Ayo-ayodele Pharmaceutical Chemist (Nigeria) Limited V. The Nigeria Industrial Development Bank Limited (2000)
LawGlobal-Hub Lead Judgment Report
ONNOGHEN, J.C.A.
This is an appeal against the interlocutory decision of the Federal High Court of Justice Ilorin Division. In Suit No. FHC/IL/5/96, presided over by Hon. Justice A. A. Jege, delivered on the 6th day of November, 1996, in which he dismissed the then plaintiffs now appellant’s application for an order of interlocutory injunction. Dissatisfied with the said ruling, the appellant has appealed to this court.
The facts of the case as can be gathered from the record of proceedings are that, appellant applied for and was granted financial assistance to enable her set up a cotton wool sanitary towel factory at Offa in Oyun Local Government Area of Kwara State. As a Security for the loan the appellant mortgaged its fixed and floating assets to the respondent.
The appellant later defaulted in the repayment of the loan and interest making it necessary for the respondent to write several letters to the appellant demanding repayment and threatening to exercise its powers under the mortgage agreement. To pre-empt the respondents from carrying out that threat the appellant instituted this action in the Federal High Court Ilorin vide a writ of summons filed on 22/2/96 in which it claims as follows:-
“Writ of Summons:
The plaintiff’s claim against the defendant is for:-
A. A Declaration:
(i) That as at 31/1/96, the plaintiffs total indebtedness to the defendant amounted to N5,810, 104.62 (Five Million, Eight Hundred and Ten Thousand, One Hundred and Four Naira, Sixty-Two kobo).
(ii) That the Defendant has breached its loan and Mortgage Agreement with the plaintiff thereby causing it serious delay and losses.
B. An Order on the Defendant:
To refund to the plaintiff the accumulated interest of 98,259.84 U.S. Dollars on the undisbursed and unutilised NERFUND Foreign Currency Long Term Loan from 30/5/91 to 13th October, 1994 plus interest on the same up to 31/01/96.
C. N5,000,000.00 (Five Million Naira) as General and Special Damages for breach of provision of working Capital as provided for in the Mortgage/Loan Agreement between the plaintiff and the Defendant.
D. All Injunctions
Restraining the Defendant, its servant or Agents from:-
(i) Arrest, Detention and prosecution of the plaintiff’s Directors or any of the plaintiffs staff/personnel before any Tribunal until the final determination of the suit; and/or
(ii) Exercising any act of closure, receivership managership or sale of the plaintiff’s factory machinery properties pledged as collateral with the defendant pending the final determination of this suit.”
These reliefs were repeated in the Statement of Claim filed together with the writ of summons on 22/2/96.
On the 26/2/96 the appellant through counsel filed a motion on notice praying the court for an order “granting an interlocutory injunction restraining the Respondent, its servants, agents, privies or any person or persons acting on its behalf from:
(a) Arrest, Detention and/or Prosecution of the Plaintiff’s Directors or any of the Plaintiff’s Staff/Personnel before any Tribunal pending the final determination of the substantive suit;
(b) Exercising any act of closure, receivership managership or sale of the plaintiff’s factory machinery and/or premises; or any of the mortgaged properties pledged as collateral with the Respondent pending the final determination of the substantive Suit.”
The application is supported by an affidavit of 20 paragraphs on which the appellant relied.
In a considered ruling the learned trial Judge dismissed the application hence this appeal.
However, before arguments and ruling on the motion the appellant changed counsel resulting in the present counsel being briefed.
The new counsel then filed an application for leave to amend the writ and the statement of claim which was opposed. Counsel also filed a further affidavit in support of the motion for interlocutory injunction which alluded to the proposed amendments. Therefore in arguing the application at the lower court, learned counsel for the appellant utilized the proposed amended pleadings of the appellants and the issues sought therein to be subsequently introduced at the trial. Being dissatisfied with the ruling by the court, the appellant has appealed to this court on two grounds namely:
Grounds of Appeal:
The learned trial Judge erred in law in refusing to grant the order of interlocutory injunction sought.
