Service of Court Processes on Companies: NBC Plc v Uzuoma Ubani and Mark & Anor. v Eke Revisited
By
Benson ’Dele Oloworaran*
Uchechukwu E. Oloworaran**
Abstract
This paper considers the relevant Supreme Court cases on the issue of service of court processes on companies and in addition probes into the precedential relevance of the apparently contradictory decisions in Mark v Eke and NBC Plc v Ubani on the subject. The paper considers the doctrinal basis of treating a decision as a judicial precedent and presents the view that although the case of Mark & Anor. v Eke made far reaching pronouncements on how and where service could be effected on companies, the relevant observations in that case do not constitute the ratio decidendi of the case and could at best be regarded as obiter dicta.
1. Introduction
The legal implications of service of court processes on the person meant to receive them are enormous in law and could determine the powers of the court to assert its jurisdiction over such a person.[1] It is for this reason that legal standards emerged to specify means of ascertaining or presuming delivery of such processes. Companies, unlike natural persons are artificial bodies that do not only function through human instruments, but also rely on them for the execution of their actions.[2] Since the promulgation of the Companies and Allied Matters Decree, 1990,[3] issues relating to service of court processes and other documents on corporations falling under the regulation of CAMA, are subject to the provisions in section 78 therein, which provides:
A court process shall be served on a company in the manner provided by the Rules of Court and any other document may be served on a Company by leaving it at, or sending it by post to, the registered office or head office of the Company.
The rationale for the provision as it affects service of court processes is to erase any rigidity on service of court processes that might have existed under the previous regulatory framework.[4] However, since there are no uniform or universal rules of courts, each case will be interpreted in the light of the particular rule under which service was effected.[5]
In addition, the rules of courts in some cases also import the provisions of the statutes under which such corporations are established to determine relevant means of service.[6] It will be expected nonetheless that where similar or same expressions have been used in the rules or relevant statutes of incorporation, the court should of necessity or rather as a rule of consistency and precedence arrive at similar decisions.
The fulcrum of the argument presented in this paper is to show that the decision in Mark & Anor v Eke,[7] apart from being obiter, is, with utmost respect, not supportable by the Statute the court purportedly construed in that case[8] and to establish that the decision in the lead judgment in NBC Plc v Ubani & Anor[9] embodies the appropriate consideration of the relevant statutes. In addition, since NBC Plc v Ubani & Anor did not distinguish or overrule the case of Mark & Anor v Eke, which was apparently cited before it, the paper demonstrates that the decision in Mark & Anor v Eke as regards how and where service could be effected on companies have no binding force of judicial precedence.
2. Meaning and Purpose of Service of Court Processes
Service basically relates to the delivery of processes meant for a party by giving same personally to the person they are meant for, or to a person through whom the law presumes the person meant to be served could receive the documents, or through a medium by which the information contained therein could be received by the person it was meant for. Service can be personal, deemed personal or substituted,[10] depending on the prescription of the law. In all cases however, it is the intent of the law that the mode adopted will get the documents or processes delivered to the person they are meant for.
Since companies act through natural persons, it goes that all personal services on companies are to be delivered to persons or in places where the persons in the helms of the affairs of the company could have knowledge of the document(s) or the contents therein.
The purpose of service of processes is to intimate the receiver of the content thereof. It does follow that as a rule of natural justice,[11] it could not be reasonably presumed that a person’s action or inaction is based on a document it could not be established he had received. It is based on this that the law regulates and ascertains how processes and documents would be served and when it would be deemed that, such services were effective. In addition, without proper service of originating processes in a suit, the court lacks the jurisdiction to entertain the suit.[12]
3. Laws Guiding Service on Companies
Section 78 of the Companies and Allied Matters Act as well as the Rules of the relevant courts guide the service of court processes on companies. In addition, through the instrumentality of court rules, the relevant statutes regulating or establishing the corporation could be considered where they provide for the means of service of processes on the corporation.
Section 78 of CAMA provides that court processes shall be served on a company in the manner provided by Rules of Court. It went ahead to state that any other document may be served on a Company by leaving it at, or sending it by post to, the registered office or head office of the Company. The provision apparently distinguished between court processes and other documents.
Whereas a court process is to be served in conformity with the relevant rules of court, service of other documents are legitimately regulated by the CAMA.[13] The CAMA did not advance any proscriptive rule on the mode of service of other documents that will be held to be at variance with the law, accordingly, where there are other statutory provisions or practice relating to service of documents and which have been followed in delivering particular documents to a company, such service would be valid. This interpretation of the second limb of the provisions of section 78 of CAMA is predicated on the use of the word may in the section. The provision seems to have only made recommendations on how and where other documents may be served on a company and not necessarily restrict service to the method contained therein.
4. Review of Relevant Decisions
Of the several authorities on the issue of service of court processes on companies, for the purpose of this paper, we have limited the discussion and review to two of such cases.
4.1 Mark v Eke[14]
The facts of the case is as follows: The respondent sued the appellants in the High Court of Abia State, Aba. The respondent’s application to place the matter under the undefended list was granted and by an ex parte application, the respondent obtained leave of the trial court to serve the writ of summons and all other relevant court processes on the appellants by substituted means. Further to the said order, a bailiff of the High Court, Aba, deposed to an affidavit of service on the appellants at No. 102, School Road, on November 23rd, 1993. On December 16th, 1993, the respondent moved the court for judgment and his application was granted. The respondent eventually applied for execution of the judgment and execution was levied on the appellants’ properties on January 7th, 1994.
After the execution, the appellants filed an application at the trial court seeking to set aside the judgment and the execution, claiming that they were never served with the court processes and that they only became aware of the suit when the writ of fifa was served on them. The affidavit in support of the motion was sworn to by the 1st appellant to the effect that the appellants were not served with originating processes, and that there was no posting of the writ of summons at their office at any time. The respondent filed a counter-affidavit to the application and annexed the affidavit of service sworn to by the bailiff.
After taking arguments from counsel to the parties, the trial court in a considered ruling dismissed the application, holding that a judgment obtained in a suit placed under the undefended list is a judgment on the merits and can only be set aside on appeal.
