Law  

Limitation period does not run during pendency of action (1)

Mohammed

Mohammed

IN THE COURT OF APPEAL
IN THE LAGOS JUDICIAL DIVISION
HOLDEN AT LAGOS
ON MONDAY THE 27th DAY OF APRIL, 2015
BEFORE THEIR LORDSHIPS

JOSEPH SHAGBAOR IKYEGH JUSTICE, COURT OF APPEAL
CHINWE EUGENIA IYIZOBA JUSTICE, COURT OF APPEAL
SAMUEL CHUKWUDUMEBI OSEJI JUSTICE, COURT OF APPEAL
APPEAL NO: CA/L/843/2013
BETWEEN
SIFAX NIGERIA LIMITED DR. TAIWO AFOLABI
MR. BABATUNDE OLANREWAJU AFOLABI
APPELLANTS
OTUNBA MICHAEL OLANTUNDE OLOWU
PORTS AND CARGO HANDLING SERVICES
COMPANY LIMITED
A N D
MIGFO NIGERIA LIMITED RESPONDENTS
DENCA SERVICES LIMITED

Where an aggrieved person commences an action within the period prescribed by the statute and such action is subsequently struck out for one reason or the other without being heard on the merit or subjected to an outright dismissal, such action is still open to be recommenced at the instance of the Claimant and the limitation period shall not count during the pendency of the earlier Suit. In other words, computation of time during the pendency of an action shall remain frozen from the filing of the action until it determined or abates. So held the court of Appeal sitting in Lagos in a unanimous lead judgment delivered by his lordship, Samuel Chukwudumebi Oseji JCA, with his learned brothers, Joseph Shagbaor Ikyegh and Chinwe Eugenia Iyizoba JCA concurring. The parties were represented by Dr. Oladapo Olanipekun with Ademola Adesina, Adetola, Ogooluwa Ogunwumiyu and O.I Salami for the Appellant.

M.I Igbokwe(SAN) with Dr. C.O Ukattah, Mr. M.T Ajayi, Mrs C.I Ochaja and Mr. I.F Nnaemeka for the Respondents.

This is an appeal against the Ruling of the High Court of Lagos State delivered by L.B LAWAL-APOAPO J. On the 5th day of July 2013 with respect to the Appellant’s motion on notice filed on 20th of December 2012.

The Respondents herein had as Claimant in the lower court commenced an action by way of a writ of summons, and statement of claim and filed on 18th of July 2012 against the Defendants (now Appellants) wherein they claimed the following relief. WHEREFORE the Claimants claim against the defendants jointly and severally as follows: 1. A declaration that the contents of the Technical Proposal/Bid document dated June, 2005 and the Memorandum of Understanding dated 27th of July 2005, other relevant oral statements and documents made between, series of letters written by and the conduct of the Claimants and the 1st Defendant in respect of the bidding in the name of the 1st Defendant for the concession and the subsequent operation/management of Technical C, Tin Can Island Port, Apapa, Lagos. 2. A declaration that by the contract constituted by the Technical Proposal/Bid document dated June, 2005, the Memorandum of Understanding dated 27th of July 2005, and other relevant oral statements and documents made between, series of letters written by and the conduct of the Claimants and the 1st Defendant in respect of the bidding in the name of the 1st Defendant for the concession and the subsequent operation/management of Technical C, Tin Can Island Port, Apapa, Lagos; the 1st Defendant, the 1st Claimant and the 2nd Claimant are on the payment of the purchase price, entitled to hold and hold, all the shares in the said joint venture and also in the 5th Defendant in the ratio of 40% 30% and 30% respectively and their Chairmen or Chief Executive officers are entitled to the appointed as directors of the said joint venture or the 5th Defendant.

