OBEYA MEMORIAL HOSPITAL V ATTORNEY GENERAL OF THE FEDERATION


​OBEYA MEMORIAL SPECIALIST HOSPITAL V ATTORNEY-GENERAL OF THE FEDERATION

In The Supreme Court of Nigeria

3rd July 1987

(1987)4 N.W.L.R (Pt. 64) 129

Before Their Lordships

1.  OBEYA MEMORIAL SPECIALIST HOSPITAL

2.  AYI-ONYEMA FAMILY LIMITED

V

1.  ATTORNEY-GENERAL OF THE FEDERATION

2.  ATTORNEY-GENERAL OF BENUE STATE

EVIDENCE – Interlocutory application – whether applicant’s affidavit suffices for purpose of discharging the burden of whether there is a serious questions to be tired.

FUNDAMENTAL RIGHTS – Right to property- need for court to protect citizen from violation of.

Equitable Remedies – Injunction – Nature of application for relief sought determines quantum of proof application requires – Interlocutory injunction – Balancing of interest required – Court must determine where balance of convenience and evidence lies – Interlocutory injunction – Existence of serious issues to be tried in substantive action, balance only of convenience to be considered – Purpose of interlocutory injunction – Condition upon which interlocutory injunction to be granted.

 

OBASEKI J.S.C (Delivering the leading judgment)

This is an interlocutory appeal. The plaintiffs/appellants instituted an action against the respondents in the Benue State High Court of Justice at Makurdi claiming:

(1) a declaration that the entry of the land and buildings of the Obeya Memorial Specialist Hospital Oturkpo Town in Oturkpo Local Government Area by Army and Airforce personnel as well as by officers and servants of the Government of Benue State was unlawful and amounts to trespass;

(2) a declaration that the Government of Benue State has no right to take or retain possession of the said land and buildings from the plaintiff save in accordance with due process of law;

(3) an order for inquiry into damages suffered by the plaintiff as a result of the unlawful entry of the said land and buildings (a) by Nigerian Army and (b) Nigerian Airforce personnel

(4) an order for inquiry into damages suffered by the plaintiff as a result of the trespass committed by the Benue State Government on the plaintiff’s goods as well as on the said land and buildings;

(5) an order for payment of appropriate sums as compensatory and/or exemplary damages to the plaintiff for the acts of trespass aforementioned; and

(6) an injunction restraining all officers of the Nigerian Army and Airforce and all officers, servants and agents of the Benue State Government from continuing the said acts of trespass/or committing further acts of trespass or from preventing the plaintiff, its officers, servants and licensees from obtaining access to the land and buildings used for the purpose of the Obeya Memorial Specialist Hospital.”

The appellants followed the filing of the action with an application by motion on notice for:

“(1) An order restraining all the officers and men of the Nigerian Army and The Nigerian Air Force by themselves, their servants or agents or otherwise from preventing the plaintiffs from obtaining access to and occupying the premises known as OBEYA MEMORIAL SPECIALIST HOSPITAL AYI-ONYEMA FAMILY LIMITED:

(2) An order requiring the Federal Government and/or the Benue State Government to restore possession of the said premises to the plaintiffs;

(3) an order restraining the Federal Government and/or the Benue State Government by themselves, their servants or agents or otherwise from delivering possession of the said premises to any person other than the plaintiffs or its duly authorised agents;

pending the determination of the above action and for such further and or other orders as this Honourable court may deem fit to make in the circumstance:

The application was heard by the Chief Judge of Benue State, Alhassan Idoko, and on the 7th day of May, 1986, he dismissed the application in a considered Ruling. In the course of his Ruling, the learned Chief Judge made a lot of pronouncements which are not reflected by the order of dismissal. He said:

“I am bound by the opinion of the Supreme Court that even in this military regime, the rule of law is in operation that no government in the Federation should put (sic) (take) law into its hand as that will be an encouragement to tyranny. No court of law will rejoice at a usurpation of its powers……………………………………………………………..

I am not too sure whether the courts can gloss over a provision of a statute such as the Edict establishing this panel even that the contents or constitutionality of it avail when such issues are raised. In that wise, I am not prepared to say that a case of usurpation of judicial powers has been made out. I agreed that it might have raised eye-brows that military men were brought to ensure the take over of the hospital through the action of the military government. The affidavit evidence says that it is this Recovery Panel that approached the Governor to (sic) that purpose. I think that is entirelywrong……. We have never known a Government or military personnel enforcing the judgement of a tribunal or panel. So that the bringing of military personnel and not the police to execute the panel’s order is entirely out of tune with the usual and normal way of enforcing such orders… Even though the facts disclose that the panel contacted the Governor for such enforcement, it is all wrong, because the governor is not the proper official to be approached to carry out such enforcement. It was only because the panel was intent on using military personnel that it made that move. That notwithstanding, the panel purported to enforce an order that fell within its powers…. so that even though the use of military personnel is condemnable, the take-over itself is said to be pursuant to an order of the panel… For the time being, I am prepared to say that the government has furnished some basis in the affidavit evidence for taking over the hospital.

      Government says it does not know the applicant and that the hospital it has taken over belongs to Obande Obeya and also that it was Obande Obeya who was in occupation and possession of the land and the building housing the hospital; that Obande was indebted to it and that since Mr. Obeya was not responding to the panel’s demands to pay up indebtedness to government, his property, the hospital was seized. Obande is not complaining in this matter but the applicant. Was there a mistaken identity as to who owns or was in possession of the hospital? Applicant said they are licence of Obeya Memorial Hospital. Obeya Memorial Hospital is owned by Obande and Sons. The period when the licence took effect is not yet disclosed. And even though there is a hospital mentioned as Obeya Memorial specialist Hospital, it is not yet disclosed whether it is registered as a private hospital under the prevailing law of the state and by who. On the face of these facts, it appears not, to me prudent to grant this equitable relief to the applicant.”

The appellant was dissatisfied with the ruling and appealed to the Court of Appeal on four grounds. The grounds were:

(1) The learned Chief Judge erred in law in failing to observe that at the stage at which the proceedings stood when he gave the decision appealed from, he was not called upon to determine any of the controversial issues of law and fact which arise between the parties and which require further oral and documentary evidence and addresses before the court can properly determine the issue.

(2) The learned trial judge erred in law and on the facts in failing to observe that it was improper for him to give consideration to various issues of fact and law not raised by counsel for the defendant without giving opportunity to the plaintiffs counsel to address him on such issues; (3) The learned Chief Judge erred in raising a doubt as to whether the plaintiff was in occupation of the premises when no such doubt was expressed by the defendant;

(4) The learned Chief Judge erred in law in making finding that “the government has furnished some basis in the affidavit evidence for taking over the hospital.”

Particulars of Error

(a) If (which is not conceded) it is the case that Obande Obeya is the owner of the hospital, it was improper for the learned Chief Judge to make the finding when Obande Obeya was not represented as a party to the proceedings;

(b) The affidavit of Obande shows clearly that the person in possession of the buildings housing the hospital is the plaintiff company and the application for mandatory injunction ought to have been considered on the basis of the allegation;

(5) The learned Chief Judge erred in law in failing to observe that the defendants having virtually admitted that it took possession viet armis, he ought to have ordered them to restore possession to the plaintiff herein.

The appeal came up for hearing before the Court of Appeal (Coram, Agbaje, Abdullahi and Macaulay, JJCA.) Jos. Again, the applicant was unsuccessful as the court in a considered judgement dismissed it.

In this judgement (concurred in by Abdullahi and Macaulay, JJCA.) Agbaje, JCA. commented in the concluding paragraphs as follows:

“If I may go back to the case of Agbor V. Metropolitan Police Commissioner, (supra) the possession of the plaintiff in the case prior to the wrong they complained of were not in dispute and in fact there was evidence that Mrs. Agbor occupied the house in dispute in the case with her children for some six months before she was ejected.

      Apart from the averments in the affidavits of the plaintiff, as to its being in occupation of the hospital in question there is no evidence from the plaintiff in support of this averment.

      Truly enough, paragraph 4 of the affidavit of Obande Obeya says that the plaintiff is in occupation of the land and the buildings housing the Obeya Memorial Hospital with the authority and as a licensee of Obeya Memorial Hospital, Obeya Memorial Hospital is an unincorporated association. As I have said, it is owned by members of Obeya family. One would have expected in an application of this nature some evidence as to when and how members of Obeya family passed any interest in the hospital to the plaintiff before one can come to the conclusion that the plaintiff has made goodhis assertion that he is in occupation of the hospital with the licence of the owners thereof.

      Again, if these were not so, one would have expected the plaintiff, in its affidavit before the courts, to show what acts it relies upon as constituting its occupation or possession of the hospital in question. The affidavit for the plaintiff in support of its application are deficient in these two particulars which I have just highlighted. If I may put it in another way, the affidavit for the plaintiff alleges occupation or possession of the premises to which the reliefs sought in the interlocutory application relate. But the affidavit does not go on to state the acts of occupation or possession by the plaintiff from which the inference may be drawn that the plaintiff was actually in possession or occupation of the premises.

      In the circumstances, I cannot hold that on the material placed before the lower court, the latter should have been satisfied that the plaintiff has made out a strong prima facie case that it was in possession of the premises the subject matter of the interlocutory application before the wrong it complained of.

For the reasons I have given in this judgement, I cannot therefore say that the learned trial Chief Judge was wrong in refusing the interlocutory application.”

The appellant was not still satisfied and therefore lodged an appeal against the decision of the Court of Appeal to this Court on three grounds of appeal which read:

(1) The court below erred and misdirected itself in law in applying to the facts and circumstances of this case what it described as “the age long requirement that in an application for an interlocutory injunction, the applicant, to succeed, must establish a probability or a strong prima facie (case) that he is entitled to the right of whose violation he complains.”

Particulars of Misdirection

(a) The alleged requirement has been criticised in American Cyanamid v. Ethicon Ltd. (1975) AC. 396

(b) On the facts of his case it was sufficient to show that the plaintiff was a licensee of the Obeya family;

(c) In Agbor v. Metropolitan Police Commissioner (1969) I WLR 703 and Ojukwu v. Governor of Lagos State  (1986) 3 NWLR. 39 the plaintiff was a licencee and the true owners of the premises (The Biafran Government and Ojukwu Transport Ltd.) were not parties to the proceedings, at any rate at the stage when interlocutory injunction was granted;

2. The court below erred in law in failing to observe that for the purpose of the interlocutory application, the affidavit of Jon Ede (a director of the plaintiff company) and of Obande Obeya (a member of Obeya family) are sufficient to establish status of the plaintiff company as a licensee of the Obeya family on the premises more so as those affidavits were not effectively or contradicted by the purely hearsay affidavit evidence of the Chief Law officer of Benue State.