Being dissatisfied with the judgment of the trial court, the appellants appealed to the Court of Appeal, contending that the trial court ought to have called evidence to resolve the conflict arising from the issue of service and that a judgment under the undefended list can be set aside by the trial court if it is shown to be a nullity. The Court of Appeal dismissed the appeal, holding that a judgment obtained under the undefended list procedure cannot be set aside except on appeal. The court also came to the conclusion that permitting litigants to challenge affidavits of service by a bailiff or other officers of the court would open up a floodgate of cases, holding rather that the trial court had sufficient materials before it to resolve the conflict in relation to service without calling oral evidence. The appellants therefore appealed to the supreme court.
The appellant articulated five issues for the determination of the Supreme Court. Since they are very relevant to this paper, they are reproduced as follows:
- Whether under the laws of Nigeria the only option available to a party disputing a judgment entered against that party under the undefended list is an appeal against that judgment.
- Whether the conclusion that the appellants were properly served with the writ of summons without oral evidence being called to resolve the issue was proper.
- Whether the judgment of the High Court which was sought to be set aside was a competent judgment.
- Whether issue 2.03 of the Court of Appeal had no sustaining ground.
- Whether a bailiff’s affidavit of service is a conclusive proof of service, under the law.
It is worthy of note that the appellants did not challenge substituted service neither did they raise issues in respect of service at a branch office. The contentions as garnered from the notice and grounds of appeal as reproduced in the reported judgment were that the appellants denied being served with the originating processes and alleged that the affidavit of service relied on by the respondent contained claims of the service of a non-existent process, namely, a statement of claim.[15]
However, in purportedly resolving issues ii and v raised in the case as reproduced herein in the preceding page, the Supreme Court made the following pronouncements on how and where service on companies should be effected:
The Companies and Allied Matters Act by section 78 makes a provision as to how to serve documents generally on any company registered under it. By this, a court process is served on a company in the manner provided by the rules of court. A service on a company, as thus provided, must be at the registered office of the company and it is therefore bad and ineffective if it is done at a branch office of the company; see Watkins v Scottish Imperial Insurance Co. (1889) 23 QBD 285. The procedure is by giving the writ to any director, trustee, secretary or other principal officer at the registered office of the company or by leaving the same at its office. That is why, I am of the view that the affidavit of service by substituted means sworn to by the bailiff is not enough to prove that 2nd appellant was duly served with the originating summons. I cannot see the need or the necessity of making a substituted service on a corporation such as the 2nd appellant. See Ben Thomas Hotels Ltd v Sebi Furnitures Ltd (1989) 5 NWLR (Pt. 123) 523. The need for substituted service arises because personal service cannot be effected and since personal service can only be effected on natural or juristic persons, the procedure for substituted service cannot be made on a corporation like the 2nd appellant herein…. [Emphasis supplied].
Two cardinal principles were enunciated by the court in this pronouncement, which may be abridged thus: companies can only be served at the registered office and; the procedure for substituted service cannot be made on a corporation.
Even though the court never reproduced the section of the rules of court so interpreted, it is hardly possible for the lower courts to exercise their discretion in distinguishing Mark & Anor v Eke from other decisions since the provision so interpreted was found in the then uniform rules of courts,[16] which states:
When a suit is against a corporation or a company authorised to sue and be sued in its name or in the name of an officer or trustee the writ or other document may be served, subject to the enactment establishing such corporation or company or under which it is registered as the case may be, by giving the same to any Director, secretary or any principal officer or by leaving it at the office of the corporation or company. [Emphasis supplied].
In Krause Thompson Organisation Ltd v Unical,[17] also calling to aid the often cited but obviously inapplicable case of Watkins v Scottish Imperial Insurance Co.,[18]the Supreme Court held that:[19]
The appellant has alluded to the observation made by the court below, to the effect that the service of the originating processes in the liaison office was valid, although not strictly an issue before this court, I am of the view that the observation is erroneous. A corporate body in this context, either a company registered under the Companies and Allied Matters Act, 1990 or a statutory corporation such as the respondent in this case, can only be served under the relevant rules of court by giving the writ of summons or document to any director, trustee, secretary, or other principal officer of the corporate body to be served, or by leaving the same at its registered or Head office. It is bad or ineffective to serve the documents at any branch office. See Watkins v Scottish Imperial Insurance Co. (1889) 23 QBD 285. [Emphasis supplied.]
4.2 NBC Plc v Ubani[20]
The plaintiff/respondent was a cocoa merchant and owns the warehouse, the subject of the claims. In furtherance of his business, the plaintiff/respondent served the appellant/defendant with letter to vacate the premises, which unknown to the plaintiff had been leased to the appellant by the plaintiff’s erstwhile wife, the 2nd Defendant at the court of trial. The plaintiff also asked for a “concessional sum” in the alternative to allow him rent a warehouse for the cocoa processing business for which he had secured a contractual obligation with a firm in England.
The appellant/defendant did neither of the requests in the letter of the plaintiff/respondent and instead, continued the use of the property without payment of rent. It was based on these facts that the plaintiff/respondent instituted an action in the High Court and secured judgment in his favour. An appeal by the defendant/appellant to the Court of Appeal was dismissed.
The defendant/appellant in an appeal to the Supreme Court raised the issue of improper service of the originating processes, that is to say, the Writ of Summons and the Statement of Claim on it as provided by section 78 of the CAMA and Order 12 Rule 8 of the Cross-Rivers High Court (Civil Procedure) Rules 1987 (interestingly, a legislation in pari materia with the one interpreted in Mark & Anor v Eke). It was the contention of the defendant/appellant that the processes were not served on any director, secretary or other principal officer or by leaving same at the office of the company, and that the service on the Depot Manager at No. 55 Obudu Road, Ikom, a premises it uses as depot was contrary to the mode of service prescribed by the law.
It was also the contention of the defendant/appellant that the defendant/appellant’s depot manager was not a principal officer of the company as envisaged by the law. Therefore, the crucial questions put forth by the defendant/appellant were whether the Depot Manager was a principal officer of the company and if so, whether he was properly served at the depot at Ikom, and not at the head office of the company. In resolving these issues, the Supreme Court held that:[21]
The defendant/appellant has suggested that service of process as aforesaid on a company or corporation for that matter must be at the registered or head office of the company or corporation. However, I tend to agree more with the plaintiff/respondent that a close scrutiny of the said provisions does not so support. Section 78 provides:
A court process shall be served on a company in the manner provided by the Rules of Court and any other document may be served on a Company by leaving it at, or sending it by post to, the registered office or head Office of the Company.
