Yekini Yusuff & Anor. V. International Institute of Tropical Agriculture & Anor. (2008)
LawGlobal-Hub Lead Judgment Report
M. D. MUHAMMAD, J.C.A.
This is an appeal against the ruling of the Oyo State High Court coram M. O. Adio J delivered on 13th April, 1999 dismissing the Plaintiffs Interlocutory application for the following:
(i) An order restraining the Defendants from selling, assigning, transferring or disposing of the generating sets subject of this action pending the determination of this action;
(ii) Alternatively an order setting aside any sale, assignment, transfer or disposal of any of the generating sets subject of this action is so far any such dealing with the generating sets occurred during the pendency of this action; and
(iii) An order directing the defendant to keep the machines safe and secure on their premises at I.T.T.A. Ibadan, or alternatively transfer same into the custody of the court pending the determination of this action.
The Plaintiffs application for the above reliefs was filed on 6/11/98 consequent upon the writ taken out by the Plaintiff on 7/10/98 to commence the substantive suit against the Defendants. The facts in support of Plaintiffs’ application gathered from the affidavit in support of the application show that Defendants had advertised the sale by auction of certain generating sets. Following the invitation for tenders, Plaintiffs bided for the purchase of 4 lots for the sum of N6,622,126:00k. In keeping with the terms of the tender, the Plaintiffs/Applicants paid a N10,000.00k non refundable deposit per lot as well as a N40,000.00k refundable deposit per lot. They paid a total deposit sum of N20,000.00k the Defendants.
The Bids were eventually opened and Plaintiffs/Applicants were informed thereafter of the success of their bids by the 2nd Defendant who also asked them to pay up the balance of the purchase sum. The deposits earlier received by the Defendants from the Plaintiffs constituted part payment of the purchase price.
Instead of receiving the balance from the Plaintiffs who had approached the 2nd Defendant to pay, the latter became hedgy. The 2nd Defendant asked the Plaintiffs to pay One Million, Five Hundred Thousand Naira, the price offered by another bidder for the entire lots. Plaintiffs indicated their interest to pay for the entire lot to the 2nd Defendant. Rather than allow the Plaintiffs/Applicants pay up, 2nd Defendant further jerked up the price to Two Million, One Hundred Thousand Naira and threatened to sell off the equipments to other willing purchasers if the amount was not promptly paid for. To forestall this sale, the Plaintiffs took out a writ against the Defendants and subsequently filed the instant application.
The Defendants opposed Plaintiffs/Applicants application. They relied on facts contained particularly in paragraph 4(v)-(xiv), 5, 6, 7, 8 and 9 of their counter affidavit. Therein, Defendants/Respondents conceded that Applicants had bidded for four lots out of the generating sets following the advertisement in respect of the sale as contained in Exhibit BDD1 annexed to the counter affidavit. The offer made by the Applicants for the four lots they won was however considered low by the committee set up to dispose off the generators. The initial bidding was cancelled following similar conclusion by the committee on bids regarding the other lots. Eventually, the committee cancelled the entire bids and delegated 2nd Defendant to negotiate higher prices from prospective buyers. 1st Applicant was informed about the cancellation and advised by the 2nd Defendant/Respondent to collect both the refundable and non refundable deposits they made. 1st Applicant went into negotiation with the 2nd Defendant for prices in respect of 1st, 2nd, 3rd, 4th, 5th and 14th lots. Similar negotiations also took place between 2nd Defendant/Respondent with other interested buyers. At the end, 1st Applicant improved on the offer of N21 Million Naira made by one Mohammed Hassan. 1st Applicant and 2nd Defendant/Respondent concluded negotiation with an offer of N21.1 Million Naira for lots 1, 2, 3, 4, 5 and 14. 1st Applicant picked up a letter of Intent written by 1st Defendant/Respondent on 31st August, 1998 with a promise to sign and return same. 1st Applicant never did. Instead, Applicant’s Counsel sent in Exhibit C threatening legal action. On 21st October, 1998, 1st Defendant/Respondent accepted a N10 Million Naira offer made by another buyer, Nucleus Ventures Ltd. and faxed a letter of Intent in their favour the same day, Nucleus Ventures Ltd paid for the lots vide an Inland Bank draft dated 27th October 1998 but delivered to and received by the Defendants the following day. With the sale scaled and confirmed by Exhibit BDD6 annexed to Defendant’s counter affidavit, Nucleus removed the generators immediately.
