Owena Bank (Nigeria) Plc Vs Nigerian Stock Exchange Limited (1997)

LAWGLOBAL HUB Lead Judgment Report

MOHAMMED, JSC. 

On the 6th day of May, 1997 this appeal was argued before this court. After reading the respective briefs of counsel for the appellant and the respondent, and listening to the oral arguments in elaboration of points made in those briefs, I allowed this appeal, set aside all the orders made by the Court of Appeal and restored the orders made by the High Court. I indicated that I would give my reasons later. I now, do so.

In this appeal Owena Bank of (Nigeria) PLC submitted that the Court of Appeal, Lagos Division, was in error to grant leave to Securities and Exchange Commission to appeal, as an interested party against a ruling delivered by Audu Kafarati, J. of Federal High Court. Lagos.

The history behind this dispute started when one Mr. I.L. Okoh of the Securities and Exchange Commission wrote to the Managing Director of Owena Bank., the appellant in this appeal, disclosing to him the decision reached by the Administrative Hearing Committee established to investigate the complaint lodged by Dominion Trust Limited against Owena Bank (Nigeria) PLC. The complaint of Dominion Trust Limited was that the appellant had declined to consent and honour the transfer of 23.7 Million shares of the bank divested by National Provident Fund (NPF) through the Owena Bank, despite the fact that the deal in respect of the shares was duly transacted on the floors of the Nigerian Stock Exchange and approved by the Securities and Exchange Commission, vide its letter dated 20th January, 1994.

The Administrative Hearing Committee at its sitting on 8th December, 1994, after hearing the parties and considering the facts, evidence and submissions before it, arrived at the following decisions:

“1. That Owena Bank (Nigeria) Plc being a Public Limited Company and by virtue of the provisions of Section 151 and Table A Part 1 of schedule 1 of the Companies and Allied Matters Decree, 1990, its shares are freely transferable. Consequently, the Board of Directors acting for and on behalf of the company has no discretion to refuse, decline or restrict transfer of its fully paid up shares.

2. That the shares of Owena Bank (Nigeria) Plc are registered by the Commission and quoted on the Nigerian Stock Exchange and accordingly, the consent of the bank is not required before effecting any transfer in respect of its shares traded on the floors of the Stock Exchange.

3. That the transfer of 29,458,127 shares of NPF were properly made to the underlisted investors in the proportion shown against their names:-

1. Alaaye Investment Co. Ltd. – 23,700,000
2. Dayke Nigeria Limited – 5,088,127
3. Ahmed Azeezat Co. Ltd. – 670,000

It was therefore not correct to state that it was Alaaye Investment that purchased the total of 29,458,127 shares.

4. That the percentage of the shares currently held by Alaaye Investment is 30%. This percentage has not exceeded the limit of shareholding a corporate body is allowed to acquire in a bank under CBN regulations.

5.The failure of Owena Bank (Nigeria) Plc to sign, seal and deliver the share certificates and other instruments of transfer lodged with it by City Securities Limited for a period of over seven (7) months amounted to wilful violation of the SEC Decree and rules and regulations made thereunder.

6. The Registrar’s conduct in waiting for seven (7) months for the bank’s prior consent before effecting transfer of the said shares was not in consonance with the spirit of the law and the SEC rules and regulations.

In view of the above, the Administrative Hearing Committee, in pursuance of the powers conferred on the Securities and Exchange Commission by Sections 6(b), (c), (h) and (i); 15(1) and (2)(b) and 24 of the SEC Decree No. 29 of 1988 and in the interest of the investing public as well as for the maintenance of the public confidence in the Nigerian Capital Market, ORDERS and DIRECTS as follows;

1. That the registration of securities of Owena Bank (Nigeria) Plc by Securities and Exchange Commission be and is hereby suspended with effect from the date of this decision.

This suspension shall remain in force until the Bank signs, seals and delivers the certificates relating to the transfers of the 29,458.127 shares divested by NPF to the transferees namely;

(a) Alaaye Investment Nig. Ltd. – 23,700.000

(b) Dayke Nig. Ltd. – 5,088,127

(c) Ahmed Azeez at Co. Ltd. – 670,000

2. It is further ordered that trading in Owena Bank (Nig.) Plc securities on the floors of The Nigerian Stock Exchange and its branches be and is hereby suspended forthwith until the Bank complies with the order herein made.
3. The Bank is hereby warned to desist from such further conducts that will frustrate the laws and operations of the Capital Market and undermine public and investors’ confidence in securities transactions in the market”.

