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CANSCO DUBAI LLC v. SEAWOLF OILFIELDSERVICES LTD & ANOR
CITATION: (2018) LPELR-43674(CA)
In the Court of AppealIn the Lagos Judicial Division
Holden at Lagos
ON MONDAY, 15TH JANUARY, 2018Suit No: CA/L/1191/15
Before Their Lordships:
CHIDI NWAOMA UWA Justice, Court of AppealHAMMA AKAWU BARKA Justice, Court of AppealBOLOUKUROMO MOSES UGO Justice, Court of Appeal
BetweenCANSCO DUBAI LLC - Appellant(s)
And1. SEAWOLF OILFIELD SERVICES LIMITED2. MIKE IGBOKWE (SAN)(Receiver/Manager of Seawolf Oilfield ServicesLtd)
- Respondent(s)
RATIO DECIDENDI
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1. COMPANY LAW - RECEIVER/MANAGER: Duty of a person appointed receiver/manager of the whole or any part of the undertaking of acompany"It is not in doubt that the 2nd respondent was appointed Receiver/Manager of the 1st respondent by Asset Management Company ofNigeria (AMCON) an agency of the Federal Government, therefore, the 2nd Respondent is an agent of AMCON and was acting on behalf ofAMCON.See, paragraph 6 of the affidavit in support of the appellant's motion ex parte, page 100 of the records. The appellant having submittedits claims to an administrative body ought to have awaited the outcome of the internal process before resorting to the Court. There wasno decision/action taken on the claims before the 2nd Respondent (Receiver) before the petition was filed. The decision would havedetermined whether a winding up petition would be necessary or not. The reason why the appellant sought the appointment of aprovisional liquidator for which she obtained the ex-parte interim orders of 20th May, 2015 was for the preservation of the assets of the1st Respondent from dissipation, paragraph 15 of the affidavit in support of the motion ex-parte page 100 of the printed records, this wastaken care of by the appointment of the 2nd Respondent as a Receiver/manager of the 1st Respondent thus, making it unnecessary toappoint another person to perform the same functions being performed by the 2nd Respondent. Paragraph 15 reads thus:"The orders sought are principally meant to preserve the funds and assets of the 1st Respondent which will be used to liquidate the 1stRespondent's indebtedness to the petitioner and other creditors likely to be interested in the proceedings."The above deposition makes the interim orders granted by the lower Court on 20th May, 2015 unnecessary. The reason being that thefunctions of a liquidator and Receiver/manager are the same, they are appointed to perform the same/similar functions contrary to theview of the learned counsel to the appellant that their roles are different. Section 425 of the CAMA outlines the powers and functions of aliquidator while a combination of Section 393 of CAMA and Schedule Eleven of the same CAMA outlines the powers and functions of aReceiver/Manager. The above provisions were well outlined by the learned counsel to the Respondents contrary to the submissions of thelearned counsel to the Appellant that the appointment of the 2nd respondent to protect the interest of AMCON does not extend to theAppellant and any other creditor of the 1st Respondent. Also, contrary to the argument of the learned counsel to the Appellant that theappointment of a provisional liquidator was necessary as a next step to winding up proceedings and a means of protecting the assets ofthe 1st Respondent from being dissipated by the 2nd Respondent during the pendency of the winding up petition, I hold that theappointment of the 2nd Respondent as the Receiver/Manager of the 1st Respondent by AMCON should allay the fears of the Appellant inrespect of the assets of the 1st Respondent.The crux of the appeal is the preservation of the assets of the 1st respondent from dissipation for which the appellant went to the lowerCourt to seek orders of interim injunction ex parte to preserve the assets pending the appointment of a provisional liquidator who was tocarry out the same function on appointment. The lower Court was right in its view that since the 2nd respondent had been appointedReceiver/Manager of the 1st Respondent which the appellant had knowledge of; therefore, there should not have been any apprehensionon the part of the appellant that the assets of the 1st respondent would be dissipated. Part of the duty of a Receiver/Manager and aprovisional liquidator is to preserve assets and undertakings of the company.In the case of PROVISIONAL LIQUIDATOR OF TAPP INDUSTRIES LIMITED & ANOR v. TAPP INDUSTRIES LTD & ORS (1995) LPELR - 2928 (SC);(1995) 5 NWLR (PT. 393) P. 9, the Apex Court held that:"the main object of appointing a provisional liquidator is the preservation of the property of the company to be wound up, all otherconditions attached to any such appointment can only go towards strengthening that main objective and not derogate from suchprincipal objective." Similarly, the appointment of a Receiver/manager under Schedule 11 of CAMA is to preserve the assets of thecompany when it is in danger of dissipation amongst other functions. Their functions are similar and it was premature and anticipatory toappoint a provisional liquidator when the 2nd Respondent was already appointed Receiver/Manager for the same purpose for which theappellant were granted the interim orders that were discharged.I agree totally with the submissions of the learned counsel to the respondents that under Section 390 (1) and (2), the Receiver owes thecompany a duty at all times to act in the best interest of the company and not only to act as agent of his appointer, AMCON. For clarity,Section 390 (1) and (2) provide as follows:"390 (1) A Receiver or Manager of any property or undertaking of a company appointed out of Court under a power contained in anyinstrument shall, subject to Section 393 of this Act, be deemed to be an agent of the person or persons on whose behalf he is appointedand, if appointed manager of the whole or any part of the undertaking of a company shall be deemed to stand in a fiduciary relationshipto the company and observe the utmost good faith towards it in any transaction with it or on its behalf.(2) such a manager shall -(a) act at all times in what he believes to be the best interests of the company as a whole so as to preserve its assets, further its businessand promote the purposes for which itwas formed, and in such manner as a faithful, diligent, careful and ordinarily skillful manager would act in the circumstances;(b) in considering whether a particular transaction or cause of action is in the best interest of the company as a whole may have regardto the interest of the employees, as well as the members of the company, and when appointed by, or as a representative of a specialclass of members or creditors may give special, but not exclusive consideration to the interests of that class."The Receiver is to act in good faith and render account of all his activities pursuant to Section 398 of CAMA, the 2nd Respondent istherefore not only an agent of his appointer AMCON. I am at one with the submissions of the learned counsel to the respondents that theReceiver appointed under 390 of CAMA above is not different from any one appointed by any other means. On the functions of theReceiver/manager being similar to those of the provisional liquidator, see also, the case of NIGERIA BANK FOR COMMERCE AND INDUSTRYAND ANOR V. ALFIJIR (MINING) (NIG) LTD (1999) LPELR - 2015 (SC); (1999) 14 NWLR (PT. 638) P. 176; (1999) 12 SC (PT. III) P. 109, theSupreme Court held that:"A Receiver/manager whether appointed by a Court or under a deed of debenture as in this case, must be impartial and subject to theterms and conditions of his appointment." (per Kalgo, JSC at p. 25, PARAS D - F)."His Lordship Ogwuegbu, JSC at p. 34, PARAS A - E in the same case held that:"The 2nd Appellant by his appointment was required to manage the plaintiffs company with a view to the beneficial realization of thesecurity of the 1st appellant on whose behalf he was appointed, and in the performance of his duties, he owed a duty of care and goodfaith. See, Section 393 (2) of the Companies and Allied Matters Act, Cap. 59, of Laws of the Federation of Nigeria, 1990, which provides:"393 (2): A person appointed manager of the whole or any part with a view to the beneficial realisation of the security of those on whosebehalf he is appointed." All of the above debunks the argument of the learned counsel to the appellant that the 2nd respondent wouldonly be acting in the interest of the appointing body AMCON and not the company and the assets being dissipated which necessitated thepetition before the lower Court for the liquidation of a company already in Receivership when the same claims formed the basis of thepetition by the appellant which had been submitted to the 2nd respondent who was yet to consider and take a decision on the claims.The trial Court's view cannot be faulted that the petitioner is encouraged to await the consideration and determination of its claim by the2nd Respondent rather than bringing or filing a petition for the liquidation of a company already in receivership."Per UWA, J.C.A. (Pp.35-42, Paras. A-C) - read in context