When:
(i) All the ingredients for the grant of interlocutory injunction were clearly present in favour of the Applicant/Appellant.
(ii) There was a clear need for the status quo ante to be maintained between the parties to prevent the proceedings from being rendered nugatory and a fait accompli being foisted on the Applicant/Appellant.
(iii) The justice of the case patently demands that, the proprietary rights and interests of the Applicant/Appellant be preserved especially against the back drop of the extent and prospective claims of the Applicant/Appellant in the substantive suit.
(iv) The refusal to grant the injunction sought was not a manifestation of judicial and judicious exercise of discretion in the circumstances of the case.
- The learned trial Judge erred in law in the circumstance of this case by refusing to grant the interlocutory injunction sought on the premises that the Applicant/Appellant failed to make lump or substantial payment to the Respondent.
When:
(i) Part of the Applicant’s/Appellant’s contentions before the court is that the inability of the Applicant/Appellant to honour her financial obligations to the Respondent was occasioned by the Respondent’s breach of the contract involved.
(ii) From all the documents in the court’s record it cannot yet be said with all certainty that the Applicant/Appellant is indebted to the Respondent and the crux of the substantive action is the determination of who of the two is indebted to the other.
(iii) The Applicant/Appellant was preoccupied with the liquidation of the indebtedness to the Bank of the North, an indebtedness that was brought into being by the Respondent’s breach of contract to wit, failure to provide, working capital to the Applicant/Appellant, being of a shorter span of two years.
(iv) The loan taken by the Applicant/Appellant is repayable over a period of Seven years or thereabout which period is yet to expire.
(v) One other contention of the Applicant/Appellant is that the Respondent has all along been charging interests well over and above the statutory rate chargeable on a portion of the facilities.”
For the purpose of this appeal, learned counsel for the appellant DAYO AKINLAJA ESQ. abandoned the order sought in the first leg of the application at the lower court and limited his submissions to the second leg of injunction for the preservation of properties. Consequently learned counsel submitted only one issue for the determination of this appeal distilled from ground one of the grounds of appeal to wit.
“Whether the decision of the Learned Trial Judge refusing the order of interlocutory injunction sought represents a judicial and judicious exercise of the discretion available to the learned trial Judge thereby making the refusal of injunction proper.”
See page 7 of the brief of argument of the appellant.
The appellant having abandoned ground two of the grounds of the appeal, it is hereby struck out.
In a rather lengthy submission on the solitary issue for determination, in fact spanning seven pages of the brief of argument, learned counsel for appellant submitted that it is common knowledge that injunction is an equitable remedy which a court issues to protect an existing legal or recognisable right of a person from unlawful invasion or continued invasion by another. For this, learned counsel relied on the case of Akapo v. Hakeem-Habeeb (1992) 7 SCNJ 119 at 137; (1992) 6 NWLR (Pt.247) 266 and Oduntan v. General Oil Ltd. (1995) 4 SCNJ 145; (1995) 4 NWLR (Pt.387) 1.
That the trial court dismissed the application on the ground that the appellant has no legal interest which could be protected by an order of injunction.
That in view of the contention of the appellant that the respondent was in breach of the contract between them by failing to provide working capital which breach resulted in losses culminating in their inability to pay the loan coupled with the fact that the respondent had clearly evinced a desire to enforce her powers as unpaid mortgagee, the learned trial Judge could not have rightly held that the Appellant had no legal interest in the properties worthy of being protected by injunction. That a mortgagor has a reversionary interest in a mortgaged property which is not lost until extinguished by sale or otherwise of the mortgaged properties. For this learned counsel cited and relied on the case of Ejikeme v. Okonkwo (1994) 9 SCNJ 131 at 140; (1994) 8 NWLR (Pt.362) 266.
