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Savannah Bank of Nigeria Ltd & Anor v. Ammel O. Ajilo & Anor. (1989) – SC

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⦿ CASE SUMMARY OF:

Savannah Bank of Nigeria Ltd & Anor v. Ammel O. Ajilo & Anor. (1989) – SC

by PipAr Chima

⦿ NOTABLE DICTA

* EFFECT OF THE LAND USE ACT
Since the promulgation of the Act by the Military Administration of General Obasanjo in 1978, the vast majority of Nigerians have been unaware of its revolutionary effect. They have been unaware that the Act swept away all the unlimited rights and interest they had in their lands and substituted them with very limited rights and rigid control of the use of their limited rights by the Military Governors and Local Governments. This appeal is probably one of the earliest of contested matters that will bring the revolutionary effect of the Act to the deep and painful awareness of many. The experience of disbelief and the ultra sensitivity to the irritating thoughts of loss of freedom to use one’s property without exploitative government control exhibited by the appellants’ counsel notwithstanding the fact remains that we must all appreciate the true legal position and bring it to the knowledge of the beneficiaries of rights and interest in land in each State of the Nigerian Federation. This will enable the steps necessary to bring the law in line with the wishes of Nigerians to be taken. Section 1 of the Act has made no secret of the intention and purpose of the law. It declared that land in each state of the Federation shall be vested in the Military Governor of each state to be held in trust for the use and common benefit of all Nigerians. – Obaseki, JSC. Savannah v. Ajilo (1989)

* DEEMED & ACTUAL GRANTS OF MILITARY GOVERNOR
That there is a distinction between a deemed grant and an actual grant goes without saying. That the same incidence flows from both grants also goes without saying. In origin, a deemed grant is different from an actual grant. A deemed grant under the Land Use Act is a grant by operation of law. An actual grant is a grant made by the activities of the Military Governor under the Land Use Act. Both the actual and the deemed grants being grants the deemed grants being regarded by the law as if made by the Military Governor also become subject to legal controls as if granted by the Military Governor. – Obaseki, JSC. Savannah v. Ajilo (1989)

* POOR DRAFTING OF THE LAND USE ACT
This case has once more highlighted the unnecessary difficulties created by lack of precision and inelegant drafting of statutes. The Land Use Act as a major legislation affecting the fortunes of every Nigerian leaves a lot to be desired in its drafting. The Land Use Act is an existing law and, as I declared in another forum earlier on last year, has come to stay with us. Laudable as the intention of the Act declared in the provisions of section 1 is, it is my opinion that it cannot be realised as long as the administrative provisions which deprive all Nigerians of the use and benefit of the land vested in the Military Governor remains. It is for Nigerians through their representatives (elected and non elected) to give detailed examinations to these provisions and make the necessary amendments to enable the Act achieve its laudable purpose. – Obaseki, JSC. Savannah v. Ajilo (1989)

* DEEMED GRANT TREATED AS ACTUAL GRANT
It is therefore my opinion that “deemed grant” is to be treated as a grant by the Military Governor with all the attendant consequences and subject to the provisions in the Act for the control by the Governor of the use and transfer of the right. – Obaseki, JSC. Savannah v. Ajilo (1989)

* READ A STATUTE AS A WHOLE
To ascertain the correct interpretation of the provision of section 34(2) vis that of section 22 of the Act, the Land Use Act is to be read as a whole. Every clause of a statute is to be construed with reference to the context of other clauses of the Act so as far as possible to make a consistent enactment of the whole statute. – Obaseki, JSC. Savannah v. Ajilo (1989)

Available:  Shodeinde v. The Registered Trustees of The Ahmadiyya (1983) - SC

* ALL LANDS VESTED IN MILITARY GOVERNOR
The control and management of all land in the state, apart from the land vested in the President, Commander-in-Chief of the Armed Forces, is therefore vested either in the Military Governor or the Local Government and while the Military Governor has power to grant statutory right of occupancy in respect of any land [see section 5(1)(a)] the Local Government has power to grant customary right of occupancy in respect of land not in an urban area [see section 6(1)(a) and (b)]. – Obaseki, JSC. Savannah v. Ajilo (1989)

* SECTIONS OF STATUTE BE READ TOGETHER
One of the important principles in the interpretation of statutes is that the clauses or sections of the Act or statute should be construed together. – Nnamani, JSC. Savannah v. Ajilo (1989)

* VOID FOR CONSENT OF MILITARY GOVERNOR
In the circumstances of this case, I would, as the two lower courts did, hold that the deed of mortgage dated 5th September, 1980 (marked Exhibit A in these proceedings) executed by the 1st plaintiff in favour of the 1st Defendant bank to secure money owed it by the 2nd plaintiff company (Respondents herein) is null and void, the consent of Military Governor of Lagos State having not been obtained before the execution of the Deed. – Nnamani, JSC. Savannah v. Ajilo (1989)

