JANNASONS COMPANY LTD (APPELLANT)
v.
UZOR & 7 OTHERS (RESPONDENTS)
(1991) All N.L.R. 280
Division: Supreme Court of Nigeria
Date of Judgment: 10 May 1991
Case Number: SC 115/1989
Before: Andrews Otutu Obaseki; Muhammadu Lawal Uwais; Saidu Kawu; Abubakar Bashir Wali; Olajide Olarewaju Olatawura, JJSC
ISSUE
Whether, in the circumstances of the case, it was proper for the court to appoint a Receiver to collect rent and profits from the defendants pending a decision as to title to the land in question and whether such appointment would be just and convenient?
FACTS
The plaintiff (appellant in this matter) claimed in the trial court that it was the legal owner of the parcel of land on which the defendants trespassed - having forcibly entered upon the land - and on which the defendants were in the process of erecting residential buildings. These buildings were nearing completion. The plaintiff sought an injunction and claimed damages for trespassing against the defendants, following repeated and fruitless appeals to the defendants to vacate the land.
The defendants denied that the plaintiff was the owner of the land in question, denied that they had forcibly entered upon the land and claimed that as they were in occupation of the land the plaintiff could not claim possession thereof.
Subsequently the plaintiff applied to the trial court for the appointment of a Receiver, pending the determination of the title to the land to collect the rents and profits accruing from the land in question, and, more particularly, from the nearly completed buildings which would soon be occupied by tenants. The trial court, satisfied that the Receiver recommended by the plaintiff was suitable and satisfied that it would be just and convenient to so appoint a Receiver, granted the application.
On appeal, the Court of Appeal held that the trial court had erred in reaching its decision in favour of the plaintiff as the plaintiff had failed to show that its interests in the rents and profits existed at the time of the application. The Court of Appeal also found that the appointment of a Receiver was nonsensical in view of the fact that, pending final determination of the case, the plaintiffs held nothing that needed to be preserved on its behalf. The plaintiffs appealed to the Supreme Court.
HELD (Unanimously dismissing the appeal)
1. On the court's jurisdiction to appoint a Receiver
The court enjoys undoubted jurisdiction to appoint a Receiver when it is just and convenient to do so. That jurisdiction, however, should be exercised with utmost circumspection. It should, for instance, not be exercised where, in this case, the plaintiff failed to show its interest in the rents and profits at the time of its application. Kawu, JSC at page 290.
2. On the principles governing the appointment of a Receiver
After his appointment by the court, the Receiver does not become the representative of either of the parties. He becomes an officer of the court and his primary function is to protect an existing right with impartiality. He cannot be appointed unless the court is satisfied that it is convenient and just to do so. Kawu, JSC at page 292.
3. On the conditions under which a receiver will be appointed
Two conditions must be present before a Receiver is appointed: (1) preservation of the property in dispute from some threat; and (2) preservation as aforesaid where ordinary legal remedies are not effective. Olatawura, JSC at page 296.
4. On whether the appointment of a Receiver in the present case was just
1. Both conditions necessary for the appointment of a Receiver were absent in the present case. The plaintiff had enjoyed sufficient warning regarding the consequences of the buildings erected by the defendant and should have awaited the outcome of the dispute. Olatawura, JSC at page 296.
2. Where a person merely alleges to have a legal right, as the plaintiff did in this case, while a similar right is claimed by someone in possession of the property in question, as the defendant did, it would not be equitable for the court to disturb that possession by the appointment of a Receiver. Olatawura, JSC at page 296
and
3. The balance of convenience is against the plaintiff. Olatawura, JSC at page 296.
4. It is clear that the defendants are in possession of the disputed land. In the circumstances it would be unjust and inconvenient to appoint a Receiver at the instance of the plaintiff who merely alleged to have a legal right to the land in dispute. Kawu, JSC at page 292.
