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AJAOKUTA STEEL COMPANY LIMITED
CORPORATE IDEAL INSURERS LIMITED
IN THE COURT OF APPEAL
4TH DECEMBER 2001
13 WRN 17
BEFORE THEIR LORDSHIPS:
MUHAMMAD SAIFULLAHI MUNTAKA-COOMASSIE, JCA (Presided)
ZAINAB ADAMU BULKACHUWA, JCA
ALBERT GBADEBO ODUYEMI, JCA (Delivered the leading judgment)
INSURANCE AND REINSURANCE LAW:-
PRACTICE AND PROCEDURE – APPEAL – Section 25(4) of Court of Appeal Act, order 3 rules 3(2) (4) and (5) of the Court of Appeal Rules – purport of the combined effect of the provisions.
PRACTICE AND PROCEDURE – APPEAL – Stay of proceedings – relevance of the merits of a substantive appeal to same.
PRACTICE AND PROCEDURE – APPEAL – Stay of proceedings – what applicant must show to succeed.
PRACTICE AND PROCEDURE – EVIDENCE – Record or act of a judicial body – nature of evidence required to prove same.
ALBERT GBADEBO ODUYEMI, JCA. (Delivering the leading judgment):
By a writ of summons issued out of the Federal High Court, Abuja on 8th December, 2000 the plaintiff (now respondent in this appeal) sued the Attorney-General of the Federation and Minister of Justice and five other defendants in an action for declaration for arrears of insurance premium: perpetual injunction, interest and damages. The present appellant was named as 4th defendant in the action.
The reliefs claimed in the statement of claim of the plaintiff are as follows:-
“I. A declaration that the plaintiff/applicant is legally entitled to the sum of N226,000.000.00 specifically appropriated, set aside and earmarked for payment to the plaintiff as arrears and outstanding of insurance premium in accordance with the provisions of the Appropriation Act 2000.
II An order of perpetual injunction restraining the defendants whether by themselves, their agents, servants and or privies howsoever from transferring, spending for any other purpose, virement of misapplying, misusing, diverting, wasting, diminishing, lapsing, retiring or causing to lapse the sum of N226,000,000,00 as the said sum has been specifically appropriated in the Appropriation Act 2000 for payment of arrears of insurance premium owed the plaintiff by the 4th defendant.
III The sum of N226,000,000.00 to the plaintiff with interest at the approved prevailing prime bank lending rate being the arrears of insurance premium owed the plaintiff by the 4th defendant from the 1st day of December 2000 until final compliance.
IV An order awarding the sum of N50,000,000.00 as special and general damages against the defendants jointly and severally in favour of the plaintiff.
PARTICULARS OF DAMAGES
General Damages = N30,000,000.00
TOTAL = N50,000,000.00″
In its statement of defence filed by the 4th defendant in the action, 4th defendant (hereinafter called the appellant) admitted the averments in the statement of claim but denied that it had received the sum of N226,000,000:00 said to have been appropriated.
Respondent then moved the lower court for final judgment against the 4th defendant/appellant in terms of the reliefs claimed in its application. The lower court, on 14th February, 2001 gave judgment as prayed. The 4th defendant later decided to appeal against the judgment.
As required by section 241(2) (c) of the Constitution of the Federal Republic of Nigeria, 1999 and section 25(l) of The Court of Appeal Act, Cap. 75 Laws of the Federation of Nigeria, 1990 the appellant by motion filed in this court on 6th July, 2001 gave notice of its application to appeal.
However since the 3 months period allowed under section 25(2) of the Court of Appeal Act had already expired, appellant in its application for leave also sought extension of time within which to seek for leave to appeal and extension of time within which to appeal against the judgment of the lower court given on 14th February, 2001.
This court considered the three-pronged application on 26th July, 2001 and granted the prayers by extending inter alia, the time within which to file notice and grounds of appeal to 26th July, 2001. The notice of appeal in terms of the proposed notice and grounds of appeal annexed to the affidavit in support of the application was as ordered, filed in this court on 26th July, 2001.
The appellant also filed in this court on the same day i.e. 26th July, 2001 another motion ex-parte as well as a motion on notice.