Counsel on both sides advised the lower court. In a precise but well considered ruling the court after reviewing the facts on both sides at pages 58-59 of the record inter alia ruled as follows:-
“I am also not going to express an opinion one way or the other whether there was a contract of sale which is absolute or conditional or whatever…. The interest of a third party – intervening at a certain stage is also left open, the consequences of this may be material at the time of final decision in this case, I was addressed extensively by both Counsel on those issues, but with the deference from (sic) them. I am not competent to proffer any views on them at this interlocutory stage”.
The court proceeded then to summarise the applicable principles governing the grant or refusal of interlocutory applications. It rightly stated that the first Issue for it to consider is whether there is a serious issue to be determined in the substantive suit. Put differently, whether Plaintiffs legal right has been established. The court continued in its ruling thus:-
“Once this is found to be so, the court shall then proceed to consider where the balance of conveniences lies. Where damages will be adequate remedy and the Defendant would be in a financial position to pay the damages, interlocutory injunction will not be granted even if the Plaintiffs claim is shown to be strong at the stage of making the application for the grant of an interlocutory injunction”.
Before it done, the court noted that where however damages would not provide the Plaintiff/Applicant with adequate remedy in the event of his success in the substantive suit, the court would then consider the sufficiency of the compensation the Plaintiff undertook to provide as damages for the loss the Defendant would have sustained at the end of the suit following the grant to the Plaintiff who eventually losses out after acquiring the injunctive order. The court captured the settled principle that it had the absolute discretion to grant and refuse the applications and concluded thus:-
“On the facts as set out … and the applicable principles of law it is my view that I should refuse the application and it is accordingly dismissed”.
Being dissatisfied, the Plaintiff has appealed against the court’s decision on four grounds. Parties at the lower court would henceforth be referred to as Appellants and Respondents in this judgment.
Briefs including Appellant’s reply brief have been filed and exchanged. These briefs have been adopted and relied upon by parties at the hearing of the appeal. It is significant to mention also that Respondents have filed a Respondent’s notice in respect of which arguments have, though, not been proffered. The notice is deemed abandoned and accordingly struck out.
The Appellants have distilled three issues from the grounds in their notice of Appeal they consider relevant in the determination of the appeal. The issues read:-
“1. Whether the trial court was right in not granting interlocutory injunction prayed for by the Appellants.
- Whether the trial court was right in not considering the prayer for setting aside the purported sale of the machines subject of this action while this case is still pending.
- Whether it was proper for the trial court to consider at an interlocutory stage issues meant for determination in the substantive action without the benefit of pleadings and oral evidence”.
The three similar issues distilled by the Respondents from the grounds of appeal as calling for determination in the appeal are:-
“i) Whether the Appellants were entitled on applicable principles to the grant of an order of injunction;
ii) Whether the sale of the equipment by the 1st Respondent to a third party ought to be set aside;
iii) Whether the lower court made pronouncements at the hearing of the interlocutory application in respect of matters to be decided at the trial”.
Under their 1st issue, learned Appellant Counsel referred to page 59 paragraph 2 up to page 60 lines 1-6 and contended that the trial judge only considered the principles applicable in the determination of applications for interlocutory injunction but failed to apply the principles to the facts in controversy in the instant case. Counsel submits that Appellants’ application was dismissed without being considered.
