Star Finance & Property Ltd. & Anor V. Nigerian Deposit Insurance Corporation (2012)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

JOHN INYANG OKORO, J.C.A. (Delivering the Leading Judgment)

The Respondent herein, as Plaintiff instituted this action at the Federal High Court Lagos via a writ of summons and statement of claim filed on 30th October, 2006. The claim against the Appellants as Defendants, jointly and severally was as follows:-

“(a) The sum of N250,000,000.00 (two hundred and fifty, million naira) being the money paid to the 1st Defendant by Metropolitan Bank Ltd., under a Memorandum of Understanding dated 13th May, 2002 for the benefit of Metropolitan Bank Ltd.

(b) Interest thereon at the rate of 21% per annum from 30th of January, 2006 until Judgment is delivered.

(c) Interest on the above amount at 7% per annum from the date of Judgment until liquidated”.

In defence of the action, the Appellants, as Defendants filed a statement of defence and counter-claim wherein they prayed the court for the following reliefs:-

(a) A declaration that a tenancy relationship exists between the 1st Counter Claimant and Metropolitan Bank Ltd. in relation to property situate and lying at Plot 1087 Adeolu Odeku Street, Victoria Island, Lagos.

(b) A declaration that sequel to the tenancy relationship between the 1st Counter-Claimant and Metropolitan Bank Ltd., Metropolitan Bank Ltd., took physical possession of the premises effective from May, 2002.

(c) A declaration that a letter dated the 9th day of June, 2006 written by the Interim Management Team of Metropolitan Bank Ltd. amounts to a breach of contract.

(d) An order of court compelling Metropolitan Bank Ltd. and/or its official liquidator, that is, Nigerian Deposit Insurance Corporation to honour the terms of the subsisting tenancy relationship that exists between Metropolitan Bank Limited and the 1st Counter-Claimant”.

As expected, in response to the statement of defence and counterclaim, the Plaintiff (now Respondent) filed a reply to the counter-claim on 8th February, 2007.

A summary of the facts are that Metropolitan Bank Limited, which had since been liquidated (hereinafter referred to as “the Bank”) and the 1st Appellant signed a Memorandum of Understanding dated the 13th day of May, 2002 under which the 1st Appellant was to grant a lease of some parts of its property situate at No. 1087 Adeola Odeku Street, Victoria Island, Lagos which was at all material times to the institution of this matter, under construction, to the Bank for 5 years to be used by the later as its Corporate Headquarters.

In furtherance of the Memorandum of Understanding, the bank paid the sum of N250,000,000.00 (two hundred and fifty million naira) in five installments to the 1st Appellant as rent for the lease of the property. However, physical possession of the property was not given to the Bank until the revocation of its licence in 2006. The Respondent herein, the Nigerian Deposit Insurance Corporation (NDIC), as liquidator of the defunct bank, brought this action at the Federal High Court to recover the money paid as rent, in order to pay same to the depositors of the bank.

At the trial, each party called a witness to prove their case.