OBANDE FESTUS OGBUINYA JCA
ABUBAKAR SADIQ UMAR JCA
MUHAMMAD IBRAHIM SIRAJO JCA
APPELLANTS
RESPONDENTS
APPEAL, BANKING LAW, COMPANY LAW, CONSTITUTIONAL LAW, CONTRACT, EVIDENCE, JUDGMENT, PRACTICE AND PROCEDURE
The 1st Appellant is a company registered under the Nigerian law and does the business of manufacturing assorted brushes while the 2nd Appellant is its Managing Director and alter ego. The Appellants and Respondents were over the years in customer-banker relationship. Appellants applied for a loan facility of N89.5M from the 1st Respondent for purchase of plant and machinery for their business and the 1st Respondent approved the loan of Eighty-Nine Million, Five Hundred Thousand Naira (N89,500,000) for the Appellants.
The said sum was applied by the 1st Respondent for the importation of the said items of plant and machinery on behalf of the Appellants. However, on the arrival of the said items of plant and machinery, the 1st Respondent took possession and seized them to date. The Appellants decided to approach the Court for redress.
While the matter was pending in Court, the 1st Respondent appealed to the Appellants for an out of Court settlement wherein 1st Appellant would be granted a bigger facility via the Central Bank of Nigeria Intervention Fund to Manufacturing Industries. Pursuant to that, the 1st Appellant withdrew the matter that was pending in Court. On the advice of the 1st Respondent, the Appellants applied to the 1st Respondent, through the 2nd Respondent (then Spring Bank) for the loan of N500,000,000 (Five Hundred Million Naira) to refinance the earlier loan and expand their business operation. The said loan was granted and accessed by the Spring Bank on the condition of disbursement to the Appellants within 48 hours. From the said sum, One Hundred and Nine Million (NI09,000,000) was repaid in liquidation of the earlier outstanding loan, and Five Million Naira (N5,000,000) as management charges – leaving the balance of Three Hundred And Eight-Five Million Naira (N385,000,000), which should be passed to the Appellants. But to date, the said money has not been released to the Appellants, hence their recourse to the Federal High Court again.
The Appellants sought for an Order of Perpetual Injunction mandating the Defendants jointly and severally to release to the Plaintiffs all items of plant and machinery listed on the document marked EXHIBIT 12 for immediate installation and use and also for an Order of Perpetual injunction mandating the defendants to disburse to the 1st Plaintiff loan sum of N385 Million granted by the Central Bank of Nigeria from the intervention fund for re-financing and restructuring of Banks’ loan to the Manufacturing sector.
The lower Court, in a judgment delivered on 25/01/2016 by M.B. Idris J. (as he then was), dismissed the Appellants claim on the grounds that they failed to prove that the 1st Appellant is an incorporated entity imbued with legal personality and that the 2nd Appellant is the Managing Director of the 1st Appellant. In similar vein, the 1st Respondent’s Counter-Claim was struck out on the ground that the 1st Appellant having not been proved to be an incorporated entity, cannot be sued. The 1st Respondent also being aggrieved with the decision of the lower Court striking out her counter claim Cross-Appealed.
Appeal dismissed
Ø Whether the lower Court was right in raising the issue of legal personality of the 1st Appellant suo motu on the basis of general traverse and proceeding to determine same against the Appellants without inviting parties to address it?
Ø Whether the lower Court was right in dismissing the Appellants’ suit in limine without considering the evidence led before it by the parties?
Ø Whether or not the Learned Trial Judge was right when the struck out the Cross-Appellant’s (Counter Claim at the lower Court) Counter-Claim against the 1st & 2nd Cross Respondents (Defendants to Counter-Claim at the lower Court), on the ground that since the 1st & 2nd Cross-Respondents despite a challenge in the pleadings of the 3rd Respondent failed to prove the due incorporation of the 2nd (sic) Cross-Respondent and the appointment of the 2nd Cross-respondent as her Managing Director, they could neither sue or be sued?
