Standard Trust Bank Plc V. Chief Emmanuel Olusola (2007)

LawGlobal-Hub Lead Judgment Report

TIJJANI ABDULLAHI, J.C.A.

This is an appeal against the Ruling of the High Court of Justice, Ekiti State holding at Ado-Ekiti, Coram C. I. Akintayo J, delivered on the 7th June, 2006. The Appellant herein was the Defendant in the lower court whilst the Respondent was the Plaintiff who filed an action claiming as per the Writ of summons the following reliefs:

“(a) a declaration that the sum of two hundred and fifty thousand naira (N250,000.00) paid over to defendant on 16th December, 2003 was for purposes of buying shares in defendant.

(b) a mandatory order on defendant to issue to plaintiff the necessary shares certificates in respect of the said sum of money.

(c) two million naira (N2,000.000.00) general damages for defendant’s breach in giving plaintiff his share certificate and the consequent loss of dividends from 2004.”

The case as can be gleaned from the processes filed by the parties is that: The Plaintiff was and is still a Customer of the Defendant at its Ado-Ekiti branch. The Plaintiff, on the 16th December, 2003, paid to the defendant the sum of N250, 000.00 through a cheque No. 03349815 drawn on plaintiffs account with the defendant number NGN 0562526001 at the Ado- Ekiti branch to buy in Appellant shares which Appellant invited the public to buy.

The Respondent, on 28th December, 2004, when he heard nothing from the Appellant either rejecting his application or returning his money or sending share certificate to him, wrote to find out what was amiss. The Appellant did not reply to the said letter. On the 11th February, 2005, Respondent caused his solicitor to write to the Appellant and the Appellant again refused to give a reply.

As a result of pressures put on the Appellant by the Respondent, the former advised the latter to contact the Appellant’s Registrar which the Respondent did. In his reply of the 18th July, 2005, the Registrar requested the Respondent to liaise with the Appellant’s Ado-Ekiti Branch, which the Respondent did. The branch confirmed that it had record of the Respondent’s payment of N250, 000.00 for buying shares and promised to get in touch with the Appellant’s Registrar, but nothing positive followed. When recapitalization and the merger of banks were imminent, the Respondent

took the matter to the Ekiti State High Court, Ado-Ekiti for adjudication.

In a motion on notice dated 8th of February, 2006 and filed on 9/2/2006, the Defendant/Applicant sought for an order striking out the suit for want of jurisdiction to hear and determine same contending that only the Federal High Court had jurisdiction to handle the matter. The Respondent opposed the application and filed a counter-affidavit. After the addresses of both counsel in the case, the learned trial judge, on the 7th June, 2006 held thus:

“I here (sic) considered the claim of the Plaintiff before this court and came to the conclusion that what is before me has to do with a transaction between the individual customer and the Bank and to this end it is my considered and humble view that this court has jurisdiction to entertain this case.”

Dissatisfied with the ruling, the Defendant filed a notice of appeal which carries one ground of appeal. (See page 42 of the record).

In accordance with the Rules of this court, Order 6 RR 2 and 4 of the Court of Appeal Rules, parties filed and exchanged their respective briefs.

The Appellant in his brief of argument undated but filed on 7th February, 2007 formulated a sole issue for determination of the appeal as follows:

“Whether the plaintiff/Respondent’s claims postulated in paragraphs (a), (b) and (c) of the Writ of Summon and paragraph 17 (a) (b) and (c) of the Statement of Claim are not matters regulating the operation of the Appellant as a Company and if yes whether the Federal and not the State High Court has jurisdiction to hear and determine same.”

The Respondent’s counsel agrees that the only issue in the appeal is one of jurisdiction. On the 22nd March, 2007, when the appeal came before us for hearing, Learned Counsel for both parties adopted their written arguments and proffered oral arguments in amplification of the said written briefs.

Learned Counsel for the Appellant, Femi Sarumi, in addition to his written brief, argued that the Respondent’s claim before the lower court borders on the sale and purchase of shares in the Appellant’s company which, by virtue of incorporation, is a public limited liability company. The legal effect of such a purchase, Learned Counsel further argued, makes the Respondent a co-owner in the Appellant’s company.