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2. COMPANY LAW - WINDING UP: Whether notice of exparte interim order of injunction in a winding up proceeding must be served onthe parties against whom the order is sought"On the Respondent's Notice, the provisions of Order 4 of Companies Winding-Up Rules, Cap C20 Laws of the Federation, 2010 prohibitsthe presentation of ex-parte applications in winding up proceedings. I agree with learned counsel that such applications must be by wayof motion notice of which must be given to the parties against whom the order is sought. The service of the motion on persons to beaffected by the grant of the reliefs sought by such motions is required. see, PROVISIONAL LIQUIDATOR, TAPP INDUSTRY LTD V. TAPPINDUSTRY LTD (SUPRA) and ANAKWENZE & ORS V. TAPP INDUSTRY LTD (1992) 7 NWLR (PT. 252) 142 at 157, PARAS C - D. Therefore, theex-parte interim orders of injunction granted by the lower Court which were later discharged ought not to have been granted. The interimorders sought at the lower Court ought to have been served on the respondents so that the respondents could be heard before the orderof 20th May, 2015, short of this, it is a breach of the respondents' right to fair hearing which is enough to invalidate the proceedings ifallowed to stand. HONEYWELL FLOUR WILLS PLC V. ECOBANK NIGERIA LIMITED (2016) 16 NWLR (PT. 1539) 387 at 425 - 426. On thisnote, the decision of the lower Court is also affirmed on the ground of inappropriateness of the grant of the ex-parte interim orders ofinjunction in a winding up petition contrary to Order 4 of the Winding Up Rules."Per UWA, J.C.A. (Pp. 42-43, Paras. E-E) - read in context
3. PRACTICE AND PROCEDURE - PRELIMINARY OBJECTION: Reason why the court must first consider and resolve a preliminaryobjection whenever it is raised"It is trite that where a preliminary objection has been raised challenging the competence of part of the issues raised or the entire case,same has to be looked into and resolved first before going into the rest of the issues where only part of the issues is being objected to,but where it is the entire appeal, same would be looked into only if the objection fails, where it succeeds, it would dispose of the entireappeal."Per UWA, J.C.A. (P. 27, Paras. D-F) - read in context
4. PRACTICE AND PROCEDURE - CONSISTENCY IN PRESENTATION OF A CASE: Whether a party can maintain on appeal a casedifferent from that which was presented at the lower Court"It is a well-established principle of law that a party will not set out on appeal, a case different from what was canvassed and determinedat trial Court. See, ATANDA v. HON. COMMISSIONER FOR LANDS AND HOUSING, KWARA STATE AND ANOR (2017) LPELR - 42346 (SC) atpp. 30-31, PARAS E-A; DAGACI DERE VS. DAGACI EBWA (2006) 7 NWLR (PT. 979) page 382 at 420 - 421; UKPONG VS. COMMISSIONERFOR FINANCE (2006) 19 NWLR (PT 1013) PAGE 187 at 221 and AJIDE V. KELANI (1985) 3 NWLR (PT. 12) 248 at 269."Per UWA, J.C.A. (P.29, Paras. B-D) - read in context
5. PRACTICE AND PROCEDURE - PRELIMINARY OBJECTION: Aim/essence of a preliminary objection"...the aim or essence of a preliminary objection is to terminate a case at an early stage, to save time and energy considering a fruitlessmatter in a Court's proceedings. It is to foreclose the hearing of a matter to save time. In the case of an appeal, the hearing of the appealto save time. See, OKAFOR v. NWUDE (1999) 7 S.C. (PT 1) 106, YARO V. AREWA CONSTRUCTION LTD & ORS (2007) 6 SCNJ 418 and EFETv. INEC & ORS (2011) LPELR - 8109 (SC); (2011) 1 - 2 SC (PT. 111) P. 61; (2011) 7 NWLR (PT 1247) P. 423. In essence, where apreliminary objection is to only a ground and an issue which will not terminate the entire appeal, there is no point raising it, since theother grounds and issues would sustain the appeal and the main issue at stake."Per UWA, J.C.A. (P. 31, Paras. B-E) - read in context
6. PRACTICE AND PROCEDURE - ABUSE OF COURT/JUDICIAL PROCESS(ES): What constitute abuse of Court process"The abuse of Court process occurs where two similar processes are used in respect of the exercise of the same right. see, AGWASIM ANDANOR v. OJICHIE & ANOR (2004) LPELR - 256 (SC); (2004) 10 NWLR (PT. 882) P. 613; (2004) SC (PT 11) P. 160; OKORODUDU v.OKOROMADU (1977) 3 SC 21; OYEGBOLA V. ESSO OF WEST AFRICA INC. (1966) 1 ALL NLR 170, HARRIMAN V. HARRIMAN (1989) 5 NWLR(PT. 119) 6 and more recently OYEYEMI & ORS V. OWOEYE & ANOR (2017) LPELR - 41903 (SC). In CHIEF VICTOR UMEH AND ANOR V.PROFESSOR MAURICE IWUH AND ORS (2008) VOL. 41 WRN A at 18 LINES 5 - 10 (SC), the Apex Court described abuse of Court processthus:"It is settled law that generally, abuse of Court process contemplates multiplicity of suits between the same parties in regard to the samesubject matter and on the same issue. See, OGOEJEOFO v. OGOEJEOFO (2006) 3 NWLR (PT. 996) 205 and OKAFOR V. ATTORNEYGENERAL OF ANAMBRA (2001) 7 WRN 77; (2001) FWLR (pt. 58) 1127; (1991) 6 NWLR (PT 200) 659; (1991) 9 - 10 SC NJ 107. The bottomline of these authorities in regard to abuse of process is that, to institute an action during the pendency of another suit claiming the samerelief is an abuse of Court is to put an end to the suit..."Per UWA, J.C.A. (Pp. 33-34, Paras. C-D) - read in context
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CHIDI NWAOMA UWA, J.C.A. (Delivering the Leading
Judgment): The appeal is against the Ruling of the Federal
High Court delivered on the 6th day of November, 2015 in
Suit No. FHC/L/CP/677/2015 upholding the Respondents'
Preliminary objection and dismissing the Winding Up
Petition filed by the Appellant as petitioner.
The background facts are that the Appellant filed a Winding
Up Petition at the lower Court dated 12th May, 2015 in
praying that the 1st Respondent may be wound up by the
Court under the provisions of the Companies and Allied
Matters Act, CAP C20, Laws of the Federation of Nigeria,
2004.
The appellant also filed a Motion Ex-parte dated 12th May,
2015, seeking preservative Orders of injunction and leave
for the advertisement of the winding up proceedings. On
the 2nd day of June, 2015, the appellant, having complied
with the order of the lower Court to advertise the Winding
up Petition, filed a Motion on Notice seeking the Order of
the lower court to appoint a provisional liquidator.
The Respondents filed a conditional Notice of intention to
appear in the Petition and a Motion on Notice dated 2nd
June, 2015. The
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Appellant's Motion on Notice sought an order discharging
and/or vacating the interim orders of injunction and/or
striking out the name of the 2nd Respondent from the
petition and striking out and/or dismissing the petition. The
Respondents further filed a Motion on Notice dated 12th
June, 2015 praying the Lower Court to stay or suspend the
execution of the interim orders of injunction pending the
hearing and determination of the Respondents' Motion on
Notice dated 2nd June, 2015.