In order to give vent to the above provisions I also set out the relevant provisions of Order 12 Rules 8 as the applicable rules to wit:
When a suit is against a corporation or a company authorised to sue and be sued in its name or in the name of an officer or trustee the writ or other document may be served, subject to the enactment establishing such corporation or company or under which it is registered as the case may be, by giving the same to any Director, secretary or any principal officer or by leaving it at the office of the corporation or company.
The above plain and unambiguous provisions of Rule 8 (supra) clearly do not stipulate as contended by the defendant/appellant that service of court process, as here must be at the registered or head office of a company. A closer examination of the same has shown that service of court processes has to follow in the manner provided by the rules of the particular court concerned, which in this instance is the Cross Rivers State High Court (Civil Procedure) Rules 1987 more particularly Order 12 Rule 8 thereof….
The court then stated:
As rightly observed by the lower court, this is indeed a remarkable departure from the provisions of the Companies Act 1968 as regards service of court processes on the Director, secretary or principal officers which has to be at the Registered office of the corporation or company, in that instance, being a statutory provision against the provision of Rule 8 (supra) is otherwise mandatory which has to be performed as directed or mandated and may where not strictly adhered to lead to invalidating the said processes as improper service; the consequence is setting aside of the same as incompetent processes.
5. Synchronizing Mark v Eke and NBC Plc v Ubani: Facts, Issues and precedential relevance:
In NBC Plc v Ubani, the court appeared to have recognised the draftsman’s departure in the laws applicable from the provisions of the English Act under which the case of Watkins v Scottish Imperial Insurance Co. was determined and which also influenced the provisions of the 1968 Companies Act of Nigeria. Both laws were not only a promotion of strict statutory regulation of service on companies, but contain the phrase “registered office,” which phrase was not contained in the rules of court under interpretation in both Mark & Anor v Eke and NBC Plc v Ubani. The distinctive feature of the CAMA is that it reposed the issue of service of court processes in the rules of courts, and rules of courts should be interpreted liberally to achieve just decisions, sans technicalities.[22]
That is not to say that where the rules of court provides for service at the head office, a different decision could not be reached, for example, the High Court of the Federal Capital (Civil Procedure) Rules provides:[23]
when a suit is against a corporate body authorised to sue and be sued in its name or in the name of an officer or trustee, the document may be served, subject to the enactment establishing that corporation or company or under which it is registered, as the case may be, by giving the writ or document to any director, secretary, or other principal officer, or by leaving it at the corporate office.
Efevwerhan[24] argues that the word “corporate office” is synonymous to “head office” or “registered office” and hence concluded that service of processes in Abuja on branch office of a company will not be good service. This position, we concede, is correct, but only as it relates to service where the processes is left at the office. Where it is delivered to the director, secretary or principal officer, the argument will not be correct as far as the said officers were found within jurisdiction, either in a branch office or any place within jurisdiction.[25] This is because, under the Abuja rules as well as under most of the rules, service of processes on companies are classified into two; delivery at the office, (in some rules, head office, registered office or corporate office and in others, just office), and delivery to some key officers of the company. In most cases, both are mutually exclusive.
Nwankwo[26] opines, and rightly too in our opinion, that it is the first method of giving the process to any director, secretary or other principal officer that need be direct and that where the second method of leaving the writ of summons or other processes at the office is applied, the rank of officer with whom it was deposited would be immaterial provided it can be established that the company is in receipt of the process.[27]
This, it must be conceded, was not what Mark & Anor v Eke and Krause Thompson Org. Ltd v Unical decided. It would appear that even though those two cases recognised that there are two means identified by which a company may be served under the rules interpreted in those cases, when it has to do with the second form, that is, “by leaving it” at the office of the corporation, the cases tend to suggest that it should be literally left in the office, that is, with no body, and that if it must be with somebody, then, it must be with the principal officers.
The canonisation of the cadre of officers on whom processes may be served in both instances appear to have been the confusing factor in interpreting the provisions of the rules as regards service on companies. In Maiden System Ltd v Effiong,[28] the process was left with the messenger at the site office, it was held that a messenger was not within the contemplation of the rules as a messenger is neither a principal officer nor synonymous to leaving the process in the office.[29] Accordingly, the service was held to be improper. It must be identified that the rule under interpretation provides for service “by leaving it at the office.” It is our suggestion that the said provision is capable of two interpretations. The process may be left “within the premises of the office” or “with any of the employees within the office.” The law did not specifically choose one over the other and as such, both methods ought to be correct, so long as the company gets the process. The deliberate choice of the word “leaving” must not be confined to premises or person.
In fact, the courts’ insistence that “leaving at the office” is synonymous with dropping the process within the office premises is the fundamental reason behind the assertion that substituted service cannot be ordered on companies. In RFG Ltd & Anor v Skye Bank Plc[30]relying on the decision in Mark & Anor v Eke, the Court of Appeal held that:
The Supreme Court in Mark v Eke (supra) per Musdapher, JSC made it clear that by the combined provisions of S. 78 of CAMA and Order 7 rule 9 of the Lagos State High Court Rules, there cannot be substituted service on a company. This is because the need for substituted service arises because personal service cannot be effected and since personal service can only be effected on natural or juristic persons, the procedure for substituted service cannot be made to a corporation or company. I agree in the circumstances that the order of substituted service on the 1st defendant now 1st appellant must be set aside as erroneous. After all, the registered office of a company is a matter of public record easily ascertained by the claimants who wish to effect service. The originating process can be left at the said registered office and an affidavit sworn to that effect.
This case explains the rationale for holding that there can be no substituted service on companies, because in the perception of the Learned Justices, the registered office of the company affected would always be known and accessible. Contentiously, this may not always be so. Sometimes, companies relocate theirs head office without notifying the Corporate Affairs Commission. Even where the Corporate Affairs Commission is notified and such an address is known through searches at the Corporate Affairs Commission, tracing the address may be tasking and sometimes, impossible. Where the address is traced, access to the premises, which is important, may be impossible. Such circumstances may definitely warrant substituted service on company.[31] The fact that a company is an artificial person does not mean it is a handicapped person.
