Prince (Dr.) B. A. Onafowokan & Ors. V. Wema Bank Plc. & Ors (2011)

LAWGLOBAL HUB Lead Judgment Report

MAHMUD MOHAMMED, J.S.C.

This appeal is against the decision of the Court of Appeal, Lagos Division in its judgment delivered on 25th March, 2004 wherein that Court set aside the decision of the Federal High Court Lagos, striking out suit No. FHC/L/CS/346/2001. The suit was instituted by a Writ of Summons and a Statement of Claim filed on 11th April, 2000 by the Respondents as Plaintiffs against the Appellants as Defendants claiming Declaratory and injunctive reliefs. On being served with the Writ of Summons and the Statement of Claim, the Defendants, without filing a statement of Defence, reacted by filing a Notice of Preliminary Objection to the competence of the action dated 1st July, 2000, contending that the trial Court lacked jurisdiction to adjudicate over the matter because the Plaintiffs had no locus standi to institute the action and urged the Court to strike out the action.

In its Ruling delivered on 9th February, 2001, the trial Court upheld the Preliminary Objection of the Defendants and struck out the action.

Dissatisfied with this Ruling, the Plaintiffs appealed against it to the Court of Appeal which after hearing the appeal, allowed it, set aside the Ruling of the trial Court and remitted the case to the trial Court for hearing the action on the merit by another Judge. The Defendants who were the Respondents at the Court of Appeal who lost in that Court, are now on appeal to this Court on a Notice of Appeal containing two grounds of appeal from which the following two issues were raised in the Appellants brief of argument.

(i) Whether the Court of Appeal was right when it allowed the appeal of the Respondent when it held that the 3rd Respondent (a Receiver appointed for just one property) did not need leave of Court to bring or defend any action or other legal proceedings in the name and on behalf of the Company under Section 393(3) of the Companies and Allied Matters Act, 1990 when the Respondents did not plead the material facts to enable them enlist in aid the provisions of the said Section 393(3) of the Companies and Allied Act, 1990 and when the said Section was interpreted in vacuo by the Court without relating it to the facts of the case.

(ii) Whether the Court of Appeal was right in holding that the preliminary objection taken at the Federal High Court appeared to be premature even though it was clear from the onset that none of the Respondents pleaded any fact which would have allowed the Receiver to sue without the leave of Court i.e that he was appointed Receiver for the whole or substantially the whole of the Company’s property under Section 393(3) and schedule 11 of the Companies and Allied Matters Act, 1990 or which could have made the Court to so infer.

In the 1st Respondent’s brief of argument, in addition to the Notice of Preliminary Objection raised on the alleged incompetence of ground 1 of the Appellants ground of appeal together with its three particulars and issue 1 arising from that ground, two issues were also identified from the two grounds of appeal. Although the issues are differently worded from those framed in the Appellant’s brief of argument, in substance the issues are the same. In what appears to be a spirit of sharing of responsibilities between the Respondents in dealing with the Appellants appeal, the 2nd and 3rd Respondents in their joint Respondents brief of argument, also decided to attack the second ground of appeal which was not included in the 1st Respondent’s Preliminary Objection, in their own Preliminary Objection to ground 2 of the Appellants ground of appeal and issue 2 arising from it as being incompetent. Subject to the ruling on their Preliminary Objection, the 2nd and 3rd Respondents also formulated two issues substantially the same as those in the Appellant’s brief earlier quoted in this judgment.

Starting with the Preliminary Objection of the 1st Respondent to ground 1 of the grounds of appeal, that ground at pages 288 – 289 of the record of appeal reads –

“(1.) The Court below erred in law when it allowed the appeal of the Plaintiffs/Respondents as regards the 3rd Plaintiff/Respondent’s non requirement of leave of the Court to institute or defend an action in the name of the Company (2nd Plaintiff/Respondent) having regard to Section 393(3) and Clause 5 of Schedule 11 of the Companies and Allied Matters Act CAP 59 Laws of the Federation of Nigeria 1990.

PARTICULARS

(a.) Before the Receiver can be (sic) enlist in aid the provisions of Section 393(3) and Clause 5 of Schedule 11 of the Companies and Allied Matters Act CAP 59 Laws of the Federation of Nigeria 1990 he must specifically plead and state in the Statement of Claim that he was appointed for the whole or substantially the whole of a Company’s property.

(b.) In the absence of such material pleading, the lower Court cannot infer that he was so appointed for the whole or substantially the whole of the Company’s property so as to make the requirement of leave of the High Court unnecessary.

(c.) Where it is thus not shown clearly that he was so appointed for the whole or substantially the whole of a Company’s property it would be wrong to enlist in aid the provisions of Section 393(3) and Clause 5 of Schedule 11 of the Companies and Allied Matters Act CAP 59 Laws of the Federation of Nigeria 1990 to circumvent the need for the leave of the Court.

In support of the objection, learned Counsel to the 1st Respondent argued that the Appellants did not raise the issue of a perceived inadequacy in the Respondents pleadings in relation to Section 393(3) and Clause 5 of Schedule 11 of the Companies and Allied Matters Act at the Court of trial and therefore the learned trial Judge made no pronouncement on this issue and that the attempt by the Appellants, as Respondents at the Court below, to raise the issue in their brief, was resisted and turned down by that Court when the issue was struck out.