Ø Whether or not this is an appropriate occasion for this Honourable Court to invoke its powers under Section 15 of the Court of Appeal Act by deciding the Cross-Appellant’s Counter-Claim in respect of which trial was concluded before the lower Court and evidence of which is already in the Record before the Court?
Neither the 1st nor the 2nd Respondents filed any Brief of Argument in opposition to the Appellants’ Brief, notwithstanding that the Appellant’s Brief of Argument was served on them. It therefore follows that the appeal was not contested by the Respondents. The effect is that the Respondents are deemed to have admitted the truth of all the facts and submissions contained in the Appellants’ Brief, in so far as they are borne out of the Record of Appeal. However, failure by the Respondents to file Brief of Argument does not automatically entitle the Appellants to judgment. It is not a smooth sailing for the Appellants because they can succeed only on the strength of their own Brief or case. This is so because this Court still has a duty to consider the issues raised by the Appellants on the merits in the light of the facts disclosed in the Record of Appeal. See Cameroon Airlines vs. Otutuizu (2011) LPELR-827 (SC); Ogbu & Anor vs. The State (2007) LPELR-2289 (SC); Ogbaji & Ors vs. Ode & Ors (2021) LPELR-52689 (CA). Therefore, failure of a Respondent to file Respondent’s Brief is immaterial and of no moment. The only consequence of such failure is that the Respondent will be deemed to have admitted the truth of what is stated in the Brief and also deemed to have adopted the issues formulated by the Appellant for the determination of the appeal; Echere & Ors vs. Ezirike & Ors (2006) LPELR-1000 (SC). I shall therefore proceed to consider the merits of the appeal on the basis of the Appellants’ Brief. – Per M. I. Sirajo, JCA
…the traverse was a general traverse affecting the entire Statement of Claim. The law has been that a general traverse is no traverse at all. In the case of Bamgbegbin & Ors vs. Oriare & Ors (2009) LPELR-733 (SC), Niki Tobi, JSC, said of general traverse, as follows:
“I entirely agree with my brother that paragraph 3, a general traverse, cannot in our law of pleadings destroy the averment in paragraph 28 of the Statement of Claim. it is the requirement of the law that a traverse must be concise and specific. It must deny the Statement of Claim in its specific detail and not just a rigmarole of or a dancing around the averment. Where a traverse, as in paragraph 3, is general, generic and omnibus, a Plaintiff is handicapped in a Reply to the Statement of Defence. That is possibly one reason why the law requires a traverse to be specific and not general.”
The Courts have also held that general traverse is evasive and may be treated as placing no burden of proof on the Plaintiff unless other paragraphs in the Statement of Defence contain a denial of the Plaintiff’s averment frontally and categorically. See Gbadamosi vs. Dairo (2007) LPELR-1315 (SC).
However, other judicial authorities are of the view that the effect of general traverse is to put the Plaintiff to strict proof of the allegation in the paragraphs that are generally denied. In the case of Dairo vs. The Registered Trustees of the Anglican Diocese of Lagos (2017) LPELR-42573 (SC), Nweze, JSC, had this to say:
“It is acknowledged that the implication of a general traverse had generated so much confusion in juristic thought due to the conflicting pronouncements of our Courts. However, it is now, tolerably, clear that the denial of a particular paragraph in a Statement of Defence, by means of the general traverse, had the same effect as a specific denial of it. Its effect, solely, is to put the plaintiff to strict proof of the allegation in that Paragraph, ACE Jimona Ltd v. NECC Ltd (1966) 1 All NLR 122, 124; Attah and Anor v. Nnacho and Ors (1965) NMLR 28. It has indeed been recognized as convenient and permissible. Its effect is that it casts on the plaintiff the burden of proving the obligation denied.
