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JOLIMAIR NIGERIA LIMITED Vs. LIBERTY BANK PLC 

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JOLIMAIR NIGERIA LIMITED Vs. LIBERTY BANK PLC 

APPEAL NO: CA/L/1117/10

Areas Of Law:

ACTION, APPEAL, BANKING LAW, COMPANY LAW, COURT, JUDGEMENT AND ORDER, PRACTICE AND PROCEDURE, WORDS AND PHRASES.

Summary Of Facts:

The Respondent initiated a suit for recovery of debt against the Appellants at the Lagos State High Court. During the proceedings particularly after the close of the case for the Respondent, steps were taken by the parties towards amicable settlement which necessitated the adjournment of the suit to allow parties explore amicable settlement.  When no report was made, the court struck out the claim and the Respondent filed several applications which were struck out before the application to relist the claim earlier struck out was heard and granted. Dissatisfied with the ruling, the Appellant has appealed to the Court of Appeal

Held

Appeal Dismissed. 

Issues For Determination
  • Whether the learned trial judge was right in holding that the application was competent;
  • Whether the learned trial judge was right in re-listing the suit when there was no sufficient materials before the court to justify the grant of the application.
  • Whether the learned trial judge was right in his interpretation of the provisions of Order 30 of the High Court Civil Procedure Rules of Lagos State to justify re-listing the suit.
Rationes

CAUSE OF ACTION – DISTINCTION BETWEEN AN ORDER OF COURT MADE IN RESPECT OF A APPLICATION NOT HEARD ON THE MERITS AND AN ORDER OF DISMISSAL

“It is trite that a suit or cause of action is pending when any proceedings can be taken in it.  So when a matter is struck out, it is still alive and kept in the court’s general cause list and when an order is made on a matter not heard on the merits, it amounts to striking out simpliciter, see the case of Panalpina World Transport (Nig) V J. B. Oladeen International & Ors (2010) 19 NWLR (Pt. 1226) 1 at 20 where the court held thus:

“When an order of court is made in respect of an application not heard on the merits, it amounts to striking out simpliciter. Even where an order of dismissal is made following a hearing which is not based on the merits, such order is still considered in law a mere striking out. When a matter is struck out in such circumstance, there is a liberty to relist.  The simple explanation is that while the matter is discontinued as from that date, it is still alive and kept in the court’s general cause list and can be brought back to the hearing cause list when an application to relist has been granted.  In such case, the plaintiff still has another opportunity to re – open the action after rectifying the deficiency that resulted in the striking out of the action.  This is applicable even where the court has not included in the order of striking out that the plaintiff has an option to relist.  The matter struck out has not left the cause list – as it is still a pending case or pending cause.”

–          PER Y. B. NIMPAR, J.C.A.

POWER OF A LIQUIDATOR- SECTION 425(1) OF THE COMPANIES AND ALLIED MATTERS ACT

“The power of a liquidator of companies is statutorily provided for in Section 425(1) of the Companies and Allied Matters Act as follows:

“The liquidator in a winding up by the court shall have power, with the sanction either of the court or of the committee of inspection, to –

(a) Bring or defend any action or other legal proceeding in the name and on behalf of the company;

(b) Carry on the business of the company so far as may be necessary for its beneficial winding up;

©appoint a legal practitioner or any other relevant professionals to assist him in the performance of his duties;

(d.) Pay any classes of creditors in full;

(e)make any compromise or arrangement with creditors or persons claiming to be creditors, or have or having or alleging themselves to have any claim, present or future, certain, or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable;

(f)compromise all calls and liabilities to calls, debts, and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent or sounding only in damages, subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehended liability to the company, and all questions in anyway relating to or affecting the assets or the winding up of the company, on such call, debt, liability or claim and give a complete discharge in respect thereof.”

The relevant provision here is section 425(1) (a) allowing the liquidator to bring or defend any action or legal proceedings in the name and on behalf of the company.” PER Y. B. NIMPAR, J.C.A.

LIQUIDATOR- DEFINITION OF A LIQUIDATOR

“A liquidator was defined in the case of Vico Agro Allied Industries Ltd V Orient Bank (1998) 1 FBTLR 11, wherein AGBAJE JSC said:

“A liquidator or receiver performs his functions in relation to the properties of another person other than himself.”

–      PER Y. B. NIMPAR, J.C.A.

WITHDRAWAL OF A BANKING LICENSE -WHETHER WITHDRAWAL OF A BANKING LICENSE CAN BRING THE JURISTIC LIFE OF THE COMPANY TO END?

