered

1 NICON 8,400 Dam Rice

…………………………………………………..

……………………………………………………

…………………………………………………….

23 NNSC Abuja 900 Bags

22. That all the bags of rice involved in this Suit had been duly sold through our states branches before the plaintiff filed this action on the 16 May, 1986.”

On 11th June, 1986 Appellant’s counsel Tokunbo Akomolafe swore to a further counter-affidavit in which paragraphs 3 and 4 read –

3. ”That all the bags of rice involved in this Suit had been duly sold through our States Branches before the Plaintiff file this action.”
4. That the inclusion of the ”on the 16th May 1986” was an error by our chambers as the action was not filed on the 16th of May, 1986.”

In reply to these counter-affidavits, Jeff Ike, in a further affidavit sworn to on the same 11th June, 1986, deposed in paragraph 6 as follows:-

6. Paragraph 22 of the affidavit of the second defendant is untrue. On Monday 19th May, 1986, both the counsel for the second defendant and the representative of the second defendant informed the Court that the second defendant had not sold the rice, and was still in possession of the rice. The learned Judge then told the representative of the second defendant that the ex-parte injunction was to continue and that the second defendant was not to sell any rice, on pain of imprisonment of its officials. In any event, I am aware of the fact that the second defendant has in its various warehouses in Lagos, rice far in excess of the 23,000 metric tons discharged from the EASTERN MAID.”

And in paragraph 7 he deposed –

”Furthermore, it was the understanding of all the parties that there would be no disposition of the rice until after the report of the administrative panel which report is still to be published.”

These affidavits reveal highly contentious assertions on this issue of the existence or non-existence of the rice. It seems to me that the unequivocal assertion of the 1st Respondent on this matter put against the equally forceful claim by the Appellant that the rice had been sold, an assertion backed by such things as the schedule of sale to State Branches, obliged the learned trial Judge either to make an on the spot inspection of the warehouses of the Appellant, or better still oral evidence to resolve the conflict. It is settled that the Court cannot resolve such conflict in affidavits except by taking oral evidence. In Falobi v Falobi (1976) 9-10 S.C.1; Fatayi-Williams, J.S.C. as he then was, set down the practice of the Court in this issue when he said –

“We have pointed out on numerous occasions that when a court is faced with affidavits which are irreconcilably in conflict, the Judge hearing the case, in order to resolve the conflict properly, should first hear oral evidence from the deponents or such other witnesses as the parties may be advised to call.”

He referred to Akinsete v. Akindutire (1966) 1 All N.L.R. 147, 148; Eboh and Ors v Oki and Ors (1974) 1 S.C. 179 at 189-190; Olu-Ibukun and Anor vs Olu-Ibukun (1974) 2 S.C. 41 at 48; Uku and Ors vs Okumagba and 3 Ors (1974) 3 S.C. 36 at 56, 64-65. This Court had cause to refer to affidavits and counter-affidavits clearly in conflict in State v Gwonto (1983) 1 S.C. N.L.R. 142. At page 155 of the record I expressed the view that –

”If the Court of Appeal had adverted its mind fully to those affidavits and counter-affidavits and then proceeded to take fresh evidence there would have been sufficient material in my view, from which it could have resolved the all-important question of whether in fact there was interpretation of the proceedings in the High Court into English and Hausa. The Court was clearly in error in not doing so.” The contention that the learned trial Judge could in the alternative visit the warehouses of the Appellant is not as far fetched as it may sound. This Court has also in related circumstances suggested that a visit was the best way of resolving such conflicts in the evidence before the Court. See Seismograph Services (Nig) Ltd v Ogbeni (1976) 1 All N.L.R. (pt.1) 188 at 217. Approval was given to the statement of Sowemimo, J.S.C. (as he then was) in the earlier case of Seismograph (Nig) Ltd v Osiso Akporuovo (1974) 6 S.C.. 110 at 128.

What then did the learned trial Judge do At the risk of repetition, I shall set down that portion of his ruling of 23rd June 1986 when he held that the counter-affidavits were in effect irrelevant. His exact words were –

”The continued existence of the rice was therefore never in issue. It was assumed by all parties concerned that the rice was still existing. The deposition that the rice had been sold is simply a non-issue. It must be discountenanced.”

The learned trial Judge ignored all these materials which were before him both on 11th June, 1986, when argument on the motion started before him, and on 23rd June, 1986, when he gave his Ruling. He was in serious error and the Court of Appeal erred too in supporting his approach. He thus made his orders without ascertaining, as he ought to have done, that the rice was actually in existence.

For all the reasons I have given above, this appeal must succeed and it does succeed. I allow the appeal and set aside the Ruling of the High Court given on the 23rd June, 1986 and all the orders made therein. I also set aside the judgment of Court of Appeal, Lagos Judicial Division dated 25th March, 1987.

I award costs of N350 in the Court of Appeal and N500 in this Court in favour of the Appellant and against the 1st and 2nd Respondents. I would end by saying that in view of the magnitude of the money involved, and particularly the interests of third parties as shown in this case, I would, as the learned trial Judge ought to have done in 1986, order accelerated hearing of the substantive suit. The parties’ counsel are to take all procedural steps to comply with this order.

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SC.82/1987