Air Via Ltd. V. Oriental Airlines (2004)

LAWGLOBAL HUB Lead Judgment Report

ONU, J.S.C.

This is an appeal by the appellant against the judgment of the Court of Appeal sitting at Lagos per Dahiru Musdapher, E. O. Ayoola, J.J.C.A. (as they then were) and M. O. Onalaja, J.C.A., delivered on 20th April, 1998 wherein the lower court allowed the appeal of the respondent herein and struck out the winding-up petition filed by the appellant before the Lagos Division of the Federal High Court.

The appellant herein (as petitioner) in the winding-up petition brought under the Companies and Allied Matters Act, Cap. 59 of Laws of the Federation of Nigeria, 1990 (hereinafter referred to in short as CAMA) had commenced the winding-up proceedings against the respondent in the trial court by filing the petition at pages 3 – 34 of the record. The petition was served on the respondent and the petitioner (appellant) brought an application to advertise the said petition, the relevant paragraphs giving rise to the action commenced in the Federal High Court of Lagos averring as follows:

“5. The petitioner states that on or about the 23rd day of November, 1990, the petitioner and respondent entered into a written wet lease agreement (hereinafter called “the agreement”) for international and domestic civil air transportation for term of 2 (two) years commencing on the agreement in proof of this averment.

11. Further to the above, the petitioner states that as at the 30th day of June, 1991, when the sum of US$1,431,450.00 (One million, four hundred and thirty one thousand, four hundred and fifty United States Dollars) was due and payable by the respondent to the petitioner in respect of the agreement, the respondent had only paid to the petitioner the sum of US$590,305.00 (Five hundred and ninety thousand, three hundred and five Dollars) thereby leaving as outstanding the sum of US$841 ,545 .00 (Eight hundred and forty-one thousand, five hundred and forty-five Dollars) in its account with the petitioner.
12. By mutual agreement of the parties, the sum of $17,600.00 (Seventeen thousand, six hundred US Dollars) was deducted from the aforementioned outstanding amount bringing the total outstanding amount to $823,545.00 (Eight hundred and twenty-three thousand, five hundred and forty-five US Dollars).
13. The petitioner states that as at 12th of July, 1991, the sum of $823,545.00 (Eight hundred and twenty-three thousand, five hundred and forty-five US Dollars) was outstanding against the respondent, in favour of the petitioner.
14. The petitioner states that it continued to demand for the outstanding sum due to it after the termination of the agreement, all to no avail.
15. The petitioner states that upon its instructions, its solicitors, Messrs. Babalakin & Co. of 24A Campbell Street, Lagos, Nigeria, wrote a letter of demand to the respondent for the outstanding amount due. However, the respondent failed, refused and/or neglected to pay the same. The petitioner shall rely on the letter dated 24th April, 1992 written by Messrs. Babalakin & Co. to the respondent at the adjudication of this action.
16. The petitioner further states that by its letter dated 23rd April, 1993 signed by a principal officer of the petitioner and delivered at the respondent’s head office at 217/219, Apapa Road, Iganmu, Lagos, it made a demand for the above mentioned amount outstanding from the respondent and the respondent has neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the petitioner. The petitioner shall rely on the said letter at the hearing of this petition.
17. The petitioner states that the respondent is unable to pay its debts.
18. In the circumstances it is just and equitable that the respondent should be wound up.”

The trial Federal High Court (per Kolo, J.) on 23rd February, 1994 delivered its ruling – see pages 99 – 107A of the record as follows:

“Coming this far, the only point of importance raised by Mr. Azike in this application is in respect of demand notice contending that the present petition has not complied with the law in that regard. The 21st paragraph of the petition is relevant here in that it states that there was a letter dated 23/4/93 which was signed by a principal officer of the petitioner and which was delivered at the respondent’s head office at 217/219 Apapa Road, Iganmu, Lagos, and that this said letter made a demand of the respondent to pay. This 21st paragraph ended that the “petitioner shall rely on the said letter at the hearing of this petition.” It is my humble view that above has, on the face of it as now before this court, substantially complied with the provisions of section 409(a) of CAMA moreso that the said 21st paragraph has not been denied except the general denial in the 6th paragraph of the affidavit in support of this application as already referred to earlier on in this court to hold otherwise. It is therefore my humble view that judging from the records in its entirety as now before this court vis-a-vis all that I have said above and of course the relevant law or laws as also dealt with in the above decided cases more particularly that of Folawiyo & Sons Ltd. v. Hammond Project (supra) (relied upon by Mr. Azike himself), I cannot but rule that this present application in its entirety cannot be granted and of necessity fails and I so rule.”

The respondent (as appellant) then appealed to the Court of Appeal (hereinafter referred to as the court below). It amended its notice of appeal several times culminating in the one dated 9th February, 1998 and filed on 11th February, 1998. The brief of the respondent (as appellant) at the court below is at pages 227 – 250 of the record while the appellant’s (as respondent) brief is at pages 270-271 of the record.

The court below after hearing the appeal delivered its judgment dated 20th April, 1998 inter alia as follows:

“The debt must be admitted or known or certain. In the instant case where the learned trial Judge merely opined that petition presented contains triable issues, then the petition for winding-up must be stayed pending the consideration of the triable issues in a proper forum. The appellant has put up a plausible defence to the action in that he has a serious counter-claim and because it believes that the respondent/petitioner was liable to it on the same contract, it has neglected to pay what was claimed against it. In this kind of claim and counter-claim arising from breach of contract, the claims must first be established in a normal case before a petition of winding-up can be embarked upon. See the Re: London and Paris Banking Corp. (supra).

In the result, this appeal succeeds. I set aside the ruling of the lower court which Mohammed Kolo, J. delivered in this matter on the 23/2/1994. In its place, I strike out the petition filed for the winding-up of the appellant’s company with costs assessed at N5,000 (five thousand Naira) only in favour of the appellant’s company.”

Aggrieved by this decision the respondent/appellant/respondent (in the rest of this judgment simply referred to as appellant) has appealed to the Supreme Court on four grounds. The lone’ issue proffered for our determination from the four grounds by the appellant reads:

“Whether the Court of Appeal was right to have struck out the petition of the appellant in the circumstances of the case.”

On behalf of the respondent the following six issues were submitted as arising for determination in this interlocutory judgment of the court below, to wit:

(i) Whether the denial and counter-claim of the respondent had materially and sufficiently disputed the debt as to justify, the striking out of the petition by the Court of Appeal.