In the Supreme Court of Nigeria
On Friday, the 10th day of December 2004
S.C. 70/2004
Between
Attorney-General of Lagos State ....... Plaintiff
And
Attorney-General of the Federation ....... Defendant
Judgment of the Court
Delivered by
Muhammadu Lawal Uwais. C.J.N
THE dispute between the parties in this suit arose from circular letter addressed to all the governors of the states and all the Local Government Chairmen in the states by the Minister of State in the Federal Ministry of Finance. The circular letter reads as follows:-
Circular Ref. No.F. 12090/VI/T2/322
Office of the Honourable Minister of State for Finance,
Ahmadu Bello Way, Abuja,
April 19, 2004.
All State Governors,
All Local Government Chairmen
RE: Local Government Elections and Allocation of Funds from the Federation Account to LGAs.
I wish to draw your attention to the attached letter from Mr. President in which he raised some constitutional issues concerning the allocations to Local Government Councils from the Federation Account.
Kindly ensure compliance, please.
Sgd.
Mrs. Nenadi E. Usman
Honourable Minister of State.
The letter in question so attached, which was addressed to the Minister of Finance by President of the Federal Republic of Nigeria, Chief Olusegun Obasanjo, reads:
President,
Federal Republic of Nigeria
PRES/87
April 8, 2004
The Hon. Minister,
Federal Ministry of Finance,
Headquarters
Abuja
Dear Hon. Minister,
Local Government Elections and Allocations of Funds from the Federation Account to LGAs.
Available information indicates that some states namely: Ebonyi, Katsina, Lagos, Nasarawa and Niger conducted the last Local Government election in the new Local Government Areas created by their respective State Assemblies.
While State Houses of Assembly are empowered by the 1999 Constitution to create new Local Government Areas, the National Assembly, is however, required under Section 8 -(5) of the Constitution, to make consequential provisions by an Act with respect to the names and Headquarters of the new Local Government Areas for any such new Local Government to have constitutional recognition.
As the National Assembly is yet to make the necessary consequential provisions in respect of any of the newly created Local Government Areas in the country, conducting election under or funding any of them from the Federation Account would clearly be a violation of the constitution. Consequently, no allocation from the Federation Account should henceforth be released to the Local Government Councils of the above-mentioned States and any other State that may fall into that category, until they revert to their constituent Local Government Areas specified in Part I of the First Schedule to the Constitution.
In addition, you are aware that under Section 162 - (6) of the Constitution, each state is required to maintain a special account to be called "State Joint Local Government Account" into which shall be paid all allocations to the Local Government Council of the State from the Federation Account and from the Government of the State. Likewise, each state is required under section 162(7) of the constitution to pay to Local Government Councils in its area of jurisdiction such proportion of its total revenue on such terms and in such manner as may be prescribed by the National Assembly. This notwithstanding, reports have indicated that some States are yet to comply with these constitutional requirements.
In view of the above, all states should be requested to submit evidence that they have established State Joint Local Government Account in compliance with Section 162-(6) of the Constitution and also determined the basis for sharing allocations from the Federation Account due to their constituent Local Government Councils. In addition, they should also submit evidence of payment of State allocation into the State Joint Local Government Account, to enable payment of allocation to the Local Government Area Councils of each State from the Federation Account to the Joint Account.
You are to bring the contents of this letter to the attention of all States and Local Government Area Councils listed in the Constitution.
Yours sincerely
Sgd.
Olusegun Obasanjo"
On April 19, 2004 the plaintiff took out an originating summons on behalf of the Government of Lagos State in which he asked for reliefs against the defendant, as representative of the Federal Government. The reliefs sought, as were later amended, and further amended read as follows:-
"1. A determination of the question whether or not there is power vested in the President of the Federal Republic
of Nigeria (by executive or administrative action) to suspend or withhold for any period whatsoever that Statutory Allocation due and payable to Lagos State Government pursuant to the provisions of Section 162(5) of the Constitution of the Federal Republic of Nigeria 1999.