The motion ex-parte sought inter alia, an order staying the judgment of the Federal High Court given on 14th February, 2001 and any further proceedings arising from the suit No. FHC/ABJ/CA/425/2000 pending the determination of the motion on notice. The motion on notice is to a similar effect except that the stay of judgment and proceedings arising therefrom is to last until the determination of the appeal notice of which had already been filed in this court.
This court heard learned counsel for the appellant on the ex-parte application on 26th July, 2001 and granted the ex-parte application as prayed. The application on notice came up for hearing on 18th October, 2001. Learned counsel on both sides addressed this court on the application. This is the ruling on the application. For the applicant, Mr. Y.S. Tukura of counsel urged upon the court as follows:-
He refers to the affidavit in support of the motion on notice and points out that two paragraphs of the affidavit have become spent as follows:-
Paragraph 5 –which indicated that the motion on notice filed by appellant on 6th July, 2001 for leave of this court to appeal against the decision of the lower court was heard and granted by this court on 26th July, 2001.
Paragraph 15 –which indicated that the proposed notice of appeal discloses substantial issues of law – Annex H can be deemed to have been accepted by this court by the grant of leave to the applicant/appellant on 26th July, 2001 to file notice and grounds of appeal and which order the appellant had complied with by filing in court a copy of exhibit H.
Placing reliance on the other paragraphs of the affidavit in support and on exhibits I, J, K, L and M, learned counsel submitted that this application for stay of judgment and further proceedings is premises on two grounds viz:-
(1) That the notice and grounds of appeal raise substantial issues of law which have to be determined on appeal.
In this respect, learned counsel submits that one of the issues to be determined in the appeal is whether, having regard to the provisions of sections 50 and 93 of the Insurance Decree, No. 2 of 1997 the respondent is entitled to claim the sum of N226 million unpaid insurance premiums which is the subject matter of the suit for which the judgment appealed against was given.
He relies on (i) Irukwu AND Ors. v. Trinity Mills Insurance Brokers AND Ors. (1997) 12 NWLR (Pt. 531) page 113;
(ii) Josien Holdings Ltd. v. Lornamead Ltd. (1995) 1 NWLR (Pt. 371) page 254.
(2) That special circumstances exist to warrant the order of stay of judgment and proceedings in this case in the exercise of the discretion of the court.
In this connection, learned counsel refers to exhibit B annexed to the affidavit in support of the application which shows that the lower court had already made a Garnishee Order Nisi towards execution of the judgment.
Learned counsel also refers to exhibit C which is an affidavit sworn to on behalf of the Garnishee that the sum of N239.4m has been set aside from the account of the judgment debtor/ appellant in compliance with the Garnishee Order Nisi.
Learned counsel also points out that it is indicated in paragraph 14(i) of the counter-affidavit of the respondent that on the same day on which this court made the order of interim stay of judgment and further proceedings pending the determination of this application on notice i.e. on 26th July, 2001; the lower court also made an order that the Central Bank of Nigeria should pay the judgment sum into the court.
Learned counsel invites attention to the averment in paragraph 14(4) and (5) of the counter-affidavit and submits that the statement in paragraph 21 is no proof that respondent is substantial.
Finally, learned counsel submits that the status quo now is that the money has been set aside by the Central Bank and that no one, not even the applicant can now touch It. He urges court to maintain that status quo by granting this application.
In opposing the application, learned senior counsel C.O. Akpamgbo, Esq. S.A.N. refers to the counter-affidavit filed in this court by the respondent and urged as follows:
It is the contention of respondent that the applicant is seeking for a wrong order from this court when it applies for a stay of judgment and further proceeding since applicant agrees that in addition to the judgment of court – exhibit A2 to the affidavit in support of the application, the lower court has already made a Garnishee Order Nisi.
Learned counsel submits therefore that the application of applicant should be stay of execution since the judgment has already merged into the execution and there is therefore no judgment to stay.
It is therefore submitted that the applicable law should have been the Sheriffs and Civil Process Act.
Learned counsel refers also to exhibit H – the notice and grounds of appeal. He submits that it is a requirement of order 3 rule 2(1) of the Court of Appeal Rules that the notice and grounds of appeal should have been filed in the lower court from which the appeal emanates i.e. the Federal High Court, Abuja.
It is therefore contended that even though this court might have rightly granted leave to appeal to the appellant, on account of failure by applicant to file exhibit H at the appropriate venue, there can be no proper application for stay of proceedings or stay of execution of the judgment.