The Court of Appeal had, before the decision in Mark & Anor v Eke achieved an interpretation of both the CAMA and the rules of courts relating to service on companies akin to the Supreme Court’s decision in NBC Plc v Ubani. In Savannah Bank of Nigeria Plc v Jatau Kyantu,[32] the Court of Appeal was of the opinion that service of court process on the branch manager of the bank was a proper and valid service.
One can scarcely deny that the reasoning in Mark & Anor v Eke appeared to be the argument canvassed by several learned authors prior to the hearing and determination of the decision in Mark & Anor v Eke. Nwadialo,[33] relying on the decision on the English Companies Act of 1862, section 62[34] in Watkins v Scottish Imperial Insurance Co,[35] arrived at the conclusion that any service at the branch office of a company will be bad.
This mirrored the opinion of Aluko,[36] who, disagreeing with the decision in Bello v National Bank of Nigeria Ltd,[37] a decision of the Court of Appeal, which interpreted Order 12 rule 8 to mean that office of the Corporation or company need not be restricted to the registered office, stated that:[38]
With utmost respect, the interpretation that was put on the rules of court relating to the service of the process of the court on a company or corporation can lead to absurdity because it is envisaged under Order 12 Rule 8 of the High Court Rules that documents or process for a company or corporation can only be accepted for a company or corporation by the natural person.
He argues further:
The reference to the office of the corporation or company must be interpreted in conjunction with the words director, secretary or other principal officers as employed in the rules of the court.
It is envisaged under the rules that director, secretary and other principal officer are usually found at the head office or registered office of a company or corporation but where any of the officers is not available any responsible officer can accept the document.
It is not in the contemplation of the provision of Order 12 Rule 8 that process of the court can be served at any office of the corporation or company without leave of the court for substituted service.
He then concludes that:[39]
The word at “the office” when read in conjunction with the word “any director, secretary or other principal officer” has shown clearly that it is in the contemplation of the rules that personal service of the court process must be effected at the head office or registered office of a company.
In Aluko’s perspective, the ejusdem generis rule of construction must be called to aid to establish the linkage between “office” and “directors, secretaries and principal officers” to show that those officers are likely to be at the head office of a company. His proposition was obviously made without considering the fact that there was no absurdity in the provision and hence, the preferred rule for the interpretation is the literal rule.[40] A look at the interpretations as given to the section in the learned treatises would no doubt reveal that they were achieved with a hindsight of both the 1968 Company Act and the English Company Act, both of which provides for “head office.” If the authors have averted their minds to the fact that there must have been a mischief that the rules sought to cure by omitting the word “head,” it would have been easy for them to appreciate the rationale behind the alteration.
The definition accorded office in Cross River Basin and Rural Development Authority v Sule[41] to the effect that an office is a place of regular transaction of business or performance of a particular service could not have been more apt in expounding the horizon of that section beyond any limitation inherent in the old statute.
In First Bank of Nigeria Plc v Njoku,[42] it was acknowledged that CAMA came with distinctive characteristics in respect of service of processes on companies. The case distinguished service of court processes on companies from other documents and also pointed out that the service of court processes are now vested in the rules of the courts. In the reasoning of the court, this was done “…to improve and facilitate service of court process on corporations and companies which under the 1968 Act were cumbersome and dilatory. The factors which the 1990 Act took into consideration are, the forum conviniens for trial, the comparative costs and convenience of service…”
The cases of Mark v Eke as well as Kraus Thompson Organisation Ltd v Unical, which were also cases interpreting the same provisions and which had obviously arrived at a different decision from NBC Plc v Ubani were both cited before the court in the case of NBC Plc v Ubani.[43] Instead of distinguishing or overruling the earlier decisions, the court merely in passing, lamented the incessant and ever increasing incidence of conflicting decisions emanating from the Supreme Court[44] and was hence silent on the status of the said cases as reference for judicial precedent. With incongruous principles thus set by the cases, the crucial issue that arose for academic discussion is their status in constituting judicial precedence.
Various authors have theorized on what constitutes a precedent in law. The Editors of the 9th edition of Black’s Law Dictionary[45] posits that a precedent is “a decided case that furnished a basis for determining later cases involving similar facts or issues.” It is the operative principle with force of law found in the reasoning of the court as enunciated on the basis of the facts and issues canvassed before it. In most common law jurisdictions, the doctrine of judicial precedent is firmly established.
Precedents could be divided into authoritative and persuasive precedents. Authoritative precedents are those precedents that are binding on courts. They could be conditional or unconditional. Generally, it is unconditional when it must be followed in all cases; while it is conditional when it could be established that it was an erroneous judgment. In all cases however, authoritative precedents would be found in the ratio decidendi of the case. On the other hand, persuasive precedents could only be brought in aid to persuade a court and are not binding on the court. In this group are obiter dicta and foreign judgments. Persuasive precedent is opinion expressed by judges on issues not canvassed before them in a suit or opinion of jurists on legal issues. It could also apply to decisions of foreign courts.[46]
Usually, the functional part of any judgment for the purpose of determining what is precedent consist of the ratio decidendi, and the obiter dictum. Whereas, the ratio decidendi would be principles developed for the resolution of the live legal issues between the parties, the obiter dictum are observations of jurists on issues not canvassed by parties, or on speculative or hypothetical issues. In AIC Ltd v NNPC,[47]the court reasoned thus:
The ratio decidendi of a case represents the reasoning or principle or ground upon which a case is decided. Obiter simply means in passing, incidental, cursory. Obiter dicta reflect, inter alia, the opinion of the Judge, which do not embody the resolution of the court. The expression of a judge in a judgment must be taken with reference to the facts of the case which he is deciding, the issues calling for decision and answers to those issues.
Since an obiter can be useful as a backup principle, it has been suggested that there are instances when it is needful and thus permitted.[48] However, the challenge that such permitted obiter may produce may be undesirable and may even threaten the sacrosanct principle of fair hearing. Ironically, this was brought forth in the case of Kraus Thompson Organisation Ltd v University of Calabar,[49] where the court warned that:
…[ On no] account should a court raise a point or issue suo motu no matter how clear it may appear to be, and proceed to resolve it one way or the other without inviting the parties to address it on the point. If it does so, it will be in flagrant abuse and breach of the aggrieved party’s right to fair hearing as entrenched in the Constitution.
