New Resources Int’l Ltd. & Anor V. Ejike Oranusi, Esq. (2010)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

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

The Respondent, Ejike Oranusi Esq., who was the Petitioner at the Federal High Court, Lagos, together with his brother, late Chief Ikechukwu Oranusi, was the only Directors and Shareholders of New Resources International Limited, the 1st Appellant herein. The company’s issued share capital was 10,000,000 ordinary shares which were held thus, 4,000,000 by the Respondent and 6,000,000 by late Ikechukwu Oranusi who was the Managing Director of the company. Sometime in July, 2005, the 2nd Appellant approached the late Chief Ikechukwu Oranusi for the purchase of the entire shares and business of the 1st Appellant Company. After subsequent negotiations, the parties agreed for the sum of N3,800,000.00 (three million, eight hundred thousand naira only) as purchase price which the 2nd Appellant paid for the acquisition of all shares and business of the company.

One Mr. J. A. Agwuncha, said to be company secretary and Legal Adviser of the 1st Appellant prepared the agreement of the sale of the 1st Appellant. He however refused and/or neglected to perfect the transfer of the ownership of the company in favour of the 2nd Appellant after collecting the sum of N451,800.00 (four hundred and fifty one thousand, eight hundred naira) for that purpose.

After the death of Chief Ikechukwu Oranusi, the Respondent became aware of the sale of the 1st Appellant Company and all the shares therein by his late brother to the 2nd Appellant. Included in the sale were the four million shares of the Respondent and the Bureau De Change Licence of the 1st Appellant Company. Upon so becoming aware of the said transaction, the Respondent filed an action at the Federal High Court to set aside the sale. The agreement which was the vehicle for this transaction was exhibited to the petition and is undated. The Appellants on their part filed an answer and “cross petition” dated 6th February, 2007 and exhibited a copy of the agreement dated 1st August, 2005.

The court, on 29th June, 2007 considered the case and ruled in favour of the Respondent, granting all the prayers sought in the petition, hence this appeal.

The Appellants filed Notice of Appeal dated 6/8/07 on the same date containing four grounds of appeal out of which three issues have been formulated for the determination of this appeal. The Issues are:

“1. Whether the trial court was not wrong in failing to consider the Appellant’s cross-petition and determine same in its ruling appealed against. (Ground 1)

2. Whether the trial court was not wrong in holding that there was no valid sale of the 1st Appellant’s shares to the 2nd Appellant, and also holding that the transaction was a takeover of the 1st Appellant. (Ground 2 & 4)
3. Whether there was no valid sale of the shares of the late Ikechukwu Oranusi (the former majority shareholder) in the 1st Appellant. (Ground 3)

In the brief prepared by B. C. Igwilo Esq., counsel for the Respondent, Issues 2 & 3 of the Appellant are adopted while issue one is couched thus:

“Whether there was a valid cross-petition by the Appellants before the Honourable trial court and if the answer is yes, whether the Hon. Trial Judge failed to consider and determine the same in the ruling of 24th April, 2007.”

As has been rightly pointed out by the learned counsel for the Appellant in his reply brief, issue one as couched by the Respondent does not derive from any ground of appeal contained in the Notice of Appeal, particularly, the first arm of the issue. No ground of appeal has challenged the competence of the cross-petition and that issue does not arise from the Judgment of the lower court, In fact. The competence or otherwise of the cross-petition was never canvassed before the court below. Two issues arise here. The first is that the Respondent’s issue one, does not derive from any ground of appeal and there is no cross-appeal. Secondly, the issue of competency of the cross-petition is a new issue raised for the first time in this court.

It is trite that for an issue to be competent, it must derive or flow from a ground of appeal. Any issue that does not have its root from any ground of appeal is incompetent and ought to be struck out. See Ikweki v. Ebele (2005) 11 N.W.L.R. (pt.936) 397; I.F.A. International Ltd. v. L.M.B. Plc (2005) 9 N.W.L.R. (pt.930) 274; Abubakar v. Joseph (2008) 13 N.W.L.R. (pt.1104) 307.

Also, any argument based on an incompetent issue does not avail any party at all. It is of no use other than to be discountenanced and struck out. See Gege v. Nande (2006) 10 N.W.L.R. (pt.988) 256; Unity Bank Plc V. Bouari (2008) 7 N.W.L.R. (pt.1086) 372; Odedo V. INEC (2008) 17 N.W.L.R. (pt.1117).

Quite apart from that, the issue is new or fresh and by the practice in this court, the party raising a fresh issue must first seek and obtain the leave of court before such an issue can be considered by the court. Failure to seek and obtain leave as in the instant case renders such an issue incompetent and liable to be struck out.

So, from whichever angle the Respondent’s first issue is looked at, it is untenable and is hereby struck out.