3PLR – ALLIED BANK PLC V BRAVO W.A LTD
POLICY, PRACTICE AND PUBLISHING, LAW REPORTS 3PLR
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ALLIED BANK PLC
V.
BRAVO W.A LTD
COURT OF APPEAL
(ENUGU DIVISION)
(1996)
3PLR/1996/21 (CA)
OTHER CITATIONS
3. NWLR PART 72 page 714
BEFORE THEIR LORDSHIPS
AKINTOLA OLUFEMI EJIWUNMI
NIKI TOBI;
EUGENE CHUKWUEMEKA UBAEZONU.
REPRESENTATION
Dr. C.C. Mbadinuhu – for 1st and 2nd appellants
Onwubuya, ESQ. – for the 3rd and 4th appellant
Obi Akpudo, ESQ – for the Respondents
EDITORS
[Sam Eleanya, Agboola Omolola Oluwafolakemi, Eleanya Kalu Vincent, Eleanya Ugochi Vine]
MAIN ISSUES
INJUNCTION- Interlocutory injunction – Principle guiding grant of
APPEAL-Interlocutory appeal- Duty on appellate court in considering
STATUTE OF GENERAL APPLICATION- Purport of Section 21 (2) of the Conveyancing Act, 1881
PRINCIPLE OF Lis pendens – Doctrine of
Equity – Maxims of
MAIN JUDGEMENT
Ejiwummi JCA.(Delivering the leading judgment):
This is an interlocutory appeal against the ruling of Nwazota J., (as the then was) in Suit No. 0/356/94. By that Suit the plaintiffs/respondents prayed the lower Court for an order of Interlocutory Injunction restraining.
(a) The 2nd and 4th defendants/respondents, their servants, agents or privies from further entering into the premises known as and called No. C/26 Nkisi Road, Low Cost Housing Estate, Bridge Head approach, Onitsha and No.8, Ihembosi Street, Onitsha) and/or from collecting rents or other profits therefrom or from evicting or attempting to evict the plaintiffs/applicants’ tenants in the said properties or from, in any manner whatsoever reconstructing or dealing with the said properties pending the determination of the substantive suit.
(b) The 1st and 3rd defendants/respondents from handing over or releasing the plaintiffs/applicants title deeds to the properties (or any of them) to the 2nd and 4th defendants/respondents and/or from in any manner whatsoever dealing
or continuing to deal with the said property in any manner inconsistent with the plaintiffs/applicants’ determination of the substantive suit.
Attached to this motion are several Exhibits, beginning with a 46 paragraphed affidavit, deposed to by a Chief Gilbert E. Obi, who described himself as a Company Director and also the Chairman and Managing Director of the 1st applicant company. Attached as exhibits to the said motion are the following documents:
(A) – Statement of Claim in Suit No. 0/180/93 Allied Bank of Nigeria Plc. v. (1) Brayo (West Africa) Ltd. (2) Chief G.E.Oni.
(B) – Statement of Claim in Suit No. 0/130/93) (1) Bravo (West Africa) Limited v. Allied Bank of Nigeria Limited and ; (2) C.C. Mojekwu (Licensed Auctioneer).
(C) – Record of Proceedings of the 17th day of February, 1994, before His Lordship the Hon. Justice Obiora Nwazota in Suit No. 0/180/93- Allied Bank of Nigeria Plc. v. Bravo (W.A.) Ltd. and Anor.
(D) – Photocopy of a Commerce Bank Plc Cheque No. A865663 dated 13/5/94 and issued in favour of Allied Bank of Nigeria Plc for the sum of N1,000,000.00
(E) – Photocopy of a letter dated 13/5/94 hand written by Obi Akpudo and ; Co., Barristers and Solicitors to Dr. C.C. Mbadinuju, Barristers of 22 Oguta Road, Onitsha.
(F) Photocopy of letter typewritten dated 16/5/95 from the Chambers of C.C. Mbadinuju Solicitors to Obi Akpudo Esq.
(F1) Photocopy of a typewritten letter dated 4/6/94 from the Chambers of Obi Akpudo and ; Co., Solicitors to the Manager, Ozubulu Branch, Allied Bank (Nig) Plc.
(G) – Photocopy of a typewritten letter dated 13th June, 1994 to the Manager, Ozubulu Branch of the Allied Bank (Plc. To Obi Akpudo Esq.
(H) – Photocopy of a typewritten letter dated 8th June, 1994 to the Deputy Director, Registrar of Town, Office of the Military Administrator, dept. of Lands, Survey and Town Planning, Deeds Registry, Awka, by Chairman /Managing Director, Bravo (West Africa) Ltd.
Against the motion filed by the applicants, the respondents filed counter-affidavits and exhibited a number of documents.
The first of two counter-affidavits was sworn to by Chief John Nnebeolisa who described himself as the 4th respondent.
The second counter-affidavit was deposed to by one T.O. Longjohn, who described himself as the Branch manager of Allied Bank (Nig.) Plc., Ozubulu. To this Sixty-seven paragraphed affidavit are attached the following Exhibits.
(A) Deed of Mortgage executed between Gilbert Ebeli Obi, Allied Bank of Nigeria Ltd. and bravo (West Africa) Ltd., on the 1st of September, 1987.
