Lead Merchant Bank Ltd. V. Petroleum [special] Trust Fund [2006] 5 NWLR [Pt. 974] 463 – 476. Ca.

Last week, my sister caught me mumbling something to myself, she said I looked like a mad woman just sitting there by the window and moving my mouth. She asked what I was doing and I told her I was trying to catch up on some school work.

She couldn’t have been more confused. Her JSS3 mind honestly could not comprehend. She then asked that I explain it to her in a simpler way. I thought about it for a second and replied “It is just a rule that forces inferior courts to follow whatever decision made by the superior courts”. She bobbed her head thoughtfully and asked “What makes one court inferior and the other superior. I won’t lie, I was growing increasingly exasperated with her lack of understanding.

“It is about Jurisdictional competency of courts. The lower court is referred to as inferior because its decisions have to align and be synced with that of the higher court” A deep breath, and I continued. “It is like when B has to do whatever A has done before. In that type of situation, A, whose actions would be mimicked and recreated overtime is the superior court, and B, whom copies and recreates the actions and decisions of A, is the inferior court”

I’m not sure she fully understood me; she just shook her head somewhat forcefully and ran out of the room.

In this week’s case, we explore what factors make a court competent, the mandatory obligation of a lower court to follow the precedent set by the higher court, and what factors determine a court’s jurisdiction.

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FACTS

The respondent herein had instituted legal action against the appellant at the High Court of the Federal Capital Territory, Abuja. The respondent, on the 30th October, 2002, had filed an application on its behalf in accordance with Orders 8 and Orders 23 of the High Court of the Federal Capital Territory, Abuja.

They sought for a leave to issue and enter the suit on the undefended list. This application was then heard and granted, much to the displeasure of the appellant, whom filed a motion on notice challenging the jurisdiction of the court on a number of grounds, after being presented with the motion ex-parte, a supporting affidavit, and the corresponding exhibits.

On the 27th March, 2003, the court of first instance had discountenanced the objections produced by the appellant, and had delivered judgement in favour of the respondent. The appellant was peeved by the relatively unfavourable decision of the trial court and had appealed to the Court of Appeal.

The Court of Appeal, unanimously allowed the appeal, and based its judgement on Section 215(1)(a) and (p) and Sections 1(1) and (3) of the Petroleum (Special)Trust Fund Decree No. 25 of 1994.

HISTORY OF THE CASE.

 High Court:

Name of the High Court: High Court of the Federal Capital Territory, Abuja. Date of the Ruling: Tuesday, 27^th May, 2003.

Counsel: Mr. E. Okoro for the Appellant & The Respondent was absent and unrepresented.

The plaintiff, the respondent herein, had filed a motion ex-parte before the trial court in accordance with Orders 8 and 23 of the High Court of the F.C.T (Civil Procedure) Rules. They sought the following reliefs;

1. Leave to issue and place the suit of the plaintiff on the undefended list and for it to be marked that way.
2. Any other orders the court deemed fit to make in the circumstance.

After the motion was moved, the learned trial judge granted the reliefs that had been sought. According the appellant, the court’s order that had granted leave to the respondent had been served to them, concurrently, with the motion ex-parte, supporting affidavit and exhibits. The appellant, aggrieved, filed a motion on notice challenging the jurisdiction of the lower court on a number of grounds. The objections raised by the appellant were rejected and judgement was entered in favour of the respondent. The appellant was also filed a sum of N14,729,000.00 and an added 10% of that sum as the counsel’s legal fees. Dissatisfied with the ruling, the appellant appealed to the Court of appeal on 8 grounds.

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Court of Appeal:

Division of the Court of Appeal: Court of Appeal, Abuja.

Names of Justices: Ibrahim Tanko Muhammad, J.C.A(Presided and read the leading judgement); Zainab Adamu Bulkachuwa, J.C.A.; Mary Peter Odili, J.C.A.

Appeal No.: CA/A/108/2003

Date of Judgement: Thursday, 14th April, 2005

Names of Counsel: Mr. E. Okoro – For the appellant; Respondent- Absent and unrepresented.

The appellant had lost out in the trial court and had appealed to the court of appeal. The appellant was granted leave to appeal to be heard and determined on the 17th March, 2005. The court granted the appellant leave for his case to be determined on its brief alone since the respondent had not filed any brief of argument.