Umesie v. Onuaguluchi (1995) 12 SCNJ 120. As shown above, in the opening paragraph of the Statement of Defence, the first defendant employed the mode of pleading known as general traverse. In the words of Mohammed JSC in Ugochukwu v. Unipetrol (Nig) Plc (2002) LPELR-3321 (SC) 7, a general traverse in the sense of a general denial is effective to cast on the plaintiff the burden of proving the allegations denied.
The Supreme Court took the same position in the recent case of Ostankino Shipping Company Ltd vs. The Owners of MT Bata 1 & Ors (2021) LPELR-58308 (SC). In that case, the Appellant, as Plaintiff, averred in its Statement of Claim as follows:
In responding to the foregoing paragraph, the Respondents, in paragraphs 1 and 2 of their Amended Statement of Defence and Counter-Claim, averred thus:
In resolving the issue as to the effect of the general traverse contained in paragraphs 1 and 2 of the Respondents’ Statement of Defence, the Supreme Court, per Muhammad, JSC, held:
“It is reasonably settled that a defendants resort to a general traverse in the statement of defence in a manner that casts the burden of proving a denied averment on the plaintiff is a convenient and permissible procedure in defining the case on the defendants which parties are to proceed to trial. Doing so constitutes specific traverse of the facts averred to by the plaintiff. By asking the appellant to prove the fact of its incorporation, the respondents who are in no position of knowing the fact of appellant’s incorporation have effectively traversed appellant’s assertion of being a corporate body. See UMESIE V. ONUAGULUCHI (1995) LPELR – 3368 (SC), MANDILAS & KARABERIS LTD V. LAMIDI APENA (1969) LPELR 25559 (SC), AKINTOLA & ANOR V. SOLANO (1986) LPELR – 360 (SC) and DAIRO & ORS V. REGISTERED TRUSTEES OF THE ANGLICAN DIOCESE (2017) LPELR -42573 (SC).”
It follows that the authorities cited above that the current state of the law is that general traverse puts the onus of proving the facts denied on the Plaintiff. – Per M. I. Sirajo, JCA
While the law donates to the trial Courts and the Appellate Courts the competence to raise fresh point on their own (suo motu) for the purpose of serving the interest or course of justice, it is incumbent on any Court that raises a fresh point or issue to invite parties, particularly the party that may be adversely affected by the fresh point raised by the Court, to address it on such a point before deciding the case on the basis of the fresh issue raised by it. This approach will be in accord with the constitutional safeguard for fair hearing, as it will afford the parties a hearing on the issue before its determination by the Court. – Per M. I. Sirajo, JCA
The issue of the legal capacity of the Appellants was resolved and rested by the evidence of Mr. Kamoru Adeyemi, who testified on behalf of the 2nd Respondent. It was therefore not a life issue before the lower Court. Not only that, learned counsel for the 2nd Respondent did not, in his final written address before the lower Court, raise that issue. It was the Court that raised the issue suo motu, and having so raised, the law expects the Court to afford the parties a hearing before basing its decision on the issue raised by it. This position of the law is trite. See Shitta-Bey vs. Federal Public Service Commission (1981) 1 S.C. 40 @ 59; Olusanya vs Olusanya (1983) 1 SCNLR (Pt.136) 136; Eholor vs. Osayande (1992) LPELR-142 (SC); University of Calabar vs Essien (1996) LPELR-188 (SC); Ifabiyi vs. Adeniyi (2000) 5 SC 31 @ 42; Agbeje & Ors vs. Ajibola & Ors (2002) LPELR-237 (SC); The State vs. Oladimeji (2003) LPELR-3225 (SC); Mojekwu vs. Iwuchukwu (2004) LPELR-1903 (SC); Kraus Thompson Organisation vs. University of Calabar (2004) LPELR-1715 (SC); Bhojsons Plc vs. Daniel-Kalio (2006) LPELR-777 (SC); Shasi vs. Smith (2009) LPELR-3039 (SC); Leaders & Company Ltd vs. Bamaiyi (2010) LPELR-1771 (SC); Victino Fixed Odds Ltd vs Ojo (2010) LPELR-3462 (SC); Uwazuruonye vs. The Governor of Imo State (2012) LPELR-20604 (SC); Jev vs Iyortyom & Ors (2014) 23000 (SC); Olaolu vs F.R.N. (2015) LPELR-24778 (SC); Ominiyi vs. Alabi (2015) LPELR-24399 (SC); Odedo vs. PDP & Ors (2015) LPELR-24738 (SC); The State vs. Kapine & Anor (2019) LPELR-49511 (SC); Idachaba vs. The University of Agriculture, Makurdi & Ors (2021) LPELR-53081 (SC).