Learned Counsel submitted that the co-ownership of the Appellant’s company is not a matter between a Banker and its Customer and therefore beyond the jurisdiction of the lower court. The jurisdiction, he further argued, is vested in the Federal High Court. Learned Counsel referred us to section 251 of the Constitution of the Federal Republic of Nigeria, particularly the proviso to section 251 (1) (D). Learned Counsel urged us to allow the appeal and strike out the suit before the lower court for lack of jurisdiction.

For his part, Learned Counsel for the Respondent, A. Adeyemi, submitted that the issue of joint-ownership is not covered by the ground of appeal filed in this appeal. Learned Counsel for the Appellant admitted raising it as a new issue without seeking leave of the court to raise it as a new issue. Learned Counsel urged the court to discountenance the submission of the Appellant’s counsel. He referred us to the case of Berende v. Usman (2005) 14 NWLR (Part 944) P. 1 at Pp, 17 – 18. Learned Counsel contended that, assuming without conceding, that the issue can be validly raised in this court, he submitted that the said issue of (Joint ownership) has not arisen in this case. This is because the Respondent, who is the Customer of the Appellant, applied for shares in the Appellant’s company in respect of which he deposited some money with the Appellant. The grouse of the Respondent at the lower court was the refusal of the Appellant to give the necessary share certificate to the Respondent. It is exactly the point that, the respondent’s offer to buy the shares has not been accepted. Learned Counsel further contended that the Respondent cannot therefore be a co-owner with the Appellant. He urged us to uphold their submission and dismiss the appeal.

Let me begin with the oral submission of the Learned Counsel for the Respondent as it relates to whether the issue of a joint ownership is a new issue in this appeal. To answer this question, recourse had to be made to the Notice of Appeal which embodied the grounds of appeal. Needless to say, the Appellant filed only a sole ground of appeal which read thus:

“The learned trial judge erred in law in assuming jurisdiction to hear and determine this matter when he held that the plaintiff’s claim before the lower court is a matter that bothers (sic) on Banker/Customer relationship and thereby came to a wrong conclusion.”

It is apparent from the sole ground stated (supra) that the issue of joint ownership has been raised for the first time when counsel was adopting his written brief. At any rate, the fact that the issue of joint-ownership was being raised for the first time during the adoption of respondent’s brief is not even in dispute, since the Learned Counsel himself admitted that he was raising same for the first time.

The question that should be asked and answered is: whether the Appellant can raise the issue for the first time without the leave of the court. This court, in the case of Berende v. Usman (supra) per Onnoghen JCA (as he then was) held that:

“No new issue can be raised in the Court of Appeal without the leave of that court being first sought and obtained. This is because, a Court of Appeal only has jurisdiction primarily to review, by way of rehearing, the decision or decisions of the lower court. In the instant case, since the issue as to whether paragraphs 4 and 5 of the affidavit of the Appellant offend sections 86 and 87 of the Evidence Act was never raised in the trial court and having been raised in the Court of Appeal without leave, it is incompetent.”

Again, in the case of Gabriel v. The State (1989) 5 NWLR (Pt. 122) P. 457 at P. 462, it was held as follows:

“The Appeal Court will not entertain a new issue not raised in the trial court except question of law or the constitution and then only with the leave of court “(Underlining mine for emphasis).

In the light of the foregoing, I am of the considered opinion that the issue of joint-ownership raised for the first time by the Appellant’s counsel whilst adopting his address without the leave of court is grossly incompetent and consideration will not be given to it in this appeal.

On the sole issue for determination, Learned Counsel for the Appellant submitted that, in determining whether the lower court has jurisdiction or not to try the matter, it is the claim of the Respondent that must be scrutinized as the jurisdiction of the court is determined by the claim before it. He relied on the cases of Ethiopian Airlines v. Justice Sylvester Umaru Onu (2005) ALL FWLR (pt. 276) P. 632 at 637 and Kisiri Investment Ltd v. La-Terminal Company Ltd (2001) FWLR (pt. 66) 766 at 770/771.