2. A declaration that the present intention or proposal of the Federal Government to suspend or withhold for any period whatsoever the statutory allocation due and payable to the Lagos State Government pursuant to the provisions of Section 162(5) of the Constitution of the Federal Republic of Nigeria 1999 will, if carried out be unlawful and contrary to the provisions of the said Constitution.
3. A consequential order of this honourable Court compelling the Defendant to pay immediately all outstanding arrears of statutory allocation due and payable to the Lagos State Government pursuant to the provisions of section 165(5) of the Constitution of the Federal Republic of Nigeria 1999.
4. An order of perpetual injunction restraining the President of the Federal Republic of Nigeria, or any functionaries or agencies of Executive arm of the Federal Government from doing anything whatsoever to suspend, withhold, for any period whatsoever or calculated to suspend or so to withhold any monies due and payable to the Lagos State government pursuant to the provisions of Section 162(5) of the Constitution of the Federal Republic of Nigeria.
The defendant after entering appearance, filed a counterclaim, which was later amended and further amended following the enactment of the Creation of New Local Government Areas (Amendment) Law, 2004, early in the month of October, 2004, that is, during the pendency of this case. The further amended counterclaim reads:-
"1. A declaration that the Plaintiff/Defendant to the Counter claims has no power or right under the 1999 Constitution to abolish Local Government Area created under the 1999 Constitution by altering their names, adjusting their boundaries and dividing them into smaller units until the National Assembly has acted pursuant to the Provisions of S. 8(5) of the 1999 Constitution.
2. A declaration that the Plaintiff/Defendant to the Counter claim has no power or right under the 1999 Constitution to create new local governments without recourse to the National Assembly as provided for under the constitution.
3. A declaration that the alteration of the names of local governments, the alteration of the boundaries of the local governments and the creation of new local governments done by the Lagos State Government and the operation of the new local governments before and or without an Act of National Assembly to that effect, is illegal unconstitutional, null and void.
4. A declaration that the following local government areas are the local governments established under the 1999 Constitution in Lagos State, Agege, Ajeromi-Ifelodun, Alimosho, Amuwo Odofin, Apapa, Badagry, Epe, Eti-Osa, Ibeju-Lekki, Ifako-Ijaiye, Ikeja, Ikorodu, Kosofe, Lagos Islandl Lagos Mainland, Mushin Ojo, Oshodi-Isol, Shomolu, Surulere.
5. A declaration that sections 1, 2 and 3 of the Local Government Areas Law No. 5 of 2002 of Lagos State are in contravention of section 3 (6) and Part 1 of the first schedule to the Constitution of the Federal Republic of Nigeria, 1999 and therefore are unconstitutional, null and void in so far as they purport to alter the provisions of the said section 3 (6) and part 1 of the First Schedule to the 1999 Constitution with respect to Lagos State of Nigeria.
6. A declaration that the 57 Local Government Areas established the by the Local Government Area Law No. 5 of the Lagos State are not entitled to benefit from the Federation Account.
7. A declaration that the elections conducted by the Lagos State Government on Saturday, March 27, 2004 into the 57 local government areas created by the Local Government Areas Law No. 5 of 2002 of Lagos State are inchoate and cannot take effect as presently established in that the 57 local government areas are not known to the constitution.
8. An order nullifying and setting aside the elections conducted by the Lagos State Government on Saturday, March 27, 2004 into the 57 local government councils established by the Local Government Areas Law No. 5 of 2002 of Lagos State.
9. An order of injunction restraining the Lagos State Governor, the Lagos State House of Assembly or any functionaries or agencies of the Lagos State Government from maintaining, financing and recognising any local government in Lagos State apart from the ones created under Schedule 1 of the 1999 Constitution.