Learned counsel then submitted that the reversionary interest or right of redemption is the legal right or recognisable right which the appellant has in the properties covered by the Debenture and which the trial court ought to protect.
Secondly, learned counsel submitted that there is a serious issue for determination at the trial which the trial court failed to consider in its ruling. That the appellant did submit on the issue.
He said the issues include:
(a) Whether there was a breach of contract by the Defendant/Respondent towards the plaintiff/Appellant by the failure of the former to provide working capital facility to the plaintiff/appellant company as agreed in Exhibit A1 for which the latter would be entitled to the award of damages.
(b) Whether the defendant/respondent is entitled to charge the interest rate stipulated in the deed of Debenture. Exhibit (a)1 in view of the NERFUND Act, Cap. 254, Laws of the Federation of Nigeria, 1990.
(c) Whether the indebtedness of the plaintiff to the defendant, if any, is what the defendant/respondent alleges it to be in view of the illegitimate higher rate of interest hitherto being charged by the Respondent herein.
(d) Whether the repayment of the plaintiff’s indebtedness to the defendant should be rescheduled or not in view of the denial of working capital by the latter to the former and the consequential losses and misfortunes caused to her business.
(e) Whether the plaintiff is not entitled to a refund of the sum claimed from the respondent in foreign currency i.e., 98.259.84 U.S. Dollars.
Learned counsel then admitted that some of the above issues arose from the proposed amendment to the writ and statement of claim which was yet to be granted at the time the application was heard but submitted that the trial court was not precluded from looking at them because the court is competent to look at documents outside an applicant’s affidavit but within the case file to arrive at a just decision in a case, citing Mhambe v. Shide (1994) 2 NWLR (Pt. 326) 321 at 330: Oke v. Aiyedun (1986) 2 NWLR (Pt. 23) 548.
Thirdly, learned counsel submitted that the balance of convenience is over-whelming in favour of the Appellant on the following points:
(i) That it is imperative that the status quo be maintained to enable the appellant maintain her hold on the properties.
(ii) If the respondent appoints a receiver he may decide to wound up the appellant in limine making it impossible for the company to prosecute her claims.
(iii) That failure to restrain the respondent, is likely to render the proceeding of this action nugatory and a fait accompli.
(iv) Monetary damages will not be sufficient to atone for the irreparable damage that the appellant would have suffered if the respondent exercises its powers of unpaid mortgagee etc.
(v) That the respondent would not be badly prejudiced by having to wait for the final determination of the action since she is claiming interest in her counter claim.
(vi) The appellant had repaid N150,000:00 and desires to make fuller payments from time to time.
(vii) Appellant has given undertaking to indemnify the respondent in damages.
viii) That since the appellant is complaining of the charging of illegal interest rate by the respondent it would amount to enthroning illegality if injunction is refused.
Learned counsel then submitted that the balance of convenience is in favour of the appellant. That since the trial court did not apply the correct principles of law before reaching its conclusion this court being a court of appeal has the power to interfere. For this he cited Mhambe v Shide (1994) 2 NWLR (Pt. 326) 321 at 329.
Finally, learned counsel urged the court to allow the appeal by granting the order of injunction.
In his arguments as contained in his brief filed on 11/5/99 Chief Bayo Ojo, SAN submitted that the proper issue for determination arising from the two grounds of appeal is whether the learned trial Judge was right to have dismissed the application for interlocutory injunction and not as identified in the appellant’s brief. That the appeal does not touch on the exercise of the learned trial Judge’s discretionary powers. That even though particulars No.IV under the first grounds of appeal alleges that, the refusal to grant the injunction was not a judicial and judicious exercise of discretion such particulars being a support for the ground of appeal cannot become the object of the main argument. For this submission learned counsel cited and relied on Adelaja v. Fanoiki (1990) 2 NWLR (pt. 131) 137 at 149.