3. Irrespective of the outcome of the appeal before it, the court below erred in law and failed to exercise its discretion judicially in not directing that the case be heard by another judge of the High Court.

Particulars of Error

The court below found that the learned Chief Judge has decided very vital issues of fact which can only properly be decided at the trial of the substantive suit. That being so, it ought to have directed that the substantive trial be held before another judge.

As the Chief Judge had transferred the substantive case from his court the appellants’ counsel did not in oral argument press the issue of transfer.

The questions posed by the grounds of appeal for determination in this appeal and formulated in the brief of arguments filed by the appellant are two fold. They are:

(1) What are the qualities and quantities of the evidence which the plaintiff require to establish in the High Court to support its application for the interlocutory injunction?

(2) Were the affidavit evidence of John Ede and Obande Obeya of the quality and quantity required?

Chief F. R. A. Williams, SAN., submitted both in the appellant’s brief and at the oral hearing of this appeal that in this application all that the plaintiff/appellant need show is that the action is not frivolous or vexatious. He commended the comment of Lord Diplock in American Cyanamid v. Ethicon Ltd. (1975) AC. 396 at 407G that the use of such expressions as “a probability”, “a prima facie case” or “a strong prima facie case” in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object to be achieved by this form of temporary relief. He contended that it is wrong to require the appellant to produce evidence to demonstrate that he is bound to succeed in the trial of the substantive case. He also relied on the observation of Coker, J. in Kufeji v. Kogbe (1961) I All NLR. 113 at 114 that

“In an application for interim relief by way of injunction, it is not necessary that a plaintiff or applicant should make out a case as he would on the merits, it being sufficient that he should establish that there is a substantial issue to be tried at the hearing.”

He also cited the case of Egbe v. Onogun (1972) 1 All NLR (Part 1) 95 at 98 where the above passage was cited with approval.

Learned counsel submitted that the affidavit evidence produced by the plaintiff/appellant clearly established the fact that there is a serious substantial question to be tried. He submitted that it was and is not necessary to adduce oral evidence to prove ‘averments’ (sic) in the affidavit and citedLadunni v. Kukoyi (1972) I ALL NLR 133 where this Court held that it was not necessary for a person applying for interlocutory injunction to restrain trespass pending trial to proceed further.

The contents of an affidavit or facts deposed to in an affidavit are deposed on oath. Those set out in the statement of claim are not. The affidavit evidence amount to proof whereas the averment in the statement of claim is not. He then cited Egbe v. Onogun (supra). He contended that the plaintiff is only the operator and manager of the hospital through staff, officers, servants and agents employed by it. These are the people prevented from carrying out their functions by the military and army personnel.

Learned counsel contends that the appellant being a body corporate can only be and is in occupation of the premises through these employees. He submitted that appellant need not prove proprietary interest in the premises to succeed and cited Agbor v. Metropolitan Police Commissioner  (supra) and Ojukwu v. Governor of Lagos State  (supra). It is enough if the appellant is lawfully in occupation with the authority of the owner. He then submitted that the affidavit evidence of John Ede and Obande Obeya were sufficient to support the application. He contended that on the issue of occupation, the affidavit evidence of the Attorney-General of Benue State is all hearsay and failed to contradict the facts sworn to by the plaintiffs/appellants’ witnesses.

The learned D.P.P. for Benue State, Mr. Aboyi J. Ikongbeh contended that the appellant failed to prove occupation although he admitted that the army and airforce personnel who seized the hospital did not find Obande Obeya in occupation when they entered the premises. He submitted that Obande Obeya was a debtor to the government and in the belief that the hospital belonged to him, the army and airforce personnel, on the request of the Recovery of Public Fund and Property Panel through the Military Governor seized the property in satisfaction of any amount he is owning.

The learned D. P.P. submitted that the appellant did not make out a prima facie case to entitle him to the interlocutory injunction and interlocutory mandatory injunction prayed. He contended that the facts deposed in the supporting affidavit of John Ede and Obande Obeya are not sufficient to show that the case is not frivolous or vexatious. He further contended that Agbor’s case and Ojukwu’s case are distinguishable on the facts from the instant appeal.

J. B. Ajala, Esq., Director of Civil Litigation in the Federal Ministry of Justice appearing for the first respondent adopted the submissions of Mr. Ikongbeh. He asked that the appeal be dismissed since the appellants conceded that they have nothing to complain against the first respondent. He submitted that an applicant must, to succeed, in an application for interim injunction establish a strong prima facie case. He then cited Woluchem v. Inko Taria Wokom (1974) 3 SC. 153. He further submitted that where damages would compensate for any injury done, the application should be refused . He submitted that Benue State Government is in a position to pay whatever damages that their action now being challenged may entail.

Chief Williams, SAN. in reply pointed out that the appellant joined the Attorney-General of the Federation because the army and the airforce personnel were involved. He commented that if even Obande Obeya were the sole owner of Obeya Memorial Hospital, it would not be right to seize itby force and referred to the provision of section 40 of the Constitution of the Federal Republic of Nigeria 1979. He concluded by submitting that the affidavit of Obande Obeya clearly proves that the plaintiff was in possession.

It is common ground that the Benue State Government took over Obeya Memorial Hospital with the assistance of army and airforce personnel.  It is important to keep in clear view the application before the court. Briefly, it is an application for interim injunction pending the determination of the substantive suit. The interlocutory nature of the application determines the nature of case to be made out by the appelicant to entitle it to the order. The nature of case determines the quantum of proof or evidence.

What are the principles governing the grant of an interlocutory injunction? The governing principles are fairly well settled although the statement and restatement of the principles has in some cases been in terms which have created confusion. This was clearly stated by Lord Diplock in the case of American Cyanamid v. Ethicon Limited  (a House of Lords English case) (1975) AC. 396 at 407 which reads:

“The courts, however, expressly deprecated any attempt to fetter the discretion of the court by laying down any rule which would have the effect of limiting the flexibility of the remedy as a means of achieving the objects I have indicated above. Nevertheless, this authority was treated by Graham J. and the Court of Appeal in the instant appeal as leaving intact the supposed rule that the court is not entitled to take account of the balance of convenience unless it has first been satisfied that if the case went to trial upon no other evidence than is before the court at the hearing of the application the plaintiff would be entitled to judgment for a permanent injunction in the same terms as the interlocutory injunction sought.

      Your Lordships should in my view take this opportunity of declaring that there is no such rule. The use of such expression as “a probability”, “a prima facie case”, or “a strong prima facie case” in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried.

      It is no part of the courts function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial.”

When an application for an interlocutory injunction to restrain a defendant from doing acts alleged to be a violation of the plaintiff’s legal right is made upon contested facts, the decision whether or not to grant an interlocutory injunction has to be taken at a time when ex hypothesis, theexistence of the right or the violation of it or both is uncertain and will remain uncertain until final judgement is given in the action. It was to mitigate the risk of injustice to the plaintiff during the period the uncertainty could be resolved that the practice arose of granting him relief by way of interlocutory injunction. However, since the middle of 19th century this has been made subject to his undertaking to pay damages to the defendant for any loss sustained by reason of the injunction if it should be held at the trial that the plaintiff had not been entitled to restrain the defendant from doing what he was threatening to do. The object of interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial; but the plaintiff’s need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented exercising his own legal rights for which he could not be adequately compensated under the plaintiff’s undertaking in damages if the uncertainty were resolved in the defendant’s favour at the trial. The court must weigh one need against another and determine where the “balance of evidence lies”. It could be seen that the High Court and the Court of Appeal surrendered their discretion to the vagaries of ascertaining from affidavit evidence conclusive proof of proprietary or occupational rights at this early stage.

In cases where the legal rights of the parties depend upon facts that are in dispute between them, as in the instant appeal, the evidence available to the court at the hearing of the application for an interlocutory injunction is incomplete. It is given on affidavit and has not been tested by oral cross-examination. The supporting affidavit of John Ede and Obande Obeya has not been tested in oral cross-examination. Neither has the counter-affidavit of Bernard Iyorbyam Hom, the Attorney General of Benue State been tested in oral cross-examination.

The purpose sought to be achieved by giving to the court discretion to grant such injunctions would be stultified if the discretion were clogged by a technical rule forbidding its exercise if upon that incomplete untested evidence the Court evaluated the chances of the plaintiff’s ultimate success in the action at 50 per cent or less but permitting its exercise if the court evaluated his chances at more than 50 per cent.

The confusion generated by the use of the term strong prima facie case has been imported into some of our judicial authorities which followed English decisions.

In Abel O. Woluchem v. Dr. Charles Inko Tariah Wokoma  (1974) 3.SC. 153 at 156, Ibekwe JSC. delivery the judgement of the Supreme Court stated the rule thus:

“The rule is that a plaintiff seeking an interlocutory injunction must establish a strong prima facie case for the existence of his right and at least that he was likely to succeed on that issue and also a prima facie case of infringement of his right. In exercising its discretion to grant the relief, the court would have regard to the balance of convenience.”

Then he went on to comment: “We fail to see how a court of law could be able to satisfy all or any of these principles before pleadings were filed and without evaluating some of evidence (be it oral or affidavit evidence by both parties).”

Another case worthy of mention in this regard is Ladunni v. Kukoyi & Ors. (1972) I All NLR (Part 1) 133. Explaining the principle, Coker, JSC. (delivering the judgement of the Court, said at page 138″

“The principle seems to us to be clear and in short an interim injunction would be granted to a party who shows that he has a prima facie case on a claim of right or in other words that, prima facie, the case he has made out is one which the opposing party would be called upon to answer and that it is just and convenient to the court to intervene and that unless the court so intervenes at that stage, the other party’s action or conduct would irreparably alter the status quo or render inaffective any subsequent decree of the court.”

The court had earlier at page 137 adopted with approval the dictum of Ungoed – Thomas, J. in In Donmar Production Ltd. v. Bart and Ors. (1967) I WLR 740 at 742 with respect to this point which reads:

“So in an application for an interlocutory injunction the applicant must establish a probability or a strong prima facie case that he is entitled to the right of whose violation he complains and, subject  to this being established, the governing consideration is the maintenance of the status quo pending the trial.

      It is well established that in deciding whether the matter shall be maintained in status quo regard must be had to the balance of convenience and to the extent to which any damage to the plaintiffs can be cured by payment of damages rather than by the granting of injunction. Of course the burden of proof lies on the applicant throughout.”

Of this statement, Coker, JSC. said at p. 137:

“We think this is a correct proposition of the law and we propose to apply it to the case in hand.”

