⦿ CASE SUMMARY OF:
Unibiz (Nig.) Ltd. v. Commercial Bank Credit Lyonnais Ltd. (2003) – SC
by PipAr Chima
⦿ LITE HOLDING
A person who appoints a receiver can sue and take action for and unbehalf of the receiver. The appointer is deemed a principal, and a receiver the agent.
Unibiz (Nig.) Ltd.
Commercial Bank Credit Lyonnais Ltd.
(2003) JELR 48889 (SC)
⦿ LEAD JUDGEMENT DELIVERED BY:
A. O. EJIWUNMI, J.S.C.
* FOR THE APPELLANT
* FOR THE RESPONDENT
The action was commenced by the respondents, who as applicants before the Federal High Court, with an ex-parte originating summons for the following orders:
(1) An order of this Honourable Court directing the receiver to take such steps as may be necessary to realize the assets of the respondent with a view to paying its outstandings to the applicant.
(2) An order of this Honourable Court restraining the respondent, its agents, privies and assigns including but not limited to its directors, and officers from doing anything that would prevent the receiver from performing his lawful duties as a receiver.
(3) And for such further order or orders as this Honourable Court may deem fit to make in the circumstances.
Pursuant to this application, the learned Judge of the Federal High Court made the following orders:
1. That the receiver is hereby directed to take such steps as may be necessary to realise the assets of the respondent with a view to paying its outstanding to the applicant bank.
2. That the respondent, its agents, privies and assigns including but not limited to its directors and officers is hereby restrained from doing anything that would prevent the Receiver from performing his lawful duties as a Receiver.
The appellant appealed to the Court of Appeal but the appeal was dismissed; hence, a further appeal to this court.
1. Who is the proper party that has locus standi as between a debenture holder who has appointed a Receiver/Manager and the Receiver/Manager, to institute an action under section 391 of the CAMA to protect the assets forming the subject matter of the Receivership?
2. Whether the Court of Appeal was right in law in holding that the orders made by the trial court upon an ex-parte application were properly made.
⦿ RESOLUTION OF ISSUE(S)
[APPEAL: ALLOWED, IN PART]
1. ISSUE 1 IS RESOLVED AGAINST THE APPELLANT BUT IN FAVOUR OF THE RESPONDENT.
i. In view of that agency relationship created by law, it seems to me clear that by the agency relationship so created with its principal, the Commercial Bank (Credit Lyonnais Nigeria) Limited, the principal can if it wishes take action for and on behalf of the agent.
It is, I think, plain that the submission made for the respondent that a receiver or manager of any property is deemed by virtue of the provisions of section 390(1) of CAMA, an agent of the person or persons on whose behalf he is appointed.
2. ISSUE 2 WAS RESOLVED IN FAVOUR OF THE APPELLANT BUT AGAINST THE RESPONDENT.
i. I have before now set out the prayer of the respondent and the order made thereon in the course of this judgment. And I do not need to refer to them again. But what need be said having regard to what I have said already that the appellant has rightly contended that he ought to have been put on notice before the trial court granted to the respondent the restraining order was placed upon the appellant. I therefore hold that the order was made in breach of the provisions of section 33(1) of the Constitution. It is my view that the principles adumbrated in the Kotoye v. C.B.N. (supra) apply in the instant case having regard to the reasons given in the course of my consideration of that case.
ii. In the context of interlocutory injunctions in which, as I have shown above, a number of decisions on set principles most of which are highly contentious, need be made, can it be doubted that to decide them after hearing only one side clearly offends each and everyone of the above, criteria and attributes of fair hearing? I do not want to concern myself with the unnecessary exercise of examining whether or not such applications can, on the letters of the rules, be brought ex-parte. But I am of the clear view that, once it is conceded that what is involved is an order for interlocutory injunction and not a mere interim order to keep matters in status quo pending the hearing of the application for interlocutory injunction on notice to both sides or until a near named date, then the procedure runs counter to the letters and spirit of section 33 of the Constitution of 1979 and ought not be entertained. For while it can be said that an interim order of injunction merely leaves matters in status quo and that the court does not have to decide any contentious issue before so doing, I do not see how the same could be said when the order by its very nature depends on the resolution of such issues as whether the applicant has established his possibility of success, that the balance of convenience is on his side as against the respondent, that the award of damages cannot sufficiently compensate his damage, and that his conduct all through entitles him to the discretion of the court. It must always be borne in mind when we consider English decisions on the point that in Nigeria, the right of fair hearing is a right entrenched in the Constitution whereas in England it is a creation of the common law which is regulated by the Rules.
