Adeyemi Durojaiye V. Continental Feeders (Nigeria) Ltd. (2001)
LawGlobal-Hub Lead Judgment Report
ADEREMI, J.C.A.
By the amended statement of claim, the appellant who was the plaintiff in the court below, High Court of Lagos sitting at Ikeja, claimed against the respondent who was the defendant before that court as follows:-
(i) An order of specific performance of the lease agreement dated 12th December, 1991.
(ii) An order of court directing the defendant to:
(a) appoint a reputable firm of Estate Surveyors and Valuers to carry out a rental valuation of the Estate,
(b) take adequate insurance cover on the Estate against fire and windstorm,
(c) to remove the Manager’s residence that was erected without the plaintiff’s consent first had and obtained,
(d) to obtain town planning permission in respect of the boys quarters erected on the estate,
(e) to re-erect the collapsed concrete rear wall fence,
(f) to hand over to the plaintiff the receipt of payment of the mandatory withholding tax on rents paid for the years 1991 to 1998.
ALTERNATIVELY, the plaintiff claims:
(a) forfeiture of the lease agreement dated 12th day of December, 1991,
(b) mesne profit at the rate of N10,000,000.00 per annum from the date of service, of the writ of summons and statement of claim on the defendant, until possession is given up.
Suffice it to say that the relationship of sublessor/sublessee existed between the appellant and the respondent by virtue of a deed of sub-lease, dated 12th December, 1991. The appellant sued the respondent for rent claimed to be due to him under the agreement and for the specific performance of the agreement as evidenced by the reliefs set out supra. The pleading exchanged between the parties are the amended statement of claim and the statement of defence. Upon the settlement of the pleadings, some applications were filed in court, but for the purpose of this appeal, the one relevant is an application brought ex-parte, dated 9th September, 1999, for Mareva injunction, for an order restraining the defendant from spending or tampering in any manner whatsoever, with the sum of N4,632,000.00, being the balance of what should accrue to the plaintiff from the total annual rent collected by the defendant, from the 1999/2000 tenancy year on the property, at 7, Adefowope Crescent, Opebi, an order that the defendant do pay the said sum into an escrow account in the name of the Chief Registrar of the court, pending the final determination of the suit and finally for an order compelling the defendant to disclose, on oath, the names of all its bankers, its account numbers and all the balances therein. The application ex-parte, was granted in the interim. The defendant was thereafter, put on notice of the said application. After taking arguments of counsel on both sides, the learned trial Judge (Adeyinka, J.) in his ruling, delivered on 20th October, 1999, discharging the interim order held thus:
“Mareva injunction is coercive in nature and should only be granted vert (sic) rase cases. I refer to Sotuminu v. Ocean Steamship (1992) 5 NWLR (pt.239) 1, and held that the plaintiff has failed to satisfy the conditions for the grant of a Mareva) injunction in this case. The issue of arbitration is irrelevant to this application. This application fails, and is hereby dismissed. The order of Interim Mareva Injunction dated the 28th day of September, 1999, is hereby discharged.
Dissatisfied with the ruling of Adeyinka J. the plaintiff/appellant entered an appeal, the notice of which carries six grounds. Distilled from the said grounds of appeal and set out in the appellant’s brief of argument, are three issues which are in the following terms:-
(1) Whether the grant of a Mareva Injunction in the circumstances of this case would amount to a determination of the main issue in contention between the parties.
(2) Whether there are such conflicts in the pleadings and on the affidavit evidence to which the exhibits attached failed to resolve and which would necessitate the calling of oral evidence.
(3) Whether the plaintiff had indeed failed to satisfy the conditions for the grant of a Mareva Injunction,
For its part, the respondent, in its brief, identified two issues for determination and they are as follows:-
(1) Whether the plaintiff satisfied the conditions for the grant of Mareva Injunction before the trial court.
(2) Whether the learned trial Judge could successfully and judicially grant an order of Mareva Injunction upon the state of the pleadings before him, without deciding on the principal and most lively issues in the plaintiff’s statement of claim.
