Nigeria Deposit Insurance Corporation V. O’silvawax International Limited & Anor. (2006)

LawGlobal-Hub Lead Judgment Report

ADEKEYE, J.C.A.

This is an appeal against the ruling of the Federal High Court, Enugu Division delivered on the 4th of May, 2001. The brief facts of the case are that the 2nd respondent Sylvanus Ifediegwu is the Managing Director of the 1st respondent O’Silvawax International Limited.

The 2nd respondent as a customer of the Co-operative and Commerce Bank (Nigeria) Plc. Niger Bridge Head Branch maintained a current account through which a loan of N1,800,000 (One million eight hundred thousand Naira) was approved for him on the 18th of May 1993. As collateral for the loan, the 2nd respondent deposited the customary right of occupancy in respect of his building at Odekpo.

The deed of mortgage executed for the building could not be registered as the 2nd respondent failed to obtain the consent of the chairman of the Ogbaru Local Government in respect of his building and also omitted to submit his tax clearance certificate. The 2nd respondent failed to refund his loan and as at the 24th of May 1994, the loan together with the interest stood at N2,241,834.41 (Two million, two hundred and forty-one thousand eight hundred and thirty-four Naira, forty-one kobo). Co-operative and Commerce Bank Plc. became distressed which caused the bank to involve itself in a drive to recover all the outstanding loans granted to its customers.

During the process, the officials of the bank took three cars the property of the 2nd respondent in distress in view of his outstanding loan, a Peugeot 505, a Mercedes Benz car and a Pathfinder Jeep. The 2nd respondent brought an action under the Fundamental Rights Enforcement Procedure Rules on the 8th of November, 1996. In granting the motion ex-parte for leave, the Federal High Court ordered the release of the Respondent cars. The bank filed a notice of preliminary objection on the 20th of November, 1996 on the ground that the court lacked jurisdiction to entertain the application, it also opposed the substantive motion on notice by filing a counter-affidavit. The Co-operative and Commerce Bank went into liquidation before the preliminary objection was heard, and the order for its winding up was made on 12/3/98. The name of Co-operative and Commerce Bank was struck out in the Suit on 26/4/99. The Nigeria Deposit Insurance Corporation thereupon became the applicant in the motion for preliminary objection challenging the jurisdiction of the Federal High Court in the application brought pursuant to the Fundamental Rights Enforcement Procedure Rules.

The court heard the parties on the objection on the 8th of May, 2001.

In his considered ruling delivered on the 4th of May, 2001, the learned Judge over-ruled the said preliminary objection and held that the court has abundant jurisdiction to hear and determine the case on merit.

Being aggrieved by the ruling, the Nigeria Deposit Insurance Corporation filed its notice of appeal to this court on the 18th of May, 2001. This court also granted the appellant’s application for departure from the rules and ordered that the bundle of documents compiled and marked exh. A by the appellant be used as the record of appeal. Parties thereafter filed and exchanged briefs. When this appeal was heard on the 30th of November, 2005, the appellant adopted and relied on the appellant’s brief filed 14/6/2005. The respondent adopted and relied on the respondents’ amended brief filed on 27/5/2005.

In the appellant’s brief, four issues were distilled for the determination of this court as follows:

“(a) Whether the Federal High court has jurisdiction to hear and determine this suit in view of the fact that it was filed sixteen months after the happening of the event contrary to Order 1 rule 3 of the Fundamental Rights Enforcement Procedure Rules, Cap. 62 Laws of the Federation of Nigeria, 1990.

(b) Whether the Federal High court has Jurisdiction to hear and determine this suit, which is a dispute between an individual customer and his bank in respect of transactions between individual customer and the bank.

(c) Whether the Federal High Court was right in law when he failed to rule on issues, which were properly raised before it.

(d) Whether a dispute arising from a simple contract between an individual customer and his bank can be upgraded to a Fundamental Rights Enforcement Procedure Action.”

The respondents in their brief adopted the four issues formulated in the appellant’s brief as their own. The respondents incorporated in their brief, a preliminary issue that this appeal CA/E/126/2001 is incompetent, as it is connected with the same issue raised in suit No. CA/E/109M/97, which this same Court of Appeal determined on 29/3/99 and made the order that the appeal sought to be facilitated by CCB (Nig.) Plc. is incompetent. Cooperative and Commerce Bank Plc. was then dismissed as a dead person and as such cannot maintain any suit in court. The Federal High Court made an order winding up CCB (Nig.) Plc. on 12/3/98, and with that order, it has seized to have legal personality and thus incapable of maintaining a suit or prosecuting an appeal. Any order made against a non-existing party is ipso facto null and void. It is against this null order in FHC/EN/M129/96, that the appellant is appealing. The appeal is consequently incompetent.