Because of the confusion caused in the minds of judges by the use of the cliche “prima facie case or probability or strong prima facie case”, the law with respect to interim injunction has been aptly described by Coker, JSC. (see Ladunni v. Kukoyi & Anor. (supra) at p. 136) as constituting one of the most difficult sections of our law.

The difficulty exists not because the law is recondite but because the ascertained principles must be subjected at all times to a rather amorphous combination of facts which are perpetually different in every case.

The learned trial judge, whose decision came to the Supreme Court on appeal and was affirmed, stating the principle which guided him, said:

“The principle on which the court will act in an applicationfor an order of interlocutory injunction is well settled and it is that the court should be satisfied that there is a serious question to be tried at the hearing and that on the facts before it there is a probability that the plaintiff is entitled to relief.”

This principle is almost a restatement of the dictum of Lord Diplock in American Cyanamide v. Ethicon Ltd. (supra). The point appears to have been more correctly stated by this court in Egbe v. Onogun (1972) I All NLR. 95 at 98 when it said:

“In Kufeji v. Kogbe (1961) All NLR. 113 which deals with the practice and procedure governing applications for interim injunctions Coker, J. (as he then was) stated at page 114.”

‘In an application for interim relief by way of injunction, it is not necessary that a plaintiff or applicant should make out a case as he would do on the merits, it being sufficient that he should establish that there is a substantial issue to be tried at the hearing.”

……………………………………………….

      In a case of interim injunction, it is not necessary to determine the legal right to a claim since at that stage, as it is in this case, there can be no such determination; because pleadings have not been filed, no issue joined, and no oral evidence adduced; therefore there cannot be any finding on the merits.”

Having examined the principles governing the grant of interlocutory or interim injunction, it is now necessary to examine the facts of this instant appeal. These are set out clearly in the short affidavit of John Ede containing 11 paragraphs, paragraphs 1 to 10 which contain the material facts read:

1. I am a director of the plaintiff company and by virtue of this I am familiar with the facts to which I depose;

2. The plaintiff has filed an action against the Federal Government and the Benue State Government claiming the following reliefs:

(i) a declaration that the entry of the land and buildings of the Obeya Memorial Specialist Hospital Oturkpo Town in Oturkpo Local Government Area by Army and Airforce personnel as well as by officers and servants of the government of Benue State was unlawful and amounts to trespass;

(ii) a declaration that the Government of Benue State has no right to take or retain possession of the said land and buildings from the plaintiff save in accordance with due process of law:

(iii) an order for inquiry into damages suffered by the plaintiff as a result of the unlawful entry of the said land and buildings.

(a) by Nigerian Army and

(b) Nigerian Airforce personnel;

(iv) an order for inquiry into damages suffered by the plaintiff as a result of the trespass committed by the Benue State Government on the plaintiff’s goods as well as on the said land and buildings;

(v) an order for payment of appropriate sums as compensatory and/or exemplary damages to the plaintiff for the acts of trespass aforementioned; and

(vi) an injunction restraining all officers of the Nigerian Army and Airforce and all officers, servants and agents of the Benue State Government from continuing the said acts of trespass or committing further acts of trespass or from preventing the plaintiff, its officers, servants and licencees from obtaining access to the land and buildings used for the purposes of the Obeya Memorial Specialist Hospital.

3. At all times material to this action, the plaintiff was in occupation of the land and buildings in Oturkpo Local Government Area, Benue State which buildings are used for the purpose of a hospital known as Obeya Memorial Specialist Hospital.

4. The said Hospital was duly registered as a medical institution pursuant to the provisions of the Private Hospital Law 1963 Cap. 100 Revised Laws of Northern Nigeria. The plaintiff will rely on the Certificate of Registration dated 17th December, 1982 issued by the Ministry of Health Benue State of Nigeria.

5. On 24th January, 1986, some 30 Nigeria Army personnel and about 10 Nigerian Airforce personnel, all armed, entered the land and buildings used for the purposes of the hospital, and effectively took possession of the same;

6. On 25th of January, 1986, the Benue State Commissioner for Health, Benue State, Mrs. Lucy Aluor after inspecting the whole hospital, carted away all records of the hospital including all personal files of all staff;

7. On 6th February, 1986, the Military Governor of Benue State, Group Captain Jonah David Jang, in company of the Commissioner for Health, Benue State, Mrs. Lucy Aluor, visited the hospital and ordered that the security walls of the hospital be increased in height by the Benue State Ministry of Works and housing;

8. On 7th February, 1986, officials from the Benue State Ministry of health arrived with about 10 extra soldiers heavily armed and summoned all the staff and served most of the staff with termination letters with effect from 7th February, 1986. They then ordered all patients on admission in the hospital out of the hospital; 9. The hospital has now remained closed to both staff and patients since then and it is heavily guarded by armed personnel;

10. To the best of my knowledge, information and belief, unless restrained by order of court, the officers and men of the Army now occupying the said hospital and the Benue State Government intend to continue to keep the plaintiff and its agents, officers, servants and licensees out of possession of the premises permanently or for an indefinite period and also to keep them from entering the said premises.”

The Attorney-General of Benue State, Mr.. Bernard Iyorlyam Hom deposed to a lengthy counter-affidavit with which he exhibited many documents concerning Obeya Memorial Hospital. One of the documents shows that the plaintiff was incorporated on the 2nd day of September, 1985. It was the certificate of incorporation of Obeya Memorial Specialist Hospital Ayi-Onyema Family Limited.

Mr. Oche Uche a civil servant also deposed to a counter-affidavit paragraph 2 of which was to the effect that Obeya Obande on 26th June, 1985 admitted to the panel on Recovery of Public Fund and Property that the hospital was a joint project between him and his family. Obande Obeya also swore to an affidavit in reply to the counter-affidavit on 10th April, 1986. Paragraphs 8 and 9 of the affidavit read:

8. The buildings comprising the hospital were financed by the Obeya family and not me personally;

9. The plaintiff company was incorporated by the Obeya family and other persons to manage and run the hospital. It is incorrect to suppose that the plaintiff company is required to register for the purpose of operating or managing the business of the hospital”.

He also exhibited a copy of the certificate of occupancy issued to the Obeya Memorial Hospital to hold the land for a term of 30 years from 1st day of August, 1982.

From the facts before the Court, it cannot be denied that there is a serious question to be tried and that the burden of proof on the applicant at this stage has been discharged. There is affidavit evidence that the appellant was in occupation of the hospital building and operating the hospital services. The action of the respondent has caused a serious disruption of the services. The seizure of the hospital buildings by heavily armed Army and Airforce personnel from unarmed law abiding citizens should not be encouraged or applauded in a democratic society such as ours where the Rule of law reigns. It is more honourable to follow the due process of law. It is also more respectful and more rewarding to follow such a course.

The question may be asked “what has the Benue State Government gained by the seizure so far? The answer is “nothing” It has not recovered the debt owed to it by Obande Obeya. Instead it has found itself saddled with costly litigation. It may be contended that the Benue State Government followed the due process of law in that it was the powers vested in the RecoveryPanel established by the Recovery of Public Funds and Property (Special Provision) Edict 1985 was exercised that led to the seizure of the Obeya Memorial Specialist Hospital. The power vested in the panel was to be exercised against the property of any person indebted or liable to the government or agency of the State. This is emphasised in the provision of section 5(e) of the Edict which reads:

“For the effective carrying out of its function under this Edict, the Recovery Panel shall have power –

‘to take possession of and sell at public auction any movable or immovable property of any person indebted or liable to the government or agency of the State, or surcharged by the government, in satisfaction of the debt or surcharge.’”

The counter affidavit of Patrick Oche Uche sworn on 3rd of April, 1986 in paragraph 2 shows quite clearly that Obande Obeya had given the panel information that the hospital was a joint project between him and his family. It reads:

“That when Obande Obeya appeared before us on 26th June, 1985, and was questioned in relation to the hospital, he is said to own, he admitted that the hospital was a joint project between him and his family. That I hereby exhibit a certified true copy of the relevant pages of the transcript of our verbatim reporters minutes of our proceedings of the day and mark it as Exhibit POV 1.”

There is affidavit evidence from Obande Obeya on this issue. In the light of the affidavit evidence, the Court of Appeal and the High Court erred in holding that the appellant failed to prove that it was in occupation for the purpose of the application for interim injunction and mandatory injunction.

A force of 30 army and 10 airforce personnel heavily armed is surely not needed by the panel to take possession of the hospital from Obande Obeya if Obande Obeya alone were running the hospital and in occupation himself. The deployment of such a force is like using a sledge hammer to kill a fly. However, this is not the stage at which the question of the ownership of the land and buildings of the hospital is to be determined. It is one of the serious questions raised by the 2nd respondent to be decided at the hearing of the substantive case. The only question for consideration by the Court in the instant appeal in the light of all the facts placed before the court in the affidavits and counter-affidavits is the question of balance of convenience. Who will stand to lose more if the status quo ante is restored and maintained till the final determination of the suit? Will the Benue State Government stand to lose more if it is returned to its former position than the appellant if the appellant is not returned to its former position?

It is obvious that the appellant will lose more. The Benue State Government will lose nothing if it withdraws from the hospital premises till the final determination of the action. The appellant, if not restored to occupation now would have lost tremendously in goodwill, patients, finance and management skill if it ultimately succeeds in the substantive action.

The balance of convenience is therefore in favour of granting the application. I must stress that the government is entitled to pursue its debtorsand recover from them all amounts legitimately due to it. The courts of law are established both for the people and the government or authority. The government should not shy away from making use and taking advantage of the processes of the courts of law. It is a misconception to think that measured speed with which the processes of court travel is too slow for the military government. Since the government was taken the civilised stand of observing the Human Rights provision of the 1979 Constitution and the Rule of Law, it cannot allow its image to be tarnished, stained and mutilated by abandoning the Rule of Law and resorting to the Rule of Force which, in the peculiar circumstance, is very barren. The rule of force wearing the kid glove of an Edict can never usher in social justice. It only wears the condemned face of the law. Let the Benue State Government return to the Rule of Law.

The appeal succeeds and is hereby allowed. The decisions of the Court of Appeal and the High court are hereby set aside and in their stead, I make the following orders:

(1) The 1st and 2nd respondents by themselves, their servants including the 30 officers and men of the Nigerian Army and the 10 officers and men of the Nigerian Airforce or their agents are hereby restrained from preventing the plaintiff and its servants or agents from obtaining access to and occupying the premises known as Obeya Memorial Specialist Hospital pending the determination of the substantive action.

