Legalpedia Citation: (2023-07) Legalpedia 97065 (CA)

In the Court of Appeal

HOLDEN AT LAGOS, NIGERIA

Fri Jul 21, 2023

Suit Number: CA/L/475/2017

CORAM

OBANDE FESTUS OGBUINYA JCA

FREDRICK OZIAKPONO OHO JCA

ABDULLAHI MAHMUD BAYERO JCA

PARTIES

AYODELE OLUGBENGA & CO

APPELLANTS

1. FBC TRUST AND SECURITIES LIMITED
2. MR. MICHAEL OLAYEMI CARDOSO

RESPONDENTS

AREA(S) OF LAW

APPEAL, COMPANY LAW, CONTRACT, EVIDENCE, PRACTICE AND PROCEDURE

SUMMARY OF FACTS

Before the lower court, the appellant and the respondents were the claimant and the defendants respectively. In December, 2014, the respondents engaged the legal services of the appellant, a firm of legal practitioners, to conduct a search in respect of property, with Title No. LO5120, at the Lands Registry, Alausa, Ikeja, Lagos and to obtain a certified true copy of the title document. The appellant alleged that it conducted the search twice and furnished the respondents with the search reports in 2015. The appellant forwarded its legal fee of N125,000.00 to the respondents. The respondents refused to pay the legal fee despite repeated demands on them by the appellant. Sequel to that, the appellant besieged the lower court. The lower court granted the second respondent’s application and dismissed that of the appellant. The appellant was dissatisfied with the decision hence the instant appeal.

HELD

Appeal dismissed

ISSUES

Whether a cause of action was disclosed against the 2nd defendant?

Was the lower court (sic) right to have held that the ruling on the defendant’s application overtakes the application of the claimant?

RATIONES DECIDENDI

CAUSE OF ACTION – MEANING OF CAUSE OF AACTION AND THE PURPORT OF A REASONABLE CAUSE OF ACTION

By way of necessary prefatory remarks, a cause of action connotes a combination of facts which, if proved or substantiated, entitles a party (plaintiff) to an enforceable right/remedy against a wrongdoer (defendant). It consists of two elements, the wrongful act of the defendant, which bestows cause of action on a plaintiff, and the consequent damage, see Savage v. Uwaechia (1972) 3 SC 214; Omiomeji v. Kolawole (2018) 14 WLR (Pt. 1106) 180; Iyeke v. PTI (2019) 2 NWLR (Pt. 1656) 217; Zubair v. Kolawole (2019) 11 NWLR (Pt. 1682) 66; Iliyasu v. Rijau (2019) 16 NWLR (Pt. 1697) 1, Maigari v. Malle (2019) 16 NWLR (Pt. 1697) 69. The content of a writ of summons or statement of claim determines the existence or otherwise of a cause of action, see UBN Plc v. Umeoduagu (2004) 13 NWLR (Pt. 890) 352.

It is apropros to, first and foremost, understand the purport of reasonable cause of action. In Uwazuronye v. Gov., Imo State (2013) 8 NWLR (Pt. 1355) 28 at 51, Onnoghen, JSC (as he then was) defined it as:

a cause of action which, when only the allegation in the statement of claim and, I may add originating process, are considered to have some chances of success.

See, also, Iyeke v. PTI (supra); Ajuwon v. Gov., Oyo State (2021) 16 NWLR (Pt. 1803) 485. It is decipherable from the definition, chronicled above, that it is an originating process and/or a statement of claim or its equivalent in an action that determine the existence or otherwise of reasonable cause of action. Put differently, a court has to examine an originating process and/or a statement of claim, or its equivalent, to reach a conclusion whether a suit discloses a reasonable cause of action or not. In such juridical exercise, a court need not examine the whole averments, in the appropriate process, seriatim, but pluck out those that form the gravamen of the claim,

see UBN v. Umeoduagu (supra); Seven-Up Bottling Co. Ltd. v. Abiola & Sons (2001) 5 MJSC 93/(2001) 13 NWLR (Pt. 730) 469; Yare v. N.S.W & I.C. (2013) 12 NWLR (Pt. 1367) 173; Atiba Iyalamu Savings & Loans Ltd. v. Suberu (2018) 13 NWLR (Pt. 1637) 387; Odumegwu v. Ibezim (2019) 9 NWLR (Pt. 1677) 244; Ajuwon v. Gov., Oyo State (supra). Absence of reasonable cause of action, entails lack of locus standi to file an action, see Uwazuronye v. Gov., Imo State (supra). – Per O. F. Ogbuinya, JCA

COURTS – CONDUCT OF COURTS IN RELATION TO PLEADINGS

The law commands the court to read pleading holistically in order to garner a flowing story of it, see Okochi v. Animkwoi (2003) 18 NWLR (Pt. 851) 1; Agi v. PDP (2017) 17 NWLR (Pt. 1595) 366; NNPC v. Roven Shipping Ltd. (2019) 9 NWLR (Pt. 1676) 67. – Per O. F. Ogbuinya, JCA

