Citation: (2021)9 N.W.L.R PT. 1782 AT 452.
Courtesy: Moruff O. Balogun Esq.
Summary of Facts:
The bank account of Mr. Ayo Fayose, then Governor of Ekiti State, was frozen by an order of the Federal High Court, Lagos. By a subsequent order of the Federal High Court, Ado-Ekiti made on 13th December 2016, the account was unfrozen and unencumbered.
Later Mr. Ayo Fayose withdrew N5 million from the account and also transferred N75 million to a bank account belonging to and operated by Mike Ozekhome’s Chambers as professional fees paid to the respondent, a legal practitioner.
On its part, the appellant sought from the trial Federal High Court, Lagos, an ex-parte order of interim attachment and freezing of the bank account of Mike Ozekhome’s Chambers for a period of 120 days. And on 7th February 2017, the trial court made the order as sought.
The respondent was aggrieved with the ex-parte order and he filed a motion on notice dated 14th February 2017 at the trial Court for Setting aside of the order. The respondent asserted that the appellant misrepresented, suppressed, and did not disclose material facts; did not comply with the rules of the trial court; and breached judicial authorities regulating the grant of ex-parte application in the course of applying for the order. Further, the respondent stated that the N75 million transferred to the account of his chambers had been dissipated before the ex-parte order was made. The respondent filed affidavit in support of his motion on notice to which he attached exhibits of invoices raised for his fees and receipts acknowledging payment of the fees. He also attached evidence of Mr. Ayo Fayose’s personal withdrawal of N5million from the account before the transfer of the N75million to the account of his chambers. In addition, the respondent attached documentary evidence (exhibit A2) that at the time Mr. Ayo Fasoye transferred N75 million to the account of his chambers, the Federal High Court, Ado-Ekiti had made an order unfreezing the account belonging to Mr. Ayodele Fayose.
Though the appellant opposed the respondent’s motion on notice, it did not tender any contrary evidence to show that Mr. Ayo Fayoses account was encumbered at the time the N75 million was transferred to the account of the respondent’s chambers.
The appellant also did not fault the documentary evidence attached to the affidavit in support of the respondent’s motion on notice. Neither did the appellant make out a case that the money had not been dissipated.
After hearing arguments of the parties, the trial court delivered its ruling. It found that at the time Mr. Ayo Fasoye transferred N75 million to the account of the respondent’s chambers, the Federal High Court, Ado-Ekiti had made an order unfreezing the account
belonging to Mr. Ayodele Fayose, as shown in exhibit A2 attached to the respondent’s motion on notice. In the end, the trial court set aside the ex-parte order on 3rd April 2017 before the expiration of the 120 days life span of the order.
The appellant appealed to the Court of Appeal where it argued amongst other grounds that the respondent ought to have known the source of money Mr. Ayo Fayose transferred to the account of his chambers as professional fees was from an illicit act or proceeds of unlawful activities.
In his brief of argument, the respondent argued what he termed a preliminary objection though he did not file a notice of the preliminary objection stating the grounds of his objection. A when the appeal was argued in court, counsel to the respondent did not argued the preliminary objection before the main appeal was argued. The appellant also did not respond to the preliminary objection.
Held (Unanimously dismissing the appeal).
The following issues were raised and determined by the Court of Appeal:
On right of legal practitioner to fees for services rendered and whether bound to ask client source of money used to pay such fees-
A legal practitioner is entitled to his fees for professional services rendered and such fees cannot be rightly labeled as proceeds of crime. Further, it is not a requirement of the law that a legal practitioner would go into inquiry before receiving his fees from his client, to find out the source of the fund from which he would be paid. In this case, there was no evidence on record at the time the money was paid to the respondent’s chambers to show that the money was from the proceeds of unlawful activities.
Therefore, the trial court rightly refused to hold that the money was from unlawful activities.
On whether provisions of Money Laundering Prohibition Act 2011 are applicable to legal practitioners –
Legal practitioners are excluded from the definition of “designated non-financial institution” as contained in the Money Laundering Prohibition Act, 2011. Further, section 25 of the Money Laundering Prohibition Act, 2011 is inconsistent with section 192 of the Evidence Act, and therefore section 25 of the Act gives way to section 192 of the Evidence Act, it cannot override or amend the Evidence Act.
The Money Laundering Prohibition Act as far as it applies to legal practitioners is invalid, null and void. In this case, the trial court rightly held that legal practitioners are excluded from those tagged “designated non – financial institutions” under the Money Laundering Prohibition Act, 2011.
On when court may set aside own decision or decision of court of co-ordinate jurisdiction –
A court of law has the inherent power to set aside its decision or that of a court of co-ordinate jurisdiction under special circumstances; for instance where the decision was made without jurisdiction, or where a misrepresentation was made which influenced the decision, or where there is a suppression of material facts, or where the order was irregularly granted. Therefore, in appropriate situations, a court can invoke its inherent jurisdiction or power to set aside its judgment or order where it is made without jurisdiction or in appropriate cases where the order or decision is affected by another defect capable of rendering the decision or order ineffective, null and void. In this case, the bank account from which the money was transferred to the account of the chambers of the respondent was not encumbered as at the time the transfer was made, therefore, the earlier ex – parte interim order of attachment or forfeiture to freeze the account for 120 days was made without jurisdiction and was rightly set aside.