Sadly, that warning was not heeded in that case. The challenge becomes complicated as both law reports and even legal practitioners hardly distinguish between obiter and ratio in analysing or highlighting principles of law enunciated in a case.
In Abacha v Fawehimmi,[50] the determination of what constitutes a ratio of a case and what would be treated as an obiter was explained as follows:
In such a situation, it is the leading judgment that is, in legal circles, regarded as the judgment of the court. The other judgments may respectively be a two-word judgment, e.g. “I concur” or judgments longer or shorter than the leading judgment.
The point of jurisprudential interest in this appeal is the relationship of the bindingness of the ratio decidendi or rationes decidendi contained in the leading judgment on the one hand, and the other concurring judgments, on the other hand. Are they at par or are some superior to others? The jurisprudence and practice of law in this country appears to be tolerably clear: it is the ratio or the rationes contained in the leading judgment that constitutes or constitute the authority for which the case stands. All other expressions contained in the concurring judgments, particularly those not addressed in the leading judgment are obiter dictum or dicta, obiter dicta in the leading judgment as well as in the concurring judgments may be of persuasive effect in other occasions.
For a proper appreciation and identification of what constitutes a ratio or an obiter, various principles have been advanced, most prominent of which are discussed below:
5.1 The Wambaugh’s Inversion Test:[51]
This test simply posits that to determine whether a judicial statement is ratio or obiter, one should invert the argument by asking whether the court would have arrived at a different decision had the statement been omitted. If the answer is in the positive, the statement is crucial and will constitute a ratio decidendi; whereas if it is not crucial, it is an obiter, a statement or observation by the way. Apparently, the principle is based on the presumed infallible assumption that the ratio decidendi is a general rule without which a case would be decided otherwise. That proved to be the doctrinal inhibition of the test, as learned jurists have observed that it merely focuses on what is not, overlooking what might be. Hence, Cross[52] criticized it thus:
… the exhortation to frame carefully the supposed proposition of law and the restriction of the test to cases turning on only one point rob it of most of its value as a means of determining what was the ratio decidendi of a case, although it has its uses as a means of ascertaining what was not ratio.
Notwithstanding the inhibition, since our task in analysing these cases is to detect what is not ratio, the principle is apt. If the rule is applied to the cases at hand, one would have no difficulty arriving at the conclusion that the decision as to how and where service of court processes should be effected on companies in both Mark v Eke and Kraus Thompson Organisation Ltd v University of Calabar[53] were not the ratio decidendi of the cases. Without the pronouncements made by the court on the issues of how and where to serve companies, the court would, with due respect, still have arrived at the decisions it did. Hence in Mark v Eke, the court did not set aside the writ for want of proper service, rather, the case was remitted to the trial court for retrial. This cannot be said of NBC Plc v Ubani, where the pronouncement on these same issues was crucial and central to the decision in that case.
Although Akeredolu and Umeche[54] conclude that, in Mark & Anor v Eke “the issue before the Supreme Court was whether a court process can be served on a company by substituted means;” with due respect to the erudite researchers, a painstaking reading of the reported judgment of the Supreme Court, the notice and grounds of appeal and the issues canvassed before the court revealed that no such issue arose, or was ever raised before the Supreme Court for determination by the parties.
As observed in Abacha v Fawehinmi,[55] when an issue has been raised suo motu and decided without allowing parties to address the court on it, it would be an obiter. The court reasoned:
It was also said the issue was raised suo motu without allowing parties to address on it. It was this ground of appeal the appellants objected to as being incompetent. This observation; no doubt, is an obiter dictum of the learned justice of the Court of Appeal. It was not part of the argument before the court. The learned justice adverted to the point on his own in the course of his judgment. It played no part whatsoever in the decision reached either by the lower court or even by the maker himself. It is not a fit subject for appeal as appeal is fought on the basis of the decision of the court and is not taken against mere obiter.
It is therefore our persuasion that the pronouncement on where and how to serve a company in the case of Mark v Eke was an obiter.
5.2 The Goodhart’s Test of material facts:[56]
This rule postulates that the ratio of a case is not found in the reasons given in the opinion or the rule of law set forth in the opinion; neither is it necessarily found by a consideration of all the ascertainable facts of the case, and the judge’s decision. The ratio, in his postulation, could be deduced, taking into consideration (a) the facts treated by the judge as material, and (b) his decision based on them.
By this doctrine, the ratio of a case is established based on what the judge does rather than what he says. In finding the ratio, the doctrine also stipulates that it is necessary to establish what facts were held to be immaterial by the judge, as the doctrine may depend as much on exclusion as it does on inclusion.
Utilizing several examples, Goodhart posited that in Hambrook v Stokes,[57] a woman died of shock when she witnessed a car accident, caused by the defendant’s carelessness, which threatened to kill or injure her child. The deceased’s husband was able to recover damages. Goodhart then postulated that the fact that the deceased was the child’s mother rather than a mere bystander might be material to the judge’s decision. If it was not treated as material by the judge, then the estate of a mere bystander could recover if he had lost his life in similar circumstances relying on the ratio of the case. But if the fact was treated as material, it might not be binding as a ratio in all cases as it would just constitute a res judicata between the parties to that action. Accordingly, to him, a judge creates law by his choice of the material facts in a case.
It must be stated also, that against this principle, the propositions in respect of how and where to effect service in Mark v Eke and Kraus Thompson Organisation Ltd v University of Calabar would still fall short of being ratio decidendi. This is because the relevant material facts treated as important in Mark v Eke was whether the affidavit of service was sufficient to establish that there was effective service, and not whether the service was proper. On its part, the case of Kraus Thompson Organisation Ltd v University of Calabar made it clear that the pronouncement on how to effect service on a company was a statement by the way when the court held thus:
The appellant has alluded to the observation made by the court below, to the effect that the service of the originating processes in the liaison office was valid, although not strictly an issue before this court,[58]
thereby eliminating any basis of treating that pronouncement as a ratio in that case. Again, by this principle, the decision on the same issue in NBC Plc v Ubani would be a ratio.