Commenting on the position of the law where a Court raises an issue suo motu, Adekeye, JSC, stated in the case of Leaders & Company Ltd vs. Bamaiyi (supra):
“It is trite law that a Court has no jurisdiction to raise an issue suo motu and unilaterally resolve it in its judgment without hearing both sides, however clear the issue may appear to be. Where a Court raised an issue suo motu, it is fair that the Court should hear counsel to the parties on the matter, particularly from the party that may be adversely affected as a result of the issue raised. Where a Court raised an issue without giving counsel the opportunity to address on it, the Court would clearly be in breach of the principle of fair hearing. The rationale behind the principle that a Court should be wary in raising an issue suo motu is to maintain the role of the Court as an independent adjudicator in Nigerian adversary system of jurisprudence. There is a legal duty on the Court to give the parties or their legal representatives the opportunity to react or address it on the issue raised.”
Speaking on this same issue in the recent case of The State vs. Kapine & Anor (supra), Abba Aji, JSC, had this to say:
“What is germane herein is the validity of the issue of delivery of judgment after the statutory period raised by the lower Court suo motu without inviting the parties to address on it. When an issue is raised suo motu, it is trite that the parties must be called to address the Court on it as the new issue raised has not been within the contesting power of the parties. It means that the parties’ contest has not or is not connected with it at all. Thus, for a Court to raise an issue suo motu and determine same without address of parties means the Court is the alpha and omega of the facts and the case of the parties or that the parties are just watchers and standbys. Courts therefore must not delve into the arenas of the contest of parties by raising issues for them and deciding on them. In the instant appeal, the parties know what their case has been since from the trial Court and fought accordingly vide the issues presented before the Court. Since the issue of the validity of the judgment delivered by the trial Court was not an appealable ground nor an issue before them, the lower Court was wrong to make that an issue for them and to dismiss the appeal based on that issue it raised suo motu without calling on the parties to address it. The fact that is on record does not save the situation since cases are won not on what is on record but by the facts or pleadings of the parties as the case may be on civil matters and on provable facts beyond reasonable doubt in criminal cases. This will certainly constitute breach of fair hearing not only to one party but to both parties for not being heard in their causes and matters, being hijacked by the Judge or the Court as the case may be… The elementary principle is that it is wrong for a Court to raise any issue of fact suo motu and decide upon it, without giving the parties an opportunity to be heard on it. This is so because the Court is bound by and therefore confined to the issues raised by the parties. Where however the Court raises an issue suo motu which it considers material for the proper determination of the case, it must give parties, particularly the party likely to be adversely affected by the issue, to be heard.”