He then urged the court to adopt the issue as formulated in the respondent’s brief of argument, in determining the appeal and to strike out or discountenance the issue identified by the appellant; for this learned SAN relied on Aladetoyinbo v. Adewunmi (1990) 6 NWLR (Pt. 154) 98 at 106 and Salzgitter Stahl Gmbh v. Aridi Ind. (Nig.) Ltd. (1996) 7 NWLR (Pt. 459) 192 at 200.
Proceeding to the merit of the appeal, learned counsel agreed that the most important consideration in an application for interlocutory injunction is possession of a legal right by the appellant which is capable of being protected by the order sought. For this he relied on the case of Akapo v. Hakeem-Habeeb (1992) 6 NWLR (Pt. 247) 266 at 291.
Learned counsel then submitted that, based on the affidavit evidence and the existing writ of summons at the time the application was moved the appellant had no legal interest which could be protected by an order of injunction. That from the affidavit evidence it is learnt that the appellant mortgaged its fixed and floating asset to the respondent on certain terms contained in Exhibit A1.
That by clause 49 of Exhibit A1 both parties agreed that at any time the monies and liabilities secured by the agreement became due, the respondent may appoint a Receiver or Receiver and Manager to take possession of the Appellant’s assets. That by the writ of summons the appellant conceded that it was indebted to the respondent to the tune of N5,810,104:62.
That to grant the order would be a breach of the principle of the sanctity of contract made by parties who are not only ad idem but also sui juris.
That the issue of non-provision of working capital is not legal ground for granting the order of injunction because the appellant eventually sourced and was granted N1.25 Million by the Bank of the North Ltd., as deposed to in paragraph 7 of the affidavit in support. That this means that the lack of working capital could not be a reason why the appellant defaulted in repaying the loan.
That the appellant claimed for a refund of money and damages for breach of contract for non-provision of working capital as contained in the writ of summons and statement of claim existing at the time the motion was moved.
Learned counsel then conceded that a mortgagor has right to redeem the mortgage. Counsel, however submitted that the ruling of the trial Judge was based on the particular facts of the case, including the admission of the appellant that it mortgaged its assets to the respondent: that it is owing the respondent N5,810,104:62 as at 31/1/96 and the appellant’s failure to repay this debt contrary to the loan and mortgage agreement.
That the action is not aimed at removing a clog to their right to redeem the mortgage and secondly that the non-payment of interest and principal on the loan granted to the appellant was a condition which was mutually agreed by the parties as one which after coming into existence, the respondent’s power to appoint a Receiver could be exercised.
That the right of the mortgagee to appoint a receiver or sell the assets under a mortgage agreement is not inconsistment with the right of the mortgagor to redeem the mortgage. That it is not the correct position of law that since a mortgagor has a right to redeem the mortgage he is always entitled to an injunction any time the mortgagee seeks to exercise his power to sell the mortgaged property to recover his money. Relying on Osunde v. Co-operative Bank Ltd. (1995) 7 NWLR (p. 410) 682 at 687 learned counsel submitted that courts do not grant interlocutory injunction as a matter of course.
That the first prayer of the appellant in the writ of summons and statement of claim for a declaration that it owes the respondent N810, 104:65 discloses no cause of action. For this learned counsel cited and relied on U.B.N. Ltd. v. Penny-Mart Ltd. (1992) 5 NWLR (pt. 240) 228 at 245-246.
That the second declaration sought and claims B & L for refund and general damages are monetary claims capable of being assuaged in money terms. That the claims are not serious or substantial issues and have no relation with the claim for an order of injunction restraining the respondent from appointing a Receiver.
That the claims of the appellant for injunction on the face of the writ and the statement of claim are the same prayers sought in the application for injunction. That to grant the order sought would have meant granting the final claim at the interlocutory stage:- for this learned counsel relied on CCMAC Investment Ltd. v. Fredrickson Finance Ltd. (1995) 8 NWLR (Pt. 411) 113 at 116.
