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Published online by Cambridge University Press: 20 January 2014
Before the enactment of the Companies and Allied Matters Act (CAMA) 1990, receivership in Nigeria was governed by case law, informal rules (of practice) and the Companies Decree 1968. Nigerian judges were heavily influenced by British case law, precedents were British and the Nigerian Companies Decree was a transplant of the British Companies Act 1948. Against this background, the Supreme Court of Nigeria delivered the Intercontractors decisions in 1988, which subsequently governed the nature, status and powers of Nigerian receivers. In 1990, CAMA introduced a more robust receivership regime which prescribed the nature, status and powers of the receiver, reversing some of the Intercontractors principles. However, the courts, particularly the Supreme Court, failed to enforce the relevant provisions of CAMA or to examine the applicability of the Intercontractors principles that they conscientiously enforced. This article examines the validity of the Intercontractors principles and their continued relevance under CAMA 2004.
1 (1988) 2 NWLR (pt 76) 280.
2 (1988) 2 NWLR (pt 76) 303.
3 Please note, except as expressly indicated, “receiver” in this article refers to the receiver and manager appointed over all or substantially all of a company's assets. The words “receiver” and “receiver/manager” may be used interchangeably but both refer to the receiver/manager appointed under a debenture over the whole or substantially the whole of a company's assets.
4 Wema Bank Plc v Onafowokan (2005) 6 NWLR (pt 921) 410.
5 See note 1 above.
6 Id at 290.
7 Id at 291.
8 Id at 291–92.
9 Id at 292–93.
10 Id at 294.
11 Ibid.
12 It refused to let the receiver remedy its mistake by obtaining leave to signify his interest and to give authority for his actions; id at 290.
13 Above at note 2.
14 Id at 314.
15 Id at 315.
16 Id at 324.
17 See note 1 above.
18 (1988) 2 NWLR (pt 76) 303 at 323.
19 Ibid; see also (1988) 2 NWLR (pt 76) 280 at 295.
20 “It is clearly not one for the private initiative of the receiver/manager as counsel for the appellant seems to assume”: id 303 at 323.
21 Id at 324–25.
22 Id at 325.
23 Laws of the Federation of Nigeria 1990, chap 59.
24 Laws of the Federation of Nigeria 2004, chap C20. The main thrust of the 2004 reform was to excise part XVII (regulating dealings in companies' securities) to be re-enacted as the Investment and Securities Act 1999.
25 Subject to contrary terms in the debenture.
26 Adebola, B “The duty of the Nigerian receiver to ‘manage’ the company” (2011) 8 International Corporate Rescue 248.Google Scholar
27 Sched 11 sets out 23 implied powers of the receiver and manager appointed over the whole or substantially the whole of the company's assets.
28 No 5: “Power to bring or defend any action or other legal proceedings in the name or on behalf of the company.”
29 CAMA was enacted in 1990; the cases were decided in 1988.
30 Compare principle (2) above with CAMA, sec 390(1).
31 Compare principle (2) above with id, secs 393(2) and 390(2).
32 Compare principle (3) above with id, sched 11, no 5.
33 But the debenture is where the receiver can show that he was appointed over all or substantially the whole of the company's assets, although CAMA does not provide a test for that purpose.
34 Discussed at “The powers of the receiver: Current applicability” below.
35 See above at “Restating the Intercontractors principles”.
36 The judgment of Rigby LJ [1896] 1 QB, upheld by the House of Lords [1897] AC 575.
37 The two modes of appointment confer different rights and powers on the receivers because of the source of the authority to act. See Moss Steamship Co Ltd v Whinney [1912] AC 254 (Moss Steamship) and Cripps & Son v Wickenden [1973] 1 WLR 944.
38 Parsons v The Sovereign Bank of Canada [1913] AC 160.
39 Id at 167. For a more thorough understanding, see Frisby, S and Davis-White, M (eds) Kerr & Hunter on Receivers and Administrators (19th ed, 2010, Thomas Reuters (Legal) Limited)Google Scholar chaps 5 and 9.
