Asset Management Corporation of Nigeria v. Suru Worldwide Ventures Nigeria Limited & Ors

The appeal herein is against the judgment of the Court of Appeal, Lagos Judicial Division, delivered on 12th July, 2019 in appeal No. CA/L/88/2018, which allowed the 1st Respondent’s appeal, set aside the judgment of the Federal High Court , Lagos Division and ordered that the Appellant’s suit be tried de novo with the 1st Respondent as a party.

FACTS LEADING TO THIS APPEAL
The 1st Respondent was a customer of Oceanic Bank International Plc (Now Ecobank Limited) and by virtue of their banker-customer relationship, the 1st Respondent applied for and was granted a number of credit facilities by the bank. The credit facilities were inter alia secured by Deeds of Legal Mortgagee in respect of some of the 1st Respondent’s properties. The 1st Respondent did not repay the credit facilities as and when due and the facilities were later bought over by the Appellant in performance of its statutory duty. The purchase of the facilities was evidenced by a Loan Purchase and Limited Servicing Agreement entered into between the Appellant and Oceanic Bank.

Now the creditor in respect of the credit

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facilities granted to the 1st Respondent by Oceanic Bank, the Appellant as Plaintiff took out an Originating Motion before the Federal High Court, Lagos Division, with the 2nd — 4th Respondents as well as the Commissioner of Police, Lagos State Command as Defendants. In the course of the proceedings, however, the Appellant applied that the name of the Commissioner of Police, Lagos State Command, sued as the 2nd Defendant, be struck out and the trial Court duly obliged. The 1st Respondent was not a party to the suit before the trial Federal High Court. The following reliefs were sought in the Originating Motion which was brought pursuant to Sections 390, 391 and 393(1) of the Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2004; Order 3 Rule 1 of the Federal High Court (Civil Procedure) Rules, 2009 and under the inherent jurisdiction of the Court:
“1. AN ORDER directing the Defendants, jointly and severally, whether personally and/or through officers and men under their command and control, to assist the Plaintiff, its officers, agents and representatives howsoever described, in exercising its rights as a legal

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mortgagee under the Deeds of Legal Mortgage registered as 32/32/2033, 88/88/2032 and 89/89/2028, respectively.
2. AN ORDER directing the Defendants, jointly and severally, whether personally and/or through officers and men under their command and control, to assist the Plaintiff, whether acting through its officers,agents and representatives howsoever described inmaintaining peace, order and for the protection of its exclusive possessory rights and powers over the properties located at No. 86, Opebi Road, Ikeja, Lagos State, No. 12, Reverend Ogunbiyi Street, G.R.A., Ikeja, Lagos State and No. 12, Allen Avenue, Ikeja, Lagos State pursuant to and in furtherance of the exercise and/or discharge of its powers, functions and duties as the Legal Mortgagee of the said properties.
3. AND for such further or other orders as this honourable Court may deem fit to make in the circumstances.”

The following were the grounds upon which the Originating Motion was brought as stated on the face thereof:
“i. By virtue of the banker/customer relationship that existed between Oceanic Bank International Plc (now Ecobank Limited) (“the bank”) and Suru

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Worldwide Ventures Nigeria Limited (“the debtor”), the latter applied for and was granted several credit facilities running into several billions of Naira.
ii. As part of the security requirements for the aforesaid credit facilities, the debtor executed several Deeds of Legal Mortgage including the Deeds of Legat Mortgage registered as 32/32/2033, 88/88/2032 and 89/89/2028 in respect of properties lying and situate at No. 86, Opebi Road, Ikeja, Lagos State, No. 12, Reverend Ogunbiyi Street, G.R.A. Ikeja, Lagos State and No. 12, Allen Avenue, Ikeja, Lagos Sate respectively.
iii. Due to the failure and refusal of the Debtor to liquidate its indebtedness arising from the aforesaid credit facilities, which as at 1st January, 2011 stood at the sum of N15,341,050,642.21 (fifteen billion, three hundred and forty-one million, fifty thousand, six hundred and forty-two Naira, twenty-one Kobo), the credit facilities were classified as non-performing loans.
iv. In order to rescue the bank from imminent collapse due to its exposure to the debtor, the Plaintiff acquired and took over the debtor’s indebtedness stated above, pursuant to its statutory

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mandate under the Asset Management Corporation of Nigeria Act, 2010 and the policy of the Federal Government of Nigeria thereto.
v. Following its acquisition of the non-performing loans, the Plaintiff became, for all intents and purposes, the primary creditor with respect to the debtor’s non-performing loans.
vi. By virtue of its acquisition of the non-performing loans granted to the debtor, all security documents over, in relation to and/or in connection with the loans passed on to the Plaintiff with all the attendant interests and rights accruing to it thereto under the Asset Management Corporation of Nigeria Act, 2010.
vii. Consequent upon its acquisition of the Debtor’s indebtedness as stated above, the Plaintiff wrote to the debtor, by its letter dated 5th August, 2011, to notify it of the said acquisition of the indebtedness and request for a repayment plan from the debtor.
viii. The debtor has failed, refused and neglected to liquidate its indebtedness to the Plaintiff despite repeated demands on it to do so.
ix. Due to the aforesaid default of the debtor to liquidate its indebtedness to the Plaintiff, the powers

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and rights of the Plaintiff as a secured creditor under the three (3) Deeds of Legal Mortgage registered as 32/32/2033, 88/88/2032 and 89/89/ 2028 in respect of properties lying and situate at No. 86, Opebi Road, Ikeja, Lagos State, No. 12, Reverend Ogunbiyi Street, G.R.A., Ikeja, Lagos State and No. 12, Allen Avenue, Ikeja, Lagos State, respectively, have arisen and therefore become exercisable.
x. The protection and assistance of the Defendants is needed by the Plaintiff for it to fully exercise its powers and rights under the aforesaid Deeds of Legal Mortgage which powers and rights have arisen and become exercisable.
xi. Unless the Defendants, as well as the officers and men under their control and command, are ordered by this honourable Court to assist the Plaintiff in maintaining peace, law and order at the properties located at No. 86, Opebi Road, Ikeja, Lagos State, No. 12, Reverend Ogunbiyi Street, G.R.A., Ikeja, Lagos State and No. 12, Allen Avenue, Ikeja, Lagos State, the Plaintiff will be disturbed, obstructed and/or intimidated in the exercise of its statutory and contractual powers, functions and duties as the Legal Mortgagee over

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the aforesaid properties.”

The Originating Motion was supported by an Affidavit with exhibits attached and a Written Address. The Appellant subsequently filed a Further and Better Affidavit in support thereof. The 2nd — 4th Respondents as the only Defendants did not file any process in defence the action before the trial Court .

It was the case of the Appellant as Plaintiff that the 1st Respondent was a customer of Oceanic Bank Plc (now Ecobank Limited) and owing to the banker-customer relationship between them, the 1st Respondent obtained some credit facilities from the bank. The facilities were inter alia secured by the properties located at No. 86, Opebi Road, Ikeja, Lagos State; No. 12, Reverend Ogunbiyi Street, G.R.A., Ikeja, Lagos State; and No. 12, Allen Avenue, Ikeja, Lagos State. The debts became due, but remained unpaid and were therefore characterized as non-performing loans. In order to save Oceanic Bank from imminent collapse, the Appellant in performance of its statutory duties took over the debts by virtue of a Loan Purchase and Limited Servicing Agreement. After the purchase, the Appellant wrote a letter (Exhibit D) to the

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1st Respondent to that effect, but the debts nevertheless remained unpaid, leading the Appellant to institute the action at the trial Court .

