LAIBRU LTD V CIVIL ENGINEERING NIG LTD(Full Text)

LAIBRU LTD V CIVIL ENGINEERING NIG LTD(Full Text)


FEDERAL SUPREME COURT

5TH JULY, 1962.


APPEAL NO. FSC 187/1961

CITATION: FSC (1962) 5 LLER 1

Alternative Citation:

[1962] NSCC 260

Before their lordships:

BRETT, F.J.

TAYLOR, F.J.

BAIRAMIAN, F.J.


BETWEEN

LAIBRU LTD

(Appellant)

AND

CIVIL ENGINEERING NIG LTD

(Respondent)


Subject:

Property Law – Chooses in action – Legal assignment – Notice
of assignment not given to debtor  Effect.

Civil Procedure – Parties – Action for debt – Substitution –
Joinder – Assignor on proper party to be joined as co-plaintiff with the
assignee in action for assigned debt.

Practice and Procedure – Rules of the Supreme court of the
Judicature (England) 0.16, r.2 – High Court of Lagos Act cap.80, s.12
Supreme Court (Civil Procedure) Rules 0.1V.

Equity Legal choses in action – Equitable assignment of.

 

BAIRAMIAN, F.J.:

The appellant company complains that the learned Judge (Onyeama, J., on the 28th October, 1960, in the High Court of Lagos suit 60 of 1960), having found in favour of the claim on the merits, erred in dismissing it on the ground that there was no power to substitute
Michael Ibru for the company as plaintiff.

Early in 1959, when trading as “Laibru,” Mr. Ibru sold goods to the defendants, for which they did not pay. In June, 1959, he and others formed the company known as Laibru Ltd., which took over his assets and liabilities, but he did not give the defendants notice of the assignment of his claim to the company. Thus the company had an equitable assignment of a legal chose in action. In such case, according to Halsbury’s Laws of England, 3rd
edition, Vol.4, page 511

“The assignor ….  must be a party to the action either as plaintiff or defendant…..

If the assignor does not bring the action himself, the assignee is entitled to do so in the name of the assignor, on giving him a proper indemnity against all costs and charges consequent on the use of his name; or on proving his failure or refusal to sue or to allow the use of his name, may make him a defendant, leave to amend being granted, if necessary.”

The suit was brought in the company’s name. When Mr. Ibru was testifying as a witness for the company, the learned Judge observed that the company had no title If no notice of assignment had been given. Counsel for the company at first asked that Mr. Ibru be added as co-plaintiff, and later that he be substituted as plaintiff, and referred to Order 16, Rule 2, of the English Supreme Court Rules, and to section 12 of the Lagos High Court Ordinance in support of using that rule. Counsel for the defence objected that the local Order on Parties could not be supplemented from the English Rules. The learned Judge left it over to decide later; he went on with the trial, and eventually dismissed the claim only because he held that he could not substitute Mr. Ibru as the plaintiff.

In the notice of appeal the company complains that he erred in so holding, and asks that the substitution be allowed, and that judgment be entered for the amount; and there is a paragraph (3) which prays for. Any further order or other orders as the Court may deem fit
to make in the circumstances. The defendants did not give notice that they would support
the judgment on any other ground.

Their learned Counsel concedes that if there is no provision to meet a situation, the English rules will apply. Section 12 of the Lagos High Court Ordinance provides that

“The jurisdiction vested in the High Court shall, so far as practice and procedure are concerned, be exercised in the manner provided by this or any other Ordinance, or by such rules and orders of court as may be made pursuant to this or any other Ordinance, and in the absence of any such provisions in substantial conformity with the practice and procedure for the time being of Her Majesty’s High Court of Justice in England.”

The second clause ekes out the deficiencies of the old Supreme Court (Civil Procedure) Rules, which are still in force; and the deficiencies are twofold:

(a) those rules are not as fully as they should be on the subjects with which the Orders deal;

(b) they contain no Orders on some other subjects.

There is nothing in the wording of the clause to restrict its application to the second class of deficiency; the clause is wide enough to include both classes of deficiency; therefore the interpretation which makes the clause more helpful should be preferred.

Order 16, Rule 2 of the English Rules provides that

“Where an action has been commenced in the name of the wrong person as plaintiff, or where it is doubtful whether it has been commenced in the name of the right plaintiff, the court or a Judge may, If satisfied that it has been so commenced through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as may be just.”

That rule is read with Rule 11 of Order 16, in which there is an express requirement that no person shall be made a plaintiff without his own consent in writing thereto. It is argued for the defendants that there is no such consent from Mr. Ibru. In the case of Tryson v. The National Provident Institution, (1886), 16 Q.B.D., 678, in refusing to add a person as plaintiff
who would not give his consent, the learned Judges made it clear that “If that express requirement had not existed in Rule 11, the court would have been able to add or substitute under Rule 2 of the Order without such consent.” That express requirement in the English Rule 11 does not exist in the corresponding local Rule 5 of Order 4, and consent is not indispensable.