(B) Debenture Deed executed between Bravo (West Africa) Ltd. On the 6th Of July 1988.
(C) Motion on Notice upon the application of the defendants/applicants in Suit No. 0/130/93 – Bravo (West Africa) Ltd. v. Allied Bank of Nigeria and ; Anor., and dated 20th July, 1993.
(D) Motion on Notice dated 16th April 1993 upon the application of plaintiff in Suit No. 0/130/93 – Bravo (West Africa) Ltd. v. Allied Bank of Nigeria and ; Anor.
(E) – Statement of Claim in Suit No. 0/180/93 Allied Bank of Nigeria Plc v. Bravo (West Africa) Ltd. and ; (2) Chief G. E Obi and dated 12th April 1994.
(F) Photocopy of typewritten letter from the Manager Ozubulu Branch of the Allied Bank of Nigeria (Plc) to Chairman/Managing Director of Bravo W/A/ Ltd., 48 New Market Road, Onitsha.
(G) Photocopy of a typewritten letter dated 15th March 1989 from the Branch Manager, Allied Bank, Ozubulu to the Chairman/Managing Director of Bravo W/A Ltd., and marked for the attention of Chief G. E. Obi.
(H) Photocopy of a typewritten letter dated 15th February, 1990 from the Branch Manager, Allied Bank Ozubulu to the Chairman/Managing Director of Bravo W/A Ltd., and headed “Final Demand Notice: Your Loan and ; overdraft facilities with us”
(I) Photocopy of a typewritten letter dated 11th February 1991, to Bravo (W/A) Ltd., by the Branch Manager Allied Bank of Nigeria Plc., Ozubulu.
(J) Photocopy of a typewritten letter dated 3rd June, 1987 from Bravo (West Africa) Ltd., to the Manager, Allied Bank
Ozubulu.
(K) Photocopy of a typewritten letter dated 29th April 1988 from Bravo (W.A) Ltd., to the manager Allied Bank Ozubulu.
(L) Photocopy of a typewritten letter dated 6th May, 1993 by Dr. C.C. Mbadinuju Solicitors, to Chief G. E. Obi Managing Director, Bravo (W.A.) Ltd., and captioned “Re Your debt of N6,120,48.91 to Allied Bank of Nigeria Plc., Demand Notice.”
(M) Statement of Account of Bravo (W.A.) Ltd., with Allied Bank Nigeria Plc.
The plaintiffs has before moving this motion for interlocutory injunction caused a writ of summons to be taken out against the defendants in suit No 0/356/94 dated 8th day of June 1994. The claim in the said writ of summons read thus:
(1)
(2)
(3) The plaintiffs used the properties known as and called No. C/26. Nkisi Road, Low Cost Housing Estate, Bridge Head approach, Onitsha and No. 8 Ihembosi Street, Onitsha as security for a loan which they obtained from the 1st
defendant. Both properties are otherwise called Plot No. C/26. Niger Bridge Head, Housing Estate Phase II Onitsha and R/17, Niger BridgeHead layout, Onitsha.
(4) In suit Nos. 0/130/93: Bravo W/A Ltd., Allied Bank of Nigeria Plc., and 0/180/9: Allied Bank of Nigeria Plc., v. Bravo (W/A) Ltd. all sides to the transaction supra are presently before an Onitsha High Court presided over by His Lordship Chief the Hon. Justice Obiora Nwazota over their various rights and liabilities with respect to the transaction pleaded in paragraph 1.
(5) Notwithstanding the facts deposed to in paragraphs 1 and 2 supra, the plaintiffs continued to repay the facility which they obtained from the 1st defendant and as at 13th May, 1994, had fully paid back the money lent to them by the 1st defendant.
(6) In spite of the facts contained in paragraphs 1, 2, and 3 supra, the 1st defendant, through the 3rd defendant (an auctioneer) purportedly sold the aforesaid properties to the 2nd and 4th defendants.
Whereof the plaintiffs claim from and against the defendants jointly and severally as follows:-
(A) Declaration that the purported sale of the properties known as and called Plot C/26, Niger Bridge Head, Housing Estate Phase II, Onitsha and R/17 Niger Bridge Head Layout, Onitsha by the 1st and 3rd Defendants to the 2nd and
4th defendants is ultra vires, null and void and of no effect whatsoever.
(B) N25,000,000.00 damages
(C) Perpetual injunction restraining:
(i) the 1st and 3rd defendants from in any manner whatsoever interfering with the plaintiffs possessory right over the aforesaid properties.
(ii) entering into the said properties (or any of them) and/or purporting to exercise any act of ownership/possession thereon.