Upon a consideration of the materials before the Court, the reliefs sought by the Appellant were granted. The 1st Respondent became aware of the action and orders granted by the trial Court when the judgment was being executed by the Appellant with the assistance of the 2nd — 4th Respondents.

The 1st Respondent therefore sought and was granted leave by the lower Court to appeal against the decision of the trial Court as an interested party. The lower Court heard the appeal and delivered a considered judgment on 2nd July, 2019. In the judgment, the lower Court held that the proceedings of the trial Court should not have been conducted without the 1st Respondent as a party, as it could have had something to urge on the Court, for instance, with respect to whether the Appellant’s right of foreclosure/possession had arisen, issues in respect of which the Defendants before the trial Court could not have been of any assistance. The Court below therefore remitted the case to the trial Court for hearing

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de novo with the 1st Respondent as a party.

Miffed by the lower Court ‘s decision, the Appellant filed two Notices of Appeal, the first on 3rd July, 2019 and the second on 29th July, 2019. The Appellant in its brief elected to abandon the former and adopt the latter, which is predicated on six grounds.

At the hearing of the appeal on 21st November, 2023, respective learned counsel for the parties identified and adopted their various processes. Collins Ogbonna, Esq, for the Appellant identified the Appellant’s counter-affidavit to the 1st Respondent’s Motion on Notice, challenging some of the Appellant’s grounds of appeal. He also identified and adopted the Appellant’s brief of argument, theAppellant’s reply brief to the 1st Respondent’s brief and the Appellant’s reply brief to the 2nd Respondent’s brief. He urged the Court to dismiss the 1st Respondent’s Motion on Notice and preliminary objection, and allow the appeal. Mr Layi Babatunde, SAN for the 1st Respondent adopted the 1st Respondent’s Motion on Notice challenging some of the Appellant’s grounds of appeal, the 1st Respondent’s Notice of Preliminary Objection, the 1st Respondent’s brief of

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argument and the 1st Respondent’S list of additional authorities. He urged the Court to strike out the appeal as per the preliminary objection or dismiss same for lacking in merit. Learned senior counsel subsequently forwarded and additional authority to this Court. The 2nd Respondent’s counsel, Godwin Attai Haruna, Esq, adopted the 2nd Respondent’s brief and urged the Court to dismiss the appeal. I.S. Dokubo, Esq for the 3rd Respondent adopted the 3rd Respondent’s brief and stated that since his client has no interest in the case, he would abide by the outcome of the appeal. Learned counsel for the 4th Respondent, Patrick Okonjo, Esq, voluntarily withdrew the 4th Respondent’s brief and same was accordingly struck out. After the adoption of processes, the appeal was adjourned to today for judgment.

1ST RESPONDENT’S NOTICE OF PRELIMINARY OBJECTION
The 1st Respondent filed a Notice of Preliminary Objection brought pursuant to Order 2 Rule 9 of the Rules of this Court. The objection is challenging the locus standi of the Appellant to institute the suit at the trial Court and the instant appeal. The sole ground of the objection as stated on the

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motion paper is the alleged lack of locus Standi on the part of the Appellant and want of jurisdiction of this Court , having regard to Sections 25, 32, 34 and 35 of the Asset Management Corporation of Nigeria (AMCON) Act, 2010 (as amended).

The preliminary objection was argued at paragraph 3.0 — 3.10 of the Appellant’s brief. It was the contention of the 1st Respondent that by the combined effect of Sections 25, 32, 34 and 35 of the AMCON Act, it is only a Loan Purchase Agreement by which the Appellant acquired the debts owed by the 1st Respondent to Oceanic Bank (now Ecobank) that can entitle the Appellant to sue in respect of the said debt. It was submitted that since the said agreement was neither exhibited by the Appellant before the lower Court nor contained in the record, the Appellant did not prove its locus standi.

Learned silk submitted that the issue of locus standi being a threshold issue touching on the jurisdiction of the Court, it can be raised anytime, even on appeal to this Court or suo motu by the Court. The cases of PETROJESSICA ENTERPRISES LTD V. LEVENTIS TECHNICAL CO. LTD (1992) 6 S.C. (PT. 11) 1; A.G. RIVERS STATE V. A.G. AKWA IBOM STATE & ANOR

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(2011) 3 SC 1; ADESANYA V. THE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA & ANOR (1981) 5 SC 112 were referred to. It was further submitted that assuming there is any party vested with the aggregate of enforceable rights to sue, it would be Ecobank and it was wrong for the Appellant to have proceeded to institute the suit at the trial Court and the instant appeal without demonstrating its locus standi via a Loan Purchase Agreement. Reliance was placed on UNITY BANK PLC V. AHMED (2019) 4 S.C. (PT. IV) 21. Relying on OBIUWEUBI V. CBN (2011) 2 — 3 S.C. (PT. 1) 46; CITEC INTERNATIONAL ESTATES LTD. V. FRANCIS (2021) 1 S.C. (PT. 1) 82, it was submitted that failure of the Appellant to frontload a Loan Purchase Agreement is fatal to its locus standi and the jurisdiction of this Court since it is the Plaintiff’s pleadings or affidavit evidence, as the case may be, that is considered in determining whether a Court has jurisdiction. Learned senior counsel urged the Court to dismiss and/or strike out the appeal for being incompetent.

Responding in the Appellant’s reply brief to the 1st Respondent’s brief, Appellant’s

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counsel submitted that by virtue of Order 2 Rule 9 of the Supreme Court Rules, a Respondent who wishes to raise a preliminary objection shall do so by filing a “Notice” raising same and setting out the grounds, at least three clear days before the hearing of the appeal. Learned counsel submitted that the 1st Respondent did not comply with the said Rule as it did not raise the objection by a separate Notice, hence the Preliminary Objection is incompetent.

On the issue of locus standi, it was submitted that the Loan Purchase and Limited Servicing Agreement executed by the Appellant and Oceanic Bank is at pages 228 — 261 of the record of appeal and that same specifically mentions that the Appellant purchased the indebtedness of the 1st Respondent from Oceanic Bank. It was submitted that the Loan Purchase and Limited Servicing Agreement was produced by the 1st Respondent before the Court below, hence, it is aware that the Appellant had locus standi to commence the action at the trial Court and the instant appeal. It was further submitted that the Appellant informed the 1st Respondent that it had purchased its outstanding indebtedness to Oceanic

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Bank.

Learned counsel submitted that the case of UNITY BANK PLC V. AHMED (supra) relied on by the Appellant is inapplicable to the facts of this appeal. Counsel submitted that in that case, this Court did not decide the issue of locus standi, but only held that where a bank sells the indebtedness of its debtor to AMCON and fails to inform the Court or the debtor of the sale, the sale will be a fact within the exclusive knowledge of the bank which will have the burden of proving same pursuant to Section 140 of the Evidence Act.