⦿ ENDING NOTE BY LEAD JUSTICE – Per
⦿ CONTRIBUTIONS OF OTHER JUSTICES TO ISSUE(S)
⦿ REFERENCED (STATUTE)
Sections 390 and 391 of the Companies and Allied Matters Act, 1990 (otherwise known as “CAMA”).
Section 390(1): A receiver or manager of any property or undertaking of a company appointed out of a court under a power contained in any instrument shall, subject to section 393 of this Act, be deemed to be an agent of the person or persons on whose behalf he is appointed and, if appointed Manager of the whole or any part of the undertaking of a company he shall be deemed to stand in a fiduciary relationship to the company and observe the utmost good faith towards it in any transaction with it or on its behalf.
Section 391: A receiver or manager of the property of a company appointed in accordance with the provisions of subsection (1) of section 390 of this Act, may apply to the court for direction in relation to any particular matter arising in connection with the performance of his functions, and on any such application, the court may give such directions or make such order declaring the rights of persons before the court or otherwise, as it thinks just.
Section 36(1) Constitution of the Federal Republic of Nigeria 1999
⦿ REFERENCED (CASE)
Kotoye v. C.B.N. (1989) 1 NWLR (Pt. 98) 419: Nnaemeka Agu, JSC stated the distinction between “ex parte” & “injunction”: I think it is correct to say that “ex-parte” in relation to injunctions is properly used in contradistinction to, “on notice” – and both expressions, which are mutually exclusive, more strictly rather refer to the manner in which the application is brought and the order procured. An applicant for a non-permanent injunction may bring the application ex-parte, that is without notice to the other side or with notice to the other side, as is appropriate. By their very nature, injunctions granted on ex-parte applications can only be properly interim in nature. They are made, without notice to the other side, to keep matters in status quo to a named date, usually not more than a few days, or until the respondent can be put on notice. The rationale of an order made on such an application is that delay to be caused by proceeding in the ordinary way by putting the other side on notice would or might cause such an irretrievable or serious mischief. Such injunctions are for cases of real urgency. The emphasis is on “real.”
Megarry, J., as he then was, put the principle rather succinctly in the case of Bates v. Lord Hailsham of Marylebone (1972) 3 All ER. 1019 at p.1025 where he stated: An injunction is a serious matter, and must be treated seriously. If there is a plaintiff who has known about a proposal for ten weeks in general terms and for nearly four weeks in detail, and he wants an injunction to prevent effect being given to it at a meeting of which he has known for well over a fortnight, he must have a most cogent explanation if he is to obtain his injunction on an ex-parte application made two and a half hours before the meeting is due to begin. It is no answer to say, as counsel for the plaintiff sought to say, that the grant of an injunction will do the defendants no harm, for apart from other considerations, an inference from an insufficiently explained tardiness in the application is that the urgency and the gravity of the plaintiffs case are less than compelling. Ex-parte injunctions are for cases of real urgency, where there has been a true impossibility of giving notice of motion.
⦿ REFERENCED (OTHERS)
⦿ NOTABLE DICTA
Since the defendant/appellant can bring action in the name of the company, it is not the law that he should be joined. It is action in the name of the company. – Ejiwunmi JSC. Unibiz v. Lyonnais (2003)
Fair hearing has been interpreted by the courts to be synonymous with fair trial and as implying that every reasonable and fair minded observer who watches the proceedings should be able to come to the conclusion that the court or other tribunal has been fair to all the parties concerned. – Ejiwunmi JSC. Unibiz v. Lyonnais (2003)
There are certain basic criteria and attributes of fair hearing, some of which are relevant in this case. These include: (i) that the court shall hear both sides not only in the case but also in all material issues in the case before reaching a decision which may be prejudicial to any party in the case. See Sheldon v. Bromfield Justices (1964) 2 QB. 573, at p. 578. (ii) that the court or tribunal shall give equal treatment, opportunity and consideration to all concerned. See on this: Adigun v. A.-G., Oyo State and Ors. (1987) 1 NWLR (Pt. 53) 678. (iii) that the proceedings shall be held in public and all concerned shall have access to and be informed of such a place of public hearing and (iv) that having regard to all the circumstances, in every material decision in the case, justice must not only be done but must manifestly and undoubtedly be seen to have been done: R. v. Sussex Justices, ex-parte McCarthy (1924) 1KB 256, at p. 259; Deduwa and Ors. v. Okorodudu (1976) 10 SC 329. – Ejiwunmi JSC. Unibiz v. Lyonnais (2003)
The effect of entrenching a provision in the Constitution is that it over-rides all contrary provisions in any law of the land, be they substantive or adjectival. – Ejiwunmi JSC. Unibiz v. Lyonnais (2003)
⦿ SIMILAR JUDGEMENTS