The appellant filed a Counter Affidavit dated 19th June,
2015 to the Respondents' Motion on Notice dated 2nd June,
2015. The Appellant also filed a Counter Affidavit dated
24th June, 2015 to the Respondents' Motion on Notice
dated 12th June, 2015.
The Respondents' Motion on Notice dated 2nd June, 2015
was argued on the 26th day of October, 2015. In its Ruling
the lower Court dismissed the petition of the Appellant,
upheld the submissions of the Respondents and declined
jurisdiction to hear the petition and subsequently dismissed
the entire winding up petition. It is against the Ruling that
the Appellant has appealed to this Court being unhappy
with the outcome. The following
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issues were distilled for the determination of the appeal
thus:
Issue 1.
"Whether or not the function of a liquidator is in
tandem with the duties of a Receiver/Manager of a
company as provided for in Section 393 of the
Companies and Allied Matters Act, 1990 (Issue
arising from Ground A)
Issue 2
Whether or not the appointment of the 2nd
Respondent as the Receiver/Manager of the 1st
Respondent is sufficient to alley (sic) the Petitioner's
apprehension in respect of the dissipation of the 1st
Respondent's assets or funds in the bank. (Issue
arising from Ground B)
Issue 3
Whether or not the Appellant’s Winding-up Petition
was inappropriate in spite of its claims presented to
the 2nd Respondent. (Issue arising from ground C)
Issue 4
Whether or not the Honourable Court ought to have
vacated the order of Mareva injunction granted on the
20th of May, 2015 (Issue arising from ground D."
The Respondents on their part distilled the following two
issues for the determination of the appeal:
1. "Considering the facts and circumstances of the
Petition presented before the lower Court, whether
the lower Court was not
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right when it declined jurisdiction to entertain the
petition of the appellant (Grounds A, B, and C of the
Notice of Appeal).
2. Having regard to the petition presented before the
lower Court, vis-a-vis settled positions of the law,
whether the lower Court was not right when it
vacated/discharged its earlier ex parte orders of
interim injunction (Ground D of the Notice of
Appeal)."
In arguing his first issue, the learned counsel to the
appellant Qudus Mumuney Esq. with Tobi Rosiji Esq. relied
on his brief of argument filed on 15/3/16 but, deemed filed
on 18/10/17 and a reply brief filed on 3/10/17 but, deemed
filed on 18/10/17. The learned counsel adopted both briefs
in urging us to allow the appeal, set aside the Ruling of the
lower Court and direct the lower Court to determine the
winding up Petition filed against the 1st Respondent.
In arguing his first issue, it was submitted that the lower
Court in its Ruling held that the function of a liquidator is
in tandem with the duties of a Receiver/Manager of a
Company as provided for in Section 393 of the Companies
and Allied Matters Act, 1990 (hereafter referred to as
"CAMA") on this basis, the
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lower Court upheld the preliminary objection of the
Respondents and dismissed the Appellant's petition for
winding up. Further, that the Ruling is to the effect that the
appointment of a Receiver/Manager by a debenture holder
pursuant to Section 390 and 393 CAMA is equivalent to the
appointment of a Liquidator pursuant to the provisions of
Section 422 of CAMA and Rule 21 of the Winding Up Rules.
The trial Court’s Ruling implies that the appointment of a
Receiver/Manager forecloses the option of presenting a
winding up petition by a creditor company. It was
submitted that the institution of the receivership is
designed to safeguard the subject matter of security for the
benefit of the persons entitled to it or to protect same from
some damage or jeopardy which threatens it. See,
ATUANYA V. ATUANYA (1994) 1 NWLR (PT. 322) P.
572. Further, that receivership guarantees the debt or
other obligation owed by the debtor by ensuring the
preservation of the property pending the realization of the
security. It was argued that there is a clear difference
between a receiver/manager appointed by a debenture
holder pursuant to the provisions of Sections 390 and 393
of
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CAMA and the appointment of an official receiver by the
Court pursuant to Section 419 of CAMA. Sections 390, 393
(1) and (2), 422 and Rule 21 of the Winding Up Rules were
reproduced for clarity.
It was argued that from the provisions of Sections 390 and
393 (1) and (2) of CAMA, a Receiver/Manager appointed
pursuant to an instrument by a debenture holder is an
agent of the debenture holder for the purpose of securing
the assets of the debtor and nothing more. On the legal
status of a receiver/manager appointed by a debenture,
see, CHRISTLIEB PLC V. MAJEKODUNMI (2009) ALL
FWLR (PT. 472) 1042 at 1046. Further, that the purpose
of appointing a Receiver/Manager for a Company is to work
towards paying outstanding debt or redeeming security or
freeing property from some jeopardy for the benefit of
creditors or debenture holders or on whose behalf the
appointment is made. Such a Receiver/Manager would not
act in the interest of a third party and would not be bound
legally to settle debt due to third parties other than the
beneficiaries of the Receiver/Manager's appointment.
It was argued that the 2nd Respondent was appointed a
Receiver/Manager pursuant to an
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instrument in line with the provisions of Section 390 and
393 of "CAMA", such appointment being distinct from the
appointment of a Liquidator pursuant to Section 422 of
"CAMA" and Rule 21 of the Winding up Rules. It was
concluded on this issue that the Appellant's application for
the appointment of a provisional liquidator for the purpose
of the winding up proceeding was made in line with the
provision of the winding up rules and ought not to have
been dismissed by the lower Court. Further, that the
function of a liquidator under a winding up proceeding is
clearly different from the status of a Receiver/Manager in
receivership.
In the appellant's second issue, it was submitted that the
lower court in its Ruling encouraged the Appellant to wait
for the consideration and determination of its claim by the
2nd Respondent rather than bringing or filing a petition for
the liquidation of a company already in receivership. It was
submitted that the 2nd Respondent was appointed the
Receiver/Manager of the 1st Respondent by a Deed of
Appointment dated 10th December, 2013 by Asset
Management corporation of Nigeria ("AMCO") in exercise
of its powers set out in
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Section 48 of the Asset Management Corporation of Nigeria
Act 2010 ("AMCON Act") and by virtue of the Loan
Purchase and Limited Service agreement dated 31st
December, 2010. Section 48 of the "AMCON ACT" was
reviewed. While interpreting Section 390 of "CAMA", it was
argued that the sole aim of appointing the 2nd Respondent
by "AMCON" is for the purpose of realizing its debt from
the 1st Respondent and nothing more, see Section 393 (2)
of "CAMA".
It was further argued that the appointment of the 2nd
Respondent to protect the interest of "AMCON" does not
extend to the Appellant and any other creditor of the 1st
Respondent. It was argued that the 2nd Respondent is by
law seen as the agent of "AMCON" and as such, his only
obligation is to secure the assets of the 1st Respondent for
the purpose of realizing the debt owed to "AMCON" by the
1st Respondent pursuant to the Loan purchase and Limited
Service Agreement dated 31st December, 2010 and the
Deed of Appointment of the 2nd Respondent dated 10th
December, 2013 by "AMCON". It was contended that the
2nd Respondent's appointment is distinct from the
appointment subject to Section 389 of "CAMA".