RESOLUTION OF THE 1ST RESPONDENT’S PRELIMINARY OBJECTION
Let me start with the contention of the Appellant that the preliminary objection is incompetent because the 1st Respondent purportedly failed to file a “Notice” as prescribed by Order 2 Rule 9 of the Rules of this Court. Subrules (1) and (2) of Order 2 Rule 9 of the Supreme Court Rules are the relevant provisions. They provide thus:
“(1) A respondent intending to rely upon a preliminary objection to the hearing of the appeal shall give the appellant three clear days notice thereof before the hearing, setting out the grounds of objection, and

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shall file such notice together with ten copies thereof with the Registrar within the same time.
(2) If the respondent fails to comply with this rule the Court may refuse to entertain the objection or may adjourn the hearing thereof at the cost of the respondent or may make such other order as it thinks fit.”
The Rule, particularly Subrule 1, places a duty on a Respondent who intends to rely on a preliminary objection to give the Appellant notice of the objection, three clear days before the hearing of the appeal. The intendment of the provision is to prevent a Respondent from springing a surprise on an Appellant, hence the requirement for a mandatory three clear days’ notice. Failure of a Respondent to file a separate “notice” does not render his preliminary objection incompetent or ineffective. Where a Respondent raises and argues his preliminary objection in his brief of argument, the need to file a separate Notice of Preliminary Objection is obviated, Where this is done and the brief containing the preliminary objection was filed not less than three clear days before the hearing of the appeal, then the requirement of Order 2 Rule 9 of the Supreme Court Rules

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would have been met, as long as the Respondent’s counsel does not fail to do what ought to be done in every case where there is an objection to the hearing of an appeal, that is, drawing the Court ‘s attention to and formally moving the objection at the hearing of the appeal. This is an acceptable practice and has been endorsed by this Court in several decisions. See GOVERNOR OF IMO STATE & ORS V. E.F. NETWOR(NIG) LTD & ANOR (2019) LPELR – 46938 (SC); NIKAGBATE V. OPAYE & ANOR (2018) LPELR — 43704 (SC); ALLANAH & ORS V. KPOLOKWU & ORS (2016) LPELR – 40724 (SC); OKEREKE V. JAMES (2012) LPELR – 9347 (SC); CAREW V. OGUNTOKUN & ORS (2011) LPELR – 9355 (SC) to mention a few.

The 1st Respondent’s brief where the preliminary objection was raised and argued was filed on 26th February, 2021, almost three years before the hearing of the appeal on 21st November, 2023. Thus, there can be no argument as to whether or not the three clear days’ notice requirement was met.

In any event, the 1st Respondent subsequently filed before the Court a separate formal Notice of Preliminary Objection on 13th

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January, 2023, also well beyond three clear days before the hearing of the appeal. Overall, the Appellant’s challenge to the competence of the 1st Respondent’s preliminary objection on account of the purported failure to comply with the provisions of Order 2 Rule 9 of the Supreme Court Rules, is baseless and is hereby discountenanced.

The sole ground of the 1st Respondent’s preliminary objection is that the Appellant lacked locus standi to institute the suit at the trial Court and consequently, this appeal.

The term, locus standi, denotes the legal capacity to institute proceedings in a Court of law. An objection to a Plaintiff’s locus standi attacks his competence to sue as to whether he has any legal or equitable interest to protect. In other words, where a Defendant challenges the locust standi of a Plaintiff, he is saying that the Plaintiff has no interest to protect in the case and that the Court lacks jurisdiction to entertain the matter. No doubt, the issue of locus standi is a fundamental matter that goes to the root of the jurisdiction of the Court , for where the Plaintiff lacks locus standi, the Court cannot create one for him or

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manufacture another Plaintiff to maintain the action. Hence, the law is firmly settled that where there is no locus standi, a Court cannot exercise jurisdiction to entertain the action or suit brought by the Plaintiff. AKANDE V. JEGEDE & ORS (2022) LPELR — 58911 (SC); INEC V. OGBADIBO LOCAL GOVT & ORS (2015) LPELR – 24839 (SC); DANIEL V. INEC & ORS (2015) LPELR – 24566 (SC); BAKARE & ORS V. ADEOGUN & ORS (2014) LPELR – 25024 (SC); AJAYI V. ADEBIYI & ORS (2012) LPELR – 7811 (SC).

It is also settled beyond equivocation that want of jurisdiction on the part of a trial Court or lower Court has the effect of robbing an appellate or higher Court of jurisdiction.
See C.G.C. (NIG) LTD V. ISA (2023) LPELR — 60350 (SC); BANK OF INDUSTRY LTD V. AWOJUGBAGBE LIGHT INDUSTRIES LTD (2018) LPELR — 43812 (SC); AKINBOBOLA V. PLISSON FISKO (NIG) LTD & ORS (1991) LPELR — 343 (SC).

For a person or party to have locus standi to sue, he must show substantial or tangible interest in the outcome of the litigation. A Court will only accord locus standi to a Plaintiff who shows that his civil rights and obligations

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have been or are in danger of being violated or adversely affected. The Plaintiff must be able to demonstrate how his rights have been infringed or how the matter directly affects him. There are two tests for determining if a person has locus standi. They are:
I. The action must be justiciable; and
2. There must be a dispute between the parties,
See P.D.P. V. I.N.E.C. (2023) 13 NWLR (PT. 1900) 89; BARBUS AND CO. (NIG.) LTD. V. OKAFOR-UDEJI (2018)1 NWLR (PT. 1630) 298; B.B APUGO & SONS LTD V. OHMB (2016) LPELR – 40598 (SC); TAIWO V. ADEGBORO (2011) 11 NWLR (PT. 1259) 562.

The grouse of the 1st Respondent is that the Appellant did not exhibit a loan purchase agreement before the trial Court to demonstrate that it had locus standi to institute the action. Relying on Sections 25, 32, 34 and 35 of the AMCON Act, the 1st Respondent also contended that the loan purchase agreement is the only means by which the Respondent can validly purchase debts owed a bank by a debtor/customer.

In a suit commenced by Originating Motion or Originating Summons, the affidavit in support of the Originating Motion or Originating Summons is

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equivalent to a Statement of Claim in a suit commenced by Writ of Summons. Now let us consider the averments in the Appellant’s affidavit in support of its Originating Motion. I consider paragraphs 10 — 13 of the affidavit particularly relevant to the consideration of the locus standi of the Appellant. The said paragraphs are reproduced below:
“10. I know that, in order to rescue the bank from imminent collapse due to its exposure to the debtor, the Plaintiff acquired and took over the debtor’s indebtedness stated above, pursuant to its statutory mandate under the Asset Management Corporation of Nigeria Act, 2010 and the policy of the Federal Government of Nigeria thereto.
11. I also know as fact that, the Plaintiff by its letter dated 5th August, 2011 informed the debtor of the acquisition of its debts from the bank. Now shown to me and marked as Exhibit D is the Plaintiff’s letter dated 5th August, 2011.
12. I know that, following its acquisition of the non- performing loans, the Plaintiff became, for all intents and purposes, the primary creditor with respect to the debtor’s non-performing loans.
13. I also know that,

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by virtue of its acquisition of the non-performing loans granted to the debtor, all security documents over, in relation to and/or in connection with the loans passed on to the Plaintiff with all the attendant interests and rights accruing to it thereto, under the Asset Management Corporation of Nigeria Act, 2010.”

From the above averments, it is clear that the Appellant demonstrated that it had an interest to protect i.e. the debt owed Oceanic Bank by the 1st Respondent, which the Appellant had acquired; and that the right had been breached i.e. by the alleged failure of the 1st Respondent to repay the debt despite repeated demands. It also demonstrated that there was a dispute between it and the 1st Respondent as to the alleged failure to repay the debt.

By Exhibit D attached to the affidavit, the Appellant informed the 1st Respondent as far back as August 2011 that it had bought over its indebtedness to Oceanic Bank. The 1st Respondent exchanged correspondences with the Appellant on the indebtedness without any complaint, rancour or challenge. In my candid view, the foregoing facts established the Appellant’s locus standi to institute the action

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before the trial Court .

Furthermore, in considering whether the Plaintiff’s has locus standi, a Court is entitled to consider and rely on all materials validly before it in order to come to a well-informed decision. See AJAYI V. ADEBIYI & ORS (2012) LPELR – 7811 (SC). In the instant case, where the 15t Respondent has raised the issue on appeal to this Court, we are entitled to consider all the materials validly before us rather than limit ourselves to the affidavit in support of the Originating Motion and pretend that other materials in the printed record do not exist.