On when court can vary or set aside ex-parte order-
Where a court makes an ex-parte order without jurisdiction, the order can be varied or discharged depending on the circumstances of the case, the grounds under which the court can do so are as follows:
A. If the plaintiff has not used his administrative powers that might have resolved the difficulty.
B. If default has been made in giving security for costs.
C. If the affidavit has not been filed when the injunction was moved.
D. If it was granted on a suppression or misrepresentation of material facts.
E. If it was irregularly granted.
F. If the plaintiff failed to attend to be cross examined.
G. If there had been delay in complying with an undertaking to amend the writ by adding a party as plaintiff.
H. If there is non-disclosure of material facts.
In this case, at the time the appellant made its application ex-parte, the appellant suppressed or failed to disclose the fact that the money was transferred to the account belonging to the respondent’s chambers after the account of Mr. Ayodele Fayose, the source of the money, had been unfrozen by the order of the Federal High Court,
Ado-Ekiti and was not encumbered. Put differently, if the appellant had informed the trial court about the facts of the case as they were at the time the trial court granted the appellant’s application, the trial court would not have been misled to grant the order ex-parte, which the trial court set aside. In the circumstance, the money was paid to the chambers of the respondent from an unencumbered and unfrozen account. It was on that basis the trial court found rightly that the respondent did not commit any infraction to warrant his account being blocked and frozen by the appellant, and discharged the order.
On duration of ex-parte order –
An order ex-parte has a very short life span. It is an interim order in which the party against who it is made can freely apply that it be discharged, or an order made pending the determination of the application on notice which may lead to its automatic termination or continuation pending the determination of the substantive suit. An order ex-parte ought not to last for more than a few day usually the next motion day, especially where there was a misrepresentation of material facts or suppression of facts. In this case, since the life span of an order ex-parte is expected to be short as an interim measure, the trial court rightly discharged its order though the period of the order had not expired.
On right of person affected by ex-parte order to apply for it to be set aside –
Order 26 Rule 9(1) of the Federal High Court (Civil Procedure) Rules allows a party affected by an ex-parte order to apply to have the issuing court set it aside within seven days. In this case, though the order ex-parte was made to last for 120 days, the entire proceeding for its setting aside was conducted in accordance with the rules of the trial court. So there is nothing wrong in discharging same in less than 120 days as earlier granted; especially when the trial court found out that some facts were suppressed or were not disclosed before the order was made. Therefore, the trial court rightly discharged the order.
On right to fair hearing –
Both parties to a suit are entitled to fair hearing. An allegation of lack of fair hearing must be substantiated. In this case, the respondent was entitled to be heard before an order that affects him is made. Since the order was made ex-parte, the respondent was entitled to have it reviewed by the trial court after other facts with exhibits in support were made known to the trial court as deposed to in the affidavit in support of the application to set aside the ex-parte order before the expiration of the 120 days granted. Further, the order unfreezing the account was made after the parties were heard.
In the circumstances, lack of fair hearing could be rightly raised.
On validity of decision of court until set aside-
A ruling or judgment of court remains valid until it is set aside by an appellate court. In this case, the ruling of the Federal High Court, Ado-Ekiti delivered on 13th December 2016, which unfroze the account of Mr. Ayodele Fayose from which the sum of N75 million was transferred as professional fees to the account of respondent’s chambers for
services rendered remains the extant decision. It has not been set aside. Therefore, it remains the law, valid and binding, and subsisting until set aside by an appeal court or by the trial court itself if it acted without jurisdiction or in the absence of an aggrieved party.
On duty on respondent intending to raise preliminary objection to an appeal-
Order 10 rule 1 of the Court of Appeal Rules, 2016 requires a respondent who intend to rely on a preliminary objection to the hearing of an appeal to give the appellant three clear days’ notice thereof before the hearing, setting out the grounds of objection, and to file such notice together with twenty copies thereof with the registry within the same time. In other words, the requirements for reliance on a preliminary objection to the hearing of an appeal as provided for in order 10 rule 1 of the Court of Appeal Rules, 2016 are:
Three clear day’s notice must be given by the appellant before the hearing of the appeal.
The grounds of the objection must be clearly set out in the preliminary objection.
Twenty copies of the preliminary objection shall be filed with the Registrar within the same time.
In this case, the respondent did not comply with any of the requirements. The respondent therefore failed to comply with the Court of Appeal Rules in raising and arguing its preliminary objection challenging the competence of the appeal.
On duty on respondent who raises preliminary objection to an appeal in brief of argument-
A notice of preliminary objection can be given in the brief of argument, but the respondent must ask the court for leave to move the notice of objection before the oral hearing of the appeal commences, and must move the court at the hearing for the reliefs prayed for. Where a preliminary objection to an appeal is set out in the brief of argument, the respondent cannot merely adopt his brief of argument in respect of the preliminary objection. The respondent required to proffer oral argument in support of the grounds which are incorporated in the preliminary objection otherwise it would be deemed to have been waived and therefore abandoned. In this case, the respondent merely adopted his brief of argument without moving the preliminary objection argued in his brief of argument when the appeal was argued. The respondent therefore failed to properly raise the preliminary objection. The preliminary objection was deemed abandoned and was disregarded.
Moruff O. Balogun Esq.
Ijebu Ode, Ogun State.