It was further argued that Appellants had satisfied all the conditions and were entitled to the grant of the reliefs they sought. They have demonstrated the existence of a legal right which ought to have been protected; that there was a serious issue to be determined between them and the Respondents; they were not guilty of delay in bringing the application; the balance of convenience was on their side and that they cannot be adequately compensated in damages. Counsel referred to various paragraph in the supporting affidavits to Appellant’s application. He also relied on Akapa Vs. Hakeem Ahmed (1992) 6 NWLR (Pt.247) 266 at 288; Obeya Memorial Hospital Vs. AG of the Federation (1987) NWLR (Pt.60) 325 at 337; Kotoye vs. CBN (1989) 1 NWLR (Pt.98); Ladunni Vs. Kukoyi (1972) ANLR :133 and Egbe Vs. Onagun 1972 1 ANLR 95 and urged us to resolve the issue in Appellant’s favour and set aside the ruling of the lower court that failed to do justice to Appellants application, and consider and grant their prayers.
In arguing Appellants’ 2nd issue for determination, learned counsel submitted that Appellants’ 2nd relief on the motion paper was in the alternative. Appellant had asked the lower court to set aside any sale, assignment, transfer or disposal of the generating sets since any such act must have taken place during the pendency of this action. This prayer, learned counsel argued, was never considered by the lower court. An alternative claim, it is contended, is to be considered where the main prayer failed. Failure to consider Appellants alternative prayer constituted a denial of their right to fair hearing, a lapse which results in the nullification of the decision on appeal. Learned Counsel further submitted that Appellant’s 2nd prayer be considered by this court and granted. He submitted that the authorities on the ground all forbid a resort by a party to self-help once the matter in controversy between it and another had been placed before a court for trial Learned Counsel supported his argument with these decisions:-
Ezegbu Vs. FAT (1992) 1 NWLR (Pt.220) 699; Effiom Vs. Ironbar (2000) 3 NWLR (Pt. 650) 545, Okeke Vs. Okoli (2000) 1 NWLR (Pt. 642) 641 and Okeke vs. Okoye (1994) 8 NWLR (Pt.364) 605. He urged that their 2nd issue be resolved in their favour as well. As for Appellants’ 3rd and last issue, learned Appellant Counsel referred to page 57 of the record and submitted that the lower court’s pronouncement thereat went to the root of the controversy before it which courts are not allowed to determine at that interlocutory stage. He cited the following: Globe Ind. Ltd. Vs. Coker (1990) 7 NWLR (Pt.162) 265, Busari VS. Oseni (1992) 4 NWLR (Pt.237) 557 at 589, Oduntan Vs. General Oil (1995) 4 NWLR (Pt.387) 13 and U.B.A. vs. Onagoruwa (1996) 3 NWLR (Pt.439) 707 in support of his terse submission under the issue and urged the resolution of the issue as well as the appeal in Appellant’s favour.
Learned Respondents’ Counsel argued the Respondent’s issues seriatim in the brief. He relied on these arguments at the hearing of the appeal. He contended in respect of their first issue that the trial judge had exhaustively considered the applicable principles for the grant of the order of injunction vis-a-vis the facts on which Appellants found their application at pages 54-60 of the record. Learned Counsel concluded that Appellants did not merit the grant. Appellants, the lower court had rightly found, contended learned Respondents counsel, did not establish a legal right from which the grant was to evolve. Counsel further argued that the act of the Respondents which Appellants sought to forestall by the application had already taken place and injunctions arc never granted to stop a completed act. Learned Counsel supported his submissions in respect of these two principles with Akauo Vs. Hakeem-Habeeb (1992) 6 NWLR (Pt.247) 266 then John Holt Vs. West African Workers Union (1963) 1 ALL NLR 379, AG Anambra Vs. Okafor (1992) 2 NWLR (Pt.224) 396 at 419 and Ochudo Vs. Oseni (1998) 13 NWLR (Pt.380) 103 at 121. He also relied on other authorities in support of arguments that Appellants had not shown that balance of convenience and such other requirement had been fulfilled by them to justify a grant of the relief they prayed the trial court. The authorities include Obeya Memorial Specialist Hospital Vs. AG Federation (1987) 11 NSCC 961 at 968, Renald Vs. RBB (1993) 6 NWLR (Pt.297) at 122. In continuation of his argument under this issue, learned counsel contended that Appellants whose substantive claim was in respect of a contract could be adequately compensated in damages.