STATEMENT OF CLAIM – USE OF STATEMENT OF CLAIM IN DETERMINING CAUSE OF ACTION

As already noted, a statement of claim is the major barometer which the court uses to gauge the existence or otherwise of a reasonable cause of action. – Per O. F. Ogbuinya, JCA

ALTER EGO – MEANING OF ALTER EGO – HOW A COMPANY FUNCTIONS

In the sphere of company law, an alter ego is the second self. Thus, the second respondent, by the appellant’s description, is the second self of the first respondent. That makes him a managing director, an agent, of the first respondent. In law, an act of a managing director simpliciter does not make him a party to a contract, see Trenco (Nig.) Ltd. v. African Real Estate and Investment Co. Ltd. (1978) A.N.L.R. 124. A company is a mere legal abstraction devoid of flesh and blood and, ipso facto, can only act through its agents: directors, managers, officials, servants, agents, et cetera, see Sale v. B.O.N. Ltd. (2016) 6 NWLR (Pt. 976) 316; Chemiron Int’l Ltd. v. Stabilini Visinoni Ltd. (2018) 17 NWLR (Pt. 1647) 62. In Bolton Engineering Co. Ltd. v. Graham & Sons (1957) 1 QB 159 at 172 – 173, Lord Denning, LJ., incisively and insightfully, declared:

A Company may, in many ways, be liken to a human body. It has brain and nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hand to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company and control what it does. The state of mind of the company of these managers is the state of mind of the company and is treated by law as such. – Per O. F. Ogbuinya, JCA

JURISTIC PERSONALITY – THE JURISTIC PERSONALITY OF A COMPANY

A company is an artificial person with rights and liabilities. The concept of corporate personality traces its paternity to the ancient English case of Salomon v. Salomon & Co. Ltd (1897) AC 22. An incorporated limited liability company is a persona ficta that enjoys a separate juristic personality. A company has its own separate legal personality that is distinct from the legal entity of its parent company, promoters, shareholders or officers and their acts/conducts cannot be attributed to nor inherited by the company, see Union Beverages Ltd. v. Pepsi Cola International Ltd. (1994) 3 NWLR (Pt. 330) 1; Balet Int’l (Nig.) Ltd. V. Olaniyi (2017) 17 NWLR (Pt. 1594) 260; FBN PLC v. A-G., Fed. (2018) 7 NWLR (Pt. 1617) 121; I.T.B. Plc v. Okoye (2021) 11 NWLR (Pt. 1786) 163. – Per O. F. Ogbuinya, JCA

VEIL OF INCORPORATION – LIFTING THE VEIL OF INCORPORATION – WHEN A COMPANY IS ACCUSED OF FRAUD

Indisputably, the doctrine of separate juristic personality of a company is a flexible one. Its elasticity is rooted in the concept of lifting the veil of incorporation. The concept of lifting the veil of incorporation denotes the judicial act of imposing personal liability on otherwise immune corporate officers, directors or shareholders for the corporation’s wrongful acts. One of the legally recognised instances for lifting the veil of incorporation is when a company is accused or liable for fraud, see FDB Financial Services Ltd. v. Adesola (2002) 8 NWLR (Pt. 668) 170; Alade v. Alic (Nig.) Ltd. (2010) 19 NWLR (Pt. 1226) 111; Mezu v. C & C. B. (Nig.) Plc (2013) 3 NWLR (Pt. 1340) 188; Oyebanji v. State (2015) 14 NWLR (Pt. 1479) 270; Oboh v. N.F.L. Ltd. (2022) 5 NWLR (Pt. 1823) 283.

Fraud, a leprous term, is amphibious in application as it “covers commission of crime as well as incidents of mere impropriety”, see Okoli v. Moreeab Finance (Nig) Ltd (2007) 14 NWLR (Pt. 1053) 37 at 72, per Ogbuagu, JSC. It connotes a willful act on the part of someone, whether words or conduct whereby another person is sought to be deprived, by illegal or inequitable means, of his entitlement, see Adimora v. Ajufo (1988) 3 NWLR (Pt. 80) 1; Egbo v. Nwali (1998) 6 NWLR (Pt. 553) 195; Onwudiwe v. FRN (2006) 10 NWLR (Pt. 988) 382; Ntuks v. NPA (2007) 13 NWLR (Pt. 1051) 392; Otukpo v. John (2012) 7 NWLR (Pt. 1299) 357; ACN v. INEC (2013) 13 NWLR (Pt. 1370) 161; Trade Bank Plc v. Pharmatek Ind. P. Ltd. (2020) 8 NWLR (Pt. 1725) 124. The law insists that a party who invites and relies on fraud in a case must plead it, alongside its particulars, and prove it by evidence beyond reasonable doubt, see Okoli v. Morecab Finance (Nig.) Ltd. (2007) 14 NWLR (Pt. 1053) 37; Belgore v. Ahmed (supra); Obitude v. Onyesom Comm. Bank Ltd. (2014) 9 NWLR (Pt. 1412) 352; Yakubu v. Jauroyel (2014) 11 NWLR (Pt. 1418) 205; Malami v. Ohikhuare (2019) 7 NWLR (Pt. 1670) 132. – Per O. F. Ogbuinya, JCA

