Boniface Ebere Okezie & Ors. V. Central Bank Of Nigeria & Ors. (2012)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

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

This is an appeal against the Ruling of the Federal High Court Lagos Division delivered on 16/6/2009 striking out the originating summons of the applicants for lacking questions for determination in Suit No.FHC/L/CS/1188/09. The appellants were the applicants in the said originating summons. The facts leading to this appeal may be briefly stated as follows:

On 14/8/2009, the 4th respondent in purported exercise of his powers as Governor of the Central Bank of Nigeria issued an order removing all the executive directors of Union Bank Plc (joined in the suit as 7th respondent) and appointed the 5th Respondents in their place. He also injected the sum of N120 billion into the bank which he accused of being weak, undercapitalized and for insolvent and therefore an unreliable and unsafe financial institution. He also instigated the 6th respondent to arrest and detain some customers of the bank and they were made to repay the loans granted to them by the bank. The 4th respondent also threatened to turn over the bank to the Nigeria Deposit Insurance Corporation (a statutory receiver and liquidator) also joined in the suit as 2nd respondent. The applicants being shareholders of the bank filed the originating summons by way of derivative action seeking leave of the court to challenge the action of the respondents on behalf of the bank and sought declaratory and restraining orders and also claimed N100 billion damages for injury to the goodwill and business of the 7th respondent both present and future arising from the unlawful conduct of the 1st, 5th and 6th respondents.

The 1st, 2nd, 4th, 5th and 7th respondents filed preliminary objection to the summons. On 12/1/2010 the applicants filed a motion praying the court to strike out or dismiss the preliminary objections of the respondents and enter judgment in favour of the applicants. On 16/3/2010 the court raised an issue on non statement of questions for construction or determination in the body of the originating summons which the respondents had already raised in their preliminary objections. Learned counsel for the parties addressed on the issue and on 16/6/2010 the court struck out the originating summons as incompetent because there were no questions for determination.

The applicants were dissatisfied with the decision and appealed against it in their Notice of Appeal dated 17/6/2010 containing two grounds of appeal. The 1st respondent also cross appealed. The appellants filed Notice of Preliminary objection to the cross-appeal. On 31/5/2011 the 6th respondent’s name was struck off from the appeal at the instance of the appellants.

On 5/12/2011 when the appeal was called, the cross appellant withdrew the cross – appeal. This led to the appellants abandoning ground 2 in the Notice of Appeal and withdrawing the arguments based on issue 2 which were struck out together with the preliminary objection to the cross appeal.

The parties filed briefs of argument with the exception of the 6th respondent even before the 6th respondent’s name was deleted from the appeal. The appellants also filed a reply brief.

In view of the striking out of Ground 2 and the second issue formulated for determination in the appellants’ brief the loan issue for determination in this appeal is:

“whether the lower court was right in its conclusion that the originating summons of the Applicants/appellants was incompetent for not containing questions for construction or determination.”

All the respondents adopted the appellants’ issue for determination. Since learned counsel had withdrawn Ground 2 of the appeal thereby leading to the striking out of the arguments on issue 2, all the arguments by counsel to the respondents on issue 2 are of no relevance to this appeal and they shall at best be ignored.

Learned counsel for the appellants argued that the originating summons followed the form specified in Form 2 of the Companies Proceedings Rules as mandated under Order 2 (2) of the said Rules and since the said Form 2 is an expedited form of originating summons it does not require the formulation of questions for determination. He said that the Companies Proceedings Rules (CPR) are the applicable Rules governing proceedings under the Companies and Allied Matters Act and that the Federal High Court Rules can apply only where the CPR is silent on the matter and cited Order 19 CPR and Order 56 Rule 1, Federal High Court Rules 2009 in support. He further argued by referring to Order 3 Rule 9(1) FHCR that even under the Federal High Court Rules it is not required that every form of originating summons must state or formulate questions for determination. He contended that the learned trial judge sought for and was addressed on the issue to mention Rule 2(2) and Form 2 of the CPR and Form 4 of the FHCR in the Ruling. He therefore submitted that it was a misconception on the learned trial judge’s conclusion that an originating summons which does not contain questions for determination is incompetent. He said the reference made in the Ruling to the Companies Winding Up Rules and other proceedings were absolutely strange to the proceedings before the lower court and urged this court to find and hold that the originating summons filed by the appellants being substantially in the form required by Rule 2(2) CPR is competent and the striking out of the summons was erroneous.

Learned counsel for the respondents submitted that having regard to the circumstances of this case, vis-a-vis the reliefs sought by the appellants, the originating summons filed by the appellants should of necessity contain questions for determination in order to be worthy of adjudication before a court of law. Reproducing Order 3 Rules 7 of the Federal High Court of Civil Procedure) Rules 2009 and the reliefs sought by the appellant it was submitted that in view of the reliefs sought, the lower court had to construe the provision of the Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act to be able to determine whether or not the appellants are entitled to the relief sought. It is learned counsel’s contention that where a case is commenced by originating summons the court is required to answer certain questions formulated by the originating summons) either in the affirmative or otherwise and based on the answer to the question or questions formulated grant or refuse the reliefs claimed. The argument that the originating summons followed the form as specified at Form 2 in the schedule to the Companies Proceedings Rules was debunked when learned counsel argued that since the appellants’ originating summons seeks reliefs in respect of the Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act and not under CAMA the CPR is not applicable. Learned counsel therefore urged this Court to reject the Appellants’ argument that they adopted the Form 2 prescribed in the schedule.

The Companies Proceedings and the Companies Winding Up Rules is the Subsidiary Legislation made pursuant to section 635[1) of the Companies and Allied Matters Act. It is statutory Instrument 14 of 1992. Rule 21 states as follows:-

“21 (1) These Rules shall apply to all proceedings taken out or arising from any provision of any