(2) The Benue State Government, the 2nd respondent, is hereby ordered to restore possession of the said premises to the plaintiff pending the determination of the substantive action; and

(3) The Benue State Government, the 2nd respondent, by itself, its servants or agents or otherwise, is hereby restrained from delivering possession of the said premises to any person other than the plaintiff or its duly authorised agent pending the determination of the substantive action.

The appellant is entitled to costs in this appeal assessed at N300.00 in this Court; N150.00 in the Court of Appeal and N50.00 in the High Court.

AUGUSTINE NNAMANI, J. S. C

I had a preview of the judgment just delivered by my learned brother, 

OBASEKI, J. S. C. and I entirely agree with his reasoning and conclusions in this matter.

What was involved in this appeal was an application for interim injunction pending the determination of the substantive suit between the parties. Based on the affidavit evidence before it both the High Court of Benue State and the Court of Appeal Jos Judicial Division, refused to grant the relief holding that the appellant herein had not made out a strong prima facie case. In its appeal to this Court, the appellant in ground 2 of its grounds of appeal complained that, (ii) The court below erred in law in failing to observe that for the purpose of the interlocutory application the affidavit of John Ede (a director of the plaintiff Company) and of Obande Obeya (a member of the Obeya family) are sufficient to establish the status of the plaintiff company as a licensee of the Obeya Family on the premises the more so as those affidavit evidence of the Chief Law Officer of Benue State”

Also in its brief of argument, the appellant identified the questions for determination as,

(i) What are the quality and quantity of the evidence which the plaintiff was required to establish in the High Court to support its application for interlocutory injunction?

(ii) Were the affidavit evidence of John Ede and Obeya of the quality and quantity so required?”

The 2nd Respondent thought that the question was,

“Whether or not on the affidavit evidence before the Court, the trial court and the Court of Appeal were justified in holding that the appellant had not established a strong prima facie case to entitle it to injunction”

I think it is pertinent to mention that the appellant is an incorporated entity and was so incorporated on 2nd September, 1985, long before the entry into the hospital on 24th January, 1986 by the combined team of Army and Airforce Personnel. It is also pertinent to mention that both John Ede and Obande Obeya are among the shareholders who subscribed the Memorandum of Association of the appellant company. From the claims of the appellant in the substantive Suit, one of which is – “a declaration that the Government of Benue State has no right to take or retain possession of the land and building comprising the said hospital save in accordance with due process of law”, the affidavits filed by the parties, and the arguments by counsel on both sides before this Court, it seems to me that there is undoubtedly a serious question to be decided between the parties. From the affidavit and papers filed by the 2nd Respondent, it would appear that Obande Obeya had applied and obtained a grant of certificate of occupancy in respect of land on which a Hospital known as Obeya Memorial Hospital stands; that the said hospital is registered under the laws of Benue State; that Obande Obeya appeared before a Panel on Recovery of Public Funds and Property set up by the Benue State Government, and that he was adjudged to owe that Government some funds following a contract which he did not execute. Then there is the Recovery of Public Funds and Property (Special Provisions) Edict 1985 under which the 2nd Respondent purports to have acted. Section 5(e) of that Edict permits the Recovery Panel to-

“Take possession of and sell by public auction any movable or immovable property of any person indebted or liable to the Government or agency of the State, or surcharged by the Government, in satisfaction of the debt or surcharge”

The contention of the 2nd Respondent is that the appellant is known to them, and that in effect the hospital is the property of Obande Obeya whichcan be seized and dealt with as per the Edict referred to above.

Surely the question of who the owners of the appellant are can only be determined in the course of the substantive suit. It is only then that it would become clear whether it belongs to Obande Obeya, and whether there was an attempt to use the appellant to wriggle out of the alleged indebtedness to the Government. Other issues that would be determined during such hearing include the question whether appellant was registered in accordance with the hospital law of Benue State and the question whether Obande Obeya is the holder of the land – either by statutory or customary grant of certificate of occupancy – on which the hospital stands. Can it therefore be argued that these issues can be determined at the point when a court is considering a prayer for interim injunction?

Or put another way, can it be said that these issues do not raise serious questions to be tried justifying a grant of injunction to maintain the status quo until such trial? I think not. The principles for the grant of interim injunction have been settled in decisions of the Courts in this country and in England.

See American Cyanamid v. Ethicon Ltd. (1975) A. C. 395;Egbe Vs Orogun (1972) I All N. L. R. pt. 1 95, 98. In Kufeji v. Kogbe 1961 1 All N. L. R.113, 114 Coker, J. (as he then was) set the test which has been accepted these years. He said

“In an application for interim relief by way of injunction, it is not necessary that a plaintiff or applicant should make out a case as he would on the merits, it being sufficient that he should establish that there is a substantial issue to be tried at the hearing”

I think I have said enough to indicate that I think such has been established on the papers and affidavits of the appellant.

Then the question was raised that the appellant was not known to the Respondent and had not shown that it was in possession or had entered in the hospital.  It has, however, been held that in an application for interim relief it is not necessary to prove proprietary interest in the property to be protected . All that seems to be needed is proof of lawful occupation with authority of owner. Ojukwu v. Governor of Lagos State (1986) 3 NWLR 39: Agbor v. Metropolitan Police Commissioner (1969) 1 N. L.R 203. In the instant appeal, John Ede one of the shareholders of the appellant company, deposed as follows in an affidavit.

(1) I am a director of the plaintiff company and by virtue of this I am familiar with the facts to which I depose.

………………………………….

(3) At all times material to this action the plaintiff was in occupation of the land and buildings in Oturkpo Local Government Area. Benue State which buildings are used for the purposes of a Hospital known as OBEYA MEMORIAL SPECIALIST HOSPITAL.

(5) On 24th January, 1986 some 30 Nigerian Army Personnel and about 10 Nigerian Airforce Personnel all armed enteredthe land and buildings used for the purposes of the hospital, and effectively took possession of the same”.

It was not seriously contested by the respondents that the appellant was in occupation when they moved in. All they say is that they don’t know appellant.

It would seem to me that in all the circumstances of this case the balance of convenience lies in favour of the appellant. As regards the use of force to take possession of the premises, I cannot improve on what has been said by my learned brother Obaseki, J. S. C. on the issue. I too would hope that the Benue State Government would return to the path of due process. If indeed the panel was convinced that the premises belonged to Obande Obeya did they need to take it in the manner they did? From the papers, there is nothing to show that there was a counter claim against the appellant, nor was there a substantive claim against Obande Obeya.

For these reasons, and the more detailed reasons in the lead judgement, I too would allow this appeal. I hereby endorse all the orders made by Obaseki, J. S. C. including the order as to costs. 

UWAIS, J.S.C.

This appeal is essentially interlocutory. It concerns the appellant’s application made in the High Court for an interim injunction to issue against the officers and men of the Nigerian Army and the Nigerian Air Force who, allegedly, had taken possession, by force, of Obeya Memorial Specialist Hospital in Oturkpo Local Government Area of Benue State. The application also sought for an order compelling the 1st and 2nd respondents herein to restore possession of the hospital to the appellant; and restraining the 1st and 2nd respondents, as well as their agents or servants from passing the possession of the hospital to any person other than the appellant.

The interlocutory application was refused by the High Court. There was an appeal, against the refusal, to the Court of Appeal. That appeal was dismissed and hence the appeal now before this court. The facts of the case have been admirably set out in the judgment of the learned brother Obaseki, J.S.C. the draft of which I had the privilege of reading in advance. I entirely agree with the judgment.

In dealing with this appeal it is necessary that care is taken not to decide any aspect of the substantive controversy between the parties, which is still pending before the High Court, so as not to prejudice the case of any of the parties. It is in this regard that I feel obliged not to add anything more to the judgment of my learned brother Obaseki, J.S.C. Since it fully represents my opinion on the appeal.

Accordingly, the appeal is hereby allowed and the decisions of the lower courts are set-aside. I enclosed the orders contained in the lead judgment.

B. O. KAZEEM, J.S.C.

I have had the opportunity of reading in draft the judgment justdelivered by my learned brother Obaseki J.S.C. and I agree entirely with the reasons and conclusions arrived at therein. However, I wish to add these few points by way of emphasis only.

The facts in this case which have been fully set out in the lead judgment were briefly that the Appellant was operating an hospital at Oturkpo in Benue State of Nigeria, but on 24th January, 1986, the Recovery of Public Funds and Property Panel (hereinafter referred to as “the Recovery Panel”) set up by the Government of Benue State of Nigeria, with the aid of some personnel of the Nigerian Airforce and the Army, forcibly ejected the Appellant’s staff from the hospital and took over possession of the said premises. The Government of Benue State had since been operating the said hospital.

The alleged reasons given for taking such an action was that one Chief Obande Obeya had been found by a Commission of Inquiry set up by the same Government of Benue State, to be indebted to that government in some huge sum of money due on a contract which was unpaid, and that the Appellant Company (which was regarded as Chief Obande Obeya’s property) was taken over by virtue of the power vested upon the said Recovery Panel under the Recovery of Public Funds and Property (Special Provision) Edict 1985: Edict No. 1B of 1985, in partial settlement of the said indebtedness. Consequently, the appellant as plaintiff instituted legal proceedings against the respondents as defendants for declarations that the action was unlawful and amounted to trespass. The appellant also sue for damages for trespass and an injunction to restrain the respondents from continuing the said trespass. However, pending the determination of the said action, the Appellant applied for the following orders:-

“An order restraining all the officers and men of the Nigerian Army and the Nigerian Airforce by themselves, their servants or agents or otherwise from preventing the plaintiff from obtaining access to and occupying the premises known as OBEYA MEMORIAL SPECIALIST HOSPITAL, AYI- ONYEMA FAMILY LIMITED.

(2) An order requiring the Federal Government and / or the Benue State Government to restore possession of the said premises to the Plaintiff.

(3) An order restraining the Federal Government and / or Benue State Government by themselves, their servants or agents or otherwise from delivering possession of the said premises to any person other than the Plaintiff or it’s duly authorised agents.”

The application was heard by the Chief Judge of the High Court of Justice of the Benue State of Nigeria holden at Makurdi and it was decided against the Appellant on the 7th of May, 1986. Inter alia, the learned Chief Judge found that the Appellant had not shown by affidavit evidence that it was really in occupation or possession of the premises forcibly entered into at the time of Government operation. The application was therefore refused . On an appeal against that decision; the Court of Appeal in Jos similarly found that the Appellant had not made out a strong prima facie case that it was in possession of the premises from which it was forcibly ejected by thegovernment. The appeal was therefore dismissed.

