➥ CASE SUMMARY OF:
Shinning Star Nig. Ltd. & Anor. v. AKS Steel Nigeria Ltd. & Ors. (2011) – SC. 101/2010
by Branham Chima.
Shining Star Nigeria Limited
Satish Chander Kashyap
Aks Steel Nigeria Ltd.
Sanjay Kumar Sharma
Nemi Chand Kothari
Chief Registrar of the Federal High Court
Supreme Court – SC. 101/2010
➥ JUDGEMENT DELIVERED ON:
Friday, the 14th Day of January 2011
➥ SUBJECT MATTER
Interlocutory appeal to reinstate receiver/manager
➥ THIS CASE IS AUTHORITY FOR:
⦿ COURT CANNOT VIA INTERLOCUTORY APPEAL DECIDE POINTS IN MAIN APPEAL
I am inclined to this view because of the settled principle of law that a court cannot, in an interlocutory application, decide an issue in the substantive case or appeal. See Akapor v Hakeem Habeeb (1992) 6 NWLR (Part 249) 266, Victory Merchant Bank Ltd v Pelfaco Ltd (1993) 9 NWLR (Part 317) 340; Amiara v Alo (1995) 7 NWLR (Part 409)623; A.C. B. LTD v Awogboro (1996) 3 NWLR (Part 437) 383. — F.F. Tabai, JSC.
⦿ PARTIES IN NOTICE OF APPEAL SHOULD BE SAME IN AN APPLICATION SUBSEQUENTLY BROUGHT ON SAME SUIT
The Notice of Appeal which is the foundation of this application has four parties as respondents, whereas the application has only three parties, exclusive of the Chief Registrar of the Federal High Court who is the 4th respondent in the Notice of Appeal. The Chief Registrar shouldn’t have been excluded/omitted from the application before us, as, if the appeal is supposed to involve the Chief Registrar, then the Chief Registrar is supposed to be involved in the application. The parties in both processes should be the same, and none should be excluded unless it has been formerly withdrawn. In this respect I endorse the submission of Chief Olanipekun. SAN on the issue of the parties, and I agree that the applicant cannot change the parties in the notice of appeal in this application. — A.M. Muktar, JSC.
⦿ [DS] IT IS EMBARRASSING FOR A LOWER COURT TO SET ASIDE A DECISION OF A HIGHER COURT
It is also not in dispute that following the order of 19 th March, 09 which had been carried out, the respondents appealed to this court against the grant of same and followed up with an application for an injunction restraining the receiver appointed from acting in that office. It is when this application and the appeal were in existence that the respondents orally applied to have the Court of Appeal order of 19/3/09 discharged. Thus when this order was discharged on 1/7/09 it completely rendered ineffective and nugatory the motion and the appeal pending before the Court of Appeal and the Supreme Court. This situation, with tremendous respect to the learned senior counsel to the respondents’ is extremely embarrassing to our judicial system and the order of seniority of the court of record in Nigeria. In the first place, the trial court is bound by the orders of the Court of Appeal and I therefore wonder where the trial court conjured its jurisdiction to discharge the higher court’s order, not being a court of co-ordinate jurisdiction without any reference to the higher court. This is to dis-organise the constitutionally well arranged seniority of courts Hierarchy of courts and staire decises brushed aside. My Lords, a trial court may not be satisfied with the orders or findings of the Court of Appeal, there is nothing it can do about it, its constitutional and judicial role is either to obey or enforce that order, any act or process challenging the said order would have to be referred to the Court of Appeal any act to the contrary would amount to a breach of the constitutional provisions of the 1999 constitution of the Federal Republic of Nigeria. The same applies to the Court of Appeal where the Supreme Court’s order is in question. By granting the order of discharge not made by it but by a higher court the trial court has in effect knocked off the substratum or lis of the appeal against the grant of that order now pending before this court. — Mutaka-Coomassie, JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
Francis Fedode Tabai, JSC.
⦿ FOR THE APPELLANT
Prof. S. A. Adesonya SAN
⦿ FOR THE RESPONDENT
Chief Wole Olanipekun SAN
➥ CASE FACT/HISTORY
In paragraph 20 of the statement of claim the plaintiffs who are the Appellants/Applicants herein claimed against the Defendants/Respondents jointly severally or in the alternative as follows, inter alia: 1. A declaration that the Plaintiff’s 58.3% majority equity holding in the 1 st Defendant is still valid and subsisting.