G.R.I Egonu, SAN and J.O Ezinwoke for the appellant
Chief Chimezie Ikeazor, SAN and Obi Akpudo and Uju Ikeazor (Mrs) for the respondent
The following cases were referred to in this judgment:
Nigeria
Alao v Omotayo (1979)3 LRN 314
John Uwakwe & others v Julius Agom Odogwu & others (1989) 5 NWLR 562
Jones Adeyeye v ET Adewoyin & others (1960) FSC 146
The following statutes were referred to in this judgment:
Nigeria
High Court Law of the Law of Eastern Region, Anambra State: Ss 25(1), 25(2)
The following rules were referred to in this judgment:
Nigeria
High Court Rules: Order 21 rule 1
The following books were referred to in this judgment:
Halsbury's Laws of England Volume 32 (3ed) at 394, paragraph 633
Kerr on Receivers (14ed) at page 5
Kerr on Receivers (16ed) at 72-73
Kawu, JSC (Delivered The Leading Judgment):- The main question for determination in this interlocutory appeal is whether the Court of Appeal was right in its decision, that the order made by Aneke, J in Suit No. 0/178/85 on 30 October 1986, appointing a Receiver was, in the circumstances of the case, erroneously made.
In the substantive suit, the appellant, herein as plaintiff, originally sued the 1st to 3rd respondents. The other defendants on record were later joined as parties by the court's order made pursuant to an application brought on their behalf.
In the substantive suit, the appellant's amended writ of summons reads as follows:-Amended Claim
"1. The plaintiff is, and was at all times material to this action, the owner in possession of the parcel of land situate at the Onitsha-Owerri Road, Onitsha, and verged pink in the Plan No. SE/AN 13/78.
2. On 19 May 1982, the 2nd and 3rd defendants in the company of others unknown to the plaintiff broke and entered the above-mentioned parcel of land and when Joseph Azubuko Nnadike, the Managing Director of the plaintiff company, challenged them they threatened to kill him and warned him to ensure that the plaintiff company quit from the said parcel of land.
3. Despite series of attempts to get the 2nd and 3rd defendants and their collaborators to see reason and to leave the plaintiff's land alone, the 2nd and 3rd defendants persisted in their threats to the Managing Director of the plaintiff company and maintained that they were going to sell off the plaintiff's said parcel of land.
4. On 23 June 1983, the defendants acting in concert, broke and entered the plaintiff's said parcel of land and started to dig the foundation of a building on the said land.
5. The plaintiff reported the acts of trespass to the Nigeria Police and despite the fact that the Nigeria Police was investigating the plaintiff's complaint, the defendants continued day and night to build on the said parcel of land.
6. The defendants intend, unless restrained by an Order of the Court, to continue with their acts of trespass on the plaintiff's said parcel of land.
7. The plaintiff therefore claims against the defendants jointly and severally for trespass.
(a) N100 000 damages for trespass.
(b) An Order of injunction restraining the defendants, their servants and agents and any person claiming through them from entering or remaining on the plaintiff's said parcel of land verged pink in the Plan No. SE/AN.13/78, or from doing anything thereon or from in any manner whatsoever interfering with the plaintiff's rights of ownership and possession of the said parcel of land."
Pleadings were ordered, filed and exchanged. Subsequently the appellant brought a motion on notice "praying the court for an Order of the Court appointing a Receiver to manage and control the building on the land in dispute and to collect all the rents and profits from the said premises pending the determination of the above case and for such further order or orders as to this Honourable Court may seem just."
The facts in support of the application on which the order appointing a Receiver was based can be found in the affidavit sworn to by a Mr. Joseph Azubuko Nnadike who claimed to be Chairman and Managing Director of the appellant. The relevant paragraphs of the said affidavit are:-
"4. That the plaintiff-applicant is the owner in possession of the parcel of land which is the subject-matter of this suit.
