➥ CASE SUMMARY OF:
Bank Of Baroda v. Iyalabani Company Limited (2002) – SC
by “PipAr” Branham-Paul C. Chima, SAL.
Supreme Court – SC.59/1998
➥ JUDGEMENT DELIVERED ON:
Thursday, the 11th day of July, 2002
➥ AREA(S) OF LAW
Amendment of writ.
➥ PRINCIPLES OF LAW
⦿ FOREIGN COMPANIES CAN SUE IN NIGERIA BY THE PRINCIPLE OF COMITY OF NATIONS
But I will go on to also accept the submission of learned counsel for the plaintiff that it is not beyond the bounds of possibility that the Bank of Baroda is a foreign company incorporated in Nigeria. If that be the case, the Nigerian courts ought to accord the status granted to it by the country of its incorporation. This principle said to be by the comity of nations has long been accepted as binding by the English Courts. This principle fell for consideration in Lazard Brothers & Co. v. Midland Bank Ltd. (1933) A.C. 289 at p. 297, Lord Wright declared the law thus:- “English courts have long since recognized as juristic persons corporations established by foreign law in virtue of the fact of their creation and continuance under and by that law. Such recognition is said to be by the comity of nations. Thus in Henriques v. Dutch West India Co. [(1728) 2Ld Raym 1532, 1535] the Dutch company were permitted to sue in the King’s Bench on evidence being given ‘of the proper instruments whereby by the law of Holland they were effectually created a corporation there’. But as the creation depends on the act of the foreign state which created them, the annulment of the act of creation by the same power will involve the dissolution and non-existence of the corporation in the eyes of English law. The will of the sovereign authority which created it can also destroy it. English law will equally recognize the one, as the other fact.” See also Halsbury’s Laws of England, 4th Edition Vol. 8(1) para. 983, where the principle was put thus:- “English law recognizes the existence of a corporation duly created in a foreign country, and will allow it to sue and be sued in England in its corporate capacity. It follows that whether a corporation has continued in existence or has been dissolved is likewise governed by the law of its place of incorporation.” … It is my humble view, that as this country ranks as a part of the comity of nations, the principle enunciated above with regard to corporations that owe their creations to a foreign law should also by all means be granted the right to sue and be sued in Nigerian courts. On that premise, I adopt the apt statement of the law by Lord Wright in Lazard Bros & Co. v. Midland Bank Ltd. (supra). But I will for this purpose substitute Nigerian courts where English courts occur in the above passage from the judgment of Lord Wright. — O. Ejiwunmi, JSC.
⦿ PLAINTIFF HAS ONUS TO PROVE LEGAL CAPACITY WHERE CHALLENGED
I think the learned Justice, with respect, was in error when he said that “the onus is on a plaintiff to aver its legal capacity.” I think the correct statement of the law is that where the legal capacity of the plaintiff is challenged by the defendant, the onus is on the former to prove his legal capacity. I believe it is this error that led their Lordships astray. This burden to prove a matter can only be discharged by leading evidence, oral or documentary, in proof of same. The plaintiff was not given the opportunity to do so in this case, before her action was struck out. I think both courts below are wrong in the course taken by them. — Ogundare, JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
O. Ejiwunmi, J.S.C.
⦿ FOR THE APPELLANT
Chief Rotimi Williams, SAN.
⦿ FOR THE RESPONDENT
➥ CASE FACT/HISTORY
The Plaintiff avers, inter alia, that the defendant duly accepted the bills of exchange, particulars of which appear hereunder, drawn by Meltroid Limited payable at 90 days after sight to the order of the plaintiff and, on the due date of each of the said bills of exchange, the said bills were dishonoured by the defendant by non-payment.
Upon being served with the writ and the statement of claim, the defendant also filed its own statement of defence. Following the filing of its statement of defence, a motion on notice dated 12/3/87 was filed and served by the defendant for an order striking out the statement of claim herein and in particular “Bank of Baroda as plaintiff therein as it disclosed no reasonable cause of action.”
The grounds upon which the respondent sought for the order to strike out the appellant’s suit are as follows: – “(i) The plaintiff has no locus standi to bring this action (ii) The plaintiff is incompetent to institute the action on the face of the statement of claim.”