It was
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submitted that the 2nd Respondent is not under any
obligation to protect the interest of the Appellant and is not
empowered by any statute or instrument to request for
submission of evidence of claim as his appointment does
not cover such action, reference was made to the Deed of
Appointment of Receiver/Manager. Further, that while the
winding up petition of the Appellant was subsisting, the
2nd Respondent in violation of the order of the lower Court
proceeded to advertise the sale of the 1st Respondent's
asset, this was: before the dismissal of the winding up
petition. It was argued that the appointment of a
provisional liquidator became necessary as the next step to
the winding up proceeding and as a means of protecting
the assets of the 1st Respondent from being surreptitiously
dissipated by the 2nd Respondent during the pendency of
the winding up petition. The duty of a provisional liquidator
was given as to preserve the company's assets before a
winding up order is made. See, PROVISIONAL
LIQUIDATOR OF TAPP IND. VS. TAPP IND. LTD
(1995) 5 NWLR (PT. 393) 9 at 40. We were urged to
hold that the appointment of the 2nd Respondent as the
Receiver/Manager of the
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1st Respondent by "AMCON" should not have and did not
in any way allay the apprehension of the Appellant in
respect of dissipation of the assets of the 1st Respondent.
On the appellant's third issue, it was submitted that the suit
that led to this appeal is a Winding Up Petition brought
pursuant to Section 408 (d) and 409 (a) of "CAMA" and the
Companies Winding Up Rules 2001, to the effect that only
creditors of a company whose debt remained unpaid three
weeks after demand for payment of same has been made
can bring a Winding Up Petition. It was argued that all the
petitioner was required to show in the petition before the
Court is the fact that it is a creditor of the Company, that
the debts owed to it, has been demanded from the
Company, and that the company is insolvent and unable to
pay the debt. See, YINKA FOLAWIYO and SONS LTD
VS. T.A. HAMMOND PROJECTS LTD (1977) FRCR 14.
It was argued that the particulars of the Winding Up
petition were given in paragraphs 7 - 18 of its claim against
the 1st Respondent. It was argued that from the above
reproduced paragraphs, the Appellant established its claim
before the lower Court as well as the fact that the
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1st Respondent is unable to pay its debt. It was stressed
that the Appellant's petition was filed in compliance with
the provisions of "CAMA" and the winding Up Rules.
Further, that the appointment of a Receiver/Manager does
not foreclose or prevent a creditor from filing a petition for
Winding Up of the Company in appropriate circumstance. A
Winding up proceeding being a process by which a
company may be dissolved or its existence brought to an
end, the provisions of Section 401 (1) of "CAMA" was
highlighted as well as Section 408 of "CAMA".
It was submitted that the Appellant's petition for Winding
Up the 1st Respondent was premised on Section 408 (d) of
"CAMA", while the essence of a receivership is to redeem
the security of creditors or debenture holders in cases of
defaulting facilities, the essence of a Winding Up
proceeding is to bring to an end the life of a company.
Consequently, that the appointment of a Receiver/Manager
under Section 390 and 393 of "CAMA" are not in tandem
with the appointment of a provisional Liquidator for the
purpose of Winding Up a Company. Further, that the
position of the law, on "Receivership" and "Winding Up
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Proceedings" is that by their respective nature, a Winding
Up proceeding may be initiated against a company even
though the company is in receivership, we were referred to
the provisions of Section 401 (1) of "CAMA". It was
reiterated that the essence of a winding Up proceeding is
to bring an end the life of a company which could be done
based on various circumstances such as where the
company is unable to pay a debt due to a creditor pursuant
to Sections 408 (d) and 410 (1) (b) of "CAMA". Another
circumstance upon which Winding Up proceeding may be
commenced against a company was given as where a
receiver satisfies itself that the company is insolvent
pursuant to Section 410 (1) (c) of "CAMA". Further, that
the rights of all the parties identified in Section 410 (1) of
"CAMA" to commence a Winding up proceeding are
independent and exclusive to them respectively, neither is
subject to the other. It was submitted that the lower Court
erred when it dismissed the Appellant's Winding Up
Petition in its entirety and directing the Appellant to wait
for the outcome of the activities of the Receiver/Manager. It
was argued that the lower Court presumed that the only
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time a Winding Up proceeding could be commenced in the
cause of receivership is where it is the receiver so
appointed that initiates Winding Up proceeding under
Section 410 (3) of "CAMA".
It was argued that the clear provisions of Section 410 (3) of
"CAMA" is to the extent that the initiation of a Winding Up
proceeding is not exclusive to "the official receiver"
attached to the Court but, it may be initiated by any other
person authorized by the provisions of Section 410 (1) of
"CAMA", including a creditor. See CHIEF THEODORE
EZEOBI SAN V. DAILY TIMES OF NIGERIA PLC
(2013) LPELR - 20815 (CA).
It was concluded on this issue that the Appellant's relief
under the petition is for the Winding Up of the 1st
Respondent on the ground that the 1st Respondent is
unable to pay its debt. Consequently, the dismissal of the
winding up Petition in its entirety on the basis that the
Appellant ought to have waited for the determination of the
claim by the 2nd Respondent is erroneous.
On the fourth issue, it was submitted that in the Appellant's
Motion Ex parte dated 12th May, 2015 seeking for an order
of mareva injunctions restraining the 1st Respondent from
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dissipating its assets pending the appointment of a
Provisional Liquidator and the affidavit in support of the
said motion clearly specified the condition indicated is in
line with the case of DUROJAIYE V. CONTINENTAL
FEEDERS (NIG) LTD (2001) 10 NWLR (PT. 722) P.657
at 659. It was argued that the Appellant gave the
particulars of the 1st Respondent's assets which were in
danger of being disposed of and satisfied the condition
precedent to the grant of the mareva injunction. It was
argued that to vacate the order of mareva injunction, the
Respondent must show that the condition for the grant of
the order did not exist. Further, that by the nature of a
mareva injunction, it is unnecessary to have a pending
motion or notice or an "ascertainable event" as argued by
the Respondents, before an order of mareva injunction is
granted by the Court. See, E.S.C.S. LTD VS. N.M.B. LTD.
(2005) ALL FWLR (PT. 265) 1805 at 1811 where the
preconditions for the grant of mareva injunction were
itemized. It was concluded on this issue that the ground
upon which the trial Court vacated the mareva injunction
was that same has become unnecessary since the 1st
Respondent was already
14
(201
8) LP
ELR-43
674(
CA)
under the receivership of the 1st Respondent, the above
ground was said to be unknown.
On the part of the respondents, in reaction to the
submissions proffered on behalf of the appellant, the
learned counsel to the Respondents Olabode Olanipekun
Esq., appearing with Bolarinwa Awujoola Esq, Olajide
Salami Esq. raised a preliminary objection in his motion on
Notice filed on 14/9/17, where he prayed as follows:
"1. AN ORDER of this honourable Court striking out
Ground D of appellant's notice of appeal dated 17th
November, 2015.
2. FURTHER TO (1) ABOVE, AN ORDER striking out issue
four in appellant's brief of argument dated 14th March,
2016 formulated from the said Ground D, along with the
arguments presented thereon.
AND FOR SUCH further order or orders as this Honourable
Court may deem fit to make in the circumstances."
The grounds upon which the application was brought are as
follows:
a. "Ground D of the notice of appeal does not arise from the
decision of the lower court.
b. Further to (a) above, Ground D is a misrepresentation of
the decision of the lower Court.
c. Arising from (a) and (b) above, Ground D of the notice
15
(201
8) LP
ELR-43
674(
CA)
of appeal is incompetent and liable to be struck out.
d. Further to (c) above, Issue four in appellant's brief is
predicated on an incompetent ground of appeal.
e. Further to (d) above, Issue four and all arguments
presented thereon are incompetent and liable to be struck
out."
