In the Supreme Court of Nigeria
Holden at Abuja
On Friday, the 12th day of December, 2025
Before Their Lordships
Helen Moronkeji Ogunwumiju
Adamu Jauro
Jummai Hannatu Sankey
Obande Festus Ogbuinya
Abubakar Sadiq Umar
Justices, Supreme Court
SC/212/2019
Between
BINEZ HOTELS LIMITED APPELLANT
And
1. BUREAU OF PUBLIC ENTERPRISES
2. FUTURE VIEW SECURITIES LIMITED RESPONDENTS RESPONDENTS
(Lead Judgement delivered by Honourable Jummai Hannatu Sankey, JSC)
Facts
The Appellant through its agent – the 2nd Respondent, agreed to purchase 13,000,000 shares held by the Federal Government of Nigera Nigercem Plc, from the 1st Respondent for the sum of N7,020,000.00. The Appellant issued a cheque for the amount in favour of the 1st Respondent, and the 1st Respondent conveyed the approval of the National Council on Privatisation to the Appellant. However, the 1st Respondent cancelled the sale midway before executing the Share Transfer Forms, and returned the un-cashed cheque to the Appellant. The Appellant subsequently discovered that, the said shares had been sold to the Ebonyi State Government.
Aggrieved, the Appellant filed an action against the Respondents and the Nigerian Stock Exchange at the Federal High Court, Lagos State, by an Amended Originating Summons. The Appellant sought the determination of the questions whether the Appellant is not entitled to the beneficial ownership of the shares, after the initial acceptance of payment by the 1st Respondent and the approval of the sale by the National Council on Privatisation, and whether it is not entitled to the whole proceeds of any purported sale to a third party, or to have the said sale set aside. The Appellant therefore, sought a declaration that it is entitled to the beneficial ownership of the said shares.
The trial court delivered its judgement in which it answered the Appellant’s questions in the negative, and dismissed the Appellant’s claims. Dissatisfied, the Appellant appealed to the Court of Appeal. However, the Court of Appeal upheld the decision of the trial court and dismissed the appeal.
Aggrieved, the Appellant appealed to the Supreme Court. The parties filed and exchanged their respective briefs of argument. The 1st Respondent in its Brief of Argument, raised a preliminary objection to the hearing of the appeal.
Arguments on the Preliminary Objection
Counsel for the 1st Respondent submitted that the appeal is incompetent, because the Appellant unilaterally removed the Nigeria Stock Exchange which was the 2nd Defendant at the trial court as a party in the appeal, without first seeking and obtaining the leave of court.
Counsel argued that the Appellant’s failure to maintain the parties from the trial court renders both the appeal at the Court of Appeal and the Supreme Court incompetent, and strips the Apex Court of jurisdiction to decide the instant appeal. He relied on Order 4 Rule 6 of the Supreme Court Rules 2024, Order 16 Rules 1-4 of the Court of Appeal Rules, 2021 and the case of APEH v PDP (2018) 1-2 SC (PT. IV), and urged the Court to strike out the appeal.
In response, Counsel for the Appellant submitted that the 1st Respondent ought to have filed a cross-appeal on the issue it raised, and having failed to do so, it was precluded from raising it before the court. Counsel explained that the point had been made at the Court of Appeal that it was a mistake of the Appellant’s Counsel in failing to ensure that the Record of Appeal properly reflected the oral application for the withdrawal of the case against the 2nd Defendant at the trial court, against whom no claim was made in the suit and who was never a necessary party. Counsel argued that the 2nd Defendant’s initial inclusion was a misjoinder and its subsequent absence is a non-joinder, neither of which should defeat the proceedings.
Resolution of the Preliminary Objection
The Apex Court held that the character of a case, including the parties, must be constant from the proceedings at the trial court right up to the ladder of appeals; and the only permissible alteration of parties, is where the leave of court to effect same has been duly sought and obtained. The Court held that where such requisite leave is not sought and obtained, the court will be bereft of jurisdiction to entertain the matter. The Supreme Court held further that the unilateral removal of a party from an appeal by another party, even if that party never actively participated in the suit at the trial court and even when the matter appears solvable without that party, is a fundamental procedural irregularity that is of grave significance. The Apex Court held additionally that, in Nigerian appellate jurisdiction, it is firmly established that once a party is properly joined to a suit at the trial court, he remains a party throughout the trial and is unchanged even on appeal, unless and until he is formally removed by an order of either the appellant court or the court concerned.
The Court held that it had painstakingly examined the record of appeal before it, but was unable to find any record of any oral application for the striking out of the name of the 2nd Respondent from the case before the trial court. The Court held that as a matter of fact, an application for the removal or striking out of a party to a suit that will consequently lead to the amendment of the processes before the court, can only be brought by way of a motion on notice. For these reasons, the Apex Court upheld the 1st Respondent’s preliminary objection, found the appeal incompetent and struck it out.
