PRACTICE AND PROCEDURE – DOCTRINE OF LIS PENDENS – Whether the doctrine of lis pendens applies to every suit
“The major contention of the appellant’s counsel is that the doctrine of lis pendens only applies to real property and not the sale of machinery found on the landed property which, in his view, qualifies as personal property. This sort of submission is not unexpected with regard to such a doctrine like that of Lis Pendens – an “archaic, anachronistic and obsolete” doctrine. Although the doctrine has either been “abolished or modified by legislation in England and in other jurisdictions that applied common law,” it has “remained in its raw form as part of our laws without modifications since then,” G. Ojo and K. Ojo, “Lis Pendens and Insecurity of Title to Land in Nigeria: A Call for Legislative Intervention,” in The Gravitas Review of Business and Property Law, Vol. 8, No 4 (Dec 2017) 11. True, indeed, as the appellant’s counsel submitted, the doctrine, which derives from the Latin expression, pendente lite nihil innovetur, which means “nothing should change during the pendency of a suit,” Amaechi v INEC (2008) 407 All FWLR 1, was initially held inapplicable to personal property, Ogundiani v Araba (1978)1 SC 55; Enekwe v International Merchant Bank of Nigeria Ltd and Ors (2006) LPELR – 1140 (SC) 21; Barclays Bank of Nigeria Ltdv Ashiru (1978) 6 – 7 SC 99, 128; Oronti v. Osidele (2012) 6 – 7 MJSC (pt 1) 178. The sole purpose of the doctrine, at least, at that pristine stage was to prevent frustration of the decree of the Court by alienation of the property in litigation, Bellamy v Sabine (1857) 1 De G and J 565; 7 Columbia Law Review 282. This purpose was accomplished by enforcing the decree against all persons who had acquired an interest pendente lite in the same manner as though they had been parties to the suit, Norris v Ile (1894) 152 111 190, 1999, Columbia Law Review VoI. 12, No. 4 (April, 1912) 363, I. O. Smith, Practical Approach to the Law of Real Property in Nigeria, (Lagos: Ecowatch Publications (Nig,) Ltd, 2013) 15-17; C. O. Olawoye, Title to Land in Nigeria, (Lagos: Evans Brothers Ltd, 1974) 38. However, contrary to that submission, another line of authorities has consistently held that the doctrine is applicable to any pending suit, including personal property, Umoh v Tita (1999) 12 NWLR (pt 631) 631, Amaechi v INEC (supra); to wrongful eviction of tenants by landlord. Akinkugbe v Ewulum Holdings Nig Ltd (2008) 4 SC 125. It has equally been made applicable to tangible and intangible res Gamadi v Yohanna (2006) 2 FWLR (pt 308) 1968 as well as declaratory reliefs, Ezomo v NNB (2007) All FWLR (pt 368) 1032; Juris Secundum, Vol 54, 570, Olori Motors Co Ltd and Ors v UBN Plc (2006) LPELR – 2589 (SC) 9- 10. The doctrine has indeed been applied to subject areas outside property law as it disallows any transfer of rights or interests in any subject matter being litigated upon, St Michael’s Pharmaceuticals Ltd v Moore Associates Ltd (2015) 812 All FWLR 1550. Against this background, some scholars have called for legislative intervention, G. Ojo and K. Ojo, “Lis Pendens and Insecurity of Title to Land in Nigeria: A Call for Legislative Intervention,” (supra); G. Ojo, “Defining the Scope and Limit of the Doctrine of Lis Pendens. Need for a Restatement of Principles, in The Gravitas Review of Business and Property Law, Vol 6, o. 3 (Sept, 2015) 1. Against this background, I agree with the leading judgment that KAN Biscuit Factory consists of the land and machinery sold during the pendency of the present suit.” Per CHIMA CENTUS NWEZE, JSC NIDB & ANOR v. KAN BISCUITS CO. LTD(Pp 12 – 15; Paras D – D)
This appeal is against the judgment of the Court of Appeal.
The Respondent by a loan and mortgage agreement dated 26/8/1992 took a term loan of US$921,080.00, US$25,094.00 from the 1st Appellant to acquire additional plant, equipment and machinery for its biscuit factory project (Kan Biscuit Factory) situate at Aba in Abia State. In default, the 2nd Appellant was appointed as Receiver. Hence, the Respondent, as Plaintiff, filed an action against the Appellants as Defendants at the Federal High Court challenging the appointment of the 2nd Appellant by the 1st Appellant as Receiver in respect of the assets of the Respondent, an order directing the Appellants to reconcile its account with the Respondent and an order of injunction restraining the Appellants from taking over or disposing the Respondent’s assets.
Before the proper hearing, the Respondent vide a motion for interlocutory injunction sought to restrain the Appellants from selling KAN Biscuit Factory. The application was however refused by the trial Court. Dissatisfied, the Respondent filed an appeal at the Court of Appeal.
Nevertheless, while the substantive matter was pending before the trial Court and the interlocutory appeal before the Court of Appeal, the Appellants went ahead and sold the factory of the Respondent. Consequently, the Respondent vide a motion on notice before the Federal High Court where the substantive matter was pending, sought to set aside the sale being made pendente lite. The trial Court delivered its ruling setting aside the sale. Dissatisfied, the Appellants appealed to the Court of Appeal. However, the Court of Appeal dismissed the appeal and upheld the decision of the trial Court. Further dissatisfied, the Appellants appealed to the Supreme Court.
The Supreme Court determined the appeal on the sole issue thus: “Whether having regard to the entire circumstances of the claims constituted in the substantive suit, all being declaratory claims and reliefs and the decision of the Courts on the interlocutory application to set aside the sale of items of personal properties-chattels (plant, equipment and machinery) other than landed property (real property) at interlocutory stage of the proceedings, the trial Court and Appeal Court were not wrong in applying the common law doctrine of lis pendens to the instant case and thereby inadvertently disposing of the substantive claims and reliefs still pending and abandoned before the trial, which led the Courts to give perverse judgments.”
UWANI MUSA ABBA AJI, J.S.C. (Delivering the Leading Judgment)
In a unanimous decision, the appeal was dismissed.