P. O. P. Martins V. Nicannar Food Co. Ltd. & Anor (1988)

LawGlobal-Hub Lead Judgment Report

NNAMANI, J.S.C. 

On 13th January, 1988, the appeal to this Court in this Suit was argued. After hearing learned counsel, and having read all the papers, I allowed the appeal and granted a conditional stay of execution of the judgment of the Federal High Court dated 4th March, 1985 pending the determination of the appeal in the Court of Appeal. I indicated that I would give my reasons for this judgment today. I now give my reasons.

In Suit No. FHC/L/27/81, the Plaintiff/Respondent sued the 1st defendant/appellant/applicant and 4 others claiming the following reliefs:-

“(1) An order for the refund of the sum of N700,000.00 (Seven hundred thousand Naira) paid by the plaintiff to the 1st defendant by two separate cheques No. 0028199 of the 3rd October, 1977 and No. 0018218 of the 24th October, 1977 being the full purchase price of 223,000 bags of cement sold to the plaintiff by the 1st defendant. The cement was said to have been shipped by the 3rd Defendant in the “M.V. Eurosailor” owned by the 4th Defendant.

(2) A further order for the payment of interest on the said sum of N700,000 calculated on the current commercial rate of interest from the 24th day of October, 1977 to the date of the order of this Honourable Court.

(3) A declaration that the whole transaction between the Plaintiff and the 1st Defendant in relation to the supply of the said cement is a calculated fraud as between all the Defendants as a clever means of transferring the purchase money illegally out of Nigeria.

(4) A further declaration against the 2nd Defendant that in the transfer of the said money abroad they have ignored Central Bank of Nigeria regulations directions and guidelines and their action has greatly contributed to the illegal transfer of the said money to Western Germany.

(5) An order for the arrest and seizure of the vessel “M.V. Eurosailor” anytime it appears on Nigeria territorial waters.

In the course of the trial the 1st Plaintiff/Respondent felt obliged to withdraw her claims against the 3rd, 4th and 5th defendants “as it became clear that these defendants were fictitious persons” as per the 1st Respondent’s counsel’s brief of argument. After hearing evidence etc., Anyaegbunam, C.J. gave judgment in favour of the Plaintiff/Respondent against the 1st defendant/appellant. The case against the 2nd defendant, 2nd defendant/respondent herein, was dismissed.

The 1st Defendant/Appellant appealed to the Court of Appeal against this judgment on 5th March, 1986.An application to the Federal High Court for stay of execution of the judgment was refused. A similar application to the Court of Appeal also failed. In a ruling in which Uthman Mohammed and Kutigi, JJCA concurred, Ademola JCA. ruled quite summarily-

“reading through the affidavit of applicant, no special circumstances are disclosed in the affidavit as to why a stay should be granted. Application dismissed N50 costs each to the Respondents”

With leave of this Court, the appellant filed 2 grounds of appeal which I do not propose to set down. Suffice it to say that they complained of error of law in that the learned Justices of the Court of Appeal refused to grant stay of execution when the issue of jurisdiction of the trial Court had been raised on appeal and also when, in appellant’s view, recondite points of law triable on appeal are contained in the grounds of appeal to the Court of Appeal.

The appellant’s counsel identified 4 issues for determination in his brief of argument and I think I ought to set them down. These were as follows:-

“1. Whether a party who has shown that there is a substantial issue of law to be decided on appeal is entitled to a stay of Execution following the decision of this Honourable Court in Balogun v. Balogun (1969) 1 All NLR 349-351.

2. Whether an appellant (sic) Court should grant a stay of execution where it is shown that the trial Court had no jurisdiction, based on the recent decisions of this Honourable Court in the cases of Akinsanya v U.B.A. (1986)4 N.W.L.R. 273 Part 35 at page 412; Nisaralai Ent. Ltd. v. Arab Bank (1986) 4 N.W.L.R. 409 (Pt.36)
3. That the Defendant/Applicant is entitled to a stay of execution in order not to render his appeal nugatory if he wins on appeal.
4. That justice of this matter demands that the status quo be maintained.”

