Applicability of Limitation Period to Action Commenced in a Wrong Court
“.....THE STOPPAGE OF TIME, DURING THE PENDENCY OF AN ACTION THAT WAS STRUCK OUT FOR WANT OF JURISDICTION, WOULD COUNT IN FAVOUR OF THE RENEWED ACTION AT THE COURT WITH THE REQUISITE JURISDICTION..... THE TIME THE RESPONDENTS SPENT AT THE WRONG COURT CANNOT BE COUNTED, AS IT WAS SUSPENDED DURING THE PENDENCY OF THE SUIT AT THE WRONG COURT”
The 1st to 4th Appellants and the Respondents, through a Memorandum of Understanding (MOU) dated 27/7/2005, jointly bidded for the concessioning and joint management of Terminal C, Tin Can Island Port, Apapa, Lagos, which was being concessioned by the Federal Government of Nigeria, through the Bureau of Public Enterprises (BPE) and the Nigerian Ports Authority (NPA). It was agreed that, if the bid was successful, they would jointly incorporate a joint venture company, to manage operations of the Port. The bid was successful, however, the Respondents later discovered that the 1st, 3rd and 4th Appellants, had incorporated the 5th Appellant without their knowledge, and the said Terminal C had been handed over to the 5th Appellant. A search by the Respondents at the Corporate Affairs Commission (CAC), further revealed that only the 1st and 3rd Appellants were shareholders and Directors of the 5th Appellant Company, contrary to the terms of the MOU. Consequently, the Respondents filed a suit at the Federal High Court in Suit No. FHC/L/CS/664/2004 and judgement was delivered in their favour. The Appellants appealed to the Court of Appeal, which affirmed the judgement of the trial Court. However, on a further appeal to the Supreme Court, the suit was struck out, for want of jurisdiction by the Federal High Court.
Thereafter, the Respondents commenced a fresh action at the High Court of Lagos State, claiming declaratory and injunctive reliefs against the Appellants. The
Appellants filed a preliminary objection challenging the competence of the suit, on the ground that it was statute barred and improperly constituted. The trial Judge ruled that the claim was not founded on a simple contract as envisaged by Section 8 of the Limitation Law of Lagos State, as argued by the Appellants. The Court also relied on a book by a certain Andrew McGee, to hold that time did not run between 2006 and 8/6/2012, when the Supreme Court struck out Suit No. FHC/L/CS/ 664/2004.
Aggrieved, the Appellants appealed to the Court of Appeal which affirmed the decision of the trial State High Court. Consequently, the Appellants appealed to the Supreme Court.
Issues for Determination
The issues considered by the Supreme Court are as follows: 1. Whether the Court of Appeal was right to affirm the decision of the trial Court, that the Respondents’ suit filed at the State High Court after their earlier suit was struck out by this Court, was not statute barred.
2. When did the cause of action that gave rise to the Respondents’ right of action, accrue?
3. Whether the Court of Appeal was right, that the trial Court had not erred in relying on the book by Professor Andre McGee, in coming to the decision that the time spent at the wrong Court by the Respondents was suspended for the purpose of computation of time.
4. Whether the lower Court was not in grave error, in affirming the holding of the trial court, that the non-joinder of the NPA and the BPE, was not fatal to the Respondents’ case.
Arguments
On the first and second issues, the Appellants argued that the Respondents’ suit commenced at the trial Court on 8th July, 2012, was statute barred by the provisions of Section 8(1) (a) of the Limitation Law of Lagos State. They argued that the Respondents’ cause of action accrued between July 2005 and 20/12/2005, when the 5th Appellant was incorporated, and their action which was filed on 18/7/2012, being one founded on a simple contract, was statute barred having been filed outside the six years limitation period prescribed in Section 8(1)(a).
In response, the Respondents argued that Section 8(1)(a) of the said Limitation Law could be activated in isolation, without considering other relevant and applicable provisions of Sections 13, 32(4) and 58 of the same law, which are exceptions to Section 13(1)(a) and would render it inapplicable. They further argued that, their cause of action accrued, when certified true copies of the 5th Appellant’s incorporation documents were obtained from the CAC, Abuja on 20/7/2006, and they discovered that contrary to the Joint Venture Agreement, only the 1st and 3rd Appellants became shareholders and Directors in the 5th Appellant. The Respondents also argued that, going by the facts of the case and the reliefs sought, the suit was not one predicated on a simple contract, as contended by the Appellants; hence, Section 8(1)(a) of the Limitation Law, was inapplicable and the relevant and applicable provision was Section 13(1), which exempted claims for specific performance of a contract or for an injunction or other equitable reliefs, from the operation of Section 8(1). They also relied on Sections 32(4) and 58(1) of the Limitation Law, and submitted that, the Appellants’ concealment and fraud, also postponed the running of the period of limitation.