At the trial High Court, the Appellants/Applicants as plaintiffs sought and obtained an interim ex-parte order on the 19/01/2007 for the appointment of the Receiver/Manager to manage the affairs of the 1 st Respondent Company pending the determination of the substantive motion on notice for an interlocutory order for the same relief. The interlocutory order for the appointment of a receiver Manager was sought to pend the determination of the suit. The Respondents herein as Defendants brought an application for an order discharging the ex-parte interim order of the 19/012007. The Respondents’ application for the discharge of the interim order appointing a receiver/manager and the Applicant’s application for the appointment of a receiver/manager were consolidated and heard together. By its ruling on the 28/02/2007 the interim order appointing a receiver/manager for the 1 st Respondent was vacated. The trial court however refused to consider the Applicant’s application for the appointment of a receiver/manager for reasons stated in the ruling. The applicants were not satisfied with the ruling and thus proceeded on appeal to the court below. In its judgement on the 19/03/2009 the Court of Appeal allowed the appeal and made a number of far reaching consequential orders.
This ruling is sequel to a motion dated the 28 th July, 2010 and filed on the 29 th of July, 2010. Motion prays for:-
- An order of interlocutory injunction restraining the Respondents their servants, agents, privies or through any person howsoever except Mr. Olusegun Bamidele Ajayi, the Receiver/Manage appointed by the Court of Appeal from running, operating and/or managing the 1st Respondent pending the determination of the appeal now pending in the Supreme Court.
- An order of Interlocutory mandatory injunction to undo what has been done restoring Mr Olusegun Bamidele Ajayi who has been physically removed as the Receiver/Manager pending the determination of the said appeal in this Court i.e Supreme Court.
- An order of interlocutory injunction restraining the 2nd and 3 rd Respondents, their servants agents privies or any person howsoever from acting as directors of the 1st Respondent or from interfering with finance, securities and other business of the 1st Respondent pending the determination of the appeal in the Supreme Court.
➥ ISSUE(S) & RESOLUTION(S)
I. Whether this Court should hear this application considering that the application will dispose of the appeal against the Ruling complained by the Appellant and also dispose of the appeal at the lower Court?
RULING: IN RESPONDENT’S FAVOUR.
A. BOTH PARTIES SHOULD CONCENTRATE ON THE MAIN APPEAL AND STOP FILING MANY APPLICATIONS
[‘After a careful consideration of the application and the Notice of appeal in the appeal pending before us, it is clear that we cannot grant the reliefs sought without thereby substantially deciding the substantive interlocutory appeal. The only issue in the interlocutory appeal pending at the court below in the sole ground of appeal is whether or not the trial court was right in its ruling of the 1 st July, 2009, and I am, with respect, of the view that the interest of justice will be better served by the appellants prosecution of the appeal instead on this application. The main suit is still pending at the trial court without any conceivable progress towards its final determination. In paragraph 20 of their statement of claim, the Plaintiffs/ Appellants/Applicants claim to have 58.3% equity share holding in the 1st Defendant/Respondent. They also claim that the resolution of the Board of Directors of the 1st Defendant/Respondent purportedly passed on the 31st of October, 2005 was never passed as no such meeting of the Board was ever held. These show the Plaintiffs alleged interest in the 1st Defendant/Respondent. These issues have to be tried and no amount of interlocutory applications can help to solve the dispute.’
‘In his concurrent ruling on the 15th March, 2010 Galinje, JCA said “The appeal to this court is interlocutory and it is in the interest of justice and both parties to concentrate on getting the appeal heard, instead of indulging in endless applications. ” I agree entirely with sentiment expressed in the above opinion. There are in my view, just too many interlocutory appeals and applications.’
‘A careful study and consideration of reliefs (2) and (3) supra reveal that they are in essence the same and of the same effect as the prayers sought in this application, and so the substratum are the same. In the circumstance, granting the prayers in the application will be tantamount to allowing the appeal and there will in fact be no need to hear the appeal, as the objective of the appellants/applicant would have been achieved. The appeal would have been overtaken, and that will occasion miscarriage of justice.’]
‘On the whole, in view of the appeals pending both in this Court and at the court below and having regard to the fact that a grant of this application and the reliefs sought therein, would, in effect, be a determination of the substantive interlocutory appeal both in this Court and at the court below, this application is refused and same is struck out. I assess the costs of this application at N30,000.00 in favour of the Respondents.’
