Dr. Sola Saraki V. N.A.B. Kotoye (1990)
LawGlobal-Hub Lead Judgment Report
This appeal is against the decision of the Court of Appeal, Lagos Division, delivered on the 17th day of April, 1989 which partially reversed the decision of the Federal High Court, Lagos granting an order of interlocutory injunction against the respondent to restrain him from exercising any right in respect of some shares in dispute held in the Bank (Societe Generale Bank (Nigeria) Ltd).
After the appeal was entered-in the Supreme Court, the appellant filed a motion for “an interim injunction to restrain the defendant/respondent from exercising any of the rights attaching to the 2.333,000 N, shares in the Society Generale Bank (Nigeria) Limited-pending-the-appeal filed by the plaintiff herein to the Supreme Court.”
After hearing argument of counsel, the court decided to hear arguments in the appeal and decide the issue raised which was similar in nature to the issue raised in the motion. Parties and their counsel were duly invited and notified in open court and the date fixed for hearing of the appeal was brought forward from September 1990 to 3rd February, 1990. The periods for filing briefs were abridged with the concurrence of counsel by the court and the stage was set for the hearing of the appeal.
Before the hearing date, the 1st day of March, 1990 to be definite, learned counsel filed a notice of motion praying-for enlargement of time to file the respondent’s brief. Also filed at the same time was a notice of intention to rely upon preliminary objection to grounds 1(b) and ground 3 and the arguments in the appellant’s brief under paragraphs 3.4, 4.5 and 6. Almost simultaneously with the filing, the plaintiff/appellant filed notice of motion for amendment of ground (111) by substituting identical grounds differently worded. The plaintiff/appellant had earlier also field a notice of motion to amend the notice of appeal by deleting the phrase:
“On the ground that injunction granted reversed the status quo and did not maintain it.”
from ground 1 of the grounds of appeal. The defendant’s/respondent’s motion for enlargement of time to file respondent’s brief being unopposed and of substantial merit was granted as prayed.
The motion for amendment to ground (iii) was not argued and accordingly, I hereby strike it out.
The application for enlargement of time to file respondent’s brief having been granted as prayed, the stage was set for the respondent to argue his notice of preliminary objection which was set out in Part 1 of the brief. It reads:
“The defendant/respondent has already given notice that he will at the hearing raise preliminary objections to
(i) Ground 1(b) which contends that the Court of Appeal ought not to have reversed the decision of the Lagos High Court is vague and has not specified the particulars upon which the appellant relies or the nature of any error which may have been made by the Court of Appeal;
(ii) Ground 3 of the grounds of appeal upon the ground that the particulars of the facts and circumstances referred to therein as grounds upon which the decision of the Court of Appeal.cannot.be supported are not specified therein;
(iii) The arguments in the appellant’s brief under paragraphs 3.4, 4.5 and 6 are not supported by the ground of-appeal filed and should be struck out and the appeal dismissed.
It is necessary at this juncture to set out the three grounds of appeal filed by the plaintiff/appellant against the decision of the Court of Appeal and these grounds are as follows:
“(i) The court below erred in law in reversing the decision of the High Court:
Particulars of Error
(a) The jurisdiction of the High Court to grant interlocutory injunction derives from the powers of the court to administer the doctrines of equity and in particular from the provisions of section 18(1) of the High Court Law of Lagos State Accordingly, though the preservation of the status quo may be the most usual basis in cases where the court finds it ‘just and convenient’ to award the remedy of injunction .it is by no means the only basis for doing so.
(b) In the- particular circumstances of this case as disclosed on the pleadings and affidavit evidence, the order made by the High Court on the application for interlocutory injunction pending trial was sound and ought not to have been reversed by the Court of Appeal.
(ii) The court below exercised its discretion wrongly and/or failed to exercise the same judicially in deciding to curtail the scope of the order of injunction pending trial granted by the High Court having regard to their decision on the application of the defendant to stay the order for injunction pending the determination of his appeal. In particular, the court below failed to observe that it was not at liberty to make a fundamental departure from the decisions given in its ruling on the defendant’s application for stay of the order of the High Court pending appeal.
(iii) The decision of the court below cannot be supported having regard to the facts and circumstances before it.”
Grounds 1(b) and 3 are the subject of this preliminary objection.
Learned counsel for the defendant/respondent alleged that the ground 1(b) is vague and has not specified the particulars upon which the appellant relies or the nature of any error which may have been made by the Court of Appeal. He further contended that paragraph 1(b) of the particulars merely contends that in the particular circumstances of this case as disclosed on the pleadings and the affidavit evidence, the order made by the High Court was sound and ought not to have been reversed by the Court of Appeal.
He further contended this item is itself a ground of law complaining that the Court of Appeal was in error but it does not set out the particulars and nature of the error as required by Order 8 Rule 2(2) of the Rules of the Supreme Court, 1985. This, according to learned counsel, is so, notwithstanding that paragraph 1(b) is listed as one of “particulars of errors” under the main ground. He cited Order 8 Rule 2(2) Supreme Court Rules, 1985 as authority.
