The Court of Appeal sitting in Lagos has set aside a 2014 judgment of the Federal High Court, which upheld Guaranty Trust Bank Plc’s N970 million outstanding debt claims against RCN Networks Ltd and Agboola Abiola, who is said to be one of the sons of the late MKO Abiola.
Appeal Court judge, Justice Paul Bassi, set aside the trial court judgment which concerned a purported contractual agreement executed between the parties via the Deed of Tripartite Legal Mortgage dated 15th August 2012, involving the property of Abiola.
A Deed of Tripartite Legal Mortgage is a three-party legal agreement involving a borrower, a bank, and a third party.
The arrangement provides security for a loan through a mortgage on a property or asset, especially when the person in need of the loan lacks sufficient collateral.
At the Federal High Court, GTB accused the respondents of defaulting on the agreement, resulting in outstanding liabilities.
“A declaration that upon the failure of the 1st Defendant to liquidate the outstanding indebtedness of the sum N970,743,041.15 owed to the Plaintiff, the 2nd Defendant (Abiola), being its Guarantor/Surety, becomes primarily liable to pay the said debt.
“An order of perpetual injunction restraining the 1st and 2nd Defendants, their privies, agents, and servants from interfering with, obstructing, disturbing, and/or frustrating Mr. Norrison I. Quakers SAN, the Receiver/Manager appointed by the Plaintiff, from exercising the powers vested in him or performing his duties as Receiver/Manager over the asset listed in the Schedule of the Deed of Tripartite Legal Mortgage,” GTB prayed at the lower court.
On 20th June 2014, the trial court granted the reliefs in GTB’s motion of 8th April 2014 and gave final judgment in favor of the respondent.
Dissatisfied with the judgment, the appellants filed their Notice of Appeal, marked CA/L/888/2014, on 18th June 2021, containing four grounds of appeal.
The appellants’ counsel, Charles Adeogun-Phillips, Esq., asked the Appeal Court to determine whether the trial court was right in holding that GTB was entitled to the reliefs sought in its originating summons and in granting the said reliefs.
The appellants further argued that there was no “valid Tripartite Deed of Legal Mortgage” entitling the respondent (GTB) to appoint a receiver over the property of the 2nd appellant (Abiola).
It was argued that even though the name of Abiola was listed as the mortgagor, he never signed the document as the mortgagor, thereby showing that there is no legal mortgage whatsoever between Abiola and the respondent (GTB).
The appellants contended that enforcing the said Tripartite Deed of Legal Mortgage against the 2nd appellant (Abiola), as the trial court did when it granted GTB’s relief to appoint a receiver pursuant to the said document over Abiola’s property, is “a blatant violation of the doctrine of privity of contract.”
Counsel for the appellants then urged the Appeal Court to set aside the trial court’s order which appointed Mr. Norrison I. Quakers SAN as receiver over Abiola’s property.
Counsel for GTB urged the Appeal Court to hold that “there was indeed a duly executed valid Tripartite Deed of Legal Mortgage between the appellants and the respondent (GTB)” entitling the bank to appoint a receiver over Abiola’s property, which is the subject matter of the Tripartite Deed of Legal Mortgage.
“Now the lower court, for some reason, elected to gloss over these alleged alterations and amendments, which even the police alluded to, and proceeded to restrict itself to the interpretation of clause 6 of the deed.
“Now the lower court, for some reason, elected to gloss over these alleged alterations and amendments, which even the police alluded to, and proceeded to restrict itself to the interpretation of clause 6 of the deed.
“Where the authenticity of the deed or document as a whole is called into question, can the court interpret this document and make a pronouncement of the rights of the parties? I think not.
“It is incumbent on the court to be satisfied that the deed or document sought to be interpreted is accepted by the parties as creating the rights and obligations of the parties.
“Again, a court cannot proceed to make a determination of the rights of parties on a contested deed or document, especially one tainted with allegations of fraud or forgery. The court cannot fill in the gaps in establishing authenticity or fraud by itself. That would be proceeding on a faulty premise,” Paul Bassi said.
“This court cannot endorse the decision of the lower court on this basis. I therefore resolve this issue in favor of the appellants,” the judge said.
The Appeal Court allowed the appeal and set aside the judgment of the Federal High Court, Lagos Division, delivered on 20th June 2014, in suit no: FHC/L/CS/876/2013.