JURISDICTION – MEANING OF JURISDICTION – PROPER/IMPROPER PARTIES AND JURISDICTION

It is now an elementary law that an issue of proper/improper parties touches and impinges on the jurisdiction of a court to entertain a matter before it. Indeed, “a person who asserts the right claimed or against whom the right claimed is exercisable must be present to give the court the necessary jurisdiction”, see Olariede v. Oyebi (1984) 1 SCNLR 390 at 406, per Eso, JSC; Ekpere v. Aforiji (1972) 1 All NLR (Pt. 1) 220; Onwunalu v. Osademe (1971) 1 All NLR 14; Awoniyi v. Reg. Trustees of AMORC (2000) 10 NWLR (Pt. 676) 522; Mozie v. Mbamalu (2006) 15 NWLR (Pt. 1003) 466; Plateau State v. A.-G., Fed. (2006) 3 NWLR (Pt. 967) 346; Faleke v. INEC (2016) 18 NWLR (Pt. 1543) 61; G. & T. Investment Ltd. v. Witts & Bush Ltd. (2011) 8 NWLR (Pt. 1250) 500; Ogbebor v. INEC (2018) 6 NWLR (Pt. 1614) 1; CBN v. Interstella Comm. Ltd. (2018) 7 NWLR (Pt. 1618) 294; Moses v. NBA (2019) 8 NWLR (Pt. 1673) 59; Adeniran v. Olusokun II (2019) 8 NWLR (Pt. 1673) 98. It stems from this hallow principle of law that the second respondent’s application was staked on jurisdiction of court.

Jurisdiction, a mantra in adjudication, connotes the authority/power of a court to determine a dispute submitted to it by contending parties in any proceeding, see Ajamole v. Yaduat (No. 1) (1991) 5 SCNJ 172; Mobil Pro. Co. Untltd. v. LASEPA (2002) 18 NWLR (Pt. 798) 1; Ndaeyo v. Ogunnaya (1977) 1 IM SLR 300; Ebhodagbe v. Okoye (2004) 18 NWLR (Pt. 905) 472; Garba v. Mohammed (2016) 16 NWLR (Pt. 1537) 144; A.-G., Kwara State v. Adeyemo (2017)1 NWLR (Pt. 1546) 210; Isah v. INEC (2016) 18 NWLR (Pt. 1544) 175; Angadi v. PDP (2018) 15 NWLR (Pt. 1641) 1; Nduul v. Wayo (2018) 16 NWLR (Pt. 1646) 548.

Indisputably, the law compels the courts to accord premier attention to issue of jurisdiction, which is numero uno in adjudication, when raised in any proceedings, see Okwu v. Umeh (2016) NWLR (Pt. 1501) 120; Brittania-U (Nig.) Ltd. v. Seplat Pet. Co. Dev. Ltd. (2016) 4 NWLR (Pt.1503) 541; Oni v. Cadbury Nig. Plc. (2016) 9 NWLR (Pt. 1516) 80; Diamond Bank Ltd. v. Ugochukwu (2016) 9 NWLR (Pt. 1517) 193; PDP v. Umeh (2017) 12 NWLR (Pt. 1579); APC v. Ndual (2018) 2 NWLR (Pt. 1602) 1; Adama v. Maigari (2019) 3 NWLR (Pt. 1658) 26; APC v. Lere (2020) 1 NWLR (Pt. 1705) 254. The reason the law, in its wisdom, insists on prime consideration of jurisdictional issue is obvious. Where a court is not clothed with the jurisdiction to entertain a matter, the proceeding germinating from it, no matter the quantum of diligence, dexterity, artistry, sophistry, transparency and objectivity injected into it, will be trapped in the intractable web of nullity, see Elugbe v. Omokhafe (2004) 18 NWLR (Pt. 905) 319; Lokpobiri v. Ogola (2016) 3 NWLR (Pt. 1499) 328; Garba v. Mohammed (2016) 16 NWLR (Pt. 1537) 144; Isah v. INEC (2016)18 NWLR (Pt. 1544) 175. Indubitably, jurisdiction has been characterised as the spinal cord, lifeline, touchstone, bedrock and linchpin of adjudication. It oxygenates the power and duty of courts in adjudication. A court without jurisdiction has been likened to an animal that is drained of blood. Hence, it occupies an olympian position in the pyramid of adjudication. – Per O. F. Ogbuinya, JCA

COURTS – CONDUCT OF COURTS TO JUDGMENTS

It smell of judicial sacrilege to tinker with an act that has not disclosed any atom of hostility to the letters and spirit of the law. – Per O. F. Ogbuinya, JCA

CASES CITED

NOT AVAILABLE

STATUTES REFERRED TO

1. High Court of Lagos State (Civil Procedure) Rules, 2012
2. Companies and Allied Matters Act, 2020
3. Legal Practitioners Act

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