Issue one formulated by the appellant, is similar to issue two in the respondent’s brief, while issue three in the appellant’s brief is in pari materia with issue one in the respondent’s brief. In its brief of argument, the appellant, taking the three issues together, submitted that the grant of a Mareva Injunction cannot amount to determining the main issue between the parties, which according to him is a claim for an order of specific performance of the agreement, dated 12th December, 1991, made between the parties in the alternative, the plaintiff claims a forfeiture of the lease agreement and mesne profit at the rate of N10,000,000.00 per annum; he placed reliance on the decision in Sotuminu v. Ocean Steamship (1992) 5 NWLR (Pt.239) 1. The lease agreement, he further argued, is the foundation of the relationship between the parties and on settled judicial authorities, he further argued, the terms of the agreement cannot be varied by oral testimony calling in aid UBN Ltd v. Ozigi (1994) 3 NWLR (pt.333) 385 and Olaloye v. Balogun (1990) 5 NWLR (Pt.148) 24. The contradictions found by the learned trial Judge in his ruling were infact non-existent. All the conditions for the grant of a Mareva Injunction were met, he further contended. He urged that the appeal be allowed. On the other hand, the respondent in its brief of argument, referred to the decisions in two cases of Third chandris Shipping Copn. v. Unimarine (1979) 2 All E.R. 972 at 973, and Mareva v. International Bulk Carriers (1988) 1 A.E.R. 213 and set-out in extenso, the conditions and requirements for the grant of this type of application as contained in the said decisions and contended that they were not met on issue two, raised by it, the respondent argued that the major cause of dispute over the lease agreement was the claim to 60% of the annual rental value of the property leased to the respondent, it further argued that there was no way by which the court below would grant the Mareva Injunction without determining whether the appellant was entitled to the benefit as epitomised by clause (2e) of the lease agreement-this would entail going into the merit of the case, a practice forbidden in law, it cited Elufioye & ors. v. Halilu & ors (1993) 6 NWLR (Pt.301) 570, S.C.C Nig. v. Our-Line Ltd. (1985) 5 NWLR (Pt.395) 364 at 372 and Bakule v. Tanarewa (Nig.) Ltd. (1995) 2 NWLR (pt.390) 728 while urging that the appeal be dismissed.
I shall start the consideration of this appeal by saying that the liability of a party in a civil suit is predicated on the pronouncement of judgment by a court of law. And until the handing-down of the judgment a party to the suit would always have an uninhibited right to deal with his property or asset the way he likes. Until 1975, the inalienable right of a party to deal with his property the way he liked remained sacrosanct in the English Legal System. As far back as 1890 Cotton L.J. in the case of Lister v. Stubbs (1890) 45 CHD. 1 observed at page 14 thus:
“you cannot get an injunction to restrain a man who is alleged to be a debtor from parting with his property.”
