Addax Petroleum Development (Nig) Ltd. V. Emef International Operations & Ors. (2010)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

KUMAI BAYANG AKAAHS J.C.A. (Delivering the Leading Judgment)

By a Demand Notice dated 5/1/2005, the Respondents (as defendants) imposed a tax of N60 million (Sixty Million Naira) on the Appellant/Plaintiff for what they called “surface disturbance right levies, community development levies and royalties”. This led the plaintiff instituting an action first in the High Court of Cross River State on 25/2/2005 but was struck out on 14/7/2005 for lack of jurisdiction. On 26/9/2005 the Plaintiff too out an Originating Summons in the Federal High Court in Suit No. HC/CA/CS/60/2005 against the defendants seeking a determination of the following question:

1. Whether the 1st and 2nd defendants are entitled to demand from the plaintiff payment of royalties, surface disturbance rights levies, community development Rules and operational fees under the following laws;

a) Taxes and Levies Act (Approved List for Collection 1998.

b) Petroleum Profits Tax LFN 1990

c) Personal Income Tax Act 1993 and

d) Constitution of the Federal Republic of Nigeria 1999.

The Plaintiff then claimed the following reliefs against the defendants jointly and severally to wit:

1. A declaration that the 1st and 2nd defendants are not empowered by any law whatsoever to distain the plaintiff of her goods, chattels, land or premises for non-payment of royalties surface disturbance right levies, community development levies and operational levies.
2. A declaration that the defendant of the 1st defendant, purportedly acting on 2nd defendant’s behalf, on the plaintiff is in violation of the provisions of the Personal Income Tax Act 1993, Petroleum Profits Tax Act LFN 1990 and Taxes and Levies Act Approved List for Collection) 1998 and thus null, void and of no effect whatsoever.
3. An Order of Injunction restraining the defendants or their agents, servants, privies from both harassing the staff of the plaintiff and threatening to disrupt the services of the plaintiff from non payment of royalties’ surface disturbance rights levies and operational fees.

On being served with the summons the 1st defendant filed notice of Preliminary Objection on 14th November, 2005 on two grounds namely:

(1) That the suit is incompetent and cannot be maintained against the 1st defendant because it acted as an agent and on behalf of a disclosed principal, the 2nd defendant, and

(2) It was no longer a proper party in the suit as its appointment as an agent had been withdrawn by the 2nd defendant since 10/3/2005.

On 25/4/2006, the 2nd and 3rd defendants also filed a Notice of Preliminary Objection on the ground that the action is, statute barred having been instituted against the prevision of Section 2(a) of the Public Officers Protection Act, Laws of the Federation of Nigeria 2094. Both written and oral arguments on the objection, filed by 2nd and 3rd defendants were taken between 26/10/2006 and 15/112006 and Ruling was reserved to 25/1/2007. The learned trial Judge upheld the objection and dismissed the action; hence thus appeal which was filed on 16/2/2007 containing three grounds of appeal. (See pages 37 – 39 of the records). The Appellant submitted two issues for determination which read thus:

1. Whether a striking out order is one in which the claim in a cause is kept alive.
2. Whether Section 2(a) of the Public Officer- Protection Act protects public officers who at all material times did not act within the confines of their public authority.

The 1st Respondent adopted the issues formulated by the Appellant. The 2nd and 3rd Respondents raised a preliminary objection on Issue 1 arguing that it does not arise from the decision appealed against and proceeded to formulate the following lone issue for determination:

Whether Section 2(a) of the Public Officers Protection Law protects public officers who at ail materiel times acted within the confines of their authority.

The Appellant filed a Reply Brief in response to the objection raised on issue 1.