That the copious reference and use made by the appellant counsel of the proposed amended statement of claim is improper and erroneous because at the time the application for injunction was moved the existing statement of claim was the one filed on 22/2/96. That there cannot be two statements of claim in a case simultaneously. That it is only after leave to amend is granted and the process filed that it supersedes the former.
Learned counsel then urged the court to discountenance all references to the amended writ or statement of claim for being irrelevant to the determination of the appeal. That the alleged issues formulated by the appellant do not arise from the relevant statement of claim.
On the issue of balance or convenience learned counsel submitted that the lower court rightly declined to consider the issue. In the alternative counsel submitted that if considered, the balance would be against the appellant. That the creditor is the respondent who had been given the rights to deal with its assets to realise the debt owing. Counsel then wondered what the balance of convenience in favour of the debtor or appellant is. That the application to restrain the creditor is inequitable and an abuse of process.
Finally, learned counsel urged the court to resolve the sole issue in the affirmative and dismiss the appeal as lacking in merit.
Following the filing of the respondent’s brief which was duly served on the appellant, learned counsel for the appellant, Daya Akinlaja Esq, filed a reply brief on 26/5/99 in which he argued that the issue formulated by the appellant arose from ground one of the grounds of appeal which is the only ground of appeal relevant to this appeal, the other ground having been abandoned. That granting or refusing an order of interlocutory injunction involves the exercise of discretion on the part of the court; and that, it does not matter whether the trial court alluded to its discretionary powers as the reason for dismissing the application in its ruling or not. That this does not materially affect the formulation of the issue for determination.
Learned counsel urged the court not to strike out or discountenance the issue formulated by the appellant.
That the fulcrum of the matter is whether or not a mortgagor has any legal right recognizable in law in respect of the mortgaged property or properties. That if this is so, injunction could be granted to protect such right in line with the decision in Akapo v. Hakeem Habeeb, supra. That it is settled law that the right of a mortgagor to the mortgaged property continues unless and until the mortgagor’s title is extinguished or his interest is destroyed by sale. That in this case, the right of the appellant/mortgagor to redeem the property has not been destroyed by sale.
That the order of injunction sought is to preserve the status quo existing between the parties pending the determination of their rights, not to enable the appellant resile from the contract vide the loan and mortgage agreement.
That the injunction sought “pending the final determination of the substantive suit” cannot qualify for asking for the same prayer as in the substantive suit which would have been inappropriate in line with the plethora of authorities. That the injunction sought on the face of the writ of summons and the statement of claim “pending the final determination of the substantive suit” was a mere slip or technical error on the part of the counsel; and urges the court to do justice by ignoring the technicality.
That the case of Mhambe v. Shide, supra justifies the use made of the proposed amendments at the time of arguing the motion for injunction at the lower court.
Finally, learned counsel for the appellant urged the court to resolve the issue formulated in the respondent’s brief against the respondent and allow the appeal.
To begin with, two preliminary points have to be decided in this appeal namely:
(a) Whether the issue formulated by the appellant arises from, the only surviving ground of appeal – Ground 1; and
(b) Whether on the authorities of Mhambe v. Shide (1994) 2 NWLR (pt. 326) 321 at 330 and Oke v. Aiyedun (1986) 2 NWLR (Pt. 23) 548 a court can legally make use of proposed amended statement of claim in considering an application that has no relationship with a grant or refusal of the amendment sought.
The grounds of appeal and the sale issue as formulated by the appellant have been quoted in extenso earlier in this judgment. Suffice it to say that I have read the ground of appeal together with the particulars thereof and the sole issue for determination over and over again.
