IN THE SUPREME COURT OF NIGERIA
ON FRIDAY, THE 4TH DAY OF JUNE 1976
BARCLAYS BANK OF NIGERIA LTD ...................................... APPELLANTS
CENTRAL BANK OF NIGERIA .......................................... RESPONDENTS
BEFORE: Fatayi-Williams Irikefe and Bello, JJ.S.C.
Section 6 of the Banking Obligations (Eastern States) Decree 1970 provides that a bank which is in doubt as to the application of the Decree to certain types of banking obligations shall refer the matter to the Governor of the Central Bank, who may give directives thereon. Section 8(1) extinguishes a customer's right in respect of certain banking obligations, and subs(2) ousts the jurisdiction of the court (inter alia) in respect of any rights extinguished under the Decree.
The plaintiff bank took out an originating summons in the Federal Revenue Court seeking against the defendant Bank the determination of certain questions relating to the provisions of the Decree. The parties held divergent views as to whether certain undischarged liabilities of the plaintiff bank were extinguished.
Before issues were joined, the defendant bank applied to the court to hold that it has no jurisdiction to hear the summons. the affidavit in support of this application deposed that the Governor of the Central Bank (the defendant bank) had already given a directive to the plaintiff bank, and it was sworn to, not by an employee of the Central Bank, but by its counsel's law clerk, who had no personal knowledge of the matter.
Solely on the strength of that affidavit evidence, the trial Judge held under s.8(2) of the Decree, the court had no jurisdiction to entertain any complaint arising from the Governor's directive and dismissed the summons.
(1) The letter of the Governor of the defendant bank relied on by them contains no directive on the point in dispute; and even if there was such a directive, it would be ultra vires the power of the governor since such a directive can only be given in a case where a commercial bank is in doubt as to the application of the Decree to a type of banking obligations, whereas the plaintiff bank was not in any doubt as to its views on the matter, such views being opposed to those held by the defendant bank.
(2) It is now well established that a provision in a statute ousting the ordinary jurisdiction of the court must be construed strictly, and that if it is capable of two meanings, that meaning shall be taken which preserves the ordinary jurisdiction of the court: moreover, there is a clear disctinction between stating that the court has no jurisdiction to hear a case and stating that that court has no jurisdiction to determine whether or not it has jurisdiction to hear the case.
Cases referred to:
Anisminic v. Foreign Compensation Commissioner (1969) 2. A.C. (HL) 147 at 170
Wilkinson v. Barking Corporation (1948) 1 K.B. 721 (CA) at 725
(3) In this case, the ruling of the court that it has no jurisdiction to hear the case is premature, for it is only when the court has determined, after pleadings and evidence, that the plaintiff bank's obligations have been extinguished that it can rule that it has no jurisdiction to deal with the summons.
Case remitted to lower court for pleadings and evidence before determination of issue of jurisdiction.
Chief F.R.A. Williams for the appellants.
Fred Egbe (Miss Teresa Egbe with him) for the respondents.
Fatai-Williams, J.S.C. (delivering the judgment of the Court):-By an originating summons issued in the Federal Revenue Court sitting in Lagos, the plaintiffs, now appellants:-
"(1) Seek against the defendants the determination of the court on the following questions, namely:-
Whether or not the right of the plaintiffs to be reimbursed for payments made by its branches in London and New York in circumstances specified in the particulars to this originating summons was-
(a) extinguished by the Banking Obligations (Easter States) Decree 1970; and
(b) properly treated by the Central Bank of Nigeria pursuant to section 4 of the Decree aforesaid by excluding it in calculating the residue of banking funds of Barclays Bank of Nigeria Limited.
(2) If the answers to 1(a) and (b) are in the negative an order for the refund to the plaintiffs of such sum as may be agreed by the parties or determined by the court to be due as not having been properly treated when calculating the residue of such banking funds."
The particulars given in support of the originating summons are as follows:-
"(1) At the written requests of the Aba Textile Mills Limited, the Aba Branch of Barclays Bank D.C.O. on various dates prior to 30th May, 1967, opened irrevocable documentary letters of credit payable in London and New York amounting to £846,729 in favour of various overseas supplies or sellers of goods. In each of the said letter of credit Barclays Bank D.C.O. guaranteed that drafts and documents drawn in strict conformity with the terms of the credit would be honoured at maturity.