Bearing that in mind, the record of appeal is replete with evidence that not only did the Appellant execute a loan purchase agreement titled “Loan Purchase and Limited Servicing Agreement” with Oceanic Bank, the 1st Respondent is well aware of the existence of the agreement. For instance, after the trial Court delivered its judgment, the 1st Respondent herein filed an application for interlocutory orders before the Court. The Loan Purchase and Limited Servicing Agreement between the Appellant and Oceanic Bank was attached as Exhibit D to the 2nd affidavit in support of the

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said motion on notice. The agreement can be found at pages 779 — 811 of Volume 2 of the record of appeal. The name of the 1st Respondent is listed as item 61 in “Schedule 1” to the agreement, as one of the debtors whose indebtedness was purchased by the Appellant. The same agreement was attached as Exhibit A to the affidavit in support of the 1st Respondent’s motion ex parte filed before the trial Court on 6th September, 2017.

Furthermore, the record of appeal contains several correspondences exchanged between the Appellant and 1st Respondent in respect of the 1st Respondent’s indebtedness.

The 1st Respondent being aware of and having acknowledged that the Appellant bought its indebtedness to Oceanic Bank, cannot be allowed to make a U-turn or do a volte-face to question the locus standi of the Appellant to sue in respect of the self-same indebtedness. It is wrong and unconscionable for the 1st Respondent to do so. It a waste of this Court ‘s time and a trivialization of the issues at hand. The 1st Respondent’s preliminary objection is without any substance or basis and same is hereby dismissed.

1ST RESPONDENT’S MOTION ON

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NOTICE
The 1st Respondent filed a Motion on Notice brought pursuant to Orders 28 and 29 of the Supreme Court Rules, Section 233(3) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and under the inherent jurisdiction of this Court. The relief sought therein and the ground of the application are as follows:
“1. AN ORDER of this honourable Court striking out grounds 3, 4 and 5 of the Appellant’s Notice and Grounds of Appeal filed on 29th July, 2019 and the issues formulated therefrom, having regard to the grounds being of facts or of mixed law and facts and for which leave is mandatorily required pursuant to S. 233(3) of the 1999 Constitution (as amended) but was neither sought nor obtained.
AND FURTHER TAKE NOTICE that the ground upon which the application is brought is that:
i) Grounds 3, 4 and 5 of the Appellant’s Notice and Grounds of Appeal dated 29/7/2019 raise issues of facts or mixed law and facts and for which prior leave of the lower or this honourable Court was required but was neither sought nor obtained.”

The application was supported by an affidavit deposed to by Mr Hassan Mohammed, a

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secretary/litigation clerk in the firm of Messrs Layi Babatunde (SAN) & Co, solicitors to the 1st Respondent/Applicant. Arguments in support of the application were canvassed in the 1st Respondent’s brief. In opposition thereto, the Appellant filed a counter-affidavit deposed to by Ugwemogak Fingesi, a counsel in the law firm of Joseph Nwobike & Co, counsel for the Appellant. Arguments in support of the counter-affidavit and in opposition to the application were proffered in the Appellant’s reply brief to the 1st Respondent’s brief.

Arguing the motion on notice, learned senior advocate contended that grounds 3, 4 and 5 of the Appellant’s Notice of Appeal are grounds of mixed law and facts filed without seeking and obtaining prior leave of Court, hence this Court was urged to strike out the said grounds as well as issues 3 and 4 distilled therefrom. Reliance was placed on BUHARI V. YABO (2018) 1 S.C. (PT. IV) 34; OGBECHIE V. ONOCHIE (1986) 3 SC 54; UTOO V. APC & ORS S.C. (PT. IV) 125; UWAK V. EKPEYONG & ORS (2019) 2-3 S.C. (PT III) 1; METUH V. FRN & ORS (2018) 2 S. C. (PT. III) 75.

In response, learned counsel for the Appellant argued that the said grounds 3, 4 and 5 complained that the lower

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Court failed to comply with the doctrine of stare decisis and are thus grounds of law. He cited in support, the case of EZENWAJI V. UNIVERSITY OF NIGERIA & ORS (2017) 5-6 S.C. (PT. 11) 73. Counsel urged the Court to dismiss the application as misconceived.

RESOLUTION OF THE 1ST RESPONDENT’S MOTION ON NOTICE
It is trite that where leave is required to be sought and obtained in respect of a ground of appeal, failure to seek leave before raising such a ground renders the ground incompetent and liable to be struck out. See AMMANI V. BALARABE & ANOR (2022) LPELR — 58906 (SC); UBN V. PETRO UNION OIL & GAS CO. LTD & ORS (2021) LPELR — 56671 (SC); NZEI & ANOR V. UNIVERSITY OF NIGERIA & ORS (2016) LPELR — 42826 (SC). Since issues for determination are distilled from grounds of appeal, any issue formulated from an incompetent ground will equally be incompetent and liable to be struck out.
By the combined effect of Section 233(2)and(3) of the Constitution of the Federal Republic of Nigeria, 1999 (as altered), a civil appeal from the Court of Appeal to this Court which involves question of mixed law and

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facts or questions of facts alone and which does not raise questions as to the interpretation or application of the Constitution; or questions as to whether any of the provisions of Chapter IV of the Constitution has been, is being or is likely to be contravened in relation to any person; or which does not stem from a decision on any question whether any person has been validly elected to the office of President or Vice-President under the Constitution, whether the term of office of President or Vice-President has ceased, whether the office of President or Vice-President has become vacant, whether any person has been validly elected to the office of Governor or Deputy Governor under the Constitution, whether the term of office of Governor or Deputy Governor has ceased, whether the term of office of Governor or Deputy Governor has become vacant; or does not fall under any exception as may be prescribed by an Act of the National Assembly; can only be brought by leave of the lower Court or this Court.
It is clear that the instant appeal does not fall within any of the above listed categories. The impugned grounds will therefore be competent and allowed to

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stand if and only if they are grounds of law alone.
In determining the nature of a ground of appeal, i.e. whether it is a ground of law, ground of fact or ground of mixed law and facts, the christening of the ground is of no help or guide to the Court. In other words, the mere fact that an Appellant has designated a ground as a “ground of law” or headed the ground as “error of law” is not conclusive as to the nature of the ground.
What the Court ought to do is to consider the ground together with its particulars and determine whether the complaint of the Appellant therein is such that will require the Court to make a pronouncement on an issue of law or that will warrant it to apply law to undisputed facts, in which case the ground will be a ground of law. Where however the complaints conveyed by the ground and its accompanying particulars are such that an appellate Court will be required to make a pronouncement on issues of disputed facts or to apply the law to disputed facts, then the ground will not be of law, but of facts or mixed law and facts, in which case leave will be required to file same before this Court. See OGBECHIE & ORS V. ONOCHIE & ORS

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(1986) LPELR – 2278 (SC); IKPONMWEN V. ASEMOTA & ANOR (2022) LPELR – 56594 (SC); SUPER CERAMICS MANUFACTURERS LTD V. H.E.P. ENGINEERING (NIG) LTD (2020) LPELR – 55369 (SC); GLOBAL WEST VESSEL SPECIALIST (NIG) LTD V. NNLG LTD & ANOR (2017) LPELR – 41987 (SC); UMANAH V. NDIC (2016) LPELR — 42556 (SC).
I have meticulously examined grounds 3, 4 and 5 raised in the Appellant’s Notice of Appeal alongside their particulars and the conclusion that I have arrived at is that the said grounds are grounds of law simpliciter. The tenor of the complaints embedded in the said grounds are that the lower Court failed to obey the doctrine of stare decisis by refusing to follow decisions of this Court in arriving at its decision. This, in my opinion, is a ground of law as it merely asks this Court to determine whether the lower Court refused to follow decisions of this Court in allowing the 1st Respondent’s appeal. Whether the complaint is a genuine one is another matter entirely.
The grounds being of law alone, no leave was needed to file same as they fall within the purview of Section 233(2)(a) of the Constitution, which provides thus:
“An

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appeal shall lie from the decisions of the Court of Appeal to the Supreme Court as of right in the following cases —
(a) where the ground of appeal involves questions of law alone, decisions in any civil or criminal proceedings before the Court of Appeal.”