From these authorities and the postulations of our topmost Judicial Oracles quoted above, it is clear as crystal, that a Court must never raise an issue suo motu and base its decision on the said issue without inviting the parties in the litigation to address the Court on it. After all, the litigation does not belong to the Court, it belongs to the parties, who shall be at liberty to nominate the issues for determination by the Court. Where the Court however considers that an issue not raised by the parties is of paramount importance to the effectual determination of the controversy before it, the input or views of the parties on the issue must be sought before a decision can be rightfully based on it. Where that is not done, the party adversely affected by the decision founded on the issue raised suo motu by the Court can find shelter under the fair hearing principle and have the decision set aside on ground of nullity for denying him a fair hearing. See Dairo vs. Union Bank of Nigeria Plc (supra). By raising the issue of the Appellants’ legal status suo motu, when that issue was no longer in dispute between the parties, in view of the evidence of the 2nd Respondent’s witness, and proceeding to resolve same suo motu against the Appellants without giving the parties, particularly the Appellants, a hearing on the issue, the lower Court was in grave error, which error occasioned a miscarriage of justice to the Appellants by breaching their right to fair hearing. This error of omission has rendered the judgment of the lower Court a nullity. In arriving at this conclusion, I am further fortified by the decision of the Apex Court in the case of Ogwe & Anor vs. Inspector General of Police & Ors (2015) LPELR-24322 (SC), at pages 27-28 of the E-Report, where Ogunbiyi, JSC, restated the consequences of not affording parties a hearing on issue(s) raised suo motu by Court, thus:
“Furthermore and on the power of Court to raise issues suo motu, the law is trite and also well settled in plethora of decided cases that parties in the circumstance must be given a hearing on the issue so raised. To do otherwise will certainly amount to a denial of fair hearing as is enshrined in Section 36(1) of the Constitution of the Federal Republic of Nigeria 1999. The Court is duty bound to give parties a hearing even if there is no likelihood of a miscarriage of justice. The consequential effect of failure to comply with this provision would warrant that the decision be set aside on the ground of a nullity.”– Per M. I. Sirajo, JCA
The failure or neglect by the learned trial Judge to determine the merits of the matter is tantamount to abdication of his judicial duties and responsibilities as a Judge. A Court of law, particularly the lower Court and this Court, has a statutory duty to consider and decide on all issues raised and submitted to it for determination. The duty of the trial Court in the circumstances of this case was to consider and pronounce on all the issues raised by the parties in their final addresses. Even where the lower Court finds that the Plaintiffs have not established their locus standi and therefore decided to strike out or dismiss the matter, as a Court of first instance whose decision is subject to appeal, the trial Court shall proceed with the substantive suit in the alternative, and make pronouncement thereon without shirking its responsibility. This approach will not only save time and resources but it will enable an aggrieved party to file his substantive appeal without the apprehension of being sent back to the lower Court for a re-hearing or re-trial. The essence of considering and determining all issues raised before a Court, including pending applications, is to accord with the principle of fair hearing as enshrined in our Constitution and to avoid the breach of a complaining party’s right to fair hearing. It will amount to a serious lapse in the performance of his judicial duty for a Judge to shy away from determining a matter upon which evidence has been properly placed before him, as was done by the learned trial Judge in the case now on appeal. In the case of Brawal Shipping (Nig.) Ltd vs. F. I. Onwadike Co. Ltd & Anor (2000) LPELR – 802 (SC), Uwaifo, JSC, held as follows:
“It is no longer in doubt that this Court demands of, and admonishes the lower Courts to pronounce, as a general rule, on all issues properly placed before them for determination, in order, apart from the issue of fair hearing, not to risk the possibility that the only issue or issues decided by them could be faulted on appeal.”
See also Owodunni vs. Registered Trustees of Celestial Church of Christ & 3 Others (2000) 6 SC (Pt.2) 60; Samba Petroleum Ltd vs. U.B.A. Plc (2010) 6 NWLR 530; Dingyadi vs. INEC (2010) LPELR – 40142 (SC); Sule vs. State (2009) LPELR – 3125 (SC); APC vs. Anambra State Independent Electoral Commission & ors (2022) LPELR-57828 (SC); Sifax (Nig) Ltd vs. Migfo (Nig) Ltd & Anor (2018) LPELR-49735 (SC); APP vs. Obaseki & Ors (2021) LPELR-58374 (SC); Musa vs. The State (2021) LPELR-57772 (SC).