Briefs of arguments have been exchanged by the parties on both the main claim by the plaintiff and the counter claim by the defendant. The plaintiff also filed defence to the defendants counter claim. A brief of argument was also filed by the amicus curiae.
Plaintiff's Claim
Arguing the plaintiff's case, Professor Osinbajo (SAN) learned Attorney-General of Lagos State, adopted the plaintiff's brief of argument and contended that the President of the Federal Republic of Nigeria has no right to withhold the payment of fund due to the Local Government Councils from the Federation Account under Section 162 subsection (5) of the 1999 Constitution of the Federal Republic of Nigeria. He submitted that the powers exercisable by the President under section 162 of the Constitution are purely executive in nature and are neither legislative nor judicial. He referred to Section 162 subsection (4) of the Constitution and argued that the provisions thereof did not give the President any discretion.
He argued further that the word "shall" in Section 162 subsections (4) (5) and (9) of the 1999 Constitution, qualified the action to be taken by the President as mandatory and not discretionary. He emphasised that nowhere in the 1999 Constitution is the President given the power to withhold funds due to states or local government councils or even the National Judicial Council by virtue of the provision of Section 162 subsection (9) thereof. He submitted, in other words, that the President has no supervisory power over the states, the local government councils or the National Judicial Council. Nor can the President be a judge in his own cause. He cited in support the cases of Eshugbayi Eleko v Officer Administering the Government of Nigeria, (1931) AC 662 at p. 670 and Military Governor of Lagos v Ojukwu, (1986) 1 NSCC Vol. 17, 302 at p. 309 line - p. 310 line 9, per Eso, JSC and p. 313 lines 43 - 51, per Obaseki, JSC.
On the question whether the President was a constitutional trustee of the Federation Account, learned Attorney-General argued that neither the Federal Government nor the President is a trustee of the fund due to local government councils, but on the contrary, it is the state governments, by virtue of the provisions of section 162 subsection (5) of the constitution, that are trustees to the fund allocated to the local government councils from the Federation Account. Relying on the provisions of Section 162 subsections (5) to (8) of the constitution, he submitted that a state government is not merely a channel for passing funds allocated to local governments. He referred to pp. 231 - 232 of the book Injunctions and Enforcement of Orders by Afe Babalola in support of the plaintiff's claim for perpetual injunction.
Alhaj Abdullahi Ibrahim, SAN, as amicus curiae, adopted his brief of argument. He referred to the provisions of Section 162 subsections (1), (3) and (5) of the 1999 constitution and submitted that states government and local government councils are entitled to share in the Federation Account and that the right cannot be tampered with by any authority. He submitted that the word "shall" in section 162 subsection (3) is mandatory and that there was no way in which the President can suspend or withhold amount due to Local Government Councils.
On the creation of local government councils, learned Senior Advocate referred to Section 8 subsections (5) and (6) of the Constitution and contended that the power of the National Assembly to amend Parts I and II of the First Schedule to the Constitution is merely consequential. He submitted that it was the State House of Assembly that has the power to create new Local Government Councils and that once this is done the creation stands. He argued that the President could not take it upon himself to withhold the funds due to the Local Governments and where the President is in doubt as to what action to take he must ask the courts for interpretation of the provisions of the Constitution in doubt. In support of the argument, he cited the case of A-G of the Federation v A-G of Abia State & 35 Ors. (2002) 6 NWLR (Part 764) 524.