* CONSTRUE SECTIONS ACCORDING TO PARTS
Where a statute is divided into parts, the ideal is to construe the sections in the part in relation to other sections in that part. Thus although the general rule is to construe the statute as a whole clarity is better attained where the words so indicate, by construing the sections in their related parts. – Karibe-Whyte, JSC. Savannah v. Ajilo (1989)

* MISCHIEF RULE IN INTERPRETATION
It is well settled that the object of all interpretation is to discover the intention of the legislature from the language used in the statute and to give effect to it. One of the most useful guides to interpretation is the mischief rule which considers the state of the law before the enactment, the defect which the legislation sets out to remedy or/and prevent, the remedy adopted by the legislature to cure the mischief and the true reason of the remedy. The duty of the court therefore is to adopt such interpretation that will enable the suppression of the mischief and to promote the remedy within the true intent of the legislation. – Karibe-Whyte, JSC. Savannah v. Ajilo (1989)

* CONSENT BY GOVERNOR BEFORE ALIENATION IS A REQUIREMENT
As I have stated before, this is the category to which section 34(2) belongs. When the holder even if in fee simple becomes the holder of a statutory right of occupancy he becomes subject to the express and implied terms of the grant. The term relating to prior consent in writing by the Governor to alienation is a statutory requirement which will be inconsistent with any contrary provision. I therefore will answer the question to be determined in this case in the affirmative. – Karibe-Whyte, JSC. Savannah v. Ajilo (1989)

⦿ PARTIES

APPELLANT
Savannah Bank of Nigeria Ltd & Anor.

v.

RESPONDENT
Ammel O. Ajilo & Anor.

⦿ COURT

Supreme Court

⦿ LEAD JUDGEMENT DELIVERED BY:

OBASEKI, JSC

⦿ APPEARANCES

* FOR THE APPELLANT

– Chief F. R. A. Williams.

* FOR THE RESPONDENT

– Dr. Kusamotu.

* AMICUS CURIAE (argued in favour of respondent)

– Professor A. B. Kasunmu, S.A.N.

⦿ CASE HISTORY

No.1 Oyekanmi Street (off Itire Road), Mushin, Lagos was by a deed of conveyance dated 23/12/65 vested in fee simple in the 1st plaintiff, then known as Abraham Oladotaun Samuel. The land was registered as No. 31 page 31 volume 896 of the Land Registry in Ibadan (now Lagos). By a deed of mortgage dated the 5th September, 1980, all the rights, title and interest in the said land was mortgaged to the 1st Defendant Bank by the 1st plaintiff to secure credit facilities and advances made by the 1st Defendant to the 2nd plaintiff.

From the pleadings, the issue is clear. While it is the contention of the plaintiffs/Respondents that the consent of the Military Governor in writing is a prerequisite to any valid transaction pertaining to the mortgaged property, the appellants contend that such requirement pertain to statutory right of occupancy granted by the Military Governor and not to (land vested in the holder of) a statutory right of occupancy deemed issued to him by the Military Governor by virtue of the title to the land and vested in him prior to the commencement of the Land Use Act and section 34(2) of the Land Use Act.

Available:  Chief Gani Fawehinmi v. Nigerian Bar Association (NBA) & Ors. (1989) - SC

The Trial Court ruled in plaintiff/respondent favour: “having considered the Act as a whole, I think I should be bound by the case of Nahman v. Odutola and also Supreme Court decisions in the case of Labaran Nakyauta v. Ibrahim Maikima (supra). I am of the opinion that failure to obtain the required consent of the Military Governor under Section 22 of the Act has rendered the deed of mortgage Exhibit A null and void ab initio and the mortgage transaction illegal. Accordingly, the power of sale under the mortgage cannot be exercised.”

The defendant/Appellant appealed to the Court of Appeal which dismissed the appeal. This is a further appeal by the Appellant.

⦿ ISSUE(S) & RESOLUTION

[APPEAL: DISMISSED]

1. WHETHER A PERSON, who is deemed to be a holder of a right of occupancy pursuant to section 34 of the Land Use Act, requires, solely by virtue of that fact, the consent of the Military Governor before he can transfer, mortgage, or otherwise dispose of his interest in the right of occupancy. More specifically, do the provisions of section 22 of the Land Use Act apply to a person who is deemed to be the holder of a right of occupancy pursuant to section 34 of the Act solely by virtue of his being deemed such a holder?