By the dictum of Cotton L.J. it seems clear that the only remedy open to a creditor in such a case was to obtain his judgment and later resort to the execution of that judgment. Pre-judgment execution against a defendant, against whom the existence of a debt had been established as being payable by him and who had assets within jurisdiction which he was likely to dispose or remove out of jurisdiction, was not allowed, in law. That was the position of the law in England until 1975, when the Court of Appeal (England) in the case of Nippon Yusen Kaisha v. Karageorgis & an (1975) 3 A.E.R. 282, made a break with the erstwhile laid down principle. In that case, shipowners from Japan entered into charter parties with two men by which three ships were let to them; one on a voyage charter the other two on time charters. The hire was payable by the charterer. The charterers failed to pay the charter party hire. Attempts to locate the two men could later not be succeed. But the plaintiff was able to locate their bank account in London banker and subsequently brought an application for an interim injunction restraining them from disposing or removing their assets which are monies in those accounts with the banks within jurisdiction delivering the judgment of the Court of Appeal (England) sequel to the appeal lodged against the refusal of the trial Judge (Donaldson J.) to grant the application Lord Denning M.R., held that where there is a strong prima facie case that a plaintiff is entitled to money from a defendant, who has assets within the jurisdiction a court of law which is also a court of equity, is always clothed with jurisdictional power to grant an interlocutory injunction ex parte, pending the trial of the plaintiff’s action, restraining the defendant from disposing of the assets see also Mareva Campania Naviera S.A. v. International Bulkcarriers S.A. (1980) 1 A.E.R. 213. The principles enunciated by the Court of Appeal (England) were given approval by the Supreme Court in the case of Sotuminu v. Ocean Steamship (Nig.) Ltd. (1992) 5 NWLR (pt.239) 1 when at page 25 Nnaemeka Agu, J.S.C. observed thus:-
“In other words, the appellant is basing his case, the subject of this appeal, on a Mareva Injunction. Such injunctions are novel and came on the firmament of injunctions only in 1975, in the case relied upon. The granting of such an injunction was a fundamental departure from the erstwhile general rule, that a plaintiff would take his queue with other creditors of the defendant and if he obtained a judgment against the defendant, he would simply, subject to the rules on priorities of debts, execute it on the defendant’s available assets or on the pernon of the defendant. In 1975, the Court of Appeal in the judgment cited above introduced a more ubiquitous feature into the practice of injunctions. This introduced a limited exception to the general rule by granting exparte injunctions restraining defendants from disposing of or dealing with any other assets within the jurisdiction of the court or removing or disposing out of the jurisdiction monies standing to the credit of the defendant even before a judgment against him.
…But as the case itself says, such will be granted only if it appears that the debt is due and owing.”
The nature and scope of Mareva Injunction would seem to have been widened by courts. It has now been firmly established that, that specie of injunction would be granted where it is likely that the plaintiff would recover judgment against the defendant for certain sum and there is, that reason on the part of the plaintiff to believe that the defendant has assets within the jurisdiction to meet the judgment wholly or in part and that the defendant may likely dispose of or dissipate the said assets, such that when judgment is delivered against him, there will be no assets to satisfy the judgment debt. See Z Ltd. v. A (1982) 1 All E.R. 556, whether the application seeking Mareva Injunction is one brought ex-parte or on notice it must be supported by an affidavit.
The question then is, what must such an affidavit show to support the exercise of the court’s discretion in granting the application? I think that from the plethora of judicial authorities an affidavit in support of such an application, must show the following:
(1) there must be an action by the plaintiff pending against the defendant within jurisdiction,
(2) the existence of an arguable case by the plaintiff,
(3) the plaintiff must show that the defendant has assets within jurisdiction and must furnish the particulars of the assets,
(4) grounds for believing that the defendant is the owner of the assets must be seen through the affidavit,
(5) that there is real likelihood of the defendant removing the assets from within the jurisdiction thus, rendering any judgment which the plaintiff may obtain nugatory,
(6) the affidavit must show that the balance of convenience is on the side of the plaintiff; and
(7) the plaintiff must be ready to give an undertaking as to damages.
See (1) Practice Note (1983) 1 A.E.R. (1) 9 and (2) Sotuminu v. Ocean Steamship (Nig.) Ltd, (J992) 5 NWLR (pt. 239) 1.
In the ruling appealed there from the learned trial Judge said inter alia:
“Upon the state of the pleadings of the parties, oral evidence is admissible to establish whether the lease agreement had been varied by the parties. The amount of N4,832,000.00 for the Mareva Injunction is therefore, not a certain sum, the likelihood of the plaintiff recovering judgment for the amount cannot be determined at this stage, but at the trial. If this application is granted, then the main issue for determination between the parties would have been determined.
I refer to paragraph 12-15 of the affidavit and paragraphs 12-14 of the plaintiff’s reply, on the fears of the plaintiff and hold that they are ipse dixit and unsubstantiated, that the defendant was building a lebanon and would exchange the rents of plaintiff’s house for United State Dollar, to be taken abroad. Although the defendant did not substantiate its solvency, the onus on the plaintiff has not been discharged by him.
