Liverpool And London Steamship Protection And Indemnity Association Ltd. V. M/t Tuma & Ors (2011)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

JOHN INYANG OKORO, J.C.A.(Delivering the Leading Judgment)

This is an appeal against the Ruling of the Federal High Court Lagos in Suit No. FHC/L/CS/1037/2006 delivered by I. N. Auta, J. (as he then was) on 30th March, 2007. By a writ of Summons and Statement of Claim dated 5th December, 2006, the Appellant, as Plaintiff instituted the action giving birth to this appeal against the Respondents as Defendants claiming the sum of US $517,808.56 (Five Hundred and Seventeen Thousand, Eight Hundred and Eight United States Dollars, Fifty Six Cents) being the total outstanding amount and interest owed by the Respondents on insurance cover provided by the Appellant for the vessel “M/T Tuma” on certain insurance policies,

Due to the failure of the 2nd and 3rd Respondents to satisfy the demands of the Appellant to liquidate the outstanding amounts, the Appellant terminated the insurance cover by issuing Notice of Termination dated 19th October, 2001. Subsequently, the Appellant issued a Writ of Summons claiming the abovementioned sums. In response to the Suit, the Respondents filed a Notice of Preliminary Objection dated 16th January, 2007 seeking a dismissal of the Suit filed by the Appellant on the grounds inter alia that the right of action was statute barred having not been brought within three years of the accrual of the cause of action as required by the Admiralty Jurisdiction Act, 1991.

On 30th March, 2007, the learned Trial Judge delivered Ruling on the Preliminary Objection upholding same and dismissed the Appellants’ action. Dissatisfied with the Ruling of the Court below, the Appellant filed a Notice of Appeal dated 15th June, 2007. The said Notice contains three Grounds of Appeal.

In keeping with the Rules of this Court, parties filed and exchanged briefs. They thereafter adopted and relied on these briefs on 17th May, 2011 when this appeal was heard.

In the brief settled by Olaotan Silva Esq. of P. O. Akinrele & Co., Counsel for the Appellant, two issues are distilled from the three grounds of appeal. The issues are:-

“1. Whether the Notice of preliminary objection filed by the Respondents is competent in the absence of a Statement of Defence.

2. Whether the Limitation Law of Lagos state is applicable to this case and if so, whether the Plaintiff’s right of action is statute barred”.

The Respondents, in their brief prepared by O. T. Opara (Mrs.), adopt the two issues formulated by the Appellants. I shall therefore determine this appeal based on the two issues submitted by the parties. Let me say here that the Appellant also filed a Reply brief which shall be considered at the appropriate time in the course of this Judgment.

On the first issue, the learned Senior Counsel, A. Akinrele (SAN) leading A. Nkadi Esq. and J. Onigbogi (Mrs.) for the Appellant submitted that the decision of the learned Trial Judge is contrary to the provisions of the Rules of the Federal High Court, particularly Order 25, Rules 1, 2 & 3 thereof.

It is his contention that demurrer proceedings have been abolished and substituted with procedure in lieu of demurrer which has been given judicial recognition, relying on the cases of Lasisi Fadare & Ors v. Attorney General of Oyo State (1982) ALL NLR 26; Shell Petroleum Development Company Ltd. v. Nwawka (2001) 10 N.W.L.R. (pt.720) 64; M.V. “Delos” v. Ocean Steamship Nig. Ltd. (2004) 17 N.W.L.R. (pt.901) 88. Learned Counsel explained and submitted further that in the procedure in lieu of demurrer, as envisaged in Order 25 of the Federal High Court Rules, 2000, the Defendant needs not admit the claim; he has to file a defence to the claim before raising his objection. Therefore, he opined, none observance of Order 25 in filing an application objecting to the Suit is not a mere technicality as held by the Court below, but renders the application incompetent and liable to be struck out.

Learned Senior Counsel concedes that an objection to the jurisdiction of a Court constitute an exception to the above rule under consideration since the law is that a challenge to the jurisdiction of the court can be brought at any time even if the only thing that has been filed is the Writ of Summons; citing Attorney General of Kwara State v Olawale ( 1993) 1 N.W.L.R. (pt.272) 670 and Nigeria Deposit Insurance Corporation v. Central Bank of Nigeria & Anor. (2002) 7 N.W.L.R. (pt.766) 272. However, according to learned Senior Counsel, where the objection to the court’s jurisdiction is based on such points of law as statutory limitation, estoppels, cause of action and abuse of process, the Defendant must first file a statement of defence before bringing the objection, otherwise, the application is incompetent relying on Order 26 Rule 6 of the Federal High Court (Civil Procedure) Rules 2000. He then urged this court to hold that the failure of the Respondents to file a statement of defence before bringing the objection is a fundamental defect, which renders the application incompetent and liable to be struck out and that the case of Famfa Oil Ltd. v. Ali Federation (2003) 18 N.W.L.R. (pt.852)453 relied upon by the learned Trial Judge is inapplicable here.

In her reply, the learned counsel for the Respondents, O. T. Opara (Mrs.) leading A. O. Bammefe (Miss) submitted that it is misleading to equate demurrer with preliminary objection to jurisdiction. That the issue of jurisdiction is not a matter for demurrer proceedings and that it is much more fundamental than that. Counsel opined that it does not follow that the Defendant/Applicant must plead first in order to raise the issue of jurisdiction: She cites and relies on the authorities of Attorney General of Kwara State v. Olawale (supra) and NDIC v. CBN (supra) which were cited by the Appellant’s Senior Counsel.

It was the further submission of learned counsel that the Notice of Preliminary Objection filed on 16/1/01 by the Respondents is not demurrer at all. Referring further to the cases of Elabanjo v. Dawodu (2006) 15 N.W.L.R. (pt.1001) 76; D. EN. R. Ltd. & 2 Ors. V. Trans International Bank Ltd & 2 Ors. (2008) 18 N.W.L.R. (pt.1119) 399 and John Ebosade Emator V The Nigerian Army (1999) 12 N.W.L.R. (pt.631) 362, learned counsel submitted that the argument that because the issue or point of law that an action is statute barred or caught up with limitation law cannot be brought by way of motion or preliminary objection is untenable and does not avail the Appellant. She relies further on the case of Chief Yakubu Sani v. okene Local Government Traditional council (2008)50 WRN 149. She urged the court to resolve this issue in favour of the Respondent.

In the Appellants’ Reply brief filed in answer to the Respondents, argument on this issue, it was contended that matters that are required by law to be specifically pleaded must be pleaded before they can be raised as a point of objection. Learned Counsel for the Appellant urged this court in paragraph 2.6 of the said reply brief to rely on and act on the dissenting Judgment of Onnoghen, JSC in Elabanjo v. Dawodu (supra).