Then by a motion on notice dated 14th April, 1987, the plaintiff sought leave of the court to amend “the statement of claim earlier filed in terms of the document delivered herewith, titled ‘amended statement of claim”‘, The amendment sought for by the plaintiff was simply to include in the original statement of claim, the following averment:- “The said bills were indorsed by the said Meltroid Limited to the plaintiff”.
The two motions were subsequently heard by the learned Judge of the High Court of Lagos State. Following the hearing, the learned Judge delivered a considered ruling. In the course of his ruling, the learned Judge refused the prayer for the amendment of the plaintiff’s statement of claim as he took the view that if the amendment was granted, it would overreach the defendant. He also held that the defendant would be deprived of the defence contained in paragraph 5 of its statement of defence and no amount of costs could adequately compensate the defendant for the injury that it would thereby suffer.
The learned Judge in upholding the order that the claim of the plaintiff be struck out, reasoned thus: – “The plaintiff in the instant suit is known simply as ‘Bank of Baroda.’ The statement of claim is silent as to its capacity. Going by the name, it is not a natural person, it is a bank, but it has not been shown in the statement of claim that it has its own distinct legal personality. For this reason, it does not have the necessary locus standi to bring an action see section 6(6)(b) of the constitution. Furthermore, there is nothing in the statement of claim which establishes that there is a dispute or controversy between the parties herein. The plaintiff is not a holder of the bills of exchange sued upon. He therefore again has no locus standi to bring an action against the defendant.”
As the plaintiff was dissatisfied with the ruling of the learned Judge, it appealed to the Court below upon three grounds of appeal. The Court of Appeal per its majority judgment as aforesaid, dismissed the appeal and upheld the judgment of the High Court. Being still dissatisfied with the judgment of the court below, the plaintiff has further appealed to this Court.
➥ ISSUE(S) & RESOLUTION(S)
♎ I. Whether the High Court and the Court of Appeal were correct in considering whether the plaintiff is a juristic person in the absence of affidavit or other evidence on the matter?
RULING: IN APPELLANT’S FAVOUR.
A. DETERMINING JURISTIC PERSON SHOULD NOT BE BASED ON SPECULATION; THE COURT BELOW SPECULATED
“Where a plaintiff has sued in what appeared to be its corporate name and has described itself, simply as “the plaintiff’ in the statement of claim it cannot be said that the writ or statement of claim shows a lack of legal personality on the face of it even though it is open to the defendant to challenge the juristic personality of the plaintiff. Where that is done, an issue to be tried would have arisen. That issue should not be determined on the basis of mere speculation or assumptions.”
“Now in striking out the claim at the stage of the proceedings, it is clear that the learned trial Judge did not consider whether the parties had joined issue with each other on the status of the plaintiff so as to resolve that issue. It would appear that the learned trial Judge having failed to recognise that a dispute was between the parties, simply accepted the averment of the defendant and held that the plaintiff had no juristic personality, for the reason that the plaintiff did not have attached to its name “Ltd’, “Plc” etc. In my respectful view the. parties should have been allowed to call evidence to determine that issue. This, if done, would have led to the determination of the status of the plaintiff. If the plaintiff in the end fails to prove its juristic personality to sue and be sued, the claim will be dismissed. The court below was clearly in error in upholding the ruling of the trial court dismissing the claim. With all the pervasive doubts in the judgment of the court below to which I have referred to above, the court below ought to have considered that the doubts expressed with regard to the status of the plaintiff would have been cleared if the trial court had allowed evidence to resolve the question as to plaintiff’s status.”
“It is clear from the above reasoning, which I gratefully adopt as my own, that the learned trial Judge wrongly came to the conclusion in holding, that the plaintiff had no locus standi. I do not consider it necessary to say more on the resolution of this issue. The court below also by its majority decision fell into the same error by affirming the ruling of the learned trial Judge who had prejudged the status of the plaintiff without hearing evidence on the point. I will therefore resolve that issue in favour of the plaintiff.”
“Having joined issue in the pleadings on plaintiff’s legal personality, the learned trial Judge should not have struck out the case in limine but should have given the plaintiff the opportunity to prove her legal personality. He was wrong in the action he took and their Lordships of the court below constituting the majority were equally wrong in affirming him.”