However, notwithstanding the peremptory determination of the appeal based on the upholding of the preliminary objection, the Apex Court decided to deliberate on the merit of the substance of the appeal, in the interest of a final closure for the parties. The Court cited ZENITH BANK PLC v JOHN & ORS 92015) LPELR-24315 (SC) in aid of its resolve in this regard, and proceeded to consider the issues raised by the Appellant.
Issue for Determination
Whether the lower Courts erred in concurrently holding that the contract for the sale of shares was invalidated, solely because the Appellant’s name was not yet entered in the company’s register of members pursuant to Section 151 of the Companies and Allied Matters Act.
Arguments
Counsel for the Appellant argued that a valid and binding contract was concluded upon its payment for the shares and the approval by the National Council on Privatisation on the transaction, relying on GADZAMA v RIMS MERCHANT BANK LTD (1997) 4 NWLR (PT. 498) 234. Counsel contended that Section 151 of CAMA 1990 (applicable at the material time) governs the procedural formality of registration, and does not negate the underlying contract or transfer of title to a purchaser. Counsel also argued that the principle of constructive trust applies, and the 1st Respondent held the shares as trustee for the Appellant after the contract was concluded, and the 1st Respondent breached that trust by selling the shares to a third party.
Counsel for the 1st Respondent argued conversely that the transaction was a mere “agreement to sell” that was cancelled before conclusion, and the cancellation constituted a counter-offer that destroyed the original offer. Counsel submitted that the specific provisions of Sections 151 and 152 of CAMA 1990 which require an executed instrument of transfer and registration of title to pass overrides the general law of contract, and since these steps were not completed, legal title remained with the Federal Government. Counsel argued additionally that, a constructive trust cannot arise from an inchoate contract.
Counsel for the 2nd Respondent argued on his part that, while the basic ingredients of a contract may have been present, the specific mandatory requirements of Section 151 of CAMA for a share transfer were not met, as there was no executed instrument of transfer. Counsel submitted that the return of the un-cashed cheque to the Appellant also indicated a lack of consideration, and that the transaction was not consummated. He contended that the Appellant’s remedy, if any, lies in damages and not in asserting ownership.
Resolution and Rationale
The Apex Court held that generally, in ascertaining the validity of a contract, the elements of offer, acceptance, consideration and intention to create legal relations must exist conjunctively, and there must be no element capable of vitiating it. The Court held however, that the provision of Section 151 of CAMA 1990 (now Section 174 of CAMA 2020) clearly provided the exact, precise and only manner by which the purchase and transfer of shares is concluded, and by that provision, the bar had been raised, such that it is not enough to have just the elements of a valid contract elements in respect of shares, the law mandates that in order to reflect such purchase, there must be an execution of an instrument of transfer of shares between the parties, after which the law requires that the name of the transferee must be entered into the company’s register of members. The Court held that until this is done, the transferor remains the holder of such shares.
The Apex Court held that from the facts in the record of appeal, the transaction between the Appellant and the 1st Respondent through the 2nd Respondent had been rendered inchoate the moment the 1st Respondent failed and/or refused to fill and execute the Share Transfer Forms, and subsequently returned the Appellant’s un-cashed cheque through the 2nd Respondent. The Court held that evidently, the Appellant could not establish the execution of an instrument of transfer of the said shares; and in light of the provisions of Section 151 of CAMA 1990 applicable at the material time, it was crystal clear that the legal ownership of the shares was still vested in the Federal Government and not the Appellant. The Apex Court found that the Appellant could not therefore, lay any claim to the 13,000,000 shares of Nigercem Plc which it had sought to purchase from the 1st Respondent.
On the issue relating to constructive trust, the Apex Court referred to its decision in IBEKWE v NWOSU (2011) LPELR-1391 (SC) in which it held, placing reliance on the English case of LYSAGHT v EDWARDS (1876) CHD. 499, that constructive trust would only come in as an equitable remedy against one who has obtained property by wrongdoing, where property has been acquired in such circumstances that the holders of the legal title may not in good conscience retain the beneficial interest.
The Court held that based on the facts of the case, the 1st Respondent cannot be said to be a constructive trustee of the Appellant, going by the extant law governing the transaction and the fact that the un-cashed cheque was returned to the Appellant. The Court held that the case would probably have been different and the court could have construed a constructive trust against the 1st Respondent, if the cheque was cashed by the 1st Respondent and still, it failed to file the Transfer of Shares Forms in favour of Appellant.
After considered the issues, the Apex Court found that even on the merit, the appeal was deserving of a dismissal. However, having found earlier that the appeal was ab initio incompetent on the basis of the preliminary objection raised by the 1st Respondent, the Supreme Court struck out the appeal.
Appeal Struck Out.
Representation
Chief Chijoke Okoli, SAN, Chief Isaac Anumudu with others for the Appellant.
Ayo Olanrewaju with others for the Respondent.
Uwaifo L. Ogedegbe for the 2nd Respondent.
Reported by Optimum Publishers Limited, Publishers of the Nigerian Monthly Law Reports (NMLR)(An affiliate of Babalakin & Co.)
