A fundamentally defective process cannot be regularized or cured by amendment (1)

IN THE COURT OF APPEAL
LAGOS JUDICIAL DIVISION
HOLDEN AT LAGOS
ON TUESDAY THE, 16TH DECEMBER 2014
BEFORE THEIR LORDSHIPS
CA/L/1114/10

1. MRS. VICTORIA ABE
2. MR. TITUS ABE
VS.
1. SKYE BANK PLC
2. MR. RASAKI YUSUF
3. MR. RAFIU AYODEJI AKINDELE

AMINA ADAMU AUGIE, J.C.A. (Presided)
SAMUEL CHUKWUDUMEBI OSEJI, J.C.A.
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.

A legal process cannot be deemed amended by mere ipsi dixt of parties. A fundamentally defective process cannot be regularized or cured by an amendment. So held the Court Of Appeal, holden at Lagos in a unanimous leading judgment delivered by His Lordship, ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, JCA with his learned brothers, SAMUEL CHUKWUDUMEBI OSEJI and AMINA ADAMU AUGIE, JJCA concurring while allowing the appeal. The parties were represented by OLUWOLE KEHINDE, ESQ, for Appellants while PAUL I. OKOH, ESQ. for the 1st and 2nd Respondents. The facts are as contained in the body of the judgment.

THIS appeal is against the judgment of Gbajabiamila J. of the Lagos State High Court delivered on 29th June, 2010, wherein the appellant’s claim was dismissed.

The background fact of this case was that the 1st appellant was a customer of the 1st respondent bank while the 2nd appellant is the spouse of the 1st appellant and the owner of the mortgaged property situate at No 12 Bello Street, Aiyederu, Ketu, Lagos. The appellants applied for and obtained a loan facility from the 1st respondent which was secured with the certificate of occupancy of the property of the 2nd appellants relating to the property. Upon default by the appellants in repaying the debts, the 1st respondent filed a suit to recover the loan vides ID/2566/2000. Judgment was entered in favour of the 1st respondent for the sum of N6,784,188.43. Pursuant to the said judgment, the 2nd appellant’s property was attached by order of court on 9/01/2004. Subsequently, the 1st respondent entered into a compromise agreement with the appellants giving concession to the latter to pay the sum of N6,000,000.00 as full and final settlement of the judgment sum. Meanwhile, without notice to the appellants, the 1st respondent sold the mortgaged property through the 2nd respondent to the 3rd respondent alleging that the appellants defaulted in fulfilling the conditions stated in the compromise agreement. Aggrieved with the sale of the property, the appellants instituted an action at the trial court wherein the claim of the appellants was dismissed.

From the foregoing, it is apparent that the issues as formulated by the parties are similar notwithstanding the differing semantics. To this extent, it is appropriate that the issues be addressed as formulated below:
Issues for Determination:

1. Whether the 1st and 2nd respondents’ statement of defence is competent and valid under the circumstance.

2. Whether the trial court was right in holding that the 1st respondent was right to have resiled from the compromise agreement reached with the appellants and later extended both formally and by implication and thus bound
by estoppel by conduct having regard to the circumstances of the case.

3. Whether the trial court was right in holding that the 1st respondent’s purported sale of the property was not vitiated by undervalue sale, bad faith, fraud and collision and in granting the 3rd respondent’s counter-claim.

4. Whether a legal mortgagee that had obtained a prior order of court to sell is therefore estopped from exercising his right of sale under the mortgage deed.

Issue One
The appellant submitted that by virtue of Order 3 rule 2 (1) and Order 11 rule 4 of the High Court of Lagos State (Civil Procedure) Rules, 2004, all originating processes must be filed contemporaneously with frontloading documents for there to be a valid suit; in which case the writ of summons, statement of claim and supporting documents would have to be filed together at the same time.

Counsel submitted that the 1st and 2nd respondent withdrew their original statement of defence on basis of incompetence, which is different from an amendment of existing process. Counsel referred to the case of: Olaniyan v. Oyewole (2008) 5 NWLR (Pt. 1079) 114. Counsel contended that the implication is that the supporting documents filed along with the original statement of defence were deemed abandoned. The subsequent statement of defence dated 15/12/09 and filed 17/12/09 was not only irregular but incompetent for two reasons:

It was filed about 3years after the appellant’s amended statement of claim was filed on 25/12/06; outside the time permitted by Order 15 rule 1 of the Lagos State High Court Civil Procedure Rules for filing defence, which is 42 days and without any order for extension of time to do so.

It was not accompanied by any witness statement on oath and documents as required by the rules of court.

Counsel further submitted that the DW1 admitted this much in his evidence but that the trial Judge did not take it into account.

On the effect of invalidity of the pleadings, Counsel referred to the following cases: Nwokorobia v. Nwogu (2009) 10 NWLR (Pt. 1150) 553 at 576; Ojukwu v. Yar’adua (2009) 12 NWLR (Pt. 1154) 50 at 125 on the ground that the 1st and 2nd respondents had no valid pleading upon which they could validly lead evidence to controvert the appellant’s case. Counsel urged this court to discountenance both the 1st and 2nd respondent’s statement of defence and other frontloaded documents as being incompetent, with the attendant implications on the case of the 1st and 2nd respondents and by extension, the 3rd respondent who relied on their case. 1st and 2nd respondents in reply contended that there was no objection to the re-filing of the statement of defence of the 1st and 2nd respondent and that all counsel on 15/12/2009 consented to the withdrawal, refilling and the mode of refilling. Counsel submitted that same was accepted by the court on 25/1/2012. Counsel further submitted that they opened their defence based on the re-filed statement of defence without any objection from the opposing counsel except for the non-filing of fresh written deposition and same was overruled by the court. Counsel contended that failure to formally obtain leave to substitute 1st and 2nd respondent did not render the substitution illegal or invalid.