Both parties are agreed that the decision of a court to grant or refuse an application for an order of interlocutory injunction is an exercise of a judicial discretion. It is the law that the exercise of that discretion must be judicial and judicious. The respondent’s complaint is to the effect that the complaint of the appellant in ground one of the grounds of appeal does not include a complaint against the exercise of the trial Judge’s discretionary powers. Learned counsel for the respondent admits that particulars No. IV of the relevant ground of appeal alleged that the refusal to grant the injunction was not a judicial and judicious exercise of discretion but contends that particulars are no substitute for the main ground. In the main ground the appellant complains that “the learned trial Judge erred in law in refusing to grant the order of interlocutory injunction sought” and gave particulars. It is my considered view that the issue formulated for determination in this appeal being:
“Whether the decision of the learned trial Judge refusing the order of interlocutory injunction sought represents a judicial and judicious exercise of the discretion available to the learned trial udge thereby making the refusal of injunction proper – Ground One” is very much within the compass of ground one of the grounds of appeal. It is obvious that the error in law complained of in the appeal is very wide; in fact wide enough to, and does, include a judicial and judicious exercise of the discretion at the disposal of a trial court to grant or refuse to grant an order of interlocutory injunction. It is my considered view that if a court fails to exercise its discretion judicially and judiciously, it commits an error in law, though to arrive at that decision the court will have to consider the relevant facts.
It is my view that ground one is wide enough to include all legal ingredients necessary for, or conditions precedent to, a grant or refusal of same in an application for an order of interlocutory injunction that are relevant to the particular facts of the case being considered. It is therefore my view that the issue formulated in this appeal arises from the ground of appeal. The fact that the learned trial Judge did not say in his ruling that he was exercising his discretionary powers as the reason for dismissing the application is immaterial once it is the law that an exercise, i.e. of deciding to grant or refuse an interlocutory injunction, is an exercise of a judicial discretion which must be carried out judicially and judiciously, the learned trial Judge does not need to state so because the law says it is so.
I have decided to treat the issue of the legal status of the proposed amended statement of claim and writ of summons in this appeal as a periphery matter because a resolution of that issue has Fundamental bearing on the just resolution of the issue for determination.
It will help to narrow down the areas in contention between the parties in this appeal.
At page 10 of the appellant’s brief of argument learned counsel for the appellant stated thus:
“It is admitted that some of the above itemised issues arose from the amendments proposed to the writ of summons and the statement of claim vide an application that has not been taken at the time the application for interlocutory injunction was being heard.
Howbeit, it is instructive to note that the learned trial judge was not precluded from looking into the proposed amended processes and making opposite use of them with regard to the issues triable in this case.
This is notably so because the legal principle has been put beyond peradventure that a court is competent to use documents outside an Applicant’s affidavit but within the case file to arrive at a just decision in a case. See the decision of this court in Mhambe v. Shide (1994) 2 NWLR (Pt. 326) 321 at 330; Oke v. Ayedun (1986) 2 NWLR (pt. 23) 548.”While it is true in law that a court is competent to use documents filed in a case file to arrive at a just decision in a case as decided by this court in Mhambe v. Shide, supra, there is a world of difference between a document duly filed in a case file such as a statement of claim, and a proposed amended writ of summons and statement of claim as in the present case.
It is my considered view that until a proposed amendment is granted, the original document duly filed is the proper document to be considered as having any legal effect. The proposed amended statement of claim or writ of summons as in this case remains a mere proposal until granted and subsequently filed. The only subsisting and valid statement of claim worthy of any consideration by the court in dealing with “triable issue” is therefore the statement of claim filed on 22/12/96. It is only when the proposed amendment is granted and duly filed that it can supersede the original statement of claim and can command any attention of the court when considering an issue relating to interlocutory injunction. It is very important to note that amendments are not granted as a matter of course. Certain legal conditions must be fulfilled before they are allowed. Therefore to treat a proposed amendment as if it had been duly granted and filed amounts to prejudging the application for leave to amend, which in an appropriate case, could be refused. Finally, learned counsel for the appellant has not referred us to any authority to the effect that a court is competent in law under the circumstances and facts of this case to refer to any and rely on “triable issues” raised in a proposed amended statement of claim either alongside the original statement of claim or at its expense. I have never heard of two statements of claim existing simultaneously in one case. Therefore, for the purpose of this judgment all references by the appellant’s counsel to alleged “triable issues” raised in the proposed amended statement of claim will be discountenanced as they are clearly immaterial and irrelevant to the determination of the issues in controversy between the parties. I hereby hold that the only relevant issues are those raised in the original processes filed on 22/2/96. If the appellant had intended to rely on the issues introduced by the proposed amended statement of claim, learned counsel ought to have waited until after moving the court and filing the amended processes before arguing the application for interlocutory injunction.