Briefly put, the facts of this case is the that the 1st Appellant and the Respondents put up a Memorandum of Understanding (MOU dated 27th of July 2005 to jointly bid for the concessioning and subsequent joint management to Terminal ‘C’ Tin Can Island Port, Apapa, Lagos, which was then being concessioned by the Federal Government of Nigeria through the Bureau for Public Enterprise (BPE) and the Nigeria Port Authority (NPA).

The bid document was subsequently submitted to the BPE by the 1st Appellant on behalf of the other after their joint effort and input in preparing same. It was also part of the MOU that, should the bid be successful, a joint venture company will be incorporated by the joint venture partners to manage the operations of the port. They eventually emerged the preferred bidders and while waiting for the 1st and 4th Appellants to summon the Respondents for a meeting to map out the way forward including the incorporation of the Joint Ventures Company Limited. The 1st, 3rd and 4th Appellants secretly promoted and incorporated the 5th Appellant (Port and Cargo Handling Services Company Limited) to the exclusion of the Respondents and without their knowledge. Upon being aware of the development and that the Port had been handed over to the 5th Appellant by the BPE/NPA, the Respondents immediately conducted a search at the corporate Affairs Commission, Abuja and on 20th of July 2006 obtained certified true copies of the incorporation documents which revealed that only the 1st and 3rd Appellants where stated as shareholders and directors to the exclusion of the Respondents contrary to the terms of the MOU. After efforts to meet with the Appellants with a view to resolving the issue failed, the respondents failed suit No. FHC/L/CS/664/2006 at the Federal High Court, Lagos. Judgment was eventually given in their favour and this was affirmed by Court of Appeal. But on further appeal to the Supreme Court the suit was struck out on the ground that the Federal High Court lacks the jurisdiction to entertain the action instituted by the Respondents. The said judgment was delivered on 8th of June 2012. The Respondents thereafter commenced this action afresh at the High court of Lagos State (Lower Court) on the 18th of July 2012. The Appellants as the defendants in the Lower Court reacted by filing a motion on notice wherein they prayed that the suit be struck out for being statute barred. In ruling delivered on 5th July 2013, the lower court held that the action is not statute barred because it was not caught by Section 8 of the Limitation Law of Lagos State. Being dissatisfied with the said ruling the Appellants filed a Notice of appeal dated and filed on 15th of July 2013. It contains four grounds of appeal.

Briefs of arguments were subsequently filed and served by the parties. In the Appellants brief of argument two issues were formulated for determination as follows:- (i). Whether the lower court was not wrong when it failed to apply the clear and ambiguous provisions of Section 8(1) of the Limitation Law of Lagos State and in holding that the Respondents’ action was not statute barred. (Grounds 1, 2 and 3). (ii). Having regard to the Respondents’ claim before the lower court, vis-à-vis the facts and circumstance of the case, whether the lower court was not in grave error when it held that the non-joinder of the Bureau of the Public Enterprises and the Nigeria Port Authority is not fatal to the Respondents. (Ground 4)

The Respondents also formulated two issues in their brief of argument as follows:-1. Whether the learned trial judge was right in holding that the Respondents’ action herein was not statute barred. (Grounds 1, 2 and 3). 2. Whether this action ought to have been dismissed or not being properly constituted on the ground of non-joinder of the Nigeria Ports Authority and the Bureau of Public Enterprises. (Ground 4).’’

These issues raised in the parties’ briefs of arguments are contextually similar. I will however adopt the Appellants’ two issues in resolving this appeal. ISSUE 1. Dwelling on this issue learned senior counsel for the Appellants, referred to section 8(1) (a) of the Limitation Law of Lagos State to submit that it is clear and unambiguous as to the time limit within which a specified kind of action may be brought and no legal proceedings may be competently brought by any person after the expiration of the period specified by statue. Thus a cause of action becomes statute barred if legal proceedings cannot be commenced in respect of same because the time prescribed by the limitation law has elapsed. Vide = CPC VS INEC (2011)18 NWLR (PT. 1279)493 at 532;