He relies on:
(i) Kano Plastics Ltd. v. Century Merchant Bank Ltd. (1998) 3 NWLR (Pt. 0. 543) page 567.
(ii) Mobil Oil Ltd. v. Agadaigho (1988) 2 NWLR (Pt. 77) page 383;
(iii) Ajaokuta Steel Coy. Ltd. v. United World Ltd. lnc. AND Anor. (2000) 13 NWLR (Pt. 684) page 252;
(iv) Ogunremi v. Dada (1962) 1 All NLR 663.
It is also the contention of learned senior counsel that applicant did not apply in the lower court for the reliefs now being sought in this court.
Finally, learned senior counsel urges this court to refuse the application. The issues which call for determination in this application are-
(i) whether the notice and grounds of appeal in this case is competent;
(ii) whether the judgment of the lower court has merged in execution of judgment;
(iii) whether special circumstances arise in this case to warrant the exercise of the discretion of the court in favour of the applicant.
The first issue posed in this judgment arose out of the objection on behalf of respondent to the competence of the notice and grounds of appeal on account of the fact that the notice of appeal was not filed in the lower court as required by order 3 rule 2(1) of the rules of this court. It touches upon the subject of jurisdiction.
With respect to the learned senior counsel, each of the four cases relied on behalf of the respondent can be distinguished from the peculiar circumstance of this case which is that the time within which applicant can make application to the lower court for leave to appeal against the judgment the subject of the appeal has expired.
That circumstance was not present in any of the four cases relied on.
In the Kano Plastic Limited case (supra), the issue was that the appeal emanated from the Kano State High Court whereas the notice and grounds of appeal which was intended to be filed in that lower court was erroneously submitted for filing in the Federal High Court, Kano.
In the Mobil case (supra), the appeal was on an interlocutory ruling; the lower court was still fully seised of the subject matter of the substantive suit. On the other hand, the statutory time in which appellant could have approached the lower court in this case under section 25 of the Court of Appeal Act had expired. That court had become functus officio in respect of the judgment. The only course left open to the appellant was by way of application for extension of time to the Court of Appeal under section 25(4).
The defect in the application in respect of the Ajaokuta case (supra) is that it joined an application for stay of execution with the application for extension of time; that is not the case in respect of the matter on hand.
Finally in the case of Ogunremi v. Dada (supra) the defect in that case was that while a competent application before the lower court was still pending, appellant made another application to the appellate court.
Apart from the provisions of section 25(4) of the Act which makes the Court of Appeal the only court of competence where the statutory period allowed for appeal has expired, attention must also be drawn to the following provisions of order 3 of the rules of this court thus:
Order 3 rule3(2)– “Any application to the court for leave to appeal (other than an application made after the expiration of the time for appealing) shall be by notice of motion which shall be served on the party or parties affected.
(4) Whenever under these rules an application may be made either to the court below or to the court it shall not be made in the first instance to the court except where there are special circumstances which make it impossible or impracticable to apply to the court below.
(5) If leave to appeal is granted by the court or by the court below the appellant shall file a notice of appeal within the time prescribed by section 25 of the Act.”
Having read the provisions of section 25 of the Act and of order 3 rule 3(2), (4) and (5) together, and guided by the principles in the established cases an appellant who has been granted leave to appeal from a final decision of the lower court has no alternative but to file the notice of appeal In the Court of Appeal where the time allowed by section 25 of the Act has already expired; this was the situation in the case at present under consideration. Also as the time allowed by statute for bringing the application had expired, it was necessary for this court, in the order, to extend the time beyond the period statutorily allowed.
In the circumstances, I hold that the notice and grounds of appeal filed in this court on 26th July, 2001 in respect of a final judgment of the lower court made on 14th February, 2001 is competent to support this application. I therefore resolve issue 1 in favour of the applicant/appellant.
Issue 2 deals with whether the judgement of the lower court has merged in the judgment to render this application for stay of judgment and further proceedings irregular. It is common ground that the application for leave to appeal was filed in this court on 6th July, 2001. It is also common ground as per exhibit XA annexed to the affidavit of urgency in support that on 6th June, 2001 the lower court made a garnishee order nisi on the Central Bank of Nigeria – the 5th defendant in the suit to which the judgment relates. The application for stay of judgment and further proceedings in this case was filed in this court on 25th July, 2001.