(2) In accordance with the terms of each of the documentary credits aforesaid, the various sellers shipped goods to Aba Textile Mills Limited and drew bills of exchange (to tallying 71 in number) in appropriate foreign currencies (amounting to £911.817 Sterling and U.S. $60,027) on the Aba Textile Mills Limited which the said Aba Textile Mills Limited duly accepted. The aforesaid shipment as well as the drawing and acceptance of each of the said bill of exchange took place prior to 30th May, 1967.
(3) Between 31st May, 1967, and 28th September, 1967, the branches of Barclays Bank D.C.O. in New York and London paid the amount payable on each of the aforesaid bills on due dates in the appropriate foreign currency to the overseas banks which had negotiated the sellers' of suppliers' bills. These payments are now represented by a debit suspense account in the books of the Head Office of the plaintiffs; and in accordance with the instructions of the Aba Textile Mills Limited in their applications for the documentary credits aforesaid, the Aba and Port Harcourt Branches of the Barclays Bank D.C.O. between the said dates debited the current accounts of the said Aba Textile Mills Limited with the Nigerian currency equivalent of the bills, together with exchange and other bank charges and returned these amounts on credit suspense accounts at these branches.
(4) On the 30th day of May, 1969, the plaintiffs were incorporated pursuant to the provisions of section 369 of the Companies Decree, 1968 and succeeded to the assets in Nigeria of Barclays Bank D.C.O. as provided for under section 369(5) of the said Decree.
(5) The plaintiffs have maintained at all material times that the monies held on suspense account at Aba and Port Harcourt branches represent undischarged liabilities which are not extinguished by the Banking Obligations (Eastern States) Decree 1970 and that accordingly the amount of such liabilities should be included when calculating the residue of banking funds whilst the defendants have maintained the contrary. The plaintiffs however paid the sum represented by such liabilities as part of the residue of banking funds on the defendants' assurance that, in the event of adjustments in their favour being made to the amount properly due, necessary funds will be made to the plaintiffs."
The summons also states that if the defendants do not enter appearance, such judgment may be given or order made against or in relation to it as the court may think just and expedient.
On the receipt of the summons, the defendants entered appearance simpliciter on 15th October, 1973. The effect of this is that an unconditional appearance has been entered. However, pursuant to an application made to it on 5th November, 1973, the court granted the defendants leave to amend the memorandum of appearance by the insertion of the word "conditional" before the word "appearance" therein so that the memorandum would read "Memorandum of Conditional Appearance". It is pertinent to observe that this amendment was allowed in spite of very strenuous opposition on the part of learned Counsel for the plaintiffs who had, therefore, appealed against the interlocutory order.
While that appeal was pending, the defendants, on 28th November, 1973, applied to the court to set aside the originating summons on the ground that the court lacks jurisdiction to hear it. Paragraphs, 1,7,8,9,10,11 and 12 of the affidavit in support of the application, sworn to by one Sikiru Agboola Lasisi, Legal Executive (another name for a lawyer's clerk), read:-
"(1) That I am Legal Executive in the firm of Messrs/Fred Egbe & Co., solicitors acting for the defendants in the above matter and have authority of the defendants to swear to this affidavit.
(7) That on the 9th day of January, 1971, the plaintiffs' bank, being a bank in doubt as to the application of the Banking Obligations (Eastern States) Decree No. 56 of 1970, to the subject matter of the Originating Summons, made a statutory application to the Governor of the Defendants' bank for directives.
(8) That the document now shown to me and marked exhibits 'SAL.1', 'SAL.1A' and 'SAL.1B' is a Photostat copy of the said application.
(9) That in furtherance of the said application for directives by the plaintiffs' bank, the Governor of the Central Bank of Nigeria by letter dated 20th January, 1973, made a statutory determination, from which appeals are expressly excluded.
(10) That the document now shown to me and marked exhibits 'SAL.2' and 'SAL.2A' is a Photostat copy of the said letter of 20th January, 1971.
(11) That the defendants inform me, and I verily believe them that the above accords with the provisions of sections 6 and 8 of the Banking Obligations (Eastern States) Decree No. 56 of 1970.
(12) That the defendants inform me, and I verily believe them that the plaintiffs have since complied with the directives of the Governor of the defendants' bank concerning the subject matter of this application."
The letter, dated 20th January, 1971, from the Governor of the Central Bank, containing the directives was exhibited as exhibit SAL.2 and it reads:-
"The General Manager, Barclays Bank of Nigeria Limited, 40, Marina, Lagos.