The application was supported by a six paragraph affidavit
deposed to by Olajide Salami Esq., a Legal Practitioner in
the law firm of Wole Olanipekun & Co., counsel to the
Respondents/Applicants. The application was argued in the
Respondents' brief of argument filed on 14/9/17 but,
deemed filed on 18/10/17 at pages 3 - 7 which was adopted
and relied upon as the learned counsel’s argument in
support of the application. The learned counsel to the
Respondents in his argument, reproduced the orders the
appellant sought in their motion paper of 12th May, 2015
and the interim orders granted by the lower Court on 20th
May, 2015. The appellant's Prayers were for:
1. "AN ORDER OF INTERIM INJUNCTION restraining the
1st respondent from tempering (sic) with the funds in any
of the 1st respondent's bank account..."
2. AN ORDER OF INTERIM INJUNCTION restraining the
16
(201
8) LP
ELR-43
674(
CA)
1st respondent .... from tempering (sic) with, alienating,
tranferring ... the 1st respondent's moveable asset."
The lower Court granted the following interim orders:
1. "that the 1st respondent, its directors, staff,
management, employees, officers, agents, privies or any
other person or group of persons whatsoever under the 1st
respondent's authority or any other authority (howsoever
derived or sourced) are hereby restrained from operating,
withdrawing from or otherwise tempering (sic) with the
funds in any of the 1st respondents bank account under
whatsoever name or guise in any Bank or Financial
institution within Nigeria pending the appointment of a
PROVISIONAL LIQUIDATOR in furtherance of the petition
herein presented."
2. "that the 1st respondent, its Agent, Servants, and/or
privies from tempering (sic) with, alienating, transferring
or otherwise dissipating or otherwise appropriating the 1st
respondent's fixed and movable assets, properties,
machinery, tools of trade or other assets howsoever
described and called are hereby restrained pending the
appointment of a PROVISIONAL LIQUIDATOR in
furtherance of the Petition herein presented."
17
(201
8) LP
ELR-43
674(
CA)
It was submitted that, the Respondents later filed a motion
on Notice seeking several reliefs one of which was to set
aside/discharge its ex parte orders of interim injunction of
20th May, 2015. The lower Court in its Ruling vacated its
interim orders, part of which read as follows:
"in the circumstances of this case, the interim orders
earlier granted by this Court on the 20th of May, 2015 was
unnecessary… I hereby discharge and/or vacate the interim
orders of injunction granted by this Court on the 20th of
May, 2015."
It was submitted that there is a great difference between
the orders sought and granted by the lower Court which
was subsequently vacated/discharged and the complaint of
the appellant in Ground D of her grounds of appeal and
issue four (4) formulated therefrom. Further, that the order
vacated by the lower Court was misrepresented in the
grounds of appeal and the issue that has been faulted. See,
ILOABACHI VS. ILOABACHI (2000) 5 NWLR (pt. 656)
178 at 203. It was argued that the appellant has set up a
different case on appeal from what transpired at the trial
Court. It was argued that the issue of mareva injunction
was never
18
(201
8) LP
ELR-43
674(
CA)
presented or argued at the lower Court. It was argued that
ground D is incompetent and should be struck out. See,
AJIDE V. KELANI (1985) 3 NWLR (PT. 12) 248 at 269.
In response to the issues formulated by the appellant, the
learned counsel to the respondents formulated two issues
for the determination of the appeal as earlier highlighted in
this judgment.
The first issue in summary is whether the lower Court was
not right when it declined jurisdiction to entertain the
petition of the appellant? It was the argument of the
learned counsel that the appellate Court would only set
aside the decision of the lower Court only if the judgment is
found to be perverse, which was not the case here. It was
argued that the lower Court found that the appellant's
petition was premature and an abuse of Court process
since by filing claims before the 2nd respondent and
thereafter filing a winding up petition before the lower
Court, the appellant had a multiplicity of machinery in
motion in pursuance of the same rights or for the
attainment of the same purpose. See, AGWASIM VS.
OJICHIE (2004) 10 NWLR (PT. 882) 613 at 622 - 623.
It was stressed that the appellant's
19
(201
8) LP
ELR-43
674(
CA)
petition was speculative and abusive; we were urged to
affirm its dismissal by the lower Court. Further, that the
appellant ought to have waited for the outcome of the
pursuance of its claims before resort to any other remedy.
In respect of the claims the appellant presented to the 2nd
respondent, we were urged to note that the 2nd respondent
was appointed Receiver/Manager of the 1st Respondent by
Asset Management Company of Nigeria (AMCON) an
administrative body and an agency of the Federal
Government. It was argued that the 2nd Respondent is an
agent of AMCON which was conceded by the appellant who
ought to have waited for the outcome of its claims before
the administrative body before resort to the Court. It was
the contention of the learned counsel to the respondents
that the decision of the lower Court on the sameness of the
functions of a Liquidator and Receiver/Manager is
unassailable with reference to Section 425 of the
Companies and Allied Matters Act (CAMA) on the
powers/functions of a Liquidator on one hand and a
combination of Section 393 and Schedule Eleven of
"CAMA" on the powers/functions of a Receiver/Manager. It
was submitted that with
20
(201
8) LP
ELR-43
674(
CA)
the above provisions, the powers of the Liquidator and the
Receiver/Manager are in essence appointed to perform
similar functions contrary to the submissions of the learned
counsel to the appellant that their respective roles are
different. It was stressed that the duties and or functions of
the 2nd respondent as Receiver, and the duties of the
provisional liquidator sought to be appointed are one and
the same, in terms of the duty to preserve the assets and
undertakings of the company. We were urged to read
Section 393 of "CAMA" with Section 390 (1) and (2) of
"CAMA" to the effect that a Receiver appointed in the
manner the 2nd respondent was appointed owes its duties
to the company and must at all times act in the best
interest of the company contrary to the view of the
appellant that the 2nd respondent is only an agent to its
appointer without acknowledging the fact that the receiver
is bound to act at all times in the interest of the company. It
was concluded that the 2nd respondent is not only an agent
to his appointer. We were urged to resolve the appellant's
issues one, two and three against the appellant.
The learned counsel to the respondents
21
(201
8) LP
ELR-43
674(
CA)
argued his second issue, in addition to his motion on Notice
filed on 14/9/17 objecting to ground D and issue four in the
appellant's Notice of appeal and brief of argument
respectively, the issue as to whether the lower Court was
not right when it vacated/discharged its earlier ex - parte
orders of interim injunction? It was submitted that an order
of injunction cannot prohibit a completed act, in that if the
ex - parte orders of the lower Court are allowed to subsist,
it would have been superfluous and would have made in
vain. See, ADEOGUN V. FASHOGBON (2008) 17 NWLR
(PT. 1115) 149 at 193, to the effect that a Court would
not make an order that cannot be enforced.
It was argued that all the arguments proferred by the
appellant under its fourth issue are premised on the grant
of a mareva injunction by the lower Court whereas the
lower Court granted interim orders of injunction. It was
submitted that the appellant did not apply for a mareva
injunction and that reference was never made to the
requirements for obtaining a mareva injunction in the
motion ex - parte which led to the grant of the discharged
interim ex - parte orders. The principles of mareva
22
(201
8) LP
ELR-43
674(
CA)
injunction were not taken into account when the ex - parte
orders were granted. We were urged to resolve the
appellant's fourth issue against it and dismiss the appeal.
The learned counsel to the Respondents also filed a
Respondent's Notice on 14/9/17 deemed properly filed on
18/10/17 which was argued in the Respondents' brief of
argument contending that the decision of the lower Court
which gave rise to the appeal be affirmed on grounds other
than those relied on by the lower Court. The grounds relied
upon are as follows:
1. "That by the imperatives of Order 4 of the Companies
Winding -Up Rules, ex-parte orders are prohibited in
winding up proceedings.