5.3 Halsbury’s Test
According to Lord Halsbury, the purport of ratio decidendi could be explained thus:
It may be laid down as a general rule that that part alone of a decision by a court of law is binding upon courts of coordinate jurisdiction and inferior courts which consists of the enunciation of the reason or principle upon which the question before the court has really been determined. This underlying principle which forms the only authoritative element of a precedent is often termed the ratio decidendi.
He raised two points that he considered crucial to determining the ratio of a case. He stated:
… every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all.
Thus, according to Lord Halsbury, it is by the evaluation of proved facts that the court creates law. It must be admitted that what is crucial to this principle is proved facts as deduced by the court. The court therefore is not to substitute evaluation of proved facts with statutory construction. The question therefore is whether the issue of how and where service was to be effected was ever treated as a proved material fact in the cases of Mark v Eke and Kraus Thompson Organisation Ltd v University of Calabar. We are of the opinion that the answer must be in the negative.
All these point to one conclusion, the pronouncement of the court in the cases of Mark v Eke and Kraus Thompson Organisation Ltd v University of Calabar, with due respect to their Lordships, constitute an obiter, an unnecessary digression and no more.
In Mark v Eke, even though the Supreme Court seems to have insinuated that the affidavit was not sufficient in its observations on section 78 of CAMA, that does not represent the fact before the court. The appellant’s contention was that the affidavit referred to a “Statement of Claim” – a non-existent process. More so, what is to be considered in determining the ratio based on this principle is the proved facts, not the line of interpretation given to the relevant statutes. However, in NBC Plc v Ubani, it could be rightly stated that the place of service was in issue and therefore constitutes a ratio.
6. The Precedential Status of Obiter Dictum on Courts in Nigeria
Even though these differences have been established, it would be apposite, in line with other Supreme Court decisions to determine whether an obiter of the Supreme Court is binding on lower courts. The controversies surrounding the precedential status of obiter dictum cannot be waived away without a jurisprudential evaluation, especially; as it would appear that, there are contentious positions on the issue. In Ifediora v Ume,[59] Nnaemeka Agu JSC held as follows:
Although this opinion was given in a criminal appeal, it has been followed and applied by the Court of Appeal in many civil appeals against interlocutory decisions. See for an example Akinsola Dawodu & Anor v F.O. Ologundundu & Ors (1986) 4 NWLR 104, at p. 112. For, it has been held by the House of Lords in England that although what is ordinarily binding in a case is the ratio decidendi and not the obiter dictum; yet an obiter dictum by the ultimate court on an important point of law is one which is binding on and followed by all the lower courts; see W.B. Anderson & Sons Ltd. & Ors v Rhodes (Liverpool), Ltd & Ors, (1967) 2 All E.R. 850. After all, a good deal of the important pronouncements of the Supreme Court in the famous case of Bronik Motors Ltd & Anor v Wema Bank Ltd (1983) 1 SCNLR 296 was obiter. Yet it was binding on the Court of Appeal and all other courts lower down in the judicial hierarchy until the law was changed in Akinsanya v UBA Ltd (1986) 4 NWLR 273.
A proper evaluation of this decision tends to suggest that the apex court sanctions an obiter as a binding authority, or so it seems. As has been suggested, and convincingly so, the case is a constructive authority for asserting that an obiter is binding. In Awojugbagbe Light Ind. Ltd v Chinukwe,[60] relying on Ifediora v Ume cited above, Salami JCA (later PCA) reasoned:
It is also equally settled law that obiter dictum of a superior court binds all the courts below such superior court on account that an obiter dictum is an indication of how the matter would be resolved when it calls for determination. See Ifediora v Ume (1988) 2 NWLR (Pt. 74) 5.
Since the decision in Ifediora v Ume was referred to and relied upon, in Awojugbagbe Light Ind. Ltd v Chinukwe, it is beyond doubt that the understanding had of it is that it treated an obiter as binding on lower courts. Indeed, the Supreme Court appeared to have re-echoed that position in the later case of Ferdo Ltd v Ibeto Ind Ltd,[61]where the court was of the view that:
As a general rule, an obiter dictum is not binding. See Alhaji Yusuf v Egbe (1987) 2 NWLR (Pt. 56) 241. However, there are occasions when an obiter dictum may have a binding effect. See, Mrs Macleans v Inlnlaks Ltd (1980) 8-11 SC1, Ifediora v Umeh (1988) 2 NWLR (Pt. 74) 5. That is not relevant for our purpose and so I will not pursue it.
Even though his Lordship did not eventually pursue the issue of exception to the general rule on the effect of an obiter dictum, it is certain that the decision in Ifediora v Umeh was referred to with acceptance by his Lordship.
On the contrary, however, holding that the observations in the judgment of the Supreme Court in Kotoye’s case[62] on the necessity of an undertaking as to damages and the consequences of failure to extract such an undertaking in an application for interlocutory injunction is obiter dicta, the Supreme Court in Afro-Cont. (Nig) Ltd v Ayantuyi[63] stated as follows:
It is indisputable that in the judgment of a court, the legal principle formulated by that court which is necessary in the determination of the issues raised in the case, that is to say, the binding part of the decision is its ratio decidendi as against the remaining parts of the judgment which merely constitutes obiter dicta, that is to say, what is not necessary for the decision. See Saude v Abdullahi (1989) 4 NWLR (Pt. 116) 387; Bamgboye v University of Ilorin (1991) (Pt. 207) 1 at page 24 etc. An obiter dictum of the Supreme Court is clearly not binding on this court or indeed on the lower courts, for obiter dicta, though they may have considerable weight are not rationes decidendi and are therefore not conclusive authority. See American International Insurance Co. v Ceekay Traders Ltd (1981) 5 SC 81 at page 110. Where however an obiter dictum in one case has been adopted and becomes a ratio decidendi in a latter case, such obiter dictum will be taken to have acquired the force of a ratio decidendi and would therefore become binding. See Victor Rossek and others v African Continental Bank and another (1993) 8 NWLR (Pt. 312) 382.