Banking Obligations (Eastern States) Decree 1970 Decree No.56
It has been ascertained on the basis of the returns submitted by your bank in respect of its assets and liabilities in the Eastern States (excluding Calabar) as at 30th May, 1967 that your residue of banking funds as defined under section 4 of the above-mentioned Decree amounted to £3,355,120 (see attached schedule for details).
I am informed that this figure of residue has been discussed and agreed with you, with a reservation that minor errors of compilation on your part may exist in the returns submitted. Such errors, if any, should be reported to us for verification with a view to making the necessary refunds in appropriate cases.
Meanwhile, you are requested to effect the payment of the aforementioned residue amounting to £3,355.120 not later than Monday, 25th January, 1971 to the Central Bank of Nigeria for the account of the Federal Government in accordance with the provisions of section 4 of Decree No. 56.
We think it is relevant, at this stage, to point out that there is nothing in the above letter to indicate that it is in reply to the letter dated 9th January, 1971, which the plaintiffs wrote to the defendants concerning the undischarged liabilities of their Aba and Port Harcourt branches. The relevant portion of this letter (exhibit SAL.1A) reads:-
"The amounts held in suspense at our Aba and Port Harcourt branches were frozen by the Bank Moratorium (Eastern States) Decree 1970, but it is our view that they are freed under Decree 56 and can be utilised to liquidate the outstanding liabilities of £790,966.13.6d and Sterling £14,259.15.0d referred to in (d) above, thus extinguishing our claim against our customers. We base our argument on section 3 of Decree 56 which extends the provisions of the Decree to all banking obligations: these obligations were incurred before secession, and the amounts held in suspense should now be released at par to meet them. We shall be glad if you will confirm as soon as possible that our interpretation of the Decree is correct.
We, of course, do not require funds released in excess of the existing liabilities of customers totalling £803,242.13.7d made up of £790,966.13.6d and the equivalent at today's rate of Stg. £14,249.15.0d mentioned in (d) above i.e. £12,276.0.1d. regarding the latter sum we would initially credit it to the Barclays Bank D.C.O. account in our books, pending a decision whether to capitalise it, or request exchange control approval to remit to U.K. There is naturally no question of our asking permission to remit part or all of the large sum (£790,966.13.6d) to London."
There is clearly nothing in the record to show that any decision was taken by the Governor of the Central Bank on any of the points raised by the plaintiffs in their letter. Furthermore, no doubt was expressed by the plaintiffs in their letter (exhibit SAL.1A) as to their position vis-a-vis the application of the Banking Obligations (Eastern States) Decree. The significance of this will be seen later in this judgment.
Nevertheless, after hearing the arguments of learned Counsel for both parties, the learned President of the Federal Revenue Court, in a reserved judgment, ruled that the court had no jurisdiction to hear the case and dismissed it. Before coming to this conclusion, the learned President observed:-
"In contending that the court has no jurisdiction to entertain the summons, the defence contended that, in resolving plaintiffs' doubt under section 6(1) as to the application of Decree No.56 to the types of Banking Obligations specified therein, directives given by the Governor of the Central Bank were duly complied with by the plaintiffs, in keeping with section 6(2) thereof. This fact is succinctly contained in paragraph 12 of the defence affidavit of 13th November, 1973 to wit,
'that the defendants inform me and I verily believe them, that the plaintiffs have since complied with the directives of the governor of the defendants' bank concerning the subject matter of this application.'
This fact was not denied in plaintiffs' counsel's counter-affidavit of the 21st of November, 1973. The Governor's directives, with which we are concerned, are contained in his letter (Ex. SAL.2) of the 20th of January, 1971, in which he directed the plaintiffs to pay a stated amount of over
N6 million to the defendants not later than the 25th of January, 1971."
After considering the provisions of section 8(2) of the Banking Obligations (Eastern States) Decree (hereinafter referred to as the Decree) which deal with the ouster of the jurisdiction of the court, the learned President observed that he did not find anything ambiguous in the said provisions, that the provisions are plain, that they admit of only one meaning and that is that is that they bar the jurisdiction of the court. He thereupon dismissed the claim.
This appeal is against both the interlocutory order by which the learned President allowed the defendants to amend the memorandum of appearance and the final judgment in which he held that the Federal Revenue Court had no jurisdiction to hear the originating summons.