On the third issue, the Appellants argued that, there was no need for extrinsic aid in the interpretation of Section 8(1) of the Limitation Law, and that time runs at every material time, in determining whether an action is Statute barred. They submitted that, the lower Court went beyond the scope of the Section, when it introduced a staggered computation of time, which the law did not envisage, as limitation of action is an issue of law and jurisdiction. They argued that, the authority of KASSIM v EBERT (TRADING AS CASH STORES) (1966) 1 ANLR 54, relied on by the Court below, was not applicable, in that a case is an authority for what it decides. The Respondents, on the other hand, argued that Courts can have recourse to external aids such as textbooks, in finding the true interpretation of a Statute and that the Courts below were right to have resorted to the textbook by McGee, who is an authority on the subject. They argued further that, the limitation period did not run when litigation was pending in
Suit No. FHC/L/CS/664/2004, up until when the Supreme Court struck out the suit.
On the 4th issue, the Appellants argued that, the Respondents’ suit at the trial Court could not be effectively determined, in the absence of both the Nigerian Ports Authority (NPA) and Bureau of Public Enterprises (BPE), and failure to join them as parties in the suit by the Respondents, rendered the suit incompetent. Conversely, the Respondents argued that, having failed to specifically plead the legal defences of non-joinder of parties or improper constitution of the suit in their Statement of Defence, the Appellants could not now raise same in their brief of argument. They also argued that, even if NPA and BPE are necessary parties, the non-joinder would not fundamentally affect the proceedings at the trial Court, as to render it a nullity.
Court’s Judgement and Rationale
In resolving the first and second issues, Their Lordships held that the application of 8(1)(a) of the Limitation Law of Lagos State 2003 is not absolute, and there are exceptions to its application as contained in Sections 13, 32(4) and 58 of the same law. Specific performance, which was one of the reliefs sought by the Respondents, is provided for under Section 13 of the Limitation Law, as one of the claims exempted from the application of Section 8(1) of the said law, and the declaratory reliefs sought by the Respondents are also equitable, and cannot be classified as a simple contract for which Section 8(1) would apply. The Court also
held that the existence of fraud, deceit and concealment in the case of the Respondents against the Appellants, also took the matter outside the ambit of the limitation period in Section 8(1)(a) of the Limitation Law. On the issue as to when the Respondent’s cause of action accrued, the court held that a party’s right of action accrues, when he becomes aware of a wrong against him, and time begins to run when the cause of action crystallises or becomes
complete - UBN v UMEODUAGU (2000) 13 NWLR (PT. 890) 352. From the facts of the case, the Respondents’ cause of action properly accrued on 20/7/06, when they confirmed the incorporation of the 5th Appellant without them, through the certified true copies of the 5th Appellant’s incorporation documents which they received from the CAC on that date.
On the third issue, the Court relied on ARAKA v EGBUE (2003) 17 NWLR (PT. 848) 1 AT 20 to hold that, although foreign decisions/opinions can only be of persuasive authority and are not binding on Nigerian Courts, as long as the legislation in question is in pari materia with ours, there is nothing in our laws that precludes Nigerian Courts from relying on such foreign decisions, which includes foreign textbooks based on such decisions. Contrary to the submission of the Appellants, the opinion expressed by Professor Andrew McGee in his book titled “Limitation Period”, is based on the decisions of foreign Courts, and the Court below clearly stated that it was persuaded, although not bound by same. Furthermore, the Court of Appeal did not rely solely on the said book, it only found support and corroboration in the opinion of the author based on certain foreign decisions he referred to, which accord with justice and common sense. Based on the foregoing, the Apex Court upheld the finding of the Court of Appeal that the stoppage of time during the pendency of an action that was struck out for want of jurisdiction, would count in favour of the renewed action at the Court with the requisite jurisdiction. A suit that is struck out, has not been disposed of permanently, and is still pending, and the Plaintiff has another opportunity to commence action after curing the deficiency which resulted in the striking out of the suit. Therefore, the time the Respondents spent at the wrong Court cannot be counted, as it was suspended during the pendency of the suit at the wrong Court. ALOR v NGENE (2007) 12 NWLR (PT. 1062) 163 AT 179; IN RE: APEH & ORS (APEH & ORS. v PDP & ORS) (2017)
LPELR-42035(SC).
On the fourth issue, the Court affirmed the finding of the Court of Appeal, that the non-joinder of a party who is not affected by the reliefs sought in the action, is not fatal to
the action before the Court. There was no paragraph in the Statement of Claim, where the NPA or BPE were accused of any wrong, or shown to have likely gained any right or interest in the subject-matter of the suit or otherwise; it follows that, they are not necessary parties, and failure to join them as parties to the suit is not fatal to the Respondents’ case.
Appeal Dismissed.
Representation:
Chief Wole Olanipekun (SAN) with others for the Appellants. M.I. Igbokwe (SAN) with others for the Respondents.