♎ II. Whether the court below was correct in refusing the plaintiff’s application to amend the statement of claim?
RULING: IN APPELLANT’S FAVOUR.
A. THE PLAINTIFF OUGHT TO BE ALLOWED TO AMEND HIS PLEADINGS
“Now it is settled that pleadings of parties may be amended in the course of the trial of a suit. The basic principle is that leave to amend is to be granted “for the purpose of determining in the existing suit the real question or questions in controversy between the parties. “It is a well established principle that the object of the court is to decide the rights of the parties, and not to punish them for mistakes they made in the conduct of their case by deciding otherwise than in accordance with their rights. I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other party”: Cropper v. Smith (1884) 26 Ch.D. 700. See also Shoe Machinery Co. v. Cutlan (1896) 1 Ch. 108, 112; Beck and Ors v. Value Capital Ltd. & Ors. U (No.2) (1975) 1 WLR 6; A.U. Amadi v. Thomas Aplin & Co. Ltd. (1972) 1 All NLR (Pt.1) 409 at 419-420; Bello Adeleke v. Falade Awoliyi and Anor. (1962) 1 SCNLR 401, (1962) 1 All NLR 260, 262. See Practice and Procedure of the Supreme Court, Court of Appeal and High Courts (of Nigeria 2nd Edition at page 345 para. 27.07. See also paragraph 18/19/5 on pp. 327-328 of 1991 White Book. Bearing in mind the principles enunciated above, I see no reason not to grant the application for amendment of its pleadings by the plaintiff. The plaintiff in accordance with its prayer is hereby granted leave to amend its pleadings by adding the following paragraph to its statement of claim: “Each of the said bills was indorsed by the said Meltroid Limited to the plaintiff before it was overdue.””
“For all the reasons given above, this appeal is hereby allowed. The plaintiff is also granted the leave sought to amend its pleadings and the case is hereby remitted to the High Court of Lagos State to be heard expeditiously. In terms of costs, I award to the plaintiff the sum of N2,000.00 as costs in the court below and the sum of N10,000.00 as costs for its success in this court.”
➥ MISCELLANEOUS POINTS
➥ REFERENCED (CASE)
⦿ THE IMPORTANCE OF ESTABLISHING JURISTIC PERSONALITY
✓ Registered Trustees of Apostolic Church v. Attorney General Mid-Western State (1972) NSCC (Vol. 7) 247, where the plaintiffs averred in their statement of claim that the Apostolic Church was incorporated under the Land (Perpetual Succession) Act. The defendants in their statement of defence denied this and put them to strict proof. This court, per Sowemimo Ag., JSC (as he then was) in that case at page 250; said:- “Although the evidence was led as to named persons being made trustees, the certificate of Incorporation was never produced with section 6 of the act under consideration they have no power to sue or be liable to being sued.”
✓ J. K. Randle v. Kwara Breweries Ltd. (1986) 6 SC 1, where again the question raised was whether the plaintiff in that case established its legal personality upon which issue was joined, Uwais, JSC (as he then was) commented thus:- “The appellant sued the respondent as a company incorporated under the Companies Act, 1968. He failed to prove the incorporation by the production of the certificate of Incorporation. As the averment in the statement of claim that the defendant was so incorporated was categorically denied by the respondent in its statement of defence the failure to prove the incorporation was fatal to the appellant’s case.”
✓ A.C.B. Plc. v. Emostrade Ltd. (supra) Kalgo, JSC at page 520 had the following to say: “It is also not enough to assume that because company uses the name ‘limited’ on the writ of summons as plaintiff, that company must be a limited liability company entitled to sue. The company’s status must be proved especially in this case where it was denied to be a limited liability company at the time of the transaction. This was not proved in this case and cannot be presumed either. The respondent as plaintiff, is therefore not a legal entity or juristic person entitled to sue and be sued in law.See Carlen (Nig.) v. University of Jos (1994) 1 NWLR (Pt. 323) 631; Shitta v. Ligali (1941) 16 NLR 23; Fawehinmi v. NBA (No.2) (1989) 2 NWLR (Pt. 105) 558. The respondent is also not one of the bodies or associations which even though not incorporated, have been expressly or impliedly conferred with a right to sue or be sued by statutes.”
➥ REFERENCED (OTHERS)