Savannah Bank Of Nigeria Ltd & Anor V. Ammel O. Ajilo & Anor (1989)

LawGlobal-Hub Lead Judgment Report

OBASEKI, J.S.C.

This appeal deals with the interpretation and application of some of the provisions of the Land Use Act 1978. Since the promulgation of the Act by the Military Administration of General Obasanjo in 1978, the vast majority of Nigerians have been unaware of its revolutionary effect.

They have been unaware that the Act swept away all the unlimited rights and interest they had in their lands and substituted them with very limited rights and rigid control of the use of their limited rights by the Military Governors and Local Governments.

This appeal is probably one of the earliest of contested matters that will bring the revolutionary effect of the Act to the deep and painful awareness of many. The experience of disbelief and the ultra sensitivity to the irritating thoughts of loss of freedom to use one’s property without exploitative government control exhibited by the appellants’ counsel notwithstanding the fact remains that we must all appreciate the true legal position and bring it to the knowledge of the beneficiaries of rights and interest in land in each State of the Nigerian Federation.

This will enable the steps necessary to bring the law in line with the wishes of Nigerians to be taken. Section 1 of the Act has made no secret of the intention and purpose of the law. It declared that land in each state of the Federation shall be vested in the Military Governor of each state to be held in trust for the use and common benefit of all Nigerians.

The principal question for determination in the appeal before this Court has been well formulated by the appellants. The formulation of the question for determination by the Respondents, though in line with the argument in the briefs filed by the appellants, is not expansive enough to accommodate a broad view of the question. I will therefore, in reference, adopt the question formulated by the appellants for the purpose of this judgment. It reads:

“Whether a person, who is deemed to be a holder of a right of occupancy pursuant to section 34 of the Land Use Act, requires, solely by virtue of that fact, the consent of the Military Governor before he can transfer, mortgage, or otherwise dispose of his interest in the right of occupancy. More specifically, do the provisions of section 22 of the Land Use Act apply to a person who is deemed to be the holder of a right of occupancy pursuant to section 34 of the Act solely by virtue of his being deemed such a holder.” (Italics mine)

Before embarking on an examination of this question, a brief narration of the course of this matter since the initiation of the proceedings in the High Court is desirable. Also, a brief resume of the facts as found by the two courts below and their judgments will be given to enable the complaints of the appellants to be appreciated.

The proceedings leading to this appeal were initiated in the High Court of Lagos State by the Respondents, Ammel O. Ajilo and Ammels Photo Industries Ltd. as plaintiffs claiming against the appellants as Defendants:

“1. A declaration that the 1st Defendant by itself, its servants or agents (including the 2nd Defendant) or acting in any other manner, howsoever, is not entitled to sell, auction, or deal in any other manner with, dispose of, any right, title or interest of the 1st plaintiff in the property situate, lying, and being at No.1 Oyekanmi Street (off Itire Road), Mushin, Lagos, in exercise or purported exercise of a power of sale under a Deed of Mortgage dated the 5th day of September, 1980 and registered as No. 52 at page 52 in volume 1807 of the Lagos State Land Registry, in the office at Lagos (which property is hereinafter called “The Mortgaged Property”) without the prior written consent of the Governor of Lagos State under section 22 of the Land Use Act, 1978, having been first sought and obtained and as no such consent has been sought and obtained.