Replying, Chief Afe Babalola (SAN) adopted the brief of argument which he filed opposing the plaintiff's claim. In the brief, section 3 subsection (6) of the Constitution is referred to. It is argued that the Local Governments referred to in section 162 of the Constitution are those created under Section 3 subsection (6) and Part I of the First Schedule to the Constitution. It is contended that statutory allocation of funds to Local Government is not intended to be the property of State Governments. Therefore, no State Government has proprietary right over the statutory allocation meant for Local Government Areas. It is argued that where a Local Government Council, as recognised under the Constitution ceases to exist, it would be irregular, wrongful and unconstitutional for the Federal Government to pay statutory allocation meant for Local Governments created under the Constitution to entities that are not recognised by the Constitution. He emphasised that the plaintiff had conceded that the 20 Local Government Councils provided for by the Constitution had been replaced with 57 Local Government Councils created by the plaintiff. It is argued that the effect of creating 57 new Local Government Councils out of the 20 is the same as creating new States out of old States, which is the situation dealt with by this Court in the case of A-G of Ondo State v A-G of Ekiti State, (2001) 17 N.W.L.R. (Part 743) 786 at p. 787G; pp. 787-788 C-D. Thus by creating 57 Local Government Councils, the plaintiff abolished the 20 that had been established by the Constitution. It is canvassed that the Constitution made provision for the allocation of funds from the Federation Account to 20 Local Government Councils in Lagos State and not the 57 created by the plaintiff. Therefore the defendant had no obligation to the 57 Local Government Councils. It is submitted that since the 20 Local Government Councils have been brought into extinction, the defendant has no obligation under the Constitution to pay the statutory allocation to the plaintiff. The defendant's brief of argument contends that by the Oath of Allegiance in the Schedule to the Constitution, to which the President subscribed, he is obliged to "preserve, protect and defend the Constitution of the Federal Republic of Nigeria." By Section 5(a) of the Constitution the executive powers of the Federal Republic of Nigeria are vested in the President, and by Section 5(6) of the Constitution "the executive powers extend to the execution and maintenance of the Constitution." It is, therefore, argued that the claim by the plaintiff against the defendant is an invitation to the defendant to commit a breach of the provisions of the Constitution which the latter had sworn to uphold.
On the interpretation to be placed on Section 162 subsection (5) it is submitted that the interpretation placed on the subsection by the plaintiff is too restrictive and does not take into consideration other relevant provisions of the Constitution. It is, therefore, submitted that the cardinal principle of interpreting the Constitution is that the provisions of the Constitution must be read together and not disjointly. To support the submission the decisions in the cases of Ifezue v Mbadugha, (1984) 5 S.C. 79 at p.101 and A-G of Ogun State v Aberuagba, (2002) 2 WRN 52 at p. 88 were cited. So also the cases of Kalu v State (1998) 13 N.W.L.R. (Part 583) 531 at pp. 586-587 and Mohammed v Olawumi, (1990) 2 NWLR (Part 133) 458 at p.484.
On the argument that State Governments are trustees for the Local Governments in their State vis-a-vis allocations from the Federation Account to the Local Governments, the defendant contends that on the contrary, it is the Federal Government that is the trustee to the Local Governments as well as the State Governments. It is argued that the State Governments are not trustees to the Local Governments but serve only as conduit pipes as they acquire no interest in funds allocated for the benefit of the Local Governments. Reference is made to the cases of A-G of the Federation v A-G of Abia State & Ors. (2002) WRN 1 at pp. 96-97 and A-G of Bendel State v A-G of the Federation, & Ors., (1982) 1-.2 S.C. 13 at p 220 and it is stressed that fund allocated to Local Governments is the property of the Local Governments and not a joint property of the State Government and the Local Governments. That in the circumstances of this case, if the plaintiff were to be held to be a trustee such a trust will be invalid for uncertainty of the object of the trust because the 20 Local Government Areas known to the 1999 Constitution have been "eliminated, obliterated or subsumed" by the creation of 57 new Local Governments by the plaintiff. The case of Knight v Knight, (1840) beau 148 on the certainties of trust and the Source Book on the Law of Trust by Ramjohn at Page 72 are referred to.
Now, Section 162 subsection (1), (3) and (5) of the 1999 Constitution provides as follows:-
162. (1) The Federation shall maintain a special account to be called "the Federation Account" into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.
................
