West African Breweries Ltd Vs Savannah Ventures Ltd & Ors (2002)

LAWGLOBAL HUB Lead Judgment Report

E. O. AYOOLA, JSC 

In this appeal from the decision of the Court Appeal delivered on 25th February, 1997 the appellant is West African Breweries Ltd., the plaintiff in an action instituted in the Federal High Court against the respondents. The parties to this appeal [that is, the appellant and the respondents] are described in this judgment, respectively, as the plaintiff and the defendants, as they were described at the trial, for convenience.

The plaintiff’s action in the Federal High Court (“the trial court”) concerned, in the main, the sale of certain assets of the North Brewery Plc, [2nd defendant, (listed as 6th respondent in the title]. The plaintiff was at a time the holder of only 50% of the equity of the North Brewery, but the remaining 50% which was held by the Federal Government of Nigeria had since been acquired by the plaintiff. The United Bank for Africa Plc. (“United Bank”) [which was the 3rd defendant at the trial but is listed in the title, herein, as the 4th respondent], acting for itself and five other creditor banks of the North Brewery, appointed the 1st defendant, Hassan Abdulraham, (“the receiver”) (listed as the 2nd respondent), as receiver/manager of North Brewery. The receiver, pursuant to that appointment, took over the property and management of the North Brewery. He entered into an agreement to sell certain assets of the North Brewery to the 4th defendant, Savannah Ventures Ltd., (“Savannah Ventures”) (listed in the title, herein, as 1st respondent) an incorporated company of which the 5th defendant, Usman Al-Bashir, was managing director.

By an agreement dated 22nd of June 1992, [Exhibit F] the receiver agreed to sell to Savannah Ventures ‘the entire assets of the Company as described in the Schedule to the document, for a consideration of N15,500,000, payable by installments, the first of which was the sum of N5,000,000, said to be paid and acknowledged by the execution of the document, and the rest of which were payable in five monthly installments of N2,500,000 payable on or before the last day of July, 1992 and subsequently in the sum of N2,000,000 (Two Million Naira) payable on or before the last day of August, September, October and November, 1992’. It was provided in the agreement, that ‘the Purchaser’ (that is, Savannah Ventures) shall be responsible for the payment of the Company’s (that is, North Brewery’s) other secured creditors and other priority creditors namely: –

Banks

1. Continental Merchant Bank Nig. Ltd;
2. Nigeria Merchant Bank Plc:
3. NICON:
4. Nigerian Industrial Development Bank Ltd

Government Agencies

1. NEPA;
2. WRECA;
3. Customs & Excise;
4. Boards of Internal Revenue (Sale Tax);
5. Boards of Internal Revenue (PAYE);
6. NPF;
7. ITF;
8. CPF.’

By the same document it was agreed by the receiver and Savannah Ventures that the receivership of the Company shall continue until the final installment of the purchase price of N15,500,000 has been paid in full and that upon payment of the full purchase price the receiver and manager shall be discharged and the assets of North Brewery shall be handed over and transferred to Savannah Ventures.

The assets of the North Brewery agreed to be sold as enumerated in the schedule to the agreement consisted of five groups classified as A, B, C, D and E as follows:

A. ‘Property lying and situate at 19/21 Dantata Road, Bompai, Kano, covered by Certificate of Occupancy Number: LKN/IND/RC/82/152 dated 25th November, 1982 including all the land of approximately 4.3439 hectares, surrounded by a high-block fence work buildings, plant and machinery previously used by North Brewery Plc. for its business as brewers and bottlers of beverages including:’ 28 items of buildings and structure enumerated.

B. ‘Property lying and situate and otherwise known as No.104, Lafia Road/Lamido Crescent, Nassarawa, Kano, covered by Certificate of Occupancy No: LKN/RES/RC/66/73 dated 6th August, 1989…’:

C. ‘Property lying and situate at Dakata Layout, Kano…..measuring approximately 11.70 hectares together with the developments thereon (if any)’;

D. Industrial Lift Truck-Sambara 4304 (2 No); Toyota Lift Truck (1 No.), 12 forklifts as enumerated, 1 fire fighting Mercedes Benz and 5 Beetle V/W vehicles;

E. 8 generators as enumerated and of varying capacity.

There were three separate valuations of the assets comprised in group A. Two were, respectively, in 1986 and 1990, by Knight Frank & Rutley, a firm of valuers commissioned by North Brewery, the third, in 1991, was by William and Partners, a firm of Valuation Surveyors commissioned by the receiver.