Learned Counsel further submitted that the claims of the Respondent which borders on the purchase of shares in a Public Limited Liability Company and the subsequent failure of the said Appellant to issue the appropriate share certificate is not just a mere matter that touches on the operation of the appellant as a company.

The very fact of incorporation, he humbly submitted, makes the Appellant a Public Limited Liability Company whose activities are governed by the Companies and Allied Matters Act and banking nature of its business in governed by the Banking Act. Learned Counsel submitted that the Appellant is primarily a Company having been duly incorporated pursuant to Section 37 of the Companies and Allied Matters Act, Laws of the Federation of Nigeria 2004 before being a Banker by the nature of its business.

Learned Counsel submitted that all matters bordering on the shares of a company a re regulated by part 6 (iv) of companies and Allied Matters Act, Laws of the Federation of Nigeria 2004 and Section 146 (1) and (2) relate to issuance of share certificates. While section 146 (1) of the Act enjoins every company to be ready for delivery within two months after allotment or within three months after a transfer has been lodged with its certificates of all shares allotted or transferred by it, while section 146 (2) of the Act enjoins every member of the company whose names are entered in the register of the company as a member to receive a share certificate three months after allotment or lodgment of transfer.

Learned Counsel further submitted that where there is default in the issuance of a share certificate, as in leg (b) of the Respondent’s claim, the remedy is not in a civil action but in a quasi criminal action as contained in section 146 (5) of the Act. He urged us to hold that the claims before the lower court are matters bordering on the operation or regulation of the Appellant as a public Limited Liability Company and not a matter between a Banker and its Customer.

If the first leg of this issue is resolved in favour of the Appellant. He further submits that by the provisions of section 251 (e) of the Constitution of the Federal Republic of Nigeria 1999, the Federal High Court has exclusive jurisdiction on any matter arising from the Companies and Allied matters Act or regulating the operation of companies incorporated under the Companies and Allied Matters Act.

Learned Counsel opined that the above Constitutional provision has been given judicial interpretation in: Trade Bank Plc. v. Benilux Nigeria Limited (2003) FWLR Pt. 162 1871; Karimu Adisa v. Emmanuel Oyinwola (2000) FWLR Pt. 8 1349 and Nigeria Tobacco Co. Plc. v. Mr. F. O. Osifeso (2000) 14 WRN 37 at 41.

Learned Counsel submitted that, in view of the arguments canvassed above, the Federal High Court, and not the State High Court, has jurisdiction to hear and determine the Respondent’s claims contained in the Writ and Statement of Claim. Learned Counsel further submitted that they are more fortified in this submission by item 180 of section 650 of the Act which prescribes the Federal High Court as the appropriate court.

On the other hand, Learned Senior Counsel for the Respondent submitted that the respondent’s claim is for specific performance of issuing a share certificate in respect of the amount he paid for shares and damages for breach of contract. The question of jurisdiction in the matter largely depends on the 1999 Constitution, especially its section 251 and the case law.

The Learned Senior Counsel argued that the relevant portions of the Constitution are Section 251, paragraphs (p) (q) (r) (s) and the proviso to the Paragraphs. Learned Senior Counsel further argued that, of all the paragraphs of the Constitution mentioned above, only the proviso to paragraph (p) (g) and (r ) is applicable to this matter as the Respondent’s claim is for specific performance and damages for breach of contract. It is the contention of the Learned Senior Counsel that the claim of the Respondent is by a customer against his bank in respect of a contract between them for a sale of shares.

On case law, Learned Senior Counsel referred us to a number of cases and submitted as follows:

“Provided that this paragraph shall not apply to any dispute between an individual and his bank. He relied on the case of Co-operative Development Bank v. Golday (2002) 14 NWLR (Part 688) P. 506 at Page 548 Para D”; “The State High Courts have jurisdiction in the circumstances indicated in the proviso”; “The Federal High Court shall not have exclusive jurisdiction in the circumstances indicated on the provisor (sic)” Okafor v. Hastuim, (2001) 1 NWLR (Part 693) 183 at 192, para B;

“The powers of the State High Court under Section 236 (1) of (Decree NO.107 1993 is now section 272 (1) of the Constitution of the Federal Republic 1999. This confers all power to the State High Court of matters not covered by Section 251 (1) of the 1999 Constitution.