In reply, learned counsel for the respondent objected that the objection was raised rather later in the day and as such, it should not be entertained by the court particularly as the defendant/respondent had taken a fresh step to wit taking a date for the hearing of the appeal and applying for enlargement of time to file respondent’s brief and filing respondent’s brief. He relied on Order 2 Rule 29(1) Supreme Court Rules, 1985 as authority. Learned counsel further contended that the ground 1(b) satisfies the Rules of Court Order 8 Rule 2(2).
The objection of appellant’s counsel, Chief F.R.A. Williams, S.A.N. based on Order 2 Rule 29(1) Supreme Court Rules, 1985 is well founded. The Rule Order 2 Rule 29(1) reads:
“An application to strike out or set aside for non-compliance with these Rules or for any other-irregularity arising from the rules of practice and procedure in this Court any proceedings or any step taken in these proceedings or any document, judgment or order therein shall only be entertained by the court if it is made within a reasonable time before the party applying has taken any fresh step after becoming aware of the irregularity.”
I observe that the notice and grounds of appeal were filed on 24th April, 1989. I also observe that respondent filed his brief containing the objection on 1st March, 1990. Although the notice of intention to rely on the preliminary objection has not, in my view, been made within reasonable time. It is also devoid of merit.
I am unable to accept the contention of learned counsel for the respondent that ground 1(b) is vague and that particular (b) of ground 1 does not satisfy the Rules – Order 8 Rule 2(2).
With regard to ground 3, learned counsel for the respondent contended that the ground is vague and that the particulars of the facts and circumstances referred to therein as grounds upon which the decision of the Court of Appeal cannot be supported are not specified therein. In reply, learned counsel for the appellant submitted that the ground has been stated as concisely as the Rules required and particulars of facts and circumstances are not required by the Rules the ground being in the nature of an omnibus ground. I cannot see any merit in the objection to ground 3.
The ground which complains-that the decision, cannot be supported having regard to the facts and circumstances of the case before the court is complete in itself. It is not vague and does not require particulars. It does not require particulars because the particulars of errors are implicit; in the allegation of disregard to the facts and circumstances of the case before the court.
The 3rd ground of objection cannot be classified strictly as a complaint against the grounds of appeal. The complaint is that the augments in paragraphs 3.4, 4.5 and 6 are not in support of or are not founded on any of the grounds of appeal. According to learned counsel for the respondent, the arguments have no basis as they have no origin in the grounds filed but appears to be on the grounds not filed in the appeal before the court.
Commenting specifically on paragraph 3.4 of the appellant’s brief, learned counsel for the respondent observed that there was no ground of appeal that the Court of Appeal was wrong in deciding that the court below must continue itself to the evidence before it before making the order.
On paragraph 4 of the appellant’s brief, learned counsel observed that there was no ground of appeal in support of the argument that the Court of Appeal should not have curtailed the injunction because the plaintiff in the court below had been contending that the defendant held the shares as a trustee. He however conceded that ground 2 complained of the curtailment of the scope of eth order of injunction but argued that the complaint was for the court’s failure to have regard to its previous ruling refusing the application for stay of the interlocutory injunction.
Dealing with paragraph 6 of the brief, learned counsel commented that the only ground of appeal relating to reversal of the status quo is amended ground 1(b). He observed that the ground has not contended that there are other basis and has not set out these other basis for preserving the status quo. There is no ground putting forward the contention that the defendant is holding as a trustee as has been done in the brief.
Dealing with paragraph 5 of the brief learned counsel for the respondent observed that the paragraph dealt with the principles of law which should guide the court or which the court should follow in setting aside the decision of the court below. It was not, learned counsel contended, in support of any ground.
In reply, learned counsel for the appellant attacked the objections on two grounds.
(1) that the application to strike out eth appeal on the grounds that the grounds of appeal are vague and did not contain particulars of and nature of errors of law or misdirection as required by Order 8 Rule 2(2) Supreme Court Rules, 1985 is too late in the day since the respondent has taken fresh step after becoming aware of the irregularity contrary to Order 2 Rule 29(1) Supreme Court Rules, 1985.
He then relied on a decision of this court in the case of Nigerian Produce Company v. Noga S.A. (1971) 2 Nigerian Commercial Law Report 211. Learned counsel referred to the appearance of the respondent in this appeal on 15th January, 1990. He did not raise his objection then, learned counsel for the appellant reminded the court and referred to the power of court to do justice under Order 10, Supreme Court Rules, 1985.
Learned counsel also submitted that it was too late to strike out eth brief as the application was not made within a reasonable time. He contended that the application should not be delayed to the date fixed for hearing of the appeal. Learned counsel then dealt with the merit of the objection. He observed that the matter before the court concerned the exercise of the court’s discretion and submitted that in that type of case the appellant is permitted to say that on the facts and circumstances of the case, the discretion was not exercised judiciously. He then referred to the case of Odusote v. Odusote (1971) Vol.7 N.S.C.C. 228; (1971) 1 All N.L.R. 219. He contended that when dealing with questions of law alone, the circumstances had to be worked out. See Nafiu Rabiu v. The State (1981) Vol. 2 N.S.C.C. (1981) 2 N.C.L.R. at 293.