(3) Any amount standing to the credit of the Federation Account shall be distributed among the Federal and State Governments and the local government councils in each State on such terms and in such manner as may be prescribed by the National Assembly.
(5) The amount standing to the credit of local government councils in the Federation Account shall also be allocated to the State for the benefit of their local government councils on such terms and in such manner as may be prescribed by the National Assembly.
It is significant that in both subsections (3) and (5) thereof reference is made to "Local Government Areas." The phrase "local government councils" has not been defined as such by the Constitution. however Section 318 of the Constitution provides that both the phrases "local government area" and "local government council" include an area council. In other words both the phrases "local government area" and "local government council" are interchangeable with regard to the meaning of "area council."
The letter by the President of the Federal Republic of Nigeria to the Minister of Finance, which is quoted above makes references to "Local Government Areas," "Local Government Councils" and "Local Government Area Councils." This is somewhat confusing. The letter states that funding of any "new Local Government Area from the Federation Account would clearly be a violation of the Constitution." However, Subsection (3) and (5) of Section 162 of the Constitution have not made any reference to payment to Local Government Areas but "local government councils." In the third paragraph of the letter, the President directs that "no allocation from the Federation Account should henceforth be released to the Local Government Councils until they revert to their constituent Local Government Areas specified in Part I of the First Schedule to the Constitution. Again in the last paragraph of the letter, the President directs the Minister to bring the contents of this letter to the attention of all the state and local government area councils listed in the constitution.
In his originating summons, the plaintiff ingeniously avoided mentioning either local government areas or local government councils or local government area councils, but premised his claim on the payment of statutory allocation due and payable to the Lagos State government pursuant to section 162(5) of the constitution of the Federal Republic of Nigeria. This simply means the amount standing to the credit of the local government councils of Lagos State in the Federation Account as provided in section 162 (5) of the Constitution.
If we are to go by technicality it will be seen that the controversy between the plaintiff and the defendant is not exactly over the directive given by the President to the Minister of Finance, as the directive relates to local government areas, local government councils and local government area councils while the plaintiffs claim is shown to concern Lagos State Government. Be that as it may, it should be borne in mind that we are in this case concerned with the interpretation of the Constitution. The inconsistency and confusion notwithstanding, this court has since laid down that in interpreting the constitution we should avoid technicalities - see the case of Nafiu Rabiu v Kano State, (1980) 8 - S.C. 130 where Sir Udo Udoma stated on ppp. 148 - 149 thus (see also (1981) 2 NCLR. 293 at p.236).
"... the function of the Constitution is to establish a frame work and principles of government, broad and general in terms, intended to apply to the varying conditions which the development of our several society, and therefore mere technical rules of interpretation of statutes are to some extend inadmissible in a way so as to defeat the principles of government enshrined in the constitution."
Also in the case of A-G of Bendel State V A-G, of the Federation & Ors (1981) 12 NSCC 314 at p. 395 lines 4 - 223 Eso, JSC observed as follows:
"It is the primary aim of this court to do substantial justice, and this should, indeed, be more pronounced in constitutional matters... The jurisdiction conferred upon the Supreme Court in regard to the interpretation and adjudication on the constitution is a special jurisdiction. The court cannot justify its usefulness in regard to this peculiar jurisdiction, by being inhibited with technicalities. Such inhibition will only serve to destroy the entire constitutional purpose of the court."
Notwithstanding the references made in the letter in question by the President to local government area or local government council or local government area councils it is clear to me that the dispute between the parties relates to the payment of funds from the Federation Account to the states of Nigeria, that is to say. Abia, Adamawa, Akwa Ibom, Anambra, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Gombe, Imo, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Kwara, Lagos, Nasarawa, Niger, Ogun, Ondo, Osun, Oyo, Plateau, Rivers, Sokoto, Taraba, Yobe and Zamfara.
Each state of Nigeria named in the first column of Part 1 of the First Schedule to this Constitution shall consist of the area shown opposite thereto to the second column of that schedule.