This later decision seems to reflect the better view on the proper effect of an obiter dictum. It also seems to be the preferred reasoning of the Supreme Court. That is, an obiter dictum is not a binding authority.[64]
The position taken in Ifediora v Ume is understandably not peculiar to Nigeria, several common law jurisdictions encounter same problem in analysing the effect of an obiter dictum. In fact, one of the cases referred to and relied upon in that matter was an English case.[65]
Certain principles seem deducible from the decisions though. Firstly, obiter dictum does not constitute part of the ratio of a case. Secondly, an obiter dictum, where it is a pronouncement on a novel issue by the higher court could be of persuasive force and may certainly be adhered to by the lower court provided that it was not made per incuriam or in error. In addition, that it was not made without considering the relevant laws and; finally, that the laws under which it was made have not changed.
In the later case, even though nothing binds the lower court to the decision, since the mind of the higher court is already revealed through the obiter, the lower court could take advantage of it in arriving at its own decision. This later principle seems to have beclouded the decision in Ifediora v Ume, leading to a rather overt misapplication of the principle.
Nonetheless, it is most certain that it is safe within the restatement of the principles through the cases to confine the relevancy of obiter dictum to its persuasiveness and no more.
7. Conclusion
Within the spectrum of this discussion, it is eminently displayed why, in our opinion, the Supreme Court never found it necessary either to distinguish or overrule the decisions in Mark & Anor v Eke and Kraus Thompson Organisation Ltd v University of Calabar, which were both cited before it. The decisions being obiter dicta, were of no binding force. It is suggested though, that where a decision is found to have no binding force, it is still desirable that the court make pronouncement as regards its status. This becomes necessary as such decisions are often not distinguished in law reports, and consequently, legal practitioners cite and judges rely on them in reaching later decisions thereby compounding principles of law relevant on each issue of law.
* LL.M, BL., Legal Practitioner, Port Harcourt. **LL.M, BL., Legal Practitioner, and Director, Institute of Human Capacity Development and Continuing Education, Port Harcourt.
[1] See, B.A. Oloworaran: “Effect of Non-Compliance with Section 97 of the Sheriffs and Civil Process Act: Supreme Court Decisions Considered,” ABUAD Law Review (2013) vol. 1, No. 1, 220-239 at 220. See also, Mobil (Nig.) Plc v Pam [2000] 5 NWLR (Pt. 657) 506 at 510; Multichem Ind. Ltd v Musa [2013] 8 NWLR (Pt. 1356) 404.
[2] See, Morse G., Charlesworth & Morse Company Law, (London: Sweet & Maxwell, 1996), Pp. 24-26.
[3] Now Companies and Allied Matters Act, Cap. C20, LFN 2004, (hereinafter, CAMA).
[4] The Companies Act of 1968, section 36, which provides: “A document may be served on a company by leaving it at or sending by post to the registered office of the company.”
[5] See, Oloworaran B.A. and Oloworaran U.E., Practice Compass, (Vol. 1 Reprint), (Port Harcourt: Benuch Legal Consult, 2014), pp. 317-323. see also Efevwerhan D.I., Principles of Civil Procedure in Nigeria, (Enugu: Chenglo Ltd, 2007), p. 185-186.
[6] See, the interpretation of section 13 of the Nigerian National Petroleum Corporation, Cap N123, LFN 2004 in Obaseki v Orukwe [2007] 17 NWLR (pt. 1062) 138.
[7] [2004] 4 NWLR (Pt. 865) 54.
[8] See the dicta of His Lordship, the Honourable Justice Ogunbiyi, JSC, in his concurring opinion at page 473-474, paragraphs E-B, of the reported judgment, which, with due respect appeared to have misconstrued the latter part of section 78 of CAMA to be applicable to service of court processes, rather than strictly to service of other documents on companies. His Lordship stated: “on the merit of the 1st issue raised, the governing provisions are, section 78 of CAMA and Order 12 rule 8 of the Cross River State High Court (Civil Procedure) Rules which are called for interpretation. I also seek to add that the latter provision is a remarkable departure from section 78 of the Act, which provides that service of court processes have to be on the Director, Secretary or Principal Officers, who must be served at the registered office of the corporation or company.”
[9] [2014] 4 NWLR (Pt. 1398) 421.
[10] See generally, Oloworaran B.A. & Oloworaran E.U.; Oloworarans’ Civil Procedure, (Port Harcourt: Institute of Human Capacity Development and Continuing Education, 2015), Chapter 5.
[11] See, Oloworaran, op. cit., above note 1.
[12] See Multichoice Ind. Ltd. v Musa [2013] 8 NWLR (Pt. 1356) 404 at 418 at paragraph E-F, per Iyizoba JCA.
[13] See, Texaco (Nig) Plc v Lukoko [1997] 6 NWLR (Pt. 510) 651, per Akintan JCA.
[14] [2004] 4 NWLR (Pt. 865) 54.
[15] Mark v Eke [2004] 4 NWLR (Pt. 865) 54 at 71-72.
[16] Order 12, Rule 8.
[17] [2004] 9 NWLR (Pt. 879) 631 at 656, C-F. See MTN Ltd v Bolingo Hotels Ltd [2004] 13 NWLR (Pt. 889) 117.
[18] (1889) 23 QBD 285.
[19] It is interesting to note that in both Mark v Eke and Krause Thompson Organisation Ltd v Unical, the Honourable Justice Musdapher, JSC read the lead judgment.
[20] [2014] 4 NWLR (Pt. 1398) 421.
[21] NBC v Ubani, Ibid., at pp. 450-451.
[22] NBC Plc v Ubani, above note 20 at p. 452.
[23] High Court of the Federal Capital (Civil Procedure) Rules; Order 11 Rule 8.
[24] Efevwerhan , above note 5 at pp. 185-186.
[25] Note 15 at p. 452.
[26] C.K. Nwankwo: “Service of a court process on a company: Mark v Eke Reviewed,” Nigerian Bar Journal, Vol. 2, No. 4, Oct., 2004, 463-474 at 465.
[27] See, Multichem Ind. Ltd v Musa [2013] 8 NWLR (Pt. 1356) 404; Daewoo Nigeria Ltd v Uzoh (2008) All FWLR (Pt. 399) 456 at 472.
[28] [2011] 2 NWLR (Pt. 1231) 354.
[29] Integrated Builders v Domzag Ventures Nig Ltd (2005) 2 NWLR (Pt. 909) 97, relied on.
[30] [2013] 4 NWLR (Pt. 1344) 251 at 274, paragraphs A-E, per Ogunwumiju JCA.
[31] See, Nwankwo, above note 26.