Learned counsel for the respondent conceded that his application ahs not complied with the requirement of Order 2 Rule 9(1) SCR. 1985. He also agreed that he agreed to the abridgement of the time prescribed by the Rules for the filing of briefs to 7 days from the date of service of appellant’s brief. He contended that Order 2 Rule 29(1) Supreme Court Rules, 1985 is inapplicable.
With regard to the complaint against ground 1(b) and ground 3, I can find nothing vague in the two grounds. When is a ground vague It is vague when it is not clearly, precisely or definitely expressed or stated. Can one say that the complaint or issue raised in ground 1(b) is vague Can one also say that the complaint or issue raised in ground 3 (of the grounds of appeal) is vague I would answer the questions in the negative.
If the grounds had been vague, I would have had no hesitation in upholding the preliminary objection and striking them out. The Rules of Court, Supreme Court Rules, 1985 does not give any accommodation to grounds that are vague or grounds that fail to give the nature and particulars of errors and misdirection. See:
Okeke Amadi v. Okeke Okoli (1977) 7 S.C. 57 at 63
Mba Nta v. Anigbo (1972) 5 S.C. 156, 164
Osawaru v. Ezeiruka (1978) 6-7 S.C. 135
Atuyeye v. Ashamu.(1987) 1 N.W.L.R. (Pt.49) 267 at 282
Particulars (b) of ground 1 is not a ground by itself but the particulars and nature of errors complained of although learned counsel for the respondent contended that it could concurrently by itself be a ground of appeal.
The pleadings and affidavit having been mentioned therein, the need to set them out in the particulars of errors does not arise. Similarly, ground 3 having complained of the decision being unsupportable having regard to the facts and circumstances before the court, it is not in the contemplation of the Rules that all the facts and circumstances be set out in the particulars.
Turning to the compliant above, paragraph 3.4, sections 4.5 and 6 of the appellant’s brief of argument being arguments in support of a ground not before the court, an examination of ground III (three) discloses that the arguments in paragraphs 3.4 and section 4 are based on it. Similarly, an examination of ground 1(b) discloses that the arguments in paragraphs 3.4 and section 4.5 and 6 are based on it. Paragraph 3.4 dealt with the questions whether the facts and circumstances include the pleadings. Paragraphs 4 and 11 of the counter-affidavit does import the facts in the pleadings filed or settled and ready for filing into these proceedings for consideration. More expressly, paragraph 13 of the counter-affidavit reads:-
“The statement of defence and counter-affidavit proposed to be filed herein has been settled and is now ready for filing and the averments of fact therein represent the true state of facts of the matters in issue herein and I rely upon the averments of fact contained therein in opposition to this application.”
A statement of defence and counter-claim being a reply to statement of claim cannot be considered in total isolation from and disregard of the statement of claim.
Section 4 deals with the scope of the injunction and the arguments under the section are in support of grounds 1, 2 and 3 of the grounds of appeal.
Section 5, headed ‘reversing’ the ‘status quo’ in my opinion is the heart of the question to be determined. Is reversing the status quo or maintenance of the status quo, i.e., depriving the respondent of the rights to exercise the right of ownership of the shares in dispute which rights he has exercised for ten years before the action was filed not the predominant consideration in this matter In my opinion, it is the main consideration. The interlocutory injunction prayed for is in the eyes of the appellant, to maintain the status quo, but in the eyes of the respondent to reverse the status quo. Ground 1 raises the issue loudly, grounds 2 and 3 raise the same issue silently.
Ground 6 is headed ‘setting aside the discretion exercised by Thomas, J,’ There is no doubt that the Court of Appeal interfered with the manner Thomas, J., exercised his discretion and that is the complaint in grounds 1, 2 and 3 of the grounds of appeal.
The objection to the paragraph 3.4 and sections 4.5 and 6 of the appellant’s brief is misconceived and I hereby overrule it. The preliminary objections fail and I hereby dismiss it.
I now proceed to consider the arguments in the appeal.
The appellant herein is the plaintiff and the respondent, the defendant in suit No. LD/938/87 before the High Court of Lagos State in the Lagos Judicial Division. In the said suit, the plaintiff claimed:
“1. A declaration that the 4.579,460 shares standing in the name of the defendant in the Register of Shareholders of Society Generale Bank (Nigeria) Limited is held by him in trust for the plaintiff.
- An order directing an inquiry into the amount of any dividends which may have been received by the defendant as holder of the aforementioned shares up to the date of judgment herein.
- An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff in accordance with the lawful direction of the plaintiff or the appropriate authorities.
- An order for rectification of the Register of Shares to give effect to any judgment delivered herein.
The writ of summons was dated 3rd of June, 1987 and filed on that date. A statement of claim bearing 2nd June, 1987, containing 17 paragraphs was filed and served. A statement of defence and counter-claim of 57 paragraphs dated 29th June, 1987 was filed and served. Before the filing of the statement of defence and counter-claim, the plaintiff filed a motion on notice for an order of interlocutory injunction dated 24th day of June, 1987. It was filed on the same date against the defendant. The motion reads:
“Motion on Notice
S.18 High Court Law
TAKE NOTICE that this Honourable Court shall be moved on Monday the 6th day of July, 1987 at the hour of 9 o’clock in the forenoon, or so soon thereafter as counsel may be beard on behalf of the plaintiff for an order of injunction restraining the defendant whether by himself, his servants or agents or howsoever otherwise from exercising any of the rights attaching to the 2,233,000 N1.00 shares in the said Societe. Generale Bank (Nigeria) Limited covered by Share Certificates 000003; 000006, 0000011, 000018, 000022, 000024, 000026 and the 3,453,100 N1 shares in the said company covered by share certificates 0000053, 0000054, 0000055 and 0000056 pending the final determination of this action and for such further or other orders as the court may consider appropriate in all the circumstances.”