The principles governing the grant of Stay of Execution by this Court are very well settled and I shall just visit them briefly in dealing with this matter. First, the power of this Court to grant the relief of Stay of Execution of judgment has been given statutory effect in Section 24 of the Supreme Court Act, 1960. That section provides that-

“An appeal under this part shall not operate as a stay of execution, but the Supreme Court may order a Stay of execution either unconditionally or upon the performance of such conditions as may be imposed in accordance with rules of Court.”

This Part mentioned is on “Appeals in Civil Cases.” This Court has in recent years taken the view that it cannot entertain an application for stay of execution except there is a pending appeal from the Court of Appeal to this Court. In Abina v. Tika Tore Press (1968) 1 All N.L.R. 210, a case clearly decided before the creation of the Court of Appeal, this Court decided that an application for stay of execution hitherto refused by the High Court but directed later to the Supreme Court would be entertained, even where an appeal has not been formally entered, if it is shown that the party presenting the application is genuinely interested in prosecuting the appeal. In the spirit and intendment of the present constitutional provisions such applications, before filing an appeal, would, in my view be more properly taken in the High Court and Court of Appeal.

I think it is appropriate to start from Vaswani v. Savalakh (1972) 12 S.C. 77 which is still the locus classicus in this matter of Stay of Execution. There the words of Coker, J.S.C. which have stood the test of time, set down the applicable principles. At page 81 of the report the learned Justice said-

“When the order or judgment of a lower court is not manifestly illegal or wrong, it is right for a Court of Appeal to presume that the order or judgment appealed against is correct or rightly made until the contrary be proved or established and for this reason the Court of Appeal, and indeed any court, will not make practice of depriving a successful litigant of the fruits of his success unless under very special circumstances. (See in this connection the observations of Bowen, L.J. in The Annot Lyle (1886) II P.114 at 116) ………………………………………….

when it is stated that the circumstances or conditions for granting a stay should be special or strong we take it as involving a consideration of some collateral circumstances or and perhaps in some cases inherent matters which may, unless the order for stay is granted, destroy the subject-matter of the proceedings or foist upon the Court, especially the Court of Appeal, a situation of complete helplessness or render nugatory any order or orders of the Court of Appeal or paralyse, in one way or the other, the exercise by the litigant of his constitutional right to appeal, or generally provide a situation in which whatever happens to the case, and in particular even if the appellant succeeds in the Court of Appeal, there could be no return to the status quo.”

In his book Practice and Procedure of the Supreme Court, Court of Appeal and High Courts of NIGERIA First Edition, para. 44. 29, page 535, Dr. T. A. Aguda, noted a few other applicable principles elicited from the cases over the years. These include,

“(a) The chances of the applicant on appeal. If the chances are virtually nil, then a stay may be refused. Vaswani Trading Co. v. Savalakh and Co. (1972) 12 S.C.77; Wey v. Wey (1975) 1 S.C. 1; Olusesan Shogo v. Latifu Musa (1975) 1 N.M.L.R.133, W.S.C.A; Odufaye v. Fatoke (1975) 1 N.M.L.R.222.

(b) The nature of the subject matter in dispute whether maintaining the status quo until a final determination of the appeal in the case will meet the justice of the case Dr. T. o. Dada v. The University of Lagos and Ors. (1971) 1 U.I.L.R. 344; Utilgas Nigerian & Overseas Co. Ltd. v. Pan African Bank Ltd. (1974) 10S.c. 105.

(c) Whether if the appeal succeeds, the applicant will not be able to reap the benefit of the judgment on appeal. See Wilson v. Church (No.2) (1879) 2 Ch.D 454, 458.

(d) Where the judgment is in respect of money and costs whether there is a reasonable probability of recovering these back from the respondent if the appeal succeeds. Lawrence Ogobegu Ebegbuna v. Janet Omotunde Ebegbuna (1974) 3 W.S.C.A. 23.