Paragraph 11 of the affidavit in support of the application for stay reads thus:-
“11. That on the same day, 17th July, 2001, the Federal High Court entertained another application by the respondent praying the court to order payment into the court which motion is adjourned to 24/7/2001 for ruling.”
In the course of his address in this court on 18th October, 2001 learned counsel for the applicant invited the attention of the court to paragraph 14(i) of the counter-affidavit of respondent which reads thus:-
“14. That paragraph 14 of the affidavit in support is untrue in that:
(i) That on the 26th day of July, 2001 the Federal High Court, Abuja, ordered the Central Bank of Nigeria to pay the already attached judgment sum of N239,418,749.98 into court so that the money will be deposited into an interest yielding account in a reputable commercial bank instead of lying idle in the vaults of the Central Bank.”
With all due respect to learned counsel on both sides this averment is not sufficient to assert the proof of the fact so stated in that it lacks the efficacy of proof which section 112 of the Evidence Act, Cap. 112 of the Laws of the Federation of Nigeria 1990 requires of a public document within section 109 of the Act. Being an averment relating to proof of the record or the act of a judicial body, it is necessary that a certified copy of the order be produced in proof – that has not been done. I am entitled to take it that the last order relating to the matter is exhibit B annexed to the affidavit in support of the application for stay i.e. the garnishee order nisi of the lower court made on 6th June, 2001.
Learned senior counsel has invited this court to find that the judgment on which an order of stay is being sought has merged in the order nisi – exhibit B.
“Nisi” is defined at page 1239 of Jowitts Dictionary of English Law, 2nd edition by John Burke volume 2 as:
” a decree, order, rule, declaration or other adjudication of a court is said to be made nisi when it is not to take effect unless the person affected by it fails to show cause against it within a certain time, that is, unless he appears before the court and gives some reason why it should not take effect.”
The interim order of stay of judgment and further proceedings was made on 26th July, 2001 consequent upon appellant’s application. No garnishee order absolute has so far been exhibited in connection with this application as emanating from the lower court.
I am therefore entitled in the circumstance to take it that the order took effect and that the order nisi of the lower court has not been made absolute in the absence of proof to the contrary. In the event, I resolve issue No. 2 in favour of the applicant/appellant.
The third and final issue for resolution in this application is whether special circumstances exist in this case to warrant the exercise of the discretion of the court in favour of the applicant.
It is a principle of law that an applicant seeking for a stay of judgment must show special or exceptional circumstances why the order should be made because the court will not make a practice of depriving a successful litigant of the fruits of his success – Vaswani Trading AND Co. v. Savalakh AND Co. (1972) 1 All NLR (Pt. 2) page 483; (1972) 12 S.C 17. It is not a correct statement of law to say that the merits of the substantive appeal is irrelevant when an application for a stay of execution is being considered. Where from the grounds of appeal filed there is likely a chance that the appeal might succeed or the grounds of appeal raise substantial point of law, procedural or substantive, the court usually leans in favour of granting application for a stay of execution. Kigo (Nig.) Ltd. v. Holman Bros (Nig) Ltd. (2001) 47 WRN 1; (1980) 5-7 S.C 60. Also, Jadesimi v. Okotie-Eboh (No. 2) (1986) 1 NWLR (Pt. 16) page 264.
Although a court should not deal with the merits of a matter at the stage of an interlocutory application, that is not the same thing as saying that an applicant is not permitted to demonstrate or show that his appeal has merit. Where grounds of appeal exist suggesting that a substantial issue of law is to be decided on appeal and where either side may have a decision in his favour, a stay will be ordered – Balogun v. Balogun (1969) 1 All NLR 349.
The bones of contention of applicant in this case are two. The first is that one of the grounds of appeal is that the contract of insurance upon which the claims are based is statutorily unenforceable because no premiums were paid in respect of any of the years covered by the contract as required by law. To my mind this is a substantial issue for decision in the appeal.
It is also the contention of the applicant that for the moment, exhibit C attached to the application for stay in its paragraph 4 avers on oath that the sum of N239,418,749.98 has been set aside from the account of the judgment debtor/applicant in compliance with the garnishee order nisi.
