Pastinor Investment Company Limited & Anor V. Bank Of The North & Anor (2014)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

ITA GEORGE MBABA, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the Rulings of Kano State High Court in Suit No. K/178/2000, delivered on 11/7/2003 and 16/7/03 by Hon. Justice Wada Omar Abubakar, terminating the Appellants’ claim for non-disclosure of cause of action and ejecting them from the premises they occupied, by means of ex-parte order, without putting them on notice.

Appellants were the Plaintiffs at the lower Court. By amended writ of summons and statement of claim, filed on 26/7/2000, Appellants had claimed against the Respondents (who were defendants at the Court below) as follows:

“(1) A declaration that the exercise of the power of sale by the 1st Defendant of the 2nd Plaintiff’s immovable properties situate and lying at Plot 204 Kawaji Quarters, Kano and covered by Certificate of Occupancy No. WLN/RES/RC/81/183, under the Legal Mortgage registered by the 1st Defendant on 13/12/91 in the sum of N1,320,000.00 only, involved collusion and constructive fraud and that these rendered the purported sale voidable and that the sale be set aside… in the interest of Justice .

(2) A declaration to the effect that the price of Three Million and Twenty Thousand Naira only (N3,020,000.00) which the 1st Defendant claimed to have sold 2nd Plaintiff’s property, worth N18 million, was too low, to be in itself evidence of fraud and that the purported sale ought be set aside in the interest of Justice and that the 2nd Defendant, was privy to the fraud, if actually he paid only N3,020,000.00 for the property, which he saw valued N18,000,000.00.

(3) A declaration the 1st Defendant, who postponed the sale of the said immovable property by public auction up to 22/2/95 on the basis of the proposals made to them by the Plaintiffs for payment rescheduling of the loan etc; ought to have, after waiting for 4 years and six months to have notified the Plaintiffs of their intention to exercise their powers under the Legal Mortgage and that failure on their part to do so vitiated the purported sale.

(4) An order of inquiry into Plaintiffs’ account No. C600006 – 01 with the 1st Defendant Bank to reconcile the Accounts, with a view to determining how a facility of N2 million only made on 6/4/92 could have risen to N15,385,386.91 by the end of January 2000, so that the Plaintiffs may be allowed to pay what shall be found due.

Alternatively: The Plaintiffs plead the doctrine of estoppel by conduct in that as far back as 1995, the Bank granted interest waivers and had asked for N2.8 million while the Plaintiffs offered N2.6 as full and final settlement of the indebtedness. So that the Plaintiffs can get back their title documents in respect of the property and that was why Plaintiffs offered to pay N3 million on the 27/10/99 as full and final payment.

(5) An order of injunction restraining the 1st and 2nd Defendants either by themselves, their servants, agents, employees, representatives, acting in any capacity whatsoever, from harassing, interfering with 2nd plaintiff’s possession, use and occupation of the said immovable property situate at Plot 204 Kawaji Quarters, Kano, until the final determination of the issues involved in this case.” (pages 45 – 46 of the Records)

A brief facts of the case at the lower Court, showed that 1st Appellant as customer of the 1st Respondent applied for a loan facility of N4.5 million from the 1st Respondent but was granted N1.2 million, guaranteed by the 2nd Appellant (who was the Chairman and Chief Executive officer of 1st Appellant) using his landed property lying and situate at 204 Kawaji Layout, Kano, under a Legal Mortgage. The 1st Appellant attracted additional facility of N800,000.00 from the 1st Respondent, raising the loan facility to N2 million. 1st Appellants’ investment in importation of agricultural produce (5000 metric tons of wheat) turned out to affect its business harshly, due to some Federal Government policies on importation and that affected the repayment schedule 1st Appellant had with the 1st Respondent. Appellant sought rescheduling of the debt but 1st Respondent refused. Appellant sought to sell the mortgaged property (to repay the loan) and found a buyer who offered N5.3 million for the property (valued at N9.1 million as at then), but the 1st Respondent, which was intimated, interfered and advertised the property. Appellants’ attempt to stop the 1st Respondent from selling the property by public auction, as per Suit No. K/120/95 yield an interim order of injunction against the 1st Respondent in 1995. But the said suit was struck out in 1996, and though it was relisted in 1997, it was again struck out in 1998, for want of jurisdiction.

Appellants thereafter dealt with the 1st Respondents’ solicitor directly, and offered to pay N3 million as full and final payment of the debt as per their letter dated 27/10/99. While doing this, Appellants said their erstwhile solicitor (Mr. Nelson Uzuegbu, who anchored the ill fated Suit No. K/120/95), unknown to Appellants, was making moves, purporting to act on the instruction of Appellants, to sell the property through a private treaty, and keeping in contact with the 1st Respondent’s solicitor – M. A. Bello and Co; that further to this, while 2nd Appellant was in Goron Dutse Prison, Kano (at the instance of the failed Banks Tribunal, Kano Zone) his said former solicitor, (Nelson Uzuegbu) drafted a letter for him in prison and asked him to sign, to the effect that he (2nd Appellant) had authorized the sale of his mortgaged property; he did not yield but rather reprimanded the lawyer for such unwholesome and fraudulent practice.

Meanwhile, Appellants’ letter of 27/10/99, offering to pay N3m to clear the debt was replied to on 17/1/2000, after the alleged sale of the property to 2nd Respondent by the private treaty, and to Appellants’ dismay, from the statement of account obtained in February 2000, the sum of three million and twenty thousand naira N3,020,000.00 was credited into 1st Appellant’s account on 1/01/2000 as proceed from the sale of the landed property; this prompted Appellants’ reasonable suspicion that Respondents and Appellants’ former solicitor colluded to construct the fraud to defraud them (Appellants). They therefore took out the suit. But the Respondents, without filing any defence, brought an application, dated 12/4/2002, praying the court to dismiss the Appellants’ claim for non-disclosure of a reasonable cause of action and to vacate the injunctive orders placed in the suit. The Court below granted Respondents’ application, struck out the suit and vacated the existing injunctive orders. But, surprisingly, after the grant of the Respondents’ application, the Respondents filed another motion (Ex-parte) on 15/7/03, using the same suit number of the concluded suit, and prayed the court to restrain Appellants from remaining in the landed property No. 204 Kawaji Quarters, Kano and the lower Court granted the said ex-parte application and consequently ejected Appellants from the premises.

This appeal is against the two rulings of the lower Court (i) striking out the Appellants’ suit for non-disclosure of reasonable cause of action on 11/7/03 and (ii) ejecting the Appellants based on ex-parte application on 16/7/03, respectively, (See pages 31 and 32 of the Records).

Appellant filed their Notice and grounds of Appeal, dated 5/11/03, as seen on pages 280 to 282 of the records, disclosing 2 grounds of appeal. They filed their brief of arguments on 7/4/06, raising 2 issues for determination: