Unburden Lawyers from Scrutinising Clients’ Sources of Funds

A Rejoinder Antithesis to Mayowa Owolabi’s Thesis (Part 1)

Introduction

I have carefully read through the article titled “A Critique of the Court of Appeal Judgement in FRN v Chief Mike Ozekhome (SAN)”, published by ThisDay Lawyer on 29th June, 2021, and circulated on other media outlets, wherein the earned author, Mr Mayowa Owolabi, stated inter alia, that:

“… The recent pronouncement of the Court of Appeal in the Chief Mike Ozekhome, SAN case is discomforting, and unduly exposes international transactions emanating from Nigeria to additional scrutiny, as it presupposes that there are no applicable internal mechanisms which ensure that Nigerian Lawyers are not unwittingly utilised for money laundering schemes...”.

In the section of the article captioned “Background”, the said Mr Owolabi noted that he had reviewed the facts surrounding the procurement of the ex-parte order, the subsequent vacation of it, and therefore, submitted very unequivocally that “the decision of the Court of Appeal accords with logic”.

Mr Owolabi also conceded that the Court of Appeal had held that the EFCC suppressed material facts in the ex parte application, with which it procured the order freezing Chief Mike Ozekhome, SAN’s account. He even conceded that “issues connected to Lawyer’s remuneration and professional fees are stipulated in Rules 48 and 54 of the Rules of Professional Conduct, 2007”. What is more, Mr Owolabi conceded that “there is no provision in the Rules that requires a Lawyer to ascertain the source of funds provided to pay his fees by a prospective client. Therefore, the Court of Appeal’s pronouncement in the Chief Mike Ozekhome, SAN case, would appear unimpeachable based on the applicable regulations”.

Having accepted the above facts and sound rationale for the decision, the author surprisingly somersaulted and contended furiously in the same article that the pronouncement of the Court of Appeal at page 27 of the said judgement, to the effect that it is not the requirement of the law that a legal practitioner should ascertain the source of the funds from which he would be paid, is “discomforting and unduly exposes international transactions emanating from Nigeria to additional scrutiny as it presupposes that there are no applicable internal mechanisms which ensure that Nigeria Lawyers are not unwittingly utilised for money laundering schemes”. I am amazed at this line of argument. Mr. Owolabi did not tell us how and why compliance with Nigerian Laws and valid court decisions based on them, especially by an appellate court, will “expose international transactions emanating from Nigeria to additional scrutiny of Nigeria Lawyers, to ensure they are not wittingly utilised for money laundering schemes”.

It must be noted that, the subject-matter of the suit culminating in the said judgement, was not an international transaction. It therefore, becomes pertinent to afford readers, a brief background facts of FRN v Chief Mike Ozekhome, SAN.

Background Facts

The Court of Appeal (Lagos Division) in Appeal No. CA/1/174/19, FEDERAL REPUBLIC OF NIGERIA v CHIEF MIKE OZEKHOME, SAN, had on 14th May, 2021, upheld the judgement of the Honourable Justice Abdulazeez Anka of the Federal High Court, Lagos, delivered on 3rd April, 2017.

The facts of this case, started from an arms deal procurement by the Federal Government. There were allegations of misappropriation of the arms deal money, leading to an investigation by the Economic and Financial Crimes Commission (“EFCC”). In the course of investigation, the EFCC approached the Lagos Division of the Federal High Court presided by Hon. Justice M.B. Idris (as he then was) and obtained an ex parte interim order to freeze some bank accounts linked to the then Governor Ayodele Fayose, the former Governor of Ekiti State. Fayose subsequently approached the Ado Ekiti Division of the same court presided over by Hon. Justice Taiwo, and obtained judgement setting aside the earlier Order of Idris J. Fayose was represented by Chief Mike Ozekhome, SAN.

Upon obtaining the judgement, Fayose approached the bank and physically withdrew N5 Million from his account for himself. He then transferred the sum of N75 Million to the Law firm of Chief Mike Ozekhome, SAN, as part payment of his professional fee in handling many cases for him. The EFCC later proceeded to the Lagos Division of the Federal High Court presided over by Abdulazeez Anka J, to obtain an interim ex parte order for 120 days freezing Mike Ozekhome’s Chamber’s account with Guaranty Trust Bank. Thereafter, Chief Mike Ozekhome, SAN, applied to the same Judge to vacate the ex parte interim order. He subsequently obtained an order of the same court, setting aside the freezing of his law firm’s account. The lower court held that the EFCC had suppressed material facts, and did not follow due process or the law in obtaining the ex parte order. It also held that as at the time the EFCC procured the ex parte order, the N75 million (subject-matter of the freezing order) had already been dissipated, having been withdrawn and utilised by Chief Mike Ozekhome as his professional fees. EFCC appealed against this lower court’s order, defreezing Ozekhome’s account. The Court of Appeal upheld the judgement of the lower court defreezing Mike Ozekhome’s Chamber’s account.

The Court of Appeal held that the lower was right to have set aside the earlier ex parte interim order, on the ground that the account from which the N75 Million was transferred was unencumbered as at the time the transfer was made. It also held that there was suppression of material facts by the EFCC in obtaining the order, since the N75 million was payment of part legal fees for professional services duly rendered, and it could not be termed proceeds from unlawful activity, as a Lawyer is not required by any law to inquire from a client the source from which his legal fee would be made.

Mr Owolabi in his write-up in the This Day, sought to impugn this brilliant judgement anchored on solid facts and law; a judgement which actually accords with extant Nigerian laws. He did this because, inter alia, a foreign United Kingdom law purportedly provides otherwise. He also went on this voyage of discovery because, as he personally noted emphatically, his critique was of “particular interest considering the fact that the client in question was a serving executive Governor of a State in Nigeria, and therefore, was a Politically Exposed Person” (PEP). Having got the premise of his thesis wrong, his conclusion could never have been right. How does the mere fact that a client is a Politically Exposed Person, suddenly impose a burden on his Lawyer to ask him or hire private investigators, to probe the source of funds with which the PEP intends to pay him? I cannot understand this. Or, can you?

More illogical is Mr Owolabi’s thesis, importing the completely alien legislations obtainable in the UK (which have no bearing whatsoever on our corpus juris) to argue his points. This, surprisingly, after again (rightly) conceding that “the current state of laws and the regulations relating to the practice of law in Nigeria, clearly indicate that we are not par with the applicable regulations in the United Kingdom”.

In OLAFISOYE v FRN (2004) LPELR-2553(SC), the Supreme Court emphasised the limits of foreign decisions on our local corpus juris, when Niki Tobi JSC (of blessed memory), in Pp 87 - 88 Paras G – E, held:

“Decisions of foreign countries, are merely of persuasive authority.This Court will certainly allow itself to be persuaded in appropriate cases, but this Court will not stray away from its course of interpreting the Nigerian Constitution by resorting to foreign decisions which were decided strictly in the context of their Constitutions, and which are not similar to ours. In Okon v The State (1988) 1 NWLR (Pt.69) 172 , Nnaemeka- Agu, JSC, said at page 180: It is well to remember not only that a foreign decision should at best be of persuasive authority in a Nigerian Court, but also that before it can even qualify as such, the legislation, substantive or adjectival, upon which it was based must be in pari materia with our own. It is dangerous to follow a foreign decision, simply because its wording approximates to our own. Nigerian Courts are obliged to give Nigerian legislation its natural and ordinary meaning, taking into account our own sociological circumstances, as well as other factors which form the background of our local legislation in question. A 'copy-cat' transposition of an English decision may in some circumstances, turn out to be inimical to justice in our own Courts.”

The Apex Court further reaffirmed this position in INAKOJU & ORS v ADELEKE & ORS (2007) LPELR-1510(SC), thus:

"It is the law that decisions of foreign courts, however learned they are or may be, are of persuasive authority and not binding on this Court. The courts have held that decisions of English Courts are of persuasive authority, as they lack binding effect in our principles of stare decisis. See Alli v Okulaja (1972) 2 All NLR 351; Dada v The State (1977) 2 NLR 135; Eliochin (Nig.) Ltd. v Mbadiwe (1986) 1 NWLR (Pt. 14) 47; Oladiran v. The State (1986) 1 NWLR (Pt. 14) 75.

In my Book on Sources of Nigerian Law (1996), I said at page 94: “Certainly, it will not only be ridiculous, but an abuse of statehood with all its attendant ramifications in international law, for courts of a sovereign country operating an equally sovereign and independent legal system, to be bound by decisions of courts of another country having the same status in international law and practice. The United Nations Charter clearly recognises the equality of States as subjects of international law, even the smallest States, and so the question of one sovereign nation succumbing to the judicial decisions of another sovereign nation should not arise at all, no matter the historical tie or connection. Viewed from this angle, it is submitted that decisions of English courts, whether by the House of Lords or the Court of Appeal, should be persuasive authorities in Nigeria, and this applies to all Nigerian courts.” Per NIKI TOBI, JSC (Pp 61 - 62 Paras C - B).

See also, on the need not to use foreign laws to stifle or overcome ours, the following cases of OKON & ORS v STATE (1988) LPELR-2472(SC); BASINCO MOTORS LTD v WOERMANNLINE & ANOR (2009) LPELR-756(SC); OBI v INEC & ORS (2007) LPELR-2166(SC); CHIGBU v TONIMAS NIG. LTD. & ANOR (2006) LPELR-846(SC); NUHU v DSS KWARA STATE COMMAND (2017) LPELR-42351(CA); NIGERIAN BREWERIES PLC v PABOD BREWERIES LTD & ANOR (2010) LPELR-4609(CA); BRITISH AMERICAN TOBACCO (INVESTMENTS) LTD v A.G. OF LAGOS STATE & ORS (2014) LPELR-23200(CA); BAT INVESTMENT LTD v A.G OGUN STATE & ORS (2011) LPELR-3891(CA). (To be continued).

“HOW DOES THE MERE FACT THAT A CLIENT IS A POLITICALLY EXPOSED PERSON, SUDDENLY IMPOSE A BURDEN ON HIS LAWYER TO ASK HIM OR HIRE PRIVATE INVESTIGATORS, TO PROBE THE SOURCE OF FUNDS WITH WHICH THE PEP INTENDS TO PAY HIM?”

The Serious and the Trivial “Life is a bank account in God’s hands. Nobody knows the balance of the remaining days. Keep depositing with forgiveness, respect, love, pure heart, prayer and obedience. Above all, always do good”.

THOUGHT FOR THE WEEK

“Our attitude towards life, determines life's attitude towards us”. (John N. Mitchell)