STANBIC IBTC PLC V. LONG TERM GLOBAL CAPITAL LTD & ANOR (2019)

Background

This appeal arose from a dispute concerning overdraft facilities granted by Stanbic IBTC Plc to Long Term Global Capital Ltd and Mr. Patrick Akinkuot. On 11 April 2007, the bank granted the first respondent an overdraft facility of N600 million for a term of 365 days, with an option to roll over the facility. Additional overdrafts of N400 million and N250 million were subsequently granted to the second respondent on 11 May 2007 and 17 July 2007 respectively. Following the second respondent’s application, the facilities were merged and secured by shares held by the respondents in various companies.

Acting upon instructions said to have been received by e-mail, the bank sold 28,745,400 units of GTBank Plc shares belonging to the respondents for N267,775,799.21. The respondents contended that the shares had been sold at an unauthorised and undervalued price and that they had already liquidated the overdraft facilities. They commenced proceedings before the Federal High Court, Lagos Judicial Division, claiming, among other reliefs, damages for breach of contract and loss of business opportunity. The trial court entered judgment for the respondents and awarded N2.5 billion as general damages.

Stanbic IBTC appealed to the Court of Appeal. It filed an original notice of appeal within time and later obtained leave to amend it. In the amended notice, however, it introduced additional grounds of appeal without obtaining the specific leave required to file and argue those grounds. The Court of Appeal struck out several grounds and dismissed the appeal as incompetent. The bank then appealed to the Supreme Court.

Issues

1. Whether the Court of Appeal was right to strike out grounds 3, 4, 5, 6, 7 and 10 as incompetent.
2. Whether ground 8 was properly struck out on the basis that it challenged an obiter dictum of the trial court.
3. Whether the Court of Appeal was entitled to entertain the respondents’ objection to the appellant’s brief and to dismiss the appeal without determining its merits.

Ratio Decidendi

The Supreme Court dismissed the appeal and affirmed the decisions of the lower courts. The principal ratio was that an appellant who wishes to rely on additional grounds of appeal must obtain the necessary leave of court. Filing an original notice of appeal within time, and later obtaining permission to amend that notice, does not automatically authorise the filing and argument of fresh or additional grounds, particularly where the prescribed time for appealing as of right has expired.

Order 8, rule 4 of the Supreme Court Rules was applied as embodying the mandatory procedural requirement that leave must be sought before additional grounds are used. The Court relied on the principle that where leave is required and has not been obtained, the additional grounds are incompetent and must be disregarded or struck out. The Court also emphasised that leave to file additional grounds is distinct from leave to argue grounds raising fresh issues or grounds of mixed law and fact. A general order permitting an amendment or the filing of additional grounds cannot be treated as a blanket authorisation to argue every new ground in the brief.

The Court further held that courts and parties are bound by the record of appeal. The Court of Appeal had ordered the appellant to file a clean copy of the draft brief marked Exhibit “AA1” within seven days. Instead, the appellant filed a materially different brief, adding issues and arguments not contained in the authorised draft. That departure rendered the brief incompetent. A party cannot unilaterally vary or enlarge an order of court by filing a different document.

Court Findings

On the first issue, the Supreme Court found that the Court of Appeal properly struck out the specified grounds. The appellant had not obtained leave to file and argue the additional grounds, and its brief was not an exact replica of Exhibit “AA1” as directed by the Court of Appeal. The procedural defects were attributable to the appellant and did not amount to a miscarriage of justice.

On the second issue, the Supreme Court distinguished between the ratio decidendi and an obiter dictum. The trial judge’s observations concerning the respondents’ state of mind and related matters were comments made in the course of the judgment and were not the legal foundation of the decision. The operative reasoning was that the bank acted wrongly by relying on an unsigned e-mail while disregarding the respondents’ duly executed written mandate. Since an opinion or incidental comment does not constitute the decision of the court, it cannot ordinarily provide a valid basis for an appeal. The Court of Appeal was therefore right to strike out the ground directed at the obiter dictum.

On the third issue, the Supreme Court rejected the argument that the Court of Appeal became functus officio after deeming the appellant’s brief properly filed and served. The order was conditional and specifically required the filing of a clean copy of Exhibit “AA1”. Because the appellant filed a substantially different brief, the respondents were entitled to object to its competence, and the Court of Appeal retained jurisdiction to determine that objection.

Conclusion

The Supreme Court held that the appeal lacked merit and dismissed it. The judgments of the Federal High Court and the Court of Appeal were affirmed. The lead judgment awarded costs of N500,000 against Stanbic IBTC Plc in favour of the respondents; other members of the panel agreed with the dismissal and consequential orders, with one separate opinion referring to a cost award of N50,000.

Significance

The decision reinforces strict compliance with appellate procedure in Nigeria. It demonstrates that the right of appeal does not permit a party to introduce fresh grounds without leave, and that a court order concerning the filing of a brief must be obeyed precisely. It also clarifies the practical distinction between binding reasoning and judicial observations made by the way: only the ratio decidendi, not an obiter dictum, is ordinarily appealable. The case is consequently important for appellate counsel dealing with amended notices, additional grounds, grounds of mixed law and fact, and objections to the competence of appellate briefs.