With all these materials and others referred to in the Bundle of Documents filed with the leave of this Court for the purpose of this appeal, the learned counsel for the parties addressed the lower Court. He said inter alia follows: –
“Upon reading and considering the text of applicants’ Motion on Notice dated 21/6/94 and the affidavits in support and contra thereto, and after hearing and considering the submissions of Messrs. Akpudo, Mbainuju and Onwuibuya of Council for the parties, and upon my bearing in mind the substance of plaintiffs/applicants claim dated 8/6/94 which forms part of the Writ of Summons issued at their instance against the defendants/respondents
and the reliefs sought of this court by the applicants in their motion on Notice aforesaid which Motion is the subject matter of this Ruling. I am satisfied on the authority of A.C.B. Ltd. v. Awagboro (1991) 2 NWLR (Pt. 176) 711, that it meets the justice of this Court to accede to the prayers sought by the applicants so as to preserving the Res. the subject matter of plaintiffs/substantive suit, and thus ensuring that ultimately the hearing of the substantive suit will not be fruitless exercise.” Being dissatisfied with the ruling and order of the lower Court, the defendants have appealed to this Court. It could appear that two sets of Notice of appeal were filed as revealed by the Briefs of Argument filed by their respective learned council. The defendants from henceforth shall be referred to as the appellants and the plaintiffs, respondents.
For the 1st and ; 2nd appellants, their learned counsel Dr. C. Mbadinuju in the brief filed on their behalf adopted that brief and placed reliance there on at the hearing before us. In that brief four issues were identified for the determination of the appeal: They are:
- Whether the learned trial judge was right in granting the order of interlocutory injunction restraining the defendants/respondents given the peculiar circumstances of this case.
- Whether in the instant case the ruling of the learned trial judge on the question of balance of convenience followed the established principles.
- Whether the learned trial judge considered the affidavit evidence of parties and the attendant governing principles in coming to this decision that damages will not adequately compensate plaintiffs if at the end of litigation judgment is entered in their favour.
- Whether the learned trial Judge was sufficiently guided by the fundamental principles governing the issue of undertaken in reaching his decision.
The 3rd and ; 4th respondents in the brief filed in their behalf by their learned counsel, G. C. N. Onwubuya Esq., the following are the issues he considered suitable for the determination of the appeal.
(i) Whether the learned trial judge exercised his discretion rightly in granting the application by considering only the balance of convenience without considering other requirements necessary for granting such an application.
(ii) Whether an application for injunction can be granting for acts that have been already completed.
(iii) Whether the order for interlocutory injunction was rightly granted having regard to the provisions of S.21 (2) of the Conveyance Act of 1881.
Although the respondents by their learned counsel Obi Okpudo Esq., in the respondent’s brief also identified two issues for the determination of the appeal, I do not deem it necessary to reproduce them. The respondents having recognized that the they have raised are but a restatement of the issues raised in the briefs of argument of the appellants were content to reply to the arguments of the appellants in their own brief. I will therefore examine the issues raised in the light of the various submissions of learned counsel for the parties in their respective briefs of Augment. It is obvious from the argument and submission of learned counsel for the parties that the central issue dominating this appeal is whether the learned trial judge applied the settled principles on interlocutory injunction with regard to whether he should or should not grant the prayers of the respondents for an order of interlocutory injunction.
For the appellant their view AND lt; AND lt ;Page 7AND gt ;AND gt;
taken together is that the learned trial judge wholly failed to advert to the affidavits before him and failed to direct his mind to the settled principles on the grant of interlocutory. For the respondents, their learned counsel contends in their brief that the order of the lower Court upheld.
I think that as it is manifest that the main issue at stake in this appeal is whether the principles concerning the grant of interlocutory injunction have been properly applied, it behooves me to refer to them first, before considering the arguments of counsel for and against the orders of the lower Court. In Kotoye v. CBN (1989) 1 NWLR (Pt. 98) 419, Nnaemeka-Agu JSC took the opportunity presented in that case to review the authorities with regard to the governing principles on the grant of interlocutory injunction. At page 441, he reviewed the principles thus, and I quote him thus:
“Applications for interlocutory injunction are properly made on notice to the other side to keep matter in status quo until the determination of the suit. Evidence is by affidavit. On the hearing of the application for an interlocutory injunction, the court after avoiding all controversial issues of fact, has to decide a number of important issues, including:
(i) The strength of the applicant’s case. A long time ago, the plaintiff was required to show a strong prima facie case that he was entitled to relief (see Harman Pictures N.V v. Osborne (1967) 1 W.L.R. 723. However since the decision of the House of Lords in American Cyanamid Co. v. Ethicon Ltd. (1975) A. C. 396, at pp. 407 – 409 it has been held that what the applicant needs to show is only a possibility, not a probability, of success at the trial that there is a serious question to be tried. This is now an accepted principle in this country. See Obeya Memorial Specialist Hospital Ayi Onyema Family Ltd. v. Attorney General of the Federation and ; Anor. (1987) 3 NWLR (Pt. 60) 325, at p. 340. It does appear, too, from the decision in Cory. v. Reindeer S. S. Co. (1915) 31 T. L. R. 530 that once the plaintiff satisfies this requisite standard in this respect, the order will still be made even though the defendant has a technical defence.
(ii) Once the applicant gets over the initial hurdle of showing that there is serious question to be tried, he must succeed is showing that the balance of convenience is on his side, that is that more justice will result in granting the balance of convenience is on his side is that of the applicant. See Missini and ; Ors. v. Balogun (1968) 1 ALL N.L.R 318.