With respect to the appeal against the interlocutory order, it is our view, and Chief Williams who appeared for plaintiffs/appellants did concede the point, that, in the particular circumstances of the present case, where the defence put forward by the defendants/respondents is that the court lacks jurisdiction to hear the case, it is immaterial whether the appearance entered by the defendants is unconditional or conditional. The reasons for this view are not far to seek. Firstly, a person who did nothing and allowed judgment to go against him in default of appearance did not thereby submit to the jurisdiction of the court (see Re Dulles Settlement Trusts (1951) 2 T.L.R. 145 as per Denning L.J. at page 146; Tallack v. Tallack (1927) P. 211 at p.222). Secondly, a plea of lack of jurisdiction raised for first time on appeal would be entertained. (See Asante v. Tawia (1949) W.N. page 40). Finally, where the court, on its own, discovers that it has acted without jurisdiction, it has an inherent power to set aside its own decision in the matter (See Forfie v. Kwabena Seifah (1958) 1 ALL E.R. 289 (P.C.)). Since an objection to the court's jurisdiction could be raised at any stage of the proceedings in the case, we do not consider it necessary for us to deal with the complaint as to whether the order was valid or erroneous.
We will now deal with the appeal against the decision of the Federal Revenue Court that it has no jurisdiction to hear the summons. The main complaints of Chief Williams may be summarised as follows. It is open to party who contends that the court lacks jurisdiction to hear a case to prove by evidence, facts which oust the jurisdiction of the court. To do so, the party must call witnesses who know about the facts. The only evidence which the learned President considered is the affidavit evidence of one Sikiru Agboola Lasisi, the legal executive. As Lasisi is not an employee of the defendants/respondents, his affidavit consists of what he was told by an unnamed person and being clearly hearsay, the learned President should not have relied either on it or on the letter (Ex. SAL.2) attached to it. Chief Williams also referred to the provisions of sections 6 and 8 of the Decree and submitted that had the learned President construed the provisions properly he would have realised that he could not determine whether the court has jurisdiction or not without first determining whether the payments made by the London and New York branches of the plaintiffs/appellants' bank on behalf of their customers in Aba and Port Harcourt represent undischarged liabilities which are not extinguished by the Decree. As the plaintiffs/appellants, on the face of their summons, based their claim on a right which they contend had not been extinguished, before the court can hold that its jurisdiction has been ousted, it must first of all determine whether the plaintiffs/appellants' rights had been extinguished or not. In other words, the only matter before the court at that stage of the proceedings is not whether the court has jurisdiction to hear the case but whether the plaintiffs/appellants have the right to ask the court to decide whether it has jurisdiction. Finally, Chief Williams submitted that section 8 of the Decree did not say, that no person can come to court or that in any matter concerning the Decree, the person must go to the Governor of the Central Bank.
In reply, Mr Egbe, for the defendants/respondents, asked that the provisions of section 8(2) of the Decree should be given a literal interpretation. If this is done, he further contended, it will be seen that the language of the section is very wide. Anything done by the Governor of the defendants/respondents' bank cannot be questioned in any court. When asked as to what the Governor has done in the case in hand, he referred to the action taken by the Governor in the letter (Ex. SAL.2), dated 20th January, 1971, and submitted that once the Governor has given the directive stated therein, the jurisdiction of the Federal Revenue Court to hear the plaintiffs/appellants' summons is ousted.
In considering whether or not a court has jurisdiction to entertain any claim, it is our view that while a person's right of access to the courts may be taken away or restricted by statute, the language of any such statute will be watched by the courts and will not be extended beyond its least onerous meaning unless clear words are used to justify such extension (See Halsburys Law of England 4th Edition, Vol. 10 para. 720). That is why it is now well established that a provision in a statute ousting the ordinary jurisdiction of the court must be construed strictly. This means that if such a provision is reasonably capable of having two meanings, that meaning shall be taken which preserves the ordinary jurisdiction of the court. (See Anisminic v. Foreign Compensation Commission (1969) 2 A.C. (H.L.) 147 at p. 170). Moreover, there is a clear distinction between stating that the court has no jurisdiction to hear a case, and stating that the court has no jurisdiction to determine whether or not it has jurisdiction to hear the case. Thus, a court may, by statute, lack jurisdiction to deal with a particular matter, but it has jurisdiction to decide whether or not it has jurisdiction to deal with such matter. (See Wilkinson v. Barking Corporation (1948) 1 K.B. 721 (A.C.) at p. 725).
It now remains for us to consider the relevant provisions of the relevant Decree in order to see whether the stage had been reached when the learned President could rule on the issue of jurisdiction to hear the case.
Section 6 of the Decree provides as follows:-
6. (1) "Where a bank is in doubt as to the application of this Decree to any deposit accounts, deposit balances or any other types of banking obligations with that bank, it shall refer the matter to the Governor of the Central Bank of Nigeria who may give such directives thereon as he deems fit.