In conclusion, I hold that the 1st Respondent/AppIicant’s complaint in the application is unfounded and same is hereby dismissed. Having dismissed both the 1st Respondent’s preliminary objection and application, the coast is now clear for a consideration of the substantive appeal.

SUBSTANTIVE APPEAL
The following issues were formulated for determination by the Appellant’s counsel:
1. Whether the lower Court had the jurisdiction to have, suo motu, and without inviting parties to address it, raised and determined the issue of the Appellant’s failure to give the 1st Respondent one (1) months’ notice of its intention to take possession of the mortgaged properties and on that basis held that, the 1st Respondent’s right to fair hearing was breached. (Ground 1)
2. Whether, having regard to the decisions of this Honourable Court in Ajayi vs. Jolayemi

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(2001) 10 NWLR (Pt. 722) 516 at 537 and Aromire & Ors. vs. Awoyemi (1972) ANLR vol. 1 (2nd Edition) 105 at 111 and the provisions of Order 9 Rules 5 and 14(1) of the Federal High Court (Civil Procedure) Rules, 2009, and the facts that:
I. The Appellant, as a legal mortgagee, is the legal owner of the mortgaged properties;
ii. Suit No: FHC/L/CS/1059/2016 did not seek to determine the right(s) of the 1st Respondent; and
ii. No relief was sought against the 1st Respondent in Suit No: FHC/L/CS/1059/2016, the lower Court was right to have held that, the 1st Respondent’s right to fair hearing was breached because it was not joined as a party in Suit No: FHC/L/CS/1059/2016. (Ground 2)
3. Whether:
I. In view of the copious evidence of the 1st Respondent’s indebtedness to the Appellant; and
II. The decisions in the cases of Omidiji vs. F.M.B. & 2 Ors. (2001) 13 NWLR (Pt. 731) 646 at 669; Ayanlere vs. F.M.B. (Nig.) Ltd. (1998) 11 NWLR (Pt. 575) 621 at 628; Okonkwo vs. C.C.S. (Nig.) Plc. (1997) 6 NWLR (Pt. 507) 48 at 71 — 72 and Assad Sabbagh & Anor. vs. The Bank of West Africa (1962) (Pt. 2) 1153 at 1156,
the lower Court was right to have held that, the

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Appellant’s right to possession of the mortgaged properties had not crystalized and/or become exercisable because the 1st Respondent was disputing the amount it is indebted to the Appellant in several suits. (Grounds 4 and 5).
4. Whether, having regard to the fact that, the Appellant is the legal owner of the mortgaged properties (being the properties relating to the suit at the trial Court ), the lower Court was right to have held that, in view of the 1st Respondent’s disputations as to the amount of its indebtedness to the Appellant, the Appellant ought not have exercised its right to possession of the mortgaged properties. (Ground 3)
5. Whether, the decision of the lower Court ought to be set aside, same having been reached upon a mis- application of the provisions of Clause 13 of the Deeds of Legal Mortgage (which deals with the mortgagee’s power of sale), rather than the provisions of Clause 3(1)(i) of the said Deeds of Mortgage (which deals with the mortgagee’s right to possession of the mortgaged properties), to the facts and circumstances of Suit No: FHC/L/CS/1059/2016. (Ground 6)”.

On his part, Learned SAN for the 1st Respondent

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formulated a sole issue for determination:
“Whether or not the lower Court, having regard to theprinted record before it, was right and/or justified in law or otherwise correct in its decision in setting aside the judgment of the trial Court and remitting the case back to the lower Court for hearing de novo with the 1st Respondent as a party.”

2nd Respondent’s counsel equally formulated a similar issue for determination:
“Whether or not the Court of Appeal was right when it set aside the judgment of the trial Court as a result of necessary and proper parties not being before the Court at the commencement of the suit ordering that the matter starts de novo with the 1st Respondent as a party.”

On behalf of the 3rd Respondent learned counsel donated a single issue for determination:
“Whether the action of the 3rd Respondent in providing security for the Appellant in the exercise of its rights as legal mortgagee is not consistent with its functions under Section 3(1) of the Nigeria Security and Civil Defence Corps (Amendment) Act, 2007, having regard to the fact that it was made a party at the trial Court wherein the orders

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were made.”

It should be noted that I have earlier mentioned that the 4th Respondent’s brief was struck out after same was withdrawn by the 4th Respondent’s counsel.

Considering the issues formulated by the respective learned counsel, I prefer to adopt the Appellant’s issue 2 as it represents the issue in contention in this appeal.

ARGUMENTS OF LEARNED COUNSEL FOR THE PARTIES
Arguing the issue, learned counsel for the Appellant submitted that in view of the findings of the lower Court that no relief was sought against the 1st Respondent, that the ownership of the mortgaged properties was already vested in the Appellant and that the 1st Respondent was not interested in the reliefs sought by the Appellant, it was wrong for the Court to have held that the 1st Respondent ought to have been joined as a party. He submitted that apart from the fact that no relief was sought against the 1st Respondent, the determination of the issue submitted for the trial Court ‘s determination to wit: whether the 2nd — 4th Respondents could, by law, provide protection, for the purpose of maintaining peace, to a mortgagee while exercising its

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right to the possession of the mortgaged property which right had already accrued to it, did not require the 1st Respondent’s input. Counsel faulted the lower Court for, in his estimation, suo motu expanding the scope of the Appellant’s reliefs by raising the issue of outstanding sum owed.

Learned counsel cited the Court of Appeal decisions in YUSUF V. ADEYEMI (2009) 15 NWLR (PT. 1165); PDP V. ABUBAKAR (2004) 16 NWLR (PT. 900) 455; SOSANYA V. ONADEKO (2000) 11 NWLR (PT. 677) 34 to submit that for an interest to lead to the joinder of a party, the said interest must relate to the reliefs sought in the case. He submitted that the reliefs sought by the Appellant in suit No. FHC/L/CS/1059/2016 concerned only the 2nd – 4th Respondent and had nothing to do with the 1st Respondent, hence the need to join it as a party did not arise. He submitted that this is the rationale behind the provisions of Order 9 Rule 5 of the Federal High Court (Civil Procedure) Rules, 2009, the applicable Rules of Court at Che time the Appellant’s suit was filed, which provides that a person against whom relief is sought may be joined as a Defendant in the suit, It was further submitted

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that this Court has in a plethora of cases upheld the position of the law as encapsulated in Order 9 Rule 5 of the Federal High Rules, 2009. He referred to the cases of AJAYI V. JOLAYEMI (2001)10 NWLR (PT. 722) 516; AROMIRE & ORS. V. AWOYEMI (1972) ANLR VOL. 1 (2ND EDITION) 105; LAJUMOKE V. DOHERTY (1969) NMLR 281, all of which counsel accused the lower Court of ignoring despite being cited for its consideration.

Counsel submitted that it was wrong for the lower Court to hold that the 1st Respondent ought to have been joined as a party because it could have clarified before the trial Court whether the Appellant complied with the conditions precedent for taking possession of the mortgaged properties; and whether the mortgage debt was still “unliquidated, relative to the other causes in litigation between the parties”. He submitted that the decision of the lower Court based on the aforesaid reasons is contrary to the spirit of the law and public policy as it has the effect of subjugating the rights of the mortgagee who is the legal owner of mortgaged properties to that of the mortgagor. He submitted that after a mortgage is consummated, the mortgagee

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becomes the legal owner of the mortgaged property while all the mortgagor retains is, at best, an equitable right of redemption which can only be activated by repayment of the mortgage debt. It was submitted that the mortgagee’s right over the mortgaged property is a legal interest which supersedes the mortgagor’s equitable interest.