(iii) The applicant, to succeed, even if he has shown that he has a good case and that the balance of convenience is on his side must furthermore show that damages cannot be an adequate compensation for his damage, if he succeeds at
the end of the day.
(iv) Conduct of the parties – has also quite often, been a relevant factor in the consideration of whether or not to grant an application for interlocutory injunction, as with permanent injunction. For an example, a plaintiff who is also in substantial breach of contract himself get an order of interlocutory injunction against a defendant alleged to be in breach, See on this Jackson v. Hamlyin (1953) 1 W.L.R. 713. Also delay in bringing the application will defeat it because such a delay postulates that there is no urgency in the matter and destroys the very basis for prompt relief by way of interlocutory injunction.
The above are the guiding principles upon which I will mirror the submission of counsel. I begin with the reason given by the 1st and 2nd appellant for their view that the interlocutory order made by the lower Court was wrong. In support thereof, he has identified at page 5 of their brief what he considered inimical to the respondents success at the lower Court, and which the learned judge of the lower Court failed to consider before making the order of interlocutory injunction against the appellants. Quoting from page 5, of the 1st and 2nd appellant brief, they state that from the affidavit evidence before the lower Court and I quote: –
- “The plaintiff filed Suit No – 0/130/93 asking for the same reliefs as in the present Suit – 0/356/94 (See pages 2-3,13,14, 36-37, and 95-96 of the record).
- Plaintiffs also filed motion on notice pursuant to the main Suit 0/130/93 with affidavit in support (See pages 91-94) of the record.
- Then the respondent filed a motion to strike out the Suit No. 0/130/93 (See pages 87 and 88 of the record). And for more than one year plaintiffs were unable to argue their motion on notice nor could they file their Statement of Claim ever after extension of time was granted them. And this state of affairs continued until plaintiffs brought the instant action – 0/356/94 which is on all fours with suit No. 0/130/93.
- Even when defendants filed a claim in Suit No. 0/180/93 to try to recover the loan/overdraft of N6,120,484.91 (See pages 34 and 35), and filed their Statement of Claim (See pages 97-98), the plaintiffs/applicants failed to put in their defence till today.
- The honourable Court in the instant suit – 0/356/94 had also ordered that plaintiffs should file their statement of claim on or before 17th October 1994 (See page 129 of the record). But till today they have characteristically failed
to do so. - Finally, it is on record before the honorable Court that for seven (7) years after plaintiffs took a loan/overdraft from the 1st defendant Bank to the tune of N1,668,000.00 the said plaintiffs repaid nothing despite repeated demands on them to do so (see paragraphs 24, 25, 27, 29, 30, 31, 34 of defendants’ counter-affidavit on pages 51-56 and 123 of the record).
Upon those facts, the learned counsel for the 1st and 2nd appellants asked the Court to note that the respondents debt with the 1st appellant has risen from the sum of N1,668,000.00 to N8,631.88 as at 31st May, 1994. But the respondent had repaid only the sum of N16 million after the case went to Court Dr. C. C. Mbadinuju of learned counsel for the 1st and 2nd appellants then submits that as it is a cardinal principle of law that in deciding who should get the order of interlocutory injunction, the Court has to look at the conduct of the parties. He therefore contends that a plaintiff who is in substantial breach of contract cannot himself get an order of interlocutory injunction against a defendant in such circumstances, Cities, Kotoye v. Central bank of Nigeria and ; 7 Ors. (Supra), and also Victory Merchant Bank v. Pelfaco Ltd. (1993) 9 NWLR (P. 317) 340 at 343.
It is further argued for the 1st and 2nd appellant that the respondents have been deleterious in the way they have handled their affairs, they cannot be the beneficiary of any equitable reliefs as delay defeats equity. The order for an interlocutory injunction being an equitable remedy. For that proposition, reference is made on Amadi Opara v. Godfrey Iheerijika and ;
Ors. (1990) 6 NWLR (Pt. 156) 291 at 292.
In referring to the case of ABC Ltd. v. Awagboro (supra), learned counsel for the 1st and ; 2nd appellant contend that that case is easily distinguishable from that instant case. In Awagboro’s case, the property had not been sold, whereas in the instant case, the property had been sold to a third party. Apart from all of the above, it is argued for the 1st and ; 2nd appellants that the balance of convenience ought to have been held by the lower Court to be their favour. For the Bank, it is a colossal loss to fail to recover the debt owing to it and which was standing in the sum of N8,631,361.88. While on the other hand, the respondents did not establish, the burden being on them, why the balance of convenience ought to be resolved in their favour. Nowhere in their affidavit is it shown how the money owing would be retired, and how they would be
inconvenienced if the order was not made in their favour.
For the 3rd and ; 4th appellant, their reasons for wanting their appeal upheld were focused on the following:
“Whether the learned trial judge was right to have resolved the question of balance of convenience in favour of the respondents. Relying on the principles postulated by Nnaemeka-Agu, J. S. C. in Kotoye v. C.B.N and ; other (supra),
submitted that the learned judge of the lower Court fell into error in answering the question in favour of the respondents. They have not submitted because the learned judge did not in reaching that conclusion consider whether the respondents have a serious question to be tried between the respondents and the 3rd and ; 4th appellants. It is their submission that had the Conveyancing Act. 1881, the Court would have concluded that they have a good defence to their claim against them by virtue of the provisions of the said Act. That leads to their contention with regard to the merit of this appeal as it affects the 3rd and ; 4th respondents.