A deliberate failure by a Court to consider all issues raised before it amounts to a miscarriage of justice and a failure to perform a statutory duty. See Ovunwo vs. Woko (2011) LPELR-2841 (SC). – Per M. I. Sirajo, JCA
…Section 15 of the Court of Appeal Act. That section provides:
The Court of Appeal may, from time to time, make any order necessary for determining the real question in controversy in the appeal, and may amend any defect or error in the record of appeal, and may direct the Court below to inquire into and certify its findings on any question which the Court of Appeal thinks fit to determine before final judgment in the appeal and may make an interim order or grant any injunction which the Court below is authorised to make or grant and may direct any necessary inquiries or accounts to be made or taken and generally shall have full jurisdiction over the whole proceedings as if the proceedings had been instituted in the Court of Appeal as Court of first instance and may re-hear the case in whole or in part or may remit it to the Court below for the purpose of such re-hearing or may give such other directions as to the manner in which the Court below shall deal with the case in accordance with the powers of that Court, or, in the case of an appeal from the Court below in that Court’s appellate jurisdiction, order the case to be re-heard by a Court of competent jurisdiction.
The above quoted provision empowers this Court to make orders that a lower Court could have made in appropriate cases towards the attainment of substantial justice to the parties in an appeal before it. The section is designed to facilitate speedy administration of justice thereby obviating the necessity of the parties returning to the lower Court for re-hearing in the event an appeal succeeds. The application of the section is however subject to the fulfilment or existence of some conditions as laid down by the Supreme Court. The conditions are:
See Ezeigwe vs. Nwawulu (2010) LPELR- 1201 (SC); Amaechi vs. INEC (2008) LPELR-446 (SC); Agbakoba vs. INEC & Ors (2008) LPELR 232 (SC); Obi vs INEC & Ors (2007) LPELR-2166 (SC); Inakoju vs. Adeleke (2007) LPELR-1510 (SC) & Dangombe vs. Lassanjang (2016) LPELR- 40791 (CA); Ojo vs. APC (2022) LPELR-58723 (CA). – Per M. I. Sirajo, JCA
My concern with the invocation of Section 15 of the Court of Appeal Act for this Court to determine the Appellants’ case are two-fold. The first one is that in the resolution of issue 1, I declared the judgment of the lower Court a nullity. The term “nullity” has been described as a void act, an act which has no legal consequence. It is an act which is not only bad but incurably bad. It is as if nothing happened. See Yar’adua & Ors vs. Yandoma & Ors (2014) LPELR-24217 (SC); Odedo vs PDP & Ors (2015) LPELR-24738 (SC); Akande vs. Jegede & Ors (2022) LPELR-58911 (SC). The law is settled that a judgment that is a nullity has no legal validity and can confer no right nor impose any obligation on any person; Ajiboye vs. Ishola (2006) LPELR-301 (SC); Udeh vs. FRN (2021) LPELR-56604 (SC). This Court can only invoke the provision of Section 15 of the Court of Appeal Act where the judgment appealed against is not tainted with nullity. Once a judgment is declared a nullity, then there is nothing before the Court of Appeal upon which to exercise its power under Section 15 of the Act. The second concern is that the second condition for the invocation of Section 15 of the Court of Appeal Act as listed above has not been satisfied by the Appellants. That condition reads:
“That the real issue raised by the claim of the Appellant at the lower Court or trial Court must be seen to be capable of being distilled from the grounds of appeal.”
All the five grounds of appeal contained in the Notice of Appeal only challenged the dismissal of the appeal in limine without going into the substance. None of the grounds of appeal complained about the merits or substance of the case before the lower Court. That is to say, the real issues raised by the claim at the lower Court cannot be distilled from the grounds of appeal before this Court. For this reason, but most importantly, for the reason of nullity of the judgment of the lower Court, this Court cannot assume the role of a trial Court and determine the substance of the Appellants’ case in the exercise of its power under Section 15 of the Court of Appeal Act. – Per M. I. Sirajo, JCA
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