The reliefs claimed in the original statement of claim filed on 22/2/96 as contained at pages 7-8 of the record of proceedings are as follows:
“A Declaration:
(1) That as at 31/1/96 the plaintiff’s total indebtedness to the defendant amounted to N5,810,104:62 (Five Million, Eight Hundred and Ten Thousand, One Hundred and Four Naira, Sixty Two Kobo).
(2) That the defendant has breached its loan and mortgage Agreement with the plaintiff, hereby causing it serious delay and losses.
B. All Order all the Defendant:
To refund to the plaintiff the accumulated interest of 98,259:84 US Dollars on the undisbursed and unutilised NERFUNDS Foreign Currency long Term Loan from 30/5/91 to 13th October, 1994 plus interest on the same up to 31/01/96.
C. N5,000,000:00 (Five Million Naira) as General and Special Damages for breach of provision of working capital as provided for in the Mortgage/Loan Agreement between the plaintiff and the defendant.
D. All Injunctions:
Restraining the defendant, its servants or agents from:-
(i) Exercising any act of closure, receivership, managership or sale of the plaintiff’s factory, machinery and/or premises; or any of the mortgaged properties pledged as collateral with the defendant pending the final determination of this Suit.”
It is important to note that on 15/4/96 the respondent filed a statement of defence and counter claim which can be found at pages 41 to 44 of the record of proceedings in which it claims inter alia, as follows:-
(iii) A declaration that the Defendant is at liberty to exercise its power of sale under the loan and Mortgage Agreement between the parties if the Plaintiff fail (sic) to liquidate the judgment debt”. The question that follows is whether having regards to the claims of the appellant as reproduced supra and the facts of the case the appellant made out a case for a grant of an order of interlocutory injunction against the respondent in terms of his motion papers.
Here is a mortgagor who admits that he is indebted to a mortgagee in whose favour he has executed a mortgage in which it confers the right of sale etc, on the mortgagee in case of failure to pay the mortgage: who asks for damages for breach of the loan and mortgage agreement; for breach of provision of working capital: refund of accumulated interest and injunction in the terms reproduced supra, contending that he has established the fact that he has a legal right worthy of protection by an order of injunctions, raised serious triable issues and has the balance of convenience in his favour. What happens to the contesting legal rights of the mortgagee conferred by the mortgage agreement in case of default?
While it is the law that a mortgagor has reversionary interest in a mortgaged property which is not lost until same is extinguished by sale or otherwise of the mortgaged property, the present action as constituted is not aimed at removing a clog on the equity of redemption of the mortgagor. It is my considered view that it is not enough for an appellant in an application for an order of interlocutory injunction to say that he has a legal right or interest to be protected. He must go further to establish irreparable damage and the fact that only an order of injunction can be adequate remedy. In the present case, the appellant is claiming inter alia, Damages of Five Million Naira and a refund of N98,259,84 US Dollars apart from the declaration that it is indebted to the respondent to the tune of N5,810,104:62. In other words the appellant admits that damages will be adequate compensation for the alleged wrongs it is complaining about. The appellant also admits that the respondent is legally entitled to his rights as a mortgagee.