And that fact being as established that the property was already sold, the respondents could not have moved the Court successfully on the provisions of Order 17 Rule 1 of the High Court Rules of Anambra State 1988, under which they brought the application at the lower Court. This is because, the provisions of Order 17 Rule 1 envisage that the properly in dispute must either be in danger of being wasted, damaged or alienated by any part to the suit. And as the properties have already gone under the hammer of them, the respondents no longer have anything to protect. For support in respect of their submission, reference is made to Oguchi v. Federal Mortgage Bank (Nig.) Ltd. and ; Other (1990) 6 NWLR (Pt. 156) 330 at 343.
The respondents, by their brief took up first the question as to whether the order of interlocutory injunction was not made in error as it was made in respect of completed acts. For that question to be properly answered, he contends that the prayers sought by them upon which the orders were made have to be examined carefully. After such examination, he contends that it could be found that actions referred to in the prayers are far from completed. It is his submission that from their prayer (a) what they wanted a restraining order on the 3rd and ; 4th appellants from further entering into the premises, and from collection rents and other profit therefrom or from evicting the respondents’ tenants in the said properties or from in any manner whatsoever reconstructing or dealing
with the said properties pending the determination of the substantive suit. With regard to their prayer (b), it is the contention of learned counsel for the respondents that the restraining order sought upon the 1st $ 2nd appellants was against their handing over to releasing the respondents title deeds to the said properties (or any of them) to the 3rd and ; 4th appellants and /or from in any manner whatsoever dealing or continuing to deal with the said properties in any manner inconsistent with the interest of respondents. And on the basis of the above analysis of the respondents prayers in the lower Court, their learned counsel Obi Akpudo submits that the acts sought to be restrained are still in future. Hence he submits that the orders made by the learned judge of the lower Court restraining the appellants in the circumstances are right and urges this
Court to uphold same.
It is further argued for the respondents that bearing in mind the principle governing the grant of an interlocutory injunction, all that an applicant needs to do at the stage when the application was made before the Lower Court was to
show that there is a serious issue to be tried. For that submission, he urges this court to defer from upholding the submissions made for the 1st appellant on the sum owing to them. To do that would prejudice the trial of the substantive
suit. Moreover to accede to the submission made that all that the respondents are left with in all the circumstances is to obtain damages from the 1st and ; 2nd appellants. The premise of this erroneous submission being what they consider as the effect of section 21 (2) of the Conveyancing Act of 1881. The contention he made against the acceptance of that submission are two folds. The first is that the 1st and ; 2nd appellants are well aware that there were pending in the lower Court at least two actions between them. One of these actions 0/130/93 was initiated on 13th of April 1993 by the respondents against the 1st and ; 2nd appellants while the other 0/180/93 was initiated by the 1st appellant against the respondents on the 24th of May 1993. These two actions predated suit No.356/94 between the respondents and the appellants, which was dated 8th of June 1994. Learned counsel for the respondents replying to the arguments of the appellants that the Suit so commenced against them was not seriously prosecuted, asks the Court to consider whether it was not open to the 1st and 2nd appellants to have brought the action to a halt as provided under the Rules: cites Order 9 Rule 42 of the High Court Rules of Anambra State 1988.
On whether there is a serious issue to be tried between the 1st appellant and the respondents. And he contends that from those claims it is very clear that as between them there are very serious issues to be resolved. Then he asked that the Court should not consider very seriously whether the properties were not sold fraudulently.
In raising this question learned counsel related the fact that while their action was pending, the parties by their counsel, namely Dr. Mbadinuju for the 1st appellant and Obi Akpudo for the respondents agreed in Court that the parties wanted an adjournment for an out-of Court settlement of the matter. The action was adjourned accordingly. Before that date following a meeting held between the respondents paid the sum of N1,000,000,00 (One Million Naira) to the 1st appellant towards the out of Court settlement of the matter. But a few days after receiving that money and before the adjourned date the 1st appellant caused the properties to be sold to the 3rd and ; 4th respondents.
I will begin in the consideration of this appeal by examining whether as argued by the appellants that the respondents have a fait accompli on their hands, the properties having been sold to the 3rd and ; 4th appellants on the 10th of May 1994 before they sought for the orders of interlocutory injunction. And if that be so, by virtue of the provision S.21 (2) of the Conveyancing Act 1881, the sale to the purchaser i.e. the 3rd and ; 4th appellant is valid. See paragraphs 56 and 58 of the 1st appellant counter-affidavit where they confirmed that the properties have been sold in the exercise of the power of sales vested in it as the mortgagee of the legal mortgage entered into between it and the respondents. See also paragraphs 6 of the 3rd respondents’ counter-affidavit where he acknowledged the purchase of the properties by public auction on the 10th
of May 1994. It is no doubt part of our law that S.21 (2) of the Conveyancing Act 1881 is applicable to the transaction in question. The provisions of the said Section 21(2) of the Conveyancing Act 1881, read thus:
“Where a conveyance is made in the professed exercise of the powers of sale conferred by this Act, the title of the purchaser shall not be impeached on the ground that no case has arisen to authorize the sale or that due notice was
not given or that the power was otherwise improperly or irregularly excised but any person damnified by an unauthorized or improper exercise of the power shall have his remedy in damages against the person exercising the power.”