2. Further to (1) above the ex-parte orders of the lower
Court were granted in violation of Order 4 of the
Companies Winding-Up Rules.
3. Arguments on the impropriety of presenting/granting ex-
parte orders in winding-up proceedings were canvassed
before the lower Court.
4. Although the decision of the lower Court in vacating the
ex-parte order is correct, it did not rely on grounds
available to it in discharging/vacating the ex-parte orders of
20th May, 2015.
5. Arising from
23
(201
8) LP
ELR-43
674(
CA)
(1) - (4) above, the decision of the lower Court ought to be
affirmed on other grounds."
A sole issue was formulated in the Respondents' Notice as
follows:
"Having regards to the provisions of Order 4 of the
Companies Winding-Up Rules, whether the lower Court had
jurisdiction to grant exparte orders in a winding-up
petition, as it did in the petition before it."
On the impropriety of ex-parte orders in winding up
petitions, reference was made to Order 4 of the Companies
Winding-Up Rules, Cap C20 Laws of the Federation, 2010.
It was submitted that the application should be by Motion
on Notice, to be served on persons to be affected by the
grants of the reliefs sought by such Motions. It was argued
that the lower Court was right to have discharged the ex-
parte orders in conformity with the position of the law. See
the Apex Court decision in PROVISIONAL LIQUIDATOR
TAPP INDUSTRY LTD VS. TAPP INDUSTRY LTD
(1995) 5 NWLR (PT. 393) 9, and ANAKWENZE & ORS
v. TAPP INDUSTRY LTD. (1992) 7 NWLR (PT 252) 142
at 157 PARAS C - D, a decision of this Court. Also,
HONEYWELL FLOUR MILLS PLC v. ECOBANK
NIGERIA LIMITED (2016) 16 NWLR (PT 1539) 387 at
425 - 426
24
(201
8) LP
ELR-43
674(
CA)
in which interim orders made ex-parte against the
Appellant were discharged by this Court. It was concluded
that the proceedings before the lower Court leading to the
grant of the ex-parte orders were in breach of the
Respondents' right to fair hearing which is enough to
invalidate the proceedings without the need to show the
same occasioned any damage or miscarriage of justice. See,
ADIGUN VS. AG OYO STATE (1987) 1 NWLR (PT 53)
678 at 721 - 722. PARA H - B and other authorities cited
and relied upon by learned counsel to the respondents. We
were urged to affirm the judgment of the lower Court on
the grounds of the illegality of the grant of the ex-parte
orders of injunction in a winding up petition as argued at
the lower Court premised on Order 4 of the Winding Up
Rules.
In the Appellant's reply brief filed on 3/10/17 but deemed
filed 18/10/17, the learned counsel to the appellant in
response to the respondents' Motion filed on 14/9/17
challenging ground D of the Notice of Appeal and the
Appellant's issue four, it was submitted that even though
the Appellant applied for interim orders of injunction, the
lower Court did not name it as such. It was argued
25
(201
8) LP
ELR-43
674(
CA)
that an interim order that has an effect of a Mareva
injunction could rightly be described as such. In defining
what a Mareva injunction is, it was likened to an order of
an interim injunction as sought before the lower Court
wherein the counter affidavit and address to the
Respondent's Motion at the lower Court, the appellant
argued that the nature of the order granted by the lower
Court was a Mareva Order. We were urged to retain the
appellant's issue four distilled from ground D of the Notice
of Appeal.
In response to the respondent's argument under their first
issue, it was submitted that the learned counsel to the
respondents misconceived Section 408 of the CAMA, 2004
and distinguished the facts in the present appeal from
those in UBA VS. MODE NIGERIA LIMITED (2000) 12
NWLR (PT 680) 16 at 22 - 21 referred to by the learned
counsel to the respondents, we were urged to
discountenance same.
In response to the second issue it was described that the
respondents' argument is misconceived, reference was
made to the appellant's resolution of her issues 1 - 3 in the
appellant's brief of argument.
In reaction to the
26
(201
8) LP
ELR-43
674(
CA)
Respondent's Notice, it was submitted that by virtue of
Order 9 Rule 4 of the Rules of this Court, the Respondents'
Notice was filed out of time on the other hand, without
conceding that it was filed within time, it was argued that
the Respondents' Notice was only in respect of part of the
ruling vacating the Order of Mareva Injunction and does
not touch on the order of the lower Court dismissing the
Appellant's petition. It was argued that the order made by
the lower Court was against the assets of the 1st
Respondent and not a person, therefore it could be brought
ex-parte and was properly brought ex-parte. We were
urged to allow the appeal.
It is trite that where a preliminary objection has been
raised challenging the competence of part of the issues
raised or the entire case, same has to be looked into and
resolved first before going into the rest of the issues where
only part of the issues is being objected to, but where it is
the entire appeal, same would be looked into only if the
objection fails, where it succeeds, it would dispose of the
entire appeal. The preliminary objection in the present case
challenged only ground D of the Appellant's
27
(201
8) LP
ELR-43
674(
CA)
Notice of Appeal and the Appellant's issue four formulated
therefrom.
The Appellant's prayer in her motion of 12th May, 2015
prayed for an "interim injunction" to restrain the 1st
respondent from tampering with the funds in any of the 1st
respondent's bank account and alienating, transferring the
1st Respondents moveable assets, page 98 of the printed
records of appeal. The lower Court on the 20th May, 2015
granted the interim orders as sought by the appellant. On
the 6th of November, 2015 the lower Court vacated the
interim orders of injunction earlier granted and held at
page 910 of the records thus:
"in the circumstances of this case, the interim orders
earlier granted by this Court on the 20th of May, 2015 was
unnecessary... I hereby discharge and/or vacate the interim
orders of injunction granted by this Court on the 20th of
May, 2015."
But, the appellant's Ground "D" of her Notice of Appeal
challenged the lower Court vacating the order of Mareva
injunction granted on the 20th of May, 2015. It is
noteworthy that the Ground "D" of the Notice of Appeal did
not reflect or challenge any part of the decision of the
lower Court being appealed
28
(201
8) LP
ELR-43
674(
CA)
against. The issue of grant and/or discharge of Mareva
injunction was not in issue and cannot arise now on appeal.
When the application ex parte for the grant of the interim
injunction that was subsequently discharged was moved,
there was no relief sought for a Mareva injunction, page
192 of the printed records. It is a well-established principle
of law that a party will not set out on appeal, a case
different from what was canvassed and determined at trial
Court. See, ATANDA v. HON. COMMISSIONER FOR
LANDS AND HOUSING, KWARA STATE AND ANOR
(2017) LPELR - 42346 (SC) at pp. 30-31, PARAS E-A;
DAGACI DERE VS. DAGACI EBWA (2006) 7 NWLR
(PT. 979) page 382 at 420 – 421; UKPONG VS.
COMMISSIONER FOR FINANCE (2006) 19 NWLR (PT
1013) PAGE 187 at 221 and AJIDE V. KELANI(1985) 3
NWLR (PT. 12) 248 at 269.
The learned counsel to the appellant in arguing his fourth
issue fully defined what a Mareva injunction is and the
conditions under which it could be granted. It is clear that
the order sought by the Appellant which was granted and
later discharged by the lower Court was an ex-parte order
of interim injunctions and not an order for a Mareva
injunction. The
29
(201
8) LP
ELR-43
674(
CA)
learned counsel to the Appellant in his reply brief had
argued that the ex-parte order granted by the lower Court
did not mention specifically the grant of interim orders in
its pronouncement. To this, I would say that the lower
Court granted the reliefs sought by the appellant as
applicant for interim orders pending the appointment of a
provisional liquidator. Again, the Appellant did not
challenge the order granted as worded by the lower Court.
