Ashford Industries Nigeria Limited v. Bank Of Industry Limited (2023)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

MUHAMMAD IBRAHIM SIRAJO, JCA (Delivering the leading judgment)

By way of originating summons, the appellants, as plaintiffs, commenced this action before the Federal High Court, sitting in Lagos (the lower court) against the respondents, as defendants, wherein they sought for the following reliefs:

1. An order of perpetual injunction mandating the defendants jointly and severally to release to the plaintiffs all items of plant and machinery listed on the document marked exhibit 12 for immediate installation and use.
2. An order of perpetual injunction mandating the defendants to disburse to the 1st plaintiff loan sum of N385 million granted by the Central Bank of Nigeria from the intervention fund for re-financing and restructuring of banks’ loan to the manufacturing sector.
3. N800 million damages for loss of earning.
4. N200 million general damages.

Following the success of the 1st appellants preliminary objection against the hearing of the suit under originating summons, the lower court ordered parties to file pleadings, which they complied.

The appellants claimed the same reliefs in their statement of claim as they did under the originating summons. In response, the 1st respondent filed a statement of defence and counter-claim, which was subsequently amended.

The 2nd respondent also filed a statement of defence, denying the claim of the appellants. At the conclusion of the trial and adoption of final written addresses filed by the parties, the lower court, in a judgment delivered on 25/01/2016 by M. B. Idris, J. (as he then was), dismissed the appellants claim on the grounds that they failed to prove that the 1st appellant is an incorporated entity imbued with legal personality and that the 2nd appellant is the Managing Director of the 1st appellant.

In similar vein, the 1st respondents counter-claim was struck out on the ground that the 1st appellant having not been proved to be an incorporated entity, cannot be sued.

Dissatisfied with the decision of the lower court, the appellants appealed to this court vide a notice of appeal filed on 22/04/2016, anchored on three grounds of appeal. An amended notice of appeal, containing five grounds of appeal, was filed on 01/02/2023 with the leave of this court.

The 1st respondent also being aggrieved with the decision of the lower court striking out her counter-claim, filed a notice of cross-appeal on 22/04/2016 and further refiled same on 16/09/2022, following the order of substitution of the 2nd respondent.

The facts of the case leading to this appeal can be summarized thus:

The 1st appellant is a company registered under the Nigerian law and does the business of manufacturing assorted brushes while the 2nd appellant is its Managing Director and alter ego.

The appellants and respondents were over the years in customer-banker relationship. Appellants applied for a loan facility of N89.5M from the 1st respondent for purchase of plant and machinery for their business.

After the conduct of necessary due diligence on the appellants, and being satisfied by their finding, the 1st respondent approved the loan of eighty-nine million, five hundred thousand naira (N89,500,000) for the appellants.

The properties of the appellants situate at Lagos and Anambra States respectively were mortgaged to the 1st respondent as collateral for the said loan. The said sum was applied by the 1st respondent for the importation of the said items of plant and machinery on behalf of the appellants.

However, on the arrival of the said items of plant and machinery, the 1st respondent took possession and seized them to date. All entreaties to the 1st respondent to release the said items of plant and machinery to the appellants were rebuffed.