There shall be seven hundred and sixty- eight local government areas in Nigeria as shown in the second column of Part 1 of the First Schedule to this Constitution and six area councils as shown in Part II of that schedule.
Subsection (6) thereof clearly shows that there are 768 local government areas in Nigeria. It seems to me, as a matter of common sense, that a local government area is supposed to represent the area of a given local government council, for 1 cannot imagine how there can be two local government councils in one local government area. That will certainly lead to confusion. I am not aware of any local government are that consists of two or more local government councils. At the inception of the 1999 Constitution, it was matter of judicial notice that there were 768 local government councils throughout the country which corresponded with the 768 local government areas mentioned in section 3 (6). So that the councils were equated or synonymous with the areas. This was the position before some states of the Federation, including the plaintiff, decided to follow the provisions of section 8 of the 1999 Constitution in attempt to create new or additional local government areas and councils. Subsection (3) of section 8 provides:
(3) A bill for a Law of a House of Assembly for the purpose of creating a new local government area shall only be passed if -
(a) a request supported by at least two-thirds majority of members (representing the area demanding the creation of the new local government area) in each of the following, namely -
(i) the House of Assembly in respect of the area, and
(ii) the local government councils in respect of the area,
is received by the House of Assembly;
(b) a proposal for the creation of the local government area is thereafter approved in a referendum by at least two-thirds majority of the people of the local government area where the demand for the proposed local government area originated;
(c) the result of the referendum is then approved by a simple majority of the members in each local government council in a majority of all the local government councils in the State; and
(d) the result of the referendum is approved by a resolution passed by two-thirds majority of members of the House of Assembly.
The import of these provisions is that a new local government area, and therefore a new local government council, could only be created by a state after the steps enumerated there in have been complied with before a bill to that effect could validly be passed by the House of Assembly of the State. In the present case, it is not in dispute that those steps had been taken by the plaintiff.
Subsection (6) of section 8 provides:
(6) For the purpose of enabling the National Assembly to exercise the powers conferred upon it by subsection (5) of this section, each House of Assembly shall, after the creation of more local government areas pursuant to subsection (3) of this section, make adequate returns to each House of the National Assembly
These provisions show that after the Law mentioned in subsection (3) of section 8 is passed by the House of Assembly returns must be submitted by the State concerned to the National Assembly to enable the National Assembly pass an Act which will amend section 3 of the Constitution and Parts 1 of the First Schedule thereof to a accommodate the new local government area created by the State. The subsection reads:
(5) An Act of the National Assembly passed in accordance with this section shall make consequential provisions with respect to the names and headquarters of State or Local government areas as provided in section 3 of this Constitution and in Parts I and II of the First Schedule to this Constitution.
Now for the purpose of creating new local government it is necessary to read together and interpret all the provisions of the Constitution mentioned above, namely section 3 subsections (1), (2) and (6) together with part I of the first schedule, section 8 subsections (3) (5) and (6) of the constitution. This is the canon of interpretation of Constitution as laid down in, Ifezue v Mbadugha, (1984) 5 S.C. 79 at p. 101, A.G. of Ogun State v Aberuagba, (1985) 1 NWLR (Part 3) 395 at p. 414 and Senate of National Assembly v Momoh, (1983) 4 NCLR 269 at p. 282. When those sections are read together what emerges is that the passing of a bill by a House of Assembly creating a local government area or local government council in accordance with section 8 subsection (3) of the Constitution is not enough, the state will have to go a step further by submitting returns to the National Assembly which in turn will have to amend section 3 (6) of the Constitution for the local government area to be accommodated by the Constitution. In other words, the exercise by the state House of Assembly in passing the necessary bill creating a new local government or local government area is inchoate as submitted by Chief Afe Babalola, SAN.
I, therefore, come to the conclusion that the passing of the Local Government Areas Law, No. 5 of 2002 by the Lagos State House of Assemb