The above provision of the Conveyancing Act 1881 have been judicially considered in our courts, and it is settled that it has been interpreted to mean that it is for the protection of a purchaser who bought and a mortgagee who sold the mortgaged property in good faith. See Oguhi v. F.M.B (Nig) Ltd. (1990) 6 NWLR (Pt. 156) 330, where at page that if the property was illegally sold in the sense that the illegality amounts to fraud- the mortgagee could not have passed an unimpeachable title to the purchaser. See also Haddington Island Quarry Company Ltd. v Huson (1911) AC 722 at 724, where in connection with the rights of mortgages under the Conveyancing Act 1881, their Lordships said:-
“Ostensibly, therefore, the mortgages acted within their powers in selling the property, and the purchaser are entitled to the full benefits of their purchase unless it be alleged and proved that they acted in collusion with
vendors or that the price was so low as in itself to be evidence of fraud or collusion.”
From the above dicta on the provisions of S.21 (2) of the Conveyancing Act 1881, it seems manifest that while the mortgages has the power to sell mortgaged property under the Act, when the load or any installment thereof becomes payable and the power of sale under the mortgage agreement
has arisen yet that sale may be impeached if it is shown that the sale was tainted with fraud and/or illegality. In respect of the sale of the properties in this appeal, the first contention of the respondents is that the properties are in their possession as their tenants are still occupying the premises when the order of interlocutory injunction was made by the lower court.
The contention of the learned counsel for the respondents may serve to explain the application to the lower court but it does not appear to me sufficient to challenge the sale of the properties to the 3rd and ; 4th appellants by the 1st appellant.
However he has argued, besides that, that before the sale of the properties to the 3rd and ; 4th appellants there were pending before the lower court action, intra parties. I have in the course of this judgement referred to the two actions. The first 0/130/93 commenced by the 1st respondent against the 1st and 2nd appellants by a writ issued on the 13th day of April 1993.
The reliefs claimed by that writ was for a declaration that the 1st appellant is not entitled to the sum named in the writ as the said amount is over and above the principle amount advanced to the 1st appellant, the other relief was for an order of perpetual injunction against the 1st and ; 2nd appellants and one thousand Naira as damages.
The 1st appellant also commenced an action in Suit 0/180/93 dated 24th May 1993 against the respondents wherein the reliefs claimed against respondents are for (a) the sum of N1,668,000.00 being the amount the respondents took as
loan/overdraft from the 1st appellant, (b) the sum of N4,452,484.91 being accumulated interest on the total accumulated debt of N6,120, 484.91 at the rate of 40 and ; from now till judgment is given in the case and (d) interest from the date of judgment at the rate of 40% until final liquidation of the debt.
It is on record that Suit No. 180/93 was before the court on the 17th of February 1994 from when it was adjourned to the 5th of May 1994. On the 17th of February 1994, it is noted that Dr. C.C. Mbadinuju appeared for the 1st appellant, and though 1st defendant was said to be in court, no counsel represented it. The court ordered pleadings be filed and exchanged. On
the adjourned date, i.e. the 5th of May 1994, both parties were represented by counsel. Dr C.C. Mbadinuju for the 1st appellant, and Akpudo for the respondents. On that date the matter was further adjourned to the 16th of June 194, as counsel on both sides pleaded for time to settle the matter out of court. As it happened Suit No. 130/93 was also called on the 5th of May 1994 and representation by counsel was also as in suit No. 180/93 that was adjourned earlier. A similar plea for adjournment was made by the two counsels for out of court settlement. The suit was therefore adjourned to the 16th June 1994 for report of settlement. It would appear that the two parties must have met after the adjourned date as a letter Exhibit ‘E’ was handwritten by Obi Akpudo Esq., of counsel for the respondents, and dated 13-5-94 to Dr. C. C. Mbadinuju of counsel for the 1st appellant. Allied Bank of Nigeria wherein reference was made to their discussion, and attached to the said letter is a cheque for the sum of One million Naira. The letter Exhibit reads in part thus: –
“Please acknowledge receipt of a Commerce Bank Plc cheque No. A865663 of 13/5/94 for One million Naira drawn in favour of your clients – Allied Bank of
Nigeria Plc. This payment, as we agreed, fully liquidates the principal sum lent to my client by the Bank. I hope you will now advise the Bank that the said suit now pending in court be withdrawn as to pave the way for fuller negotiations on interest accrued over the period.
Please acknowledge receipt.
Yours faithfully,
Signed”.
By a letter dated the 16th may 1994 Exhibit F, Dr. C. C. Mbadinuju acknowledged the receipt of Obi Akpudo’s letter, as he
wrote thus –
Re Bravo (W.A. Ltd.).