This motion was supported by affidavit evidence of 9 paragraphs sworn by Dr. Sola Saraki, the plaintiff. The defendant filed a counter-affidavit evidence of 13 paragraph sworn by Nathaniel Adedamola Babalola.Kotoye, the defendant. Paragraphs 2, 3, 4 and 5 of the affidavit are of special significance and relevance: They read:
“2. The defendant and myself’ are registered as holders of various numbers of shares in Societe Generale Bank (Nigeria) Limited.
- The sums of money paid on behalf of the defendant for his acquisition of shares in the said company were provided by me and the said shares were held by the defendant in the full knowledge that I was the beneficial owner of the shares and that he was obliged to deal with the shares for my benefit and in accordance with my directions.
- The defendant has after receiving financial and other material support from me over a period of some twenty years, now denied that he is my trustee for the said shares and claims to be the beneficial owner of the said shares.
- I am fully aware from my intimate knowledge of the defendant that, in the event my claim against him succeeds, if he is permitted to part with possession of shares, he will not be in a position to make monetary compensation to me for the value of the said shares.”
There is therefore affidavit evidence that the defendant was dealing with the shares for the benefit of the plaintiff and in accordance with plaintiff’s direction. There is also affidavit evidence that the defendant now disputes plaintiff’s beneficial ownership of the shares and also claims himself to be the beneficial owner of the shares.
The counter-affidavit deposed to be the defendant bears this dispute out. I will therefore refer to paragraph 2, 3, 4, 5, 6, 9, 10 and 13. They read as follows:
“2. That paragraphs 3 and 4 of the affidavit in support are untrue.
- That the shares which I purchased initially in Societe Generale Bank (Nigeria) Limited- were-paid for from credit facilities granted to the plaintiff and I jointly by the United Bank for Africa and paid from a joint account opened by us thereat.
- That as is shown in paragraph 7(2) of the statement of claim, I provided four of my properties as security for the loan thus granted by the U.B.A. and say that- those houses were mine and were purchased from my own resources and loans granted to me by Bankers.
- That before the U.B.A. agreed to grant us the loan of N750,000.00 with which to purchase the said shares, they required that the plaintiff and I provide the initial sum of N150,000.00.
- That it was I who found the N150,000:00 by borrowing the same and paid the same into the joint account before the U.B.A. released the fund needed for the share purchase to us. The said sum of N150,000.00 has been subsequently repaid to the lender from the joint account aforesaid.
- That I am owner in my own right of all the shares standing in my name in the Register of Societe Generate Bank (Nigeria) Limited (hereinafter referred to as “the Bank”) just in the same way as the plaintiff is the beneficial owner of the shares purchased with the loan granted through the U.B.A. joint account (with the exception of part of those shares held by the plaintiff in trust for some Nigerians to be determined by the plaintiff and the defendant).
- That I have since 1977, when the first shares were allotted to me exercised the full rights of ownership in respect of all the shares which have come to be registered in my name.
- That the statement of defence and counter-claim proposed to be filed herein has been settled and is now ready for filing and the averments of facts therein represent the true state of the facts of the matters in issue herein, and I rely upon the averments of fact contained therein in opposition to this application.” Paragraph 7(2) of the statement of claim to which the defendant referred in paragraph 4 of his counter-affidavit reads:
“The United Bank for Africa Ltd. granted overdraft facilities to the plaintiff and the defendant on the security of (i) plaintiff’s properties at 3/5 Ondo Street, West; 45 Marine Road, Apapa, 6 Amosu Street, Surulere and 13 Oguntokun Street; Surulere and (ii) defendant’s properties at plot 28, Block T, G.R.A., Ikeja, 18 Jalupon Close, Surulere and 13 Olufemi Street, Surulere and house and land at Ibara, Abeokuta. The properties used by defendant as security were purchased by him with substantial cash donation from plaintiff.”
The application came up for hearing before Olusola Thomas, J., After hearing arguments and submissions of counsel to the parties, he delivered a considered Ruling wherein he granted the application in the following terms:
“Apart from the temporary restraint on defendant’s right to deal with the shares until the dispute is finally determined and which he will resume if he succeeds his inconvenience is less in comparison with the irreparable loss to the plaintiff if he succeeds at trial. I accordingly order that the defendant, whether by himself, his servants or agents or howsoever otherwise be restrained from exercising any of the rights attaching to the 2,233,000 N1.00 shares in Societe Generale Bank (Nigeria) Limited covered by share certificate 000003, 000006, 000011, 000018, 000022, 000024, 000026 and the 3,453,100 N1.00 shares in the said company covered by share certificates 000053, 000054, 000055 and 000056 pending the final determination of this action. I hereby impose an undertaking on the plaintiff to pay damages to the defendant if at the trial it was found by the court that the order hereby made ought not to have been made.”