Appellants were also guilty of delay in bringing the application. By all the relevant factors for the grant of the relief sought by the Appellants, the lower court, argued the learned counsel, is right in its refusal of the relief. Counsel asked that the issue be resolved against the Appellants.
Under their 2nd issue, learned respondents’ Counsel submitted that Appellants’ application was filed on the 6th November, 1998 well after the offer by a third party to the Respondents on 21/10/98 and the sale between these two on 28/11/98. The lower court could not lawfully set-aside the sale to the third party that had not been made a party to the proceedings before it Respondents had not been restrained as at the time they effected the sale. Such a sale, learned counsel emphasized, cannot be set-aside on the authority of Re-Kasali Anikilaye 1960 WNLR 69, Counsel also relied on Aguda on Civil Procedure 2nd edition in this regard and prayed that this issue be resolved again in favour of the Respondents.
For their last issue, learned Respondents’ Counsel argued that in establishing that Appellants had a right on the basis of which the Respondents were to be restrained, it was necessary for the trial court to determine that the two sides were in a kind of relationship. Since the Appellants had alleged the existence of a contract between the two, it was impossible for the court to grant the relief canvassed without making a finding to the effect that Appellants had a legal right which needed to be protected. If Appellants now challenge the finding, learned counsel argued further, they are themselves saying that they did not merit the grant of the injunction by the lower court. Appellants cannot have it both ways. Learned Counsel urged that both the issues as well as the Appeal be resolved against the Appellants.
Now, in determining the appeal, I would like to consider the issues formulated by the Appellants. Their 1st and 3rd issues will be jointly and in the first place considered, while the 2nd issue comes on its own and subsequently.
The trial court as submitted by learned Respondents’ Counsel has stated the correct principles relating the grant or refusal of interlocutory injunction. Learned Appellants’ Counsel had argued with tremendous furor that the trial court had determined the substantive Issue before it in the course of considering the application. It cannot be.
The portion of the court’s judgment reproduced from the record of appeal earlier in this judgment should put to rest the misplaced contention of learned Appellants’ Counsel. The court was alert to its responsibilities and had stated that at the interlocutory stage Appellants’ application was being considered, it must not and certainly did not determine the substantive matter. The court was aware that at that stage trial of the substantive issue had not commenced and the essence of determining the application before it was to preserve the Res. By extention, the exercise involved the protection of Appellants’ lights against injury for which they cannot be adequately compensated in damages. There was no trial on the merits and the trial court had fully grasped what it had to do.
There are three questions a court prayed to exercise its discretion in an application for an interlocutory injunctive order must ask itself and answer. The trial court had asked these relevant questions which are:-
(a) Whether the Appellants had raised a serious question for trial;
(b) If (a) above was answered in the positive whether damages against the Respondent would have provided adequate compensation for the temporary inconvenience and
(c) If (b) above was in the negative in whose favour, the Appellants and the Respondents, was it balance of convenience.
In Oyeyemi Vs. Irewole Local Government Ikire (1993) 1 NWLR (Pt. 270) 462 at 461, this court referring to decisions such as Obeya Memorial Hospital Vs. Attorney General of the Federation & Anor. (1987) 3 NWLR (Pt. 60) 325 stated thus:-
“Today, the law in relation to interlocutory injunctions as approved by the Supreme Court is that the Court should be satisfied that there is a serious issue to be tried. Having thus done, if the court finds that it is a type of act that should be restrained by an injunction, then it should proceed to consider the balance of convenience, and if it is satisfied that the balance was on the side of the Applicant, the court should then extract an undertaking from the Applicant as to damages”.