(e) Poverty is not a special ground for granting a stay of execution except where the effect will be to deprive the appellant of the means of prosecuting his appeal. Nwajekwu Emefisi and Ors v. Michael Mbanugwo and Ors (1970-71) 1 E.C.S.L.R. 100”.

The court’s discretion to grant stay of execution must be exercised judiciously and it would be so exercised where it is shown that the appeal involves substantial points of law necessitating the parties and issues being in status quo until the legal issues are resolved.

Vaswani’s case (supra); Utilgas case (supra). It is clear that this Court would consider granting a stay of execution where as Coker, J .S.C. put it Vaswani’s case” the grounds of appeal filed do raise vital issues of law and there are substantial issues to be argued on them as they are”. In Balogun v. Balogun (1969) 1 All N.L.R. 349 at 351, this Court, again as per Coker, J.S.C. held that where grounds exist suggesting that a substantial issue of law is to be decided on appeal in an area in which the law is to some extent recondite, and where either side could have a decision in his favour, a stay ought to be granted. I am not unaware of the decision of this Court in which the scope of this case appears to have been restricted. This is Okafor v. Nnaife (1987) 4 N.W.L.R. Pt. 64 129. With all respect, I think this Court was swayed in the Nnaife case by the facts of that case which involved continuous acts of trespass. In a case in which a substantial point of law, such as on jurisdiction, does arise Balogun’s case would still have full force. These cases have been followed by myriads of cases in this Court and other courts. See U.N.O. v. P.A.B. (1974) 10 S.C. 105; Kigo v. Holman Bros Ltd. (1980) 5/7 S.C.; El-Khalil v. Oredein (1985) 3 N.W.L.R. Pt. 12 371 C.A.; Okafor v. Nnaife (1987) 4 N.W.L.R. Pt. 64 129: See also Monk v. Bartram (1891) 1 Q.B. 346; Becker v. Earl’s Court Ltd. (1911) 56 S. J. 206; The Ratata (1897) P. at 132; Cooper v. Cooper (1876) 2 Ch. D. 293; Emmerson v. Ind. Coope (1886) 56 L. J. Ch. 905; Youssoup off v. Metro Goldwyson Mayer Pictures (1934) 50 T.L.R. 581, 586. How do these principles affect the present appeal It is clear that the Court of Appeal after looking at the affidavits before it decided that there were no special circumstances justifying the grant of stay of execution. Going through the affidavit in support of the motion before the Court of Appeal, there is no direct reference to the issue of jurisdiction. In paragraphs 7,8 and 9, the Appellant herein deposed as follows:-

“7. That by refusing to grant the stay of execution, the lower Court has refused to preserve the res pending the determination of my appeal.

8. That the judgment creditor is making every effort to levy execution on my properties while my appeal is still pending.
9. That if I succeed on appeal, I will find it difficult, if not impossible, to recover any money and property from the judgment creditor”

Considered on the basis of this sort of information, it is not surprising that the Court of Appeal refused the Appellant’s application. The facts of this case do not make it easy for any Court to exercise its discretion to grant this equitable remedy in appellant’s favour. Whatever may be the appellant’s defence, and the issues are yet to be sorted out by the Court of Appeal, it is not in dispute that the Plaintiff/Respondent paid him personally N700,000 in 1977! It is not also in dispute that judgment was entered in favour of Plaintiff/Respondent almost ten years later in 1986! It sounds ridiculous to me too that the appellant could have been seeking stay of execution in the Court of Appeal on the ground that if his appeal succeeded, the Plaintiff/Respondent would be unable to repay him whatever it had recovered in execution. But it was the same Plaintiff/Respondent which in 1977 handed over N700,000 to him. Nothing was produced to show that the circumstances of the Plaintiff company had changed adversely in 1986 to make repayment impossible. Incidentally, it was the same contention which was made before Anyaegbunam, C. J. when an application was made to the Federal High Court for stay of execution. Nor if one considers the conduct of the appellant in this case, particularly the manner in which he evaded service of process and, later appearance in Court for over 3 years, can one talk of the justice of the case being on his side.