“This is to acknowledge receipt of the cheque for N1000, 000.00 (One million Niara) from your above client as settlement in part as per our claim in suit No.0/180/93 on behalf of Allied Bank (Nig) Plc. As you are aware from
the observations of the Court on this matter, when we go back on the date, court shall pronounce on the remaining issue of bank interest.
If your client is interested in settling the bank interest out of court, we would like to get your proposal on it before the next adjournment of 16th June, 1994. Thanks for your continued co-operation.
Yours faithfully,
Signed.
DR. C.C. Mbadinuju.”
But from Exh. F1 which is a letter dated 14th June, 1994 and written by Obi Akpudo Esq., it would appear that despite the exchange of correspondence between counsel on behalf of their parties, and the receipt of N1,000,000.00 by the 1st appellant, the properties have been sold before the 4th June 1994. By this letter Obi Akpudo sought to know the truth on the sale from the Manager of the Allied Bank, Ozubulu Branch. He was not however forth-coming on the truth about the sale as he avoided same by claiming that the matter had been referred to their Legal Department at their Head Office, See Ex. G., in the Bundle of Documents. It would appeal that the respondents commenced their proceedings in suit No. 0/356/94 on the 8th day of June 1994, upon the way matters turned having regard to the correspondence to which I have referred to above. And which led to the order of injunction, which now form the subject of this appeal.
From the narration of the events that I have given in respect of this matter, it is clear that at the time when the sale of the properties was effected, there were two actions pending between the parties. I have hitherto mentioned that the properties were in fact sold to the 3rd respondent on the 10th of May by public auction. It is significant to note that on the 13th May, 1994, the respondents believing that they were still on the path of an out of Court settlement of the suit paid the sum of One million Naira to the 1st appellant upon that understanding. And it is also an amazing fact that this payment was duly acknowledged by the learned counsel for the first appellant on the 16th May 1994. And in that letter reference was made to the need for a meeting to discuss further the out of court
settlement which learned counsel for the parties have agreed would be reported to the Court on the 16th of June 1994. I will for now refrain from dwelling upon this last fact. However as it is clear that there was a pending litigation between
the parties. I must consider what effect. If any this aspect of the matter has no the merit of this appeal. The view of the learned judge was made clear in his ruling that it does having regard to the decision of this Court in A.C.A. v. Awagbaro (1991) 2 NWLR (Pt. 176) 711. The learned counsel for the 1st and 2nd appellants has argued that this case is distinguishable from this instant appeal. But before deciding this question, an excursion into decided cases would be advantageous. There is no doubt that the principle under decided cases would be advantageous. There is no doubt that the principle under discussion here in what is generally described as the doctrine of lis pendens. This doctrine was considered and applied by our Supreme Court in Bendens. This doctrine was considered and applied by our Supreme Court in Barclays Bank of Nigeria Ltd. v. Alhaji Adam Badejoko Ashiru and ; Ors. (1978) 6 and ; 7.S.C.99 where Idigbe,. S.C. (as he then was) at pages 124 and 126 quoted with approval the enunciation of the doctrine by Turner L-J in Bellamy v. Sabine (1987)
726 L.J. (N.S) Equity. And it suffices that I refer to the observation of the Lord Chancellor reproduced at pages 125 of the judgment in Ashiru case (supra): – It reads: –
“It is scarcely accurate to speak of lis pendens as affecting a purchaser upon the doctrine of notice. Although undoubtedly the language of the Court often so describes its operation. It affects him not because it amounts to notice but because the law does not allow to litigant’s parties and give to them pending the litigation, rights in the property in dispute. So as to prejudice the opposite party. Where a litigation is pending between a plaintiff and a defendant, as to the right to a particular estate, the necessities of mankind require that the decision of the Court in the suit shall be binding, not only on the litigant parties, but also upon those who derive title under them by alienation made pending the suit: whether such alliances had or had, not, notice of the pending proceedings. If this
were so there could be no certainly that litigation would ever come to an end. A mortgage or sale made before a final decree to a person who had no notice of pending proceedings, would always render a new suit necessary: and so interminable litigation might be the consequence “.
In A.C.B.v. Awogboro (1991) 2 NWLR (196) 711, this Court was faced with a situation in respect of property that was to be sold when considering whether the order of interlocutory injunction ordered by the lower court should be upheld. On deciding to uphold the order of the lower Court, this Court took into consideration that there was an action pending in the lower Court, in respect of the matter. On that point my learned brother Niki Tobi, J. C. A. in the A.C.A. v. Awogboro (supra) at p.719 said
“The res in this matter is 27 Onayode Street, Ikorodu Road, Lagos. It is the property mortgaged by the 1st plaintiff/respondent to the 1st defendant/appellant. There is a proposal on the part of the defendant/appellants to sell the said property. There is an action pending in the State High Court by the plaintiff/respondent contesting the proposed sale of the property. It would appear that the learned trial Judge granted the application for interlocutory
injunction in view of the pending action.”