Mareva Injunction is coercive in nature and should only be granted in rare cases. I refer to Sotiminu v. Ocean – Steamship (1992) 5 NWLR (Pt.239) 1, and hold that the plaintiff has failed to satisfy the conditions for the grant of a Mareva Injunction in this case. This application fails and it is hereby, dismissed. The order of Interim Mareva Injunction dated the 28th day of September, 1999, is hereby discharged.
The paragraphs of the supporting affidavit relevant here are 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16. The relevant paragraphs of the counter-affidavit of the respondent are paragraphs 7 c, d, e, f and g, 8, 9, 15, 19 and 20. In respect of reply to the counter-affidavit, the following paragraphs are germane 2,3,4,7 and 13. I shall now proceed to examine the printed evidence in the light of the principles, that must guide the court in the treatment of this type of applicant. From the printed evidence and going by the findings of the court below, there is no doubt that the plaintiff has established the existence of an action against the defendant which case, in my view is arguable.”
I find support for this statement in paragraphs 5, 6, 7, 8, 9, 10 and 11 of the affidavit in support and paragraphs 7, 15 of the counter-affidavit with due respect, to the learned trial Judge, he went on a wrong premise of the law when he held that oral evidence is admissible to establish whether the lease agreement had been varied by the parties and that the amount of N4,832,000.00 is therefore, not a certain sum. In the first place, without necessarily determining the case at this stage, I wish to say that it is trite law that oral evidence is inadmissible to vary, add to or subtract from the contents of a document.
Has the plaintiff/appellant shown that the defendant/respondent has assets within jurisdiction? In paragraphs 10 and 11 of the affidavit the plaintiff deposed thus:
Para 10
“That already the plaintiff/applicant has collected the sum of N2,500,000.00 out of N7,332,000.00 leaving a balance of N4,832,000.00
Para 11
”That the payment of the sum of N4,832,000.00 into an interest yielding account in a reputable bank, is necessary to take care of inflation that will reduce the value of the money
Again, in paragraph 13 of the reply to the counter-affidavit the plaintiff deposed thus:-
“That the only free asset of the defendant is the rents, which are collected from my premises, the subject-matter of this suit and which are being deposited in a special account opened by the defendant at Citizen Bank, Alausa Branch, Agidingbi Road, Ikeja, to which the defendant’s Managing Director is the sole signatory.”
There is nothing from the printed evidence of the respondent denying this crucial averment which not only shows that the defendant/respondent has assets within jurisdiction but goes further to furnish the particulars of the assets and their location. From the records of appeal the Managing Director of the defendant/respondent (although a company incorporated under the Nigerian Laws) is a foreigner, a Belizean he has been shown to be the sole signatory to the account with the Citizen Bank. Condition 4 and 5 will seem to me to have been satisfied. Given the setting of the facts before the court below it is my view that the balance of convenience is on the side of the plaintiff/appellant. And having given an undertaking as to damages I would think that the plaintiff/appellant has satisfied all the conditions needed for the grant of a Mareva Injunction. I would therefore, answer issue one in the appellant’s brief in the negative, the grant of the application will not tantamount to a determination of the main issue in contention between the parties, so also, I answer issue three in the appellant’s brief in the negative, the plaintiff/appellant has satisfied all the conditions for the grant of Mareva Injunction. From all I have said, supra issue two in the appellant’s brief is non sequitur. Again, for all I have said, I answer issues one and two in the respondent’s brief in the affirmative.
In the final result, I adjudge this appeal to be meritorious. It is allowed and I hereby grant the order of Mareva Injunction in favour of the plaintiff/appellant. The case is hereby sent back to the Chief Judge of Lagos State Judiciary, for reassignment to another Judge, who will continue the hearing of the case. The appellant is entitled to the cost of this appeal, which I fix in his favour at N5,000.00.
Other Citations: (2001)LCN/0939(CA)