Mrs F.M. Saraki & Anor. V. N.a.b. Kotoye (1992)

LawGlobal-Hub Lead Judgment Report

G. KARIBI-WHYTE, J.S.C

The main issue in this appeal is straightforward. It is whether the Court of Appeal was right in dismissing the preliminary objection raised by the plaintiffs against the application for stay of proceedings in the High Court brought by the defendant. Defendant having appealed against the rejection by the learned trial Judge of evidence sought to be tendered, and having also rejected an application for stay of proceedings, applied to the Court of Appeal seeking the same relief.

The arguments can only be better understood and appreciated after the facts have been clearly stated and the issues put in their proper perspective.

The Facts:

This appeal has its origin in the two consolidated suits between the parties. These are LD/845/87 and LD/938/87. The 1st plaintiff is not a party to the action in LD/938/87. The defendant is the same in both suits.The declarations sought in both suits are for the shares standing in the name of the defendant in the Societe Generale Bank (Nig) Ltd. to be held in trust for the plaintiffs or (alternatively) for the 2nd plaintiff.

An order was also sought directing an inquiry into the dividends which may have been received in respect of the shares so held by the defendant in trust for the plaintiff, and injunction restraining the defendant from dealing with the said shares. An order rectifying the register of shareholders was also sought.

The defendant in Suit No., LD/938/87 counterclaimed for a Declaration that the shares standing in his name should be so declared. He also sought injunction restraining the plaintiff from dealing with the said shares. In the statement of claim it was averred that plaintiffs and defendant are close friends. Defendant came into the Bank through 2nd plaintiff and held all the shares allotted to him on behalf of 2nd plaintiff.

In their statement of claim, plaintiffs pleaded to the effect that 2nd plaintiff rendered financial assistance to the defendant, when he averred, in paragraphs 4, 5 of the second Amended Statement of Claim as follows –

“4. The plaintiff came to know the defendant following his release from detention after the Military coup of 1966. The defendant was jobless and his legal practice was not yielding sufficient income for his needs and the plaintiff gave him financial and other assistance from time to time up to and including the period when the Bank was established to do banking business in Nigeria in 1976.

5. At all times material to the investment of funds in the bank, the defendant had no surplus earnings or loan facilities to enable him make any investment and the understanding between the parties was that the plaintiff alone would fund the investment. It was in the contemplation of both parties that the investment was to assist the plaintiff in his efforts to continue giving financial assistance to the defendant. The plaintiff also intended that, depending on the level of dividends he would donate a reasonable percentage of the shares to his close friends including the defendant and sell the remainder to other Nigerian shareholders.”

The defendant in answer to the above averments pleaded in his further amended statement of defence and counterclaim as follows –

“5. The defendant denies paragraphs 4 and 5 of the 2nd Amended Statement of claim and avers as follows:-

(i) The defendant who had, in the first Republic been successively, a private legal practitioner, and a Minister of Trade and Industry, came to meet the plaintiff after his release from detention in 1968 whilst the plaintiff was then struggling to build a private medical practice.

(ii) The defendant neither needed nor did he receive financial assistance from the plaintiff as the defendant, who had returned to his legal practice (on his release from detention in 1968) in the firm of Kotoye & Oluwa of which he was a Senior Partner, then owned a Duplex building which was yielding rent, two cars (a Mercedes Benz 220 S and a Peugeot 4(3) and resided in a four-bedroom house. The defendant had even during the period of his detention and thereafter been able to meet his financial commitment from his own resources.

(iii) The plaintiff was not in a position to provide financial assistance to the defendant because the plaintiff was still struggling to put together a private medical practice and was not even in a position to provide himself with an appropriate or comparative standard of living as he was even then only able to manage to live in a one-bedroom apartment with a wife, two children and an aunt-in-law and went about in a battered 403 car which he had purchased second-hand.”