He referred to: U.B.N. Plc v. Orharhuge (2000) 2 NWLR (Pt. 645) 495 at 518 to submit that 1st and 2nd respondent’s act amounted to an irregularity which has been cured by the acquiescence of the appellants. Counsel further submitted that there is a difference between pleadings and accompanying documents filed along with pleadings and either of them can be amended or substituted independent of the other as provided for under Order 24 rule 3 and submitted that the presumption under that provision is that the original witness(es) statement on oath attached to the original statement of defence as well as copies of the documents consequent upon such amendment. Counsel further submitted that there was no obligation on the part of the 1st and 2nd respondents to re-file by way of substitution, their witness statement on oath which was filed pursuant to the original statement of defence. Counsel argued that the authorities cited by the appellants as to the effect of invalidity of pleadings are most irrelevant and inapplicable in this case and urged the court to dismiss this appeal.

The appellant in his reply brief referred to Order 3 rule 2(1) and Order 17 rule (1) of the Lagos State High Court (Civil Procedure) Rules, 2004 and submitted that the provisions are mandatory as the word ‘shall’ is used in both provisions. Counsel cited D.E.N.R. Ltd. v.Trans Int’l Bank Ltd. (2008) 18 NWLR (Pt. 1119) 388 at 431; Order 5 rule 1 of Lagos State High Court (Civil Procedure) Rules, 2004; Gambari v. Mahmud (2010) 3 NWLR (Pt. 1181) 278 and argued that failure to comply with the frontloading requirement under the Rules renders the proceedings a nullity. Counsel also placed reliance on N.R.W. Ind. Ltd. v. Akingbulugbe (2011) 11 NWLR (Pt. 1257) 131 to submit that the statement of defence dated 26/10/2006 and all the processes accompanying it and based on it were incompetent. He further relied on SLB Consortium v. N.N.P.C. (2011) 9 NWLR (Pt. 1252) 317; F.B.N. v. Maiwada (2013) 5 NWLR (Pt. 1348) 444 to contend that the consent of counsel does not cure the fundamental defect.

In resolving this issue, it is a fact and not in dispute that the defence had filed an initial statement of defence which was signed in the name of a law firm. He withdrew same and filed another in its place but without the accompanying statement on oath, list of witnesses and list of documents. What was withdrawn then was the statement of defence.

It is trite that when a legal process is filed in the name of a law firm, such process is dead on arrival and is incompetent. Under the Lagos State High Court (Civil Procedure) Rules, 2004, Order 15 rule 1(2) thereof, the statement of defence is to be filed alongside with the witness statement, list of documents and list of witnesses. Therefore, having filed what was dead on arrival; same is incapable of having any attachments. They cannot stand alone as they go along with the statement of defence as a single process – originating process for the defence.

The new statement of defence having been filed after the time allowed under the rules, needed leave and also extension of time for it to be competently filed or regularized. This was not done. 3rd respondent’s contention was that the statement of defence was amended and that an amendment takes effect from the date of the previous process. A legal process cannot be deemed amended by mere ipsi dixt of parties. A fundamentally defective process cannot be regularized or cured by an amendment. See Ministry of Works and Transport, Adamawa State & Ors. v. Yakubu and Anor. (2013) 6 NWLR (Pt. 1351) 481 at 496; Alawiye v. Ogunsanya (2013) 5 NWLR (Pt. 1348) 570. Again, on the record, what was filed was clearly headed at page 53 of the record and dated 15/12/09. Nothing on the face of the “statement of defence” shows that it was amended. What is more? It was filed 2 years after the witness statement on oath of DW1, which is dated 14/9/07. It cannot be amended. It is invalid and consequently would not suffice. See: Okarika v. Samuel (2013) 7 NWLR (Pt. 1352) 19 at 24.

Since the introduction of the Uniform Rules, non-compliance with the provision of the rules relating to filing of originating processes such process should not be accepted for filling and if filed will render a proceeding null. Order 5 rule 1 of the Lagos State High Court (Civil Procedure) Rules makes it mandatory that originating processes must be frontloaded both in the claim and the defence. The courts have consistently held that failure to comply with this provision attracts nullification of the proceedings. See: Gambari v. Mahmud (2010) 3 NWLR (Pt. 1181) 278 and all processes hinged on such namely the claim or defence or process in a legal proceeding based on it would be incompetent. See N.R.W. Ind. Ltd. v. Akingbulugbe (supra) and F.B.N. v. Maiwada (2013) 5 NWLR (Pt. 1348) 444.

The provision of Order 24 rule 6 of the High Court of Lagos State is stipulates what should be done in the event of any amendment of pleadings or endorsement. It provides: “6. Whenever any endorsement or pleading is amended, it shall be marked in the following manner: “Amended ….. day of ….. pursuant to order of (name of Judge) dated the ….. day of …..”