In the instant case, contract constitutes the Appellants’ cause of action. It is also glaring from Respondents’ counter affidavit that the right of a 3rd party, Nucleus Ventures Ltd., had intervened. Nucleus Ventures Ltd. to which the items the subject matter of the substantive suit were sold was not a party to the suit. Its constitutionally guaranteed right would have been affected without its being heard. The principle that injunctions against a person not made a party to an action are generally not granted had of necessity to apply. See paragraph 1045 of Halsbury Laws of England Vol. 24 (4th edition) and Nduke Vs. Ibezim (2002) 12 NWLR (Pt. 780) 139.
Again, learned Respondents Counsel in stoutly and rightly defending the lower court’s judgment had submitted that by the time Appellants application was filed Respondents had already sold the goods, the sale of which to the third party was sought to be restrained by the application. Completed acts, he argued, are never restrained.
What the trial court did, in the appraisal of the facts regarding the relationship between the Applicants and the Respondents was a determination of the fact that there was a serious issue to be tried in the substantive suit. The exercise had infact insulated the merits of the matter for discussion contrary to what the learned Appellants’ Counsel suggests. This determination that the substantive suit commenced by the Appellants was not frivolous is a procedural necessity without which the trial court could not have progressed meaningfully in deciding the Appellants’ application. I agree with learned Respondents’ Counsel that Appellants had the duty of establishing that the writ they took out had disclosed a reasonable cause of action and they accordingly had the legal right to press for the reliefs in their application. The trial court’s determination of this basic factual necessarily does not, as it were, constitute a determination of the substantive suit. The right to an interlocutory injunction is never a cause of action by itself. Instead, it is a right that sprouts from and survives on the basis of a pre existing cause of action against the party that had threatened or invaded the Applicants’ right see Kadiya Vs. Kadiya (2001) 14 NWLR 519; Daewoo (Nig.) Ltd. Vs. Hazcon (Nig.) Ltd. (1998) 7 NWLR (Pt. 558) 438 and Norvartis Pharma Services, Inc & Anor Vs. Swissco Nigeria Ltd. & Anor (2004) 2 NWLR (Pt. 856) 28 at 44.
Learned Appellants’ Counsel has asked us to allow this appeal. He succeeds only if he shows that the lower court in its consideration of Appellants application had discarded matters it ought to have taken into account or that it had not exercised its discretion judicially and judiciously. See Norvartis Pharma Services Inc. & Anor Vs. Swissco Nigeria Ltd. & Anor (supra). My examination of the decision appealed against leaves me with the firm view that the submissions of the learned counsel are hollow. The fact remains that beyond holding that there was a serious issue to be tried in the instant action the lower court only proceeded to hold that Appellants had not met the other requirements to entitle them to the reliefs they sought. Appellants for instance did not prove that damages would not be adequate compensation for the injury they will suffer on being refused their application and in the event of the decision in the action being in their favour. Such a lapse puts them in a very bad stead. On it alone their application could have been justifiably refused. See Vee Gee (Nig.) Ltd. Vs. Contact (Overseas) Ltd. (1992) 9 NWLR (1’1. 266) 503 at 515.
The application of three more principles which bind the lower court subdues Appellants’ cause all the more. Learned Respondents’ Counsel has alluded to them in his brief. Firstly, interlocutory injunction is never granted against a completed act. See Kadiya Vs. Kadiya (supra) Abubakar Vs. J.M.D.B. (1997) 10 NWLR (Pt.524) 242; CRN Vs. Ind. Rank Ltd. (1997) 9 NWLR (Pt.522) 712. It is manifest from the counter affidavit filed by the Respondents that by the time the Appellants filed their application seeking to restrain the Respondents, the machineries the disposal of which the Appellants asked the lower court to restrain had already been sold to a third party. It is wrong for a court in such circumstances to grant an injunction to restrain acts that had already been completed. See Governor of Imo State Vs. Anosike (1987) 4 NWLR (Pt.66) 663 at 673; John Holt Nig. Ltd. Vs. Holt African Workers Union (1963) 2 SCNLR 383, and Udemah Vs. Nigeria Coal Corporation (1991) 3 NWLR (Pt.180) 477 at 490.