After reading the above letter the appellant filed an application for an Order of Certiorari to quash the decision of Securities and Exchange Commission suspending the appellant from both having its securities registered and its stocks traded on the floors of the Nigerian Stock Exchange. The grounds upon which the reliefs were sought are that the proceedings before the Administrative Hearing Committee violated the principles of natural justice and mandatory provision for a fair hearing as enshrined in Section 33 of the Constitution of the Federal Republic of Nigeria, 1979. The panel was in breach of the Rules of Natural Justice and the proceedings violated the intendment of Section 24 of the Securities and Exchange Control Act Cap. 406 Laws of the Federation of Nigeria, 1990.

The learned Chief Judge of the Federal High Court, after hearing both parties, and in a well considered judgment, found that the proceedings and conviction based on it before the Administrative Hearing Committee was against natural justice. The learned Chief Judge concluded that the applicant (appellant in this appeal) was not given an opportunity to defend itself in the substantial parts of the complaint and held that the decision was void ab initio. Consequently the court quashed the said proceedings. An appeal has been lodged to the Court of Appeal against that judgment.

Meanwhile, the appellant commenced an action against the Nigerian Stock Exchange in the Federal High Court, Lagos and claimed for:

“DECLARATIONS

1. That the plaintiff is entitled to have its securities listed and registered with the Stock Exchange traded on the floor of the Nigerian Stock Exchange and its branches.
2. That the decision of the defendant not to allow trading of the plaintiff’s securities on the floor of the Stock Exchange is unjustified and illegal.

PERPETUAL INJUNCTIVE ORDERS

1. Directing the defendant by itself, its agents, servants and privies and otherwise howsoever to restore to the official list of the Exchange and to allow trading of the plaintiff’s securities on the floor of the Stock Exchange and its branches”.

The appellant simultaneously filed a motion ex parte and a motion on notice seeking against the Nigerian Stock Exchange the following injunctive reliefs:

“An interim order of injunction, pending the hearing and determination of the Motion on Notice for an interlocutory injunction, restraining the defendant by itself, its servants, agents or privies or otherwise howsoever from preventing the trading in the plaintiff’s securities on the floor of the Stock Exchange or its branches OR ALTERNATIVELY.

An interim order of injunction, pending the hearing and determination of the motion on notice for an interlocutory order of injunction, directing the defendant by itself, its servants, agents or privies or otherwise howsoever to restore to the official list of the Stock Exchange and allow trading in the plaintiff’s securities on the floor of the Stock Exchange and its branches”.

The Federal High Court per Abdu-Kafarati, J., on the 23rd of February, 1996 granted the first prayer only and ordered that the Nigerian Stock Exchange Limited, its servants, agents or privies be restrained from preventing the trading in the appellant’s securities on the floors of the Stock Exchange or its branches. The Securities and Exchange Commission, who is the respondent in this appeal, applied to the Court of Appeal for leave to appeal as an interested party against the Ex-parte Order made by Abdu-Kafarati, J. The Court of Appeal Coram Musdapher, Uwaifo and Pats-Acholonu, JJ.C.A. agreed that the Ex-parte Order made by Abdu-Kafarati, J. of Federal High Court affected the respondent in the performance of its functions and it was accordingly entitled to leave to appeal from that order as a person interested. Leave to appeal against the Ex-parte Order of Abdu-Kafarati, J. was therefore granted. Extension of time to appeal was granted although not sought for by the respondent. It is against this order of the Court of Appeal that the appellant filed this appeal on eight grounds of appeal. Three issues have been raised from those grounds. They are:

(a) Whether the applicant is a person having an interest within the meaning and intendment of Section 222(a) of the Constitution 1979 and entitled to appeal against the Ex-parte Order of the 23rd of February,1996.

(b) If the answer to (a) is in the affirmative whether the Court of Appeal was competent to grant the applicant’s application having regard to the reliefs sought for by the applicant.