Reliance was placed on OKUNEYE V. F.B.N. PLC (1996) NWLR (PT. 457) 749; ALL STATES TRUST BANK V. NSOFOR (2004) ALL FWLR (PT. 201) 1719; AWOJUGBAGBE LIGHT IND. LTD. V. CHINUKWE (1995) 4 NWLR (PT. 390) 370; ABDULRAHMAN V. ODUNEYE (2009) 17 NWLR (PT. 1170) 220; ATIBA IYALAMU SAVINGS & LOANS LTD. V. SUBERU (2018) 13 NWLR (PT. 1637) 387.

Counsel urged the Court to resolve the issue in favour of the Appellant and allow the appeal.

In response, learned silk for the 1st Respondent submitted that the Appellant has not established what prejudice or miscarriage of justice it will suffer by allowing the 1st Respondent to put its case before the trial Court so as to attain a fair end to the case. He submitted that the owner of a property may be liable in trespass in certain cases where the tenant is in de facto lawful

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occupation since legal ownership may reside in one person with actual legal possession residing in another. He pointed out that the lower Court found that the 1st Respondent was in de facto possession of the property as an attorned monthly tenant and there is no appeal against the finding.

Learned senior counsel cited the case of OBEYA MEMORIAL HOSPITAL V. AG. FEDERATION (1987) 7 S.C. (PT. 1) (REPRINT) 38 to submit that the Courts are guardians of the rule of law and will frown at any unlawful invasion of properties by anyone, no matter how highly placed. He stated that in providing the grounds and rationale for its suit at the trial Court, the Appellant made damning allegations of indebtedness and refusal to pay against the 1st Respondent, which it had no opportunity to respond to, having been deliberately kept out of the suit by the Appellant. He urged the Court to affirm the judgment of the lower Court.

There is no reply in the Appellant’s reply brief to any new issue raised in the 1st Respondent’s brief in relation to the issue at hand.

The arguments of counsel in the 2nd Respondent’s brief are similar to those of the 1st Respondent. No

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purpose will be served by repeating them here.

In the Appellant’s reply brief to the 2nd Respondent’s brief, it was argued that failure to challenge the suit at the trial Court and the appeal at the lower Court means that the 2nd Respondent conceded to the reliefs sought by the Appellant, and he can therefore not take a different stand here. He relied on the cases of NWAFOR V. E.F.C.C. (2021) 13 NWLR (PT. 1794) 548; NWANKWO V. YAR’ADUA (2010) 12 NWLR (PT. 1209) 518; SAKATI V. BAKO (2015) 14 NWLR (PT. 1480) 531; SKYE BANK PLC V. AKINPELU (2010) 9 NWLR (PT. 1198) 179.

For 3rd Respondent, learned counsel stated that the 3rd Respondent is neutral and by providing security for the Appellant to take possession of the mortgaged properties, he only obeyed the judgment of the trial Court, as he was bound to do. Reliance was placed on ODOGWU V. ODOGWU (1992) 2 NWLR (PT. 255) 539; GOVERNOR OF LAGOS STATE V. OJUKWU (1986) 3 NWLR (PT. 26) 39; NGERE V. OKURUKET XIV (2014) 11 NWLR (PT. 1417) 147. Counsel submitted that the actions of the 3rd Respondent was also in line with his statutory duties. It was stated that as soon as the lower Court rendered its decision, the 3rd

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Respondent put all actions on hold. The Appellant did not file a reply brief to the 3rd Respondent’s brief.

RESOLUTION OF THE SUBSTANTIVE APPEAL
The Appellant filed Suit No. FCH/L/CS/1059/2016 with a view to obtaining an order of the trial Court directing the 2nd — 4th Respondents to assist in recovering the mortgaged properties located at No. 86, Opebi Road, Ikeja, Lagos State; No. 12, Reverend Ogunbiyi Street, G.R.A., Ikeja, Lagos State; and No. 12, Allen Avenue, Ikeja, Lagos State. The properties were in the actual possession of the 1st Respondent, but the suit was commenced and concluded without the 1st Respondent as a party.

The general rule is that no action shall be defeated by reason of non-joinder of a party and a Court shall determine the suit before it between the parties before it. This is echoed by Order 9 Rule 5 and Order 9 Rule 14(1) — (3) of the Federal High Court (Civil Procedure) Rules, 2009, the Rules of Court in force at the time of the institution of the action. The provisions are reproduced below:
Order 9 Rule 5:
“5. Any person may be joined as defendant against whom the right to any relief is alleged to

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exist, whether jointly, severally or in the alternative. Judgment may be given against one or more of the defendants as may be found to be liable, according to their respective liabilities, without any amendment.”
Order 9 Rule 14(1) – (3)
14. (1) No proceeding shall be defeated by reason of misjoinder or non-joinder of parties, and a Judge may deal with the matter in controversy so far as regards the rights and interest of the parties actually before him.
(2) A Judge may at any stage of the proceedings either upon or without the application of either party and on such terms as may appear to the Judge to be just, order that the names of any parties improperly joined be struck out.
(3) A Judge may order that the name of any party who ought to have been joined or whose presence before the Court is necessary to effectually and completely adjudicate upon and settle the questions involved in the proceedings be added.”
This however represents the general rule. There are instances where failure to add a party to an action will be fatal. Where a necessary party whose presence is necessary for the determination of all the questions in a

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suit is not added as a party, the failure will have fatal consequences and the judgment will be unsustainable. Similarly, where the Plaintiff claims a relief or reliefs which when granted will have a binding effect on a person who is not a party to the action, the action becomes incompetent as the necessary party has not been joined. see RMAFC V. A.G. OF RIVERS STATE & ANOR (2023) LPELR— 60355 (SC); A.P.C. V. UDUJI (2020) 2 NWLR (PT. 1709) 541; A.D.C. V. BELLO (2017) 1 NWLR (PT. 1545) 112.
A necessary party to a proceeding is a party whose presence and participation is necessary or essential for the effective and complete determination of the claim before the Court. He is not only a desirable or proper party, but also a party who is both interested in the subject matter of the proceedings and in the absence of whom the questions or issues in dispute cannot be properly, judiciously and finally settled unless he is made a party. See JEGEDE & ANOR V. INEC & ORS (2021) LPELR – 55481 (SC); SIFAX (NIG) LTD & ORS V. MIGFO (NIG) LTD & ANOR (2018) LPELR — 49735 (SC); LAGOS STATE BULK PURCHASE CORPORATION PURIFICATION TECHNIQUES (NIG.) LTD

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(2012) LPELR — 20617 (SC); BWACHA V. IKENYA & ORS(2011) LPELR – 8105 (SC).

The relevant questions to consider in determining whether the joinder of a party is necessary are:
1. Is the cause or matter likely to be defeated by the non- joinder?
2. Is it possible for the Court to adjudicate on the cause of action set up by the Plaintiff unless the third party is added as Defendant?
3. Is the third party a person who ought to have been joined as a Defendant?
4. Is the third party a person whose presence before the Court as Defendant will be necessary in order to enable the Court effectually and completely to adjudicate on and settle all the questions involved in the cause or matter?
See the locus classicus case of GREEN V. GREEN(1987) 3 NWLR (PT. 61) 480 and the case of A.D.C. V. BELLO (2017) 1 NWLR (PT. 1545) 112.