But that was not all that was before the Court of Appeal. In paragraph 3 of the Appellant’s affidavit before the Court of Appeal, the appellant deposed that –

“being dissatisfied with the judgment, I filed an appeal against the said judgment at the Court of Appeal on 5th March, 1986. A copy of the Notice of Appeal is attached as Exhibit ‘B’.”

Ground 1 in Exhibit B complained that”

“The learned trial Judge erred in law in assuming jurisdiction when the transaction between all the parties was an ordinary business transaction”.

Incidentally this issue of jurisdiction is the first ground of appeal to this Court. From the short judgment of the Court of Appeal, it does not appear that this ground of appeal was considered before that Court decided that there were no special circumstances to justify the grant of stay of execution. Yet if a notice of appeal does disclose substantial grounds of appeal to be argued on appeal, there is every justification for the exercise of the discretion to grant stay. The issue of jurisdiction has been raised by the appellant from the start of the proceedings. It was extensively canvassed before the learned trial Chief Judge, and in his judgment he held as follows:-

“Among the points raised in course of the address by learned counsel for the 2nd Defendant/Bank was the jurisdiction of this Court to entertain this action. This issue will always echo and reecho in this Court……………………………………………………..From the Statement of Claim, Statement of Defence and evidence adduced by both the Plaintiff/Company and the 1st Defendant, this is a claim arising out of an agreement relating to the carriage of goods in a ship. Vide Exhibits F. to F.6 British Shipping Laws, Vol. 1, Admiralty Practice, page 2; Halsbury’s Laws of England, 4th Edition, Vol. 1 paragraph 311. This will bring this action within the Admiralty Jurisdiction of this Court. See Section 7 paragraph 1(c)(ii)(d) of the Federal High Court Act, 1973, No. 13……………In the case of St. Elefteria (1957-58) P.179 at 186, it held that Section 1(1)(h) of the Administration of Justice Act, 1956, is wide enough to cover claims arising out of any agreement relating to carriage of goods in a ship, whether such claim was based on contract or tort.”

The question here is whether this was indeed an agreement of carriage of goods by sea or, as the appellant’s counsel has contended, a contract for supply of cement simpliciter. If it was the latter, then of course the Federal High Court had no jurisdiction. Although by the recent decision of this Court in Savannah Bank v. Pan Atlantic (1987) 1 N.W.L.R. Pt.49, 212, the Federal High Court and State High Courts now have concurrent jurisdiction in admiralty matters, in 1977 jurisdiction in admiralty matters lay clearly with the Federal High Court. If the learned Chief Judge was right, then his Court had jurisdiction.

This is certainly not an area in which it can be said that the law is well settled. Until the Savannah case (supra) ended controversy on the issue, the question whether the suit was to be taken in the Admiralty Court or not was a live one in those circumstances in which contracts involved carriage of the goods by sea. In the recent decision of this Court. Akinsanya v. U.B.A. Ltd. (1986) 4 N.W.L.R. Pt.35, 273 the facts were not ton dissimilar to the present suit. There the appellant had decided to import 10,000 metric tons of cement. He contracted with a Swiss Company, ASDECAMO, to supply him with the cement. The appellant approached the respondent to open a letter of credit in favour of ASDECAMO. The respondent later confirmed the letter of credit with a Swiss Bank. No cement was shipped to the Appellant, and the vessel named on the Bill of Lading – “Thomas Mann” was found not to be in existence. Both the High Court and the Court of Appeal dismissed the appellant’s claim holding that it was an admiralty matter and that the High Court of Lagos had no jurisdiction. This Court allowed the appeal, holding among other things, that “as the whole transaction is documentary credit and that the Bill of Lading is not itself the contract of carriage between the shipper and the charterer, but is merely evidence of its terms, the learned Justice is therefore in serious misconception of the law of documentary credit to have concluded that the contract is concerned with the contents, which would lead the Court to engage itself in bothering on how the cement was carried in a ship to Apapa or whether Thomas Mann was in fact Conference Line Vessel or not.”