Both parties agree that the courts do not grant interlocutory injunctions as a matter of course. See Osunde v. Co-operative Bank Ltd. (1995) 7 NWLR (Pt. 410) 682 at 687.
It is my view that once an applicant admits that monetary award is adequate compensation, an order of interlocutory injunction becomes an over kill and very irrelevant.
This holding accords with the “triable issues” disclosed in the original statement of claim and identified at page 10 of the brief of argument of the appellant as (a) and (e). These are, at the risk of repetition, as follows:-
“(a) Whether there was a breach of contract by the defendant/respondent towards the plaintiff/appellant by the failure of the former to provide working capital facility to the plaintiff/appellant company as agreed to in exhibit (A)1 for which the latter would be entitled to the award of damages.
(e) Whether the Plaintiff is not entitled to a refund of the sum claimed from the respondent in foreign currency i.e. N98,259.84 US Dollars.”
It is my view that issues (b), (c) and (d) are formulated from the proposed amended statement of claim and are therefore discountenanced. That being the case the trial of issue Nos (a) and (e) and their resolution in favour of the appellant will attract monetary award not an order of injunction. I want to be clearly understood as saying that it is not every case where there is or are triable issues that an order of interlocutory injunction must be issued or be made. If monetary compensation is adequate, injunction will be refused.
I had earlier made reference to relief No. (iii) in the counter claim which seeks a declaration.
That relief puts paid to the fears of the appellant as regards the exercise of the power of sale etc, of the respondent under the mortgage during the pendency of the action. We all know that the courts frown at a resort to self help in matters pending before the courts of law.
It is obvious that without an order of the court in terms of relief No. (iii) on the counterclaim the respondent will be resorting to self help if it takes other steps that may result in the actualisation of that relief prior to the determination of the case.
On the issue of balance of convenience, it is clear from the facts of this case as disclosed in the statements of claim and defence and counter claim and the applicable law as discussed in this judgment that the issue of balance of convenience does not apply and was rightly ignored by the trial court. Here is a plaintiff who confesses to owing the respondent some money for which it entered into a loan and mortgage agreement. It has defaulted in repayment but is asking for damages for breach of contract to provide working capital. Before the trial it has come to court asking for interlocutory order of injunction to restrain the respondent from taking steps to recover the debt by exercising its right under the Mortgage and claims that the balance of convenience is in its favour, i.e. the self professed debtor. We must not forget the fact that the remedy of injunction is an equitable one!
It is the law that an appellate court will not normally interfere with the exercise of discretion by a lower court merely because it would have exercised the discretion differently if faced with a similar situation. In the present case it is my considered opinion that the trial court applied the correct principles of law in reaching its conclusion in the matter before it.
On the issue of granting an interlocutory relief which in effect amounts to a grant of the relief in the substantive proceedings both counsel agree that both the statement of claim and motion papers talk of injunction “pending the final determination of the substantive suit.”
This, to my mind amounts to asking for interlocutory order of injunction in both the statement of claim and the motion papers. There is nothing wrong with that if that is what the appellant wants. However, it is my view that a grant of the injunction sought cannot mean granting the final claim at the interlocutory stage which is what the law frowns upon. See CCMAC Investment Ltd. v. Fredrickson Finance Ltd. (1995) 8 NWLR (Pt. 411) 113 at 116 where it is stated thus:
“The court will normally not make an interlocutory order if its effect would be a grant of the relief in the sustentative proceedings…”It would have been a different kettle of fish if the injunction sought on both processes were perpetual.
It does not matter whether injunction sought is an error of the previous counsel particularly as the present counsel had every opportunity to amend same before moving the application but failed. He cannot now shift the blame. In any event I have held that the issue is not material or relevant since if the application had met all legal requirements it would still have been granted.
That being the case, this appeal lacks merit and is accordingly dismissed with N2,5000:00 cost in favour of the respondent.
Other Citations: (2000)LCN/0678(CA)