“If the legislature had intended such a matter of contractual relationship as arising in the claim before the State High Court to be exclusive determination of the Federal High Court, they would have provided for it in such terms” Shippers Council v. United World Ltd, (2001) 7 NWLR (Part 713) 576 at 586, Paras C – D;

“It is my view based on the PROVISO, that Section 230 (1) (s) of Constitution and (Suspension and Modification) Decree 107 of 1993 cannot on its own oust the jurisdiction of the Lagos High Court.” Usman Danfodio v. University, (2001) 15 NWLR (Part 736) 305 at 323, paras D – F;

“The State High Courts have jurisdiction in the circumstances indicated in the proviso.” P. T. F. v. I. F. M. S. (2002) 16 NWLR (Part 794) 586 at 600, Para H;

“It is not in every case a company or body formed under Companies Act, 1968 that Federal High Court must exercise jurisdiction and the State High Court’s jurisdiction of the State High Court is ousted and that of the Federal High Court vests the matters must pertain to operation of Companies Act”.

Continental Industrial Gas Ltd v. Onafelio (2003) 7 NWLR (Part 820) 474, Para G;

“I have no doubt that the respondent, in the case in hand, can sue the appellant in conversion for the proceeds of the cheques which the Appellant paid to a stranger who is not the payee of the cheque. The plaintiff/respondent’s case is simply in tort of conversion and the action filed by the Plaintiff/Respondent against the appellant can be entertained by any State High Court.” Trade Bank Plc v. Benilux (2003) 9 NWLR (Part 825) 416 at 431 to 432, Paras H – A.

Learned Senior Counsel urged us to resolve the issue of jurisdiction in favour of the respondent.

Now, it has been settled beyond peradventure that the competence of a court to adjudicate over a matter depends on the following:

(1) It is properly constituted as regards numbers and qualifications of the members of the bench, and no member is disqualified for one reason or another; and

(2) The subject matter of the case is within its jurisdiction, and there is no feature in the case which prevents the court from exercising its jurisdiction; and

(3) The case comes before the court initiated by due process of law, and upon fulfillment of any condition precedent to the exercise of jurisdiction. See the cases of: Shell Pet Dev. v. Isaiah (1997) 6 NWLR (Pt. 508) 236 at P. 246 per Katsina Alu, JCA (as he then was); P. D. P. v. INEC (1999) 11 NWLR (Pt. 626) 2000 at P. 241 and Madukolu and Ors v. Nkemdilim (1962) ALL NLR (Reprint) 581 at Pp. 589 0 590.

Now, it is in this con that the claim of the plaintiff is hereby reproduced infra with a view to finding out whether or not it is within the jurisdiction of the lower court. Plaintiff claims against the defendant as follows:

“(a) A declaration that the sum of Two Hundred and Fifty Thousand Naira (N250,000.00) paid over to defendant on 16th December, 2003 through plaintiff’s cheque number 03349815 drawn on

plaintiff’s account number NGN 0562526001 with defendant at Ado-Ekiti was for purposes of buying shares in defendant.

(b) a mandatory order on defendant to issue to plaintiff the necessary share certificates in respect of the said sum of money.

(d) two million naira (N2,000.000.00) general damages for defendant’s breach in giving plaintiff his share certificate and the consequent loss of dividends from 2004.”

