Whether A Third Party Can Challenge the Appointment of An Agent by The Master

CASE TITLE: MUBECO PETROLEUM CO. LTD. v. FBN PLC & ORS (2023) LPELR-61113(CA)
JUDGMENT DATE: 22ND SEPTEMBER, 2023
PRACTICE AREA: CIVIL PROCEDURE
LEAD JUDGMENT: MUSLIM SULE HASSAN, J.C.A.

SUMMARY OF JUDGMENT:

INTRODUCTION:

This appeal borders on the interpretation of the doctrine of lis pendens

FACTS:

This is an appeal against the decision of the Kaduna State High Court.

The case of the Appellant by her claims before the trial Court is basically that she took a loan from the 1st Respondent to advance her business. The said loan was covered by a deed of legal mortgage with the Appellant’s lubricant blending factory along Zaria Kaduna Road and her petrol station located at Ahmadu Bello Expressway.

The Appellant was unable to pay the loan and the 1st Respondent appointed the 2nd respondent as receiver manager to sell the property and recover the loan. However, the property of the Appellant which the 2nd Respondent was appointed by the 1st Respondent did not include the Petrol Station covered by the deed of legal Mortgage. It is the Appellant’s case that while in the process of disposing his property, he commenced talks with the 1st and 2nd Respondent to see how they could agree on an amount he could pay to settle the loan. Whilst that talk was ongoing, the defendants entered into an agreement to sell the Appellant’s petrol station to a company named Twelve Dots Investments Limited for N150, 000,000.00, and the company had even made a deposit of N10, 000,000.00.

That the sale transaction later cumulate into Litigation between the 1st and 2nd Respondents herein and Twelve Dot Investment Limited over the property of the Appellant in Suit No. KDDH/KAD/47/2008, wherein the Court made an order restraining the 1st and 2nd Respondents from disposing of the petrol station of the Appellant until the said suit was finally determined.

The 1st and 2nd Respondent however, during the pendency of this suit, still went ahead to dispose of the Appellant’s petrol station despite the orders of Court, hence the instant action by the Appellant.

The 1st and 2nd Respondent’s cases were that the 1st Respondent bank granted the Appellant loan of over Three Hundred Million Naira to expand his business, which was covered by a deed of legal mortgage with Appellant’s petrol station. The Appellant failed to repay the loan and the 1st Respondent appointed the 2nd Respondent to sell the petrol station. At the point of this sale, the indebtedness of the Appellant to the 1st Respondent was over One Billion Naira. However, upon evaluation of the property, the 1st Respondent requested the Appellant to pay the forced sale price of the property which was about One Hundred and Fifty Million Naira, but the Appellant failed to meet up and she instructed the 2nd Respondent to sell the property.

The case of the 1st and 2nd Respondent was that the Appellant was aware of the sale but did not complain about it, and the property was sold to the 3rd Respondent for the sum of Forty Three Million Naira. After the sale, the 1st Respondent approached the Appellant to pay her the sum of One Hundred and Fifty Million Naira as final payment of his indebtedness, and since then, the Appellant had filed one suit against the other, which has all been dismissed or struck out. The suit that led to the instant appeal was equally dismissed.

On the part of the 3rd Respondent, his case was simply that he got to know of the sale of the petrol station from the Appellant who notified him that the company was indebted to the 1st Respondent to the tune of A Billion Naira and that the petrol station was for sale. The case of the 3rd Respondent was that he bade for the petrol station and has purchased it since 2008.

However, the Appellant retained possession and was even leasing the petrol station to 3rd parties until 2013, when the 3rd Respondent demanded to take possession of the petrol station, and that was when the Appellant began suing him in all manners of suits, including this suit, the subject matter of this appeal, and criminal charges, which were all dismissed.

The Trial Court dismissed all the reliefs sought by the Appellant. The Appellant dissatisfied, appealed to the Court of Appeal.

ISSUE(S):
The Court determined the appeal on the following issues:

“1. Whether having regard to the doctrine of lis pendens, the learned trial Judge was correct when he sustained the sale of the Appellant’s petrol filling station at Ahmadu Bello Way, Kaduna by the 2nd Respondent as receiver appointed by the 1st Respondent during the pendency of suits concerning the said filling station.

2. Whether the learned trial Judge was right in law when he upheld the sale of Appellant’s petrol station at Ahmadu Bello Way Kaduna, also known as C7 Mogadishu Layout, covered by Certificate of Occupancy No. KD18597 by the 2nd Defendant and whether the 2nd Defendant had no capacity/authority to sell same.

3. Whether having held that the 4th Respondent, Kaduna State Ministry of Land, Survey, and Country Planning (formally the 5th Defendant), was not a public officer and that the suit against it was not statute barred, the learned trial Judge had the jurisdiction to reverse itself and hold that the 4th Respondent is a public officer and that the suit against it was statute barred.

4. Whether the decision of the learned trial Judge that the 3rd Respondent was not liable to the Appellant for unlawful demolition and occupation of the Appellant’s petrol station pendente lite is correct.”

DECISION/HELD:
In the end, the appeal was dismissed.

RATIO(S):
• LAND LAW – LIS PENDENS – Doctrine of lis pendens; instance where same does not arise
• JUDGMENT AND ORDER – SETTING ASIDE JUDGMENT/ORDER – Circumstances where a Court can/cannot vary/set aside its decision/judgment/order
• COMMERCIAL LAW – AGENCY – Whether a third party can challenge the appointment of an agent by the master

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