In the appeal before us against that decision, the main issue for consideration was whether the Respondents had any justifiable right in forcibly depriving the Appellant of possession of the said premises with the aid of military personnel before the determination of the pending action. It was contended by the Appellant that it was at the material time managing the hospital therein; and it was being so, it was entitled to continue to do its job; and could not be evicted save by an order of court. It was also pointed out that the Appellant was an incorporate body which had been in existence since the 2nd of September, 1985, and it did not have to establish any proprietary interest in the property once it was still in possession. It was therefore maintained that the action taken by the Respondents was not only high-handed, but that it was equally unlawful as being against the Rule of Law. The case of Military Governor of Lagos State & Ors v Ojukwu & Ano. (1986) 1 NWLR 621 at pages 636 – 638 was cited in support.

In defence of their action, the Respondents relied on the power vested upon the Recovery Panel set up by the Government of Benue State, under Section 5 (e) of Edict No. 18 of 1985, and it was submitted that in so far as Chief Obande Obeya who owned the property (claimed by the Appellant) had been adjudged by a Commission of Inquiry to be indebted to the Government of Benue State, and that indebtedness had not been discharged, their action was lawful.

Section 5 (e) of Edict No. 1B of 1985 on which the Respondents relied provides as follows:

5″ For the effective carrying out of its functions under this Edict, the Recovery Panel shall have power:-

(a) ……………………………………………………………

(b) …………………………………………………………..

(c) ……………………………………………………………

(d) …………………………………………………………..

(e) to take possession of and sell by public auction any movable or immovable property of any person indebted or liable to the Government or agency of the State or surcharged by the Government, in satisfaction of the debt or surcharge.”

There is no doubt that the provisions of Section 5(e) of the Edict relied upon by the Respondents empowered the Recovery Panel” to take possession of and sell by public auction any movable or immovable property of any person indebted or liable to the Government or agency of the State……………………… in satisfaction of the debt ……………..”. But the question remains whether the Appellant as a Corporate body has been so found to be indebted to the Government. Even in the case of Chief Obande Obeya, it had not been established at the trial of the substantive action that he was so indebted. The action taken by the Respondents seem to me rather premature. They should have waited until the substantive action had been tried and it has been found that either the Appellant as a corporate body had been indebted to the Government of Benue State; or that even Chief Obande Obeya was so indebted and owned the Appellant company; or that he incorporated the Appellant company to frustrate the effort of the Government in recoveringthe debt owed them.

A Nigerian citizen and indeed any Nigerian Company as a Corporate body in lawful possession of their properties are entitled to protection of those properties under our Constitution; and until they are proved not to be entitled, the Courts as guardians of the Rule of Law will frown at any unlawful invasion of such properties by anyone no matter how highly placed. That point was made clear in the case of the Military Governor of Lagos State & ors v. Chief Emeka O.Ojukwu & anor. (Supra).

In that case, the property situate at 29 Queens Drive belonged to the Ojukwu Transport Ltd. before the civil war of 1967 – 1970. But during the period of the civil war, it was administered by the Government of Lagos State as an abandoned property and let to G. Cappa Ltd. When G. Cappa Ltd. vacated the premises after the civil war, Chief Emeka Ojukwu who claimed to have an interest in the property took possession of it without the consent in the Military Governor of Lagos State. When he was threatened with an eviction therefrom by that Government he instituted legal proceedings at the High Court of Lagos to challenge the constitutionality of the decision to do so. While the action was pending, Chief Ojukwu being apprehensive that the Military Governor would use force to eject him without resort to Court process, made an interlocutory application for an interim injunction to restrain the Governor from ejecting him pending the determination of he action. An ex-parte interim order was first made by the trial judge pending the service of notice and hearing of the application. The order was later discharged after the application was heard and refused. Thereafter, the Military Governor with over 150 armed policemen, and without an order of court authorising him to do so, moved into the premises and threw Chief Ojukwu into the street. Chief Ojukwu and Ojukwu Transport Ltd. subsequently appealed to the Court of Appeal in Lagos against the refusal of the order of interim injunction; and Chief Ojukwu applied for an order to be re-instated into possession. The Court of Appeal granted the order; and the Governor of Lagos State appealed against that order. The Governor of Lagos State also asked for a Stay of execution of the order of the Court of Appeal pending the determination of the appeal.

The principal question for consideration in that case was whether there was legal and constitutional basis or authority for the action taken by the Governor of Lagos State to eject Chief Ojukwu from the premises, the subject-matter of a pending matter between the parties before the High Court.

In his own judgment, Obaseki J.S.C. observed thus:-

“I can find no constitutional or legal authority to support the action of the appellants (i.e the Military Government). Indeed all the authorities are the other way.

      In the area where rule of law operates, the rule of self help by force is abandoned. Nigeria being one of the countries in the world even in the third world which proclaim loudly to follow the rule of law, there is no room for the rule of self by force to operate. Once a dispute has arisen between a person and the government or authority and the dispute has been brought before the court, thereby invoking the judicial powers of the state, it is the duty of the governmentto allow the law to take its course or allow the legal and judicial process to run its full course. The action the Lagos State Government took can have no other interpretation than the show of the intention to preempt the decision of the court. The courts expect the utmost respect of the law front he government itself which rules by the law. ……………………………………… If the Government of Lagos State wants possession from Chief Emeka Odumegwu Ojukwu, it should apply for an order of possession from the competent Court of Law.”

In refusing the application for a stay, my learned brother observed:-

“I will be doing injustice to the cause of the rule of law if I grant this application and allow the eviction of the respondent to stand. The Nigerian Constitution is founded on the rule of law the primary meaning of which is that every thing must be done accordingly to law. It means also that government should be conducted within the frame-work of recognised rules and principles which restrict discretionary power which Coke colourfully spoke of as ‘golden and straight metwand of law as opposed to the uncertain and crooked cord of discretion. (see 4 Inst. 41). More relevant to the case in hand, the rule of law means that disputes as to the legality of acts of government are to be decided by judges who are wholly independent of the executive. See Wade on Administrative Law 5th Edition p. 22-27. That is the position in this country where the judiciary has been made independent of the executive by the Constitution of the Federal Republic of Nigeria 1977 as amended by Decree No. 1 of 1984 and No. 17 of 1985.

      The judiciary cannot shirk its sacred responsibility to the nation to maintain the rule of law. It is both in the interest of the government and all persons in Nigeria. The law should be even handed between the government and citizens.”

The above decision is very much applicable to this case; and I am of the view that it will be vheer injustice and against the rule of law which all justices have sworn to maintain between two litigating parties without fear or favour, affection or ill-will.

In the circumstances, I will also allow the appeal; and make the same orders contained in the lead judgment of my learned brother Obaseki J.S.C. 

SAIDU KAWU, JSC

I have had the advantage of reading in draft the lead judgement of my learned brother, Obaseki, J.S.C. which has just been delivered and I completely agree with his reasoning and conclusions. I am also of the viewthat this appeal ought to be allowed.

The appellant instituted an action in the High Court of Benue State Makurdi, against the respondents claiming certain reliefs and after the filing of the action, applied to the court for

“(1) An order restraining all the officers and men of the Nigerian Army and the Nigerian Airforce otherwise from preventing the plaintiff from obtaining access to and occupying the premises known as OBEYA MEMORIAL HOSPITAL, AYI-ONYEMA FAMILY LIMITED.

(2) An order restraining the Federal Government and/or Benue State Government by themselves, their servants or agents or otherwise from delivering possession of the said premises to any person other than the Plaintiff or its’s duly authorised agents. Pending the determination of the above action and for such further and or other orders as this Honourable Court may deem fit to make in the circumstances”.

At the conclusion of all the submissions made by learned counsel on behalf of the parties, the application was, on the 7th day of May, 1986 dismissed by the learned Chief Judge of Benue State. An appeal to the Court on Appeal was unsuccessful as that court upheld the decision of the trial court. This is a further appeal to this Court.

There is no doubt that, as alleged by the appellant, some Army and Airforce personnel, at the instance of the Government of Benue State, invaded the hospital on the 24th January, 1986 and forcibly took over possession of the premises. This fact was not disputed by the respondents. The dispute was as to who was in occupation of the hospital on that date. It was person in occupation and not the appellant. But on this issue, there was before the court the affidavit evidence of one John Ede, a director of the appellant company who swore as follows:-

“(1) I am a director of the plaintiff company and by virtue of this I am familiar with the facts to which I depose.

(3) At all times material to this action the plaintiff was in occupation of the land and buildings in Otukpo Local Government Area, Benue State which buildings are used for the purposes of the Hospital known as OBEYA MEMORIAL SPECIALIST HOSPITAL.

(5) On 24th January, 1986 some 30 Nigerian Army personnel and about 10 Nigerian Airforce personnel, all armed, entered the land and buildings used for the purposes of the hospital, and effectively took possession of the same.

In addition to this there was the affidavit evidence of Obande Obeya to the effect that the appellant was in occupation of the premises as a licensee of Obeya Memorial Hospital. In my view the affidavit evidence adduced by the appellant, at that stage of the litigation, was enough to satisfy the court that the appellant was in occupation at the time of the trespass.

Now, on the material placed before the courts, was the appellant not entitled to the grant of an interlocutory order? I think it was. Applying the principles governing the grant of interlocutory injunctions enunciated inAmerican Cyanamid v. Ethicon Ltd (1975) A. C. 396 at 407, Egbe v. Onofun (1972) 1 All N.L.R. 95 at p.98 and Kufeji vs. Kogbe (1961) 1 All N. L. R. 113 at 114 to the facts of this case, as set out in the affidavit of John Ede, I am in no doubt whatsoever that both the Court of Appeal and the trial court were in error to have refused the appellant’s prayers.

In the circumstances, I too would allow the appeal. I abide by all the orders made in the lead judgement of my learned brother, Obaseki, J. S. C. including the order as to costs.

Cases referred to in the judgment

Agbor v. Metropolitan Police Commissioner (1969) 1WLR 703.

American Cyanamid v. Ethicon Ltd. (1975) AC 396.

Donmar Production Ltd. v. Bart and Ors. (1967) 1 WLR 740.

Ebgo v. Onogun (1972) 1 All NLR (Pt. 1) 95.

Kufeji v. Kogbe (1961) 1 All NLR 113.

Ojukwu v. Governor of Lagos State (1986) 3 NWLR 39.

Woluchem v. Inko Taria Wokoma (1974) 3 SC 153.