The learned counsel for the 1st and ; 2nd appellants, Dr. C.C. Mbadinuju has argued in his brief that the A.C.A. v. Awagboro’s case (supra) is distinguishable to the instant appeal. Though he did not elaborate on the distinguishing factors it seems to me that his contention would appear to be that the differences lies in the fact that in the A.C.B. v. Awagboro’s case the sale of the property had not taken place, while in the instant case the sale has taken place. Assuming that is a distinguishing factor for a moment, but the fact remained that there is an action in Court challenging the right to sell and there was certainly a move to forestall it by the payment to the 1st appellant of the sum of One million naira by the respondents. It will be recalled that it was while this arrangement was going on that the 1st appellant, unknown to the respondent, caused the properties to be sole, I fail to see what distinction that there is between the parties, and the learned judge was right to have considered this as a factor in deciding whether he would make an interlocutory injunction is an exercise of the
discretionary powers of the Court, and in exercising that power the Court sought to consider the contending issues before it. The Court does not and cannot ignore that there was a pending action before him, and more so where as in this case the 1st appellant had before the Court an action to determine the extent of the debt owed to it by the respondent.
I now go on to consider whether the order of interlocutory injunction was properly granted having regard to the fact that the appellants’ contention that the Court did not properly consider the balance of convenience before making his order. I must in this respect recognize that this being an interlocutory appeal, I must confine myself to those issues necessary for disposing of the appeal and make no pronouncement on anything that will tend to prejudge the main issues at the trail.
See: Ogbonnaya v. Adapalm (Nig) Ltd. (1993) 1 ALL E.R. 504 at 511.
What then should be the attitude of the Court in the consideration of the balance of convenience between the parties? I have before now referred to several judicial pronouncements on the guiding principles and they are to guide me in
deciding whether the lower Court approached that aspect of the case properly. But permit me to also refer to the dictum of Madarikan J., (as he then was) in Akinloye and ; Ors. v. A.I.T. Ltd. and ; Ors. 91961) N.M.L.R. 116 at 117, referr4ed to by my brother Uwaifo in Ilechukwu v. Iwugo (1989) 2 NWLR (Pt. 101) 90 at 107. It reads: –
“In deciding whether to grant an interlocutory injunction in this case, I ought to take into consideration the balance of convenience to the parties and the nature of the injury which the defendants, on the other hand, would suffer if
the injunction was granted and the case id subsequently decided in their favour, and that which the plaintiff, on the other hand, might sustain if the injunction was refused and they should ultimately obtain judgment in their favour.”
I have before now identified the competing contention of the parties through their learned counsel. In the main the contention of the appellants is that as the respondent was owing the 1st and 2nd appellants were right to have sold the
properties to the 3rd and 4th appellants. That with that kind of money owing to the bank. i.e. the 1st appellant, it had every right to have sold the property as they did. But there is the point made by the respondents that they paid the sum of N1,000,000.00 to the appellant on the understanding that the action in court would be withdrawn for discussion leading to an agreement for the out-of-court settlement of the disputes. Besides that it is the case of the respondents that they were still in possession of the properties despite the surreptitious sale of the properties to the 3rd and 4th appellants. It is my view that the issue raised on this above show that the respondents did make out a prima facie case, which persuaded the lower court to making the order of interlocutory injunction in favour of the respondents. Earlier in this judgment I had referred to the sequence of events that occurred before the properties in dispute were sold. It would be recalled that the point made was that while the actions pending in court were adjourned at the request of counsel appearing, for out-of-court settlement and report to the court on the adjourned day. 16/6/94, 1st appellant without honouring this commitment to the court caused the property to
be sold on the 19th may 1994. In the meantime it caused the holding of what turned out to be a sham meeting with the respondents for an out of court settlement of the matter which led to the payment of the sum of N1,000,000.00 to the 1st appellant. It is my humble view that in considering on which side the balance of convenience ought to be titled in the case care must be taken not to allow a party who either by skilful maneuvering and/or deliberate mischief misled the other party into a position of the party making the representation to be beneficiary of this doctrine which is based upon equitable
principles.
In this result, from all I have said above, I find no merit in the appeal lodged by the appellants against the order of interlocutory injunction made by the lower court. I therefore dismiss their appeals in toto. I uphold the main suit. The
orders of the lower Court having regard to the heading of this matter in this appeal will now for the avoidance of doubt read thus: –
(a) The 3rd and 4th appellants, their servants against or privies from further entering into the premises known as and called No. C/26 Nkisis Road, Low Cost Housing Estate, bridge Head approach, Onitsha and No. 8 Ihembosi Street
Onitsha (otherwise called R/17, Niger Bridge Head Lay-out, Onitsha) and/or from collecting rents or other profits therefrom or from evicting or attempting to evict the respondents’ tenants in the said properties or from, in any manner whatsoever reconstructing or dealing with the said properties pending the determination of the substantive suit.
(b) The 1st and 2nd appellant from handing over or releasing the respondents title and/or from in any manner whatsoever dealing or continuing to deal with the said property in any manner inconsistent with the respondents’
determination of the substantive suit.
I also uphold the orders made as to undertaking pursuant to the grant of the order of injunction. Addition the other orders with regard to pleadings to facilitate the hearing of the main suit are also affirmed.
Each set of appellants, namely, the 1st and 2nd to 3rd and 4th having lost the appeal are hereby ordered to pay costs in the sum of N1000.00 each to the respondents.
Tobi and Ubaezonu JJCA both concurred with the lead judgment.