(2) Where the Governor of the Central Bank of Nigeria has given any directives under the foregoing provisions of this section it shall be the duty of the bank concerned to comply with the directives."
(Italics are ours).
"Banking Obligation" is defined in section 9 of the Decree as:-
"any banking transactions with either a commercial bank or the Central Bank of Nigeria whereby the commercial bank or the Central Bank of Nigeria incurs a liability to a customer or vice versa."
"Bank" is also defined in the same section as "the Central Bank of Nigeria and any bank licensed under the Banking Decree 1969". It is not disputed that the plaintiffs/appellants is a bank so licensed.
To our mind, the operative words in section 6 are "where a bank is in doubt". In the case in hand, paragraph 5 of the particulars in the originating summons and the letter of 9th January, 1971 (Ex. SAL.1) show clearly that the plaintiffs/appellants are not in any doubt as to whether their undischarged liabilities are extinguished by the provisions of the Decree. Their view is that they are not while the Central Bank held the contrary view. In these circumstances, the Governor cannot give any directives as to which view should prevail, particularly in view of the provisions of section 8 as to jurisdiction. It will clearly be for the court, after hearing evidence, to determine which of the two views should prevail.
Section 8 of the Decree provides as follows:-
8. (1) "Except to the extent to which a bank is obliged under the provisions of this Decree to honour any claim of a customer relating to banking obligations, the rights of the customer in respect of any banking obligations to which section 2 or 3 of this Decree applies are hereby extinguished.
(2) No civil proceedings shall lie or be instituted in any court for or on account of or in respect of any act, matter or thing done or purported to be done by any person under this Decree or in respect of any rights which are extinguished thereunder and if any such proceedings have been or are instituted before or after the commencement of this Decree, shall abate, be discharged and made void."
(Italics are ours).
A close look at the provisions of subsection (2) of section 8 shows that the jurisdiction of the courts is ousted:-
(a) on account of or in respect of any act, matter or thing done or purported to be done by any person under this Decree; and
(b) in respect of any rights which are extinguished under the Decree.
The originating summons is brought, not in respect of any "act, matter or thing done or purported to be done" by the Governor of the Central Bank; it is brought in order to determine which of the two views-the commercial bank's view or the Central Bank's view-as to the undischarged liabilities is correct. In our view, the letter of the Governor dated 20th January, 1971 (Ex. SAL.2) contained no directives on this point. Even if it did, it would be ultra vires the Governor's powers under section 6 because, as we have pointed out earlier, the plaintiffs/appellants are never in doubt as to their views as to the application of the Decree to their banking obligations. For this reason, the first part of the provisions of section 8(2) could not be invoked to oust the jurisdiction of the court.
As for the second part which provides that the jurisdiction of the court is ousted in respect of any rights which are extinguished under the Decree, it is our view that this part can only be invoked if the court is satisfied from the evidence before it that such rights are extinguished. Moreover, before the court can be so satisfied, it must be proved by evidence that the rights of the customers concerned do not come within claims relating to banking obligations which the commercial bank concerned is obliged to honour by virtue of the provisions of the Decree. In other words, the defendants/respondents must first prove that the rights of the plaintiffs/appellants' customers do not arise out of any banking transactions with the plaintiffs/appellants whereby the plaintiffs/appellants incur liability to the said customers or vice versa.
It, therefore, follows, that before the learned President of the Federal Revenue Court can determine whether or not the court has jurisdiction to entertain the claim, he must first of all examine what the plaintiffs/appellants contended to be their undischarged liabilities to their customers and determine, after pleadings have been delivered and evidence adduced in support of the facts pleaded, whether these undischarged liabilities relate to banking obligations, and, if they are, whether they are banking obligations which have been extinguished. In our view, it is only after he has determined that these obligations have been extinguished that he can rule that the court has no jurisdiction to order the refund asked for in the originating summons.
Since the learned President has not followed this procedure, we think that his ruling on the issue of jurisdiction is premature. We, therefore, allow the appeal, set aside the ruling of the learned President in Suit FRC/L/M1/73, including the order as to costs, delivered in the Federal Revenue Court on 21st January 1974. We further order that the case be remitted to the said court where pleadings should be ordered and delivered and evidence taken in order to determine whether the court has jurisdiction to entertain the originating summons or not.
The plaintiffs/appellants are awarded costs assessed in the court below at
N32.00 and in this Court at N176.00.