The appellant, in its brief brought up seven issues for formulation before the court. The first issue questioned the Trial Courts’ jurisdictional competency over the claim lain before it by the respondent. The appellant posited that the subject matter at hand was well out of the capacity of the trial court. The appellant’s learned counsel stated the undisputed fact that the respondent was an agency of the Federal Government of Nigeria. The counsel argued that, virtue of sections 251(1) of the 1999 Constitution and Section 1(1)(3), 2, 3 of the Petroleum (Special) Trust Fund Act, the lower court completely lacked the jurisdiction to consider the case.

The determinants of the jurisdiction and competency of a court was reiterated in the case. The locus classicus of the subject matter – Madukolu v. Nkemdilim – laid down the requirements which had to be in place for a court to have jurisdiction and they were;

1. The court had to be properly constituted in respect to the number and qualification of its members;
2. The subject matter had to be in its jurisdiction;
3. The action had to have been initiated through the due process of law; and
4. All conditions to the exercise of its jurisdiction has been met.

The second issue touched on the absence of proper follow-through of the due process of initiating any legal procedure. It challenged the mode in which the suit was commenced. Apparently, the respondent failed to file a writ of summons and did not pay any filing fees for the filing of the claim.

Thirdly, the appellant asked whether the judgement had been validly entered for the respondent and for the legal fees of its solicitors on the undefended list.

The fourth issue raised for determination was if there was any affidavit evidence on which the claim on what was said to be the respondent’s writ of summons could be granted

Another issue raised for consideration to the Court of Appeal, by the appellant, was whether it was justified, ethically and legally, for the trial judge to have formulated a case of money had and received and decided it when the case of the respondent was not one for money had and received.

The appellant also raised for formulation the legality of the trial judge entering judgment in favour of the respondent for a sum that was higher than what the respondent said was due to it.

Finally, the appellant questioned the lower court’s refusal to consider the defence on the merit raised in the affidavit filed by the appellant, notwithstanding that the appellant had not filed a notice of intention to defend.

In concluding the leading argument, cases were brought up to set the definition of federal government agencies and parastatals. The case in question is NEPA v. Edegbero (2002) 18 NWLR (Pt. 798) @97. It was further stated that the trial judge had been wrong for completely dismissing the precedent which had been set for it by a higher court It stated;

Deliberate refusal to so be bound amounts to judicial impertinence which is capable of enthroning judicial rascality and anarchy in the judicial hierarchy.
It was resolved that, in fact, the court of first instance had lacked competent jurisdiction on the subject matter and the appeal was allowed. The ruling of the High Court was set aside as a nullity as the court, had been established, to not have sufficient jurisdiction over the subject matter.

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HELD;

• On determinants of jurisdiction of court – It was established that for a court to be regarded as having sufficient and competent jurisdiction over a subject matter,  it had to fulfil the following ingredients; The court had to be properly constituted in regards to number of members and the qualification of its members; the subject matter had to be within its jurisdiction; the action had to be initiated by a due process of law; any condition to the exercise of its jurisdiction had to be fulfilled.
• On Factors which a court must consider before assuming jurisdiction over a matter – These three issues [subject matter, due process, and parties involved] are crucial factors which a court must watch out for carefully before commencing proceedings. The court is duty bound to look into all these issues even if none of the parties involved brings it up.
• On Exclusive jurisdiction of the Federal High Court to entertain suit involving the revenue of the federal Government or any of its organs or agencies – Subsequent to section 251[a[, it can be gathered that all suits relating to the revenue of the government of the federation where the Government or any of its organs is suing or being sued must be holden at the Federal High Court to the exclusion of any other court.
• On Exclusive Jurisdiction of the Federal High Court in actions relating to the administration and management of the Federal Government or its agencies – By provisions of Section 251[1][p] of the Constitution of the Federal Republic of Nigeria, 1999, all actions relating to the management and administration bodies and parastatals of the Federal Republic of Nigeria must be taken at the Federal High Court.
• On Exclusive Jurisdiction of the Federal High Court in matters in which the federal Government or any of its agencies is a party – By Virtue of Section 251[1][p], [q] and [r] of the Constitution of the Federal Republic of Nigeria, 1999, exclusive jurisdiction is vested in the Federal High Court in matters in which the federal Government or any of its agencies is a party.
• NOTABLE PRONOUNCEMENT – On Obligation on lower courts to follow by decisions of higher courts – Per Ibrahim Tanko Muhammad, J.C.A at page 476 paras C-D: 

“The principle of stare decisis, I think, has an obligation on lower courts to be bound by the decisions of higher courts. Deliberate refusal to be so bound amounts to judicial impertinence which is capable of enthroning rascality and anarchy in the judicial hierarchy, this must be eschewed and discouraged by Judges”

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