Dematic (Nig) Ltd V. Utuk & Anor (2022)

LAWGLOBAL HUB Lead Judgment Report

HELEN MORONKEJI OGUNWUMIJU, J.S.C. 

This is an appeal against the decision of the Court of Appeal, Calabar Division delivered by Hon. Justice J. Omokri, N. S, Ngwuta and M. A. Owoade (JJCA) on 17th March, 2009. The Court of Appeal set aside the Ruling of the trial Court delivered on the 5th May, 1995 and ordered the vesting of the custody of the property situate at No. 149 Ikot Epene Road Uyo, on the 2nd Respondent. Dissatisfied with the decision of the Court below, the Appellant (who was the 2nd Respondent at the Court below) has appealed to this Court on two grounds as contained in its 2nd Amended Notice of Appeal dated 13th of September, 2021.

The original Petitioner in this case was the late Okon Udo Utuk. Okon Udo Utuk was the Director/Chief Executive Officer of Utuks Group of Companies consisting of: (1) Utuks Construction & Marketing & Co. Ltd., (2) Utuks Motors Ltd., (3) Utuks Drainage Ltd., (4) Century Transport Ltd.

​Upon the demise of Okon Udo Utuk, the trial Court on the 25th September, 1995 substituted him with Ini Okon Udo Utuk, the present 1st Respondent in this appeal and the Appellant at the Court below. The late Okon Udo Utuk had filed a petition for the winding up of Utuks Motors Ltd at the Federal High Court, Calabar on the 11th February, 1993 in Suit No. FHC/CA/M4/93. Premised on the winding up petition of Okon Udo Utuk, the trial Court appointed the Deputy Chief Registrar of the Federal High Court (now the present 2nd Respondent) as Provisional Liquidator on the 21st October, 1994 for the purpose of taking over and managing the property of Utuks Motors Ltd. pending the determination of the main petition for winding up. One of the properties of Utuks Motors Ltd. which the Provisional Liquidator was to take over and manage was the property at No. 149, Ikot Epene Road, Uyo, Akwa Ibom State.

Prior to that, the above property had been mortgaged to First Bank of Nigeria Plc (“the Bank”) as security for loan obtained by Utuks Motors Ltd. Based on the mortgage deed, the Bank appointed the firm of Adetona & Co. Receiver/Manager to foreclose the mortgaged property and realize the indebtedness of Utuks Motors Ltd. The Receiver/Manager sold the property at No. 149, Ikot Epene Road, Uyo to the Appellant (Dematic Nigeria Ltd) on the 1st January 1993.

On the 26th January 1995, the Provisional Liquidator filed a motion pursuant to Sections 424 (1) (a), 425 (1) (a), 413 and 414 of the Companies and Allied Matters Act (herein after referred to as CAMA) at the trial Court seeking an order to void the sale of the property and an order vesting the specific property at No. 149, Ikot Ekpene Road, Uyo in his custody for the purpose of valuation pending the winding up of the company. The trial Court in its Ruling delivered on the 5th May, 1995 held that First Bank validly exercised its right of sale on the property under the Deed of Mortgage. The ruling was in favour of the present Appellant.

The 1st Respondent, not satisfied with the trial Court’s Ruling appealed to the Court below. The Court below in its judgment delivered on the 17th March, 2009 set aside the Ruling of the trial Court and voided the sale of the property to the Appellant. The Court ordered the vesting of the property in the custody of the liquidator for valuation purpose.

​It is against the judgment of the Court of Appeal that the Appellant has appealed to this Court on two (2) grounds as contained in the Amended Notice of Appeal dated 13th September, 2021.

The Appellant in the brief settled by Yakubu Maikasuwa Esq. formulated two issues for determination set out below as follows:

1. Whether the 1st Respondent had the legal capacity (locus standi) to commence this appeal at the lower Court in view of the provisions of Section 422 (9) of the Companies and Allied Matters Act 1990.
2. Whether the learned Justices of the Court of Appeal had jurisdiction to entertain the matter on appeal before them in view of the provision of Section 417 of the Companies and Allied Matters Act 1990.

The 1st Respondent’s brief was settled by Francis Ekanem Esq. and the 2nd Respondent’s brief was settled by Chibuike Ezeokwuora Esq.

​In determining this appeal, I have crystallised both issues identified by the Appellant and adopted by the Respondents as the sole issue for the determination of this appeal. These issues relate to the grounds of appeal and the Appellant’s case as presented before this Court. It is worthy of note that both issues presented for determination by the Appellants are challenging the jurisdiction of the trial Court and the Court below to determine the issues in controversy between the parties. Thus, this is a new issue of jurisdiction not presented for determination before the Courts below.

SOLE ISSUE

Whether Section 422(9) of Companies and Allied Matters Act 1990 now Section 585(9) of CAMA 2020 and Section 417 now Section 580 endows the 1st Respondent with capacity to appeal to the lower Court and whether the lower Court had jurisdiction to entertain the matter.

On the first leg of this issue dealing with the interpretation of Section 585(9) of CAMA, the Appellant’s counsel argued that by the provisions of Section 422 (9) of the Companies and Allied Matters Act, 1990, where a Provisional Liquidator is appointed for a company, the powers, functions, duties and authority of the Board of Directors ceases and the Board becomes functus officio. Counsel submitted that by the trial Court’s order of 21st October, 1994 the 2nd Respondent was directed to take over and manage the properties of Utuks Motors Ltd. The appointment of a Provisional Liquidator for Utuks Motors Ltd on the 21st October, 1994 therefore puts an end to the powers of the Directors (including the 1st Respondent) in Utuks Motors Ltd.