Constitutionality of Section 34(6) of the AMCON Act

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In the Court of Appeal of Nigeria In the Lagos Judicial Division Holden at Lagos On Friday, the 15th day of December, 2020 Before Their Lordships

Monica B. Dongban-Mensem

Mudashiru Oniyangi

Jamilu Y. Tukur

Justices, Court of Appeal

CA/L/1266/2019

Between

Asset Management Corporation of Nigeria…… Appellant

And

1. Mr. Adedayo Mumini Shittu

2. More & S.A. More Limited

3. Knight Rook Limited

4. Mr. Lanre Olaoluwa ……..Respondents

(Lead Judgement delivered by Honourable Monica B. Dongban-Mensem, PCA)

Facts

The Appellant and the 3rd and 4th Respondents were parties to an action before the Federal High Court in Suit No. FHC/L/CS/744/2017 – Asset Management Corporation of Nigeria (AMCON) v Knight Rook Limited & Ors. On 3rd October 2017, the trial Judge in the case, delivered judgement in favour of AMCON, which judgement was affirmed by the Court of Appeal in Appeal No. CA/L/698/2018 on 3rd June, 2019.

Upon the execution of the judgement, the Appellant took over the 3rd Respondent company and properties belonging to the company. The 1st and 2nd Respondent who had acquired interest in the property known as Block 6 Plot 4, Victory Park Estate, Igbokushu, Lekki, Lagos, lost possession of their properties. Consequently, they instituted the action resulting in this appeal against the 3rd and 4th Respondent qonly, at the High Court of Lagos State. They also filed an application seeking an Order of Interlocutory Injunction against the 3rd and 4th Respondents pending the determination of the suit. The Appellant sought to join the suit and was joined by an Order of the trial court.

The 3rd and 4th Respondents, as well as the Appellant, filed separate Preliminary Objections challenging the jurisdiction of the trial court. The trial court delivered a ruling dismissing the Preliminary Objections and granted the 1st and 2nd Respondent’s application, seeking an Order of Interlocutory Injunction. Dissatisfied with the ruling of the trial court, the Appellant appealed to the Court of Appeal.

Issues for Determination

The following issues were determined by the Court of Appeal:

1. Whether the trial court ought to grant an order of injunction against the Appellant, in view of the provisions of Section 34(6) of the Asset Management Corporation of Nigeria (Amendment No. 2) Act, 2019.

2. Whether the trial court had the vires to make an interlocutory order to reverse an executed judgement of a competent court, which has been confirmed on appeal.

3. Whether the trial court had jurisdiction to entertain the suit, in view of the abuse of court processes and other numerous features robbing the court of jurisdiction.

Arguments

On the first issue, counsel for the Appellant submitted that the provisions of Section 34(6) of the Asset Management Corporation of Nigeria (Amendment No. 2) Act (“AMCON Act”) does not infringe judicial powers, particularly the inherent powers of the trial court guaranteed by Section 6 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended). This is because the inherent powers of the trial court are adjunct to the laws validly made by the legislative organs pursuant to the Constitution, and where a statute such as the AMCON Act expressly prohibits a court from making a certain order, the inherent powers cannot be introduced to side-track the legislation. The Appellant relied on the case of METUH v FRN & ANOR. (2017)11 NWLR (Pt. 1575) 177. Counsel argued further that an Order of Injunction, being an equitable remedy, must follow the law, and not supersede the law. He stated that there is uncontroverted affidavit evidence that AMCON took over the 3rd Respondent company, which owns a parcel of land inclusive of the land in dispute, in exercise of its power under the AMCON Act.

In response, counsel argued on behalf of the 1st and 2nd Respondent that the trial court was right to reject the Appellant’s invitation to decline exercising its judicial powers on account of the provision of Section 34(6) of the AMCON Act, as any statute that seeks to regulate, obliterate and limit the judicial powers conferred on the courts by Section 6(6) of the Constitution is null and void. Counsel submitted further that the case of METUH v FRN (supra) cited by the Appellant, is inapplicable in this case. In addition, he contended that assuming the court does not have the requisite jurisdiction, the Appellant failed to place sufficient facts and documents before the court to establish that the properties belonging to the 1st and 2nd Respondent were eligible bank assets. Replying to the submissions above, counsel for the Appellant submitted that Section 6(6) of the Constitution only relates to the jurisdiction, and not powers of the court. He argued further that the power of the trial court to make Orders of Interlocutory Injunction is not constitutional but provisions of High Court Rules, and that he had shown that the claim before the court relates to eligible bank assets.