In my respectful view, this is no match in quality for the unaudited and uncertified statement of the assets listed in paragraph 21 of the counter-affidavit of respondent filed in this court on 17th September, 2001. It appears crystal clear that the balance of convenience favours a grant of the application.
Learned senior counsel submitted that the points now being canvassed were not raised before the lower court. It is to be pointed out that paragraph 4 of the affidavit in support of the application filed in this court on 6th July, 2001 made it clear that the judgment of the lower court given on 14th February, 2001 was a consent judgment.
Accordingly, I resolve the third issue posed for resolution in this judgment in favour of the applicant/appellant. In the event, the application succeeds.
I hereby order that the judgment of the Federal High Court delivered on 14th February, 2001 and any further proceedings arising from the said suit FHC/ABJ/CA/425/2000 be stayed pending the determination of the appeal in this case.
I make no order as to costs.
MUHAMMAD SAIFULLAHI MUNTAKA-COOMASSIE, JCA.: The motion ex-parte together with motion on notice were filed on 26th July, 2001 by the appellant. Both applications prayed this court for an order staying the judgment of the Federal High court delivered on 14/2/2001 pending the determination of the appeal. The ex-parte motion for stay pending the hearing of the motion on notice was taken and granted on 26/7/2001.
It was that application on notice for stay of judgment and proceedings arising therefrom that engaged our attention on 18/10/2001. After hearing the motion on that day, ruling was reserved.
I have had the opportunity of reading before now the leading ruling just delivered by my learned brother Albert Gbadebo Oduyemi, JCA. I entirely agree with his reasoning and conclusions ably adumbrated therein.
In fact, I, with due respect, adopt them as mine. I have nothing more pressing and useful to add to this elegant ruling.
The application for stay of the judgment of the Federal High Court Abuja delivered on 14th day of February, 2001 and any further proceedings arising therefrom are hereby halted and stayed pending the determination of the appeal before us. I make no order as to costs.
ZAINAB ADAMU. BULKACHUWA, JCA.:I have read before now the draft of the ruling just delivered by my learned brother Oduyemi, JCA. I agree with his reasoning that this application the application for stay of further proceedings of the lower court has merit and must be allowed.
An unsuccessful litigant as in this instance applying for a stay must show exceptional or special circumstances which will imply that the balance of justice is weighed in favour of a stay. The applicant had by his affidavit evidence and by his grounds of appeal shown these special circumstances. Granting a stay in the circumstances of this case will therefore be in order.
I grant the applicant in and abide by the consequential order in the lead ruling. I make no order as to costs.
Cases referred to in the judgment
Ajaokuta Steel Co. Ltd. v. United World lnc. (2000) 13 NWLR (Pt. 684) 252.
Balogun v. Balogun (1969) 1 All NLR 349.
Irukwu v. Trinity Mills Insurance Brokers. (1997) 12 NWLR (Pt. 531) 113.
Jadesimi v. Okotie-Eboh (No. 2) (1986) 1 NWLR (Pt. 16) 264.
Josien Holdings Ltd. v. Lornamead Ltd. (1995) 1 NWLR (Pt. 371) 254
Kano Plastics Ltd. v. Century Merchant Bank Ltd. (1998) 3 NWLR (Pt. 543) 567.
Kigo (Nig.) Ltd. v. Holman Bros (Nig) Ltd. (2001) 47 WRN 1; (1980) 5-7 S.C 60.
Mobil Oil (Nig.) Ltd. v. Agadaigho (1988) 2 NWLR (Pt. 77) 383.
Ogunremi v. Dada (1962) 1 All NLR 663.
Vaswani Trading AND Co. v. Savalakh AND Co. (1972) 1 All NLR (Pt. 2) 483; (1972) 12 S.C 77.
Statutes referred to in the judgment
Constitution of the Federal Republic of Nigeria, 1999 s. 241(2)(c).
Court of Appeal Act, Cap. 75 Laws of the Federation of Nigeria, 1990 s. 25(1)(2)(4).
Evidence Act Cap. 112, Laws of the Federation of Nigeria, 1990 Ss. 25(1)(2)(4), 109 AND 112.
Insurance Decree No. 2 of 1997 Ss. 50 AND 93.
Rules of court referred to in the judgment
Court of Appeal Rules 1981 or. 3 rr. 2(1), 3(1)(2)(4)AND(5).