RULING: IN RESPONDENT’S FAVOUR.
i. In this connection, if section 34(2) is read together with sections 38, 22,28,20 and 15, the construction that will emerge will in my view be that section 22 applies to any alienation by the holder of a deemed grant of a statutory right of occupancy. A statute should not be given a construction that will defeat its purpose. To exclude a holder of a deemed grant of statutory right of occupancy, the interpretation would defeat the purpose of the Act particularly the provision of section 22. The construction ut res magis valeat quam perat must be given. If the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we shall avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that the legislature would legislate only for the purpose of bringing about an effective result [Nokes v. Doncaster Amalgamated Collieries Ltd. (1940) A.C. 1014 per Viscount Simon, L.c. at 1022].

ii. It is clear that in view of the wordings of section 1 of the Act, the powers of control and management vested in the Military Governor and Local Governor by section 2 of the Act are not outside but as set out in the Act. While the interest vested in the Military Governor is unstated in the Act, the interest a Nigerian can lawfully acquire from the Military Governor is scaled down to statutory right of occupancy. In terms of known interests in land, the quantum of a statutory right of occupancy remains unclear. To the extent that it can only be granted for a specific term (see section 8 of the Act) it has the semblance of a lease. Also to the extent that a holder has the sole right to and absolute possession of all the improvements on the land during the term of a statutory right of occupancy, a holder does not enjoy more rights than a lessee under common law. When therefore section 34(2) of the Act converted the interest held by an owner to a statutory right of occupancy the Act reduces him to the position of a tenant subject to the control of the state through the governor. As a tenant, he is bound by the implied and express terms of the tenancy. As one of the terms stated in the Act is that a holder requires prior consent in writing of the Military Governor to any alienation, I would answer the question for determination in the affirmative.

Available:  ALHAJI AMINU JUBRILLAH ABDULLAHI & ORS v. MRS. CHRISTIANA IYABO ADETUTU (2019)

⦿ ENDING NOTE BY LEAD JUSTICE – Per Obaseki JSC

In my view and I agree with Chief Williams’ expression of anxiety over the implementation or consequences of the implementation of the consent clauses in the Decree; it is bound to have a suffocating effect on the commercial life of the land and house owning class of society who use their properties to raise loans and advances from the banks. I have no doubt that it will take the whole working hours of a State Military Governor to sign consent papers (without going half way) if these clauses are to be implemented. These areas of the Land Use Act need urgent review to remove their problem nature.

⦿ REFERENCED (STATUTE)

Section 34(1) and (2) of the Land Use Act reads: 1. The following provisions of this section shall have effect in respect of land in an urban area vested in any person immediately before the commencement of this Decree; 2. Where the land is developed, the land shall continue to be held by the person in whom it was vested immediately before the commencement of this Decree as if the holder of the land was the holder of a statutory right of occupancy issued by the Military Governor.”

Section 22 of the Land Use Act: “It shall not be lawful for the holder of a statutory right of occupancy granted by the Military Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sub-lease or otherwise howsoever without the consent of the Military Governor first had and obtained.”

Section 5(1) of the Land Use Act reads: “It shall be lawful for the Military Governor in respect of land whether or not in an urban area (a) to grant statutory right of occupancy to any person for all purposes.”

Section 38 of the Land Use Act reads: “Nothing in this part shall be construed as precluding the exercise of the Military Governor or as the case may be the Local Government concerned of the powers to revoke, in accordance with the applicable provisions of this Decree the rights of occupancy, whether statutory or customary in respect of any land to which this part relates.”

Section 26 of Land Use Act reads: “Any transaction or any instrument which purports to confer on or vests in any person any interest or right over land other than in accordance with the provision of this Decree shall be null and void.”

Section 40 of Land Use Act reads: “Where on the commencement of this Act proceedings had been commenced or were pending in any court or tribunal (whether at first instance or on appeal) in respect of any questions concerning or pertaining to title to any land or interest therein such proceedings may be continued and be finally disposed of by the court concerned but any order or decisions of the court shall only be as respects the entitlement of either of the parties to the proceedings to a right of occupancy, whether statutory or customary, in respect of such land as provided in this Decree.”

⦿ REFERENCED (CASE)

* LEAN TO BROADER INTERPRETATION IN STATUTES; INTERPRETATION SHOULD NOT DEFEAT PURPOSE OF STATUTE
Rabiu v. State (1980) 8-11 SC. 130 at 148-149; Udoma JSC opined: In my view, this Court should whenever possible, and in response to the demands of justice, lean to the broader interpretation; unless there is something in the text or in the rest of the Constitution to indicate that the narrower interpretation will best carry out the objects and purposes of the Constitution…I do not conceive it to be the duty of this Court to construe any of the provisions of the Constitution as to defeat the obvious ends the Constitution was designed to serve where another construction equally in accord and consistent with the words and sense of such provisions will serve to enforce and protect such ends.”

⦿ REFERENCED (OTHERS)

⦿ SIMILAR JUDGEMENTS

End

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