2. A declaration that the purported mortgage or transfer of the said mortgaged property to the 1st Defendant by the 1st plaintiff is ineffective, null and void and as no power to mortgage the said mortgaged property can be exercised or exercisable by any of the parties thereto as the power to mortgage is subject to the written prior consent of the Governor of Lagos State under section 22 of the Land Use Act, 1978 and no consent has been sought or obtained by either the plaintiff or the 1st Defendant or at all.
3. A declaration that the Public Notice entitled “Auction Notice” dated 24th May, 1985 whereby the 2nd Defendant as agent of the 1st Defendant advertised that the mortgaged property shall be sold by public auction on Friday, 14th June, 1985 on the instruction of the 1st Defendant in exercise or purported exercise of the power of sale of the 1st Defendant under the mortgage deed aforesaid, is invalid, null, and void because no power of sale under that mortgage deed can be exercised or is exercisable on 14th June, 1985 without the prior written consent of the Governor of Lagos State under section 22 of the Land Use Act, 1978 and no such consent had been sought or obtained by the 1st Defendant or at all.
4. An order of perpetual injunction restraining the 1st Defendant by itself, its servants or agents (including the 2nd Defendant) or otherwise however, from auctioning, selling, disposing or otherwise dealing with any rights, title or interest of the 1st plaintiff in the mortgaged property in exercise or purported exercise of a power of sale under the said mortgage deed.”

Pleadings were filed and exchanged and the issues joined were listed for hearing and determination before Hotonu, J. At the hearing, no witnesses were called but two documents, the Deed of Legal Mortgage and the title deed were admitted by consent and marked Exhibits ‘A’ and ‘B’ respectively. Counsel then closed their clients’ cases and addressed the court.

At this juncture, it is necessary to refer to the pleadings to ascertain the issues joined. The statement of claim contains only 10 paragraphs and the statement of defence 5 paragraphs. As evidence was not heard in this matter, I think it necessary for the purpose of this judgment to set the pleadings (the statement of claim and the statement of defence) out in full. The statement of claim reads:

“1. The 1st plaintiff is the managing director of the 2nd plaintiff company;

2. The 2nd plaintiff is a company incorporated in Nigeria under the Companies Act, 1968 with its registered office at 43 Bamgbose Street, Lagos, Lagos State and is a customer of the 1st Defendant Bank.
3. The 1st Defendant is a Bank incorporated as a limited liability company with its registered office at 9/11 Catholic Mission Street, Lagos and having branches throughout Nigeria.
4. The 2nd Defendant is a licensed auctioneer and has been engaged as an auction agent of the 1st defendant to carry out the sale of the mortgaged property mentioned in paragraph 5 infra.
5. By a deed of Legal mortgage dated 5th day of September, 1980, and registered as No. 52 at page 52 in Volume 1807 of the Lagos State Land Registry, in the office at Lagos, the 1st plaintiff as surety mortgaged all his rights, title and interest in the property situate, lying and being at No.1 Oyekanmi Street (off Itire Road), Mushin, Lagos (hereinafter called “the Mortgaged Property”) to the 1st Defendant, the sums secured by that deed of mortgage in respect of Credit Facilities or Advances made by the 1st Defendant to the 2nd plaintiff.
6. The plaintiffs aver that in the Public Notice entitled “Auction Notice” dated 24th May, 1985, the 2nd Defendant as agent of the 1st Defendant! Bank advertised that the mortgaged property shall be sold by public auction on Friday, 14th June, 1985 by 2 p.m. on the instruction of the 1st Defendant in the exercise or purported exercise of a power of sale of the 1st Defendant under the said mortgage deed.
7. The plaintiffs further aver that by and under section 22 of the Land Use Act, 1978, the purported mortgage/transfer of the mortgaged property to the 1st Defendant by the 1st plaintiffs is ineffectual without prior written consent of the Governor of Lagos State, and at all material times no such consent has been sought and obtained by the 1st Defendant;
8. By and under section 22 of the Land Use Act, 1978, the statutory power of sale contained in the said mortgage deed is not exercisable without the prior written consent of the Governor of Lagos State, and at all material times no such consent has been sought or obtained by the Defendants or at all.
9. The plaintiffs aver that in breach of the requirements of section 22 of the Land Use Act, the 1st and 2nd Defendants are planning and are taking steps to sell, auction, assign or dispose of the rights, title and interest of the 1st plaintiff in the mortgaged property and would do so unless restrained by this Honourable Court.
10. The plaintiffs shall found on the following documents at the trial of this case namely:

(a) auction notice dated 24th May, 1985;