Regarding the second issue, counsel for the Appellant argued that given the decision of the Federal High Court and the Court of Appeal in Suit No. FHC/L/CS/744/2017 and Appeal No. CA/L/698/2018 respectively, in respect of the ownership of the assets of the 3rd Respondent, the trial court cannot sit as an appellate court over the decisions of the Federal High Court and the Court of Appeal. Counsel submitted that the 1st and 2nd Respondent should have commenced an Interpleader Proceeding, if they believed that their properties were wrongly attached during the execution of the judgement. In response to the submissions of the Appellant on this issue, counsel argued on behalf of the 1st and 2nd Respondent that in the suit leading to the instant appeal, they sought declaratory reliefs that they are the legal owners of their respective properties, but the Federal High Court was not called upon to determine the issue as to title to the land. Counsel also argued that the 1st and 2nd Respondent’s cause of action, is not suitable under the Interpleader Proceeding.

On the third issue, counsel contended on behalf of the Appellant that prior to the commencement of the suit leading to this appeal, the 1st and 2nd Respondent had commenced two suits before the High Court of Lagos State, which were withdrawn. He submitted that one of the suits was withdrawn on the same date the suit leading to this appeal was filed, and this constitutes an abuse of court process. Responding to the submission, counsel for the 1st and 2nd Respondent argued that the suit does not constitute an abuse of court process, as there was no live suit against the Appellant or the 3rd and 4th Respondents bordering on the same issues before the court as at the time the action was filed.

Court’s Judgement and Rationale

Deciding the first issue, the their Lordships held that Section 34(6) of the AMCON Act seeks to take away from the courts, discretion which is the core of their constitutional authority. The court found that the case of METUH v STATE (supra) relied on by the Appellant supports the 1st and 2nd Respondent’s argument that any act by a court or legislation inconsistent with the Constitution, is null and void. The grant of an injunction is one of the discretionary powers of the court by virtue of the provision of Section 6(6) of the Constitution; therefore, Section 34(6) of the AMCON Act which seeks to curtail the discretion of the court and the right of citizens to seek redress from the court, is inconsistent with the provisions of Constitution, and consequently, null and void.

Regarding the second issue, the appellate court decided that where a court of competent jurisdiction has reached a decision on the subject-matter of a suit, no action can be brought before the same court or court of co-ordinate jurisdiction on the same subject matter, except on appeal. The principle of res judicata serves as a bar to such suits – COLE v JIBUNOH & ORS. (2016) LPELR–40662 (SC). The court, however, found in the instant case that the principle of res judicata is not applicable, because the subject-matter differed and the 1st and 2nd Respondent who are aggrieved with the decision, should not be denied access to court based on the pronouncement of the Federal High Court.

On the third issue, their Lordships relied on the decision in R-BENKAY NIGERIA LTD v CADBURY NIGERIA LTD (2012) LPELR-7820 (SC), where the Supreme Court described abuse of court process as the improper use of judicial process by a party in litigation to interfere with the due administration of justice. Instances of abuse of court process were described to include instituting multiple actions on the same subject-matter against the same opponent on the same issues. In this case, the appellate court found that as at the time of the ruling appealed against, there was no other suit on the same subject- matter pending, as the other suits filed earlier were withdrawn. Therefore, there was no live suit before the court, which could constitute an abuse of court process.

Appeal Dismissed.

Representation

Ifedayo A. Adedipe, SAN with Jide Olasite, Esq. and K.O. Atuchukwu, Esq. for the Appellant.

Kemi Pinheiro, SAN FCIArb with Thaddeus Idenyi, Esq. and Omotosho Alade, Esq. for the 1st and 2nd Respondent.

Olugbenga Dosumu, Esq. for the 4th Respondent.

Reported by Optimum Publishers Limited, Publishers of the Nigerian Monthly Law Reports (NMLR) (An Affiliate of Babalakin & Co.)