In the instant suit, the contract on the face of it was for the supply of cement to the Plaintiff/Respondent by the appellant. As in the Akinsanya case, a letter of credit was opened in the 2nd Defendant Bank in favour of 3rd Defendant’s Managing Director, Hanslock. The cement was to be carried in a ship “M.V. Eurosailor.” The cement never arrived and no ship like M.V. Eurosailor was in existence. It was alleged that based on forged bill of lading, the money paid for the cement was transferred abroad by the 2nd Defendant/Respondent. See also Nasaralia v. Arab Bank (1986) 4 N.W.L.R. Pt. 36, 409. I also have to take note of two decisions of this Court in which the jurisdiction of the Federal High Court as it is affected by the Administration of Justice Act 1956 (on which the learned trial Chief Judge relied) was considered. See American International Insurance Company v. Ceekay Traders Ltd. (1981) 5 S.C.81 and Aluminium Manufacturing Company (Nigeria) Ltd v. Nigerian Ports Authority (1987) 1 N.W.L.R. Pt. 51 475 at 486. Do the facts of this case bring it within “any claim arising out of any agreement relating to the carriage of goods in a ship or to use or hire of a ship” (Section 1(1)(h) Administration of Justice Act).

I do not have to decide whether jurisdiction lay in this matter in 1977 with the Federal High Court or the High Court. It is sufficient if after looking at the facts mentioned above, I am satisfied that the ground of appeal does disclose a substantial arguable point of law. Ground I of the grounds of appeal, as I stated earlier has raised the issue of jurisdiction. Jurisdiction of a Court is a fundamental issue, for if the Federal High Court did not have it in 1977, its judgment as well as the judgment of the Court of Appeal, the subject of the appeal to this Court, would be a nullity. See Unuakhoni v. State (1985) 3 N.W.L.R. Pt.12 364 C.A. I am of the view therefore that the ground of appeal on jurisdiction raises a substantial arguable point of law which would justify holding the matter in status quo until the legal issues are resolved. Is this then a special circumstance justifying stay of execution I would answer in the affirmative. In defining special circumstance in Vaswani’s case (supra), Coker, J.S.C. referred to consideration of collateral circumstances or inherent matters. I think a substantial arguable ground of law on appeal is a collateral circumstance worthy of consideration in deciding whether to grant stay of execution or not. Although I was inclined to grant stay of execution on the sole ground discussed above, I was not unmindful of the facts I have also set down above which would have placed the equity in this matter completely on the side of the Plaintiff/Respondent. It was for this reason that I made a conditional order of stay of execution, ordering the Appellant within 7 days from 13th January, 1988, to deposit his title deeds to the property known as and situated at 20, Yesufu Street, Papa Ajao Mushin, Lagos with the Chief Registrar of the Court of Appeal, Lagos.

It was for the reasons set down above that I gave my said judgment on 13th January, 1988.

M. L. UWAIS, J.S.C.: This appeal was allowed on the 13th January, 1988 and our reasons for doing so were reserved until today. I now give my reasons. I have had the opportunity of reading in draft the reasons for judgment read by my learned brother Nnamani, J.S.C. I agree with the reasons and adopt them as mine. I wish to reiterate the conditional order I made on the 13th January, 1988 for the stay of execution granted to the appellant, which is, that-

“The ruling of the Court of Appeal is set-aside and the stay of execution is granted on condition that the title deed of the appellant on house No. 22 Yesufu Street. Papa-Ajao, Mushin Local Government Area, Lagos is deposited with the Chief Registrar of the Court of Appeal, Lagos within 7 days.”

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SC.230/1986