Can the Court Make an Order Against or in Favour of a Person Who is Not a Party to a Suit?

CASE TITLE: FIDELITY BANK PLC v. SAGECOM CONCEPTS LTD. & ANOR (2025) LPELR-81172(SC)
JUDGMENT DATE: 11TH APRIL, 2025
PRACTICE AREA: CIVIL PROCEDURE
LEAD JUDGMENT: ADAMU JAURO, J.S.C.

SUMMARY OF JUDGMENT:

INTRODUCTION:
This appeal borders on Civil Procedure.

FACTS:
This appeal is against the decision of the Court of Appeal, Lagos Division in appeal No. CA/L/494/2018, wherein the appeal of the Appellant was dismissed and the judgment of the trial High Court of Lagos State was affirmed.

The case at the trial Court involved a property at No. 25, Probyn Road, Ikoyi, Lagos. The 2nd Respondent held a 25-year lease on the property from the National Electric Power Authority. The 2nd Respondent mortgaged the property to the Appellant to secure a 3 million-dollar loan and obtained an additional N100 million loan secured by other properties in Ibadan. When the 2nd Respondent defaulted, the Appellant sold one Ibadan property, prompting the 2nd Respondent to sue in Suit No. FHC/L/CS/957/2005. The Federal High Court issued an interim injunction restraining the Appellant from dealing with the disputed property.

Despite the injunction, the Appellant appointed Hemaco Commercial Enterprises to sell the property. The 1st Respondent, unaware of the injunction, agreed to purchase the lease for N350 million in November 2005, partly financed by a N300 million loan from FCMB at 19.5% interest. The Appellant received the purchase price and handed over title documents and rental details to FCMB.

The 1st Respondent only learned of the injunction in January 2006 through a newspaper and sought a refund, which the Appellant refused. The 1st Respondent was joined as a Defendant in the original suit and counterclaimed against both the Appellant and 2nd Respondent for possession and damages. On 20th June 2011, the Federal High Court ruled that the Appellant’s power of sale had arisen and the property assignment was valid but declined jurisdiction over the 1st Respondent’s counterclaim, transferring it to the Lagos High Court.

The 1st Respondent then commenced a new suit against the 2nd Respondent and Appellant for possession and damages. The Appellant filed a defence and counterclaimed against the 2nd Respondent for possession and rent proceeds. After trial, the Court held the Appellant failed to disclose the injunction to the 1st Respondent, preventing it from taking possession and causing economic loss. The Court granted the 1st Respondent’s claims and partially granted the Appellant’s counterclaim.

The Appellant appealed to the Court of Appeal, which dismissed the appeal and upheld the trial Court’s decision. Still dissatisfied, the Appellant appealed to the Supreme Court.

ISSUE(S) FOR DETERMINATION:
The Court formulated a sole issue for determination of the appeal:

Whether the Court below was right in affirming the decision of the trial Court to the effect that the 1st Respondent proved its entitlement to the reliefs sought in its claim?

DECISION/HELD:
In conclusion, the Court dismissed the appeal and upheld the decision of the Court of Appeal.

RATIOS:
● ACTION- COUNTER-CLAIM: Whether a counter-claim is a separate and independent action; exception to the rule
● ACTION- PARTY(IES) TO AN ACTION: Whether the court can make an order against or in favour of a person who is not a party to a suit
● APPEAL- GROUND(S) OF APPEAL: Distinction between ground of law, ground of fact and ground of mixed law and facts
● APPEAL- LEAVE OF COURT/LEAVE TO APPEAL: Whether leave of the Court of Appeal or Supreme Court is required to appeal on ground(s) of fact or mixed law and fact to the Supreme Court; effect of failure to seek leave
● APPEAL- GROUND(S) OF APPEAL: How to determine the nature of a ground of appeal
● APPEAL- FORMULATION OF ISSUE(S) FOR DETERMINATION: Whether a respondent who files neither a cross appeal nor respondents notice can formulate issues for determination not related to the grounds of appeal filed
● APPEAL- APPEAL AGAINST DECISION/FINDING OF COURT: Whether a party who succeeded in a counterclaim can appeal against the main claim
● DAMAGES- SPECIAL DAMAGES: Whether a claim for special damages must be specifically pleaded and strictly proved
● EQUITY- PRINCIPLES OF EQUITY: Whether equity will allow a party to benefit from his own wrong
● EVIDENCE- UNCHALLENGED/UNCONTROVERTED EVIDENCE: Whether the Court is entitled to act on unchallenged evidence

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