➥ MISCELLANEOUS POINTS
⦿ DISSENTING JUDGEMENT delivered by Walter Samuel Nkanu Onnoghen. JSC:
✓ THE APPLICATION IS NOT BASED ON SUIT PENDING BEFORE THIS COURT BUT ON MATTERS AT THE TRIAL COURT
‘It is therefore very clear that the grant of the prayers of discharge of the order of the Court of Appeal has effectively rendered nugatory the pending appeal by the respondents before this court against the order appointing the receiver. The situation is very worrisome and embarrassing to the judiciary and the legal profession. By granting the order of discharge not made by it but by a higher Court, the trial Court has in effect knocked off the bottom of the appeal against the grant of that order now pending before this Court. Looking closely at the preliminary objection, I agree with learned senior counsel for the applicants that the objection is not based on the application under consideration but deals mainly with matters pending at the trial Court such as suits instituted therein for the benefit of the receiver etc. There is therefore no merit in the preliminary objection which is accordingly dismissed.’
✓ PARTIES SHOULD BE RESTORED TO THE POSITION THEY WERE BEFORE THE SETTING ASIDE OF THE LOWER COURT’S JUDGEMENT
‘In exercising its power to grant mandatory injunction, the Court is primarily concerned with the invocation of its disciplinary jurisdiction to prevent its jurisdiction to try the case before it from being frustrated or stultified. I therefore hold the considered view that it is in the best interest of the judicial process if parties are restored to the position they were before the setting aside of the lower Court’s order made on 19th March, 2009 which order was executed in the 23rd day of March, 2009 pending the determination of the appeal against the order and that against the Ruling of the lower Court, and every other pending application(s). It is for the above reasons that I find myself unable to agree with the lead ruling in this application written by my learned brother Tabal. JSC just delivered.’
In the circumstance, I find merit in the application and I proceed to grant the alternative prayers in the following terms:- 1. It is hereby ordered that Mr Olusegun Bamidele Ajayi, the Receiver/Manager appointed for the 1 st respondent on the 23 rd day of March, 2009 following the orders of the Court of Appeal of 19 th March, 2009 be and is hereby restored to his office as Receiver/Manager of the 1 st respondent pending the determination of the appeal pending before this Court. 2. It is further ordered that the 2 nd and 3 rd respondents, their agents, privies or any person howsoever be and are hereby restrained from acting as Directors of the 1 st respondent or from interfering with the finance, securities and other businesses of the 1 st respondent pending the determination of the appeal pending in this Court.” There shall be costs of N50,000.00 against the respondents in favour of the applicants.
⦿ DISSENTING JUDGEMENT delivered by Muhammad Saifullahi Mutaka-Coomassie, JSC:
✓ A RECEIVER MANAGER NEED NOT BE A PARTY TO THE SUIT AS HE IS AN OFFICER OF THE COURT
‘See Section 389 (1) of the Companies and Allied Matters Act CAMA A receiver when appointed by a court is not an agent of either party to the litigation. He is rather an officer of court when appointed over land, real property or corporate body. He de jure takes over possession and his appointment operates as general information against all the parties to the litigation. See Uwakwe v Odogwu (1989) 5 NWLR (pt. 123) 562. Also a receiver as such is not entitled to bring an action in his own name as receiver, this is because no property is automatically vested in him by his appointment, but he may acquire a right to sue in his own name out of his receivership but not in consequence of it alone. See Intercontractors Nigeria Ltd v U. A. C Nig. Ltd (1994) 3 NWLR (pt. 333) 481 at 490. In the case at hand, the Receiver/Manager is not required to be a party to this case before this motion or the appeal could be heard. He is an officer of the court executing the orders and powers vested on him by reason of that appointment. It is for these reasons that I hold that this leg of the preliminary objection is misconceived. The other legs of the objection could be taken together with the application.’