Mareva injunction was not reflected anywhere, also going
by the definition of Mareva injunction as defined in the
appellant's reply brief. The orders granted and later
vacated did not qualify to be termed Mareva injunction. The
learned counsel to the appellant had also argued that the
interim orders granted are Mareva injunctions, I do not
agree with the line of argument as what was sought,
granted and later discharged at the lower Court was not an
order of Mareva injunction. I hold that ground 'D' of the
Notice of Appeal did not arise from the decision of the
lower Court being appealed against, it is incompetent as
well as the appellant's fourth issue formulated therefrom.
There is merit in the preliminary objection
30
(201
8) LP
ELR-43
674(
CA)
which is sustained. Ground 'D' of the Notice of Appeal and
the appellant's issue four are incompetent, both are hereby
struck out.
Before I go into the other issues, it is noteworthy that the
aim or essence of a preliminary objection is to terminate a
case at an early stage, to save time and energy considering
a fruitless matter in a Court's proceedings. It is to foreclose
the hearing of a matter to save time. In the case of an
appeal, the hearing of the appeal to save time. See,
OKAFOR v. NWUDE (1999) 7 S.C. (PT 1) 106, YARO V.
AREWA CONSTRUCTION LTD & ORS (2007) 6 SCNJ
418 and EFET v. INEC & ORS (2011) LPELR - 8109
(SC); (2011) 1 - 2 SC (PT. 111) P. 61; (2011) 7 NWLR
(PT 1247) P. 423. In essence, where a preliminary
objection is to only a ground and an issue which will not
terminate the entire appeal, there is no point raising it,
since the other grounds and issues would sustain the
appeal and the main issue at stake. In the present appeal,
ground 'D' of the Notice of Appeal which was challenged in
the preliminary objection was argued in the Appellant's
fourth issue and fully responded to in the respondent's
second issue, it would have been
31
(201
8) LP
ELR-43
674(
CA)
easier, better and time saving to have addressed the issue
of the competence or otherwise of ground 'D' of the Notice
of Appeal and the appellant's issue four in the main appeal.
The remaining three issues formulated by the appellant are
captured in the respondents' first issue which I will utilize
in resolution of the crux of the appeal which reads thus:
"Considering the facts and circumstances of the petition
presented before the lower Court, whether the lower Court
was not right when it declined jurisdiction to entertain the
petition of the appellant?"
From the deposition of the respondents in paragraph 5(viii)
of the affidavit in support of the respondents' motion of
2/6/15 before the lower Court, at page 237 of the printed
records, in paragraph 5 (viii) of the Respondents'
applicants' application it was deposed as follows:
"The 1st respondent and its receiver/manager are currently
treating the petitioner's claim."
The same claim formed the basis for the presentation of the
petition by the appellant which had been submitted to the
2nd respondent who was yet to determine same. The
appellant as petitioner did not wait for
32
(201
8) LP
ELR-43
674(
CA)
consideration and determination of its claim by the 2nd
Respondent which ought to have been done before filing a
petition for the liquidation of a company already in
receivership. By the claims filed before the 2nd Respondent
and the subsequent filing of a winding up petition before
the lower Court it is in other words, setting up in motion
multiple machinery to attain the same rights or for the
same purpose, which amounts to an abuse of Court
process. If the 2nd Respondent as Receiver/Manager paid
the claim presented before him, the basis for the petition
would have been lost and would end up being abandoned or
overtaken by events. The abuse of Court process occurs
where two similar processes are used in respect of the
exercise of the same right. see, AGWASIM AND ANOR v.
OJICHIE & ANOR (2004) LPELR - 256 (SC); (2004) 10
NWLR (PT. 882) P. 613; (2004) SC (PT 11) P. 160;
OKORODUDU v. OKOROMADU (1977) 3 SC 21;
OYEGBOLA V. ESSO OF WEST AFRICA INC. (1966) 1
ALL NLR 170, HARRIMAN V. HARRIMAN (1989) 5
NWLR (PT. 119) 6 and more recently OYEYEMI & ORS
V. OWOEYE & ANOR (2017) LPELR - 41903 (SC). In
CHIEF VICTOR UMEH AND ANOR V. PROFESSOR
MAURICE IWUH AND ORS
33
(201
8) LP
ELR-43
674(
CA)
(2008) VOL. 41 WRN A at 18 LINES 5 - 10 (SC), the
Apex Court described abuse of Court process thus:
"It is settled law that generally, abuse of Court process
contemplates multiplicity of suits between the same parties
in regard to the same subject matter and on the same issue.
See, OGOEJEOFO v. OGOEJEOFO (2006) 3 NWLR (PT.
996) 205 and OKAFOR V. ATTORNEY GENERAL OF
ANAMBRA (2001) 7 WRN 77; (2001) FWLR (pt. 58)
1127; (1991) 6 NWLR (PT 200) 659; (1991) 9 - 10 SC
NJ 107. The bottom line of these authorities in regard to
abuse of process is that, to institute an action during the
pendency of another suit claiming the same relief is an
abuse of Court is to put an end to the suit..."
I agree with the learned counsel to the respondents that
the appellant having presented its claims before the 2nd
respondent, it is an acknowledgment that the 1st
respondent would be able to meet up any debt obligation (if
any) and if the debt is satisfied by the 2nd respondent then
the contention that the 1st respondent would not be able to
pay its debts would have been baseless which makes the
appellant's petition speculative. This justifies the dismissal
of the
34
(201
8) LP
ELR-43
674(
CA)
petition by the lower Court of the claims presented to the
2nd respondent through a petition. The appellant ought to
have awaited the outcome, before resorting to another
remedy in the Court.
It is not in doubt that the 2nd respondent was appointed
Receiver/Manager of the 1st respondent by Asset
Management Company of Nigeria (AMCON) an agency of
the Federal Government, therefore, the 2nd Respondent is
an agent of AMCON and was acting on behalf of AMCON.
See, paragraph 6 of the affidavit in support of the
appellant's motion ex parte, page 100 of the records. The
appellant having submitted its claims to an administrative
body ought to have awaited the outcome of the internal
process before resorting to the Court. There was no
decision/action taken on the claims before the 2nd
Respondent (Receiver) before the petition was filed. The
decision would have determined whether a winding up
petition would be necessary or not. The reason why the
appellant sought the appointment of a provisional
liquidator for which she obtained the ex-parte interim
orders of 20th May, 2015 was for the preservation of the
assets of the 1st Respondent from dissipation, paragraph
35
(201
8) LP
ELR-43
674(
CA)
15 of the affidavit in support of the motion ex-parte page
100 of the printed records, this was taken care of by the
appointment of the 2nd Respondent as a Receiver/manager
of the 1st Respondent thus, making it unnecessary to
appoint another person to perform the same functions
being performed by the 2nd Respondent. Paragraph 15
reads thus:
"The orders sought are principally meant to preserve the
funds and assets of the 1st Respondent which will be used
to liquidate the 1st Respondent's indebtedness to the
petitioner and other creditors likely to be interested in the
proceedings."
The above deposition makes the interim orders granted by
the lower Court on 20th May, 2015 unnecessary. The
reason being that the functions of a liquidator and
Receiver/manager are the same, they are appointed to
perform the same/similar functions contrary to the view of
the learned counsel to the appellant that their roles are
different. Section 425 of the CAMA outlines the powers and
functions of a liquidator while a combination of Section 393
of CAMA and Schedule Eleven of the same CAMA outlines
the powers and functions of a Receiver/Manager. The above
provisions were
36
(201
8) LP
ELR-43
674(
CA)
well outlined by the learned counsel to the Respondents
contrary to the submissions of the learned counsel to the
Appellant that the appointment of the 2nd respondent to
protect the interest of AMCON does not extend to the
Appellant and any other creditor of the 1st Respondent.