It was further submitted that in determining whether an action is statute barred, the court would look at the writ of summons and the statement of claim. The statement of claim will help determine when the cause of action arose while the writ of summons will help to ascertain the dated the action was filed and if the dated on the face of the writ exceeds the period prescribed by statute, then the action will be statute barred. Vide WILLIAMS VS WILLIAMS (2008) 10 NWLR (PT. 1095) 364 at 383; AJAYI VS ADEBIYI (2012)11 NWLR (PT.1310)137 at 167;

It was further argued that by operation of law the Respondents’ right of action had been automatically extinguished upon the expiration of 6 years. Vide ETHIOPIAN AIRLINES VS AFRIBANK (NIG) PLC (2006) 17 NWLR (PT. 1008) 245 at 264; OLAGUNJU VS PHCN (2011) 10 NWLR (PT.1254) 113. ISSUE2. Herein it was submitted that the lower court erred in law by its finding that the NPA and BPE are not necessary parties having sufficient interest in the subject matter of the suit.

It was further noted that the NPA and BPE are both creatures of enabling statutes, established to perform such functions as are described in their respective statutes and these functions are performed as agents of the Federation Government and were also vested with legal personalities to sue and sued. Thus the respondents having complained in their statement of claim that the appellants circumvented their agreement in the acquisition/bid for the subject matter of the suit i.e. (Terminal C, Tin Can Island Port, Apapa which is within the purview and management of the NPA and being concessioned by the BPE it makes both bodies necessary parties for the effective hearing and determination of the claim filed by the Respondents. On the definition of necessary parties reference was made to the cases of BWACHA VS IKEYA (2011) 3 NWLR (PT.1235) 610 at 626;

It was then contended that the non-joinder of the NPA and BPE is fatal to the Respondents’ case which has become incompetent and improperly constituted as to parties and this robs the court of the jurisdiction to adjudicate on the matter and the court ought to strike it out accordingly.

In the Respondents’ issue I it was submitted by their learned senior counsel that though it is agreed that a cause of action become statute barred if legal proceedings cannot be commenced in respect of same because the time prescribed by the limitation law has elapsed but that the cause of action in the instant case was not statute barred.

It was further submitted that a look at the relief endorsed on the writ of summons will show that the basis on which the Respondents’ action is supported are declaration of contractual rights, specific performance, and injunction, implied or constructive trustee, account and damages for conspiracy to injure and defraud. Also that even if the declaratory reliefs are claims in simple contract as wrongly contended by the Appellants, but because specific performance, injunction, implied and constructive trustee, accounts and damages for conspiracy to injure and defraud are also other basis on which the Respondents’ action is supported, it will not be right to hold that the Respondents action is founded on simple contract as envisaged by Section8(1)(a)of the Limitation Law because there are other reliefs on which the Respondents’ action or claim is based.

It was then further submitted that the lower court never agreed with the Appellants as to when a cause of action arose, but the correct position is as shown at page 477 to 478 of the record where the lower court stated in its ruling that:-“From the reliefs set out above, clearly and without any shadow of doubt the claim of the Respondent (sic) is not founded on simple Contract as envisaged by Section 8 but also on declaration of right, damages and injunction.

It was then strongly submitted that the Appellants ought not to have referred to and considered only a few paragraphs of the statement of claim in isolation in arriving at their conclusion that the cause of action herein arose on 20th of December 2005. Rather they ought to have considered the totality of the pleadings which wholly presented the case of the Respondents, as was done by the learned trial judge in arriving at his decision that the cause of action herein was not statute barred.

He added that it was wrong for a defendant relying on the defence of limitation of action to compute the time of accrual of the cause of action from the statement of defence or affidavit in support as was done by the Appellants who claimed that cause of action arose on 20th of December 2005, except such a date is admitted by the Respondents. Vide SAVANNAH BANK OF NIGERIA LTD VS PAN ATLANTIC SHIPPING TRANSPORT AGENCIES LTD. (1987) 1 NWLR (PT. 49) 212;

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