PRACTICE AND PROCEDURE – DOCTRINE OF LIS PENDENS – Whether the doctrine of lis pendens applies to every suit
“It must be reiterated that contrary to what learned appellants’ counsel forcefully contends, the doctrine of lis pendens applies beyond cases in respect of title or right to real property. This Court remains persistent in its view on the doctrine of lis pendens that any person who purchases any property or acquires any right which is the subject of a determination of the Court exposes himself to a probable trouble since the outcome may be against the vendor. See OLORI MOTOR COMPANY LTD & ORS V. UNION BANK OF NIGERIA PLC (2006) LPELR – 2589 (SC). In AMAECHI V. INEC (2008) LPELR – 446 (SC), which is not a case in respect of real property, Aderemi JSC (of blessed memory) in his concurring contribution on the doctrine enthused as follows:- The doctrine of lis pendens finds expression in the assertion that prevents any transfer of any right or the taking of any steps capable of foisting a state of helplessness and/or hopelessness on the parties or the Court during the pendency in Court of an action and even after. By that doctrine, the law does not allow to litigant parties … to prejudice any of the litigating parties. The doctrine negates and disallows any transfer of rights or interest in any subject matter that is being litigated upon during the pendency of litigation in respect of the said subject matter. (Underlining supplied for emphasis) See also ORONTI V. ONIGBANJO (2012) LPELR – 7804 (SC) and BAMGBOYE V. OLUSOGA (1996) LPELR – 736 (SC). Yes, the doctrine does appear, majorly, to have been applied in real property disputes. That notwithstanding, the doctrine rests upon the firm foundation that no effective transfer of rights or interest in the subject matter of an action is facilitated during the pendency in Court of the action. See PROF. AJIBOYE AKINKUGBE V. EWULUM HOLDINGS NIGERIA LTD & ANOR (2008) LPELR – 346 (SC).” Per MUSA DATTIJO MUHAMMAD, JSC in NIDB & ANOR v. KAN BISCUITS CO. LTD (2022-LCER-46534-SC) (Pp 10 – 11;
Facts
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.
Issues
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.”
Lead Judge(ment)
UWANI MUSA ABBA AJI, J.S.C. (Delivering the Leading Judgment)
Held
In a unanimous decision, the appeal was dismissed.
Alternate Citations
(2022) LPELR-57280(SC)
Full Judgment
Counsel:
MUSA N. TOLANI, ESQ.
with him,
FIDELIS MBADUGHA, ESQ.
and
VICTOR IWUCHUKWU, ESQ.
For Appellant(s)
IBE IKWECHEGH, ESQ.
For Respondent
For Appellant(s)
For Respondent(s)
Counsel’s Photograph(s) Needed.