‘It is my considered view that by the reasons of the said appointment, he is deemed an officer of the court, and not a party to the case. See Section 389(1) of the Companies and Allied Matters Act (CAMA). A receiver when appointed by a court is not an agent of either party to the litigation. He is rather an officer of court. When appointed over land, real property or corporate body he de jure takes over possession and his appointment operates as a general injunction against all the parties to the litigation. See Uwakwe v Odogwu (1989) 5 NWLR (pt 123) 562 Per Kawu and Nnaemeka-Agu JJSC at pp 576 paras E, F & G; and p 589 paras D G. Also a Receiver as such is not entitled to bring an action in his own name as receiver; this is because no property is automatically vested in him by his appointment, but he may acquire a right to sue in his own name out of his receivership but not in consequence of it alone. I refer to Intercontractors Nigeria Ltd V. U.A.C Nigeria Ltd. (1994) 3 NWLR (pt 333) 481/490. In the instant case, the Receiver/Manager is not required to be a party to this case before this motion or the appeal could be heard. He is an officer of the court executing the orders and powers vested on him by reason of that appointment. It is for these reasons that I hold that this leg of preliminary objection is misconceived.’
✓ THIS COURT CANNOT FOLD ITS ARMS AND WATCH THE GROSS ABUSE OF COURT PROCESS BUT SHOULD RESTORE PARTY
‘The learned respondents’ counsel forcefully argued that to grant this application would amount to disposal of the pending appeal before this court. Even if that postulation is correct, would this court be placed in a position where it would be looking helplessly where a judicial order as provided in the constitution is being recklessly abused or breached? No !!! This court would not fold its arms and watch helplessly on the face of this gross abuse of court process by either party taking undue advantage of the other. The appropriate thing to do is to fall back on the order of mandatory injunction which is restorable in nature to undo what has been wrongfully or illegally done. It is usually used to set aside completely acts and restore the parties to the statusquo ante bellum.’
✓ PRINCIPLES GUIDING THE GRANT OF MANDATORY INJUNCTION HAVE BEEN SATISFIED
‘In the case of Daniel v Ferguson (1891) 5 CH. D. 27 at 30 the principles guiding the grant of mandatory injunction have been spelt out clearly as follows:- ‘1. The state of affairs which is complained of must be such that would have entitled the plaintiff obtain prohibitory injunction. 1. The state of affairs which might have been prohibited from coming about must have arisen at the time when the material order is made. 3. It must not have been impossible for the defendant to restore to the earlier position. 4. It must appear that damages and other legal remedies are not sufficient to put the plaintiff in a favourable position as if he had received equitable relief in specie. 5. It must appear in all the circumstances and particularly in view of equitable considerations such as laches, hardship, impossibility of performance or compliance and inconveniences as between the parties, that the most just course is that the mandatory order be granted. 6. The plaintiff’s case must be unusually strong and clear. 7. Where it can be shown that the defendant attempted to steal a match on the plaintiff by rushing to complete the act, mandatory injunction will lie to restore the plaintiff to the position he would have been.’ See also Allport V. Securities Corporation (1895) 64 L. J CH. 491.
Though the above authorities are of persuasive nature, I agree with the principles stated therein. Where the restorative mandatory injunction is invoked to deal with the defendant who attempts to steal a match on the plaintiffs case, the court is concerned with the merit of the plaintiff’s case. The court is concerned with the invocation of its disciplinary jurisdiction to prevent its jurisdiction to try the case before it from being frustrated or stultified. With due respect, the defendants did not only try to steal the match, but also decided to kill the 1 st respondent by the various acts of financial mis-management they have inflicted on it at the end of which the plaintiff would have lost all other investments in the 1 st respondent. The justice of this case therefore demands that this order be granted.’
‘It is for the reasons stated above that I respectfully disagree with the lead ruling of my learned brother Tabai. JSC. In the circumstances, I find merit in this application and I hereby grant the alternative prayers in the following terms:- 1. It is hereby ordered that Mr. Olusegun Bamidele Ajayi the Receiver/Manager appointed for the 1 st respondent on the 23 rd day of March 2009 following the orders of the Court of Appeal of 19 th March, 2009 be and is hereby restored to his office as Receiver/Manager of the 1 st Respondent pending the determination of the appeal pending before the Supreme Court. 2. It is further ordered that the 2nd and 3 rd Respondents, their agents, Privies or any person howsoever be and are hereby restrained from acting as Directors of the 1 st Respondent or from interfering with the finances, securities, and other businesses of the 1 st respondent pending the determination of the appeal pending in this court. Both parties are advised to pursue all the appeals pending in all the Courts. Thirty thousand naira (N30,000) costs are awarded in favour of the appellants/applicants in this application. Application is granted.’
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)