Legalpedia Citation: (2015) Legalpedia (CA) 61119

In the Court of Appeal

Tue May 5, 2015

Suit Number: CA/L/52/2001

CORAM

PARTIES

1. IDEAL FINANCE AND INVESTMENT CO. LIMITED

2. OTUNBA ADEBAYO .A. OSHIYOYE

APPELLANTS 

1. FINANCIAL OPPORTUNITY CENTRE LIMITED

2. PRINCE OLUMUYIWA ADEWUNMI ASHAYE

3. DEPUTY SHERIFF, HIGH COURT OF LAGOS.

RESPONDENTS 

AREA(S) OF LAW

SUMMARY OF FACTS

The 1st Appellant applied for loan from the 1st Respondent while the Appellants gave corporate and personal guarantee for One million at 10.5% per month interest for 90(Ninety)days to the 1st Respondent. The Appellant, in an attempt to repay the money, issued a cheque of Eko International Bank Plc, which failed as the cheque was dishonoured . The 1st Respondent thereafter took a writ against the Appellants which was subsequently withdrawn. Not relenting, the 1st Respondent again filed a summons under Order 10 Rule 1&2 of the Lagos State High Court Rules 1972 wherein judgment was given in favour of the 1st Respondent. The Appellant applied for instalmental payment and also for a stay of execution which was struck out for want of diligent prosecution. In an attempt to enforce the judgment, the 1stRespondent applied for a writ of Fifa against the judgment debtors(the Appellants) which was executed and moveable items attached were sold by public auction. The money released from the sales of the items attached was not able to offset the debt, hence the 1st Respondent again caused a writ of fifa to be issued against the immovable property of the 2nd Appellant within the jurisdiction of the court at No.16 Abiola street, Alapere, Ketu. The 2ndAppellant made attempt to set aside the writ of fifa issued against him with his immovable property which were attached to the writ on the ground that there was no valid notice of the auction. The Chief Judge of Lagos State thereafter issued the certificate of purchase in favour of the 2nd Respondent. The application to set aside the auction was refused, thus this appeal.

HELD

Appeal Dismissed

ISSUES

Whether the sale of property carried out on 23rd October 1997 was properly done in accordance with the relevant law in force governing Public Auction?

Whether part payment of the judgment debt vitiates auction done on 23rd October 1997 when there was no subsisting agreement between the parties or a court order to that effect for liquidation of the judgment debt by instalmental payment?

Whether the receipt of part payment by a judgment creditor after pasting of Public Notice on the premises to sell amounts to withdrawal of the Public Notice?

Under what circumstances will the Deputy Sheriff become a necessary party as would be required to file counter affidavit after an auction sale had been carried out pursuant to his official duty and it would be proper for the court to declare the sale as irregular?

 

RATIONES DECIDENDI

COLLUSION -DEFINITION OF COLLUSION

‘‘Collusion is defined by Black’s Law Dictionary 9th Edition as follows:
“An Agreement to defraud another or to do or obtain something forbidden by law.” PER. Y. B. NIMPAR J.C.A

AUCTION- DEFINITION OF AUCTION

‘‘Auction is defined as: “A manner of seeking or letting property by bids at a place open to the general public, usually to the highest bidder by public competition. The process which the public are asked to pay are the highest which those who bid can be tempted to offer by the skill and fact of the auctioneer under excitement of open competition.”See Okonkwo V C.C.B (Nig) (2003) 8 NWLR (Pt 822) 352.’’ PER. Y. B. NIMPAR J.C.A

EFFECT OF IRREGULARITY- IRREGULARITY MUST CAUSE IRREPARABLE INJURY TO THE CLAIMANT FOR IT TO HAVE EFFECT

‘‘For irregularity to have effect it must cause irreparable injury to the claimant. It is a double edged sword. The two must go together. The two conditions are:
(i) Material irregularity
(ii) Substantial injury
The existence of these two conditions requires evidence”. PER. Y. B. NIMPAR J.C.A

JOINING OF ISSUES – PARTIES ARE NOT COMPELLED TO JOIN ISSUES

“There is no legal requirement on a party to join issues with the opponent. The ideal situation is that a party would controvert assertions made against such a party. The choice however, rest with such a party. There is no compulsion to defend a suit or claim.’’ PER. Y. B. NIMPAR J.C.A

ESSENCE OF NOTICE OF AUCTION – THE ESSENCE OF A NOTICE OF AUCTION IS TO ESTABLISH GOOD FAITH

‘‘The essence of notice has been held not to be to the benefit or protection of the judgment debtor but in order to make the sale one conducted in good faith, see Okonkwo V CCB (Nig) Plc (2003) 8 NWLR (Pt 822) 347 at 386’. PER. Y. B. NIMPAR J.C.A

COURT CONDUCTED AUCTION – THE HIGHEST BIDDER IN A COURT AUCTION IS TO BE GIVEN A RECIEPT FOR MONEY PAID AND A CERTIFICATE TO SHOW TITLE

‘‘Being a court conducted auction, the law requires a receipt for money paid issued to the purchaser and a certificate to show title vested in the highest bidder.’’ PER. Y. B. NIMPAR J.C.A

BURDEN OF ESTABLISHING FRAUD – THE BURDEN OF ESTABLISHING FRAUD RESTS ON THE APPELLANT

‘‘The burden of establishing fraud, collusion and connivance rest squarely on the appellants. Like all criminal allegations in civil suits, the appellants are expected to plead adequately, supply particulars and prove same beyond reasonable doubt.’’ PER. Y. B. NIMPAR J.C.A

SALES OF PROPERTY BY AUCTION – A VALID NOTICE OF SALE OF LANDED PROPERTY BY AUCTION IS FUNDAMENTAL

‘‘Valid notice is fundamental to a sale of landed property by auction.’’ PER. Y. B. NIMPAR J.C.A

TITLE OF A BUYER IN AN AUCTION SALE – THE TITLE OF A BUYER AT AN AUCTION CANNOT BE DEFEATED BY IRREGULARITY IN THE AUCTION SALE

‘‘Under Section 21 (1) of Conveyancing Act, 1881 applicable to Lagos State (statute of general application), the title of a buyer at an auction cannot be defeated by irregularity in the auction sale, see A.C.B V Ihekwoaba(2003) 16 NWLR (Pt 846) 249 in the same vein undervalue cannot also defeat the interest of a purchaser at an auction.’’ PER. Y. B. NIMPAR J.C.A

EFFECT OF FAILURE TO GIVE ADEQUATE NOTICE OF AUCTION – FAILURE TO GIVE ADEQUATE NOTICE CANNOT IMPEACH THE AUCTION

‘‘The failure to give adequate notice cannot impeach the auction i.e. the purchaser is protected and the only remedy open to the appellants is in damages.’’ PER. Y. B. NIMPAR J.C.A

VALIDITY OF AN AUCTION – A 7 DAYS NOTICE MUST BE GIVEN FOR AN AUCTION TO BE VALID.

‘‘The Supreme Court in the case of Taiwo V Adegboro(2011) LPELR 3133 (SC) in considering the relevancy of notice held that:
“It is clear that before an auction can be held to be valid there must be 7 days’ Notice before the auction is held.” PER. Y. B. NIMPAR J.C.A

CASES CITED

STATUTES REFERRED TO

Auction Law of Lagos State

Conveyancing Act (Statute of General Application) 1881

Sheriff and Civil Processes Act, Cap 407

 

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