Earlier on in his Ruling, the learned trial Judge observed and commented as follows:-
“The summary of the plaintiffs pleading forms the genesis of the allegations on which the plaintiff relied and those facts he deposed to in his supporting affidavit. I have already reproduced the plaintiff’s affidavit above.
These facts have been contested by the defendant in his counter-affidavit which incorporated his statement of defence and counter-claim. The defendant gave his own version of the case. This is not the
stage where the court should examine and determine the truth or otherwise of certain allegations either in the plaintiff’s case or the defendant’s case. It is a matter for trial. Obaseki, Justice of the Supreme Court put such a situation as the present in Obeya Memorial Specialist Hospital case in this manner-
‘When an application for interlocutory injunction to restrain a defendant from doing acts alleged to be a violation of the plaintiff’s legal right is made on contested facts; the decision whether or not to grant an interlocutory injunction has to be taken at a time when ex hypothesis the existence of the right or the violation of it or both is uncertain and will remain uncertain until final judgment is given in the action. It was to mitigate the risk of injustice to the plaintiff during the period the uncertainty could be resolved that the practice arose of granting him relief by way of interlocutory injunction.’
Upon the nature of the case as framed by the plaintiff, I cannot say that his claim is frivolous, indeed, from the contested facts by the defendant, there are serious questions to he tried in this case.”
The defendant was dissatisfied and took the matter on appeal to the Court of Appeal on 7 grounds of appeal. While the appeal was being proceeded for hearing, the defendant unsuccessfully applied to the High Court and the Court of Appeal in succession to have the interlocutory injunction suspended pending the determination of the appeal.
Eventually, the appeal came up for hearing and after hearing oral arguments of counsel and considering the arguments and submissions in the briefs filed, the court, by a majority of 2 to 1 varied the order of injunction by removing voting rights from the operation of the order.
Kalgo, J.C.A., with Awogu, J.C.A., partially allowed tile appeal and varied the order of injection while Akpata, J.C.A., dismissed the appeal. Kalgo, J.C.A., concluding his lead judgment observed and commented as follows:
“On the whole, there was no evidence before the trial court in the affidavit in support of the application for interlocutory injunction to justify making an order depriving the appellant the rights to exercise his ownership right on the shares in dispute, which right he has exercised for the past ten years before the action was filed. There was however evidence in the affidavit in support to justify an order of interlocutory injunction restraining the appellant from selling or otherwise alienating the shares in dispute pending the determination of the action. Accordingly, I hold that the order of injunction made by the trial Judge in the instant appeal is too wide and that ground 3, 4 and 7 of the ground of appeal succeed. The appeal therefore succeeds in part and is hereby partly allowed. The order of injunction made by the learned trial Judge is hereby varied and I make instead the following order:
- The defendant/appellant whether by himself, his servants or agents or howsoever otherwise, be and are hereby restrained from selling, pledging, mortgaging or otherwise alienating the 2,233,000 N1.00 shares in Societe Generalte Bank (Nigeria) Limited covered by share certificates 000003, 000006, 000011, 000018, 000022, 000024, 000026 and the 3,453,000 N1.00 shares in the said Bank covered by share certificates 000053, 000054, 000055 and 000056 pending the final determination of the substantive action.
- The appellant is further restrained from selling, pledging, mortgaging or otherwise alienating any bonus or bonus shares or scrip issues representing any profit accruing on the shares mentioned in paragraph (1), pending the final determination of the substantive action.’
The undertaking in damages ordered by the trial Judge shall continue to stand unaltered. The appellant is entitled to costs in this appeal which I assess at N250.00.”
The reasoning of the learned Justice of the Court of Appeal leading to the decision was set out in the judgments as follows:
“Although the learned trial Judge did not make an express findings on the issue, he must have found the balance of convenience tilted in favour of the plaintiff/respondent when he proceeded to make an order in his favour.
In considering the issue of the balance of convenience, the case of American Cyanamid (supra) referred by Chief G.O.K. Ajayi in his brief and submission in this court, Lord Diplock on page 510 as follows:
‘ ….. the governing principle is that the court should first consider whether if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at the trial. If, on the other hand, damages would not provide adequate remedy for the plaintiff in the event of his succeeding at the trial, the court should consider whether on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff’s undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure of recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason on this ground to refuse an interlocutory injunction.’
It would appear from the affidavit in support that the respondent was concerned about selling or otherwise alienating the shares in dispute. I therefore agree with Chief Ajayi, S.A.N, that since respondent did not make a case for interfering with the ownership rights of the appellant over the shares, the trial court, by making the order as per the terms of the prayers of the respondent has given him more than he was entitled to which was wrong in law. A court is not a charitable institution and a party must prove his case to be entitled to the judgment of the court.
In the case of the instant appeal, the trial court can only look at the whole case to decide whether to grant an injunction or not as Lord Denning said in Hubbard’s case (supra). The trial Judge cannot in this case look at the parties pleadings and proceed to find that the appellant was a trustee of the shares in question which is one of the important things to be determined at the trial.