[32] (1998) 2 NWLR (Pt. 536) 41. See further Bello v National Bank of Nigeria Ltd [1992] 2 NWLR (Pt. 246) 206, Texaco (Nig) Ltd v Lukoko [1997] 6 NWLR (Pt. 510) 651, 662-665, Palm Beach Insurance Ltd v Bruhns [1997] 9 NWLR (Pt. 519) 80, UBN v Orharhuge [2002] 2 NWLR (Pt. 645) 495, Cross Rivers Basin Rural Authority v Sule [2001] 1 NWLR (Pt. 708) 194. For a comprehensive analysis of the cases, see, K. Mayomi: “The Place of Service of Originating Processes: Registered Office or Branch Office? Kraus Thompson Ltd v University of Calabar in Perspective,” The Appellate Review, Vol. 1 No. 5, pp.17-33.
[33] See, Nwadialo, Civil Procedure in Nigeria (2nd edition), (Lagos: Unilag Press, 2000), pp. 255-256.
[34] It provides; “Any summons, notice, order, or other document required to be served upon the company may be served by leaving the same, or sending it through the post in a prepaid letter addressed to the company, at their registered office.”
[35] (1989) 23 QBD 285.
[36] Oluwole Aluko, Introduction to Civil Procedure, (Ibadan, Spectrum Law Pub., 1997), p. 32.
[37] (1992) 6 NWLR (Pt. 246, 206 at 215, see also, Palm Beach Insurance Ltd v Bruhns (1997) 9 NWLR (Pt. 519) 80.
[38] Aluko, Ibid., p. 32.
[39] Ibid.
[40] J.F. Olorunfemi and B.A. Oloworaran: “Taming the Unruly Horse of Rules of Interpretation: A Review of Marwa & Anor v Nyako & Ors,” Law and Policy Review, Vol. 4, (2012), pp. 1-36. See further, MGS & L Ltd v WBS Ltd [2013] NWLR (Pt. 1336) 581 at 599, per Mukhtar JSC (as he then was), in the lead judgment.
[41] [2001] 6 NWLR (Pt. 708) 194, Texaco (Nig) Plc v Lukoko (1997) 6 NWLR (Pt. 510) at 651.
[42] (1995) 3 NWLR (Pt. 384) 457; see also Nigeria Arab Bank Ltd v Felly Keme Nigeria Ltd [1995] 4 NWLR (Pt. 387) 100.
[43] Above note 15 at pp. 447.
[44] Ibib., p. 449, paragraphs E-G.
[45] See B.A. Garner, E-In-C, Black’s Law Dictionary, (9th ed.), (St. Paul, Min.: Thomas Reuters, 2009), p. 1295.
[46] Even though textbook opinions are not precedents, they are persuasive authorities. See Akpata JSC in Ejabulor v Osha (1990) 5 NWLR (Pt. 148) 1 at 11.
[47] [2005] 1 NWLR (Pt. 937) 563 at 590, per Edozie JSC, at paragraphs G-A.
[48] See, Tobi JCA (as he then was) in Onagoruwa v State (1993) 7 NWLR (Pt. 303) 49 at 100 and Apata JSC in Akinbinu v Oseni (1992) 1 NWLR (Pt. 215) 97 at 100.
[49] Note 12 at pp. 651-652.
[50] [2000] 6 NWLR (Pt. 660) 228 at 323 per Achike JSC at paragraphs A-E. See further, R. Benkay (Nig) Ltd v Cadbury (Nig) Ltd [2006] 6 NWLR (Pt. 976) 338 at 381, per Onnoghen, JCA, (as he then was), in the lead judgment.
[51] Eugene Wambaugh, The Study of Cases (Boston: Little, Brown, & Co., 1892), p. 3.
[52] Rupert Cross and J.W. Harris, Precedent in English Law, (4th ed.), (Oxford University Press, 1991) pp. 65-66. In their own assertion therein, “there are…two steps involved in the ascertaining of the ratio decidendi…. First, it is necessary to determine all the facts of the case as seen by the judge; secondly, it is necessary to discover which of those facts were treated as material by the judge.”
[53] See, K. Mayowa: “The Proper Place of Service of Originating Processes: Registered Office or Branch Office? Kraus Thompson Ltd v University of Calabar in Perspective,” The Appellate Review, vol. 1 No. 5, 17-33 at 18, conceding that the decision in Kraus Thompson Ltd v University of Calabar in respect of place of service of processes was obiter.
[54] A. Akeredolu & C. Umeche, “Service of a Company by Substituted Means- A Review of the Supreme Court’s Decision in Kalu Mark & Anr v Gabriel Eke,” The Appellate Review, vol. 1 No. 5, 35-48 at 44. Compare their earlier comments on issues before the court at p. 38 id. See also Nwankwo, note 25 above, at p. 471.
[55] Per Uwaifo JSC at p. 351, paragraphs B-D.
[56] “Determining the ratio decidendi of a case” (1930) Yale LJ 161; “The ratio decidendi of a case” (1959) 22 MLR 118. H.K. Lücke, “Ratio Decidendi : Adjudicative Rational and Source of Law” Bond Law Review Volume 1, Issue 1 Article 2, 1989, pp. 36-51.
[57] [1925] 1 KB 141.
[58] [Emphasis supplied].
[59] [1988] 2 NWLR (Pt. 74) 5 at 13, paragraphs D-F.
[60] (1993) 1 NWLR (Pt. 270) 485 at 509.
[61] [2004] 5 NWLR (Pt. 866) 317 at 371-372, paragraphs H-A, per Niki Tobi JSC
[62] Kotoye v CBN [1989] 1 NWLR (Pt. 98) 419.
[63] [1995] 9 NWLR (Pt. 420) 411 at 435, per Iguh JSC at paragraphs D-H.
[64] See, Otun v Otun [2004] 14 NWLR (Pt. 893) 381 at 397, paragraphs G-H, per Kalgo Jsc.
[65] W.B. Anderson & Sons Ltd. & Ors v Rhodes (Liverpool), Ltd & Ors, (1967) 2 All E.R. 850. See also, Matthew Harding and Ian Malkin: “The High Court of Australia’s Obiter Dicta and Decision Making in Lower Courts,” Sydney Law Review, Vol. 34, pp. 239-267.