PRACTICE AND PROCEDURE – DOCTRINE OF LIS PENDENS – Whether the doctrine of lis pendens applies to every suit
“Counsel for the Appellant submitted vehemently that the doctrine of lis pendens is inapplicable to the instant case as the doctrine only applies to cases where a party seeks to recover or assert title to real property. However, counsel seems to have lost sight of the fact that when a suit is pending before a Court, neither party is permitted to dispose of the subject matter of the suit in order not to overreach the other party. This is in accord with common sense and fair play. In this case, the substantive suit before the trial Court and the Respondent’s appeal before the lower Court challenging the dismissal of its application for interlocutory injunction were still pending at the time the Appellants executed the Deed of Sale in favour of a third party. In the circumstance, the Appellants were precluded from transferring the factory of the Respondent, being the subject of litigation, to a third party. What the Appellants did is akin to self-help and taking the law into one’s hand in a matter over which the Courts were already seised. This has been condemned in several decisions. It has no place in a civilized society and this Court will not lend its judicial credence to it. See the cases of GOV. OF LAGOS STATE V. OJUKWU (1986) 1 NWLR (PT. 18) 621, OKOCHI V. ANIMKWOI (2003) 18 NWLR (PT. 851) 1 AND AGBAI V. OKOGBUE (1991) 7 NWLR (PT. 204) 391. The sale of the said factory is therefore void ab initio and liable to be set aside.” Per ADAMU JAURO, JSC in NIDB & ANOR v. KAN BISCUITS CO. LTD (2022-LCER-46534-SC) (Pp 19 – 21; Paras F – A)
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.