Also, contrary to the argument of the learned counsel to the
Appellant that the appointment of a provisional liquidator
was necessary as a next step to winding up proceedings
and a means of protecting the assets of the 1st Respondent
from being dissipated by the 2nd Respondent during the
pendency of the winding up petition, I hold that the
a p p o i n t m e n t o f t h e 2 n d R e s p o n d e n t a s t h e
Receiver/Manager of the 1st Respondent by AMCON should
allay the fears of the Appellant in respect of the assets of
the 1st Respondent.
The crux of the appeal is the preservation of the assets of
the 1st respondent from dissipation for which the appellant
went to the lower Court to seek orders of interim injunction
ex parte to preserve the assets pending the appointment of
a provisional liquidator who was to carry out the same
function on appointment. The lower Court was right in its
view that since the
37
(201
8) LP
ELR-43
674(
CA)
2nd respondent had been appointed Receiver/Manager of
the 1st Respondent which the appellant had knowledge of;
therefore, there should not have been any apprehension on
the part of the appellant that the assets of the 1st
respondent would be dissipated. Part of the duty of a
Receiver/Manager and a provisional liquidator is to
preserve assets and undertakings of the company.
In the case of PROVISIONAL LIQUIDATOR OF TAPP
INDUSTRIES LIMITED & ANOR v. TAPP INDUSTRIES
LTD & ORS (1995) LPELR - 2928 (SC); (1995) 5
NWLR (PT. 393) P. 9, the Apex Court held that:
"the main object of appointing a provisional liquidator is
the preservation of the property of the company to be
wound up, all other conditions attached to any such
appointment can only go towards strengthening that main
objective and not derogate from such principal objective."
Similarly, the appointment of a Receiver/manager under
Schedule 11 of CAMA is to preserve the assets of the
company when it is in danger of dissipation amongst other
functions. Their functions are similar and it was premature
and anticipatory to appoint a provisional liquidator when
the 2nd Respondent was already
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appointed Receiver/Manager for the same purpose for
which the appellant were granted the interim orders that
were discharged.
I agree totally with the submissions of the learned counsel
to the respondents that under Section 390 (1) and (2), the
Receiver owes the company a duty at all times to act in the
best interest of the company and not only to act as agent of
his appointer, AMCON. For clarity, Section 390 (1) and (2)
provide as follows:
"390 (1) A Receiver or Manager of any property or
undertaking of a company appointed out of 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 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.
(2) such a manager shall -
(a) act at all times in what he believes to be the best
interests of the company as a whole so as to preserve its
assets, further its business and promote the purposes for
which it
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was formed, and in such manner as a faithful, diligent,
careful and ordinarily skillful manager would act in the
circumstances;
(b) in considering whether a particular transaction or cause
of action is in the best interest of the company as a whole
may have regard to the interest of the employees, as well
as the members of the company, and when appointed by, or
as a representative of a special class of members or
creditors may give special, but not exclusive consideration
to the interests of that class."
The Receiver is to act in good faith and render account of
all his activities pursuant to Section 398 of CAMA, the 2nd
Respondent is therefore not only an agent of his appointer
AMCON. I am at one with the submissions of the learned
counsel to the respondents that the Receiver appointed
under 390 of CAMA above is not different from any one
appointed by any other means. On the functions of the
Receiver/manager being similar to those of the provisional
liquidator, see also, the case of NIGERIA BANK FOR
COMMERCE AND INDUSTRY AND ANOR V. ALFIJIR
(MINING) (NIG) LTD (1999) LPELR – 2015 (SC);
(1999) 14 NWLR (PT. 638) P. 176; (1999) 12 SC (PT.
III) P.
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109, the Supreme Court held that:
"A Receiver/manager whether appointed by a Court or
under a deed of debenture as in this case, must be
impartial and subject to the terms and conditions of his
appointment." (per Kalga, JSC at p. 25, PARAS D - F)."
His Lordship Ogwuegbu, JSC at p. 34, PARAS A - E in
the same case held that:
"The 2nd Appellant by his appointment was required to
manage the plaintiffs company with a view to the beneficial
realization of the security of the 1st appellant on whose
behalf he was appointed, and in the performance of his
duties, he owed a duty of care and good faith. See, Section
393 (2) of the Companies and Allied Matters Act, Cap. 59,
of Laws of the Federation of Nigeria, 1990, which provides:
"393 (2): A person appointed manager of the whole or any
part with a view to the beneficial realisation of the security
of those on whose behalf he is appointed."
All of the above debunks the argument of the learned
counsel to the appellant that the 2nd respondent would
only be acting in the interest of the appointing body
AMCON and not the company and the assets being
dissipated which necessitated the petition before the
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lower Court for the liquidation of a company already in
Receivership when the same claims formed the basis of the
petition by the appellant which had been submitted to the
2nd respondent who was yet to consider and take a
decision on the claims. The trial Court's view cannot be
faulted that the petitioner is encouraged to await the
consideration and determination of its claim by the 2nd
Respondent rather than bringing or filing a petition for the
liquidation of a company already in receivership. I agree
with the submissions of the learned counsel that the
petition was premature and an abuse of the Court process.
The appellant's fourth issue covered by the Respondent's
second issue was earlier struck out under the preliminary
objection.
On the Respondent's Notice, the provisions of Order 4 of
Companies Winding-Up Rules, Cap C20 Laws of the
Federation, 2010 prohibits the presentation of ex-parte
applications in winding up proceedings. I agree with
learned counsel that such applications must be by way of
motion, notice of which must be given to the parties against
whom the order is sought. The service of the motion on
persons to be affected by the grant
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of the reliefs sought by such motions is required. see,
PROVISIONAL LIQUIDATOR, TAPP INDUSTRY LTD V.
TAPP INDUSTRY LTD (SUPRA) and ANAKWENZE &
ORS V. TAPP INDUSTRY LTD (1992) 7 NWLR (PT.
252) 142 at 157, PARAS C - D. Therefore, the ex-parte
interim orders of injunction granted by the lower Court
which were later discharged ought not to have been
granted. The interim orders sought at the lower Court
ought to have been served on the respondents so that the
respondents could be heard before the order of 20th May,
2015, short of this, it is a breach of the respondents' right
to fair hearing which is enough to invalidate the
proceedings if allowed to stand. HONEYWELL FLOUR
WILLS PLC V. ECOBANK NIGERIA LIMITED (2016)
16 NWLR (PT. 1539) 387 at 425 - 426. On this note, the
decision of the lower Court is also affirmed on the ground
of inappropriateness of the grant of the ex-parte interim
orders of injunction in a winding up petition contrary to
Order 4 of the Winding Up Rules.
In the final analysis, the appeal is without merit, same is
hereby dismissed. The decision of the lower Court is hereby
affirmed.
I award costs of N100,000.00 (One Hundred
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Thousand Naira) against the Appellant to the Respondents.
HAMMA AKAWU BARKA, J.C.A.: I Agree.
BOLOUKUROMO MOSES UGO, J.C.A.: I agree.
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Appearances:
Qudus Mumuney, Esq. with him, Tobi Rosiji ForAppellant(s)
Olabode Olanipekun, Esq. with him, BolarinwaAwujoola, Esq, Olajide Salami, Esq. and AbiolaIbadin for the 1st and 2nd Respondents.For Respondent(s)
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