In the instant case, the Appellant is contending that the decision of the lower Court was reached in error because, in its view, there was nothing wrong in conducting the proceedings at the trial Court without the 1st Respondent as a party. It opined that no relief was sought

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against the 1st Respondent and the questions arising in the action could be resolved without its presence. On the other hand, the 1st Respondent’s argument is that the lower Court was right in its decision that the 15t Respondent’s constitutional right to fair hearing was breached by reason of the failure to make it a party to the proceedings before the trial Federal High Court . Before I proceed, let me say that contrary to the submission of the Appellant’s counsel, the lower Court never held that the 1st Respondent was “not interested in the reliefs sought by the Appellant” in suit No. FCH/L/CS/1059/2016. This is a deliberate twisting of the decision of the Court below. The part of the decision of the Court below which the Appellant seems to be referring to is contained at page 1343 of volume 3 of the record wherein the Court stated thus:
“Arguendo, even if the Appellant is not interested in the 1st Respondent’s reliefs…” (underlining mine for emphasis).

By beginning with the word arguendo (meaning for the sake of argument), the Court below presented a situation to show that assuming the contention of the Appellant was correct, there was still reason

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to join the 1st Respondent as a party to the Appellant’s suit before the trial Court. Now let us examine the Appellant’s assertion that the 1st Respondent’s input was not required to resolve the questions arising before the trial Court. The reliefs sought by the Appellant as well as the grounds upon which its Originating Motion was predicated have been set out earlier in this judgment. Some salient averments contained in the affidavit in support of the Originating Motion are reproduced below:
7. I know that by virtue of the banker/customer relationship that existed between Oceanic Bank International Plc (Now Ecobank Limited) (“the bank”) and Suru Worldwide Ventures Nigeria Limited (the debtor”), the latter applied for and was granted several credit facilities running into several billions of Naira.
8. I know that as part of the security requirements for the aforesaid credit facilities, the Debtor executed several Deeds of Legal Mortgage including the Deeds of Legal Mortgage registered as 32/ 32/ 2033, 88/88/2032 and 89/89/2028 in respect of properties lying and situate at No. 86, Opebi Road, Ikeja, Lagos State, No. 12, Reverend Ogunbiyi

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Street, G.R.A., Ikeja, Lagos State and No. 12, Allen Avenue, Ikeja, Lagos State, respectively. Now shown to me and marked Exhibits A, B and C are the aforesaid Deeds of Legal Mortgage.
9. I also know that when the facilities advanced to the debtor became due and payable, the debtor failed to repay the indebtedness to the bank despite repeated demands. I know that due to the failure and refusal of the debtor to liquidate its indebtedness arising from the aforesaid credit facilities, which as at 1st January, 2011 stood at the sum of (fifteen billion, three hundred and forty-one million, fifty thousand, six hundred and forty-two Naira, twenty- one Kobo), the credit facilities were classified as non- performing loans.
10. In order to rescue the bank from imminent collapse due to its exposure to the debtor, the Plaintiff acquired and took over the debtor’s indebtedness stated above, pursuant to its statutory mandate under the Asset Management Corporation of Nigeria Act, 2010 and the policy of the Federal Government of Nigeria thereto.
11. I also know as a fact that the Plaintiff by a letter dated 5th August, 2011 informed the debtor of the

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acquisition of its debts from the bank. Now shown to me and marked as Exhibit D is the Plaintiffs letter dated 5th August, 2011.
12. I know that following its acquisition of the non- performing loans, the Plaintiff became, for intents and purposes, the primary creditor with respect to the debtor’s performing loans.
13. I also know that by virtue of its acquisition of the non-performing loans granted to the debtor, all security documents over, in relation to and/or in connection with the loans passed on to the Plaintiff with all the attendant interests and rights accruing to it thereto under the Asset Management Corporation of Nigeria Act, 2010.
14. I know as a fact that the debtor has failed, refused and neglected to liquidate its indebtedness to the Plaintiff despite repeated demands on it to do so.
15. I know that due to the aforesaid default of the debtor to liquidate its indebtedness to the Plaintiff, the powers and rights of the Plaintiff as a secured creditor under the three (3) Deeds of Legal Mortgage registered as 32/32/2033, 88/88/2032 and 89/89/2028 in respect of properties lying and situate at No. 86, Opebi Road,

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Ikeja, Lagos State, No. 12, Reverend Ogunbiyi Street, G.R.A., Ikeja, Lagos State and No. 12, Allen Avenue, Ikeja, Lagos State respectively, have arisen and therefore become exercisable.
16. I know as a fact that the protection and assistance of the Defendants is needed by the Plaintiff for it to fully exercise its powers and rights under the aforesaid Deeds Legal Mortgage which powers and rights have arisen and become exercisable.
17. I also know that unless the Defendants, as well as the officers and men under their control and command, are ordered by this honourable Court to assist the Plaintiff in maintaining peace, law and order at the properties located No. 86, Opebi Road, Ikeja, Lagos State, No. 12, Reverend Ogunbiyi Street, G.R.A., Ikeja, Lagos State and No. 12 Allen Avenue, Ikeja, Lagos State. The Plaintiff will be disturbed, obstructed and/or intimidated in the exercise of its statutory and contractual powers, functions and duties as the Legal Mortgagee over the aforesaid properties.”

From the grounds upon which the Originating Motion was brought and averments in the Appellant’s affidavit in support of the Originating Motion, it is

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obvious that the Appellant raised some prominent issues such as:
1. That the 1st Respondent applied for and was granted some credit facilities by Oceanic Bank International Plc (Now Ecobank Limited).
2. That as part of the security requirements for the credit facilities, the 1st Respondent and Oceanic Bank executed Deeds of Legal Mortgage in respect of some properties, including the properties sought to be recovered by the Appellant.
3. That despite repeated demands, the 1st Respondent failed to repay the credit facilities, even after the Appellant acquired the 1st Respondent’s indebtedness from Oceanic Bank.
4. That due to the failure of the 1st Respondent to liquidate its indebtedness, the powers and rights of the Appellant as a secured creditor under three Deeds of Legal Mortgage had arisen and become exercisable.

The question that immediately agitates one’s mind is whether the Appellant is correct in its assertion that the questions arising from its action before the trial Court could have been determined without the presence of the 1st Respondent. The only possible answer is in the negative. Allegations of

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indebtedness and failure to pay or settle same were raised against the 1st Respondent. It was not open to the Appellant to unilaterally make up its mind that the 1st Respondent could not possibly have an answer to those allegations as well as the assertion that the Appellant’s rights and powers as mortgagee had become exercisable. It is not open to a Plaintiff or any party in litigation to assume that another party or person has no defence to an action or a question arising in litigation. Neither a party nor a Court is permitted to assume that a party to an action or a person whose interest is affected by the litigation has no reply or answer to questions affecting his interests. No matter how certain a party or a Judge is about the questions to be determined, the principles of natural justice must not be ignored.
Furthermore, while it may appear that no relief was claimed against the 1st Respondent, it is not in doubt that it was the ultimate target of the suit. The 1st Respondent was the entity that stood to be affected, and was indeed affected, by the outcome of the suit. The reliefs sought were in essence for the trial Court to direct the 2nd

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— 4th Respondents to assist the Appellant in taking possession of the properties from the 1st Respondent. The Appellant admitted that the 1st Respondent was in de facto possession of the properties in question. In APUGO V. UGOJI (2022) 16 NWLR (PT. 1857) 669 at 720 paras. G — H, this Court stated thus:
“…the blue litmus test for the determination of who may be a necessary party to a suit is predicated on whether the Judgment will affect the party; and one of the reasons which makes it necessary to make a particular person a party to an action is that he will be bound by the result of the action and to put an end to parallel litigations. See Gassol v. Tutare & Ors (2013) LPELR-20232(SC); (2013) 14 NWLR (Pt. 1374) 221.”