Statutes referred to in the judgment

Republic of Public Funds and Property (Special Provision) Edict 1985

1979 Constitution of Federal Republic of Nigeria.

Counsel:

Chief F.R.A. Williams, SAN

with him:

1. Mr. M.N. Chukuma

2. Mr. S.B. Johnson For Appellant

3. Mr. Austin Lawani; and

4. Mr. F.R.A. Williams (Jnr.)

Mr. J. B. Ajala

(Director of Civil Litigation & Publication, For 1st Respondent

Federal Ministry of Justice

Mr. A. J. Ikongbe (D.P.P., Benue State

Ministry of Justice) For 2nd Respondent

(with him: Mr. I. S. Yakubu

(Ag. D.D.P.P. Benue State Ministry of Justice

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The Anton Pillar case


Download Anton Pillar case

​ANTON PILLER KG v. MANUFACTURING PROCESSES LTD. AND OTHERS 

[COURT OF APPEAL] 

[1976] Ch. 55 [1975 A. No. 6292] 

Practice – Discovery – Motion for – Action for infringement of copyright and using confidential information – Interim injunction and order for inspection – Application ex parte for order to enter premises to inspect and remove documents and files – Court’s inherent jurisdiction 

The defendants, an English company and their two directors, were the United Kingdom agents of the plaintiffs, German manufacturers of frequency converters for computers. The plaintiffs claimed that the defendants were in secret communication with other German manufacturers and were giving them confidential information about the plaintiffs’ power units and details of a new converter, the disclosure of which could be most damaging to the plaintiffs. In order to prevent the disposal by the defendants, before discovery in an action, of documents in their possession relating to the plaintiffs’ machines or designs, the plaintiffs applied ex parte for an interim injunction to restrain the defendants from infringing their copyrights and disclosing confidential information and for an order for permission to enter the defendants’ premises to inspect all such documents and to remove them into the plaintiffs’ solicitors’ custody. On the plaintiffs undertaking to issue a writ forthwith Brightman J. granted the interim injunction but refused to order inspection or removal of documents. 

On the plaintiffs’ ex parte appeal, which was heard in chambers with judgments later in open court:- 

Held, allowing the appeal, that in most exceptional circumstances, where plaintiffs had a very strong prima facie case actual or potential damage to them was very serious and there was clear evidence that defendants possessed vital material which they might destroy or dispose of so as to defeat the ends of justice before any application inter partes could be made, the court had inherent jurisdiction to order defendants to AND “permitAND ” plaintiffs’ representatives to enter defendants’ premises to inspect and remove such material; and that in the very exceptional circumstances the court was justified in making the order sought on the plaintiffs’ ex parte application (post, pp. 58E-F, 60F-H, 61B, E-F, H-62B). 

Dicta of Lord Redesdale in United Company of Merchants of England, Trading to the East Indies v. Kynaston (1821) 3 Bli.(O.S.) 153, 163-164 applied. 

E.M.I. Ltd. v. Pandit [1975] 1 W.L.R. 302 approved. 

Per curiam. In the enforcement of such orders, plaintiffs must act carefully and with full respect for defendants’ rights (post, pp. 61C, 62C-D, E). 

Order of Brightman J. reversed in part. 

The following cases are referred to in the judgments: 

E.M.I. Ltd. v. Pandit [1975] 1 W.L.R. 302; [1975] 1 All E.R. 418. 

Entick v. Carrington (1765) 2 Wils.K.B. 275. 

Hennessy v. Rohmann, Osborne AND Co. [1877] W.N. 14; (1877) 36 L.T. 51. 

Morris v. Howell (1888) 22 L.R.Ir. 77. 

United Company of Merchants of England, Trading East Indies v. Kynaston (1821) 3 Bli.(O.S.) 153. 

The following additional cases were cited in argument: 

Anwyl v. Owens (1853) 22 L.J.Ch. 995. 

Fowler v. Lewy (1875) 1 Char.Cham.Cas. 14. 

Lonsdale (Earl of) v. Curwen (1799) 3 Bli.(O.S.) 168 (note). 

Pall Europe Ltd. v. Microfiltrex Ltd. (unreported), October 28, 1974 

INTERLOCUTORY APPEAL from Brightman J. 

On November 26, 1975, on the ex parte motion of the plaintiffs, Anton Piller KG (a limited partnership), Brightman J., on the plaintiffs’ undertaking (1) forthwith to issue a writ of summons in their intended action against the defendants, Manufacturing Processes Ltd. (AND “M.P.L.AND “), Bernard Preston Wallace and Alfred Henry Stephen Baker, and (2) to abide by any order of the court as to damages sustained by the defendants by reason of any order to be made, ordered that the defendants be restrained until December 2, 1975, or further order, from (i) infringing the plaintiffs’ copyrights in original circuit board drawings and photographs therefrom for their equipment, (ii) publicising or using other than for the plaintiffs’ benefit any confidential information or documents supplied to them by the plaintiffs, (iii) manufacturing or helping others to manufacture copies of the plaintiffs’ equipment, (iv) disposing of or destroying (a) infringements of such copyrights (b) documents or articles relating to the design, manufacture or supply of the plaintiffs’ equipment. 

Brightman J. declined to order the further relief set out in a schedule: 

AND “That the defendants … do permit such persons not exceeding two as may be duly authorised by the plaintiffs and members or employees not exceeding two of the plaintiffs’ solicitors to enter forthwith the premises known as … or such parts thereof as shall be occupied or used by the defendants at any hour between 8 … in the forenoon and 9 … in the evening for the purpose of (a) inspecting all documents or articles relating to the design, manufacture, sale or supply of copies of the plaintiffs’ equipment … (b) removing into the plaintiffs’ solicitors’ custody (i) all original documents relating to the manufacture, operation or maintenance of the plaintiffs’ equipment which … had been supplied by the plaintiffs to the defendants (ii) all documents or articles relating to the design, manufacture, sale or supply of copies of the plaintiffs’ equipment ….AND ” 

The plaintiffs, who had been willing to undertake that the documents or articles removed would not be used by them save for the purposes of the action without leave of the court, issued a writ against the defendants claiming injunctions, delivery up of all infringing copies of copyright material and inquiries as to damages. 

The plaintiffs appealed ex parte by leave of the judge against the refusal to grant the relief set out in the schedule. The appeal was heard in chambers on December 2. 

The facts are stated in the judgment of Lord Denning M.R. 

Hugh Laddie for the plaintiffs. So far as is known there have been seven ex parte applications to the courts for AND “permitAND ” orders for inspection, five of which have been granted. In the case of an order made by Goff J. on October 28, 1974, Pall Europe Ltd. v. Microfiltrex Ltd. (unreported) [1974 P. No. 4640] solicitors were present and incriminating material was found. 

The courts have recognised that it is a very severe form of order that is sought. Yet every day of the week orders are made severely restricting a defendant’s business activities, his property or his actions. In many cases an injunction would be enough but there are cases where matter may be destroyed. There is matter here which might well be made unavailable in the action by destruction or other disposition. 

R.S.C., Ord. 29, r. 2 deals with the AND “Detention, preservation, etc., of subject matter of cause or matter.AND ” By Ord. 29, r. 2 (5) an application for an order under the rule has to be made by AND “summons or by notice.AND ” 

It is under the inherent jurisdiction of the court that power is found to make the order sought. The Court of Chancery has such power, e.g., to prevent property from being removed from the jurisdiction. 

As to the power to AND “permitAND ” inspection, see United Company of Merchants of England, Trading to the East Indies v. Kynaston (1821) 3 Bli.(O.S.) 153, per Lord Redesdale at pp. 163-164. Lord Redesdale said at p. 166 that Earl of Lonsdale v. Curwen (1799) 3 Bli.(O.S.) 168 (note) was directly in point and that AND “the order was made before the decree, and upon a question where the rights of the parties were uncertain.AND ” This is an equitable, discretionary, remedy. Anwyl v. Owens (1853) 22 L.J.Ch. 995 where AND “the object of the applicationAND ” was to AND “preserve property during litigationAND ” is entirely consistent with the Kynaston decision and with the present application made to preserve property during the trial. For an example of an ex parte application for an order for inspection of premises made in an emergency, see Hennessy v. Rohmann, Osborne AND Co. [1877] W.N. 14, where the application was made under the then Ord. 52, r. 3, and Malins V.-C. said that AND “the circumstances … warranted him in making an immediate order for inspection of the premises,AND ” although he did not act under that rule. The court has inherent power to dispense with notice. See also Morris v. Howell (1888) 22 L.R.Ir. 77. In Fowler v. Lewy (1875) 1 Char.Cham.Cas. 14 Quain J. said that he could not make an order for inspection ex parte. 

This application falls within the words of Templeman J. in E.M.I. Ltd. v. Pandit [1975] 1 W.L.R. 302, 307-308 but Templeman J. went too far in imposing stringency on plaintiffs. The plaintiffs in the present case want to preserve property so that it cannot be used to their prejudice and in order to prevent the defendants destroying it. Enormous damage may be done to the plaintiffs. Brightman J. recognised AND “the strong prima facie evidenceAND ” of what the defendants are doing. It is virtually 

impossible to establish that the defendant is a proven rogue on an ex parte application. That standard is too high. Brightman J.’s judgment was too restrictive. 

The defendants did not appear and were not represented. 

At the conclusion of the hearing in chambers the court made an order ex parte substantially in the form of the schedule to the order of Brightman J. The order was directed to be drawn up on December 2 and served and the court said that the reasons for the order would be delivered on December 8. 

Dec. 8. The following judgments were delivered. 

LORD DENNING M.R. During the last 18 months the judges of the Chancery Division have been making orders of a kind not known before. They have some resemblance to search warrants. Under these orders, the plaintiff and his solicitors are authorised to enter the defendant’s premises so as to inspect papers, provided the defendant gives permission. 

Now this is the important point: The court orders the defendant to give them permission. The judges have been making these orders on ex parte applications without prior notice to the defendant. None of the cases have been reported except the one before Templeman J. on December 3, 1974, E.M.I. Ltd. v. Pandit [1975] 1 W.L.R. 302. But in the present case Brightman J. refused to make such an order. 

On appeal to us, Mr. Laddie appears for the plaintiffs. He has appeared in most of these cases, and can claim the credit – or the responsibility – for them. He represented to us that in this case it was in the interests of justice that the application should not be made public at the time it was made. So we heard it in camera. It was last Tuesday. After hearing his submissions, we made the order. We now come to give our reasons in public. But at the outset I must state the facts, for it is obvious that such an order can only be justified in the most exceptional circumstances. 

Anton Piller KG (AND “PillersAND “), the plaintiffs, are German manufacturers of high repute. They make electric motors and generators. They play an important part in the big new computer industry. They supply equipment for it. They have recently designed a frequency converter specially for supplying the computers of International Business Machines. 