Appellants cause received a further devastating knock from the principle outlined by the Supreme Court in the case of Commissioner for Works; Benue State Vs. Devcom Ltd. (1988) 3 NWLR (pt. 83) 407 where the court held that an injunction does not lie to restrain a defendant such as the Respondents in the case at hand from terminating a contract. At page 423 of the law report the apex court stated thus:-
“In this case, the Appellant who is a party to the contract with the Respondent is within his legal rights to terminate the contract and subject himself to action for damages resulting from his act”.
The principle that did the greatest havoc on Appellants efforts is that which illegalizes the grant of interlocutory injunction against persons who were not parties to the action in which the grant was made and who were not heard. The facts of this case clearly show that the right of Nucleus Ventures Limited that bought the machineries, which sale or disposal the Appellants sought the lower court to restrain, had intervened. The company was never a party in the action in which Appellants applied for the interlocutory order seeking to restrain the Respondents.
A grant by the lower court of the interlocutory injunction behind the company would have violated the company’s right to fair hearing as guaranteed by Section 33 (1) of the 1999 Constitution. Such a determination would have been a nullity and an exercise in utter futility. See Uzondu Vs. Uzondu (1997) 9 NWLR (Pt.521) 466 at 482 and Adigun Vs. Olomo (1987) 3 NWLR (Pt.59) 111.
What flow from the combined effect of the application of all these principles is that in its refusal of Appellants’ application the lower court had not acted arbitrarily or illegally. The court had taken account of all the relevant factors and applied the correct principles in the exercise of its discretion. This court cannot in the circumstance interfere see Kadiya Vs. Kadiya (supra) and Oyeyemi Vs. Irewole Local Government (1993) 1 NWLR (Pt. 270) 462. Appellants’ 1st and 3rd issues have failed and are resolved against them.
Finally, Appellants’ Counsel is right in his submission that where a party’s substantive relief has been adjudged unmeritorious by a court, the court has the further duty of considering the party’s alternative relief(s). See Ibafon Co. Ltd. Vs. Nigeria Ports Plc. (2000) 8 NWLR (Pt.667) 86. In the instant case, the trial court having correctly applied the relevant principles of law and rightly decided that the Appellants were not entitled to an order for interlocutory injunction, the court had the duty of considering and determining Appellants alternative prayer that called for setting aside of the sale to Nucleus Ventures Ltd. It is for this. This resolves Appellants 3rd issue in their favour against the Respondents.
Section 15 of the Court of Appeal Act 2004 (formerly Section 16) immediately comes to play. The section empowers this court to consider Appellants’ alternative reliefs that had not been considered by the court below. The affidavits for and against the reliefs are contained in the record of proceeding. This power is exercised at appropriate instances. But does the instant case come within the purview of the enabling law and authorities? I think not. The question we must answer before invoking our powers under Section 15 of the Court of Appeal Act is this: Can this court make an order which affects a third party who is neither a party to this action nor is presently in court and heard? The answer to the question as returned by this court while dealing with facts similar to those in the instant case in Ibafon Co. Ltd. Vs. Nigeria Ports Plc (supra) is a resounding No! An order against a person who is not a party to the action and has not been heard being unjust and a breach of the rules of fair hearing is never made. See Onyekwulunne Vs. Ndulue (1977) 7 NWLR (Pt.512) 250 at 281-282 and Okpata v. Obo (1960) SCNLR 103 at 110. So the resolution of Appellants’ third issue in their favour does not after all avail them.
On the whole, this appeal has no merit. It is accordingly dismissed with a cost of N20,000.00k against the Appellants in favour of the Respondents.
Other Citations: (2008)LCN/2641(CA)