(c) Whether the Court below was right in coming to a decision without first recording and considering the objections and opposition of the appellant”.

The learned counsel for the respondent on his part also raised the following three issues from the grounds for determination of the appeal.

(1) Whether extension of time to appeal was required or whether time to appeal starts to run from date of grant of leave to appeal as interested person?

(2) Whether on the materials before the Court of Appeal the respondent established that it is a person interested within the meaning of Section 222(a) of the 1979 Constitution as amended.

(3) Whether grounds 3(i), 3(ii), 3(v) and 3(vii) of the grounds of appeal contained in the notice of appeal and additional grounds of appeal are incompetent leave of the Supreme Court not having been first sought and obtained to raise fresh points of law not raised at the lower Court on appeal and/or due to non-compliance with the provisions of Order 8 Rule 2 of the Supreme Court Rules, 1985 as amended”.

Before considering the issues formulated I think it is pertinent to deal with issue 3 raised by the learned counsel for the respondent because it stands as a preliminary objection to the appeal. With respect. I have gone through all the grounds mentioned in issue 3 and, in my view, they are all grounds of law and the appellant does not require leave to file them. The second point in the same issue is of no consequence, because as the learned counsel for the appellant has indicated in the reply brief the issue has been raised in paragraphs 11 and 12 of the counter-affidavit filed by the appellant at the Court of Appeal. It is not correct therefore to say that it is a fresh point of law which was not raised at the court below. The 2 paragraphs read:

“11. That the order sought to be appealed from by the applicant herein does not directly affect any of its interests, rights or duties as spelt out by law.

12. That the appellant does not infact have any legally recognisable interest in this matter save for an interest to persecute the plaintiff herein”.

This clearly is the answer to the objection raised by the learned counsel for the respondent in issue 3 which he formulated for the determination of this appeal.

Starting with issue 1, learned counsel for the appellant, Mr. Emukpoeruo, submitted that for an applicant to be entitled to leave to appeal as a person having an interest in the matter he must show not only that he is a person interested but also that the Order made prejudicially affects his interests see D.D. Ikonne v. Commissioner of Police, Imo State & Anor. (1986) 3 NWLR (Pt. 36) 473 at 503. It has been held in that case by this Court that the interest recognisable by the courts must be a legally recognisable interest. Learned counsel further argued that the respondent is a creature of statute created by section 1 of the Securities and Exchange Commission Decree No. 29 of 1988 and accordingly all its powers, duties and functions are to be found in that enactment. But more importantly, it cannot legally exercise any powers, carry out any duty or execute any functions outside the parameters of its enabling statute. See A.G. v. Fulham Corporation (1921) 1 Ch. 440. To drive the point home, learned counsel submitted that the Court below, in granting the respondent time within which to seek leave to appeal, leave to appeal and extension of time to appeal from the Ex-parte Order of Kafarati, J. failed to inquire into whether the function which the respondent said it is executing and which it seeks leave to continue executing is in fact within its legal powers. I think learned counsel is quite right here. Counsel’s submission is in reference to Section 24(1) of Securities and Exchange Commission Decree No. 29 of 1988 which reads:

“24. -(1) The Commission may if in its opinion the public interest and the protection of investors so require and after notice and opportunity for hearing have been given to the affected person, suspend for a period not exceeding twelve months or with the approval of the Minister, revoke the registration of a security or any person registered under this decree if the commission finds that the issuer of such a security or a person registered by the commission has failed to comply with any provisions of this Decree or the rules and regulations made thereunder”.

It is crystal clear from the above provision that the respondent has power to suspend the registration of any person’s security for a period of twelve calendar months and no more, or to obtain the approval of the minister in order to revoke the registration of a person’s securities. The respondent in this appeal suspended the appellant on 9th December, 1994. Thus by the 23rd of February, 1996 when Abdu-Kafarati, J. vacated the order of suspension and restrained the respondent from preventing the trading in the appellant’s securities on the floor of Stock Exchange or its branches the suspension in fact had lapsed since 8th December, 1995.

There is no statutory provision empowering the respondent to extend the statutory limitation and no order had been obtained from the Minister revoking the registration of the appellant’s securities.