“It is trite that the withdrawal of the banking license does not extinguish the life of the company, see Oredola Okeya Trading Co & Anor V Bank Of Credit & Commerce International & Anor In Re: Mr. Sikiru Amolegbe & Anor (2014) 8 NWLR (Pt 1408) 77 where the apex court held thus:

“Liquidation is distinguishable from dissolution which is the end of the legal existence of a company.  Liquidation may precede or follow dissolution.  Thus, mere revocation of a banking license of a bank, without more, as claimed by the instant applicant cannot bring to an end the juristic life of the bank or corporation.  Likewise where, where a bank or corporation ceases to operate or closes its business that does not determine the legal existence of such a bank or corporation”.

In the same judgment the Supreme Court said as follows:

“The dissolution of a legal person is analogous to the death of an ordinary person. Now dead men are no longer persons in the eye of the law as they have laid down their legal personality with their lives at death. Also by section 454(1) & (2) of the Companies and Allied Matters Act Cap. 59, a company ceases to be from the date the court orders its dissolution.  Thus, a company dies on its dissolution”.

The apex court also made a categorical statement on Section 417 of the Companies and Allied Matters Act when it said:

“S. 417 ‘If a winding-up order is made or a provisional liquidator is appointed no action or proceeding shall be proceeded with or commenced against the company except by leave of the court given on such terms as the court may impose.’ My understanding of this section is that the fact of winding-up of a Company or the appointment of a liquidator does not by itself result in the death of a corporate body thereby removing its legal personality.”

–      PER Y. B. NIMPAR, J.C.A.

EXISTENCE OF A COMPANY – WHEN DOES A COMPANY CEASE TO EXIST?

“A company ceases to exist the day the court orders its dissolution. Until such an event, the company cannot be considered dead”.  PER Y. B. NIMPAR, J.C.A.

NIGERIAN DEPOSIT INSURANCE CORPORATION -STATUS OF THE NIGERIAN DEPOSIT INSURANCE CORPORATION WHEN A BANKING LICENSE IS REVOKED

“The Nigerian Deposit Insurance Company Act, 2006 (NDIC Act), is by law an automatic liquidator when the banking license of a bank is revoked by the Central Bank of Nigeria.  The NDIC Act provides thus:

“S. 40(1). Whenever the license of an insured institution is revoked by the Central Bank of Nigeria, the Corporation shall act as Liquidator of such failed insured institution with the powers conferred on a liquidator under the Companies and Allied Matters Act, 1990 and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for the purposes of that Act.” PER Y. B. NIMPAR, J.C.A.

APPLICATION TO RELIST A MATTER – PERIOD WITHIN WHICH AN APPLICATION TO RELIST A MATTER CAN BE MADE

“The exercise of discretion is strictly within the confines of a court so empowered.  An application to relist a matter struck out is given to the High Court under Order 30 Rule 4 (3) of the Lagos State High Court Civil Procedure Rules which states as follows:

“An application to relist a cause struck out or set aside a Judgment shall be made within 6 days after the order or Judgment or such longer period as the Judge may allow.”

–      PER Y. B. NIMPAR, J.C.A.

EXERCISE OF DISCRETION – CIRCUMSTANCE IN WHICH AN APPELLATE COURT CAN INTERFERE WITH THE EXERCISE OF DISCRETION BY A TRIAL COURT

“Court of Appeal is always wary of interfering with the exercise of discretion by a trial court unless it appears that the result of the order will occasion injustice or defeat the right of the party’s altogether, see the case of U.C.C.N. V. Dangote Ind. Ltd [2006] 6 NWLR (Pt. 980) PG. 616.PER Y. B. NIMPAR, J.C.A.

 

DEFAULT JUDGEMENT – THE COURT HAS POWER TO SET ASIDE ITS OWN DEFAULT JUDGMENT

“The law is clear that unless and until the court pronounces a judgment on merit or by consent, it retains the power to set aside its own default judgment, see the case of Mohammed V. Husseini (1998) 11 – 12 SC 135, Teno Eng. Ltd. V. Adisa (2005) 10 NWLR (Pt. 933) 346.” PER Y. B. NIMPAR, J.C.A.

Statutes Referred To:

Companies and Allied Matters Act   

Lagos State High Court Civil Procedure Rules

Nigerian Deposit Insurance Company Act, 2006 (NDIC Act)

1 Comment

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