Since 1972 Pillers have had, as their agents in the United Kingdom, a company here called Manufacturing Processes Ltd. (AND “M.P.L.AND “), which is run by Mr. A. H. S. Baker and Mr. B. P. Wallace, their two directors. These agents are dealers who get machines from Pillers in Germany and sell them to customers in England. Pillers supply M.P.L. with much confidential information about the machines, including a manual showing how they work, and drawings which are the subject of copyright. 

Very recently Pillers have found out – so they say – that these English agents, M.P.L., have been in secret communication with other German companies called Ferrostaal and Lechmotoren. The object of these communications is that M.P.L. should supply these other German companies with drawings and materials and other confidential information so that they can manufacture power units like Pillers. Pillers got to know of these communications through two AND “defectors,AND ” if I may call them so. One was the commercial manager of M.P.L., Mr. Brian Firth; the other was the sales manager, Mr. William Raymond Knight. These two were so upset by what was going on in M.P.L. that on their own initiative, without any approach by Pillers whatever, on October 2, 1975, one or both flew to Germany. They told Pillers what they knew about the arrangements with Ferrostaal and Lechmotoren. They disclosed also that M.P.L. was negotiating with Canadian and United States firms. In making these disclosures, both Mr. Firth and Mr. Knight were putting themselves in a perilous position, but Pillers assured them that they would safeguard their future employment. 

The disclosures – coming from defectors – might have been considered untrustworthy. But they were supported by documents which emanated from both Ferrostaal and Lechmotoren. They showed that M.P.L. was in regular communication with those German companies. They were sending them drawings and arranging for inspection of the Piller machine, for the express purpose that the Lechmotoren company might manufacture a prototype machine copied from Pillers. One of the most telling communications was a telex from a representative of Ferrostaal to Mr. Wallace saying: 

AND “It is the opinion of Mr. S. (of Lechmotoren) that the best way to find a final solution for the … prototype is to send Mr. Beck (also of Lechmotoren) to you as soon as the … latest design of P. (Piller) has arrived in your factory. In this case it is guaranteed that the Lech prototype will have exactly the same features as the P-type. We hope you will agree to this proposal and we ask you to let us have your telex in order to arrange Mr. Beck’s visit accordingly.AND ” 

On getting this information, Pillers were extremely worried. They were about to produce a fine new frequency converter called the AND “Silent Block.AND ” They feared that M.P.L., in co-operation with the German manufacturers, would make a copy of their AND “Silent BlockAND ” and ruin their market. They determined to apply to the court for an injunction to restrain M.P.L. and their directors, the defendants, from infringing their copyright or using confidential information or making copies of their machines. But they were fearful that if the defendants were given notice of this application, they would take steps to destroy documents or send them to Germany or elsewhere, so that there would be none in existence by the time that discovery was had in the action. 

So, on Wednesday, November 26, 1975, Pillers’ solicitors prepared a draft writ of summons and, with an affidavit, they went before Brightman J. and asked, first, for an interim injunction to restrain infringement, etc., and, secondly, for an order that they might be permitted to enter the defendants’ premises so as to inspect the documents of the plaintiffs and remove them, or copies of them. Brightman J. granted an interim injunction, but refused to order inspection or removal of the documents. He said: 

AND “There is strong prima facie evidence that the defendant company is now engaged in seeking to copy the plaintiffs’ components for its own financial profit to the great detriment of the plaintiffs and in breach of the plaintiffs’ rights.AND ” 

He realised that the defendants might suppress evidence or misuse documentary material, but he thought that that was a risk which must be accepted in civil matters save in extreme cases. 

AND “Otherwise,AND ” he said, AND “it seems to me that an order on the lines sought might become an instrument of oppression, particularly in a case where a plaintiff of big standing and deep pocket is ranged against a small man who is alleged on the evidence of one side only to have infringed the plaintiffs’ rights.AND ” 

Let me say at once that no court in this land has any power to issue a search warrant to enter a man’s house so as to see if there are papers or documents there which are of an incriminating nature, whether libels or infringements of copyright or anything else of the kind. No constable or bailiff can knock at the door and demand entry so as to inspect papers or documents. The householder can shut the door in his face and say AND “Get out.AND ” That was established in the leading case of Entick v. Carrington(1765) 2 Wils.K.B. 275. None of us would wish to whittle down that principle in the slightest. But the order sought in this case is not a search warrant. It does not authorise the plaintiffs’ solicitors or anyone else to enter the defendants’ premises against their will. It does not authorise the breaking down of any doors, nor the slipping in by a back door, nor getting in by an open door or window. It only authorises entry and inspection by the permission of the defendants. The plaintiffs must get the defendants’ permission. But it does do this: It brings pressure on the defendants to give permission. It does more. It actually orders them to give permission – with, I suppose, the result that if they do not give permission, they are guilty of contempt of court. 

This may seem to be a search warrant in disguise. But it was fully considered in the House of Lords 150 years ago and held to be legitimate. The case is United Company of Merchants of England, Trading to the East Indies v. Kynaston (1821) 3 Bli.(O.S.) 153. Lord Redesdale said, at pp. 163-164: 

AND “The arguments urged for the appellants at the Bar are founded upon the supposition, that the court has directed a forcible inspection. This is an erroneous view of the case. The order is to permit; and if the East India Company should refuse to permit inspection, they will be guilty of a contempt of the court…. It is an order operating on the person requiring the defendants to permit inspection, not giving authority of force, or to break open the doors of their warehouse.AND ” 

That case was not, however, concerned with papers or things. It was only as to the value of a warehouse; and that could not be obtained without an inspection. But the distinction drawn by Lord Redesdale affords ground for thinking that there is jurisdiction to make an order that the defendant AND “do permitAND ” when it is necessary in the interests of justice. 

Accepting such to be the case, the question is in what circumstances ought such an order be made. If the defendant is given notice beforehand and is able to argue the pros and cons, it is warranted by that case in the House of Lords and by R.S.C., Ord. 29, r. 2 (1) and (5). But it is a far stronger thing to make such an order ex parte without giving him 

notice. This is not covered by the Rules of the Supreme Court and must be based on the inherent jurisdiction of the court. There are one or two old precedents which give some colour for it, Hennessy v. Rohmann, Osborne AND Co. [1877] W.N. 14, and Morris v. Howell (1888) 22 L.R.Ir. 77, an Irish case. But they do not go very far. So it falls to us to consider it on principle. It seems to me that such an order can be made by a judge ex parte, but it should only be made where it is essential that the plaintiff should have inspection so that justice can be done between the parties: and when, if the defendant were forewarned, there is a grave danger that vital evidence will be destroyed, that papers will be burnt or lost or hidden, or taken beyond the jurisdiction, and so the ends of justice be defeated: and when the inspection would do no real harm to the defendant or his case. 

Nevertheless, in the enforcement of this order, the plaintiffs must act with due circumspection. On the service of it, the plaintiffs should be attended by their solicitor, who is an officer of the court. They should give the defendants an opportunity of considering it and of consulting their own solicitor. If the defendants wish to apply to discharge the order as having been improperly obtained, they must be allow to do so. If the defendants refuse permission to enter or to inspect, the plaintiffs must not force their way in. They must accept the refusal, and bring it to the notice of the court afterwards, if need be on an application to commit. 

You might think that with all these safeguards against abuse, it would be of little use to make such an order. But it can be effective in this way: It serves to tell the defendants that, on the evidence put before it, the court is of opinion that they ought to permit inspection – nay, it orders them to permit – and that they refuse at their peril. It puts them in peril not only of proceedings for contempt, but also of adverse inferences being drawn against them; so much so that their own solicitor may often advise them to comply. We are told that in two at least of the cases such an order has been effective. We are prepared, therefore, to sanction its continuance, but only in an extreme case where there is grave danger of property being smuggled away or of vital evidence being destroyed. 

On the evidence in this case, we decided last Tuesday that there was sufficient justification to make an order. We did it on the precedent framed by Templeman J. It contains an undertaking in damages which is to be supported (as the plaintiffs are overseas) by a bond for £10,000. It gives an interim injunction to restraint the infringement of copyright and breach of confidential information, etc. It orders that the defendants do permit one or two of the plaintiffs and one or two of their solicitors to enter the defendants’ premises for the purpose of inspecting documents, files or things, and removing those which belong to the plaintiffs. This was, of course, only an interim order pending the return of the summons. It is to be heard, we believe, tomorrow by the judge. 

ORMROD L.J. I agree with all that Lord Denning M.R. has said. The proposed order is at the extremity of this court’s powers. Such orders, therefore, will rarely be made, and only when there is no alternative way of ensuring that justice is done to the applicant. 

There are three essential pre-conditions for the making of such an order, in my judgment. First, there must be an extremely strong prima facie case. Secondly, the damage, potential or actual, must be very serious for the applicant. Thirdly, there must be clear evidence that the defendants have in their possession incriminating documents or things, and that there is a real possibility that they may destroy such material before any application inter partes can be made. 

The form of the order makes it plain that the court is not ordering or granting anything equivalent to a search warrant. The order is an order on the defendant in personam to permit inspection. It is therefore open to him to refuse to comply with such an order, but at his peril either of further proceedings for contempt of court – in which case, of course, the court will have the widest discretion as to how to deal with it, and if it turns out that the order was made improperly in the first place, the contempt will be dealt with accordingly – but more important, of course, the refusal to comply may be the most damning evidence against the defendant at the subsequent trial. Great responsibility clearly rests on the solicitors for the applicant to ensure that the carrying out of such an order is meticulously carefully done with the fullest respect for the defendant’s rights, as Lord Denning M.R. has said, of applying to the court, should he feel it necessary to do so, before permitting the inspection. 

In the circumstances of the present case, all those conditions to my mind are satisfied, and this order is essential in the interests of justice. 

I agree, therefore, that the appeal should be allowed. 

SHAW L.J. I agree with both judgments. The overriding consideration in the exercise of this salutary jurisdiction is that it is to be resorted to only in circumstances where the normal processes of the law would be rendered nugatory if some immediate and effective measure was not available. When such an order is made, the party who has procured the court to make it must act with prudence and caution in pursuance of it. 

Solicitors: Collyer-Bristow AND Co. for Band, Hatton AND Co., Coventry. 

The Mareva Case (​MAREVA COMPANIA NAVIERA SA V INTERNATIONAL BULKCARRIERS SA) 


Download Mareva’s Case

​MAREVA COMPANIA NAVIERA SA V INTERNATIONAL BULKCARRIERS SA 

The Mareva [1980] 1 ALL E.R. 213 

BANKING AND FINANCE: CIVIL PROCEDURE: SHIPPING 

COURT OF APPEAL, CIVIL DIVISION 

LORD DENNING MR, ROSKILL AND ORMROD LJJ 

23 JUNE 1975 

Injunction – Interlocutory – Danger that defendant may transfer assets out of jurisdiction – Injunction restraining disposition of defendant’s assets within jurisdiction – Whether court having jurisdiction to grant injunction in advance of judgment – Supreme Court of Judicature (Consolidation) Act 1925, s 45(1). 