In regard to substitution, it is argued for the defendants that it cannot be made except in the case of a misnomer, and In re: Nos.55 and 57 Holmes Road, Kentish Town: Beardmore Motors Ltd. v. Birch Bras. (Properties) Ltd., (1959) Ch. 298, is cited in support. It is true that the applicants there argued, in part, that it was a case of mere misnomer; the learned Judge thought not; his reason for declining to amend was that it would divest the respondents
of a right in favour of which time had run. Misnomer is one instance; there are others; the rule, namely Rule 2 in Order 16 of the English Rules is not confined to misnomers. What is more, if a case comes within the rule, there is no difference in principle between adding and substituting a plaintiff, for it mentions both.

In regard to addition, it is objected that it is not asked for in the notice of appeal; also that it is not known whether Laibru’s assets and liabilities had been properly transferred to the company. The transfer was proved by Mr. Ibru in his evidence. The notice of appeal could be amended, but addition can be made under paragraph 3 of the notice, which prays for further
or other order which the court may deem fit. Adding Ibru does no harm: the only legitimate interest of the defendants is to ensure that they shall not be asked to pay twice.

But for their objection to Ibru being substituted, he would presumably have been substituted as the plaintiff in the course of his evidence, and consequential orders on pleadings could then have been made with ease, which impels me to observe that applications to change the parties should be decided forthwith. Now it is rather late for amending the pleadings, if
amendment should be necessary. Whether it is, and what it should be, has not been discussed.

On the other hand, the addition of Michael Ibru as a co-plaintiff does not involve any amendment of pleadings, but only that he should have an opportunity of saying whether he would like to have an indemnity against costs from the company, and anything else he might wish to say. He should have been given notice of the appeal, as the company was asking for him to be substituted as the plaintiff or for any other order which might seem fit. We thought that, as there was no ground of substance for sending the case back for a fresh trial merely because of the mistake of not making him plaintiff in the course of the company’s evidence at the hearing in the court below, this was a proper case for making use of the provision which enables our Court to direct notice to be given to a person who should have been given notice of the appeal. That provision is in Rule 5 (1) of Order 7 of the Federal Supreme Court Rules, 1961; it reads as follows

“5(1) The Registrar of the Court below shall, after the notice of appeal has been filed,
cause to be served a true copy thereof upon each of the parties mentioned in the notice of appeal. It shall not be necessary to serve any party not directly affected:

Provided that the Court may, of its own motion, or on the application of any person claiming to be affected, direct notice to be served on all or any parties to the action or other proceeding or upon any person not a party and in the meantime may postpone or adjourn the hearing of the appeal upon such terms as may be just and make such order as might have been made if
the person served with such notice had been originally parties to the appeal.”

Notice was sent to Michael Ibru to appear and say what he might wish, and also to the appellant company and to the respondents so that they, too, might have an opportunity of making any submissions they might wish to make. Mr. Ibru said that he was willing to be joined as co-plaintiff and that he did not want to have any security for costs; the appellant company did not wish to say anything; the respondents did not appear.

As the learned trial Judge would have given judgment in favour of the claim but did not through a mistake of law; as the respondents did not dispute in the appeal their indebtedness; and as the mistake can be rectified now: I propose that the following orders be made:

The appeal is allowed, the judgment of the Court of Lagos in Suit 60 of 1960 given on 28th October, 1960, is set aside; it is ordered that Michael Ibru be and he is hereby added as co-plaintiff in the Suit, and that judgment be entered for the plaintiff company and the co-plaintiff against the defendants for ₤822-2s-6d (Eight hundred and twenty-two pounds, two shillings and six pence) with costs in the court below to be taxed there; costs are allowed to the appellant company against the respondents (defendants) at thirty-five guineas.

BRETT, F.J.: I concur.

DISSENTING JUDGEMENT OF TAYLOR, F.J.

I have dealt in my Judgment only with the issue as to whether this Court is empowered, at the hearing of an appeal, or, as happened here, at the close of the hearing of the appeal to add a party as co plaintiff appellants, for it is on this point that I disagree with the majority decision.

The plaintiffs, Messrs Laibru Limited, sued the defendants for the sum of ₤812-2s-6d, being the balance of the purchase price of goods sold and delivered by them to the defendants between December 1958 and January 1959.

The plaintiffs in their Statement of Claim filed on the 28th March, 1960, aver in paragraphs 1 and 2 as follows:

1. The plaintiffs are a Limited Liability Company incorporated under the Companies Ordinance on or about the 22nd day of June,1959.

2. The Company upon its incorporation took over the business of the Firm Messrs Laibru then of 40 Balogun Street, Lagos, and also all its assets and liabilities as at that date.”