This means, in effect, that the trial court confines himself in the circumstances of this appeal to the evidence disclosed in the affidavit of the partitas. Pleadings are not evidence on oath and should be disregarded in this consideration.”
The plaintiff was dissatisfied with the decision and has appealed to this court against it on 3 grounds. The three grounds have earlier on in this judgment been set out in full.
Briefs of argument were filed by the parties and at the oral hearing, learned counsel for the parties adopted their respective briefs. In addition, oral submissions were made by counsel in amplification of their briefs.
Chief F.R.A. Williams, S.A.N., learned counsel for the appellant for mulated two questions for determination in this appeal. These two questions are:
- whether the decision of the court below is one which a tribunal properly instructed as to the law applicable-to-the facts and circumstances of a case of this sort, can reasonably arrive at; and
- whether the court below acted’ correctly in deciding to set aside the decision of the High Court on the ground that the order of injunction granted by that court reversed the status quo and did not maintain it.
Learned counsel then submitted that the appeal is only on the question of scope of injunction. This, he contended, is because the Court of Appeal watered down the order of injunction granted by the High Court (Thomas, J.) and left voting rights out of the scope of injunction. He submitted that the court below was wrong to have done so. He contended that the learned Justices of the Court of Appeal (Kalgo, J.C.A. and Awogu, J.C.A.) were wrong to have held that the learned trial Judge should have confined himself to only the affidavit evidence and not look at the pleadings incoming to a decision on the application for interlocutory injunction. He contended that the High Court was justified in looking at the pleadings in an application of this sought. He then referred to Ladunni v. Kukoyi (1972) All N.L.R. 133 and Hubbard v. Vosper (1972) 2 Q.B. 96 relied on by Kalgo, J.C.A., for his decision to exclude consideration of the pleadings in coming to a decision on the application. He finally referred to paragraph 13 of the counter-affidavit where the respondent relied on the facts pleaded in the statement of defence and counter-claim.
He also submitted that it is not the law that an injunction can only be granted to “maintain” the status quo and not to “reverse” it.
It was his contention, that the proposition that an application for an interlocutory injunction must show that there is a serious question to be tried necessarily involves an examination and consideration of the pleadings. He further stressed that the need to examine the pleadings was emphasized in the dictum of Lord Diplock in American Cyanamid. v. Ethican Ltd. (1975) A.C. 396 that ‘the court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words that there is a serious question to be tried’.
Learned counsel then cited in support Obeya Memorial Specialist Hospital v. Attorney-General of the Federation & Ors. (1987) 3 N.W.L.R (Pt.60) 325 at 340; Ladunni v. Kukoyi (1972) 1 All N.L.R. (Pt.1) 133; Patel v. Smith (1989) 1 W.L.R. 853 and Manchester Corporation v. Connolly (1970) 1 Ch. 420 at 427D and Section 18(1) of the High Court of Lagos State. He then referred to the scope of injunction claimed by the plaintiff which is in respect of all the rights attached to the said shares. He then submitted that the claim to beneficial ownership of shares registered in the name of the defendant involves all the rights attaching to the shares specified more especially as plaintiff averred that he provided the money for the acquisition of the said shares. He then cited Kirby v. Wilkins (1929) 1 Ch. At 444 at p.454 where Romer, J., (as he then was) declared that “a shareholder holds shares as a bare trustee for a third person, he is no doubt obliged to exercise his voting power in the way that the cestui que truste desires.” He then submitted that the court below erred when Kalgo, J.C.A., said there was no evidence to justify making an order depriving the appellant of the right to exercise this ownership rights on the shares in dispute which rights he has exercised for ten years before the action “was filed” and also when Awogu, J.C.A., declared that “The rights need to be protected, and the appellant has been doing so prior to this action and should continue to do so. That is the status quo.”
He finally submitted that the Court of Appeal erred in setting aside the discretion exercised by Thomas, J., and urged the court to approve the guidelines laid down by Lord Diplock in Hadner Productions Ltd. v. Hamilton (1983) A.C. 191 at 220. The court below is not allowed to substitute its own discretion for that of Thomas, J., when there was no cause to interfere.
In reply, Chief G.O.K. Ajayi, S.A.N., repeated his objection to the grounds – ground 1(b) and ground 2 of the grounds of appeal before he submitted that the appellant’s brief dealt with issues not raised by the grounds of appeal. He contended that ground 1(a) did not specify the other basis upon which an order of interlocutory injunction could be granted or should have been granted in this case. He then proceeded to examine grounds 2 and 3 and then submitted that whether or not the Court of Appeal held that it was incorrect for the High Court to have looked at the pleadings was not an issue raised in any of the grounds of appeal. He also submitted that the plaintiff’s contention that the order of the Court of Appeal curtailed the order of injunction was not raised in the grounds of appeal. He contended that the arguments in the brief bore no relation to ground 2 of the grounds of appeal.
On the complaint of reversal of the status quo against the High Court by Court of Appeal, he submitted that there was no complaint against the determination of the Court of Appeal that what the High Court did was to reverse the status-quo. He contended that there was no ground of appeal to support appellant’s submission in the brief that the justices of the Court of Appeal overlooked one of the issues raised before the Lagos High Court. He then submitted that there was also no ground of appeal to support the challenge to the splitting of the disputed rights. He submitted that the Supreme Court had held in a number of cases that where points canvassed in the Brief of Argument are not supported by any grounds of appeal, the court will ignore that portion of the brief citing the case of Western Steel Works v. Iron & Steel Workers (1987) 1 NWLR (Pt.49) 284 at 304 per Oputa, J.S.C. He submitted that as ground 2 was not argued and developed in its con in the brief, it should be taken as abandoned.