Thus, by the time the Court of Appeal granted the respondent leave to appeal the respondent had no legal function entrusted to it by law to perform in enforcing or claiming to be entitled to continue to enforce the suspension of the appellant. If the respondent has no legal function to perform it cannot be a person aggrieved because its interest, if it had any, had lapsed by the 8th of December, 1995.

Mr. Idigbe made unconvincing submissions in respect of the interest of the respondent in the suspension of the appellant from trading on the floor of Stock Exchange. Learned Counsel made futile endeavour to show that the interpretation placed on Section 24 of SEC ACT would lead to absurdity. He said that the interpretation does not take into consideration the mischief sought to be curtailed by the Section, i.e. maintaining market integrity and public confidence. Mr. Idigbe is obviously wrong in trying to find another interpretation to Section 24 of SEC ACT so that the respondent could find authority to interfere with the appellant’s rights to have its securities traded on the floor of Stock Exchange.

The rule of construction of statutes is that they should be construed according to the intent of the legislature which promulgated the Act. If the words of the statute are in themselves precise and unambiguous then no more can be necessary than to expound those words in the natural and ordinary meaning. Chief Obafemi Awolowo v. Alhaji Shehu Shagari & 2 Ors. (1979) All NLR 120. I must emphasise that from the provisions of Section 24 of SEC ACT the power of the respondent to suspend any person wishing to trade in securities on the floor of Stock Exchange is Limited to a period of 12 calendar months and no more. No other statutory interpretation could find extension beyond that period without the statute explicitly providing same.

In sum, the Court of Appeal was in error to grant extension of time to the respondent to seek leave to appeal, leave to appeal and extension of time to appeal because the respondent cannot continue to enforce or renew the suspension order against the appellant as at the 23rd of February, 1996. The respondent’s interest, if any, had lapsed by the 8th of December, 1995.

I will now touch the issue of incompetency of the respondent’s application before the Court of Appeal. There is no dispute over the fact that in the motion argued before the Court of Appeal the respondent did not apply for extension of time within which to appeal. Learned counsel for the appellant has submitted that without the relief for extension of time within which to appeal the respondent’s application before the Court of Appeal is incompetent and ought to have been struck out. He referred to Nalsa & Team Associates v. NNPC (1996) 3 NWLR (Pt. 439) 621. Learned Counsel further submitted that it was not competent for the court below to suo motu grant extension of time within which the respondent was to appeal when the relief was not sought for in the motion paper. This being a substantive relief and not a merely consequential order. See Akapo v. Hakeem Habeeb (1992) 6 NWLR (Pt.247) 266 at 296 – 297.

Mr. Emukpoeruo, quite helpfully, referred to a recent decision of this court to buttress his argument. This is the case of Funduk Engineering Ltd. v. James Mc Arthur & Ors. In Re Madaki (1996) 7 NWLR (Pt. 459) 153. The facts of that case are on all fours with the case in hand. In that case, Uwais, C.J.N. who wrote the lead judgment, agreed with the submission of counsel for the appellant that where the interested party is late in filing his application against the final decision of the High Court, he is bound to ask for an extension of time within which to appeal, for leave to appeal and in addition, pray for enlargement of time within which to appeal. This court’s decision in the case of Iroegbu v. Okwordu (1990) 6 NWLR (Pt. 159) 643 at Page 664 was referred to. In that case Obaseki, JSC. stated as follows:
“If the statutory period within which to exercise a right of appeal has expired the court cannot entertain an application for leave (to appeal) unless a prayer for extension of time to seek leave (to appeal) and prayer for extension of time to appeal are included”.

The cases of Tunji Bowaje v. Moses Adediwura (1976) 6 SC 143; Amudipe v. Arijodi (1978) 9 & 10 SC 27 and Owoniboys Technical Services Ltd. v. John Holt Ltd. (1991) 6 NWLR (Pt.198) 550 at 557 were referred to. There is really no need for a final decision to resolve conflict over the decision of courts over the issue. The Supreme Court had made several pronouncements over this issue and it has been emphasised in those decisions that once a party wishes to appeal from either a final or an interlocutory decision of the High Court whether he is the original party or an interested party, he must file his appeal within the time prescribed by Section 25 of the Court of Appeal Act. If the time within which he could file his appeal has expired he must apply for enlargement of time within which to seek leave to appeal; 2, leave to appeal and 3, extension of time within which to appeal. If any of the three prayers is not included in the application the application shall be incompetent and must be struck out.