From these two paragraphs, I understand that as from the 22nd day of June, 1959, the firm of Messrs Laibru ceased to exist. It was no longer a going concern and Messrs Laibru Limited had taken over completely all its assets and liabilities. I should make it clear that by the use of the word ‘firm’ in pleadings drafted by a member of the legal profession, I take it that he had in mind the same meaning attached to the word in Halsbury’s Laws of England Vol.22, (1st Ed.) at page 5, i.e.: a short collective name for the individuals who constitute
the partners, and the name under which they trade is their firm name.

Going back to the pleadings, again, it is averred in paragraph 9 of the Statement of Claim as follows:

9. The right to recover this amount has since been vested in the plaintiffs’ Company upon its incorporation on the 22nd June, 1959.

This to me can only mean that the present plaintiffs/appellants, and they alone, are the persons entitled in law to bring this action for the recovery of the sum alleged to be due. The defendants specifically deny paragraphs 1 and 2 of the Statement of Claim, and in addition
to the denial of the existence of any contract between the parties, deny paragraph 9 by the general traverse contained in paragraph 1 of the Statement of Defence. In paragraph 4 of the Statement of Claim it is averred that:

4. Towards the latter part of 1958 the said Mr. M.A.K. Shonowo acting for and on behalf of the defendants verbally agreed with Mr. M.C. Ibru, a Managing Director of Messrs Laibru that the Firm should sell and deliver to the defendants building materials ……

The effect of this paragraph is again to repeat the fact that Messrs. Laibru is a Firm and that one M.C. Ibru is the Managing Director of same, and that it was in that capacity that he entered into the contract. That, in short, was the position when the case came up for trial in the High Court.

At the hearing the only witness who gave any evidence to identify this rather vague body known as Messrs Laibru was the second plaintiff, M.C. Ibru, and this is what he said:

I was formerly carrying on business as Messrs Laibru of 40 Balogun Street, Lagos; the business is now a Limited Liability Company.

Clause 3a of the Memorandum of Association reads thus:

The objects for which the Company is established are: to acquire and take over as a going concern the undertaking and all or any of the assets and liabilities of Laibru and to run that business with or without modifications.

It was after the tendering of the Memorandum of Association that the Trial Judge, quite properly in my view, remarked that the question of assignment of the debt must arise since the debt was contracted at a time when the plaintiff company did not exist. Learned Counsel for the plaintiff then made the following application:

I now wish to apply to add Messrs Laibru as the second plaintiff  M.C. Ibru carrying on business as Messrs Laibru.

Where the Learned Trial Judge erred was in not hearing the parties out on this application and making his ruling there and then. He adjourned the matter for Counsel’s further consideration. Before the matter came up for further argument, a motion had been filed by the plaintiffs seeking the follows:

(a) An amendment of the writ of summons by adding ‘the plaintiffs claim jointly and severally to the first line.

(b) By adding as a second plaintiff “M.C. Ibru trading as Messrs. Laibru.”

(c) Any further order or orders as this Honourable Court may deem fit to make in the circumstances.

The affidavit filed in support of this application, states in paragraphs 3,4 and 5, that:

(3) That the name “Laibru Ltd” was wrongly inserted as only plaintiff.

(4) That the second plaintiff sought to be joined “Messrs M.C. Ibru trading as “Laibru” is a person likely to be affected by the result of this case.

(5) That the first plaintiff Laibru Ltd., being the Company now carrying on the business of the firm “Laibru” it is also likely to be affected by the result of this case.

I cannot reconcile paragraphs 4 and 5 of the affidavit with paragraph 9 of the Statement of Claim, for indeed some seven months previous to the issue of the writ there was no one trading as “Laibru” nor was there a firm in existence by that name. The confusion, however, does not end there, for at the hearing of the motion Counsel for the plaintiffs shifted his ground and argued not in accordance with the motion for adding a plaintiff, but for substitution. He is recorded as saying this: Regarding my application to strike out the present plaintiff and substitute a new one See Order 16 Rule 2 Rules of Supreme Court.

The Learned Trial Judge then proceeded with the evidence and not till he delivered judgment dismissing the case did he rule that he had not the power to grant the order sought to substitute. He went on to say that had he the power to do so, he would have given judgment for Messrs Laibru.

Against this judgment the plaintiffs have appealed and filed one ground of appeal with their Notice of Appeal, which reads thus:

That the Trial Judge erred in law in refusing the appellants’ application to substitute another plaintiff on the ground that Order 16 Rule 2 of the Rule of the Supreme Court of England could not apply when a situation arose which was covered by the said rule and which was not
provided for in Order IV of the Supreme Court (Civil Procedure) Rules Cap.211 of the Laws of Nigeria.