A declaration

The Federal High Court, like any other Court in the Federation, is a creature of a statute, in this case, the Constitution of the Federal Republic of Nigeria, 1999. It goes without saying therefore that its jurisdiction is contained in the statute creating it, the 1999 Constitution of the Federal Republic of Nigeria; Section 251 (1) a – s and subsections (2) and (3) of the same. The relevant provisions, for the purpose of the appeal is, section 251 (1) (a) to (d) which provides thus:

“251 (1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be coffered upon it by an Act of the National Assembly, the Federal High Court shall have exercise jurisdiction to the exclusion of any other court in civil causes and matters:-

(a) relating to the revenue of the Government of the Federation in which the said Government or any organ thereof or a person suing or being sued on behalf of the said Government; is a party;

(b) connected with or pertaining to the taxation of companies and other bodies established or carrying on business in Nigeria and other persons subject to Federal taxation.

(c) connected with or pertaining to customs and excise duties and export duties, including any claim by or against the Nigeria Customs service or any member or officer thereof; arising from the performance of any duty imposed under any regulation relating to customs and excise duties and export duties;

(d) connected with or pertaining, banking, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures:

Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.

In the interpretation of the provisions of the Constitution or any Act, the duty of the court is to adopt a literal interpretation which means that, where the provision of a statute are clear and unambiguous, they require no resort to any cannon of construction, but they must be read in their plain and ordinary words which best give their meaning.

However, where a literal interpretation of the provisions of a statute will result in absurdity or injustice, the court may seek internal aid within the body of the statute itself or external aid from statutes that are in pari materia with the statute being construed in order to avoid absurdity or injustice. The court shall discountenance frivolity, but should adopt a liberal approach and avoid construing it in a manner that one section would defeat the intent or purpose of another. See Abubakar v. A. G. Federation (2007) 3 NWLR (Pt. 1022) P. 601; Buhari v. Obasanjo (2005) 2 NWLR (Pt. 910) P. 241; Awuse v. Odali (2003) 14 NWLR (Pt. 851) Page 116.

Luckily the provisions of sections 251 (1) (a – d) are very clear and unambiguous and do not need any aid whether internal or external to interpret them.

The Federal High Court has jurisdiction, 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 National Assembly, to hear and determine cases to the exclusion of any other in civil causes and matters stated inter-alia in paragraphs (a – d).

Paragraph D is very germane to the matter at hand and it provides thus:

” connected with or pertaining, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures:”

However, that is not the end of the matter. The power conferred on the Federal High Court vide paragraph D is only exercisable subject to the proviso of the said paragraph. The proviso reads thus:

“Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” (Underling supplied for emphasis).

The question to be asked is whether the dispute between the Appellant and the Respondent is a dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank. To answer this question, recourse had to be made to the claim of the plaintiff filed at the lower court. The relevant paragraphs are hereunder reproduced as follows:

“(1) Plaintiff is a Petrol dealer of Okesa Street, Ado Ekiti (2) Defendant is a body corporate engaged in banking operations all over Nigeria with its headquarters at Flat 1662, Oyin Jolayemi Street, Victoria Island, PMB 12859, Lagos State with a branch in Ado-Ekiti.

(3) Plaintiff is a customer of defendant in its Ado-Ekiti Branch

(4) Sometimes in 2003 defendant invited people to by shares in it.

(5) On 16th December, 2003 plaintiff paid to defendant two hundred and fifty thousand naira (N250.000.00) through a cheque number 03349815 drawn on plaintiff’s account with defendant number NGN 0562526001 at the Ado-Ekiti Branch. Defendant’s letter of 28th December, 2004 will be relied upon at the trial.

(6) Till today defendant has failed, neglected and refused to issue plaintiff necessary shares certificate in return for the said sum of money.”

It is apparent from the above paragraphs of the Statement of claim of the plaintiff that the dispute between the parties is a dispute between an individual, (in this case the Plaintiff/Respondent), and his bank (the Defendant/ Appellant). That being the case, the question posed a while ago must be answered in the affirmative. For the avoidance of any doubt, the dispute is between an individual and his bank, and the Federal High court has no jurisdiction to hear and determine the matter under consideration. In the final analysis, in the light of all that I said, this appeal is completely devoid of any merit. Same must be and it is hereby dismissed accordingly. I remit the case back to the learned trial Judge for continuation of hearing.

I award N10, 000.00 costs against the Appellant in favour of the Respondent.

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Other Citations: (2007)LCN/2412(CA)