Shorn of any embellishment, there is no doubt that the 1st Respondent was the party that was to be affected by any outcome of the action before the trial Court . Hence, while the trial Court gave directions compelling the 2nd — 4th Respondents to do certain acts, those acts were targeted at stripping the 1st Respondent of possession of the mortgaged properties. It cannot be seriously argued otherwise. The questions arising

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for the trial Court’s determination and upon which its decision was founded were such that the 2nd — 4th Respondents could not have had any input. No wonder they all did not, or better still, could not defend the suit.

The Appellant has sought to equate the situation of the mortgaged properties to that of an outright sale. The difference between both situations could not be more glaring. When a person sells a property to another, he totally and completely divests himself of his interest in the property. His interest ceases the moment he sells the property to another. A mortgage transaction is however different. In a legal mortgage, the mortgagee retains the right of redemption, and he is entitled to recover ownership of the mortgaged property once he has repaid the loan or liquidated the indebtedness. Thus, by executing a deed of legal mortgage in favour of the mortgagee, the mortgagor does not completely divest himself of his interest in the mortgaged property.
The mortgagee’s powers only arise when the debt is due but unpaid. Thus, while the mortgagee has certain powers, they are exercisable only subject to certain conditions. Thus, while title

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in the mortgaged properties passed to the Appellant and the 1st Respondent became an attorned monthly tenant as per the terms of the Deeds of Legal Mortgage, the 1st Respondent’s interest as the mortgagee was still alive, albeit in abeyance; and it could become the outright owner again upon fulfilling its obligations under the Deeds of Legal Mortgage. Hence the mortgagee’s, Appellant in this case, power of foreclosure/possession which the Appellant sought the assistance of the 2nd — 4th Respondents to exercise as well as the power of sale, are not at large. They are exercisable only upon some conditions, such as when the debt is due but remains unliquidated by the mortgagor (the 1st Respondent). see BABATUNDE V. B.O.N. LTD.(2011) 18 NWLR (PT. 1279) 738; ADETONA V. ZENITH INTL BANK PLC (2011) 18 NWLR (PT. 1279) 627; JOLASUN V. BAMGBOYE (2010) 18 NWLR (PT. 1225) 285. Hence, the 1st Respondent should have been joined so that the Court could hear its side of the story as to whether the right of foreclosure could be exercised by the Appellant. As long as the Appellant sought to repossess the property by the instrumentality of litigation, the 1st Respondent

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who would have been evicted from the premises was undoubtedly a necessary party. Failure to make the 1st Respondent a party was against the rules of natural justice and its right to fair hearing.

Natural justice is made up the two principles i.e. nemo judex in causa sua (a man cannot be a Judge in his own cause) and audi alteram partem (hear the other side). These are the jointly known as twin pillars of natural justice and must at all times be observed. In the instant case, the failure to afford the 1st Respondent an opportunity to be heard grossly and blatantly violated the audi alteram partem rule. The 1st Respondent inalienable right to fair hearing guaranteed under Section 36(1) of the Constitution Federal Republic of Nigeria, 1999 (as amended) was blatantly violated and it is a surprise that the Appellant is seeking judicial endorsement for that violation. Section 36(1) of the Constitution provides as follows:
“In the determination of his civil rights and obligations, including any question or determination by or against any government or authority, a person shall be entitled to a fair hearing within a reasonable time by a Court or other Tribunal

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established by law and constituted in such manner as to secure its independence and impartiality.”
The above provision demands that a person should be given the opportunity of being heard before his civil rights and obligations are determined. If a person is given the opportunity to be heard, but refuses to take it, he cannot complain of lack of fair hearing.
The true test of a fair hearing is the impression of a reasonable person who was present at the trial, whether from his observation, justice has been done in the case. See MOHAMMED V. KANO N.A. (1968) 1 ALL NLR 424; IGWE V. STATE (2021) LPELR – 55336 (SC); MPAMA V. FBN PLC (2013) LPELR – 19896 (SC); OKAFOR V. A.-G., ANAMBRA STATE (1991) 6 NWLR (PT. 200) 659; ARIORI & ORS V. ELEMO & ORS (1983) LPELR — 552 (SC). In a situation such as this where the 1st Respondent was completely shut out, an impartial observer who is a man of reason and a complete stranger to the proceedings will certainly get the impression that he was not accorded his right to fair hearing. In APUGO V. UGOJI (supra), an action in respect of a land over which a Certificate of Occupancy was granted to the

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Incorporated Trustees of the Roman Catholic Diocese of Umuahia, but which the body was not added as a party, Kekere-Ekun, JSC in delivering the lead judgment held thus at p. 694 paras D — E:
“In appropriate circumstances, the non-joinder of a necessary party might result in a breach of the principles of natural justice, particularly the right to fair hearing guaranteed by Section 36(1) of the Constitution of the Federal Republic of Nigeria, 1999, as amended. A breach of the right to fair hearing renders the proceedings and the resultant judgment, no matter how erudite, a nullity. See P.D.P v. Ezeonwuka (2018) 3 NWLR (Pt. 1606) 187 @ 262-263 G – E; Otapo v. Sunmonu & ors. (1987) 2 NWLR (Pt. 58) 587.”

After reviewing the pleadings, his Lordship arrived at the following conclusion at page 699, paras D — F of the report:
“I am of the humble view that their Lordships cannot be faulted in their reasoning in this respect. As stated earlier in this judgment, the general rule is that an action will not ordinarily be defeated on the basis of non-joiner or misjoinder of parties. The exception is where there is a breach of the principles of

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natural justice, particularly as it relates to fair hearing. In the instant case, the learned trial Judge breached the Incorporated Trustees’ right to fair hearing by invalidating or nullifying a grant made in their favour by the Abia State Government on grounds of fraud,when they were not parties to the suit and therefore had no opportunity to defend their title. The resultant decision, on this ground alone, is a nullity and cannot be allowed to stand.”
see also RMAFC V. A.G. OF RIVERS STATE & ANOR (supra).

There is a saying to the effect that “a man’s head cannot be shaved behind his back”. What transpired in the entire proceedings before the trial Court had the opposite effect, The infringement of the 1st Respondent’s right to fair hearing having been established, the proceedings before the trial Court are a nullity and the lower Court cannot be faulted for setting aside same. See CHITRA KWMC LTD. V. AKINGBADE (2016) 14 NWLR (PT. 1533) 487; OVUNWO V. WOKO (2011) 17 NWLR (PT. 1277) 522; OBASAN V. ABUDU & 4 ORS (2023) 3 S.C. (PT. 11) 1; MIL. GOV. LAGOS STATE V. ADEYIGA (2012) 5 NWLR (PT. 1293) 291. The sole issue for determination is

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hereby resolved against the Appellant.

The Appellant ought to have abided by the well-reasoned decision of the lower Court instead of proceeding on this needless, ill- advised and time-wasting misadventure. Perhaps if that had been done, the entire proceedings before the trial Court would have been concluded and any appeal arising therefrom might have been underway, The case has instead spent another five needless years in Court.

In deciding this appeal, I have deliberately focused on the issue at hand, that is whether the 1st Respondent ought to have been joined as a party to the Appellant’s suit before the trial Court. I have avoided all other issues so as not to prejudge the fresh proceedings that will now take place before the trial Court. Those issues are better left for the determination of the trial Court.

In conclusion, I find no merit in the appeal and same is hereby dismissed. The judgment of the Court of Appeal, Lagos Division delivered on 2nd July, 2019, setting aside the judgment of the trial Court and remitting the case to that Court for hearing de novo with the 1st Respondent as a party, is hereby affirmed. I make no

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order as to costs.