The relief sought reads as follows:

(1) That the amendment be allowed by substituting Michael Ibru trading under the name and style of Messrs Laibru for “Laibru Limited” as plaintiff.

(2) That judgment be entered for the “Messrs Laibru” for the amount claimed with costs.

(3) Any further order or other order as the Court may deem fit to make in the circumstances.

At the hearing of the appeal Mr. Ogunsanya for the appellants again shifted his ground and argued not as contained in his ground of appeal and relief for substitution but for joinder of the assignor as plaintiff/appellant. He wound up his argument by submitting that the proper
order for the Trial Judge to have made in the circumstances was one of non-suit.

If pleadings in the original court of hearing and grounds of appeal and the relief claimed are to have any meaning at all, then in my view parties must be bound by them as long as they remain unamended. If on the other hand an amendment is made then the other side should be given an opportunity of considering his position in the light of the amendment.

After judgment had been reserved in the appeal, this Court by a majority decision issued out a notice on the parties and also on Michael Ibru to appear. On the 28th June, 1962, Michael Ibru appeared, but the respondents, though served, did not appear in person, nor were they
represented. Michael Ibru was then asked whether he consented to be joined in the appeal as appellant, and he replied in the affirmative, and as to whether any conditions should be attached to his joinder, he answered in the negative. He was then joined by order. Reference has been made in the majority judgment to Order 7 Rule 5(1) of the Federal Supreme Court Rules, 1961, which states that:

The Registrar of the Court below shall, after the notice of appeal has been filed, cause to be served a true copy thereof upon each of the parties mentioned in the notice of appeal. It shall not be necessary to serve any party not directly affected:

Provided that the Court may, of its own motion, or on the application of any person claiming to be affected, direct notice to be served on all or any parties to the action or other proceeding or upon any person not a party and in the meantime may postpone or adjourn the hearing of the appeal upon such terms

I concede that we have the power to order that a person not a party to the proceedings should be served with notice if we feel that he is party who will be affected by the result, but it is in my view a far different thing for this Court to make such an order in the face of the pleadings and the ground of appeal and relief claimed, all of which have not at any stage been
amended.

At this stage I would refer to the case of Performing Right Society v. London Theatre of Varieties, (1922) 2 KB. 433, the headnote of which reads thus:

In 1916, a firm of musical publishers assigned by deed to the plaintiffs the performing rights of all songs of which they then possessed or should thereafter acquire such rights. Subsequently a certain song was written, and the copyright in it together with the right of performance was assigned by the authority to the said firm. The defendants, music hall
proprietors, permitted the said song to be publicly sung in their music hall without the consent of the plaintiffs. The plaintiffs sued the defendants under the Copyright Act, 1911, for infringement of their performing right.

One of the points that came up for decision before Branson, J., was whether the plaintiffs as equitable assignees of the performing rights, were not entitled to sue in their name without joining their assignors as co-plaintiffs. Branson, J., answered this point in favour of the plaintiffs. On appeal, Bankes, L.J., held at page 447 as follows:

Whichever view is correct, it appears to me that apart from authority the result in this action is the same, namely, that the plaintiffs should not be allowed to maintain the present action without adding the legal owners of the copyright. If the first conclusion is the correct one then the action cannot proceed without them. If the second is correct then the Court in
the exercise of its discretion should not allow the action to proceed in the absence of a party who may be interested and who ought to be bound, or whose presence might afford a defence to the defendant.

I have cited this authority mainly in respect of the Order made by the Appeal Court possessed of power to add parties. The order made is contained in the judgment of Younger, L.J. at page 460, where he says: I agree, however, that the opportunity of amending the proceedings by adding the publishers as co-plaintiffs, should not, even now, be denied to them. That amendment, if they elect to make it, would, be, however, on the terms that all the defendants’ costs of action thrown away by the fact that up to the amendment the action was not maintainable, should be the defendants’ in any event. If the plaintiffs elect to amend, the further costs should abide the Issue of the further trial. If the plaintiffs do not so elect within a prescribed time, the action should be dismissed with costs.

This authority is referred to in the 1962 Annual Practice, under the heading “Adding Parties.” The passage reads thus: The Court of Appeal has power to add or give leave to add
parties. In my view the correct order to make in this appeal is to send the case back for a retrial, setting aside the judgment of the Trial Judge, giving leave to the appellants, If they so wish, to add a new coplaintiff within one month from today. If on the other hand the appellants do not elect within that time, then the action should be dismissed with costs to
the respondents to be assessed by the Trial Judge. In any event, I would allow costs to the respondents in this appeal assessed at 19 guineas.

Appeal allowed:

Dismissal set aside:

Michael Ibru joined as co-Plaintiff: Judgment for Plaintiffs
in the amount claimed.

Appearances

Ogunsanya, for the Appellants.

Rotimi Williams, Q.C., (with him Nzegwu) for the
Respondents.