Finally, learned counsel for the respondent submitted that the appeal must fail as the ground upon which the decision of the Court of Appeal was given remains unchallenged.
I have set out the submissions of counsel in detail so as to see whether the argument of counsel deals with the portion of the-decision complained of. It is a cardinal principle in adjudicating in appeal cases to consider the grounds of appeal in relation to the portion or part of the decision complained of. The part of the decision of the Court of Appeal complained of in the instant appeal as stated in the notice of appeal reads:
“The portion of the decision curtailing the scope of injunction granted by the High Court.”
The complaints in grounds 1, 2 and 3 of the grounds of appeal can only relate to that portion of the decision curtailing the scope of the injunction. They must not be examined in other lights. Although the grounds of appeal could have been drafted more elegantly and with greater precision and use of aggressive words, the grounds as drafted are not vague.
Ground 1 complains of an error of law. The nature’ of the error in law given is the reversal of the decision of the High Court and the particulars are that having regard to the circumstances of the case as disclosed in the pleadings and affidavit evidence the order of interlocutory injunction pending trial made by the High Court ought not to have been reversed. This ground, in my view, has not violated the conditions for validity laid down in Order 8 Rule 2(2) of the Supreme Court Rules; 1985.
The argument of counsel for the appellant that the Court of Appeal’s rejection of any consideration of the pleadings in spite of defendant’s affidavit evidence that he relies on the statement of defence in answer to plaintiff’s affidavit evidence of beneficial ownership of the shares led it to interfere erroneously and in justifiably with the order of interlocutory injunction made by the High Court, is a development and an elaboration of this ground, Particulars (a) of the ground taken by itself may rightly be regarded as hanging in the air but taken as the particulars of error complained of attacks the decision of the Court of Appeal for considering only the requirement to maintain the status quo when the power given to the court to grant injunction where it is ‘just and convenient’ involves a consideration of other basis within the con of ‘just and convenient’. The provisions of section 18(1) of the High Court Law, Cap 52 of the Laws of Lagos-State states that:
“The High Court may grant ………an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the court to be just or convenient so to do.”
gives strength to this argument. This is so having regard to the provision of sub-section (3) of section 18 which confines itself to only an application for an injunction to prevent any threatened or apprehended waste or trespass. This subsection reads:
“If, whether before or at or after the hearing of any civil cause or matter, all application is made for an injunction to prevent any threatened or apprehended waste or trespass, the injunction may be granted if the court thinks fit whether the person against whom the injunction is-sought is or is not in possession under any claim of title or otherwise, or (if out of possession) does or does not claim a right to do the act sought to be restrained under any colour of title and whether the estates claimed by both or by either of the parties are legal or equitable.”
If the ground had been vague and without the nature and particulars of the error, it would have been liable to be struck out and I would not have hesitated to strike it out as there are a series of judicial authorities in support of such course of action. See:
Ayinla v. Adigun (1986) 2 N.W.L.R. (Pt.30) 511
Anyaoke v. Adi (1986) 3 N.W.L.R. (Pt.31) 731
Atuyeye v. Ashamu (1987) 1 N.W.L.R. (Pt.49) 267
Anakwenze v. Aneke (1985) 1 N.W.L.R. (Pt.4) 771
Mba Nta v. Anigbo (1972) 5 S.C. 156 at 165
Okeke Amadi v. Okeke Okoli (1977) 7 S.C. 57 at 63 to 64
National Investment and Properties Co. Ltd. v. The Thompson Organization Ltd. & Ors. (1969) 1 All N.L.R. 138 at 142.
However, the grounds is valid and I shall consider the arguments and submissions on it. Learned counsel for the appellant has referred this court to the portion of the judgment where Kalgo, J.C.A., with whom Awogu, J.C.A., agreed said:-
“The trial Judge cannot, in this case, look at the parties pleadings and proceed to find that the appellant was a trustee of the shares in question which is one of the important things to be determined at the trial.
This means in effect, that the trial court must confine himself in the circumstances of this appeal, to the evidence disclosed in the affidavit of the parties. Pleadings are not evidence on oath and should be disregarded from consideration.”
An application for an interlocutory injunction must be based on a pending action and cannot be considered in total isolation from the pleadings in the writ of summons, statement of claim and statement of defence if filed or to be filed. However, the affidavit must, in giving the facts on which the application is based, not omit to refer to the pleadings if already filed or about to be filed. This has been done in the instant appeal. When the courts shuts its eyes to the pleadings referred to in the affidavit evidence, its ability to do justice in the application or to make an order that is just or convenient is curtailed as the compass of vision is-severely restricted. It was this restriction of the vision of the court that led it to hold that:
“On the whole, there is no evidence before the trial court in the affidavit in support of the application for interlocutory injunction to justify making an order depriving the appellant of the rights to exercise his ownership right on the shares in dispute, which rights he has exercised for ten years before the action was filed.”