Mr. Idigbe learned counsel for the respondent went off the track again on this issue where he said that time for filing the appeal in respect of an interested party begins to run after the party has obtained leave to appeal as an interested party. It is quite clear that the learned counsel did not advert his attention to the provision of Section 25(2)(a) of the Court of Appeal Act. A case which Mr. Idigbe referred to in support of his submission is not helpful to his argument at all.
The case is a decision of the Court of Appeal see Tunde Oshunrinde v. Olujemi Akande, Appeal No. CA/L/44/85 delivered on 21st May, 1985. In that case Nnaemeka-Agu, J.C.A. (as he then was) held as follows;
“It is now a settled point of law that an applicant who needs leave to appeal must, apart from the express provision of the Court of Appeal Rules, 1981 with which I shall deal anon, obtain his leave and file the Notice of appeal within the periods stipulated by Sections 25(2)(a) of the Court of Appeal Act, 1976, or Section 31(2)(a) of the Supreme Court Act, 1960, as the case may be. See on this Amudipe v. Arijodi (supra) at P. 33”.

The decision of the Court of Appeal in that case is therefore contrary to the argument put forward by Mr. Idigbe in this appeal. The prayer for extension of time to appeal is a vital application once a party is out of time to appeal. The Court of Appeal, in the case in hand, had not been asked to extend the time for the respondent to appeal when it gratuitously did so. The Court is in error to do so, because the Order is not a consequential order. It must be specifically prayed for before it could be granted. In the case of Odofin v. Agu (1992) 3 NWLR (Pt. 299) 350 this court when asked to accept that such an order is consequential rejected the argument. Nnaemeka-Agu, JSC cleared the air over such assumption in the following opinion:
“Now a consequential order is one giving effect to a judgment or order to which it is consequential. See Obayagbona v. Obazee (1972) 5 S.C. 247. It is directly traceable to or flowing from that other judgment or order duly prayed for and made. In this case, each of the substantive prayer, which I have discussed above is a substantive prayer, none can be consequential to the other, I therefore, do not agree with learned counsel for the respondents that the order for the extension of time to appeal was a consequential order within which to seek leave to appeal. Each of the three prayers must have to be prayed for and duly asked for before it can be granted”.

It is abundantly clear that the respondent was out of time when it decided to seek leave to appeal from the Ex-parte Order made by Kafarati, J. The ruling of the learned trial Judge was delivered on 23rd February, 1996. The respondent filed its application for extension of time to seek leave to appeal and leave to appeal on 13th March, 1996, four days after the time within which to appeal from an interlocutory decision had expired. Since the statutory period (Section 25(2)(a) of Court of Appeal Act) within which to file an appeal from an interlocutory decision had expired the respondent must apply for extension of time within which to appeal. The respondent had not done so and therefore its application was incompetent.
I do not have to consider the argument in issue 3 since this appeal has succeeded on the two issues I dealt with above. It is for the above reasons I announced that this appeal had succeeded and I allowed it. The respondent has no legally recognisable interest to be granted leave to appeal as an interested party from the ruling of Abdu-Kafarati, J. Secondly, the order of the Court of Appeal which granted the respondent extension of time within which to seek leave to appeal, leave to appeal and extension of time to appeal is hereby set aside. The motion filed by the respondent on 13th March, 1996 is hereby struck out. The appellant is entitled to the cost of this appeal which I assess at N1,000.00.

BELGORE, JSC.

On the 6th day of May, 1997 this Court allowed this appeal and reserved its ruling to today.
As I had the privilege of having read the reasons given by my learned brother, Mohammed, JSC., for the judgment, I have nothing to add than to say that the Court of Appeal was in error to have granted relief not sought nor ancillary to the prayers before it. I therefore adopt the reasons in the judgment of Mohammed, JSC. as mine for setting aside the orders of the Court of Appeal.

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Other Citation: (1997) LCN/2728(SC)