40 Moss Steamship, above at note 37 at 257.
41 It would be interference with the actions of an officer of the court. See Frisby and Davis-White (eds) Kerr & Hunter on Receivers, above at note 39 at 165.
42 Moss Steamship, above at note 37 at 260.
43 Ibid.
44 Frisby and Davis-White (eds) Kerr & Hunter on Receivers, above at note 39 at 243.
45 Above at note 37. Compare the decisions of Lord Lorebun and the Earl of Halsbury with that of Lord Atkins in Moss Steamship.
46 L Doyle “The residual status of directors in receivership” (1996) Company Lawyer 131 at 133.
47 Doyle, ibid.
48 Moss Steamship, above at note 37 at 259.
49 Id at 263.
50 Doyle “The residual status of directors”, above at note 46.
51 Doyle, Administrative Receivership: Law and Practice (1995, Pearsons Professional Limited) at 50.
52 Gomba Holdings UK Ltd v Homan (1986) 1 WLR 1301 at 1308.
53 Fletcher, IThe Law of Insolvency (4th ed, 2009, Sweet & Maxwell)Google Scholar at 452; also Re Kayford Ltd [1975] 1 All ER 604 and Doyle “The residual status of directors”, above at note 46 at 133.
54 Newhart Developments Ltd v Co-operative Commercial Bank Ltd [1978] 2 WLR 636.
55 The position of the law is however still fluid on this point. See Newhart Developments, ibid and Paramount Acceptance Co v Souster [1981] 2 NZLR 38; compare with Tudor Grange Holdings Ltd v Citibank NA [1992] Ch 53.
56 Hoffman J in Gomba Holdings, above at note 52 at 1307.
57 Ibid.
58 (1993) 4 NWLR (pt 287) 346.
59 Id at 359.
60 (1999) 14 NWLR (pt 638) 176 at 200.
61 See above at “Restating the Intercontractors principles”.
62 Report on the Reform of Nigerian Company Law and Related Matters: Vol 1, Review and Recommendation (1988, Nigerian Law Reform Commission) at 6.
63 Above at note 2 at 322.
64 Id at 323.
65 [1912] 2 Ch 305 at 311.
66 Id at 310–11.
67 See Gomba Holdings, above at note 52 at 1307–08.
68 [1955] Ch 634.
69 Id at 644–45. See also: Shamji v Johnson Matthey Bankers [1991] BCLC 36; Downsview Nominees Ltd v First City Corp Ltd [1993] AC 295; Medforth v Blake [2000] Ch 86; and Silven Properties Ltd v Royal Bank of Scotland Plc EWCA [2003] Civ 1409.
70 See Gaskell v Gosling, above at note 36; R Billins Agency Law (September 2010, Sweet & Maxwell, R.34) (loose-leaf) at B 2.2.
71 See above at note 58.
72 See above at note 60.
73 NBCI, above at note 58 at 359.
74 Above at note 60 at 196–97.
75 See however CAMA, sec 651(2).
76 (2001) 7 NWLR (pt 713) 534; (2003) 6 NWLR (pt 816) 402.
77 Id, 402 at 425 then 427.
78 Re Vimbos [1900] 1 Ch 470; Robinson Printing Company Limited v Chic Limited [1904] 2 Ch 123.
79 See excerpts of the debentures from the Nigerian cases cited, as set out by the courts.
80 NBCI, above at note 60 at 199.
81 See above at note 26.
82 See above at “Restating the Intercontractors principles”.
83 [1928] Ch D 840.
84 [1966] 1 WLR 1384.
85 See above at note 65.
86 Gough Garages Ltd v Pugsley [1930] 1 KB 615; Re Northern Garage Ltd [1946] Ch 188.
87 [1978] 1 WLR 22.
88 Above at note 1 at 294–95 and above at note 2 at 323.
89 CAMA, sec 393(3) and sched 11.
90 See above at note 76.
91 Id (Pt 816) at 424–25 and 427.
92 Above at note 1 at 294–95 and above at note 2 at 323–24.
93 Above at note 76 (Pt 816) at 427.
94 Above at note 4.
95 Id at 419–20.
96 Ibid.
97 (2011) 12 NWLR (pt 1260) 24.