Cases referred to in judgments 

Beddow v Beddow (1878)9 Ch D 89, 47 LJ Ch 588, 28(2) Digest (Reissue) 959, 22. 

Lister & Co v Stubbs (1890) 45 Ch D I,[1886–90] All ER Rep 797, 59 LJ Ch 570, 63 LT 75, CA, 1 Digest (Repl) 549, 1715. 

Nippon Yusen Kaisha v Karageorgis [1975] 3 All ER 282,[1975] 1 WLR 1093,[1975] 2 Lloyd’s Rep 137, CA, Digest (Cont Vol D) 534, 79a. 

North London Railway Co v Great Northern Railway Co (1883) 11 QBD 30, 52 LJQB 380, 48 LT 695, CA, 28(2) Digest (Reissue) 959, 24. 

Appeal 

The plaintiffs, Mareva Compania Naviera SA (‘the shipowners), issued a writ on 25 June 1975 claiming against the defendants, International Bulkcarriers SA (‘the charterers’), unpaid hire and damages for repudiation of a charterparty.  On an ex parte application Donaldson J granted an injunction until 17.00 hours on 23 June restraining the charterers from removing or disposing out of the jurisdiction moneys standing to the credit of the charterers’ account at a London bank.  The shipowners appealed against Donaldson J’s refusal to extend the injunction beyond 17.00 hours on 23 June.  The facts are set out in the judgment of Lord Denning MR. 

Bernard Rix for the shipowners. 

The charterers were not represented. 

23 June 1975.  The following judgments were delivered. 

LORD DENNING MR.  This raises a very important point of practice.  It follows a recent case, Nippon Yusen Kaisha v Karageorgis.  The plaintiffs are shipowners who owned the vessel Mareva.  They let it to the defendants (‘the charterers’) on a time charter for a trip out to the Far East and back.  The vessel was to be put at the disposal of the charterers at Rotterdam.  Hire was payable half monthly in advance and the rate was $US3,850 a day from the time of delivery.  The vessel was duly delivered to the charterers on 12 May 1975.  The charterers sub-chartered it.  They let it on a voyage charter to the President of India.  Freight was payable under that voyage charter:  90% was to be paid against the documents and the 10% later. 

Under that voyage charter the vessel was loaded at Bordeaux on 29 May 1975 with a cargo of fertiliser consigned to India.  The Indian High Commission, in accordance with the obligations under the voyage charter, paid 90% of the freight.  But paid it to a bank in London.  It was paid out to the Bank of Bilbao in London to the credit of the 213 charterers.  The total sum which the Indian High Commission paid into the bank was £174,000.  Out of that the charterers paid to the shipowners, the plaintiffs, the first two instalments of the half monthly hire.  They paid those instalments by credit transferred to the shipowners.  The third was due on 12 June 1975, but the charterers failed to pay it.  They could easily have done it, of course, by making a credit transfer in favour of the shipowners.  But they did not do it.  Telexes passed which make it quite plain that the charterers were unable to pay.  They said they were not able to fulfil any part of their obligations under the charter, and they had no alternative but to stop trading.  Their efforts to obtain further financial support had been fruitless. 

Whereupon the shipowners treated the charterers’ conduct as a repudiation of the charter.  They issued a writ on 20 June.  They claimed the unpaid hire, which comes to $US30,800, and damages for the repudiation.  The total will be very large.  They have served the writ on agents here, and they have applied also for service out of the jurisdiction.  But meanwhile they believe that there is a grave danger that these moneys in the bank in London will disappear.  So they have applied for an injunction to restrain the disposal of those moneys which are now in the bank.  They rely on the recent case of Nippon Yusen Kaisha v Karageorgis.  Donaldson J felt some doubt about that decision because we were not referred to Lister & Co v Stubbs.  There are observations in that case to the effect that the court has no jurisdiction to protect a creditor before he gets judgment.  Cotton LJ said (45 Ch D 1 at 13,[1886–90] All ER Rep 797 at 799): 

  

‘I know of no case where, because it was highly probable that if the action were brought to a hearing the plaintiff could establish that a debt was due to him from the defendant, the defendant has been ordered to give security until that has been established by the judgment or decree.’ 

  

And Lindley LJ said (45 Ch D 1 at 15,[18890] All ER Rep 797 at 800):  ‘…  we should be doing what I conceive to be very great mischief if we were to stretch a sound principle to the extent to which the Appellants ask us to stretch it …’ 

Donaldson J felt that he was bound by Lister & Co v Stubbs and that he had no power to grant an injunction.  But, in deference to the recent case, he did grant an injunction, but only until 17.00 hours today (23 June 1975), on the understanding that by that time this court would be able to reconsider the position. 

Now counsel for the charterers has been very helpful.  He has drawn our attention not only to Lister & Co v Stubbs but also to s 45 of the Supreme Court of Judicature (Consolidation) Act 1925, which repeats s 25(8) of the Judicature Act 1873.  It says: 

  

‘A mandamus or an injunction may be granted or a receiver appointed by an interlocutory Order of the Court in all cases in which it shall appear to the Court to be just or convenient …’ 

  

In Beddow v Beddow ((1878) 9 Ch D 89 at 93) Jessel MR gave a very wide interpretation to that section.  He said:  ‘I have unlimited power to grant an injunction in any case where it would be right or just to do so …’ 

There is only one qualification to be made.  The court will not grant an injunction to protect a person who has no legal or equitable right whatever.  That appears from North London Railway Co v Great Northern Railway Co.  But, subject to that qualification, the statute gives a wide general power to the courts.  It is well summarised in Halsbury’s Laws of Englanda: 

 214 

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a 21 Halsbury’s Laws (3rd Edn) 348, para 729; see now 24 Halsbury’s Laws (4th Edn) para 918 

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‘…  now, therefore, whenever a right, which can be asserted either at law or in equity, does exist, then, whatever the previous practice may have been, the Court is enabled by virtue of this provision, in a proper case, to grant an injunction to protect that right. 

In my opinion that principle applies to a creditor who has a right to be paid the debt owing to him, even before he has established his right by getting judgment for it.  If it appears that the debt is due and owing, and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment, the court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent him disposing of those assets.  It seems to me that this is a proper case for the exercise of this jurisdiction.  There is money in a bank in London which stands in the name of these charterers.  The charterers have control of it.  They may at any time dispose of it or remove it out of this country.  If they do so, the shipowners may never get their charter hire.  The ship is now on the high seas.  It has passed Cape Town on its way to India.  It will complete the voyage and the cargo will be discharged.  And the shipowners may not get their charter hire at all.  In face of this danger, I think this court ought to grant an injunction to restrain the charterers from disposing of these moneys now in the bank in London until the trial or judgment in this action.  If the charterers have any grievance about it when they hear of it, they can apply to discharge it.  But meanwhile the shipowners should be protected.  It is only just and right that this court should grant an injunction.  I would therefore continue the injunction. 

ROSKILL LJ.  I agree that this injunction should be extended until judgment in the action or until further order.  The application to this court is made ex parte, and is necessitated by the fact that the learned judge, Donaldson J, understandingly in the circumstances, refused to extend the jurisdiction beyond 17.00 hours this afternoon (23 June 1975).  Though the admirable argument to which we have listened puts the case very fairly both for and against continuing the injunction, the fact remains that, we have only heard argument from one side and I do not think it would be right to express any opinion as to what the result would be were this matter hereafter to be argued fully.  But, as at present advised, it seems reasonably clear, first, that this court has jurisdiction to continue this injunction, and, secondly, that the difficult question is whether on the present facts this court ought at this stage to continue it until judgment or further order.  Donaldson J, in his judgment of which we have a full note, has asked a number of other questions of this court which at present it would be wrong for us to seek to answer.  If the charterers were represented, it would no doubt be said on their behalf that the decision of this court in Lister & Co v Stubbs precludes this court, not as a matter of jurisdiction but as a matter of practice, from granting this injunction. 

Indeed it is right to say that, as far as my own experience in the Commercial Court is concerned, an injunction in this form has in the past from time to time been applied for but has been consistently refused.  This court should not, therefore, on an ex parte interlocutory application be too ready to disturb the practice of the past save for good reasons.  But on the facts of this case, there are three good reasons for granting this injunction.  First, this ship was on time charter from the plaintiffs to the defendants on the New York Produce form, which provided, a little unusually, for a daily rate of hire payable half-monthly in advance and only the first two half-monthly instalments have been paid; secondly, there has been what would seem to be a plain and unexcused default in the payment of the third half-monthly instalment, and indeed a repudiation of the time charter by the charterers; thirdly, that third instalment fell due when the ship was under voyage charter from the time charterers to the President of India as voyage charterers. 

On the evidence the charterers have already received £174,000 from the voyage charterers.  Yet they have sent a telex to the shipowners in London on 17 June stating 215 that their efforts to raise further financial support have been fruitless and that they have no alternative but to stop trading.  If therefore this court does not interfere by injunction, it is apparent that the shipowners will suffer a grave injustice which this court has the power to help avoid; the injustice being that the ship will have to continue on her voyage to India and perhaps, as is not unknown in Indian ports, wait a long time there for discharge without remuneration while the charterers will be able to dissipate that £174,000. 

In my judgment it would be wrong to tolerate this if it can be avoided.  If it is necessary to find a reason for distinguishing this case from Lister & Co v Stubbs, I would venture to suggest that it is at least arguable that the court should interfere to protect the shipowners’ rights which arise under cl 18 of the time charter.  The relevant part reads:  ‘That the Owners shall have a lien upon all cargoes, and all sub-freights for any amounts due under this Charter, including General Average contributions.’ 

There is or may be a legal or perhaps equitable right which the shipowners may be entitled to have protected by the court.  The full extent and nature of that right has long been a controversial matter which may have to be resolved hereafter and I therefore say no more about it. 

For those rather narrow reasons I should continue this injunction until judgment or further order.  It is open to the charterers to apply to discharge the injunction or to apply for a stay under the arbitration clause at any time if they are so advised.  I agree with the order proposed by Lord Denning MR. 

ORMROD LJ.  I agree.  In my judgment the charterers here have a very strong case on the merits.  We have not heard any argument from the other side because it is an ex parte application.  In these circumstances I would reserve my own views until I have heard argument from the other side if any such argument is put forward.  But, in the absence of any such argument, in my view this injunction should be continued.