5. That the plaintiff-applicant acquired the land in dispute in February 1978, under Onitsha Native Law and Custom from John Chike Agusiobo, the head of John Tiger Oranefo Agusiobo's family.
6. That the plaintiff-applicant immediately went into possession of the said land and jointly with me built concrete walls round its land as well as my own personal land and installed an iron gate at the entrance of the premises.
7. That on 19 May 1982, the 2nd and 3rd defendants-respondents and their hirelings broke and entered the land and destroyed the front wall and carried away the iron gate.
8. That on 23 June 1983, the defendants-respondents again broke and entered the plaintiff-applicant's land and started digging the foundation of a building.
9. That despite my protests and the investigation by the Nigerian Police to whom I lodged complaints on the matter the defendants-respondents continued night and day to build on the plaintiff-applicant's said land.
10. That even after the institution of the above suit the defendants-respondents persisted in the erection of the said building.
11. That the said building is now almost completed and the defendants-respondents are arranging to let it to tenants.
12. That the plaintiff-applicant had already filed its statement of claim and plans in the above case and the facts contained therein are true.
13. That at the hearing of this application the plaintiff-applicant will rely on its statement of claim and plans which are hereby specifically referred to as Exhibits.
14. That the rents the defendants-respondents will collect from the building on the plaintiff-applicant's said land will be lost to the plaintiff-applicant unless a Receiver is appointed to collect same.
15. That any tenants put in the said building will be in danger of being compelled to pay over again any rents they might have paid to any person other than the plaintiff-applicant.
16. That the firm of Akporiaye, Ezukanma & Co of 93 Upper New Market Road, Onitsha, are reputable estate Managers and are willing to serve as Receivers in respect of the said building."
There was a counter affidavit sworn to by the 7th defendant/respondent, Chukwuebuka Efobi, on behalf of the other defendants, and the counter affidavit reads as follows:-
"I, Chukwuebuka Efobi, Male, Christian, Nigerian citizen, Businessman of Plot 44 Omagba Phase II Obosi, doth make oath and says as follows:-
(1) That I am the 7th defendant/respondent in this application.
(2) That I make this affidavit with the knowledge, consent and authority of the other defendants/respondents.
(3) That paragraphs 4, 5, 6, 7, 8, 9, 10 of the affidavit of Jonnasons Company Limited in support of this application are false.
(4) That the plaintiff/applicant is not the owner of the land in dispute and cannot possibly be in possession since we have structure on the land in dispute.
(5) That the plaintiffs never constructed any walls or any structure of any description with or without iron gates and that we never at any time broke down any walls or any building or iron-gate on the land.
(6) That the structures on the land in dispute were erected at the normal pace of construction and that the construction of the said building were completed long before the institution of this action.
(7) That we bought our pieces of land and erected the structures thereon in good-faith.
(8) That the defendants/respondents have already filed their statement of defence and Plan in this matter and the facts contained therein are true and the said statement of defence and Plan are hereby specifically referred to as Exhibits.
(9) That the plaintiff/applicant did not at any time lodge a complaint against us to the Nigeria Police but that at a time some of us were invited by the members of the N.S.O. who let us go after a very brief interrogation.
(10) That I respectfully depose that it is not just and convenient in the circumstance to appoint a Receiver.
(11) That I make this affidavit believing same to be true and correct to the best of my knowledge and conscience."
After hearing arguments and submissions of Counsel, the application was granted on 30 October 1986. In granting the motion the learned trial Judge held:-
"Learned Counsel for the respondents has argued that the subject matter of this action is land and not the rent accruing from it, and cites the case of Alao v Omotayo (1979) 3 LRN 314. I have read this judgment of the Lagos State High Court as per Oshodi, J, but find myself not persuaded by that decision. The learned Judge in deciding as he did seemed to have based his reasoning on a passage in Kerr on Receivers (14ed) at page 5 where it is stated:-
"A receiver can only be appointed for the purpose of getting in and holding or securing funds or other property, which the court at the trial, or in the course of the action, will have the means of distributing amongst, or making over to, the persons entitled thereto. The object sought by such appointment is therefore the safeguarding of property for the benefit of those entitled to it. There are two main classes of cases in which the appointment is made: (1) to enable persons who possess rights over property to obtain the benefit of those rights and to preserve the property pending realisation, where ordinary legal remedies are defective; (2) to preserve property from some danger which threatens it."