If the learned Justice, had looked at not only the affidavit evidence but also the pleadings, it would have been abundantly clear that ownership of the shares is in dispute and that before the dispute arose, and that plaintiff claimed that all the ownership rights attaching to the shares were exercised by defendant on the direction of the plaintiff who claims to be the beneficial owner.
In any case, at the stage at which an order of interlocutory injunction is made, the rights of the parties are yet to be determined and there must be a serious question on this. The principles on which the injunction should be granted and which guides the courts are well set out in American Cyanamid v. Ethican Ltd. (supra) and Obeya Memorial Specialist Hospital v. Attorney-General of the Federation and others (supra); (1987) 3 N.W.L.R. (Pt.60) 325. There being no violation or breach of those principles, the learned Justices of the Court of Appeal were in error to have interfered with the order made by the learned trial Judge.
The plaintiff is sui juris and it is the law that in such cases the trustees of a trust vote as all the beneficiaries may direct. See Palmer’s Company Precedents 17th Edition page 499.
It is the law also that where a share holder holds shares as a bare trustee for a third person, he is obliged no doubt to exercise his voting power as the cestui que trust desires. See
Kirby v. Wilkins (1929) 2 Ch. At 444 and 454
Butt v. Kelson (1952) Ch. 197
The status-quo required to be preserved in the instant appeal is the ownership rights as claimed by the defendant (for a trespasser does not by the very act of trespass acquire possession). It is as claimed by the plaintiff status quo ante lite in before the dispute or cause of action arose. See:
Governor of Lagos State v. Ojukwu (1986) 1 N.W.L.R (Pt.18)
Page 621 at pp.640 – 645, per Oputa, J.S.C.
Thomas v. Park (1944) 2 All E.R. 477.
A decision to maintain the status quo is a discretionary matter and can only be upset if the discretion has been wrongly exercised or exercised on wrong principles. See
University of Lagos v. Aigoro (1985) 1 N.W.L.R. (Pt.1) 143
The proper role of a Court of Appeal where there is a proper exercise of discretion is not to interfere with the decision. To do so merely on the ground that the appellate court would have exercised the discretion differently is an assault on justice and not within the statutory powers of the appeal court. See:
Hadmor Productions Ltd. v. Hamilton (1983) 1 A.C. 191 at 220 per Lord Diplock,
Since the dispute or issue joined in this case is as to the ownership of the shares and the application of the plaintiff which was granted was for interlocutory injunction¢ restraining the defendant his servants or agents from exercising any right attaching to the said number of shares, the Court of Appeal was wrong in restricting the injunction to the rights the court has specified and discharging the injunction in respect of other rights including voting rights. The right to sell, the right to pledge, the right to mortgage and the right to alienate in any other ways which have been placed under the order are as much constituent parts of ownership rights as voting right. Kalgo, J.C.A., to justify the severance quoted paragraphs 3, 5 and 6 of plaintiff’s affidavit and commented.
“It is pertinent to observe that there are no averments in the affidavit in support complaining about the exercise of ownership rights on the shares by the appellant. In any view, having regard to the nature of the case, the issue of the exercise of ownership rights over the shares in question must be treated separately and distinctly from the possibility of selling or otherwise alienating the shares. It would appear from the affidavit in support that the respondent was only concerned about selling or otherwise alienating the shares in dispute.
I therefore agree with Chief Ajayi that since the respondent did not make any case for interfering with the ownership rights of the appellant over the shares, the trial court by making the order as per the terms of the prayers of the respondent’s motion has given him more than he was entitled to which was wrong in law. A court is not a charitable institution and a party must prove his case to be entitled to the judgment of the court: Ekpenyong v. Nyong (1975) 2 S.C. 1.”
These comments are not justified by the affidavit evidence or the pleadings.
The learned Justice, with the greatest respect, failed to adverts his mind sufficiently to the facts deposed to in the affidavit in support of and to the terms of the motion before the court. A proper appreciation of paragraphs 3, 4 and 5 would have led the learned Justice of the Court of Appeal to the opposite view or conclusion. If the learned Justice had not excluded the pleading from his consideration, he would not have fallen into the error highlighted above.
Ground 1 succeeds. The above consideration also disposes of ground 3. Ground 3 therefore also succeeds.
With regard to ground 2, I agree with Chief G.O.K. Ajayi, S.A.N. that it is not a sound argument that the reasons for the court’s rejection of the application for suspension of the order of interlocutory injunction pending the determination of the appeal to the Court of Appeal should have been followed and sued to dismiss the appeal. The respondent did not apply for interim injunction. He applied only for an order suspending the injunction ordered against him pending the determination of the appeal. The facts and consideration must differ widely from the facts and arguments in the appeal.
Ground 2 of the grounds of appeal therefore fails.
Grounds 1 and 3 having succeeded, the appeal succeeds. The decision of the Court of Appeal to vary the order made by the High Court is hereby set aside. The order made by the Court of Appeal is also hereby set aside and in its stead, the order of interlocutory injunction made by the High Court is hereby restored.
The appellant is entitled to costs in this appeal fixed at N500.00 in this court and N300.00 in the Court of Appeal.