And the learned Judge commented as follows:-
"In view of the above statement I do not see to which of the two classes the application before (sic) . . .
and went on to conclude that the applicant was not claiming rents collected but claiming the land in dispute and that 'until he is adjudged the rightful claimant there will be nothing to preserve.' Let me simply say that I am satisfied that this application falls within the first class of the two main classes set out in Kerr on Receivers above."
Further down in his judgment, he also held as follows:-
"Learned Counsel for the respondents had advanced the argument that to have a specific Receiver appointed, the applicants need to file an affidavit of suitability of the Receiver, showing his experience, what he would do with the money collected, where he would keep the money, his interest, whether he has the capability and qualifications to perform. In this regard the Counsel cites the case of Jones Adeyeye v ET Adewoyin & others (1960) FSC 146. To this, applicant's Counsel replies that in the Adeyeye case (supra), the suitability or (sic) the Receiver was questioned on the body of the affidavit.
In the case in hand the applicant in paragraph 16 of his affidavit has deposed that:-
'The firm of Akporiaye, Ezukanma & Co of 93 Upper New Market Road, Onitsha are reputable estate Managers and are willing to serve as Receivers of the said building.'
In my opinion the words 'reputable estate managers' are sufficient to describe and emphasise the suitability, experience, capability and qualification of the Receiver so nominated. And in that case what the said Receiver will do with money collected and where he will keep it must be seen as taken for granted unless the respondent raises the issue in his counter affidavit. The defendants/respondents have not raised any such issue, neither did they question the truth of paragraph 16 of the affidavit. I hold that the plaintiff/applicant has done all that is required of him with regards to the nomination of a suitable Receiver.
For the above reasons I will grant this application. The firm of Akporiaye, Ezukanma & Co of 93 Upper New Market Road, Onitsha are hereby appointed as Receivers to manage and control the building on the land in dispute and to collect all the rents and profits from the said building pending the determination of this suit. The remuneration of the said Receivers, their mode of operation and other consequential matters are to be handled by the Asst. Chief Registrar of this Court in accordance with normal usages.
Application granted."
Being dissatisfied with the Ruling of the learned trial Judge, the respondents in this appeal, appealed to the Court of Appeal, Enugu Judicial Division, and that Court, having considered all the principles and the relevant authorities relating to the appointment of Receiver by Courts, allowed the appeal and reversed the Ruling of Aneke, J. In the lead judgment of Uwaifo, JCA with which Macaulay and Oguntade, JJCA, agreed, the court came to the conclusion that "the order for a Receiver was erroneously made in circumstances which were not just and convenient." This appeal is from that decision.
Four grounds of appeal were filed and, without their particulars, they are as follows:-
(1) That the Court of Appeal misdirected itself in law in holding that an order for the appointment of a Receiver in the present case could not be made on the ground that the plaintiff-applicant-respondent-appellant had not established at the time of the application, his interest in the rents and profits accruing from the land in dispute.
(2) That the Court of Appeal misdirected itself in law in holding that an Order for the appointment of a Receiver could not be made in the present case on the ground that "there was nothing to preserve for the plaintiff - pending the determination of the case."
(3) That the Court of Appeal misdirected itself in law in holding that even if the plaintiff-applicant-respondent-appellant succeeded in the present action it would not be entitled to the rents and profits accruing from the land in dispute up to the determination of the suit.
(4) That the Court of Appeal erred in law in setting aside the Order of the High Court appointing a Receiver in respect of the building erected on the land in dispute